S-4

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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on September 3, 2004

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Cornell Companies, Inc.
(and its subsidiaries identified on the following page)
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 8744
(Primary Standard Industrial
Classification Code Number) 76-0433642
(I.R.S. Employer
Identification Number)

Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, Texas 77027
(713) 623-0790
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive officer) Harry J. Phillips, Jr.
Chief Executive Officer
Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, Texas 77027
(713) 623-0790
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
David F. Taylor
Locke Liddell & Sapp LLP
3400 JPMorgan Chase Tower
600 Travis Street
Houston, Texas 77002
(713) 226-1200

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

        If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective Amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit(1)	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee
103/4% Senior Notes due 2012	$112,000,000	100%	$112,000,000	$14,191(1)
Guarantees of 103/4% Senior Notes due 2012	—	—	—	—(2)

(1)

Calculated in accordance with Rule 457(f)(2). For purposes of this calculation, the Offering Price per new note was assumed to be the stated principal amount of each original note that may be received by the Registrant in the exchange transaction in which the new notes will be offered.

(2)

Pursuant to Rule 457(n) of the Securities Act, no separate registration fee is payable for the guarantees.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

Exact Name of Registrant as Specified in its Charter*	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
CCG I Corporation	Delaware	8744	76-0544498
Cornell Abraxas Group, Inc.	Delaware	8744	76-0545741
Cornell Companies Administration, LLC	Delaware	8744	None
Cornell Companies Management, LP	Delaware	8744	76-0700116
Cornell Companies Management Holdings, LLC	Delaware	8744	74-3024864
Cornell Companies Management Services, Limited Partnership	Delaware	8744	76-0700115
Cornell Corrections Management, Inc.	Delaware	8744	74-2650655
Cornell Corrections of Alaska, Inc.	Alaska	8744	76-0578707
Cornell Corrections of California, Inc.	California	8744	94-2411045
Cornell Corrections of Rhode Island, Inc.	Delaware	8744	74-2650654
Cornell Corrections of Texas, Inc.	Delaware	8744	74-2650651
Cornell International, Inc.	Delaware	8744	None
Cornell Interventions, Inc.	Illinois	8744	74-2918981
WBP Leasing, Inc.	Delaware	8744	76-0546892

*

Addresses and telephone numbers of principal executive offices are the same as that of Cornell Companies, Inc.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 3, 2004

PROSPECTUS

Cornell Companies, Inc.
Offer to Exchange
Registered 10³/4% Senior Notes due 2012
for
All Outstanding 10³/4% Senior Notes due 2012 issued on June 24, 2004
($112 million in principal amount outstanding)

        We are offering to exchange, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal, all of our outstanding 10³/4% Senior Notes due 2012 issued on June 24, 2004 for our registered 10³/4% Senior Notes due 2012. In this prospectus, we will call the original notes the "Old Notes" and the registered notes the "New Notes." The Old Notes and New Notes are collectively referred to in this prospectus as the "notes."

The Exchange Offer

•

The exchange offer expires at 5:00 p.m., New York City time,                         , 2004, unless extended.

•

The exchange offer is not conditioned upon a minimum aggregate principal amount of Old Notes being tendered.

•

All outstanding Old Notes validly tendered and not withdrawn will be exchanged.

•

The exchange offer is not subject to any condition other than that the exchange offer not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.

•

We will not receive any cash proceeds from the exchange offer.

The New Notes

•

The terms of the New Notes to be issued in the exchange offer are substantially identical to the Old Notes, except that we have registered the New Notes with the Securities and Exchange Commission. In addition, the New Notes will not be subject to certain transfer restrictions.

•

The New Notes will be guaranteed by our existing and future subsidiaries that guarantee any of our other indebtedness or indebtedness of any subsidiary guarantor.

•

Interest on the New Notes will be paid at the rate of 10³/4% per annum, semi-annually in arrears on each January 1 and July 1, beginning January 1, 2005.

•

The New Notes will not be listed on any securities exchange or the Nasdaq Stock Market.

You should carefully consider the risk factors beginning on page 9 of this prospectus before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        Each broker-dealer that receives New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed to make this prospectus available to any broker-dealer for a period of 180 days after the expiration date for use in connection with any such resale. See "Plan of Distribution."

The date of this prospectus is                        , 2004.

TABLE OF CONTENTS

Until                        , 2004, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unused allotments or subscriptions.

This prospectus incorporates important business and financial information about Cornell Companies, Inc. that is not included in or delivered with this prospectus. Documents incorporated by reference are available from us without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit in this document. You can obtain documents incorporated by reference in this prospectus by requesting them in writing or by telephone from us at the following address:

Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, Texas 77027
Attention: John R. Nieser
Telephone No: (713) 623-0790

To obtain timely delivery of any requested documents, you must request the information no later than five business days before you make your investment decision. Please make any such requests on or before                        , 2004. See "Where You Can Find More Information" for more information about these matters.

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PROSPECTUS SUMMARY

The following is a summary of the material information appearing in other sections of this prospectus. It is not complete and does not contain all the information that you should consider before exchanging Old Notes for New Notes. You should carefully read this prospectus and the documents incorporated by reference to understand fully the terms of the exchange offer and the New Notes, as well as the tax and other considerations that may be important to you. You should pay special attention to the "Risk Factors" section beginning on page 9 of this prospectus, as well as the section entitled "Risk Factors and Cautionary Statement for Purposes of the "Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995" included in our Annual Report on Form 10-K for the year ended December 31, 2003, and the other documents incorporated by reference in this prospectus. You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document. For purposes of this prospectus, unless the context otherwise indicates, when we refer to "the Company," "Cornell," "us," "we," "our," or "ours," we are describing Cornell Companies, Inc., together with its subsidiaries.

The Exchange Offer and New Credit Facility

        In June 2004, we issued and sold $112 million in aggregate principal amount of our 10³/4% Senior Notes due 2012, or Old Notes. In connection with that sale, we entered into a registration rights agreement with the initial purchasers of the Old Notes, in which we agreed to deliver this prospectus to you and complete an exchange offer of the Old Notes. Pursuant to the registration rights agreement, we are offering to issue $112 million in aggregate principal amount of our new 10³/4% Senior Notes due 2012, or New Notes, in exchange for a like aggregate principal amount of our Old Notes. We refer to this offer to issue New Notes in exchange for Old Notes in accordance with the terms set forth in this prospectus and the accompanying letter of transmittal as the exchange offer. You are entitled to exchange your Old Notes for New Notes. We urge you to read the discussions under the headings "Summary of the Terms of the Exchange Offer" and "Summary of the Terms of the New Notes" in this summary for further information regarding the exchange offer and the New Notes.

        The net proceeds from the sale of the Old Notes were approximately $107.2 million, which was used in part to repay and refinance the indebtedness under our previous credit facility and outstanding synthetic lease obligations. In connection with the offering of Old Notes, on June 24, 2004, we entered into a revolving credit facility (the "2004 Credit Facility") to fund working capital for acquisitions, to refinance existing debt, to fund capital expenditures and other general corporate purposes. The 2004 Credit Facility provides for borrowings of up to $60.0 million under a revolving line of credit and is reduced by outstanding letters of credit. The available commitment under the 2004 Credit Facility was approximately $53.5 million at June 30, 2004. We had outstanding letters of credit of approximately $6.5 million at June 30, 2004.

Our Business

        We are a leading provider of correctional, treatment and educational services outsourced by federal, state and local governmental agencies. We provide a diversified portfolio of services for adults and juveniles through our three operating divisions: (1) adult secure institutional services; (2) juvenile justice, educational and treatment services; and (3) adult community-based corrections and treatment services. At June 30, 2004, we operated 66 facilities in 15 states and the District of Columbia. Additionally, we had five facilities under development, construction or renovation, including one facility in an additional state. As of June 30, 2004, total available residential service capacity was 13,530 including capacity for 2,726 individuals that will be available upon completion of construction or renovation of residential facilities, and total available non-residential service capacity was 4,090.

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        We provide a diversified portfolio of services for adults and juveniles through three operating divisions:

Adult secure institutional correctional and detention services.    Our adult secure institutional division provides maximum-, medium- and low-security incarceration. This division is committed to ensuring public safety through the operation of secure facilities. We provide a variety of programming and services for inmates in an environment of dignity and respect that is designed to facilitate their successful reintegration into society upon release and to reduce recidivism.

Juvenile justice, educational and treatment services.    Our juvenile division provides residential, community-based, behavioral health and alternative treatment and education programs to juveniles between the ages of 10 and 17, including individualized continuing care plans to help juveniles re-enter the community. Our programs emphasize the development of individual competencies and community and victim restoration consistent with principles of balanced and restorative justice.

Adult community-based corrections and treatment services.    Our adult community-based corrections and treatment services division provides community-based services, including job placement, drug and alcohol treatment and education programs, to individuals who have been granted parole, sentenced to probation or are serving the final term of their sentences. Our facilities provide an alternative to incarceration and focus on the successful transition of offenders from a correctional facility back into society.

Our headquarters are located at 1700 West Loop South, Suite 1500, Houston, Texas 77027, and our telephone number is (713) 623-0790. Our web address is www.cornellcompanies.com. Information on our website does not constitute part of this prospectus.

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Summary of the Terms of the Exchange Offer

The Exchange Offer	We are offering to exchange up to $112 million aggregate principal amount of the New Notes for up to $112 million aggregate principal amount of the Old Notes. Old Notes may be exchanged only in $1,000 increments. New Notes will be issued only in minimum denominations of $1,000 and integral multiples of $1,000.
	The terms of the New Notes are identical in all material respects to the Old Notes except that the New Notes will not contain terms with respect to transfer restrictions, registration rights and payments of additional interest that relate to the Old Notes. The New Notes and the Old Notes will be governed by the same indenture, dated June 24, 2004.
Registration Rights Agreement	We issued $112 million of the Old Notes on June 24, 2004 to J.P. Morgan Securities Inc., Comerica Securities, Inc., Piper Jaffray & Co. and SouthTrust Securities, Inc., the initial purchasers, under a purchase agreement dated June 17, 2004. Pursuant to the purchase agreement, we and the initial purchasers entered into a registration rights agreement relating to the Old Notes pursuant to which we agreed to complete this exchange offer not later than December 21, 2004. We also agreed to have this exchange offer registration statement remain effective until 180 days after the closing of the exchange offer. If we fail to fulfill our obligations under the registration rights agreement, additional interest will accrue on the Old Notes at an annual rate of 0.25% for the first 90-day period, increasing by an additional 0.25% for each subsequent 90-day period, in each case until the exchange offer is completed, up to a maximum of 1.00% per year of additional interest. See "Exchange Offer and Registration Rights."
Resale	We believe that you will be able to freely transfer the New Notes without registration or any prospectus delivery requirement; however, certain broker-dealers and certain of our affiliates may be required to deliver copies of this prospectus if they resell any New Notes.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on                        , 2004, unless we extend the exchange offer. See "The Exchange Offer—Expiration Date; Extensions; Termination; Amendments."

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Use of Proceeds	We will not receive any proceeds from the exchange of the New Notes for the outstanding Old Notes.
Conditions to the Exchange Offer	The exchange offer is not subject to any conditions other than that it does not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.
Procedures for Tendering Old Notes	If you wish to accept the exchange offer, sign and date the letter of transmittal that was delivered with this prospectus in accordance with the instructions, and deliver the letter of transmittal along with the Old Notes and any other required documentation to the exchange agent. Alternatively, you can tender your outstanding Old Notes by following the procedures for book-entry transfer, as described in this prospectus. By executing the letter of transmittal or by transmitting an agent's message in lieu thereof, you will represent to us that, among other things:
	•	the New Notes you receive will be acquired in the ordinary course of your business;
	•	you are not participating, and you have no arrangement with any person or entity to participate, in the distribution of the New Notes;
	•	you are not our "affiliate," as defined in Rule 405 under the Securities Act, or a broker-dealer tendering Old Notes acquired directly from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act; and
	•	if you are not a broker-dealer, that you are not engaged in and do not intend to engage in the distribution of the New Notes.
Effect of Not Tendering	Old Notes that are not tendered or that are tendered but not accepted will, following the completion of the exchange offer, continue to be subject to the existing restrictions upon transfer thereof.
Taxation	The exchange of Old Notes for New Notes will not be a taxable event for United States federal income tax purposes. See "United States Federal Income Tax Consequences."

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Special Procedures for Beneficial Owners	If you are a beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and wish to tender such Old Notes in the exchange offer, please contact the registered holder as soon as possible and instruct them to tender on your behalf and comply with our instructions set forth elsewhere in this prospectus.
Guaranteed Delivery Procedures	If you wish to tender your Old Notes, you may, in certain instances, do so according to the guaranteed delivery procedures set forth elsewhere in this prospectus under "The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery."
Withdrawal Rights	You may withdraw Old Notes that you tender pursuant to the exchange offer by furnishing a written or facsimile transmission notice of withdrawal to the exchange agent containing the information set forth in "The Exchange Offer—Withdrawal of Tenders" at any time prior to the expiration date.
Acceptance of Old Notes and Delivery of New Notes	We will accept for exchange any and all Old Notes that are properly tendered in the exchange offer prior to the expiration date. See "The Exchange Offer—Procedures for Tendering Old Notes." The New Notes issued pursuant to the exchange offer will be delivered promptly following the expiration date.
Broker-Dealers	Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. See "Plan of Distribution."
Exchange Agent	JPMorgan Chase Bank is the exchange agent for the exchange offer. The address and phone number of JPMorgan Chase Bank are on the inside of the back cover of this prospectus.

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Summary of the Terms of the New Notes

Issuer	Cornell Companies, Inc.
New Notes	$112 million aggregate principal amount of 103/4% Senior Notes due 2012
Maturity Date	July 1, 2012
Interest Rate	103/4% per annum, accruing from June 24, 2004 or from the date most recently paid
Interest Payment Dates	January 1 and July 1, commencing on January 1, 2005
Optional Redemption	The New Notes will be redeemable at our option, in whole or in part, at any time on or after July 1, 2008, at the redemption prices set forth in this prospectus, together with accrued and unpaid interest, if any, to the date of redemption.
	At any time prior to July 1, 2007, we may redeem up to 35% of the original principal amount of the New Notes (including any additional notes we may issue) with the proceeds of one or more equity offerings of our common shares at a redemption price of 110.75% of the principal amount of the New Notes, together with accrued and unpaid interest, if any, to the date of redemption.
Guarantees	When issued, the New Notes will be guaranteed on a senior unsecured basis by all subsidiaries that guarantee the Old Notes. Additionally, any additional existing and future subsidiaries that guarantee our indebtedness, or indebtedness of any subsidiary guarantor, will guarantee the notes until such guarantees of other indebtedness are released. The guarantees will be unsecured senior indebtedness of our subsidiary guarantors and will have the same ranking with respect to indebtedness of our subsidiary guarantors as the notes will have with respect to our indebtedness.
Ranking	The New Notes will:
	•	be unsecured;
	•	be effectively junior to our secured debt to the extent of the value of the assets securing such debt;
	•	rank equally with all of the existing and future unsecured unsubordinated debt; and
	•	be senior to any future senior subordinated debt.

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	As of June 30, 2004, we had approximately $293.5 million of total indebtedness (net of original issue discount of $1.5 million on the New Notes) and the ability to borrow an additional $53.5 million under our 2004 Credit Facility (excluding an additional $6.5 million represented by letters of credit), to which the New Notes would be effectively subordinated. As of June 30, 2004, our subsidiaries had no outstanding indebtedness.
	On August 14, 2001, we completed an arms'-length sale and leaseback transaction relating to 11 of our facilities (the "2001 Sale and Leaseback Transaction"). We sold the facilities to an unaffiliated company, Municipal Corrections Finance, L.P. ("MCF"), and are leasing them back for an initial period of 20 years, with approximately 25 years of additional renewal period options. In connection with the 2001 Sale and Leaseback Transaction, MCF issued $197.4 million in bonds to finance its purchase of these facilities. For financial reporting purposes, we have consolidated the assets, liabilities, and the results of operations of MCF in our financial statements as of August 14, 2001. However, we do not have any remaining ownership interest in the facilities we sold to MCF. As of June 30, 2004, $183.0 million of our indebtedness was attributable to MCF.
Covenants	The indenture governing the New Notes, among other things, limits our ability and the ability of our subsidiaries to:
	•	incur additional debt;
	•	issue redeemable stock and preferred stock;
	•	repurchase capital stock;
	•	make other restricted payments including, without limitation, paying dividends, making investments and redeeming debt that is junior in right of payment to the notes;
	•	create liens;
	•	sell or otherwise dispose of assets, including capital stock of subsidiaries;
	•	enter into agreements that restrict dividends from subsidiaries;
	•	enter into mergers or consolidations;
	•	enter into transactions with affiliates;
	•	guarantee indebtedness; and

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	•	enter into sale/leaseback transactions.
	These covenants will be subject to a number of important exceptions and qualifications. For more information, see "Description of the Notes."
Mandatory Offers to Purchase	The occurrence of a change of control will be a triggering event requiring us to offer to purchase from you all or a portion of your New Notes at a price equal to 101% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase. Certain asset dispositions will be triggering events that may require us to use the proceeds from those asset dispositions to make an offer to purchase the notes at 100% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase if such proceeds are not otherwise used within 365 days to repay senior secured indebtedness, including indebtedness under our new senior secured credit facility (with a corresponding reduction in commitment), or to invest in assets related to our business.
Governing Law	The New Notes will be, and the indenture is, governed by, and construed in accordance with, the laws of the State of New York.
Trustee, Transfer Agent and Paying Agent	JPMorgan Chase Bank
Book-Entry Depository	The Depository Trust Company

You should read the "Risk Factors" section beginning on page 9, as well as the other cautionary statements throughout this prospectus, to ensure you understand the risks involved with the exchange of the New Notes for the outstanding Old Notes.

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RISK FACTORS

Before you decide to participate in the exchange offer, you should read the risks, uncertainties and factors that may adversely affect us that are discussed under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors and Cautionary Statement for Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995" in our Annual Report on Form 10-K for the year ended December 31, 2003, which is incorporated by reference in this prospectus, as well as the following additional risk factors.

Risks Related to Tendering Old Notes for New Notes

You may find it difficult to sell your New Notes because there is no existing trading market for the New Notes.

        You may find it difficult to sell your New Notes because an active trading market for the New Notes may not develop. There is no existing trading market for the New Notes. We do not intend to apply for listing or quotation of the New Notes on any securities exchange, and so we do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Although the initial purchasers have informed us that they intend to make a market in the New Notes, they are not obligated to do so, and any market-making may be discontinued at any time without notice. As a result, the market price of the New Notes, as well as your ability to sell the New Notes, could be adversely affected.

We may not be able to generate sufficient cash to service all of our indebtedness, including the New Notes, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

        Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain other financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest and additional interest, if any, on our indebtedness.

        If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness, including the New Notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. We could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The 2004 Credit Facility and the indenture governing the New Notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds, which we could realize from them and the proceeds may not be adequate to meet debt service obligations then due.

        Certain of our borrowings, including borrowings under our 2004 Credit Facility and $84.0 million aggregate principal amount of the notes with respect to which we entered into a floating interest rate swap agreement, are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.

Restrictive covenants may adversely affect us.

        The indenture governing the New Notes contains various covenants that limit our ability to engage in specified types of transactions. These covenants limit our ability to, among other things:

•

incur additional debt, provide guarantees in respect of obligations of other persons or issue redeemable preferred stock;

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•

pay dividends or repurchase capital stock or subordinated debt; make some types of investments;



•

incur liens;



•

engage in sale-leaseback transactions;



•

restrict distributions from our subsidiaries;



•

sell assets and capital stock of our subsidiaries;



•

consolidate or merge with or into, or sell substantially all of our assets to, another person; and



•

enter into new lines of business.

        In addition, the 2004 Credit Facility contains restrictive covenants and requires us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those tests. A breach of any of these covenants could result in a default under our 2004 Credit Facility and/or the New Notes. Upon the occurrence of an event of default under our new senior secured credit facility, the lenders could elect to declare all amounts outstanding under the 2004 Credit Facility to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders under the 2004 Credit Facility could proceed against the collateral granted to them to secure that indebtedness. We have pledged a significant portion of our assets as collateral under the 2004 Credit Facility. If the lenders under that facility accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets remaining after we repay the 2004 Credit Facility and to repay other indebtedness, including the New Notes.

If we default on our obligations to pay our indebtedness we may not be able to make payments on the New Notes.

        Any default under the agreements governing our indebtedness, including a default under the 2004 Credit Facility that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest and additional interest, if any, on the New Notes and substantially decrease the market value of the New Notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest and additional interest, if any, on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness (including covenants in our indenture and the 2004 Credit Facility), we could be in default under the terms of the agreements governing such indebtedness, including the 2004 Credit Facility and the indenture. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under the 2004 Credit Facility could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If our operating performance declines we may in the future need to obtain waivers from the required lenders under the 2004 Credit Facility to avoid being in default. If we breach our covenants under the 2004 Credit Facility and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under the 2004 Credit Facility, the lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation.

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The New Notes and the guarantees are effectively subordinate to all of our secured debt and, if a default occurs, we may not have sufficient funds to fulfill our obligations under the New Notes and the guarantees.

        The New Notes are general senior unsecured obligations that rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The New Notes are effectively subordinate to all our and our subsidiary guarantors' secured indebtedness to the extent of the value of the assets securing that indebtedness. As of June 30, 2004, we had approximately $183.0 million of secured indebtedness (which consists solely of obligations under the MCF bonds that are consolidated for financial purposes, and which does not include availability of approximately $60.0 million under the 2004 Credit Facility). In addition, the indenture governing the New Notes, subject to some limitations, permits us to incur additional secured indebtedness and your New Notes will be effectively junior to any additional secured indebtedness we may incur.

        In the event of our bankruptcy, liquidation, reorganization or other winding up, our assets that secure our secured indebtedness will be available to pay obligations on the New Notes only after all secured indebtedness, together with accrued interest, has been repaid in full from our assets. Likewise, because the 2004 Credit Facility is a secured obligation, our failure to comply with the terms of the facility would entitle those lenders to declare all the funds borrowed thereunder, together with accrued interest, immediately due and payable. If we were unable to repay such indebtedness, the lenders could foreclose on substantially all of our assets, which serve as collateral. In this event, our secured lenders would be entitled to be repaid in full from the proceeds of the liquidation of those assets before those assets would be available for distribution to other creditors, including holders of the New Notes. Holders of the New Notes will participate in our remaining assets ratably with all holders of our unsecured indebtedness that is deemed to be of the same class as the notes, and potentially with all of our other general creditors. We advise you that there may not be sufficient assets remaining to pay amounts due on any or all the notes then outstanding. The guarantees of the New Notes will have a similar ranking with respect to secured and unsecured senior indebtedness of the subsidiaries as the notes do with respect to our secured and unsecured senior indebtedness, as well as with respect to any unsecured obligations expressly subordinated in right of payment to the guarantees.

We may not be able to repurchase the New Notes upon a change of control.

        Upon the occurrence of specific kinds of change of control events, we will be required to offer to repurchase all outstanding New Notes at 101% of their principal amount. We may not be able to repurchase the New Notes upon a change of control because we may not have sufficient funds. Further, we may be contractually restricted under the terms of our senior indebtedness from repurchasing all of the New Notes tendered by holders upon a change of control. Accordingly, we may not be able to satisfy our obligations to purchase your New Notes unless we are able to refinance or obtain waivers under the 2004 Credit Facility. Our failure to repurchase the New Notes upon a change of control would cause a default under the indenture and a cross-default under the 2004 Credit Facility. The 2004 Credit Facility also provides that a change of control will be a default that permits lenders to accelerate the maturity of borrowings thereunder. Any of our future debt agreements may contain similar provisions.

        In addition, the change of control provisions in the indenture may not protect you from certain important corporate events, such as leveraged recapitalization (which would increase the level of our indebtedness), reorganization, restructuring, merger or other similar transaction, unless such transaction constitutes a "Change of Control" under the indenture. Such a transaction may not involve a change in voting power or beneficial ownership or, even if it does, may not involve a change in the magnitude required under the definition of "Change of Control" in the indenture to trigger our obligation to repurchase the notes. Therefore, if an event occurs that does not constitute a "Change of Control," we will not be required to make an offer to repurchase the New Notes and you may be required to continue to hold your New Notes despite the event.

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Despite current indebtedness levels, we may still be able to incur substantially more debt. This could further exacerbate the risks described above.

        We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture do not fully prohibit us or our subsidiaries from doing so. If we incur any additional indebtedness that ranks equally with the New Notes, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of us. This may have the effect of reducing the amount of proceeds paid to you. Additionally, the 2004 Credit Facility provides commitments up to $60.0 million. All of those borrowings would be secured indebtedness. If new debt is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify.

A significant portion of our assets is owned, and a significant percentage of our revenue is generated, by our subsidiaries. Our ability to repay the New Notes depends upon the performance of these subsidiaries and their ability to make distributions.

        Almost all of our operations are conducted by our subsidiaries and, therefore, our cash flows and our ability to service indebtedness, including our ability to pay the interest on and principal of the New Notes when due, will be dependent upon cash dividends and distributions or other transfers from our subsidiaries. Payments to us by our subsidiaries will be contingent upon our subsidiaries' earnings.

        Our subsidiaries are separate and distinct legal entities and, except for the existing and future subsidiaries that will be subsidiary guarantors of the New Notes, they will have no obligation, contingent or otherwise, to pay amounts due under the New Notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payments.

Federal and state fraudulent transfer laws permit a court to void the guarantees, and, if that occurs, you may not receive any payments on the New Notes.

        The issuance of the guarantees may be subject to review under federal and state fraudulent transfer and conveyance statutes. While the relevant laws may vary from state to state, under such laws the payment of consideration will be a fraudulent conveyance if (1) we paid the consideration with the intent of hindering, delaying or defrauding creditors or (2) we or any of our subsidiary guarantors, as applicable, received less than reasonably equivalent value or fair consideration in return for issuing either the notes or a guarantee, and, in the case of (2) only, one of the following is also true:

•

we or any of our subsidiary guarantors were or was insolvent or rendered insolvent by reason of the incurrence of the indebtedness; or



•

payment of the consideration left us or any of our subsidiary guarantors with an unreasonably small amount of capital to carry on the business; or



•

we or any of our subsidiary guarantors intended to, or believed that we or it would, incur debts beyond our or its ability to pay as they mature.

        If a court were to find that the issuance of a guarantee was a fraudulent conveyance, the court could void the payment obligations under such guarantee or further subordinate such guarantee to presently existing and future indebtedness of ours or such subsidiary guarantor, or require the holders of the New Notes to repay any amounts received with respect to such guarantee. In the event of a finding that a fraudulent conveyance occurred, you may not receive any repayment on the New Notes. Generally, an entity would be considered insolvent if, at the time it incurred indebtedness:

•

the sum of its debts, including contingent liabilities, was greater than the fair salable value of all its assets; or

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•

the present fair salable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or



•

it could not pay its debts as they become due.

        We cannot be certain as to the standards a court would use to determine whether or not we or the guarantors were solvent at the relevant time, or regardless of the standard that a court uses, that the issuance of the guarantees would not be subordinated to any subsidiary guarantor's other debt.

        If the guarantees were legally challenged, any guarantee could also be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the subsidiary guarantor, the obligations of the applicable guarantor were incurred for less than fair consideration. A court could thus void the obligations under the guarantees, subordinate them to the applicable subsidiary guarantor's other debt or take other action detrimental to the holders of the New Notes.

Our former use of Arthur Andersen LLP as our independent auditor may pose risks to us and will limit your ability to seek potential recoveries from them related to their work.

        In May 2002, our board of directors, upon the recommendation of its audit committee, approved the dismissal of Arthur Andersen LLP, our former independent auditor, and retained PricewaterhouseCoopers LLP to succeed Arthur Andersen as our independent registered public accounting firm. On June 15, 2002, Andersen was convicted on a federal obstruction of justice charge. Our audited consolidated financial statements for the fiscal year ended December 31, 2001 were audited by Arthur Andersen. While Arthur Andersen has previously consented to the inclusion of its audit report for such period in our reports filed with the SEC, Arthur Andersen is no longer able to reissue a consent to including or incorporating by reference its audit reports relating to such financial statements in our filings with the SEC as may be required under SEC rules. The SEC has provided certain regulatory relief designed to allow companies that file reports with the SEC to dispense with the requirement of filing a consent of Arthur Andersen in certain circumstances. Notwithstanding the SEC's regulatory relief, an investor's ability to seek potential recoveries from Arthur Andersen related to any claims that an investor may assert as a result of the work performed by Arthur Andersen may be limited significantly by the lack of such consent and the diminished amount of assets of Arthur Andersen that are or may be available to satisfy any such claims.

Risk Related to Continuing Ownership of the Old Notes

If you fail to exchange your outstanding Old Notes for New Notes, you will continue to hold notes subject to transfer restrictions.

        We will only issue New Notes in exchange for outstanding Old Notes that you timely and properly tender. Therefore, you should allow sufficient time to ensure timely delivery of the outstanding Old Notes and you should carefully follow the instructions on how to tender your Old Notes set forth under "The Exchange Offer—Procedures for Tendering Old Notes" and in the letter of transmittal that accompanies this prospectus. Neither we nor the exchange agent are required to notify you of any defects or irregularities relating to your tender of outstanding Old Notes.

        If you do not exchange your outstanding Old Notes for New Notes in this exchange offer, the outstanding Old Notes you hold will continue to be subject to the existing transfer restrictions. In general, you may not offer or sell the outstanding Old Notes except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not plan to register the outstanding Old Notes under the Securities Act. If you continue to hold any outstanding Old Notes after this exchange offer is completed, you may have trouble selling them because of these restrictions on transfer.

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The trading market for unexchanged Old Notes could be limited.

        The trading market for unexchanged Old Notes could become significantly more limited after the exchange offer due to the reduction in the amount of Old Notes outstanding upon consummation of the exchange offer. Therefore, if your Old Notes are not exchanged for New Notes in the exchange offer, it may become more difficult for you to sell or otherwise transfer your Old Notes. This reduction in liquidity may in turn reduce the market price, and increase the price volatility, of the Old Notes. There is a risk that an active trading market in the unexchanged Old Notes will not exist, develop or be maintained and we cannot give you any assurances regarding the prices at which the unexchanged Old Notes may trade in the future.

Risks Related to Our Business and Our Industry

Our level of indebtedness could adversely affect our ability to achieve our growth strategy, raise additional capital to fund our operations and prevent us from meeting our obligations under the notes.

        We are highly leveraged and our total indebtedness is approximately $293.5 million (net of original issue discount of $1.5 million on the New Notes). Our high degree of leverage could have important consequences for you, including the following:

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It may limit our ability to achieve our growth strategy.



•

Our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes may be limited.



•

A substantial portion of our cash flow from operating activities must be dedicated to the payment of principal and interest on our indebtedness and is not available for other purposes, including our operations, capital expenditures and future business opportunities.



•

The debt service requirements of our other indebtedness could make it more difficult for us to make payments on the notes.



•

Certain of our borrowings, including borrowings under the 2004 Credit Facility and $84.0 million of our interest obligations under the notes with respect to which we have entered into a floating interest rate swap agreement, will be at variable rates of interest, exposing us to the risk of increased interest rates. The detrimental effect of a hypothetical 100 basis point increase in interest rates would be to reduce income before provision for income taxes by approximately $210,000 and $420,000 for the three and six months ended June 30, 2004.



•

It may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt.



•

We may be vulnerable in a downturn in general economic conditions or in our business, or we may be unable to carry out capital spending that is important to our growth.

Resistance to privatization of correctional and detention facilities could result in our inability to obtain new contracts or the loss of existing contracts.

        Management of correctional and detention facilities, particularly of adult secure facilities, by private entities has not achieved complete acceptance by either the government or the public. We have found that it is difficult to begin operations in a state that has not historically outsourced corrections services. For example, after we were awarded a contract from the Bureau of Prisons for the Moshannon Valley Correctional Center, which is expected to be our first adult secure facility in Pennsylvania, the Office of the Attorney General of Pennsylvania took action to prevent us from operating that facility based on its belief that the operation of a private prison in Pennsylvania was unlawful. Although these claims have since been resolved, we experienced significant delays in

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construction of that facility and incurred significant expenses, some of which may not be reimbursed, as a result of this resistance. In late May 2004, a group of private citizens seeking to prevent construction of Moshannon Valley Correctional Center sent comments to the Bureau of Prisons alleging, among other things, that the environmental assessments conducted by the Bureau of Prisons with respect to the Moshannon Valley Correctional Center were inadequate. If these allegations result in litigation, we could experience additional delays and expenses, even if we are successful in defending any such lawsuit. If we are unsuccessful in any such litigation, we would lose our contract for the facility, which would have a material adverse affect on us.

        The movement toward privatization of correctional and detention facilities has also encountered resistance from certain groups, such as labor unions, local sheriff's departments, religious organizations and groups believing that correctional and detention facility operations should only be conducted by governmental agencies. For example, in California, the well-funded correctional officers union opposes private prison operations. If it is ultimately successful, we could lose our contracts in that state for the Baker and Leo Chesney prison facilities.

        Changes in the dominant political party or political climate in a state in which correctional facilities are located could have an adverse impact on privatization. Furthermore, some governmental agencies are not legally permitted to delegate their traditional management responsibilities for correctional and detention facilities to private companies.

        In addition, as a private prison manager, we are subject to government legislation and regulation restricting the ability of private prison managers to house certain types of inmates, such as inmates from other jurisdictions or inmates at medium or higher security levels. Legislation has been enacted in several states, and has previously been proposed in the United States House of Representatives, containing such restrictions. Any such legislation may have a material adverse affect on us.

        Any of these resistances may make it more difficult for us to renew or maintain existing contracts, to obtain new contracts or sites on which to operate new facilities or to develop or purchase facilities and lease them to government or private entities, any or all of which could have a material adverse effect on our business.

Budgetary pressure on federal, state and local governments may result in contract cancellation or a reduction in per diem rates, which would reduce our profitability.

        Our cash flow is subject to the receipt of sufficient funding of and timely payment by contracting government entities. If the appropriate government agency does not receive sufficient appropriations to cover its contractual obligations, a contract may be terminated or the amounts payable to us may be deferred or reduced.

        Federal, state and local governments have encountered, and are expected to continue to encounter, significant budgetary constraints that may result in a reduction of spending on the outsourced services that we provide. Such budgetary limitations may cause the contractual commitments to be reduced or even eliminated, which would make it unprofitable to continue operating a certain facility and require us to find alternate customers or close such facility.

        Many states are facing significant budget deficits and are under pressure to reduce current levels of spending or control additional spending. As a result of this increased budgetary pressure, we have granted a few of our customers relief from formulaic increase provisions in their agreements and some of our customers have not included in their appropriation legislation amounts that would increase the per diem rates payable to us.

        We have experienced both rate reductions and rescission of scheduled rate increases, including at our juvenile facilities, certain Alaskan facilities and two adult secure facilities. For example, in 2003 we experienced reductions in average per diem rates at our adult secure institutional facilities of $48.21 in

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2002 to $47.79 due to a reduction in the per diem rate at the D. Ray James Prison in the second half of 2003 as requested by the contracting agency. Contractual rate increases are generally intended to offset increases in expenses and inflation. To the extent rates are not increased or are reduced, our profitability will be adversely affected.

        As a result of such rate reductions, we shut down three unprofitable facilities between 2001 and 2003. More governmental agencies may approach us about per diem rate concessions.

Our ability to win new contracts to develop and manage correctional, detention and treatment facilities depends on many factors outside our control.

        Our growth is generally dependent upon our ability to win new contracts to develop and manage new correctional, detention and treatment facilities. This depends on a number of factors we cannot control, including crime rates and sentencing patterns in various jurisdictions. Accordingly, the demand for our facilities could be adversely affected by the relaxation of enforcement efforts, leniency in conviction and sentencing practices or through the legal decriminalization of certain activities that are currently proscribed by criminal laws. For instance, changes in laws relating to drugs and controlled substances or illegal immigration could reduce the number of persons arrested, convicted and sentenced, thereby potentially reducing demand for correctional facilities to house them and community-based services to transition offenders back into the community. Similarly, reductions in crime rates could lead to reductions in arrests, convictions and sentences requiring correctional facilities.

        When seeking bids, most governmental entities evaluate the financial strength of the bidders. To the extent they believe we do not have sufficient financial resources, we will be unable to effectively compete for bids. Additionally, our success in obtaining new awards and contracts may depend, in part, upon our ability to locate land that can be leased or acquired on favorable terms. Furthermore, desirable locations may be in or near populated areas and, therefore, may generate legal action or other forms of opposition from residents in areas surrounding a proposed site.

We often incur significant costs before receiving related revenues, which can result in cash shortfalls and a risk of not recovering our investment.

        When we are awarded a contract to manage a new facility, we may incur significant expenses before we receive contract payments. These expenses include purchasing real estate, constructing new facilities, leasing office space, purchasing office equipment and hiring and training personnel. As a result, when the government does not fund a facility's pre-opening and start-up costs, we may be required to invest significant sums of money before receiving related contract payments. For example, at June 30, 2004, we had incurred approximately $18.6 million of design, construction and land development costs and capitalized interest related to the Moshannon Valley Correctional Center contract. We are currently negotiating a contract amendment with the Bureau of Prisons relating to the Moshannon Valley Correctional Center. If we are unable to successfully negotiate the amendment with the Bureau of Prisons or if third party opposition to this project is successful, we will be unable to move forward with the construction and operation of the facility and could incur an impairment charge. At June 30, 2004, this impairment charge would have been $18.6 million.

        In addition, payments due to us from governmental agencies may be delayed due to billing cycles or as a result of failures by our governmental customers to attain necessary budget approvals and finalize contracts in a timely manner. Several juvenile services contracts related to educational services provide for annual collection several months after a school year is completed. In addition, a contract may be terminated prior to its scheduled expiration and as a result we may not recover these expenses or realize any return on our investment.

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        We have undertaken development projects without written commitments to make use of facilities. At June 30, 2004, we had incurred approximately $34.9 million related to five such projects under development and expect to incur $87.7 million in additional capital expenditures prior to completion of the facilities. We may not be able to obtain contracts for these facilities in a timely fashion, if at all. To the extent we do not obtain contracts, we will be unable to recover our investment and our financial condition and results of operations would be adversely affected.

We are subject to the short-term nature of government contracts.

        Many governmental agencies are legally limited in their ability to enter into long-term contracts that would bind elected officials responsible for future budgets. Therefore, many contracts with governmental agencies typically either have a very short term or are subject to termination on short notice without cause. The majority of our contracts have primary terms of one to three years. In addition, our contracts with governmental agencies may contain one or more renewal options that may be exercised only by the contracting government agency.

        Some of these contracts may not be renewed by the corresponding governmental agency and no assurance can be given that any agency will exercise a renewal option in the future. The non-renewal or termination of any of our significant contracts with governmental agencies could materially adversely affect our financial condition, results of operation and liquidity, including our ability to secure new facility management contracts from others. To the extent we have made significant capital expenditures and have short-term contracts with our customers that are not renewed or extended, we may not recover our entire capital investment.

We have in the past incurred, and may continue to incur, significant expenses for facilities that we no longer operate.

        If we close a facility, we may remain committed to perform our obligations under the applicable lease, which would include, among other things, payment of the base rent for the balance of the lease term. We may also be required to incur other expenses with respect to such facilities. The potential losses associated with our inability to cancel leases may result in our keeping open underperforming facilities. As a result, ongoing lease operations at closed or underperforming facilities could impair our results of operations.

Our profitability may suffer if the number of offenders occupying our correctional, detention and treatment facilities decreases or there is a shift in occupancy among our divisions.

        Our correctional, detention and treatment facilities are dependent upon governmental agencies supplying offenders and we do not control occupancy levels at our facilities. We believe the rate of growth experienced in the adult secure sector during the late 1980s and early 1990s is stabilizing.

        Historically, a substantial portion of our revenues has been generated under contracts that specify a net rate per day per resident, or a per diem rate, sometimes with no minimum guaranteed occupancy levels, even though most correctional facility cost structures are relatively fixed. Under such a per diem rate structure, a decrease in occupancy levels at a particular facility could have a material adverse effect on the financial condition and results of operations at such facility. A decrease in the occupancy of certain juvenile justice, education and treatment facilities would have a more significant impact on our operating results than a decrease in occupancy in the adult secure institutional services division due to higher per diem revenue at certain juvenile facilities. Average residential service capacity for the three months ended June 30, 2004 was 100.9% compared to 100.6% for the three months ended June 30, 2003. Capacity rates may, however, decrease below these levels in the future.

        Recent suggestions by social commentators and various political or governmental representatives suggest that community-based corrections of adults may be emphasized in the future as alternatives to

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traditional incarceration. We have historically experienced higher operating margins in the adult secure institutional services and the adult community-based corrections and treatment services sectors than in the juvenile services sector. A shift in occupancy among our segments of business operations could result in a decrease in our profitability.

We depend on a limited number of governmental customers for a significant portion of our revenues.

        We currently derive, and expect to continue to derive, a significant portion of our revenues from the Bureau of Prisons and various state agencies. The loss of, or a significant decrease in, business from the Bureau of Prisons or those state agencies could seriously harm our financial condition and results of operations. The Bureau of Prisons accounted for approximately 24.9% of our total revenues for the fiscal quarter ended June 30, 2004 ($17.4 million) and 21.7% for the fiscal year ended December 31, 2003 ($59.0 million). We expect to continue to depend upon the Bureau of Prisons and a relatively small group of other governmental customers for a significant percentage of our revenues.

A failure to comply with existing regulations could result in material penalties or non-renewal or termination of our facility management contracts.

        Our industry is subject to a variety of federal, state and local regulations, including education, environmental, health care and safety regulations, which are administered by various regulatory authorities. We may not always successfully comply with these regulations, and failure to comply could result in material penalties or non-renewal or termination of facility management contracts. The contracts typically include extensive reporting requirements and supervision and on-site monitoring by representatives of contracting governmental agencies. Corrections officers are customarily required to meet certain training standards, and in some instances facility personnel are required to be licensed and subject to background investigation. Certain jurisdictions also require that subcontracts be awarded on a competitive basis or that we subcontract with businesses owned by members of minority groups. The failure to comply with any applicable laws, rules or regulations and the loss of any required license could adversely affect the financial condition and results of operations at our affected facilities.

If we fail to satisfy our contractual obligations, our ability to compete for future contracts and our financial condition may be adversely affected.

        Our failure to comply with contract requirements or to meet our client's performance expectations when performing a contract could materially and adversely affect our financial performance and our reputation, which, in turn, would impact our ability to compete for new contracts. Our failure to meet contractual obligations could also result in substantial actual and consequential damages. In addition, our contracts often require us to indemnify clients for our failure to meet performance standards. Some of our contracts contain liquidated damages provisions and financial penalties related to performance failures. Although we have liability insurance, the policy limits may not be adequate to provide protection against all potential liabilities.

        For example, due to the challenging nature of the services we were contracted to provide, the speed with which we ramped up the population of the facility and the difficulty we had in hiring and retaining qualified personnel to run the facility due to the strength of the local economy, we encountered significant difficulties operating the New Morgan Academy, which was a juvenile facility with a residential service capacity of 214. As a result, we did not meet our internal operating standards or those required by the contract. We ultimately determined it was necessary to terminate the contract and agreed with Pennsylvania to do so. Similar failures may damage our reputation, make it more difficult to obtain new contracts or contract renewals in the future and may cause current contracts to be terminated.

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Competitors in our industry may adversely affect the profitability of our business.

        We must compete with government entities and other private operators on the basis of cost, quality and range of services offered, experience in managing facilities, reputation of personnel and ability to design, finance and construct new facilities on a cost effective competitive basis. While there are barriers for companies seeking to enter into the management and operation of correctional, detention and treatment facilities, there can be no assurance that these barriers will be sufficient to limit additional competition. Certain areas of our operation may not pose a significant barrier to entry into the market by private operators. For example, private operators may not find it as difficult to bid for juvenile treatment, educational and detention services and pre-release correctional and treatment services as they do adult secure institutional, correctional and detention services.

        Further, our government customers may assume the management of a facility currently managed by us upon the termination of the corresponding management contract or, if such customers have capacity at their facilities, may take inmates currently housed in our facilities and transfer them to government run facilities. The resulting decrease in occupancy levels would reduce our revenue due to the per diem rate structure and could result in a significant decrease in the profitability of our business.

A disturbance or violent occurrence in one of our facilities could result in closure of a facility or harm to our business.

        An escape, riot, disturbance, or violent occurrence at one of our facilities could adversely affect the financial condition, results of operations and liquidity of our operations. For example, in late 2003, there was a disturbance at our Baker Community Correctional Center. Among other things, the negative publicity generated as a result of an event could adversely affect our ability to retain an existing contract or obtain future ones. In addition, if such an event were to occur, there is a possibility that the facility where the event occurred may be shut down by the relevant governmental agency. A closure of certain of our facilities could adversely affect the financial condition, results of operations and liquidity of our operations. Such negative events may also result in a significant increase in our liability insurance costs.

We may be unable to attract and retain sufficient qualified personnel necessary to sustain our business.

        Our delivery of services is labor-intensive. When we are awarded a contract, we must hire operating management, security, case management and other personnel. The success of our business requires that we attract, develop, motivate and retain these personnel. Our ability to recruit and retain qualified individuals varies by facility and is related to the socio-economic factors in the particular community in which the facility operates. Often the Department of Labor wages we offer our employees are higher than wages they may obtain elsewhere in the community. However, if the local economy where a facility is located is robust and unemployment is low, we may have difficulty hiring and retaining qualified personnel. This was one of the factors that contributed to our closure of the New Morgan Academy. In addition, there are inherent risks associated with the nature of the services we provide and this could cause certain qualified individuals to seek other employment opportunities. We have experienced high turnover of personnel in our juvenile facilities within the first year of their employment. Our inability to hire sufficient personnel on a timely basis or the loss of significant numbers of personnel could adversely affect our business.

If we do not successfully integrate the businesses that we acquire, our results of operations could be adversely affected.

        We may be unable to manage businesses that we may acquire or integrate them successfully without incurring substantial expenses, delays or other problems that could negatively impact our results of operations. Acquisitions generally require the integration of facilities, some of which may be

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located in states in which we do not currently have operations. Business combinations involve additional risks, including:

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diversion of management's attention;



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loss of key personnel;



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assumption of unanticipated legal or financial liabilities;



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our becoming significantly leveraged as a result of the incurrence of debt to finance an acquisition;



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unanticipated operating, accounting or management difficulties in connection with the acquired entities;



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amortization or charges of acquired intangible assets, including goodwill; and



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dilution to our earnings per share.

        Also, client dissatisfaction or performance problems with an acquired business could materially and adversely affect our reputation as a whole. Further, the acquired businesses may not achieve the revenues and earnings we anticipated.

We may continue to operate under unprofitable contracts at facilities that we own to offset expenses associated with ownership of the facility.

        If we close a facility that we own, we will remain obligated for expenses associated with the facility. If our operations are unprofitable at a leased facility or if the leased facility is performing significantly below targeted levels, we would typically terminate the contract and the lease. However, we may continue to operate our contract at an owned facility to offset the expenses associated with ownership. Continued performance of such a contract could have a material adverse effect on our business and results of operations.

Negative media coverage, including inaccurate or misleading information, could adversely affect our reputation and our ability to bid for government contracts.

        The media frequently focuses its attention on private operators' contracts with governmental agencies. If the media coverage of private operators is negative, it could influence government officials to slow the pace of outsourcing government services, which could reduce the number of requests for proposals, or RFPs. The media may also focus its attention on the activities of political consultants engaged by us, even when their activities are unrelated to our business, and we may be tainted by adverse media coverage about their activities. Moreover, inaccurate, misleading or negative media coverage about us could harm our reputation and, accordingly, our ability to bid for and win government contracts.

Governmental agencies may investigate and audit our contracts and, if any improprieties are found, we may be required to refund revenues we have received, and/or to forego anticipated revenues and may be subject to penalties and sanctions, including prohibitions on our bidding in response to requests for proposals, or RFPs.

        Governmental agencies we contract with have the authority to audit and investigate our contracts with them. As part of that process, some governmental agencies review our performance on the contract, our pricing practices, our cost structure and our compliance with applicable laws, regulations and standards. If the agency determines that we have improperly allocated costs to a specific contract, we may not be reimbursed for those costs and we could be required to refund the amount of any such costs that have been reimbursed. If a government audit uncovers improper or illegal activities by us or we otherwise determine that these activities have occurred, we may be subject to civil and criminal

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penalties and administrative sanctions, including termination of contracts, forfeitures of profits, suspension of payments, fines and suspension or disqualification from doing business with the government. Any adverse determination could adversely impact our ability to bid in response to RFPs in one or more jurisdictions and significantly reduce the probability of our success in the bid process for future contracts.

Because environmental laws impose strict as well as joint and several liability for clean up costs, unforeseen environmental risks could prove to be costly.

        Our facilities, and any facilities that we may acquire in the future, may be subject to unforeseen environmental risks. The federal Comprehensive Environmental Response, Compensation, and Liability Act, as amended, or CERCLA, imposes strict, as well as joint and several, liability for certain environmental cleanup costs on several classes of potentially responsible parties, including current owners and operators of the property. Other federal and state laws in certain circumstances may impose liability for environmental remediation, which costs may be substantial. Further, the operation of our facilities, and the development of new facilities, requires that we obtain, and comply with, permits and other authorizations under environmental laws. Obtaining such permits and authorizations can prove to be difficult and time consuming.

We are the subject of class action lawsuits that, if decided against us, could have a negative effect on our financial condition, results of operations, cash flows and future prospects.

        In March and April 2002, we, our former President and Chief Executive Officer and our former Chief Financial Officer were named as defendants in four federal putative class action lawsuits. These lawsuits were brought on behalf of all purchasers of our common stock between March 6, 2001 and March 5, 2002 and relate to our restatement in 2002 of certain financial statements. The lawsuits involved disclosures made concerning two prior transactions executed by us: the 2001 Sale and Leaseback Transaction and the 2000 synthetic lease transaction. These four lawsuits were consolidated into one action and an amended consolidated complaint was filed. The amended consolidated complaint seeks, among other things, restitution damages, compensatory damages, rescission or a rescissory measure of damages, costs, expenses, attorneys' fees and experts' fees.

        In May and June 2002, we and our directors were sued in certain derivative lawsuits. These lawsuits relate to our restatement in 2002 of certain financial statements. These lawsuits all allege breaches of fiduciary duty and waste of corporate assets by all of the defendants.

        The plaintiffs in these cases have not quantified their claim of damages and the outcome of the matters discussed above cannot be predicted with certainty. If an adverse decision in these matters exceeds our insurance coverage or if our insurance coverage is deemed not to apply to these matters, an adverse decision could have a material adverse effect on us, our financial condition, our results of operations and our future prospects.

Because our revenues can fluctuate from period to period, we may face short-term funding shortfalls from time to time.

        Revenues can fluctuate from year to year due to changes in government funding policies, changes in the number of clients referred to our facilities by governmental agencies, the opening of new facilities or the expansion of existing facilities and the termination of contracts for a facility or the closure of a facility. Our revenues fluctuate from quarter to quarter, based on the number of contracted days in each quarter. Because our revenues can vary, we may face short-term funding shortfalls from time to time. In addition, full-year results are not likely to be a direct multiple of any particular quarter or combination of quarters.

21

If we are unable to renew our labor contracts on terms reasonable to us, our operating results could be adversely affected or we could be subject to work stoppages.

        Approximately 512 employees at five adult secure facilities and one juvenile facility are represented by unions. We recently negotiated renewals for four of these facilities but are still waiting for finalization of these agreements. We are currently negotiating one union contract covering 52 employees at the Danville Center for Adolescent Females. A failure to renew any contract on terms reasonable to us could adversely affect our operating results. Additionally, if employees were to engage in a work stoppage or a strike we would have to find replacement workers in order to fulfill our contractual requirements. To the extent our contracts do not reimburse us for such additional expenses, our operating results would be adversely affected.

We are subject to significant insurance costs.

        Workers' compensation, employee health and general liability insurance represent significant costs to us. We continue to incur increasing insurance costs due to adverse claims experience and rising healthcare costs in general. Due to concerns over corporate governance and recent corporate accounting scandals, liability and other types of insurance have become more difficult and costly to obtain. In addition, as a result of the stockholder lawsuits brought within the last few years, our directors and officers liability insurance has increased. Unanticipated additional insurance costs could adversely impact our results of operations and cash flows, and the failure to obtain or maintain any necessary insurance coverage could have a material adverse effect on us.

We may be adversely affected by inflation.

        Many of our facility management contracts provide for fixed management fees or fees that increase by only small amounts during their terms. If, due to inflation or other causes, our operating expenses, such as wages and salaries of our employees, and insurance, medical and food costs, increase at rates faster than increases, if any, in our management fees, then our profitability would be adversely affected.

We are subject to risks associated with ownership of real estate.

        Our ownership of correctional and detention facilities subjects us to risks typically associated with investments in real estate. Investments in real estate, and in particular, correctional and detention facilities, are relatively illiquid and, therefore, our ability to divest ourselves of one or more of our facilities promptly in response to changed conditions is limited. Investments in correctional and detention facilities subject us to risks involving potential exposure to environmental liability and uninsured loss. Our operating costs may be affected by the obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as well as the cost of complying with future legislation. In addition, although we maintain insurance for many types of losses, there are certain types of losses, such as losses from earthquakes, riots and acts of terrorism, which may be either uninsurable or for which it may not be economically feasible to obtain insurance coverage. As a result, we could lose both our capital invested in, and anticipated profits from, one or more of the facilities we own. Further, it is possible to experience losses that may exceed the limits of insurance coverage.

22

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus and the documents incorporated by reference herein include forward-looking statements relating solely to Cornell Companies, Inc. (and not any of its subsidiaries individually) within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate" or "predict" that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made in this prospectus and in any other documents or oral presentations made by us or on our behalf. In addition to the factors described in this prospectus under "Risk Factors—Risks Related to Our Business and Our Industry" and those set forth from time to time in our filings with the Commission, important factors that could cause our actual results to differ materially from those in forward-looking statements include, among others, the following:

•

the outcomes of pending putative class action shareholder and derivative lawsuits, and related insurance coverage,



•

our ability to win new contracts and to execute our growth strategy,



•

risks associated with acquisitions and the integration thereof (including the ability to achieve administrative and operating cost savings and anticipated synergies),



•

the timing and costs of the opening of new programs and facilities or the expansions of existing facilities,



•

our ability to negotiate contracts at those facilities for which we currently do not have an operating contract,



•

significant charges to expense of deferred costs associated with financing and other projects in development if management determines that one or more of such projects is unlikely to be successfully concluded,



•

results from alternative deployment or sale of facilities such as the New Morgan Academy or the inability to do so,



•

our ability to negotiate a contract amendment with the BOP related to the Moshannon Valley Correctional Center and our ability to resume construction of that facility,



•

changes in governmental policy and/or funding to discontinue or not renew existing arrangements, to eliminate or discourage the privatization of correctional, detention and pre-release services in the United States, or to eliminate rate increase,



•

the availability of financing on terms that are favorable to us, and



•

fluctuations in operating results because of occupancy levels and/or mix, competition (including competition from two competitors that are substantially larger than we are), increases in cost of operations, fluctuations in interest rates and risks of operations.

        You should not place undue reliance on forward-looking statements, which speak only as of the date of this prospectus.

23

WHERE YOU CAN FIND MORE INFORMATION

        We and the subsidiaries that guarantee the notes have filed a registration statement with the Commission under the Securities Act of 1933 that registers the securities offered by this prospectus. The registration statement, including the attached exhibits, contains additional relevant information about us and the subsidiary guarantors. The rules and regulations of the Commission allow us to omit some information included in the registration statement from this prospectus.

        In addition, we file annual, quarterly and current reports, proxy statements and other information with the Commission under the Securities Exchange Act of 1934. You may read and copy this information at the Commission's public reference room, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.

        You may also obtain copies of this information by mail from the public reference section of the Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. The Commission also maintains an Internet world wide web site that contains reports, proxy statements and other information about issuers, including Cornell, who file electronically with the Commission. The address of that site is www.sec.gov. You can also inspect reports, proxy statements and other information about us at the offices of the New York Stock Exchange, Inc., located at 20 Broad Street, New York, New York 10005.

        We "incorporate by reference" information in this prospectus, which means that we disclose important information to you by referring you to another document filed separately with the Commission. This important information is not included in or delivered with this prospectus. The information incorporated by reference is deemed to be part of this prospectus, except for any information superseded by information contained directly in this prospectus. The documents listed below and incorporated by reference in this prospectus contain important information about Cornell and its financial condition.

•

Annual Report on Form 10-K for the fiscal year ended December 31, 2003;



•

Quarterly Report on Form 10-Q for the quarter ended March 31, 2004;



•

Quarterly Report on Form 10-Q for the quarter ended June 30, 2004; and



•

Current Reports on Form 8-K filed January 29, 2004, June 8, 2004, June 25, 2004 and August 27, 2004.

        All documents filed by us with the Commission from the date of this prospectus to the end of the offering of the notes under this prospectus shall also be deemed to be incorporated by reference in this prospectus.

        We also disclose information about us through current reports on Form 8-K that are furnished to the Commission pursuant to Item 2.02 (Results of Operations and Financial Condition) and Item 7.01 (Regulation FD Disclosure) of Form 8-K (formerly Item 12 and Item 9, respectively). This information disclosed in these reports is not considered to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, is not subject to the liabilities of that section and is not incorporated by reference in this prospectus.

        You can obtain any of the documents listed above or any additional documents that we file with the Commission, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, through us at the address below or through our web site at www.cornellcompanies.com or from the Commission through the Commission's web site at the address provided above. Documents incorporated by reference are available from us without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit

24

in this document. You can obtain documents incorporated by reference in this prospectus by requesting them in writing or by telephone from us at the following address:

Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, Texas 77027
Attention: John R. Nieser
Telephone No.: (713) 623-0790

To obtain timely delivery of any requested documents, you must request the information no later than five business days before you make your investment decision. Please make any such requests on or before                        .

We have not authorized anyone to give any information or make any representation that differs from, or adds to, the information in this document or in our documents that are publicly filed with the Commission. Therefore, if anyone does give you different or additional information, you should not rely on it.

If you are in a jurisdiction where it is unlawful to offer to exchange or sell, or to ask for offers to exchange or buy, the securities offered by this document, or if you are a person to whom it is unlawful to direct these activities, then the offer presented by this document does not extend to you.

The information contained in this document speaks only as of its date unless the information specifically indicates that another date applies.

25

SELECTED HISTORICAL FINANCIAL INFORMATION

        The table below presents selected historical consolidated financial data. The consolidated historical financial data for each of the consolidated statements of operations and of cash flows for the two fiscal years ended December 31, 2003 and consolidated balance sheets as of December 31, 2003 and 2002 were derived from the financial statements audited by PricewaterhouseCoopers LLP included in this prospectus. The consolidated historical financial data for each of the consolidated statements of operations and of cash flows for the fiscal year ended December 31, 2001 were derived from the financial statements audited by Arthur Andersen LLP included in this prospectus. We revised our financial statements for the year ended December 31, 2001 to include the transitional disclosures required by statement of financial accounting standards No. 142, "Goodwill and Intangible Assets." The revisions to our 2001 financial statements related to these transitional disclosures were reported on by PricewaterhouseCoopers LLP. Additionally, we revised our financial statements for the year ended December 31, 2001 to conform to the requirements set forth in statement of Financial Accounting Standard No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." The revision to the 2001 financial statements related to the adoption of Statement of Financial Accounting Standard No. 145 was reported on by PricewaterhouseCoopers LLP. However, PricewaterhouseCoopers LLP was not engaged to audit, review, or apply any procedures to our 2001 financial statements other than with respect to such revisions and, accordingly, did not express an opinion or any other form of assurance on our 2001 financial statements taken as a whole. The consolidated historical financial data for each of the consolidated statements of operations and of cash flows for the two fiscal years ended December 31, 2000 and consolidated balance sheets as of December 31, 2001, 2000 and 1999 were derived from our historical consolidated financial statements audited by Arthur Andersen LLP that are not incorporated into this prospectus. The historical financial data for the consolidated statements of operations and of cash flows for the six months ended June 30, 2004 and 2003 and consolidated balance sheets as of June 30, 2004 and 2003 were derived from our unaudited interim financial statements also incorporated by reference into this prospectus. In the opinion of our management, this six month financial data includes normal recurring adjustments necessary for a fair presentation of the results for those interim periods in accordance with GAAP. Our historical results are not necessarily indicative of results to be expected in future periods.

        The consolidated financial statements for fiscal years 1999 through 2001 were audited by Arthur Andersen LLP, which has ceased operations. The report previously issued by Arthur Andersen LLP on our financial statements as of and for each of the three years in the period ended December 31, 2001 has not been reissued by Arthur Andersen LLP.

        For financial reporting purposes, we have consolidated the assets, liabilities, and results of operations of MCF beginning on August 14, 2001 and the synthetic lease owned by the synthetic lease investor beginning in the second quarter of 2000. We do not have any remaining ownership interest in the facilities we sold to MCF. As a result of consolidating the assets and liabilities of MCF and the synthetic lease assets and liabilities, our consolidated historical financial statements reflect the depreciation expense on the associated properties and interest expense (1) on the bond debt of MCF used to finance MCF's acquisition of the 11 facilities in the 2001 Sale and Leaseback Transaction and (2) related to the synthetic lease investor's debt, in each case instead of rent expense. Additionally, as a result of consolidation we do not include the rental payments pursuant to the 2001 Sale and Leaseback Transaction and the synthetic lease, which was repaid with a portion of the net proceeds from the offering of the Old Notes.

        The following should be read together with our financial statements and notes thereto included in this prospectus and our Annual Report on Form 10-K for the year ended December 31, 2003, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004, each of which is incorporated by reference in this prospectus.

26

		Year Ended December 31,															Six Months Ended June 30,
		1999			2000			2001			2002			2003			2003			2004
																	(unaudited)
		(Dollars in thousands)
Statements of income data:
Revenues:
	Adult secure institutional	$	76,011		$	91,163		$	99,791		$	99,549		$	102,120		$	50,656		$	52,465
	Juvenile		67,131			86,033			116,262			124,967			118,797			58,029			62,336
	Adult community-based		33,825			48,854			49,197			50,629			50,715			24,927			24,516
Consolidated revenues			176,967			226,050			265,250			275,145			271,632			133,612			139,317
Operating expenses			135,850			174,612			205,805			212,309			209,736			103,452			108,629
Pre-opening and start-up expenses			2,929			2,298			3,858			—			3,398			393			4,030
Depreciation and amortization			6,007			7,463			9,278			9,779			10,699			5,173			6,338
General and administrative expenses			9,932			12,024			15,291			21,480			23,415			8,620			9,765
Income from operations			22,249			29,653			31,018			31,577			24,384			15,974			10,555
Interest expense			8,522			16,492			21,787			20,698			19,280			9,681			9,793
Interest income			(117	)		(100	)		(888	)		(1,974	)		(1,626	)		(825	)		(817	)
Loss on extinguishment of debt			—			—			4,946			—			—			—			2,357
Minority interest in consolidated special purpose entities			—			(246	)		(1,674	)		574			—			—			—
Income (loss) before provision (benefit) for income taxes and cumulative effect of changes in accounting principles			13,844			13,507			6,847			12,279			6,730			7,006			(666	)
Provision (benefit) for income taxes			5,538			5,538			2,958			4,952			2,760			2,873			(273	)
Income (loss) before cumulative effect of changes in accounting principles			8,306			7,969			3,889			7,327			3,970			4,133			(393	)
Cumulative effect of changes in accounting principles, net of related income tax provision (benefit) of approximately ($1,969), $535 and ($671) in 1999, 2001 and 2002, respectively			(2,954	)		—			770			(965	)		—			—			—
Net income (loss)		$	5,352		$	7,969		$	4,659		$	6,362		$	3,970		$	4,133		$	(393	)
Balance sheet data (at end of period)
Cash and cash equivalents		$	1,763		$	620		$	53,244		$	52,610		$	40,171		$	51,541		$	76,297
Property and equipment, net			194,498			246,191			253,243			255,450			267,903			257,120			282,782
Total assets			273,991			336,850			444,807			441,291			448,157			443,988			503,060
Total debt			141,500			191,763			245,653			239,888			235,598			240,517			293,153
Stockholders' equity			97,208			104,320			153,104			159,952			166,235			167,246			166,354
Statement of cash flows data:
Cash flows from operating activities		$	(881	)	$	10,541		$	11,547		$	19,764		$	26,211		$	8,845		$	7,942
Cash flows from investing activities			(41,575	)		(56,073	)		(48,089	)		(12,298	)		(35,964	)		(12,004	)		(23,733	)
Cash flows from financing activities			41,700			44,389			89,166			(8,100	)		(2,686	)		2,090			51,917
Earnings per share:
	Basic
	Income (loss) before cumulative effect of changes in accounting principles		0.88			0.85			0.40			0.57			0.31			0.17			(0.08	)
	Cumulative effect of changes in accounting principles		(0.31	)		—			0.08			(0.08	)		—			—			—
	Net income (loss)		0.57			0.85			0.48			0.49			0.31			0.17			(0.08	)
	Diluted
	Income (loss) before cumulative effect of changes in accounting principles		0.86			0.84			0.39			0.55			0.30			0.17			(0.08	)
	Cumulative effect of changes in accounting principles		(0.31	)		—			0.07			(0.07	)		—			—			—
	Net income (loss)		0.55			0.84			0.46			0.48			0.30			0.17			(0.08	)
Number of shares used in per share computation:
	Basic		9,432			9,383			9,616			12,911			12,941			12,854			13,146
	Diluted		9,660			9,495			10,069			13,232			13,263			13,173			13,146

27

RATIO OF EARNINGS TO FIXED CHARGES

	Twelve Months Ended December 31,										Six Months Ended June 30,
	1999		2000		2001		2002		2003		2003		2004
Ratio (earnings divided by fixed charges)(1)	2.1	x	1.5	x	1.3	x	1.4	x	1.3	x	1.5	x	—

(1)

For the purposes of determining the ratio of earnings to fixed charges, earnings consist of earnings (loss) before income tax expense (benefit), and minority interest income (loss). Fixed charges consist of interest expense which includes capitalized interest and amortization of capitalized interest, amortization of debt issuance costs and that portion of rent expense attributable to interest costs. Due to the loss before provision for income taxes and cumulative effect of changes in accounting principles for the six months ended June 30, 2004, the ratio coverage was less than 1:1. In order to achieve a coverage of 1:1, the Company would have had to generate additional income of approximately $1.4 million for the six months ended June 30, 2004.

28

USE OF PROCEEDS

        This exchange offer is intended to satisfy our obligations under the registration rights agreement entered into in connection with our issuance of the Old Notes. We will not receive any cash proceeds from the issuance of the New Notes. We will exchange outstanding Old Notes for New Notes in like principal amount as contemplated in this prospectus. The terms of the New Notes are identical in all material respects to the existing Old Notes except as otherwise described herein under "Description of the Notes." The Old Notes surrendered in exchange for the New Notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the New Notes will not result in a change in our total debt and other financing obligations.

        The net proceeds from the sale of the Old Notes was approximately $107.2 million, of which $65.9 million was used to repay and refinance the indebtedness under our previous credit facility and outstanding synthetic lease obligations. We intend to use the remaining net proceeds for general corporate purposes, which may include acquisitions. Affiliates of J.P. Morgan Securities Inc., Comerica Securities, Inc. and SouthTrust Securities, Inc, three of the initial purchasers, were lenders under our previous credit facility. As such, they received a portion of the proceeds from the sale of the Old Notes that were used to repay amounts outstanding under that facility.

29

CAPITALIZATION

        The following table sets forth our historical unaudited consolidated capitalization as of June 30, 2004, which includes the completion of the 2004 Credit Facility and the issuance of the Old Notes and our application of the proceeds therefrom as described above. The exchange of the Old Notes for the New Notes will not impact our overall capitalization. This table is unaudited and should be read in conjunction with our consolidated financial statements and related notes contained herein and in our Annual Report on Form 10-K for the year ended December 31, 2003 and our Quarterly Report on Form 10-Q for the quarters ended March 31, 2004 and June 30, 2004, each of which is incorporated by reference in this prospectus.

		As of June 30, 2004
		(in thousands) (unaudited) (Dollars in thousands)
Cash and cash equivalents		$	76,297
Total debt:
	2004 Credit Facility(1)	$	—
	103/4% Senior Notes due 2012(2)		110,527
	MCF 8.47% bonds due 2016		183,000
	Capitalized lease obligations		3
Total debt			293,530
Total stockholders' equity			166,354
Total capitalization		$	459,884

(1)

Does not include $6.5 million of letters of credit issued under the 2004 Credit Facility.

(2)

Does not include fair-value adjustment of $0.4 million of the Senior Notes as a result of the interest rate swap but does include original issue discount of $1.5 million.

30

THE EXCHANGE OFFER

Exchange Terms

        Old Notes in an aggregate principal amount of $112 million are currently issued and outstanding. The maximum aggregate principal amount of New Notes that will be issued in exchange for Old Notes is $112 million. The terms of the New Notes and the Old Notes are substantially the same in all material respects, except that the New Notes will not contain terms with respect to transfer restrictions, registration rights and payments of additional interest.

        The New Notes will bear interest at a rate of 10³/4% per year, payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2005. Holders of New Notes will receive interest from the date of the original issuance of the Old Notes or from the date of the last payment of interest on the Old Notes, whichever is later. Holders of New Notes will not receive any interest on Old Notes tendered and accepted for exchange. In order to exchange your Old Notes for New Notes in the exchange offer, you will be required to make the following representations, which are included in the letter of transmittal:

•

the New Notes that you receive will be acquired in the ordinary course of your business;



•

you are not participating, and have no arrangement or understanding with any person or entity to participate, in the distribution of the New Notes;



•

you are not our "affiliate," as defined in Rule 405 of the Securities Act, or a broker-dealer tendering Old Notes acquired directly from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act; and



•

if you are not a broker-dealer, that you are not engaged in and do not intend to engage in the distribution of the New Notes.

        Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any Old Notes properly tendered in the exchange offer, and the exchange agent will deliver the New Notes promptly after the expiration date of the exchange offer.

        If you tender your Old Notes, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of the Old Notes in connection with the exchange offer. We will pay all charges, expenses and transfer taxes in connection with the exchange offer, other than the taxes described below under "—Transfer Taxes."

We make no recommendation to you as to whether you should tender or refrain from tendering all or any portion of your existing Old Notes in this exchange offer. In addition, no one has been authorized to make this recommendation. You must make your own decision whether to tender into this exchange offer and, if so, the aggregate amount of Old Notes to tender after reading this prospectus and the letter of transmittal and consulting with your advisors, if any, based on your financial position and requirements.

Expiration Date; Extensions; Termination; Amendments

        The exchange offer expires at 5:00 p.m., New York City time, on                        , 2004, not less than 20 full business days after the date of commencement of the exchange offer, unless we extend the exchange offer, in which case the expiration date will be the latest date and time to which we extend the exchange offer.

        We expressly reserve the right, so long as applicable law allows:

•

to delay our acceptance of Old Notes for exchange;

31

•

to terminate the exchange offer if any of the conditions set forth under "—Conditions of the Exchange Offer" exist;



•

to waive any condition to the exchange offer;



•

to amend any of the terms of the exchange offer; and



•

to extend the expiration date and retain all Old Notes tendered in the exchange offer, subject to your right to withdraw your tendered Old Notes as described under "—Withdrawal of Tenders."

        Any waiver or amendment to the exchange offer will apply to all Old Notes tendered, regardless of when or in what order the Old Notes were tendered. If the exchange offer is amended in a manner that we think constitutes a material change, or if we waive a material condition of the exchange offer, we will promptly disclose the amendment or waiver by means of a prospectus supplement that will be distributed to the registered holders of the Old Notes, and we will extend the exchange offer to the extent required by Rule 14e-1 under the Exchange Act.

        We will promptly follow any delay in acceptance, termination, extension or amendment by oral or written notice of the event to the exchange agent, followed promptly by oral or written notice to the registered holders. Should we choose to delay, extend, amend or terminate the exchange offer, we will have no obligation to publish, advertise or otherwise communicate this announcement, other than by making a timely release to an appropriate news agency.

        In the event we terminate the exchange offer, all Old Notes previously tendered and not accepted for payment will be returned promptly to the tendering holders.

        In the event that the exchange offer is withdrawn or otherwise not completed, New Notes will not be given to holders of Old Notes who have validly tendered their Old Notes.

Resale of New Notes

        Based on interpretations of the Commission staff set forth in no action letters issued to third parties, we believe that New Notes issued under the exchange offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, if:

•

you are acquiring New Notes in the ordinary course of your business;



•

you are not participating, and have no arrangement or understanding with any person or entity to participate, in the distribution of the New Notes;



•

you are not our "affiliate" within the meaning of Rule 405 under the Securities Act; and



•

you are not a broker-dealer who purchased Old Notes directly from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act.

        If you tender Old Notes in the exchange offer with the intention of participating in any manner in a distribution of the New Notes:

•

you cannot rely on those interpretations by the Commission staff, and



•

you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K.

        Only broker-dealers that acquired the Old Notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives New Notes for its own account in exchange for Old Notes, where such Old Notes were acquired by such broker-dealer

32

as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the New Notes. Please read the section captioned "Plan of Distribution" for more details regarding the transfer of New Notes.

Acceptance of Old Notes for Exchange

        We will accept for exchange all Old Notes validly tendered pursuant to the exchange offer, or defectively tendered, if such defect has been waived by us. We will not accept Old Notes for exchange subsequent to the expiration date of the exchange offer. Tenders of Old Notes will be accepted only in denominations of $1,000 and integral multiples thereof.

        We expressly reserve the right, in our sole discretion, to:

•

delay acceptance for exchange of Old Notes tendered under the exchange offer, subject to Rule 14e-1 under the Exchange Act, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the holders promptly after the termination or withdrawal of a tender offer, or



•

terminate the exchange offer and not accept for exchange any Old Notes not theretofore accepted for exchange, if any of the conditions set forth below under "—Conditions of the Exchange Offer" have not been satisfied or waived by us or in order to comply in whole or in part with any applicable law. In all cases, New Notes will be issued only after timely receipt by the exchange agent of certificates representing Old Notes, or confirmation of book-entry transfer, a properly completed and duly executed letter of transmittal, or a manually signed facsimile thereof, and any other required documents. For purposes of the exchange offer, we will be deemed to have accepted for exchange validly tendered Old Notes, or defectively tendered Old Notes with respect to which we have waived such defect, if, as and when we give oral, confirmed in writing, or written notice to the exchange agent. Promptly after the expiration date, we will deposit the New Notes with the exchange agent, who will act as agent for the tendering holders for the purpose of receiving the New Notes and transmitting them to the holders. The exchange agent will deliver the New Notes to holders of Old Notes accepted for exchange after the exchange agent receives the New Notes.

        If, for any reason, we delay acceptance for exchange of validly tendered Old Notes or we are unable to accept for exchange validly tendered Old Notes, then the exchange agent may, nevertheless, on our behalf, retain tendered Old Notes, without prejudice to our rights described under "—Expiration Date; Extensions; Termination; Amendments", "—Conditions of the Exchange Offer" and "—Withdrawal of Tenders", subject to Rule 14e-1 under the Exchange Act, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the holders thereof promptly after the termination or withdrawal of a tender offer.

        If any tendered Old Notes are not accepted for exchange for any reason, or if certificates are submitted evidencing more Old Notes than those that are tendered, certificates evidencing Old Notes that are not exchanged will be returned, without expense, to the tendering holder, or, in the case of Old Notes tendered by book-entry transfer into the exchange agent's account at a book-entry transfer facility under the procedure set forth under "—Procedures for Tendering Old Notes—Book-Entry Transfer", such Old Notes will be credited to the account maintained at such book-entry transfer facility from which such Old Notes were delivered, unless otherwise requested by such holder under "Special Delivery Instructions" in the letter of transmittal, promptly following the expiration date or the termination of the exchange offer.

        Tendering holders of Old Notes exchanged in the exchange offer will not be obligated to pay brokerage commissions or transfer taxes with respect to the exchange of their Old Notes other than as

33

described in "Transfer Taxes" or in Instruction 7 to the letter of transmittal. We will pay all other charges and expenses in connection with the exchange offer.

Procedures for Tendering Old Notes

        Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or held through a book-entry transfer facility and who wishes to tender Old Notes should contact such registered holder promptly and instruct such registered holder to tender Old Notes on such beneficial owner's behalf.

Tender of Old Notes Held Through Depository Trust Company

        The exchange agent and Depository Trust Company (DTC) have confirmed that the exchange offer is eligible for the DTC's automated tender offer program. Accordingly, DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer Old Notes to the exchange agent in accordance with DTC's automated tender offer program procedures for transfer. DTC will then send an agent's message to the exchange agent.

        The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering Old Notes that are the subject of that book-entry confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce such agreement against such participant. In the case of an agent's message relating to guaranteed delivery, the term means a message transmitted by DTC and received by the exchange agent which states that DTC has received an express acknowledgment from the participant in DTC tendering Old Notes that they have received and agree to be bound by the notice of guaranteed delivery.

Tender of Old Notes Held in Certificated Form

        For a holder to validly tender Old Notes held in certificated form:

•

the exchange agent must receive at its address set forth in this prospectus a properly completed and validly executed letter of transmittal, or a manually signed facsimile thereof, together with any signature guarantees and any other documents required by the instructions to the letter of transmittal, and



•

the exchange agent must receive certificates for tendered Old Notes at such address, or such Old Notes must be transferred pursuant to the procedures for book-entry transfer described below. A confirmation of such book-entry transfer must be received by the exchange agent prior to the expiration date of the exchange offer. A holder who desires to tender Old Notes and who cannot comply with the procedures set forth herein for tender on a timely basis or whose Old Notes are not immediately available must comply with the procedures for guaranteed delivery set forth below.

Letters of transmittal and Old Notes should be sent only to the exchange agent, and not to us or to DTC.

The method of delivery of Old Notes, letters of transmittal and all other required documents to the exchange agent is at the election and risk of the holder tendering Old Notes. Delivery of such documents will be deemed made only when actually received by the exchange agent. If such delivery is by mail, we suggest that the holder use property insured, registered mail with return receipt requested, and that the mailing be made sufficiently in advance of the expiration date of the exchange offer to permit delivery to the exchange agent prior to such date. No alternative, conditional or contingent tenders of Old Notes will be accepted.

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Signature Guarantee

        Signatures on the letter of transmittal must be guaranteed by an eligible institution unless:

•

the letter of transmittal is signed by the registered holder of the Old Notes tendered therewith, or by a participant in one of the book-entry transfer facilities whose name appears on a security position listing it as the owner of those Old Notes, or if any Old Notes for principal amounts not tendered are to be issued directly to the holder, or, if tendered by a participant in one of the book-entry transfer facilities, any Old Notes for principal amounts not tendered or not accepted for exchange are to be credited to the participant's account at the book-entry transfer facility, and neither the "Special Issuance Instructions" nor the "Special Delivery Instructions" box on the letter of transmittal has been completed, or



•

the Old Notes are tendered for the account of an eligible institution.

        An eligible institution is a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or a trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act.

Book-Entry Transfer

        The exchange agent will seek to establish a new account or utilize an existing account with respect to the Old Notes at DTC promptly after the date of this prospectus. Any financial institution that is a participant in the DTC system and whose name appears on a security position listing as the owner of the Old Notes may make book-entry delivery of Old Notes by causing DTC to transfer such Old Notes into the exchange agent's account. However, although delivery of Old Notes may be effected through book-entry transfer into the exchange agent's account at DTC, a properly completed and validly executed letter of transmittal, or a manually signed facsimile thereof, must be received by the exchange agent at one of its addresses set forth in this prospectus on or prior to the expiration date of the exchange offer, or else the guaranteed delivery procedures described below must be complied with. The confirmation of a book-entry transfer of Old Notes into the exchange agent's account at DTC is referred to in this prospectus as a "book-entry confirmation." Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent.

Guaranteed Delivery

        If you wish to tender your Old Notes and:

        (1)   certificates representing your Old Notes are not lost but are not immediately available,

        (2)   time will not permit your letter of transmittal, certificates representing your Old Notes and all other required documents to reach the exchange agent on or prior to the expiration date of the exchange offer, or

        (3)   the procedures for book-entry transfer cannot be completed on or prior to the expiration date of the exchange offer,

you may nevertheless tender if all of the following conditions are complied with:

•

your tender is made by or through an eligible institution; and



•

on or prior to the expiration date of the exchange offer, the exchange agent has received from the eligible institution a properly completed and validly executed notice of guaranteed delivery,

35

by manually signed facsimile transmission, mail or hand delivery, in substantially the form provided with this prospectus. The notice of guaranteed delivery must:

        (a)   set forth your name and address, the registered number(s) of your Old Notes and the principal amount of Old Notes tendered;

        (b)   state that the tender is being made thereby;

        (c)   guarantee that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal or facsimile thereof properly completed and validly executed, together with certificates representing the Old Notes, or a book-entry confirmation, and any other documents required by the letter of transmittal and the instructions thereto, will be deposited by the eligible institution with the exchange agent; and

        (d)   the exchange agent receives the properly completed and validly executed letter of transmittal or facsimile thereof with any required signature guarantees, together with certificates for all Old Notes in proper form for transfer, or a book-entry confirmation, and any other required documents, within three New York Stock Exchange trading days after the expiration date.

Other Matters

        New Notes will be issued in exchange for Old Notes accepted for exchange only after timely receipt by the exchange agent of:

•

certificates for (or a timely book-entry confirmation with respect to) your Old Notes,



•

a properly completed and duly executed letter of transmittal or facsimile thereof with any required signature guarantees, or, in the case of a book-entry transfer, an agent's message, and



•

any other documents required by the letter of transmittal.

        We will determine, in our sole discretion, all questions as to the form of all documents, validity, eligibility, including time of receipt, and acceptance of all tenders of Old Notes. Our determination will be final and binding on all parties. Alternative, conditional or contingent tenders of Old Notes will not be considered valid. We reserve the absolute right to reject any or all tenders of Old Notes that are not in proper form or the acceptance of which, in our opinion, would be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular Old Notes.

        Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding.

        Any defect or irregularity in connection with tenders of Old Notes must be cured within the time we determine, unless waived by us. We will not consider the tender of Old Notes to have been validly made until all defects and irregularities have been waived by us or cured. Neither we, the exchange agent, or any other person will be under any duty to give notice of any defects or irregularities in tenders of Old Notes, or will incur any liability to holders for failure to give any such notice.

Withdrawal of Tenders

        Except as otherwise provided in this prospectus, you may withdraw your tender of Old Notes at any time prior to the expiration date.

        For a withdrawal to be effective:

•

the exchange agent must receive a written notice of withdrawal at the address set forth on the inside of the back cover of this prospectus, or

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•

you must comply with the appropriate procedures of DTC's automated tender offer program system.

        Any notice of withdrawal must:

•

specify the name of the person who tendered the Old Notes to be withdrawn, and



•

identify the Old Notes to be withdrawn, including the principal amount of the Old Notes.

        If Old Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Notes and otherwise comply with the procedures of DTC.

        We will determine all questions as to validity, form, eligibility and time of receipt of any withdrawal notices. Our determination will be final and binding on all parties. We will deem any Old Notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

        Any Old Notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder or, in the case of Old Notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, such Old Notes will be credited to an account maintained with DTC for the Old Notes. This return or crediting will take place promptly after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn Old Notes by following one of the procedures described under "—Procedures for Tendering Old Notes" at any time on or prior to the expiration date.

Conditions of the Exchange Offer

        Notwithstanding any other provisions of the exchange offer, if, on or prior to the expiration date, we determine, in our reasonable judgment, that the exchange offer, or the making of an exchange by a holder of Old Notes, would violate applicable law or any applicable interpretation of the staff of the Commission, we will not be required to accept for exchange, or to exchange, any tendered Old Notes. We may also terminate, waive any conditions to or amend the exchange offer or, subject to Rule 14e-1 under the Exchange Act, which requires that an offeror pay the consideration offered or return the securities deposited by or on behalf of the holders thereof promptly after the termination or withdrawal of the exchange offer, postpone the acceptance for exchange of tendered Old Notes.

Transfer Taxes

        We will pay all transfer taxes applicable to the transfer and exchange of Old Notes pursuant to the exchange offer. If, however:

•

delivery of the New Notes and/or certificates for Old Notes for principal amounts not exchanged, are to be made to any person other than the record holder of the Old Notes tendered;



•

tendered certificates for Old Notes are recorded in the name of any person other than the person signing any letter of transmittal; or



•

a transfer tax is imposed for any reason other than the transfer and exchange of Old Notes to us or our order,

the amount of any such transfer taxes, whether imposed on the record holder or any other person, will be payable by the tendering holder prior to the issuance of the New Notes.

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Consequences of Failing to Exchange

        If you do not exchange your Old Notes for New Notes in the exchange offer, you will remain subject to the restrictions on transfer of the Old Notes:

•

as set forth in the legend printed on the Old Notes as a consequence of the issuance of the Old Notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and



•

otherwise set forth in the offering memorandum distributed in connection with the private offering of the Old Notes.

        In general, you may not offer or sell the Old Notes unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the Old Notes under the Securities Act.

Accounting Treatment

        The New Notes will be recorded at the same carrying value as the Old Notes, as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will amortize the expenses of the exchange offer over the term of the exchange notes.

Exchange Agent

        JPMorgan Chase Bank has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus, the letter of transmittal or any other documents to the exchange agent. You should send certificates for Old Notes, letters of transmittal and any other required documents to the exchange agent at the address set forth on the inside of the back cover of this prospectus. Holders of Old Notes may also contact their commercial bank, broker, dealer, trust company or other nominee for assistance concerning the exchange offer.

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DESCRIPTION OF THE NOTES

        The Company will issue the New Notes, and the Old Notes were issued, under an indenture dated June 24, 2004, among itself, the Subsidiary Guarantors named therein and JPMorgan Chase Bank, as trustee. The terms of the notes include those expressly set forth in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The indenture is unlimited in aggregate principal amount, although the issuance of the notes was limited to $112.0 million. We may issue an unlimited principal amount of additional notes having identical terms and conditions as the notes. We will only be permitted to issue such additional notes if at the time of such issuance, we were in compliance with the covenants contained in the indenture. Any additional notes will be part of the same issue as the notes and will vote on all matters with the holders of the notes.

        This summary of the material terms of the notes and the indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the indenture, including the definitions of certain terms therein, and the Trust Indenture Act. We will provide a copy of the indenture governing the notes, at no cost, to any holder who receives this prospectus. To request a copy of this document, you should telephone JPMorgan Chase Bank at the telephone number on the inside of the back cover of this prospectus. We have included at the end of this section a summary of capitalized terms used in this section. Terms used in this section and not otherwise defined in this section have the respective meanings assigned to them in the indenture.

        For purposes of this description, references to "the Company," "we," "our" and "us" refer only to Cornell Companies, Inc. and not to its subsidiaries. References to the Company and its Restricted Subsidiaries do not include Municipal Corrections Finance, an entity that is not a subsidiary of the Company, but which the Company is required to include in its consolidated financial statements in accordance with GAAP.

General

The notes.    The notes:

•

are general unsecured, senior obligations of the Company;



•

are limited to an aggregate principal amount of $112.0 million, subject to our ability to issue additional notes;



•

mature on July 1, 2012;



•

will be issued in denominations of $1,000 and integral multiples of $1,000;



•

will be represented by one or more registered notes in global form, but in certain circumstances may be represented by notes in definitive form;



•

rank equally in right of payment to any future senior indebtedness of the Company, without giving effect to collateral arrangements; and



•

will be unconditionally guaranteed on a senior basis by all of the Restricted Subsidiaries providing guarantees under our 2004 Credit Facility on June 24, 2004 and by all of the Restricted Subsidiaries that guarantee future indebtedness of the Company or any Subsidiary Guarantor.

Interest.    Interest on the notes will compound semi-annually and:

•

accrue at the rate of 10³/4% per annum;



•

accrue from the date of original issuance or, if interest has already been paid, from the most recent interest payment date;

39

•

be payable in cash semi-annually in arrears on January 1 and July 1, commencing on January 1, 2005;



•

be payable to the holders of record on the December 15 and June 15 immediately preceding the related interest payment dates; and



•

be computed on the basis of a 360-day year comprised of twelve 30-day months.

        We also will pay additional interest to holders of the notes if we fail to complete this exchange offer by December 21, 2004 days or if certain other conditions contained in the registration rights agreement are not satisfied.

Payments on the Notes; Paying Agent and Registrar

        We will pay principal of, premium, if any, and interest on the notes at the office or agency designated by the Company in the Borough of Manhattan, The City of New York, except that we may, at our option, pay interest on the notes by check mailed to holders of the notes at their registered address as it appears in the registrar's books. We have initially designated the corporate trust office of the trustee in New York, New York to act as our paying agent and registrar. We may, however, change the paying agent or registrar without prior notice to the holders of the notes, and the Company or any of its Restricted Subsidiaries may act as paying agent or registrar.

        We will pay principal of, premium, if any, and interest on, notes in global form registered in the name of or held by The Depository Trust Company or its nominee in immediately available funds to The Depository Trust Company or its nominee, as the case may be, as the registered holder of such global note.

Transfer and Exchange

        A holder may transfer or exchange notes in accordance with the indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge will be imposed by the Company, the trustee or the registrar for any registration of transfer or exchange of notes, but the Company may require a holder to pay a sum sufficient to cover any transfer tax or other governmental taxes and fees required by law or permitted by the indenture. The Company is not required to transfer or exchange any note selected for redemption. Also, the Company is not required to transfer or exchange any note for a period beginning (1) 15 days before the mailing of a notice of an offer to repurchase notes or of a redemption of notes and ending at the close of business on the day of such mailing or (2) 15 days before an interest payment date and ending on such interest payment date.

        The registered holder of a note will be treated as the owner of it for all purposes.

Optional Redemption

        Except as described below, the notes are not redeemable until July 1, 2008. On and after July 1, 2008, the Company may redeem all or, from time to time, a part of the notes upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as a percentage of principal amount) plus accrued and unpaid interest on the notes, if any, to the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on

40

the relevant interest payment date), if redeemed during the twelve-month period beginning on July 1 of the years indicated below:

Year	Percentage
2008	105.375	%
2009	102.688	%
2010 and thereafter	100.000	%

        Prior to July 1, 2007, the Company may on any one or more occasions redeem up to 35% of the original principal amount of the notes (calculated after giving effect to any issuance of additional notes) with the net cash proceeds of one or more public equity offerings at a redemption price of 110.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided that

        (1)   there is a public market at the time of such redemption;

        (2)   at least 65% of the original principal amount of the notes (calculated after giving effect to any issuance of additional notes) remains outstanding after each such redemption; and

        (3)   the redemption occurs within 60 days after the closing of such public equity offering.

        If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the person in whose name the note is registered at the close of business, on such record date, and no additional interest will be payable to holders whose notes will be subject to redemption by the Company.

        In the case of any partial redemption, selection of the notes for redemption will be made by the trustee in compliance with the requirements of the principal national securities exchange, if any, on which the notes are listed or, if the notes are not listed, then on a pro rata basis, by lot or by such other method as the trustee in its sole discretion will deem to be fair and appropriate, although no note of $1,000 in original principal amount or less will be redeemed in part. If any note is to be redeemed in part only, the notice of redemption relating to such note will state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note.

        The Company is not required to make mandatory redemption payments or sinking fund payments with respect to the notes.

Ranking

        The notes will be general unsecured obligations of the Company that rank senior in right of payment to all existing and future indebtedness that is expressly subordinated in right of payment to the notes. The notes will rank equally in right of payment with all existing and future liabilities of the Company that are not so subordinated and will be effectively subordinated to all of our secured indebtedness and liabilities of our subsidiaries that do not guarantee the notes. In the event of bankruptcy, liquidation, reorganization or other winding up of the Company or its Subsidiary Guarantors or upon a default in payment with respect to, or the acceleration of, any indebtedness under the 2004 Credit Facility or other secured indebtedness, the assets of the Company and its Subsidiary Guarantors that secure indebtedness will be available to pay obligations on the notes and the Subsidiary Guarantees only after all indebtedness under such credit facility and other secured indebtedness has been repaid in full from such assets. We cannot assure you that there will be sufficient assets remaining after the satisfaction of our obligations under the 2004 Credit Facility and any other secured indebtedness to pay amounts due on any or all of the notes then outstanding.

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        As of June 30, 2004 outstanding indebtedness of the Company and the Subsidiary Guarantors was $110.5 million (net of original issue discount of $1.5 million), none of which was secured. As of June 30, 2004, the Subsidiary Guarantors had no outstanding indebtedness. Additionally, Municipal Corrections Finance had an additional $183.0 million of indebtedness outstanding as of that date.

Subsidiary Guarantees

        The Subsidiary Guarantors, jointly and severally, unconditionally guarantee on a senior basis the Company's obligations under the notes and all obligations under the indenture. Such Subsidiary Guarantors have agreed to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable counsel fees and expenses) incurred by the trustee or the holders in enforcing any rights under the Subsidiary Guarantees. The obligations of Subsidiary Guarantors under the Subsidiary Guarantees rank equally in right of payment with other indebtedness of such Subsidiary Guarantor, except to the extent such other indebtedness is expressly subordinate to the obligations arising under the Subsidiary Guarantee.

        Although the indenture limits the amount of indebtedness that Restricted Subsidiaries may incur, such indebtedness may be substantial.

        The obligations of each Subsidiary Guarantor under its Subsidiary Guarantee are limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law.

        In the event a Subsidiary Guarantor is sold or disposed of (whether by merger, consolidation, the sale of its capital stock or the sale of all of its assets (other than by lease)) and whether or not the Subsidiary Guarantor is the surviving corporation in such transaction to a person which is not the Company or a Restricted Subsidiary of the Company, such Subsidiary Guarantor will be released from its obligations under its Subsidiary Guarantee if:

        (1)   the sale or other disposition is in compliance with the indenture, including the covenants "—Limitation on Sales of Assets and Subsidiary Stock," "—Limitation on Sale of Capital Stock of Restricted Subsidiaries," and "—Merger and Consolidation;" and

        (2)   all the obligations of such Subsidiary Guarantor under all credit facilities and related documentation and any other agreements relating to any other indebtedness of the Company or its Restricted Subsidiaries terminate upon consummation of such transaction.

        In addition, a Subsidiary Guarantor will be released from its obligations under the indenture, its Subsidiary Guarantee and the registration rights agreement if the Company designates such subsidiary as an Unrestricted Subsidiary and such designation complies with the other applicable provisions of the indenture.

Change of Control

        If a Change of Control occurs, unless the Company has exercised its right to redeem all of the notes as described under "—Optional Redemption", each holder will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such holder's notes at a purchase price in cash equal to 101% of the principal amount of the notes plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

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        Within 30 days following any Change of Control, unless the Company has exercised its right to redeem all of the notes as described under "—Optional Redemption", the Company will mail a notice (the "Change of Control Offer") to each holder, with a copy to the trustee, stating:

        (1)   that a Change of Control has occurred and that such holder has the right to require the Company to purchase such holder's notes at a purchase price in cash equal to 101% of the principal amount of such notes plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date) (the "Change of Control Payment");

        (2)   the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the "Change of Control Payment Date"); and

        (3)   the procedures determined by the Company, consistent with the indenture, that a holder must follow in order to have its notes repurchased.

        On the Change of Control Payment Date, the Company will, to the extent lawful:

        (1)   accept for payment all notes or portions of notes (in integral multiples of $1,000) properly tendered pursuant to the Change of Control Offer;

        (2)   deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes so tendered; and

        (3)   deliver or cause to be delivered to the trustee the notes so accepted together with an officer's certificate stating the aggregate principal amount of notes or portions of notes being purchased by the Company.

        The paying agent will promptly mail to each holder of notes so tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each such new note will be in a principal amount of $1,000 or an integral multiple thereof.

        If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, if any, will be paid to the person in whose name a note is registered at the close of business on such record date, and no additional interest will be payable to holders who tender pursuant to the Change of Control Offer.

        The Change of Control provisions described above will be applicable whether or not any other provisions of the indenture are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders to require that the Company repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

        Prior to mailing a Change of Control Offer, and as a condition to such mailing (i) the requisite holders of each issue of indebtedness issued under an indenture or other agreement that may be violated by such payment shall have consented to such Change of Control Offer being made and waived the event of default, if any, caused by the Change of Control or (ii) the Company will repay all outstanding indebtedness issued under an indenture or other agreement that may be violated by a payment to the holders of notes under a Change of Control Offer or the Company must offer to repay all such indebtedness, and make payment to the holders of such indebtedness that accept such offer, and obtain waivers of any event of default from the remaining holders of such indebtedness. The Company covenants to effect such repayment or obtain such consent within 30 days following any Change of Control, it being a default of the Change of Control provisions of the indenture if the Company fails to comply with such covenant.

43

        The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

        The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of the indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in the indenture by virtue of the conflict.

        The Company's ability to repurchase notes pursuant to a Change of Control Offer may be limited by a number of factors. The occurrence of certain of the events that constitute a Change of Control would constitute a default under the 2004 Credit Facility. In addition, certain events that may constitute a change of control under the 2004 Credit Facility and cause a default under that agreement may not constitute a Change of Control under the indenture. Future indebtedness of the Company and its subsidiaries may also contain prohibitions of certain events that would constitute a Change of Control or require such indebtedness to be repurchased upon a Change of Control. Moreover, the exercise by the holders of their right to require the Company to repurchase the notes could cause a default under such indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Company. Finally, the Company's ability to pay cash to the holders upon a repurchase may be limited by the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases.

        Even if sufficient funds were otherwise available, the terms of the 2004 Credit Facility and future indebtedness may prohibit the Company's prepayment of notes before their scheduled maturity. Consequently, if the Company is not able to prepay the indebtedness under the 2004 Credit Facility and any such other indebtedness containing similar restrictions or obtain requisite consents, as described above, the Company will be unable to fulfill its repurchase obligations if holders of notes exercise their repurchase rights following a Change of Control, resulting in a default under the indenture. A default under the indenture may result in a cross-default under the 2004 Credit Facility.

        The Change of Control provisions described above may deter certain mergers, tender offers and other takeover attempts involving the Company by increasing the capital required to effectuate such transactions. The definition of "Change of Control" includes a disposition of all or substantially all of the property and assets of the Company and its Restricted Subsidiaries taken as a whole to any person. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of "all or substantially all" of the property or assets of a person. As a result, it may be unclear as to whether a Change of Control has occurred and whether a holder of notes may require the Company to make an offer to repurchase the notes as described above.

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Certain Covenants

Limitation on Indebtedness

        The Company will not, and will not permit any of its Restricted Subsidiaries to, incur any indebtedness (including acquired indebtedness); provided, however, that the Company and the Subsidiary Guarantors may incur indebtedness if on the date thereof:

        (1)   the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least (a) 2.00 to 1.00, if such indebtedness is incurred on or prior to September 30, 2006, and (b) 2.25 to 1.00, if such indebtedness is incurred thereafter; and

        (2)   no default or Event of Default will have occurred or be continuing or would occur as a consequence of incurring the indebtedness or transactions relating to such incurrence.

        The first paragraph of this covenant will not prohibit the incurrence of the following indebtedness:

        (1)   indebtedness of the Company incurred pursuant to a credit facility in an amount up to $100.0 million less the aggregate principal amount of repayments with the proceeds from Asset Dispositions utilized in accordance with clause (3)(a) of "—Limitation on Sales of Assets and Subsidiary Stock" that permanently reduce the commitments thereunder;

        (2)   guarantees by the Company or Subsidiary Guarantors of indebtedness incurred in accordance with the provisions of the indenture; provided that in the event such indebtedness that is being guaranteed is a subordinated obligation or a guarantor subordinated obligation, then the related guarantee shall be subordinated in right of payment to the notes or the applicable Subsidiary Guarantee, as applicable;

        (3)   indebtedness of the Company owing to and held by any wholly-owned subsidiary or indebtedness of a Restricted Subsidiary owing to and held by the Company or any wholly-owned subsidiary; provided, however,

        (a)   if the Company is the obligor on such indebtedness, such indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the notes;

        (b)   if a Subsidiary Guarantor is the obligor on such indebtedness and the Company or a Subsidiary Guarantor is not the obligee, such indebtedness is subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor; and

        (c)   (i)    any subsequent issuance or transfer of capital stock or any other event which results in any such indebtedness being beneficially held by a person other than the Company or a wholly-owned subsidiary of the Company; and

        (ii)   any sale or other transfer of any such indebtedness to a person other than the Company or a wholly-owned subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such indebtedness by the Company or such Subsidiary, as the case may be;

        (4)   indebtedness represented by (a) the notes issued on June 24, 2004, the Subsidiary Guarantees and the exchange notes and exchange guarantees issued in a registered exchange offer pursuant to the registration rights agreement, (b) any indebtedness (other than the indebtedness described in clauses (1), (2), (3), (6), (8), (9) and (10)) outstanding on June 24, 2004 and (c) any Refinancing Indebtedness incurred in respect of any indebtedness described in this clause (4) or clause (5) or incurred pursuant to the first paragraph of this covenant;

        (5)   indebtedness of a Subsidiary Guarantor incurred and outstanding on the date on which such Subsidiary Guarantor was acquired by the Company (other than indebtedness incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related

45

transactions pursuant to which such Subsidiary Guarantor became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Subsidiary Guarantor is acquired by the Company, the Company would have been able to incur $1.00 of additional indebtedness pursuant to the first paragraph of this covenant after giving effect to the incurrence of such indebtedness pursuant to this clause (5);

        (6)   indebtedness under currency agreements and interest rate agreements; provided, that in the case of currency agreements, such currency agreements are related to business transactions of the Company or its Restricted Subsidiaries entered into in the ordinary course of business or in the case of currency agreements and interest rate agreements, such currency agreements and interest rate agreements are entered into for bona fide hedging purposes of the Company or its Restricted Subsidiaries (as determined in good faith by the Board of Directors or senior management of the Company) and substantially correspond in terms of notional amount, duration, currencies and interest rates, as applicable, to indebtedness of the Company or its Restricted Subsidiaries incurred without violation of the indenture;

        (7)   the incurrence by the Company or any of its Subsidiary Guarantors of indebtedness represented by capitalized lease obligations, mortgage financings or purchase money obligations with respect to assets other than capital stock or other Investments, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvements of property used in the business of the Company or such Subsidiary Guarantor, in an aggregate principal amount not to exceed $15.0 million at any time outstanding;

        (8)   indebtedness incurred in respect of workers' compensation claims, self-insurance obligations, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business;

        (9)   indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Company or a Restricted Subsidiary or capital stock of a Restricted Subsidiary, provided that the maximum aggregate liability in respect of all such indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

        (10) indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such indebtedness is extinguished within five business days of incurrence; and

        (11) in addition to the items referred to in clauses (1) through (10) above, indebtedness of the Company and its Subsidiary Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other indebtedness incurred pursuant to this clause (11) and then outstanding, will not exceed $10.0 million at any time outstanding.

        The Company will not incur any indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any subordinated obligations of the Company unless such indebtedness will be subordinated to the notes to at least the same extent as such subordinated obligations. No Subsidiary Guarantor will incur any indebtedness if the proceeds thereof are used, directly or indirectly, to refinance any guarantor subordinated obligations of such Subsidiary Guarantor unless such indebtedness will be subordinated to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee to at least the same extent as such guarantor subordinated

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obligations. No Restricted Subsidiary may incur any indebtedness if the proceeds are used to refinance indebtedness of the Company.

        For purposes of determining compliance with, and the outstanding principal amount of any particular indebtedness incurred pursuant to and in compliance with, this covenant:

        (1)   in the event that indebtedness meets the criteria of more than one of the types of indebtedness described in the first paragraph and the clauses of the second paragraph of this covenant, the Company, in its sole discretion, will classify such item of indebtedness on the date of incurrence and only be required to include the amount and type of such indebtedness in the first paragraph or any of the clauses of the second paragraph;

        (2)   all indebtedness outstanding on the date of the indenture under the 2004 Credit Facility shall be deemed initially incurred on June 24, 2004 under clause (1) of the second paragraph of this covenant and not the first paragraph or clause (4) of the second paragraph of this covenant;

        (3)   guarantees of, or obligations in respect of letters of credit relating to, indebtedness which is otherwise included in the determination of a particular amount of indebtedness shall not be included;

        (4)   if obligations in respect of letters of credit are incurred pursuant to a credit facility and are being treated as incurred pursuant to clause (1) of the second paragraph above and the letters of credit relate to other indebtedness, then such other indebtedness shall not be included;

        (5)   the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Subsidiary Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

        (6)   indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such indebtedness; and

        (7)   the amount of indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

        Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional indebtedness and the payment of dividends in the form of additional shares of preferred stock or Disqualified Stock will not be deemed to be an incurrence of indebtedness for purposes of this covenant. The amount of any indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other indebtedness.

        In addition, the Company will not permit any of its Unrestricted Subsidiaries to incur any indebtedness or issue any shares of Disqualified Stock, other than non-recourse debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such date (and, if such indebtedness is not permitted to be incurred as of such date under this "Limitation on Indebtedness" covenant, the Company shall be in default of this covenant).

        For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of indebtedness, the U.S. dollar-equivalent principal amount of indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such indebtedness was incurred, in the case of term indebtedness, or first committed, in the case

47

of revolving credit indebtedness; provided that if such indebtedness is incurred to refinance other indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing indebtedness does not exceed the principal amount of such indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of indebtedness that the Company and the Subsidiary Guarantors may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any indebtedness incurred to refinance other indebtedness, if incurred in a different currency from the indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

Limitation on Restricted Payments

        The Company will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to:

        (1)   declare or pay any dividend or make any distribution on or in respect of its capital stock (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) except:

        (a)   dividends or distributions payable in capital stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase such capital stock of the Company; and

        (b)   dividends or distributions payable to the Company or a Restricted Subsidiary (and if such Restricted Subsidiary is not a wholly-owned subsidiary, to its other holders of common capital stock on a pro rata basis);

        (2)   purchase, redeem, retire or otherwise acquire for value any capital stock of the Company or any direct or indirect parent of the Company (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) held by persons other than the Company or a Restricted Subsidiary (other than in exchange for capital stock of the Company (other than Disqualified Stock));

        (3)   purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any subordinated obligations or guarantor subordinated obligations (other than the purchase, repurchase, redemption, defeasance or other acquisition or retirement of subordinated obligations or guarantor subordinated obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement); or

        (4)   make any Restricted Investment in any person;

(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (4) shall be referred to herein as a "Restricted Payment"), if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

        (a)   a default shall have occurred and be continuing (or would result therefrom); or

        (b)   the Company is not able to incur an additional $1.00 of indebtedness pursuant to the first paragraph under the "Limitation on Indebtedness" covenant after giving effect, on a pro forma basis, to such Restricted Payment; or

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        (c)   the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to June 24, 2004 would exceed the sum (without duplication) of:

        i.      50% of Consolidated Net Income for the period (treated as one accounting period) from the beginning of the first fiscal quarter commencing after the date of the indenture to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which financial statements are in existence (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit);

        ii.     100% of the aggregate net cash proceeds received by the Company from the issue or sale of its capital stock (other than Disqualified Stock) or other capital contributions subsequent to June 24, 2004 (other than net cash proceeds received from an issuance or sale of such capital stock to a subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination);

        iii.    the amount by which indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange (other than by a subsidiary of the Company) subsequent to June 24, 2004 of any indebtedness of the Company or its Restricted Subsidiaries convertible or exchangeable for capital stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair market value of any other property, distributed by the Company upon such conversion or exchange); and

        iv.    the amount equal to the net reduction in Restricted Investments made by the Company or any of its Restricted Subsidiaries in any person resulting from:

        (A)  repurchases or redemptions of such Restricted Investments by such person, proceeds realized upon the sale of such Restricted Investment to an unaffiliated purchaser, repayments of loans or advances or other transfers of assets (including by way of dividend or distribution) by such person to the Company or any Restricted Subsidiary; or

        (B)  the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as provided in the definition of "Investment") not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary,

which amount in each case under this clause (iv) was included in the calculation of the amount of Restricted Payments; provided, however, that no amount will be included under this clause (iv) to the extent it is already included in Consolidated Net Income.

        The provisions of the preceding paragraph will not prohibit:

        (1)   any purchase, repurchase, redemption, defeasance or other acquisition or retirement of capital stock, Disqualified Stock or subordinated obligations of the Company or guarantor subordinated obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, capital stock of the Company (other than Disqualified Stock and other than capital stock issued or sold to a subsidiary or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination); provided, however, that (a) such purchase, repurchase, redemption, defeasance, acquisition or retirement will

49

be excluded in subsequent calculations of the amount of Restricted Payments and (b) the net cash proceeds from such sale of capital stock will be excluded from clause (c)(ii) of the preceding paragraph;

        (2)   any purchase, repurchase, redemption, defeasance or other acquisition or retirement of subordinated obligations of the Company or guarantor subordinated obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, subordinated obligations of the Company or any purchase, repurchase, redemption, defeasance or other acquisition or retirement of guarantor subordinated obligations made by exchange for or out of the proceeds of the substantially concurrent sale of guarantor subordinated obligations that, in each case, is permitted to be incurred pursuant to the covenant described under "—Limitation on Indebtedness" and that in each case constitutes Refinancing Indebtedness; provided, however, that such purchase, repurchase, redemption, defeasance, acquisition or retirement will be excluded in subsequent calculations of the amount of Restricted Payments;

        (3)   any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Company or a Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be, that, in each case, is permitted to be incurred pursuant to the covenant described under "—Limitation on Indebtedness" and that in each case constitutes Refinancing Indebtedness; provided, however, that such purchase, repurchase, redemption, defeasance, acquisition or retirement will be excluded in subsequent calculations of the amount of Restricted Payments;

        (4)   so long as no default or Event of Default has occurred and is continuing, any purchase or redemption of subordinated obligations or guarantor subordinated obligations of a Subsidiary Guarantor from Net Available Cash to the extent permitted under "—Limitation on Sales of Assets and Subsidiary Stock" below; provided, however, that such purchase or redemption will be excluded in subsequent calculations of the amount of Restricted Payments;

        (5)   dividends paid within 60 days after the date of declaration if at such date of declaration such dividend would have complied with this provision; provided, however, that such dividends will be included in subsequent calculations of the amount of Restricted Payments;

        (6)   so long as no default or Event of Default has occurred and is continuing,

        (a)   the purchase, redemption or other acquisition, cancellation or retirement for value of capital stock, or options, warrants, equity appreciation rights or other rights to purchase or acquire capital stock of the Company or any Restricted Subsidiary or any parent of the Company held by any existing or former directors, employees or management of the Company or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate directors, employees or management; provided that such redemptions or repurchases pursuant to this clause will not exceed $1.0 million in the aggregate during any calendar year (with the unused amounts in any calendar year being carried over to the next succeeding calendar year; provided, that such redemptions and repurchase shall not exceed $2.0 million in any calendar year); and

        (b)   loans or advances to employees or directors of the Company or any Subsidiary of the Company the proceeds of which are used to purchase capital stock of the Company, in an aggregate amount not in excess of $1.0 million at any one time outstanding; provided, however, that the amount of such loans and advances will be included in subsequent calculations of the amount of Restricted Payments; provided, however, that the Company and its Subsidiaries will comply in all material respects with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated in connection therewith relating to such loans and advances;

50

        (7)   so long as no default or Event of Default has occurred and is continuing, the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company issued in accordance with the terms of the indenture to the extent such dividends are included in the definition of "Consolidated Interest Expense"; provided that the payment of such dividends will be excluded from the calculation of Restricted Payments;

        (8)   repurchases of capital stock deemed to occur upon the exercise of stock options, warrants or other convertible securities if such capital stock represents a portion of the exercise price thereof; provided, however, that such repurchases will be excluded from subsequent calculations of the amount of Restricted Payments;

        (9)   the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any subordinated obligation (i) at a purchase price not greater than 101% of the principal amount of such subordinated obligation in the event of a Change of Control in accordance with provisions similar to the "Change of Control" covenant or (ii) at a purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to the "—Limitation on Sales of Assets and Subsidiary Stock" covenant; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Disposition Offer, as applicable, as provided in such covenant with respect to the notes and has completed the repurchase or redemption of all notes validly tendered for payment in connection with such Change of Control Offer or Asset Disposition Offer; and

        (10) Restricted Payments in an amount not to exceed $5.0 million; provided that the amount of such Restricted Payments will be included in the calculation of the amount of Restricted Payments.

        The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount and any non-cash Restricted Payment shall be determined conclusively by the Board of Directors of the Company acting in good faith whose resolution with respect thereto shall be delivered to the trustee, such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value is estimated in good faith by the Board of Directors of the Company to exceed $5.0 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the trustee an officer's certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant "Restricted Payments" were computed, together with a copy of any fairness opinion or appraisal required by the indenture.

Limitation on Liens

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur or suffer to exist any lien (other than Permitted Liens) upon any of its property or assets (including capital stock of Restricted Subsidiaries), whether owned on the date of the indenture or acquired after that date, which lien is securing any indebtedness, unless contemporaneously with the incurrence of such liens effective provision is made to secure the indebtedness due under the indenture and the notes for so long as such indebtedness is so secured or, in respect of liens on any Subsidiary Guarantor's property or assets, any Subsidiary Guarantee of such Subsidiary Guarantor, equally and ratably with (or prior to in the case of liens with respect to subordinated obligations or guarantor subordinated obligations, as the case may be) the indebtedness secured by such lien for so long as such indebtedness is so secured.

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Limitation on Sale/Leaseback Transactions

        The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale/leaseback transaction unless:

        (1)   the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such sale/leaseback transaction at least equal to the fair market value (as evidenced by a resolution of the Board of Directors of the Company) of the property subject to such transaction;

        (2)   the Company or such Restricted Subsidiary could have incurred indebtedness in an amount equal to the Attributable Indebtedness in respect of such sale/leaseback transaction pursuant to the covenant described under "—Limitation on Indebtedness;"

        (3)   the Company or such Restricted Subsidiary would be permitted to create a lien on the property subject to such sale/leaseback transaction without securing the notes by the covenant described under "—Limitation on Liens;" and

        (4)   the sale/leaseback transaction is treated as an Asset Disposition and all of the conditions of the indenture described under "—Limitation on Sales of Assets and Subsidiary Stock" (including the provisions concerning the application of Net Available Cash) are satisfied with respect to such sale/leaseback transaction, treating all of the consideration received in such sale/leaseback transaction as Net Available Cash for purposes of such covenant.

Limitation on Restrictions on Distributions from Restricted Subsidiaries

        The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

        (1)   pay dividends or make any other distributions on its capital stock or pay any indebtedness or other obligations owed to the Company or any Restricted Subsidiary (it being understood that the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on capital stock);

        (2)   make any loans or advances to the Company or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other indebtedness incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or

        (3)   transfer any of its property or assets to the Company or any Restricted Subsidiary. The preceding provisions will not prohibit:

        (i)    any encumbrance or restriction pursuant to an agreement in effect at or entered into on the date of the indenture and identified in an annex to the indenture, including, without limitation, the indenture and the 2004 Credit Facility in effect on such date;

        (ii)   any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any capital stock or indebtedness incurred by a Restricted Subsidiary on or before the date on which such Restricted Subsidiary was acquired by the Company (other than capital stock or indebtedness incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company or in contemplation of the transaction) and outstanding on such date provided, that any such encumbrance or restriction shall not extend to any assets or property

52

of the Company or any other Restricted Subsidiary other than the assets and property so acquired;

        (iii)  any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement effecting a refunding, replacement or refinancing of indebtedness incurred pursuant to an agreement referred to in clause (i) or (ii) of this paragraph or this clause (iii) or contained in any amendment to an agreement referred to in clause (i) or (ii) of this paragraph or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement are no less favorable in any material respect to the holders of the notes than the encumbrances and restrictions contained in such agreements referred to in clauses (i) or (ii) of this paragraph on June 24, 2004 or the date such Restricted Subsidiary became a Restricted Subsidiary, whichever is applicable;

        (iv)  in the case of clause (3) of the first paragraph of this covenant, any encumbrance or restriction:

        (a)   that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any such lease, license or other contract;

        (b)   contained in mortgages, pledges or other security agreements permitted under the indenture securing indebtedness of the Company or a Restricted Subsidiary to the extent such encumbrances or restrictions restrict the transfer of the property subject to such mortgages, pledges or other security agreements;

        (c)   pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of the Company or any Restricted Subsidiary; or

        (d)   contained in any Permitted Lien;

        (v)   (a) purchase money obligations for property acquired in the ordinary course of business and (b) capitalized lease obligations permitted under the indenture, in each case, that impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this covenant on the property so acquired;

        (vi)  any restriction with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or substantially all the capital stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition;

        (vii) customary provisions in joint venture agreements and other similar agreements entered into by the Company or any Restricted Subsidiary in the ordinary course of business;

        (viii) net worth provisions in leases and other agreements entered into by the Company or any Restricted Subsidiary in the ordinary course of business; and

        (ix)  encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order.

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Limitation on Sales of Assets and Subsidiary Stock

        The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:

        (1)   the Company or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by the Board of Directors of the Company (including as to the value of all non-cash consideration), of the shares and assets subject to such Asset Disposition;

        (2)   at least 75% of the consideration from such Asset Disposition received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or cash equivalents; and

        (3)   an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company or such Restricted Subsidiary at its option, as the case may be:

        (a)   to the extent the Company or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any indebtedness), to prepay, repay or purchase secured indebtedness of the Company (other than any Disqualified Stock or subordinated obligations) or secured indebtedness of a wholly-owned subsidiary (other than any Disqualified Stock or guarantor subordinated obligation of a wholly-owned subsidiary that is a Subsidiary Guarantor) (in each case other than indebtedness owed to the Company or an affiliate of the Company) within 360 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of indebtedness pursuant to this clause (a), the Company or such Restricted Subsidiary will retire such indebtedness and will cause the related commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased;

        (b)   to the extent of the balance of such Net Available Cash after application in accordance with clause (a), to the extent the Company or such Restricted Subsidiary elects, to invest in Additional Assets within 360 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

        (c)   to redeem notes pursuant to any provision described under "Optional Redemption;" and

        (d)   any combination of the foregoing;

provided that pending the final application of any such Net Available Cash in accordance with clause (a), (b), (c) or (d) above, the Company and its Restricted Subsidiaries may temporarily reduce indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by the indenture.

        Any Net Available Cash from Asset Dispositions that are not applied or invested as provided in the preceding paragraph will be deemed to constitute "Excess Proceeds." On the 361st day after an Asset Disposition, if the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be required to make an offer ("Asset Disposition Offer") to all holders of notes and to the extent required by the terms of other pari passu indebtedness, to all holders of other pari passu indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such pari passu indebtedness with the proceeds from any Asset Disposition, to purchase the maximum principal amount of notes and any such pari passu notes to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the notes and pari passu notes plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in the indenture or the agreements governing the

54

pari passu notes, as applicable, in each case in integral multiples of $1,000. To the extent that the aggregate amount of notes and pari passu notes so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in the indenture. If the aggregate principal amount of notes surrendered by holders thereof and other pari passu notes surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the trustee shall select the notes and pari passu notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered notes and pari passu notes. Upon completion of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.

        The Asset Disposition Offer will remain open for a period of 20 business days following its commencement, except to the extent that a longer period is required by applicable law (the "Asset Disposition Offer Period"). No later than five business days after the termination of the Asset Disposition Offer Period (the "Asset Disposition Purchase Date"), the Company will purchase the principal amount of notes and pari passu notes required to be purchased pursuant to this covenant (the "Asset Disposition Offer Amount") or, if less than the Asset Disposition Offer Amount has been so validly tendered, all notes and pari passu notes validly tendered in response to the Asset Disposition Offer.

        If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the person in whose name a note is registered at the close of business on such record date, and no additional interest will be payable to holders who tender notes pursuant to the Asset Disposition Offer.

        On or before the Asset Disposition Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of notes and pari passu notes or portions of notes and pari passu notes so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all notes and pari passu notes so validly tendered and not properly withdrawn, in each case in integral multiples of $1,000. The Company will deliver to the trustee an officer's certificate stating that such notes or portions thereof were accepted for payment by the Company in accordance with the terms of this covenant and, in addition, the Company will deliver all certificates and notes required, if any, by the agreements governing the pari passu notes. The Company or the paying agent, as the case may be, will promptly (but in any case not later than five business days after termination of the Asset Disposition Offer Period) mail or deliver to each tendering holder of notes or holder or lender of pari passu notes, as the case may be, an amount equal to the purchase price of the notes or pari passu notes so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Company for purchase, and the Company will promptly issue a new note, and the trustee, upon delivery of an officer's certificate from the Company, will authenticate and mail or deliver such new note to such holder, in a principal amount equal to any unpurchased portion of the note surrendered; provided that each such new note will be in a principal amount of $1,000 or an integral multiple of $1,000. In addition, the Company will take any and all other actions required by the agreements governing the pari passu notes. Any note not so accepted will be promptly mailed or delivered by the Company to the holder thereof. The Company will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date.

        For the purposes of this covenant, the following will be deemed to be cash:

        (1)   the assumption by the transferee of indebtedness (other than subordinated obligations or Disqualified Stock) of the Company or indebtedness of a wholly-owned subsidiary (other than guarantor subordinated obligations or Disqualified Stock of any wholly-owned subsidiary that is a Subsidiary Guarantor) and the release of the Company or such Restricted Subsidiary from all

55

liability on such indebtedness in connection with such Asset Disposition (in which case the Company will, without further action, be deemed to have applied such deemed cash to indebtedness in accordance with clause (a) above); and

        (2)   securities, notes or other obligations received by the Company or any Restricted Subsidiary from the transferee that are converted by the Company or such Restricted Subsidiary into cash within 45 days following the closing of such Asset Disposition.

        The Company will not, and will not permit any Restricted Subsidiary to, engage in any Asset Swaps, unless:

        (1)   at the time of entering into such Asset Swap and immediately after giving effect to such Asset Swap, no default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

        (2)   in the event such Asset Swap involves the transfer by the Company or any Restricted Subsidiary of assets having an aggregate fair market value, as determined by the Board of Directors of the Company in good faith, in excess of $5.0 million, the terms of such Asset Swap have been approved by a majority of the members of the Board of Directors of the Company; and

        (3)   in the event such Asset Swap involves the transfer by the Company or any Restricted Subsidiary of assets having an aggregate fair market value, as determined by the Board of Directors of the Company in good faith, in excess of $10.0 million, the Company has received a written opinion from an independent investment banking firm of nationally recognized standing that such Asset Swap is fair to the Company or such Restricted Subsidiary, as the case may be, from a financial point of view.

        The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to the indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the indenture by virtue of any conflict.

Limitation on Affiliate Transactions

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any affiliate of the Company (an "Affiliate Transaction") unless:

        (1)   the terms of such Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable transaction at the time of such transaction in arm's-length dealings with a person who is not such an affiliate;

        (2)   in the event such Affiliate Transaction involves an aggregate consideration in excess of $5.0 million, the terms of such transaction have been approved by a majority of the members of the Board of Directors of the Company and by a majority of the members of such Board of Directors having no personal stake in such transaction, if any (and such majority or majorities, as the case may be, determines that such Affiliate Transaction satisfies the criteria in clause (1) above); and

        (3)   in the event such Affiliate Transaction involves an aggregate consideration in excess of $10.0 million, the Company has received a written opinion from an independent investment banking, accounting or appraisal firm of nationally recognized standing that such Affiliate

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Transaction is not materially less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm's-length basis from a person that is not an affiliate.

        The preceding paragraph will not apply to:

        (1)   any Restricted Payment (other than a Restricted Investment) permitted to be made pursuant to the covenant described under "—Limitation on Restricted Payments;"

        (2)   any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements and other compensation arrangements, options to purchase capital stock of the Company, restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits plans and/or indemnity provided on behalf of officers and employees approved by the Board of Directors of the Company;

        (3)   any transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries and guarantees issued by the Company or a Restricted Subsidiary for the benefit of the Company or a Restricted Subsidiary, as the case may be, in accordance with "—Limitation on Indebtedness;"

        (4)   the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, directors of the Company or any Restricted Subsidiary;

        (5)   the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of any agreement to which the Company or any of its Restricted Subsidiaries is a party as of or on June 24, 2004 and identified on a schedule to the indenture on June 24, 2004, as these agreements may be amended, modified, supplemented, extended or renewed from time to time; provided, however, that any future amendment, modification, supplement, extension or renewal entered into after June 24, 2004 will be permitted to the extent that its terms are not more disadvantageous to the holders of the notes than the terms of the agreements in effect on June 24, 2004; and

        (6)   loans or advances to employees made in accordance with clause (6) under the definition of "Permitted Investment."

Limitation on Sale of Capital Stock of Restricted Subsidiaries

        The Company will not, and will not permit any Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of any voting stock of any Restricted Subsidiary or to issue any of the voting stock of a Restricted Subsidiary (other than, if necessary, shares of its voting stock constituting directors' qualifying shares) to any person except:

        (1)   to the Company or a wholly-owned subsidiary; or

        (2)   in compliance with the covenant described under "—Limitation on Sales of Assets and Subsidiary Stock" and immediately after giving effect to such issuance or sale, such Restricted Subsidiary would continue to be a Restricted Subsidiary.

        Notwithstanding the preceding paragraph, the Company or any Restricted Subsidiary may sell all the voting stock of a Restricted Subsidiary as long as the Company or such Restricted Subsidiary complies with the terms of the covenant described under "—Limitation on Sales of Assets and Subsidiary Stock."

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SEC Reports

        Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act, the Company will file with the SEC, and make available to the trustee and the registered holders of the notes, the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that are specified in Sections 13 and 15(d) of the Exchange Act within the time periods specified therein. In the event that the Company is not permitted to file such reports, documents and information with the SEC pursuant to the Exchange Act, the Company will nevertheless make available such Exchange Act information to the trustee and the holders of the notes as if the Company were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act within the time periods specified therein.

        If the Company has designated any of its subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management's Discussion and Analysis of Results of Operations and Financial Condition, of the financial condition and results of operations of the Company and its Restricted Subsidiaries.

Merger and Consolidation

        The Company will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any person, unless:

        (1)   the resulting, surviving or transferee person (the "Successor Company") will be a corporation organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by supplemental indenture, executed and delivered to the trustee, in form satisfactory to the trustee, all the obligations of the Company under the notes and the indenture;

        (2)   immediately after giving effect to such transaction (and treating any indebtedness that becomes an obligation of the Successor Company or any subsidiary of the Successor Company as a result of such transaction as having been incurred by the Successor Company or such subsidiary at the time of such transaction), no default or Event of Default shall have occurred and be continuing;

        (3)   immediately after giving effect to such transaction, the Successor Company would be able to incur at least an additional $1.00 of indebtedness pursuant to the first paragraph of the "Limitation on Indebtedness" covenant;

        (4)   each Subsidiary Guarantor (unless it is the other party to the transactions above, in which case clause (1) shall apply) shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such person's obligations in respect of the indenture and the notes and its obligations under the registration rights agreement shall continue to be in effect; and

        (5)   the Company shall have delivered to the trustee an officer's certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the indenture.

        For purposes of this covenant, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more subsidiaries of the Company, which properties and assets, if held by the Company instead of such subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

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        The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under the indenture, and the predecessor Company will be released from the obligation to pay the principal of and interest on the notes, provided, however, that in the case of a lease of all or substantially all its assets, the predecessor Company will not be released from the obligation to pay the principal of and interest on the notes.

        Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve "all or substantially all" of the property or assets of a person.

        Notwithstanding the preceding clause (3), (x) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company and (y) the Company may merge with an affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction to realize tax benefits; provided that, in the case of a Restricted Subsidiary that merges into the Company, the Company will not be required to comply with the preceding clause (5).

        In addition, the Company will not permit any Subsidiary Guarantor to consolidate with, merge with or into any person (other than (i) the Company, as contemplated above, and (ii) another Subsidiary Guarantor) and will not permit the conveyance transfer or lease of substantially all of the assets of any Subsidiary Guarantor unless:

        (1)   (a) the resulting, surviving or transferee person will be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and such person (if not such Subsidiary Guarantor) will expressly assume, by supplemental indenture, executed and delivered to the trustee, all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee; (b) immediately after giving effect to such transaction (and treating any indebtedness that becomes an obligation of the resulting, surviving or transferee person or any Restricted Subsidiary as a result of such transaction as having been incurred by such person or such Restricted Subsidiary at the time of such transaction), no default of Event of Default shall have occurred and be continuing; and (c) the Company will have delivered to the trustee an officer's certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the indenture; or

        (2)   the transaction is made in compliance with the covenant described under "—Limitation on Sales of Assets and Subsidiary Stock".

Future Subsidiary Guarantors

        After June 24, 2004, the Company will cause each Restricted Subsidiary that is not a Subsidiary Guarantor, other than a foreign subsidiary, that guarantees any indebtedness of the Company or any of its Subsidiary Guarantors to execute and deliver to the trustee a Subsidiary Guarantee pursuant to which such Restricted Subsidiary will unconditionally guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any and interest on the notes on a senior basis and all other obligations under the indenture. Notwithstanding the foregoing, in the event the Subsidiary Guarantor is released and discharged in full from all of its obligations under guarantees of (1) any credit facility and (2) all other indebtedness of the Company and its Restricted Subsidiaries, then the Subsidiary Guarantee of such Subsidiary Guarantor shall be automatically and unconditionally released or discharged; provided, that such Restricted Subsidiary has not incurred any indebtedness in reliance on its status as a Subsidiary Guarantor under the covenant "—Limitation on Indebtedness" unless such Subsidiary Guarantor's obligations under such indebtedness so incurred are satisfied in full and discharged.

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Limitation on Lines of Business

        The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Related business, except to such extent as would not be material to the Company and its Restricted Subsidiaries as a whole.

Payments for Consent

        Neither the Company nor any of its Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fees or otherwise, to any holder of any notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid or is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or amendment.

Events of Default

        Each of the following is an Event of Default:

        (1)   default in any payment of interest or additional interest (as required by the registration rights agreement) on any note when due, continued for 30 days;

        (2)   default in the payment of principal of or premium, if any, on any note when due at its stated maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

        (3)   failure by the Company or any Subsidiary Guarantor to comply with its obligations under "Certain Covenants—Merger and Consolidation;"

        (4)   failure by the Company or any Subsidiary Guarantor to comply for 30 days after notice with any of its obligations under the covenants described under "Change of Control" above or under the covenants described under "Certain Covenants" above (in each case, other than a failure to purchase notes which will constitute an Event of Default under clause (2) above and other than a failure to comply with "Certain Covenants—Merger and Consolidation" which is covered by clause (3));

        (5)   failure by the Company or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the indenture;

        (6)   default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than indebtedness owed to the Company or a Restricted Subsidiary, whether such indebtedness or guarantee now exists, or is created after the date of the indenture, which default:

        (a)   is caused by a failure to pay principal of, or interest or premium, if any, on such indebtedness within the grace period provided in such indebtedness ("payment default"); or

        (b)   results in the acceleration of such indebtedness prior to its maturity (the "cross acceleration provision"); and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $10.0 million or more;

        (7)   certain events of bankruptcy, insolvency or reorganization of the Company or a significant subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited

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consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a significant subsidiary (the "bankruptcy provisions");

        (8)   failure by the Company or any significant subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a significant subsidiary to pay final judgments aggregating in excess of $10.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days (the "judgment default provision"); or

        (9)   any Subsidiary Guarantee of a significant subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries would constitute a significant subsidiary ceases to be in full force and effect (except as contemplated by the terms of the indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a significant subsidiary or group of Subsidiary Guarantors that taken together as of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries would constitute a significant subsidiary denies or disaffirms its obligations under the indenture or its Subsidiary Guarantee.

        However, a default under clauses (4) and (5) of this paragraph will not constitute an Event of Default until the trustee or the holders of 25% in principal amount of the outstanding notes notify the Company of the default and the Company does not cure such default within the time specified in clauses (4) and (5) of this paragraph after receipt of such notice.

        If an Event of Default (other than an Event of Default described in clause (7) above) occurs and is continuing, the trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding notes by notice to the Company and the trustee, may, and the trustee at the request of such holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the notes to be due and payable. Upon such a declaration, such principal, premium and accrued and unpaid interest will be due and payable immediately. In the event of a declaration of acceleration of the notes because an Event of Default described in clause (6) under "Events of Default" has occurred and is continuing, the declaration of acceleration of the notes shall be automatically annulled if the event of default or payment default triggering such Event of Default pursuant to clause (6) shall be remedied or cured by the Company or a Restricted Subsidiary or waived by the holders of the relevant indebtedness within 20 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the notes would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest on the notes that became due solely because of the acceleration of the notes, have been cured or waived. If an Event of Default described in clause (7) above occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all the notes will become and be immediately due and payable without any declaration or other act on the part of the trustee or any holders. The holders of a majority in principal amount of the outstanding notes may waive all past defaults (except with respect to nonpayment of principal, premium or interest) and rescind any such acceleration with respect to the notes and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the notes that have become due solely by such declaration of acceleration, have been cured or waived. Subject to the provisions of the indenture relating to the duties of the trustee, if an Event of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders unless such holders have offered to the trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive

61

payment of principal, premium, if any, or interest when due, no holder may pursue any remedy with respect to the indenture or the notes unless:

        (1)   such holder has previously given the trustee notice that an Event of Default is continuing;

        (2)   holders of at least 25% in principal amount of the outstanding notes have requested the trustee to pursue the remedy;

        (3)   such holders have offered the trustee reasonable security or indemnity against any loss, liability or expense;

        (4)   the trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

        (5)   the holders of a majority in principal amount of the outstanding notes have not given the trustee a direction that, in the opinion of the trustee, is inconsistent with such request within such 60-day period.

        Subject to certain restrictions, the holders of a majority in principal amount of the outstanding notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or of exercising any trust or power conferred on the trustee. The indenture provides that in the event an Event of Default has occurred and is continuing, the trustee will be required in the exercise of its powers to use the degree of care that a prudent person would use in the conduct of its own affairs. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the trustee determines is unduly prejudicial to the rights of any other holder or that would involve the trustee in personal liability. Prior to taking any action under the indenture, the trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

        The indenture provides that if a default occurs and is continuing and is known to the trustee, the trustee must mail to each holder notice of the default within 90 days after it occurs. Except in the case of a default in the payment of principal of, premium, if any, or interest on any Note, the trustee may withhold notice if and so long as a committee of trust officers of the trustee in good faith determines that withholding notice is in the interests of the holders. In addition, the Company is required to deliver to the trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any default that occurred during the previous year. The Company also is required to deliver to the trustee, within 10 days after it becomes aware of the occurrence thereof, written notice of any events which would constitute a default or an Event of Default, their status and what action the Company is taking or proposing to take in respect thereof.

        In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company or any Subsidiary Guarantor with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the notes pursuant to the optional redemption provisions of the indenture or was required to repurchase the notes, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to July 1, 2008, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company or any Subsidiary Guarantor with the intention of avoiding the prohibition on redemption of the notes prior to July 1, 2008, a make-whole premium specified in the indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the notes.

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Amendments and Waivers

        Subject to certain exceptions, the indenture and the notes may be amended or supplemented with the consent of the holders of a majority in principal amount of the notes then outstanding (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes) and, subject to certain exceptions, any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes). However, without the consent of each holder of an outstanding note affected, no amendment may, among other things:

        (1)   reduce the principal amount of notes whose holders must consent to an amendment;

        (2)   reduce the stated rate of or extend the stated time for payment of interest on any note;

        (3)   reduce the principal of or extend the stated maturity of any note;

        (4)   reduce the premium payable upon the redemption or repurchase of any note or change the time at which any note may be redeemed or repurchased as described above under "Optional Redemption," "Change of Control," or "Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock", whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

        (5)   make any note payable in money other than that stated in the note;

        (6)   impair the right of any holder to receive payment of principal of, premium, if any, principal of and interest on such holder's notes on or after the due dates therefore or to institute suit for the enforcement of any payment on or with respect to such holder's notes;

        (7)   make any change in the amendment provisions which require each holder's consent or in the waiver provisions; or

        (8)   modify the Subsidiary Guarantees in any manner adverse to the holders of the notes.

        Notwithstanding the foregoing, without the consent of any holder, the Company, the Guarantors and the trustee may amend the indenture and the notes to:

        (1)   cure any ambiguity, omission, defect or inconsistency;

        (2)   provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under the indenture;

        (3)   provide for uncertificated notes in addition to or in place of certificated notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code, or in a manner such that the uncertificated notes are described in Section 163(f) (2) (B) of the Code);

        (4)   add guarantees with respect to the notes or release a Subsidiary Guarantor upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accord with the applicable provisions of the indenture;

        (5)   secure the notes;

        (6)   add to the covenants of the Company and the Subsidiary Guarantors for the benefit of the holders or surrender any right or power conferred upon the Company;

        (7)   make any change that does not adversely affect the rights of any holder;

        (8)   comply with any requirement of the SEC in connection with the qualification of the indenture under the Trust Indenture Act; or

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        (9)   provide for the issuance of exchange securities which shall have terms substantially identical in all respects to the notes (except that the transfer restrictions contained in the notes shall be modified or eliminated as appropriate) and which shall be treated, together with any outstanding notes, as a single class of securities.

        The consent of the holders is not necessary under the indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. A consent to any amendment or waiver under the indenture by any holder of notes given in connection with a tender of such holder's notes will not be rendered invalid by such tender. After an amendment under the indenture becomes effective, the Company is required to mail to the holders a notice briefly describing such amendment. However, the failure to give such notice to all the holders, or any defect in the notice will not impair or affect the validity of the amendment.

Defeasance

        The Company at any time may terminate all its obligations under the notes and the indenture("legal defeasance"), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes. If the Company exercises its legal defeasance option, the Subsidiary Guarantees in effect at such time will terminate.

        The Company at any time may terminate its obligations under covenants described under "Certain Covenants" (other than "Merger and Consolidation"), the operation of the cross-default upon a payment default, cross acceleration provisions, the bankruptcy provisions with respect to significant subsidiaries, the judgment default provision and the Subsidiary Guarantee provision described under "Events of Default" above and the limitations contained in clause (3) under "Certain Covenants—Merger and Consolidation" above ("covenant defeasance").

        The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the notes may not be accelerated because of an Event of Default with respect to the notes. If the Company exercises its covenant defeasance option, payment of the notes may not be accelerated because of an Event of Default specified in clause (4), (5), (6), (7) (with respect only to significant subsidiaries), (8) or (9) under "Events of Default" above or because of the failure of the Company to comply with clause (3) under "Certain Covenants—Merger and Consolidation" above.

        In order to exercise either defeasance option, the Company must irrevocably deposit in trust (the "defeasance trust") with the trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the trustee of an opinion of counsel (subject to customary exceptions and exclusions) to the effect that holders of the notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. In the case of legal defeasance only, such opinion of counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law.

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Satisfaction and Discharge

        The indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of notes, as expressly provided for in the indenture) as to all outstanding notes when:

        (1)   either (a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the trustee for cancellation or (b) all of the notes (i) have become due and payable, (ii) will become due and payable at their stated maturity within one year or (iii) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the trustee funds in an amount sufficient to pay and discharge the entire indebtedness on the notes not theretofore delivered to the trustee for cancellation, for principal of, premium, if any, and interest on the notes to the date of deposit together with irrevocable instructions from the Company directing the trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

        (2)   the Company has paid all other sums payable under the indenture; and

        (3)   the Company has delivered to the trustee an officer's certificate and an opinion of counsel stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture have been complied with.

No Personal Liability of Directors, Officers, Employees and Stockholders

        No director, officer, employee or incorporator of the Company or any Restricted Subsidiary or any stockholder of the Company, as such, shall have any liability for any obligations of the Company under the notes, the indenture or the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

Concerning the Trustee

        JPMorgan Chase Bank will be the trustee under the indenture and has been appointed by the Company as registrar and paying agent with regard to the notes.

Governing Law

        The indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

        The following is a summary of capitalized terms used in this summary description of the notes. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

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"Additional Assets" means:

        (1)   any property, plant or equipment, including improvements thereon, to be used by the Company or a Restricted Subsidiary in a Related business;

        (2)   the capital stock of a person that becomes a Restricted Subsidiary as a result of the acquisition of such capital stock by the Company or a Restricted Subsidiary; or

        (3)   capital stock constituting a minority interest in any person that at such time is a Restricted Subsidiary;

provided, however, that, in the case of clauses (2) and (3), such Restricted Subsidiary is primarily engaged in a Related business.

"Asset Disposition" means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer, issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of shares of capital stock of a subsidiary (other than directors' qualifying shares), property or other assets (each referred to for the purposes of this definition as a "disposition") by the Company or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction.

        Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:

        (1)   a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a wholly-owned subsidiary; provided that in the case of a sale by a Restricted Subsidiary to another Restricted Subsidiary, the Company directly or indirectly owns an equal or greater percentage of the common stock of the transferee than of the transferor;

        (2)   the sale of cash equivalents in the ordinary course of business;

        (3)   a disposition of inventory in the ordinary course of business;

        (4)   a disposition of obsolete or worn out equipment or equipment that is no longer useful in the conduct of the business of the Company and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;

        (5)   transactions permitted under "Certain Covenants—Merger and Consolidation";

        (6)   an issuance of capital stock by a Restricted Subsidiary to the Company or to a wholly-owned subsidiary;

        (7)   for purposes of "Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock" only, the making of a Permitted Investment or a disposition subject to "Certain Covenants—Limitation on Restricted Payments";

        (8)   an Asset Swap effected in compliance with "Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock";

        (9)   dispositions of assets in a single transaction or series of related transactions with an aggregate fair market value in any calendar year of less than $2.5 million (with unused amounts in any calendar year being carried over to the next succeeding calendar year subject to a maximum of $5.0 million in such next succeeding fiscal year);

        (10) dispositions in connection with Permitted Liens;

        (11) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

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        (12) the licensing or sublicensing of intellectual property or other general intangibles and licenses, leases or subleases of other property in the ordinary course of business which do not materially interfere with the business of the Company and its Restricted Subsidiaries; and

        (13) foreclosure on assets.

"Asset Swap" means concurrent purchase and sale or exchange of Related business assets between the Company or any of its Restricted Subsidiaries and another person; provided that any cash received must be applied in accordance with the "Limitation on Sales of Assets and Subsidiary Stock" covenant.

"Attributable Indebtedness" in respect of a sale/leaseback transaction means, as at the time of determination, the present value (discounted at the interest rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided that if such interest rate cannot be determined in accordance with GAAP, the present value shall be discounted at the interest rate that is borne by the notes, compounded semi-annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such sale/leaseback transaction (including any period for which such lease has been extended).

"Change of Control" means:

        (1)   (A) any "person" or "group" of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have "beneficial ownership" of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the voting stock of the Company (or its successor by merger, consolidation or purchase of all or substantially all of its assets) (for the purposes of this clause, such person or group shall be deemed to beneficially own any voting stock of the Company held by a parent entity, if such person or group "beneficially owns" (as defined above), directly or indirectly, more than 35% of the voting power of the voting stock of such parent entity);

        (2)   the first day on which a majority of the members of the Board of Directors of the Company are not continuing directors;

        (3)   the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole to any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act); or

        (4)   the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company.

"Consolidated Coverage Ratio" means as of any date of determination, with respect to any person, the ratio of (x) the aggregate amount of Consolidated EBITDA of such person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements are in existence to (y) Consolidated Interest Expense of such person for such four fiscal quarters, provided, however, that:

        (1)   if the Company or any Restricted Subsidiary:

        (a)   has incurred any indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an incurrence of indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such indebtedness as if such indebtedness had been incurred on

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the first day of such period (except that in making such computation, the amount of indebtedness under any revolving credit facility outstanding on the date of such calculation will be deemed to be (i) the average daily balance of such indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (ii) if such facility was created after the end of such four fiscal quarters, the average daily balance of such indebtedness during the period from the date of creation of such facility to the date of such calculation) and the discharge of any other indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new indebtedness as if such discharge had occurred on the first day of such period; or

        (b)   has repaid, repurchased, defeased or otherwise discharged any indebtedness since the beginning of the period that is no longer outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a discharge of indebtedness (in each case other than indebtedness incurred under any revolving credit facility unless such indebtedness has been permanently repaid and the related commitment terminated), Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such discharge of such indebtedness, including with the proceeds of such new indebtedness, as if such discharge had occurred on the first day of such period;

        (2)   if since the beginning of such period the Company or any Restricted Subsidiary will have made any Asset Disposition, including by way of sale/leaseback transaction, or disposed of any company, division, operating unit, segment, business, group of related assets or line of business or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is such an Asset Disposition:

        (a)   the Consolidated EBITDA for such period will be reduced by an amount equal to the Consolidated EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period or increased by an amount equal to the Consolidated EBITDA (if negative) directly attributable thereto for such period; and

        (b)   Consolidated Interest Expense for such period will be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the capital stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such indebtedness after such sale);

        (3)   if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) will have made an Investment in any Restricted Subsidiary (or any person which becomes a Restricted Subsidiary or is merged with or into the Company) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of a company, division, operating unit, segment, business, group of related assets or line of business, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto (including the incurrence of any indebtedness) as if such Investment or acquisition occurred on the first day of such period; and

        (4)   if since the beginning of such period any person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) will have incurred any indebtedness or discharged any indebtedness, made any Asset Disposition or any Investment or acquisition of assets that would have required an

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adjustment pursuant to clause (2) or (3) above if made by the Company or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such period.

For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act). If any indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest rate agreement applicable to such indebtedness if such interest rate agreement has a remaining term in excess of 12 months). If any indebtedness that is being given pro forma effect bears an interest rate at the option of the Company, the interest rate shall be calculated by applying such optional rate chosen by the Company.

"Consolidated EBITDA" means, with respect to any person for any period, without duplication, Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income:

        (1)   Consolidated Interest Expense;

        (2)   Consolidated Income Taxes;

        (3)   consolidated depreciation expense;

        (4)   consolidated amortization expense or impairment charges recorded in connection with the application of Financial Accounting Standard No. 142 "Goodwill and Other Intangibles";

        (5)   other non-cash charges reducing Consolidated Net Income (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation);

        minus

        (6)   non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business.

Notwithstanding the preceding sentence, clauses (2) through (5) relating to amounts of a Restricted Subsidiary of a person will be added to Consolidated Net Income to compute Consolidated EBITDA of such person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such person and, to the extent the amounts set forth in clauses (2) through (5) are in excess of those necessary to offset a net loss of such Restricted Subsidiary or if such Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders.

"Consolidated Income Taxes" means, with respect to any person for any period, taxes imposed upon such person or other payments required to be made by such person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such person or such person and its Restricted Subsidiaries (to the extent such income or profits were included in

69

computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental authority.

"Consolidated Interest Expense" means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense:

        (1)   interest expense attributable to capitalized lease obligations and the interest portion of rent expense associated with Attributable Indebtedness or any synthetic lease obligations in respect of the relevant lease giving rise thereto, determined as if such lease were a capitalized lease in accordance with GAAP, and the interest component of any deferred payment obligations; provided that this clause (1) shall not apply to any rent expense in respect of the Company's obligations to Municipal Corrections Finance under the Master Lease Agreement, between the Company and Municipal Corrections Finance, dated as of August 14, 2001;

        (2)   amortization of debt discount and debt issuance cost (provided that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Interest Expense);

        (3)   non-cash interest expense;

        (4)   commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing;

        (5)   an amount equal to the interest expense of indebtedness of Municipal Corrections Finance;

        (6)   the interest expense on indebtedness of another person that is guaranteed by such person or one of its Restricted Subsidiaries or secured by a lien on assets of such person or one of its Restricted Subsidiaries;

        (7)   costs associated with hedging obligations (including amortization of fees) provided, however, that if hedging obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income;

        (8)   the consolidated interest expense of such person and its Restricted Subsidiaries that was capitalized during such period;

        (9)   the product of (a) all dividends paid or payable, in cash, cash equivalents or indebtedness or accrued during such period on any series of Disqualified Stock of such person or on preferred stock of its Restricted Subsidiaries payable to a party other than the Company or a wholly-owned subsidiary, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state, provincial and local statutory tax rate of such person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP;

        (10) receivables fees; and

        (11) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any person (other than the Company and its Restricted Subsidiaries) in connection with indebtedness incurred by such plan or trust;

For the purpose of calculating the Consolidated Coverage Ratio in connection with the incurrence of any indebtedness, the calculation of Consolidated Interest Expense shall include all interest expense

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(including any amounts described in clauses (1) through (11) above) relating to certain defined indebtedness of the Company or any Restricted Subsidiary.

For purposes of the foregoing, total interest expense will be determined (i) after giving effect to any net payments made or received by the Company and its Subsidiaries with respect to interest rate agreements and (ii) exclusive of amounts classified as other comprehensive income in the balance sheet of the Company. Notwithstanding anything to the contrary contained herein, commissions, discounts, yield and other fees and charges incurred in connection with any transaction pursuant to which the Company or its Restricted Subsidiaries may sell, convey or otherwise transfer or grant a security interest in any accounts receivable or related assets shall be included in Consolidated Interest Expense.

"Consolidated Net Income" means, for any period, the net income (loss) of the Company, its consolidated Restricted Subsidiaries and Municipal Corrections Finance, determined in accordance with GAAP; provided, however, that there will not be included in such Consolidated Net Income:

        (1)   any net income (loss) of any person if such person is not a Restricted Subsidiary (other than Municipal Corrections Finance), except that:

        (a)   subject to the limitations contained in clauses (3), (4) and (5) below, the Company's equity in the net income of any such person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (2) below); and

        (b)   the Company's equity in a net loss of any such person (other than an Unrestricted Subsidiary) for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary;

        (2)   any net income (but not loss) of any Restricted Subsidiary if such subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

        (a)   subject to the limitations contained in clauses (3), (4) and (5) below, the Company's equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend (subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in this clause); and

        (b)   the Company's equity in a net loss of any such Restricted Subsidiary for such period will be included in determining such Consolidated Net Income;

        (3)   any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of the Company or its consolidated Restricted Subsidiaries (including pursuant to any sale/leaseback transaction) which is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any capital stock of any person;

        (4)   any extraordinary gain or loss; and

        (5)   the cumulative effect of a change in accounting principles.

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"Disqualified Stock" means, with respect to any person, any capital stock of such person which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event:

        (1)   matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

        (2)   is convertible or exchangeable for indebtedness or Disqualified Stock (excluding capital stock which is convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary); or

        (3)   is redeemable at the option of the holder of the capital stock in whole or in part,

in each case on or prior to the date that is 91 days after the earlier of the date (a) of the stated maturity of the notes or (b) on which there are no notes outstanding, provided that only the portion of capital stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further that any capital stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such capital stock upon the occurrence of a change of control or asset sale (each defined in a substantially identical manner to the corresponding definitions in the indenture) shall not constitute Disqualified Stock if the terms of such capital stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the Company may not repurchase or redeem any such capital stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Company with the provisions of the indenture described under the captions "Change of Control" and "Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock" and such repurchase or redemption complies with "Certain Covenants—Limitation on Restricted Payments."

"Investment" means, with respect to any person, all investments by such person in other persons (including affiliates) in the form of any direct or indirect advance, loan (other than advances or extensions of credit to customers in the ordinary course of business) or other extensions of credit (including by way of guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of capital stock, indebtedness or other similar instruments issued by, such person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an Investment:

        (1)   hedging obligations entered into in the ordinary course of business and in compliance with the indenture;

        (2)   endorsements of negotiable instruments and documents in the ordinary course of business; and

        (3)   an acquisition of assets, capital stock or other securities by the Company or a subsidiary for consideration to the extent such consideration consists of common stock of the Company.

For purposes of "Certain Covenants—Limitation on Restricted Payments,"

        (1)   "Investment" will include the portion (proportionate to the Company's equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such subsidiary as a Restricted Subsidiary, the Company will be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the

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Company's "Investment" in such subsidiary at the time of such redesignation less (b) the portion (proportionate to the Company's equity interest in such subsidiary) of the fair market value of the net assets (as conclusively determined by the Board of Directors of the Company in good faith) of such subsidiary at the time that such subsidiary is so re-designated a Restricted Subsidiary; and

        (2)   any property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company. If the Company or any Restricted Subsidiary sells or otherwise disposes of any voting stock of any Restricted Subsidiary such that, after giving effect to any such sale or disposition, such entity is no longer a subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value (as conclusively determined by the Board of Directors of the Company in good faith) of the capital stock of such subsidiary not sold or disposed of.

"Net Available Cash" from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal (but not interest) pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of:

        (1)   all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP (after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition;

        (2)   all payments made on any indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;

        (3)   all distributions and other payments required to be made to minority interest holders in subsidiaries or joint ventures as a result of such Asset Disposition; and

        (4)   the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

"Permitted Investment" means an Investment by the Company or any Restricted Subsidiary in:

        (1)   a Restricted Subsidiary or a person which will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Related business;

        (2)   another person if as a result of such Investment such other person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such person's primary business is a Related business;

        (3)   cash and cash equivalents;

        (4)   receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade

73

terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

        (5)   payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

        (6)   loans or advances to employees made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary; provided, however, that the Company and its subsidiaries will comply in all material respects with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated in connection therewith relating to such loans and advances;

        (7)   capital stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;

        (8)   Investments made as a result of the receipt of non-cash consideration from an Asset Disposition that was made pursuant to and in compliance with "Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock";

        (9)   Investments in existence on June 24, 2004;

        (10) currency agreements, interest rate agreements and related hedging obligations, which transactions or obligations are incurred in compliance with "Certain Covenants—Limitation on Indebtedness";

        (11) Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (11), in an aggregate amount at the time of such Investment not to exceed $20.0 million outstanding at any one time (with the fair market value of such Investment being measured at the time made and without giving effect to subsequent changes in value);

        (12) Guarantees issued in accordance with "Certain Covenants—Limitations on Indebtedness"; and

        (13) any Asset Swap made in accordance with "Certain Covenants—Limitation on Sale of Assets and Subsidiary Stock".

"Permitted Liens" means, with respect to any person:

        (1)   liens securing indebtedness and other obligations under a credit facility and related hedging obligations and liens on assets of Restricted Subsidiaries securing guarantees of indebtedness and other obligations of the Company under a credit facility permitted to be incurred under the indenture in an aggregate principal amount at any one time outstanding not to exceed $100.0 million;

        (2)   pledges or deposits by such person under workmen's compensation laws, unemployment insurance laws, social security laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of indebtedness) or leases to which such person is a party, or deposits to secure public or statutory obligations of such person or deposits of cash or United States government bonds to secure surety or performance or appeal bonds to which such person is a party, or deposits as security for contested taxes or import or customs duties or for the payment of rent, in each case incurred in the ordinary course of business;

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        (3)   liens imposed by law, including carriers', warehousemen's and mechanics' liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings if a reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made in respect thereof;

        (4)   liens for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;

        (5)   liens in favor of issuers of surety or performance bonds or letters of credit or bankers' acceptances issued pursuant to the request of and for the account of such person in the ordinary course of its business; provided, however, that such letters of credit do not constitute indebtedness;

        (6)   encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or liens incidental to the conduct of the business of such person or to the ownership of its properties which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such person;

        (7)   liens securing hedging obligations so long as the related indebtedness is, and is permitted to be under the indenture, secured by a lien on the same property securing such hedging obligation;

        (8)   leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

        (9)   judgment liens not giving rise to an Event of Default so long as such lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

        (10) liens for the purpose of securing the payment of all or a part of the purchase price of, or capitalized lease obligations, purchase money obligations or other payments incurred to finance the acquisition, improvement or construction of, assets or property acquired or constructed in the ordinary course of business provided that; (a) the aggregate principal amount of indebtedness secured by such liens is otherwise permitted to be incurred under the indenture and does not exceed the cost of the assets or property so acquired or constructed; and (b) such liens are created within 180 days of construction or acquisition of such assets or property and do not encumber any other assets or property of the Company or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto;

        (11) liens arising solely by virtue of any statutory or common law provisions relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution; provided that: (a) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve Board; and (b) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution;

        (12) liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

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        (13) liens existing on June 24, 2004;

        (14) liens on property or shares of stock of a person at the time such person becomes a Restricted Subsidiary; provided, however, that such liens are not created, incurred or assumed in connection with, or in contemplation of, such other person becoming a Restricted Subsidiary; provided further, however, that any such lien may not extend to any other property owned by the Company or any Restricted Subsidiary;

        (15) liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such liens are not created, incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that such liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

        (16) liens securing indebtedness or other obligations of a Restricted Subsidiary owing to the Company or a wholly-owned subsidiary;

        (17) liens securing the notes and Subsidiary Guarantees;

        (18) liens securing Refinancing Indebtedness incurred to refinance indebtedness that was previously so secured, provided that any such lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original lien arose, could secure) the indebtedness being refinanced or is in respect of property that is the security for a Permitted Lien hereunder;

        (19) any interest or title of a lessor under any capitalized lease obligation or operating lease; and

        (20) liens securing indebtedness (other than subordinated obligations and guarantor subordinated obligations) in an aggregate principal amount outstanding at any one time not to exceed 10% of total tangible assets at the time of determination.

"Refinancing Indebtedness" means indebtedness that is incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) (collectively, "refinance," "refinances," and "refinanced" shall have a correlative meaning) any indebtedness existing on the date of the indenture or incurred in compliance with the indenture (including indebtedness of the Company that refinances indebtedness of any Restricted Subsidiary and indebtedness of any Restricted Subsidiary that refinances indebtedness of another Restricted Subsidiary) including indebtedness that refinances Refinancing Indebtedness, provided, however, that:

        (1)   (a) if the stated maturity of the indebtedness being refinanced is earlier than the stated maturity of the notes, the Refinancing Indebtedness has a stated maturity no earlier than the stated maturity of the indebtedness being refinanced or (b) if the stated maturity of the indebtedness being refinanced is later than the stated maturity of the notes, the Refinancing Indebtedness has a stated maturity at least 91days later than the stated maturity of the notes;

        (2)   the Refinancing Indebtedness has an average life at the time such Refinancing Indebtedness is incurred that is equal to or greater than the average life of the indebtedness being refinanced;

        (3)   such Refinancing Indebtedness is incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the indebtedness being refinanced (plus, without duplication, any additional

76

indebtedness incurred to pay interest or premiums required by the instruments governing such existing indebtedness and fees incurred in connection therewith); and

        (4)   if the indebtedness being refinanced is subordinated in right of payment to the notes or the Subsidiary Guarantee, such Refinancing Indebtedness is subordinated in right of payment to the notes or the Subsidiary Guarantee on terms at least as favorable to the holders as those contained in the documentation governing the indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

"Restricted Investment" means any Investment other than a Permitted Investment.

"Restricted Subsidiary" means any subsidiary of the Company other than an Unrestricted Subsidiary.

"Subsidiary Guarantee" means, individually, any guarantee of payment of the Old Notes and New Notes by a Subsidiary Guarantor pursuant to the terms of the indenture and any supplemental indenture thereto, and, collectively, all such guarantees. Each such Subsidiary Guarantee will be in the form prescribed by the indenture.

"Subsidiary Guarantor" means each subsidiary of the Company in existence on June 24, 2004 and any Restricted Subsidiary that is required to provide a Subsidiary Guarantee in accordance with "Certain Covenants—Future Subsidiary Guarantors."

"Unrestricted Subsidiary" means:

        (1)   any subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and

        (2)   any subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company may designate any subsidiary of the Company (including any newly acquired or newly formed subsidiary or a person becoming a subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if: (1) such subsidiary or any of its subsidiaries does not own any capital stock or indebtedness of or have any Investment in, or own or hold any lien on any property of, any other subsidiary of the Company which is not a subsidiary of the subsidiary to be so designated or otherwise an Unrestricted Subsidiary; (2) all the indebtedness of such subsidiary and its subsidiaries shall, at the date of designation, and will at all times thereafter, consist of non-recourse debt;

        (3)   such designation and the Investment of the Company in such subsidiary complies with "Certain Covenants—Limitation on Restricted Payments";

        (4)   such subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its subsidiaries;

        (5)   such subsidiary is a person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation:

        (a)   to subscribe for additional capital stock of such person; or

        (b)   to maintain or preserve such person's financial condition or to cause such person to achieve any specified levels of operating results; and

        (6)   on the date such subsidiary is designated an Unrestricted Subsidiary, such subsidiary is not a party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary with terms substantially less favorable to the Company than those that might have been obtained from persons who are not affiliates of the Company. Any such designation by

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the Board of Directors of the Company shall be evidenced to the trustee by filing with the trustee a resolution of the Board of Directors of the Company giving effect to such designation and an officer's certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any indebtedness of such subsidiary shall be deemed to be incurred as of such date.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation, no default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Company could incur at least $1.00 of additional indebtedness under the first paragraph of the "Limitation on Indebtedness" covenant on a pro forma basis taking into account such designation.

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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

        The following is a summary of material United States federal income tax consequences relating to exchanging Old Notes for New Notes and owning and disposing of New Notes. This discussion is not a complete discussion of all the potential tax consequences that may be relevant to you. This discussion is based upon the Internal Revenue Code of 1986, as amended (the "Code"), its legislative history, existing and proposed regulations thereunder, published rulings, and court decisions, all as in effect on the date of this document, and all of which are subject to change, possibly on a retroactive basis. We have not sought any ruling from the Internal Revenue Service or an opinion of counsel with respect to the statements made herein concerning the notes, and we cannot assure you that the Internal Revenue Service will agree with such statements. Except as otherwise stated in this discussion, this discussion deals only with notes held as a capital asset by a holder who is a United States person and purchased the Old Notes upon original issuance at their original issue price. A "United States person" is:

•

an individual citizen or resident of the United States or any political subdivision thereof;



•

a corporation, or a partnership or other entity that is treated as a corporation or partnership for United States federal income tax purposes, that is created or organized in the United States or under the laws of the United States or of any state thereof including the District of Columbia;



•

an estate whose income is subject to United States federal income taxation regardless of its source; or



•

a trust if a United States court is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or it was in existence on August 19, 1996, and has elected to be treated as a United States person.

        Your tax treatment may vary depending on your particular situation. This summary does not address all of the tax consequences that may be relevant to holders that are subject to special tax treatment, such as:

•

dealers in securities or currencies;



•

financial institutions;



•

tax-exempt investors;



•

traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;



•

persons liable for alternative minimum tax;



•

insurance companies;



•

real estate investment trusts;



•

regulated investment companies;



•

persons holding notes as part of a hedging, conversion, integrated or constructive sale transaction or a straddle; or



•

United States persons whose functional currency is not the United States dollar.

        If a partnership holds notes, the tax treatment of a partner will generally depend on the status of the partner and on the activities of the partnership. Partners of partnerships holding notes should consult their own tax advisors.

        We urge you to consult your own tax advisors regarding the particular United States federal tax consequences of exchanging, holding and disposing of notes, as well as any tax consequences that may

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arise under the laws of any relevant foreign, state, local, or other taxing jurisdiction or under any applicable tax treaty.

Receipt of New Notes

        Your exchange of Old Notes for New Notes under the exchange offer will not constitute a taxable exchange of the Old Notes. As a result:

•

you will not recognize taxable gain or loss when you receive New Notes in exchange for Old Notes;



•

your holding period in the New Notes will include your holding period in the Old Notes; and



•

your basis in the New Notes will equal your adjusted basis in the Old Notes at the time of the exchange.

Taxation of Interest

        Interest paid on the New Notes generally will be taxable to you as ordinary interest income at the time payments are accrued or received in accordance with your regular method of accounting for United States federal income tax purposes.

Sale or Other Taxable Disposition of New Notes

        You must recognize taxable gain or loss on the sale, exchange, redemption, retirement or other taxable disposition of a New Note. The amount of your gain or loss equals the difference between the amount you receive for the New Note in cash or other property, valued at the fair market value, minus the amount attributable to accrued qualified stated interest on the New Note, if any, and your adjusted tax basis in the New Note. Your initial tax basis in a New Note equals the price you paid for the Old Note that you exchanged for the New Note reduced by any payments other than payments of qualified stated interest made on the Old Note.

        Your gain or loss will generally be a long-term capital gain or loss if your holding period in the New Note is more than one year. Otherwise, it will be a short-term capital gain or loss. Payments attributable to accrued qualified stated interest that you have not yet included in income will be taxed as ordinary interest income.

Non-United States Holders

        The following discussion applies to Non-United States Holders. You are a "Non-United States Holder" if you are not a United States person. Special rules may apply to you if you are a controlled foreign corporation, foreign personal holding company, a corporation that accumulates earnings to avoid United States federal income tax or, in certain circumstances, a United States expatriate.

Exchange of Old Notes

        Your exchange of Old Notes for New Notes under the exchange offer will not constitute a taxable exchange of the Old Notes, and the consequences of the exchange to you will be the same as those of a United States person described above under the heading "—Receipt of New Notes."

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Interest

        Interest that we pay to you on the New Notes will not be subject to United States federal income tax and withholding of United States federal income tax will not be required on interest payments if you:

•

do not actually or constructively own 10% or more of the total combined voting power of all classes of our stock;



•

are not a controlled foreign corporation with respect to which we are a related person;



•

are not a bank whose receipt of interest is described in Section 881(c)(3)(A) of the Code; and



•

you certify to us, our payment agent, or the person who would otherwise be required to withhold United States tax, on Form W-8BEN (or applicable substitute form), under penalties of perjury, that you are not a United States person and provide your name and address.

        If you do not satisfy the preceding requirements, your interest on a New Note would generally be subject to United States withholding tax at a flat rate of 30% (or a lower applicable treaty rate).

        If you are engaged in a trade or business in the United States, and if interest on a New Note is effectively connected with the conduct of that trade or business (or in the case of an applicable tax treaty, is attributable to a permanent establishment maintained by you in the United States), you will be exempt from United States withholding tax but will be subject to regular United States federal income tax on the interest in the same manner as if you were a United States person. See "—Taxation of Interest." In order to establish an exemption from United States withholding tax, you may provide to us, our payment agent or the person who would otherwise be required to withhold United States tax, a properly completed and executed IRS Form W-8ECI (or applicable substitute form). In addition to regular United States federal income tax, if you are a foreign corporation, you may be subject to a United States branch profits tax.

Gain on Disposition

        You generally will not be subject to United States federal income tax with respect to gain recognized on a sale, redemption, exchange or other disposition of a New Note unless:

•

the gain is effectively connected with the conduct by you of a trade or business within the United States, or, under an applicable tax treaty, is attributable to a permanent establishment maintained by you in the United States; or



•

if you are an individual, you are present in the United States for 183 or more days in the taxable year and certain other requirements are met.

Applicable Tax Treaties

        You should consult with your own tax advisor as to any applicable income tax treaties that may provide for a lower rate of withholding tax, exemption from, or a reduction of, branch profits tax, or other rules different from the general rules under United States federal income tax laws.

Information Reporting and Backup Withholding

United States Persons

        In general, information reporting requirements may apply to payments made to you and to the proceeds of a disposition of the notes, unless you are an exempt recipient such as a corporation. Backup withholding may apply if you fail to supply an accurate taxpayer identification number or otherwise fail to comply with applicable United States information reporting or certification

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requirements. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal income tax liability provided the required information is furnished to the Internal Revenue Service.

Non-United States Holders

        Backup withholding and information reporting will not apply to payments of principal or interest on the notes by us or our paying agent to you if you certify as to your status as a Non-United States Holder under penalties of perjury or otherwise establish an exemption (provided that neither we nor our paying agent has actual knowledge that you are a United States person or that the conditions of any other exemptions are not in fact satisfied).

        The payment of the proceeds of the disposition of notes to or through the United States office of a United States or foreign broker will be subject to information reporting and backup withholding unless you provide the certification described above or otherwise establish an exemption. The proceeds of a disposition effected outside the United States by you of notes to or through a foreign office of a broker generally will not be subject to backup withholding or information reporting. However, if that broker is a United States person, a controlled foreign corporation for United States tax purposes, a foreign person 50% or more of whose gross income from all sources for certain periods is effectively connected with a trade or business in the United States, or a foreign partnership that is engaged in the conduct of a trade or business in the United States or that has one or more partners that are United States persons who in the aggregate hold more than 50% of the income or capital interests in the partnership, information reporting requirements will apply unless that broker has documentary evidence in its files of your status as a Non-United States Holder and has no actual knowledge to the contrary or unless you otherwise establish an exemption.

        You should consult your tax advisors regarding the application of information reporting and backup withholding to your particular situation, the availability of an exemption therefrom, and the procedure for obtaining such an exemption, if available. Any amounts withheld from a payment to you under the backup withholding rules will be allowed as a credit against your United States federal income tax liability and may entitle you to a refund, provided you furnish the required information to the Internal Revenue Service.

ERISA CONSIDERATIONS

If you intend to use plan assets to exchange for any of the New Notes offered by this prospectus, you should consult with counsel on the potential consequences of your investment under the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the prohibited transaction provisions of ERISA and the Code. If you intend to use governmental or church plan assets to exchange for any of the New Notes, you should consult with counsel on the potential consequences of your investment under similar provisions applicable under laws governing governmental and church plans.

The following summary is based on the provisions of ERISA and the Code and related guidance in effect as of the date of this prospectus. This summary does not attempt to be a complete summary of these considerations. Future legislation, court decisions, administrative regulations or other guidance will change the requirements summarized in this section. Any of these changes could be made retroactively and could apply to transactions entered into before the change is enacted.

Fiduciary Responsibilities

        ERISA imposes requirements on (1) employee benefit plans subject to ERISA, (2) entities whose underlying assets include employee benefit plan assets, for example, collective investment funds and insurance company general accounts, and (3) fiduciaries of employee benefit plans. Under ERISA,

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fiduciaries generally include persons who exercise discretionary authority or control over plan assets. Before investing any plan assets in any note offered in connection with this prospectus, you should determine whether the investment:

        (1)   is permitted under the plan document and other instruments governing the plan; and

        (2)   is appropriate for the plan in view of its overall investment policy and the composition and diversification of its portfolio, taking into account the limited liquidity of the notes.

        You should consider all factors and circumstances of a particular investment in the notes, including, for example, the risk factors discussed in "Risk Factors" and the fact that in the future there may not be a market in which you will be able to sell or otherwise dispose of your interest in the notes.

        We are not making any representation that the sale of any notes to a plan meets the fiduciary requirements for investment by plans generally or any particular plan or that such an investment is appropriate for plans generally or any particular plan.

Prohibited Transactions

        ERISA and the Code prohibit a wide range of transactions involving (1) employee benefit plans and arrangements subject to ERISA and/or the Code, and (2) persons who have specified relationships to the plans. These persons are called "parties in interest" under ERISA and "disqualified persons" under the Code. The transactions prohibited by ERISA and the Code are called "prohibited transactions." If you are a party in interest or disqualified person who engages in a prohibited transaction, you may be subject to excise taxes and other penalties and liabilities under ERISA and/or the Code. As a result, if you are considering using plan assets to invest in any of the notes offered for sale in connection with this prospectus, you should consider whether the investment might be a prohibited transaction under ERISA and/or the Code.

        Prohibited transactions may arise, for example, if the notes are acquired by a plan with respect to which we, or any of our affiliates, are a party in interest or a disqualified person. Exemptions from the prohibited transaction provisions of ERISA and the Code may apply depending in part on the type of plan fiduciary making the decision to acquire a note and the circumstances under which such decision is made. Some of these exemptions include:

        (1)   Prohibited transaction class exemption ("PTCE") 75-1 (relating to specified transactions involving employee benefit plans and broker-dealers, reporting dealers and banks);

        (2)   PTCE 84-14 (relating to specified transactions directed by independent qualified professional asset managers);

        (3)   PTCE 90-1 (relating to specified transactions involving insurance company pooled separate accounts);

        (4)   PTCE 91-38 (relating to specified transactions by bank collective investment funds);

        (5)   PTCE 95-60 (relating to specified transactions involving insurance company general accounts); and

        (6)   PTCE 96-23 (relating to specified transactions directed by in-house asset managers).

        These exemptions do not, however, provide relief from the self-dealing prohibitions under ERISA and the Code. In addition, there is no assurance that any of these class exemptions or other exemptions will be available with respect to any particular transaction involving the notes.

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Treatment of Notes as Debt Instruments

        Some transactions involving our operations could give rise to prohibited transactions under ERISA and the Code if our assets were deemed to be plan assets. Pursuant to Department of Labor Regulations Section 2510.3-101 (which we refer to as the "plan assets regulations"), in general, when a plan acquires an "equity interest" in an entity such as Cornell Companies, Inc., the plan's assets include both the equity interest and an undivided interest in each of the underlying assets of the entity unless exceptions set forth in the plan assets regulations apply.

        In general, an "equity interest" is defined under the plan assets regulations as any interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features. Although there is very little published authority concerning the application of this definition, we believe that the notes should be treated as debt rather than equity interest under the plan assets regulations because the notes (1) should be treated as indebtedness under applicable local law and debt, rather than equity, for United States tax purposes and (2) should not be deemed to have any "substantial equity features." However, no assurance can be given that the notes will be treated as debt for purposes of ERISA. If the notes were to be treated as an equity interest under the plan assets regulations, the purchase of the notes using plan assets could cause our assets to become subject to the fiduciary and prohibited transaction provisions of ERISA and the Code unless investment in the notes by "benefit plan investors" is not "significant," as determined under the plan assets regulations. We cannot assure you that the criteria for this exception will be satisfied at any particular time and no monitoring or other measures will be taken to determine whether such criteria are met. This means that, if the notes are treated as equity interests under the plan assets regulations and investment in the notes by benefit plan investors is significant, our assets could be treated as plan assets subject to ERISA and a non-exempt prohibited transaction could arise in connection with our operating activities.

        Any insurance company proposing to invest assets of its general account in the notes should consider the implications of the U.S. Supreme Court's decision in John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank, 510 U.S. 86, 114 S. Ct. 517 (1993), which, in some circumstances, treats such general account as including the assets of a plan that owns a policy or other contract with such insurance company, as well as the effect of Section 401(c) of ERISA, as interpreted by regulations issued by the Department of Labor.

Government and Church Plans

        Governmental plans and some church plans, while not subject to the fiduciary responsibility provisions of ERISA or the prohibited transactions provisions of ERISA or the Code, may be subject to state or other federal laws that are very similar to the provisions of ERISA and the Code. If you are a fiduciary of a governmental or church plan, you should consult with counsel before purchasing any notes offered for sale in connection with this prospectus.

Foreign Indicia of Ownership

        ERISA also prohibits plan fiduciaries from maintaining the indicia of ownership of any plan assets outside the jurisdiction of the United States district courts except in specified cases. Before investing in any note offered for sale in connection with this prospectus, you should consider whether the acquisition, holding or disposition of a note would satisfy such indicia of ownership rules.

84

Representations and Warranties

        If you acquire or accept a note offered in connection with this prospectus, you and any subsequent transferee will be deemed to have represented and warranted that either:

        (1)   you have not used plan assets to acquire such note;

        (2)   your acquisition and holding of a note (A) is exempt from the prohibited transaction restrictions of ERISA and the Code under one or more prohibited transaction class exemptions or does not constitute a prohibited transaction under ERISA and the Code, and (B) meets the fiduciary requirements of ERISA; or

        (3)   if you use plan assets to acquire such note and you are not otherwise subject to ERISA, such acquisition is in compliance with the applicable laws, rules and regulations governing such plan.

GLOBAL SECURITIES; BOOK-ENTRY SYSTEM

The Global Securities

        The notes will initially be represented by one or more permanent global notes in definitive, fully registered book-entry form (the global securities) which will be registered in the name of Cede & Co., as nominee of DTC and deposited on behalf of purchasers of the notes represented thereby with a custodian for DTC for credit to the respective accounts of the purchasers (or to such other accounts as they may direct) at DTC.

        We expect that pursuant to procedures established by DTC (a) upon deposit of the global securities, DTC or its custodian will credit on its internal system portions of the global securities which will contain the corresponding respective amount of the global securities to the respective accounts of persons who have accounts with such depositary and (b) ownership of the notes will be shown on, and the transfer of ownership thereof will be affected only through, records maintained by DTC or its nominee (with respect to interests of participants (as defined below) and the records of participants (with respect to interests of persons other than participants). Such accounts initially will be designated by or on behalf of the initial purchasers and ownership of beneficial interests in the global securities will be limited to persons who have accounts with DTC (the participants) or persons who hold interests through participants. Noteholders may hold their interests in a global security directly through DTC if they are participants in such system, or indirectly through organizations which are participants in such system.

        So long as DTC or its nominee is the registered owner or holder of any of the notes, DTC or such nominee will be considered the sole owner or holder of such notes represented by such global securities for all purposes under the indenture and under the notes represented thereby. No beneficial owner of an interest in the global securities will be able to transfer such interest except in accordance with the applicable procedures of DTC in addition to those provided for under the indenture and, if applicable, those of the Euroclear System (Euroclear) and Clearstream Banking, société anonyme, Luxembourg (Clearstream Luxembourg).

Certain Book-Entry Procedures for the Global Securities

        The operations and procedures of DTC, Euroclear and Clearstream Luxembourg are solely within the control of the respective settlement systems and are subject to change by them from time to time. Investors are urged to contact the relevant system or its participants directly to discuss these matters.

        DTC has advised us that it is:

•

a limited-purpose trust company organized under the laws of the State of New York;

85

•

a "banking organization" within the meaning of the New York Banking Law;



•

a member of the Federal Reserve System;



•

a "clearing corporation" within the meaning of the New York Uniform Commercial Code, as amended; and



•

a "clearing agency" registered pursuant to Section 17A of the Securities Exchange Act of 1934.

        DTC was created to hold securities for its participants (collectively, the participants) and to facilitate the clearance and settlement of securities transactions, such as transfers and pledges, between participants through electronic book-entry changes to the accounts of its participants, thereby eliminating the need for physical transfer and delivery of certificates. DTC's participants include securities brokers and dealers (including the initial purchasers), banks and trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. Indirect access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the indirect participants) that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Investors who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants. The rules applicable to DTC and its participants are on file with the Commission.

        The laws of some jurisdictions may require that some purchasers of securities take physical delivery of those securities in definitive form. Accordingly, the ability to transfer beneficial interests in notes represented by a global security to those persons may be limited. In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of persons who hold interests through participants, the ability of a person holding a beneficial interest in a global security to pledge or transfer that interest to persons or entities that do not participate in DTC's system, or to otherwise take actions in respect of that interest, may be affected by the lack of a physical security in respect of that interest.

        So long as DTC or its nominee is the registered owner of a global security, DTC or that nominee, as the case may be, will be considered the sole legal owner or holder of the notes represented by that global security for all purposes of the notes and the indenture. Except as provided below, owners of beneficial interests in a global security will not be entitled to have the notes represented by that global security registered in their names, will not receive or be entitled to receive physical delivery of certificated securities, and will not be considered the owners or holders of the notes represented by that beneficial interest under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee. To facilitate subsequent transfers, all global securities that are deposited with, or on behalf of, DTC will be registered in the name of DTC's nominee, Cede & Co. The deposit of global securities with, or on behalf of, DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. We understand that DTC has no knowledge of the actual beneficial owners of the securities. Accordingly, each holder owning a beneficial interest in a global security must rely on the procedures of DTC and, if that holder is not a participant or an indirect participant, on the procedures of the participant through which that holder owns its interest, to exercise any rights of a holder of notes under the indenture or that global security. We understand that under existing industry practice, in the event that we request any action of holders of notes, or a holder that is an owner of a beneficial interest in a global security desires to take any action that DTC, as the holder of that global security, is entitled to take, DTC would authorize the participants to take that action and the participants would authorize holders owning through those participants to take that action or would otherwise act upon the instruction of those holders.

86

        Conveyance of notices and other communications by DTC to its direct participants, by its direct participants to indirect participants and by its direct and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

        Neither DTC nor Cede & Co. will consent or vote with respect to the global securities. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants of DTC to whose accounts the securities are credited on the applicable record date, which are identified in a listing attached to the omnibus proxy.

        Neither we nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of notes by DTC, or for maintaining, supervising or reviewing any records of DTC relating to the notes.

        Payments with respect to the principal of and premium, if any, and interest on a global security will be payable by the trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of the global security under the indenture. Under the terms of the indenture, we and the trustee may treat the persons in whose names the notes, including the global securities, are registered as the owners thereof for the purpose of receiving payment thereon and for any and all other purposes whatsoever. Accordingly, neither we nor the trustee has or will have any responsibility or liability for the payment of those amounts to owners of beneficial interests in a global security. It is our understanding that DTC's practice is to credit direct its participants' accounts on the applicable payment date in accordance with their respective holdings shown on DTC's records, unless DTC has reason to believe that it will not receive payment on that date. Payments by the participants and the indirect participants to the owners of beneficial interests in a global security will be governed by standing instructions and customary industry practice and will be the responsibility of the participants and indirect participants and not of DTC, us or the trustee, subject to statutory or regulatory requirements in effect at the time. None of us, the trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial interests in the global securities or for maintaining, supervising or reviewing any records relating to those beneficial interests.

        Transfers between participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream Luxembourg will be effected in the ordinary way in accordance with their respective rules and operating procedures.

        Subject to compliance with the transfer restrictions applicable to the notes, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Clearstream Luxembourg participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream Luxembourg, as the case may be, by its respective depositary; however, those crossmarket transactions will require delivery of instructions to Euroclear or Clearstream Luxembourg, as the case may be, by the counterparty in that system in accordance with the rules and procedures and within the established deadlines (Brussels time) of that system. Euroclear or Clearstream Luxembourg, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant global securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream Luxembourg participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream Luxembourg.

        Because of time zone differences, the securities account of a Euroclear or Clearstream Luxembourg participant purchasing an interest in a global security from a participant in DTC will be

87

credited, and any such crediting will be reported to the relevant Euroclear or Clearstream Luxembourg participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream Luxembourg) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream Luxembourg as a result of sales of interests in a global security by or through a Euroclear or Clearstream Luxembourg participant to a participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream Luxembourg cash account only as of the business day for Euroclear or Clearstream Luxembourg following DTC's settlement date.

        Although we understand that DTC, Euroclear and Clearstream Luxembourg have agreed to the foregoing procedures to facilitate transfers of interests in the global securities among participants in DTC, Euroclear and Clearstream Luxembourg, they are under no obligation to perform or to continue to perform those procedures, and those procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream Luxembourg or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

        DTC, Euroclear or Clearstream Luxembourg may discontinue providing its services as securities depositary with respect to the global securities at any time by giving reasonable notice to us or the trustee. Under such circumstances, if a successor securities depositary is not obtained, certificates for the securities are required to be printed and delivered.

        We may decide to discontinue use of the system of book-entry transfers through DTC or a successor securities depositary. In that event, certificates for the securities will be printed and delivered.

        We have provided the foregoing information with respect to DTC to the financial community for information purposes only. We obtained the information in this section and elsewhere in this prospectus concerning DTC, Euroclear and Clearstream Luxembourg and their respective book-entry systems from sources that we believe are reliable. Although we expect DTC, Euroclear or Clearstream Luxembourg and their participants to follow the foregoing procedures in order to facilitate transfers of interests in global securities among their respective participants, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time.

EXCHANGE OFFER AND REGISTRATION RIGHTS

        In connection with the issuance of the Old Notes, we and our subsidiary guarantors entered into a registration rights agreement with J.P. Morgan Securities Inc., Comerica Securities, Inc., Piper Jaffray & Co. and SouthTrust Securities, Inc., (collectively, the "Initial Purchasers"). This exchange offer is being made pursuant to the registration rights agreement. The following summary of selected provisions of the registration rights agreement is not complete and is subject to all the provisions of the registration rights agreement. Copies of the registration rights agreement are available from us upon request as described under "Where You Can Find More Information."

        Pursuant to the registration rights agreement, we agreed to use our reasonable best efforts to file with the SEC and cause to become effective this exchange offer registration statement relating to an offer to exchange the Old Notes for New Notes, which have terms identical to the Old Notes (except that such New Notes will not be subject to restrictions on transfer or to any increase in annual interest rate).

        Upon effectiveness of the exchange offer registration statement, we will offer the New Notes in exchange for Old Notes. We have agreed to commence the exchange offer promptly after the exchange offer registration statement is declared effective and use our reasonable best efforts to complete the exchange offer no later than 60 days after the effective date. The exchange offer will remain open for at least 20 business days after the date we mail notice of the exchange offer to noteholders. For each

88

note surrendered to us under the exchange offer, the noteholder will receive an exchange note evidencing an equal principal amount of indebtedness of the note surrendered. Interest on each exchange note will accrue from the last interest payment date on which interest was paid on the notes or, if no interest has been paid on the notes, from the closing date. Under current SEC interpretations, the exchange notes will generally be freely transferable after the exchange offer, except that any broker-dealer that participates in the exchange must deliver a prospectus meeting the requirements of the Securities Act when it resells the exchange notes.

        If the exchange offer is not completed (or, if required, the shelf registration statement is not declared effective) on or before December 21, 2004, the annual interest rate borne by the notes will be increased by 0.25% per annum for the first 90-day period (which rate will be increased by an additional 0.25% per annum for each subsequent 90-day period that such additional interest continues to accrue, provided that the rate at which such additional interest accrues may in no event exceed 1.00% per annum) until the exchange offer is completed or the shelf registration statement is declared effective.

        If:

•

we determine that the exchange offer would violate any applicable law or applicable interpretations of the staff of the SEC;



•

the exchange offer is not completed by December 21, 2004,



•

any initial purchaser shall reasonably request in connection with any offer or sale of Old Notes not eligible to be exchanged for New Notes in the exchange offer;

        we will use our reasonable best efforts to:

•

cause to become effective a shelf registration statement relating to resales of the notes; and



•

keep that shelf registration statement effective until the expiration of the time period referred to in Rule 144(k) under the Securities Act, or such shorter period that will terminate when all notes covered by the shelf registration statement have been sold.

        We will, in the event of such a shelf registration, provide to each noteholder copies of a prospectus, notify each noteholder when the shelf registration statement has become effective and take certain other actions to permit resales of the notes. A noteholder that sells notes under the shelf registration statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with those sales and will be bound by the provisions of the registration rights agreement that are applicable to such a noteholder (including certain indemnification obligations). Under applicable interpretations of the staff of the SEC, our affiliates will not be permitted to exchange their notes for registered notes in the exchange offer.

        If the shelf registration statement, if required, has been declared effective and thereafter either ceases to be effective or the prospectus contained therein ceases to be usable at any time during the required period, and such failure to remain effective or usable exists for more than 30 days (whether or not consecutive) in any 12-month period, then the interest rate on the Old Notes will be increased by (i) 0.25% per annum for the first 90-day period immediately following the 30^th day in such 12-month period and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until the shelf registration statement has again been declared effective or the prospectus again becomes usable, up to a maximum of 1.00% per annum of additional interest.

        If we effect the exchange offer, we will be entitled to close the exchange offer 20 business days after its commencement, provided that we have accepted all notes validly surrendered in accordance with the terms of the exchange offer. Notes not tendered in the exchange offer shall bear interest at

89

the rate set forth on the cover page of this prospectus and be subject to all the terms and conditions specified in the indenture, including transfer restrictions.

        Holders of Old Notes will be required to make certain representations to us, as described in the registration rights agreement, in order to participate in the exchange offer and will be required to deliver information to be used in connection with the shelf registration statement in order to have their Old Notes included in the shelf registration statement and benefit from the provisions regarding additional interest set forth above. Any holders, other than the initial purchasers, who are eligible to participate in the exchange offer but fail to, or elect not to, participate therein will continue to hold transfer restricted Old Notes. The transfer restricted Old Notes will remain outstanding and will continue to accrue interest, but holders of transfer restricted Old Notes will have no further rights to exchange their transfer restricted Old Notes or have such securities registered under the registration rights agreement.

PLAN OF DISTRIBUTION

        Based on interpretations by the staff of the Commission set forth in no action letters issued to third parties, we believe that you may transfer New Notes issued under the exchange offer in exchange for Old Notes unless you are:

•

our "affiliate" within the meaning of Rule 405 under the Securities Act;



•

a broker-dealer that acquired Old Notes directly from us; or



•

a broker-dealer that acquired Old Notes as a result of market-making or other trading activities without compliance with the registration and prospectus delivery provisions of the Securities Act;

provided that you acquire the New Notes in the ordinary course of your business and you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the New Notes. Broker-dealers receiving New Notes in the exchange offer will be subject to a prospectus delivery requirement with respect to resales of the New Notes.

        To date, the staff of the Commission has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to transactions involving an exchange of securities such as this exchange offer, other than a resale of an unsold allotment from the original sale of the Old Notes, with the prospectus contained in the exchange offer registration statement.

        Each broker-dealer that receives New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired as a result of market-making activities or other trading activities. In addition, until            , all dealers effecting transactions in the New Notes may be required to deliver a prospectus.

        We will not receive any proceeds from any sale of New Notes by broker-dealers. New Notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such New Notes. Any broker-dealer that resells New Notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such New Notes may be deemed to be an "underwriter" within the meaning of the

90

Securities Act and any profit on any such resale of New Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the notes), other than commissions or concessions of any brokers or dealers, and will indemnify the holders of the notes (including any broker-dealers) against specified liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

        The validity and enforceability of the notes offered hereby will be passed upon for Cornell Companies, Inc. by Locke Liddell & Sapp LLP, Houston, Texas.

EXPERTS

Independent Registered Public Accounting Firm

        The consolidated financial statements as of December 31, 2003 and 2002 and for each of the two years in the period ended December 31, 2003 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

Independent Accountants

        The consolidated statements of operations and cash flows of Cornell for the year ended December 31, 2001, included in this prospectus, have been audited by Arthur Andersen LLP, independent accountants, as indicated in their report appearing herein. Arthur Andersen has ceased active operations. After reasonable efforts, we have been unable to obtain Arthur Andersen's written consent to the inclusion or incorporation of their report in this prospectus. As a result, Arthur Andersen will not have any liability for any untrue statement of a material fact contained in the financial statements audited by Arthur Andersen or any omission of a material fact required to be stated therein. Accordingly, investors would likely be unable to successfully recover on a claim against Arthur Andersen for any untrue statement of a material fact contained in the financial statements audited by Arthur Andersen or any omission of a material fact required to be stated therein.

        In May 2002, our board of directors, upon the recommendation of its audit committee, approved the dismissal of Arthur Andersen as our independent auditor and retained PricewaterhouseCoopers LLP as Cornell's independent registered public accounting firm with respect to the audit of Cornell's consolidated financial statements for our fiscal years ending December 31, 2003 and 2002 and as of December 31, 2003 and 2002 included herein. However, PricewaterhouseCoopers has not audited the financial statements that were audited by Arthur Andersen.

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The exchange agent for the exchange offer is:

JPMorgan Chase Bank
1-800-275-2048

By Overnight JPMorgan Chase Bank 2001 Bryan Street, Floor 10 Dallas, TX 75201 Attention: Frank Ivins
or	By Fax 214-468-6494 Attn: Frank Ivins
JPMorgan Chase Bank 4 New York Plaza, Ground Floor New York, NY 10004

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited consolidated financial statements:
	Report of independent registered public accounting firm
	Report of independent public accountants
	Consolidated balance sheets at December 31, 2003 and December 30, 2002
	Consolidated statements of operations and comprehensive income (loss) for the fiscal years ended December 31, 2003, 2002 and 2001
	Consolidated statements of stockholders' equity for the fiscal years ended December 31, 2003, 2002 and 2001
	Consolidated statements of cash flows for the fiscal years ended December 31, 2003, 2002, and 2001
	Notes to consolidated financial statements

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Cornell Companies, Inc.:

        In our opinion, the accompanying consolidated balance sheets as of December 31, 2003 and 2002 and the related consolidated statements of operations and comprehensive income, stockholders' equity and cash flows for each of the years then ended present fairly, in all material respects, the financial position of Cornell Companies, Inc. and its subsidiaries (collectively the Company) at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The consolidated financial statements of the Company for the year ended December 31, 2001, prior to the revisions described in Note 3 of the consolidated financial statements, were audited by other independent accountants who have ceased operations. Those independent accountants expressed an unqualified opinion on those financial statements in their report dated April 16, 2002.

        As discussed above, the consolidated financial statements of the Company as of December 31, 2001, and for the year then ended, were audited by other independent accountants who have ceased operations. As described in Note 3, those financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets," which was adopted by the Company as of January 1, 2002. We audited the transitional disclosures for 2001 included in Note 3. In our opinion, the transitional disclosures for 2001 in Note 3 are appropriate. Additionally, as described in Note 3, these financial statements have been revised to conform to the requirements set forth in Statement of Financial Accounting Standard No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections," which was adopted by the Company as of January 1, 2003. We audited the adjustments described in Note 3 that were applied to revise the 2001 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2001 financial statements of the Company other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 financial statements taken as a whole.

/s/  PRICEWATERHOUSECOOPERS LLP

Houston, Texas
March 11, 2004,
except for Note 16,
as to which the date
is June 3, 2004

F-2

        The following report is a copy of a report previously issued by Arthur Andersen LLP ("Andersen"). This report has not been reissued by Andersen and Andersen did not consent to the incorporation by reference of this report (as included in this Form 10-K) into any of the Company's registration statements.

        As discussed in Note 3, the Company has revised its financial statements for the year ended December 31, 2001 to include the transitional disclosures required by statement of financial accounting standards No. 142, "Goodwill and Intangible Assets." The Andersen report does not extend to these changes. The revisions to the 2001 financial statements related to these transitional disclosures were reported on by PricewaterhouseCoopers LLP, as stated in their report appearing herein.

        Additionally, as discussed in Note 3, the Company has revised its financial statements for the year ended December 31, 2001 to conform to the requirements set forth in Statement of Financial Accounting Standard No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." The Andersen report does not extend to these changes. The revisions to the 2001 financial statements related to these the adoption of Statement of Financial Accounting Standard No. 145 were reported on by PricewaterhouseCoopers LLP, as stated in their report appearing herein.

F-3

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Cornell Companies, Inc.:

        We have audited the accompanying consolidated balance sheets of Cornell Companies, Inc. and subsidiaries as of December 31, 2001 and 2000*, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2001*. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cornell Companies, Inc. and subsidiaries as of December 31, 2001* and 2000*, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001*, in conformity with accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Houston, Texas
April 16, 2002

*

The Company's consolidated balance sheet as of December 31, 2001 and 2000 and the consolidated statements of operations and comprehensive income, shareholders' equity and cash flows for the years ended December 31, 2000 and 1999 are not included in this prospectus.

F-4

CORNELL COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

			December 31,
			2003			2002
			(In thousands, except share data)
Assets
Current assets:
	Cash and cash equivalents		$	40,171		$	52,610
	Accounts receivable—trade (net of allowance for doubtful accounts of $1,929 and $2,238, respectively)			52,772			57,263
	Other receivables (net of allowance for doubtful accounts of $5,386 for 2003)			3,769			2,772
	Restricted assets			22,185			14,767
	Deferred tax assets			3,411			3,300
	Prepaids and other			8,789			5,528
		Total current assets		131,097			136,240
Property and equipment, net				267,903			255,450
Other assets:
	Debt service reserve fund			23,800			24,157
	Intangible assets, net			13,287			13,062
	Deferred costs and other			12,070			12,382
		Total assets	$	448,157		$	441,291
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable and accrued liabilities		$	36,577		$	32,622
	Current portion of long-term debt			8,306			7,630
		Total current liabilities		44,883			40,252
Long-term debt, net of current portion				227,292			232,258
Deferred tax liabilities				7,006			4,954
Other long-term liabilities				2,741			3,875
		Total liabilities		281,922			281,339
Commitments and contingencies
Stockholders' equity:
	Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued			—			—
	Common stock, $.001 par value, 30,000,000 shares authorized, 14,578,505 and 14,201,038 shares issued and outstanding, respectively			15			14
	Additional paid-in capital			143,735			140,085
	Retained earnings			34,218			30,248
	Treasury stock (1,537,583 and 1,429,586 shares of common stock, respectively, at cost)			(12,458	)		(11,038	)
	Deferred compensation			(803	)		(811	)
	Notes from shareholders			—			(442	)
	Other comprehensive income			1,528			1,896
		Total stockholders' equity		166,235			159,952
		Total liabilities and stockholders' equity	$	448,157		$	441,291

The accompanying notes are an integral part of these consolidated financial statements.

F-5

CORNELL COMPANIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)

			Year ended December 31,
			2003			2002			2001
			(In thousands, except share data)
Revenues			$	271,632		$	275,145		$	265,250
Operating expenses				209,736			212,309			205,805
Pre-opening and start-up expenses				3,398			—			3,858
Depreciation and amortization				10,699			9,779			9,278
General and administrative expenses				23,415			21,480			15,291
	Income from operations			24,384			31,577			31,018
Interest expense				19,280			20,698			21,787
Interest income				(1,626	)		(1,974	)		(888	)
Loss on extinguishment of debt				—			—			4,946
Minority interest in consolidated special purpose entities				—			574			(1,674	)
	Income before provision for income taxes and cumulative effect of changes in accounting principles			6,730			12,279			6,847
Provision for income taxes				2,760			4,952			2,958
	Income before cumulative effect of changes in accounting principles			3,970			7,327			3,889
Cumulative effect of changes in accounting principles, net of related income tax provision (benefit) of approximately ($671) and $535 in 2002 and 2001, respectively				—			(965	)		770
	Net income		$	3,970		$	6,362		$	4,659
Earnings per share:
	Basic
		Income before cumulative effect of changes in accounting principles	$	.31		$	.57		$	.40
		Cumulative effect of changes in accounting principles		—			(.08	)		.08
		Net income	$	.31		$	.49		$	.48
	Diluted
		Income before cumulative effect of changes in accounting principles	$	.30		$	.55		$	.39
		Cumulative effect of changes in accounting principles		—			(.07	)		.07
		Net income	$	.30		$	.48		$	.46
Number of shares used in per share computation:
	Basic			12,941			12,911			9,616
	Diluted			13,263			13,232			10,069
Comprehensive income:
	Net income		$	3,970		$	6,362		$	4,659
	Unrealized gain/(loss) on derivative instruments			(368	)		1,896			—
		Comprehensive income	$	3,602		$	8,258		$	4,659

The accompanying notes are an integral part of these consolidated financial statements.

F-6

CORNELL COMPANIES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

	Common Stock
																		Other Compre- hensive Income/ (Loss)
															Notes from Share- holders
	Shares	Par Value		Additional Paid-In Capital			Retained Earnings		Treasury Stock			Deferred Compen- sation
	(In thousands, except share data)
Balances at January 1, 2001	10,161,113	$	10	$	91,625		$	19,227	$	(5,933	)	$	—		$	(609	)	$	—
Exercise of stock options	156,923		—		886			—		—			—			—			—
Income tax benefits from stock options exercised	—		—		619			—		—			—			—			—
Deferred compensation	—		—		1,088			—		—			(1,088	)		—
Amortization of deferred compensation	—		—		—			—		—			55			—			—
Purchase of treasury stock (154,316 shares at cost)	—		—		—			—		(2,157	)		—			—			—
Issuance of common stock in public offering	3,450,000		4		43,818			—		—			—			—			—
Issuance of common stock to employee stock purchase plan	46,767		—		214			—		—			—			—			—
Issuance of common stock under 2000 director's stock plan	22,387		—		125			—		—			—			—			—
Exercise of stock warrants	168,292		—		603			—		—			—			—			—
Accrued interest on notes from shareholders	—		—		—			—		—			—			(42	)		—
Net income	—		—		—			4,659		—			—			—			—
Balances at December 31, 2001	14,005,482		14		138,978			23,886		(8,090	)		(1,033	)		(651	)		—
Exercise of stock options	95,059		—		201			—		—			—			—			—
Income tax benefits from stock options exercised	—		—		244			—		—			—			—			—
Deferred compensation	—		—		(101	)		—		—			101			—			—
Mark to market adjustments for deferred bonus plan	—		—		(551	)		—		—			551			—			—
Other comprehensive income	—		—		—			—		—			—			—			1,896
Deferred and other stock compensation	—		—		144			—		—			89			—			—
Purchase of treasury stock (277,100 shares, at cost)	—		—		—			—		(2,429	)		—			—			—
Purchases of treasury stock by deferred bonus plan (39,665 shares at cost)	—		—		519			—		(519	)		(519	)		—			—
Repayment of shareholder notes	—		—		—			—		—			—			250			—
Issuance of common stock to employee stock purchase plan	82,581		—		399			—		—			—			—			—
Issuance of common stock under 2000 director's stock plan	17,916		—		252			—		—			—			—			—
Accrued interest on notes from shareholders	—		—		—			—		—			—			(41	)		—
Net income	—		—		—			6,362		—			—			—			—
Balances at December 31, 2002	14,201,038		14		140,085			30,248		(11,038	)		(811	)		(442	)		1,896
Exercise of stock options	315,853		1		2,069			—		—			—			—			—
Income tax benefits from stock options exercised	—		—		575			—		—			—			—			—
Mark to market adjustments for deferred bonus plan	—		—		315			—		—			(315	)		—			—
Other comprehensive income/(loss)	—		—		—			—		—			—			—			(368	)
Deferred and other stock compensation	—		—		—			—		—			513			—			—
Purchase of treasury stock (106,500 shares, at cost)	—		—		—			—		(1,230	)		—			—			—
Purchases of treasury stock by deferred bonus plan (8,115 shares at cost)	—		—		190			—		(190	)		(190	)		—			—
Repayment of shareholder notes	—		—		—			—		—			—			464			—
Issuance of common stock to employee stock purchase plan	46,486		—		356			—		—			—			—			—
Issuance of common stock under 2000 director's stock plan	15,128		—		145			—		—			—			—			—
Accrued interest on notes from shareholders	—		—		—			—		—			—			(22	)		—
Net income	—		—		—			3,970		—			—			—			—
Balances at December 31, 2003	14,578,505	$	15	$	143,735		$	34,218	$	(12,458	)	$	(803	)	$	—		$	1,528

The accompanying notes are an integral part of these consolidated financial statements.

F-7

CORNELL COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Year ended December 31,
				2003			2002			2001
				(Dollars in thousands)
Cash flows from operating activities:
	Net income			$	3,970		$	6,362		$	4,659
	Adjustments to reconcile net income to net cash provided by operating activities—
		Cumulative effect of changes in accounting principles			—			965			(770	)
		Minority interest in consolidated special purpose entities			—			574			(1,674	)
		Loss on extinguishment of debt			—			—			4,946
		Depreciation			9,804			8,901			7,753
		Amortization of intangibles and other assets			895			878			1,525
		Amortization of deferred compensation			502			233			55
		Amortization of deferred financing costs			1,157			1,113			2,012
		Provision for bad debts			7,550			1,246			1,339
		Loss on sale of property and equipment			50			—			39
		Deferred income taxes			1,941			(1,959	)		3,637
		Change in assets and liabilities:
			Accounts receivable		(583	)		2,010			(9,368	)
			Restricted assets		24			1,467			(3,696	)
			Other assets		(2,283	)		247			4,680
			Accounts payable and accrued liabilities		4,675			(74	)		(1,230	)
			Deferred revenues and other liabilities		(1,491	)		(2,199	)		(2,360	)
		Net cash provided by operating activities			26,211			19,764			11,547
Cash flows from investing activities:
	Capital expenditures				(22,304	)		(11,114	)		(14,168	)
	Payments to restricted escrow arrangement, net				(10,385	)		—			—
	Proceeds from sales of property and equipment				—			—			98
	Return of restricted assets from deferred bonus plan				—			1,000			—
	Payments of non-compete agreements				(1,000	)		—			—
	Purchases of marketable securities, net				—			—			(23,800	)
	Payments to restricted debt payment account, net				(2,275	)		(2,184	)		(10,219	)
			Net cash used in investing activities		(35,964	)		(12,298	)		(48,089	)
Cash flows from financing activities:
	Proceeds from long-term debt and bonds				24,339			1,083			273,774
	Payments on long-term debt				(21,000	)		—			(220,393	)
	Payments of MCF bonds				(7,600	)		(6,800	)		—
	Payments of capital lease obligations				(31	)		(113	)		(42	)
	Proceeds from issuances of common stock				—			—			43,822
	Payments of debt issuance and other financing costs				(31	)		—			(9,537	)
	Collections of payments of shareholder notes				440			173			(3,650	)
	Proceeds from (distributions to) equity owners of consolidated special purpose entities				—			(614	)		6,249
	Proceeds from exercise of stock options and warrants				2,427			600			1,100
	Purchases of treasury stock				(1,230	)		(2,429	)		(2,157	)
			Net cash (used in) provided by financing activities		(2,686	)		(8,100	)		89,166
Net increase (decrease) in cash and cash equivalents					(12,439	)		(634	)		52,624
Cash and cash equivalents at beginning of period					52,610			53,244			620
Cash and cash equivalents at end of period				$	40,171		$	52,610		$	53,244
Supplemental cash flow disclosure:
	Interest paid, net of amounts capitalized			$	18,690		$	19,544		$	15,728
	Income taxes paid				3,387			3,369			516
Other non-cash investing and financing activities:
	Other comprehensive income (loss)				(368	)		1,896			—
	Purchases of treasury stock by deferred bonus plan				190			519			—
	Debt cancelled for stock warrants exercise				—			—			603
	Common stock issued for board of director fees				145			252			125
	Borrowings on capital lease				3			65			50

The accompanying notes are an integral part of these consolidated financial statements.

F-8

CORNELL COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of the business

        Cornell Companies, Inc. (collectively with its subsidiaries and consolidated special purpose entities, the "Company"), a Delaware corporation, provides the integrated development, design, construction and management of facilities to governmental agencies within three operating segments: (1) adult secure institutional services, (2) juvenile justice, educational and treatment services and (3) adult community-based corrections and treatment services.

2. Significant accounting policies

Consolidation

        The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and the Company's activities relative to two financings of operating facilities. All significant intercompany balances and transactions have been eliminated. Minority interest in consolidated special purpose entities represents equity that other investors have contributed to the special purpose entities. Minority interest is adjusted for income and losses allocable to the owners of the special purpose entities. As the cumulative losses of the special purpose entity exceed the equity that is recorded as minority interest by the Company, the excess losses are recorded in the Company's Statements of Operations and Comprehensive Income.

Cash and Cash Equivalents

        The Company considers all highly liquid unrestricted investments with original maturities of three months or less to be cash equivalents. The Company invests its available cash balances in short term money market accounts and commercial paper.

Accounts Receivable

        The Company extends credit to the governmental agencies and other parties contracted with in the normal course of business. Further, management of the Company regularly reviews outstanding receivables, and provides estimated losses through an allowance for doubtful accounts. In evaluating the adequacy of this allowance for doubtful accounts, management makes judgments regarding its customers' ability to make required payments, economic events and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may occur.

        At December 31, 2003, other receivables include approximately $5.7 million related to the misappropriated escrow funds for the Southern Peaks Treatment Center. The Company has provided a reserve of approximately $5.4 million on this balance through an allowance for doubtful accounts due to the uncertainty surrounding its recovery. Refer to Note 9 to the consolidated financial statements for a discussion concerning the Southern Peaks Treatment Center escrow account funding and related transactions.

F-9

        The changes in the Company's allowance for doubtful accounts associated with trade accounts receivable for the years ended December 31, 2003, 2002 and 2001 are as follows:

	Year ended December 31,
	2003			2002			2001
	(Dollars in thousands)
Balance at beginning of period	$	2,238		$	3,068		$	2,578
Provision for bad debts		2,165			1,246			1,339
Write-offs of bad debt accounts		(2,474	)		(2,076	)		(849	)
Balance at end of period	$	1,929		$	2,238		$	3,068

        At December 31, 2003, other receivables include costs totaling approximately $1.4 million for direct costs incurred by the Company since the issuance of a Stop-Work Order by the Federal Bureau of Prisons (BOP) in June 1999 for payroll and other operating costs related to the Moshannon Valley Correctional Center. These costs were incurred at the direction of the BOP with the understanding that such costs would be reimbursed. The Company is pursuing a claim for reimbursement of a portion of its expenses incurred in connection with issuance of the Stop-Work Order and the delay of the project, including the $1.4 million in accounts receivable. This reimbursement claim is independent of the amendment to the contract—i.e., if the BOP agrees to an amendment of the contract, the Company will still pursue its claim—and the Company is currently negotiating this claim with the BOP. The Company's invested costs in the project total approximately $18.2 million. The BOP has asserted that it is only responsible for reimbursing a portion of these costs—that portion of the investment lost due to the issuance of the Stop-Work Order. Although the Company believes that the BOP will reimburse substantially more than the $1.4 million account receivable, it is uncertain how much the BOP will agree to pay in connection with the Company's claim for reimbursement. Any amounts not reimbursed by the BOP, the Company will expense that portion of costs that cannot be capitalized with respect to the Company's remaining real property interest. See Note 12 to the consolidated financial statements

Restricted Assets

        Restricted assets at December 31, 2003 and 2002 include approximately $14.7 million and $12.4 million, respectively, of MCF's restricted cash accounts. MCF's restricted accounts are comprised primarily of a debt service fund used to segregate rental payment funds from the Company to MCF for MCF's semi-annual debt service. MCF's funds are invested in short term certificates of deposit, money market accounts and commercial paper.

        Restricted assets at December 31, 2003 include $5.0 million of funds in a restricted escrow account related to the Southern Peaks Treatment Center. See Note 9 to the consolidated financial statements for further discussion concerning this restricted escrow account.

        For certain facilities, the Company maintains bank accounts for restricted cash belonging to facility residents, commissary operations and equipment replacement funds used in certain state programs. Restricted assets at December 31, 2003 and 2002 include approximately $2.3 million and $2.1 million, respectively, for these accounts. A corresponding liability for these obligations is included in accrued liabilities in the accompanying financial statements.

F-10

        Restricted assets at December 31, 2003 and 2002 include approximately $205,000 and $300,000, respectively, of assets held in a rabbi trust for a deferred bonus plan. See Note 10 to the consolidated financial statements.

Property and Equipment

        Property and equipment are recorded at cost. Ordinary maintenance and repair costs are expensed, while renewal and betterment costs are capitalized. Buildings and improvements are depreciated over their estimated useful lives of 30 to 50 years using the straight-line method. Prepaid facility use cost, which resulted from the July 1996 acquisition of the Big Spring Correctional Center and the December 1999 transfer of ownership of the Great Plains Correctional Facility to a leasehold interest, is being amortized over 50 years using the straight-line method. Furniture and equipment are depreciated over their estimated useful lives of 3 to 10 years using the straight-line method. Amortization of leasehold improvements is recorded using the straight-line method based upon the shorter of the life of the asset or the term of the respective lease.

Capitalized Interest

        The Company capitalizes interest on facilities while under development and construction. Interest capitalized for the years ended December 31, 2003, 2002 and 2001 was approximately $760,000, $823,000 and $1.3 million, respectively, and related primarily to the design and development of the Moshannon Valley Correctional Center.

Debt Service Reserve Fund

        The debt service reserve fund was established at the closing of MCF's bond issuance and is to be used solely for MCF's debt service to the extent that funds in MCF's debt service accounts are insufficient. The debt service reserve fund is invested in short term commercial instruments and earns a guaranteed rate of return of 3.0%. See Note 11 to the consolidated financial statements.

Intangible Assets

        Reference is made to Note 3 to the consolidated financial statements for a discussion of the Company's policies regarding intangible assets.

Deferred Costs

        Costs incurred related to obtaining debt financing are capitalized and amortized over the term of the related indebtedness. At December 31, 2003 and 2002, the Company and its consolidated special purpose entities had net deferred debt issuance costs of approximately $6.6 million and $7.5 million, respectively. Deferred costs also include costs related to projects actively under development which are considered to be probable of successful completion at the balance sheet date.

Realization of Long-Lived Assets

        The Company assess realization of long-lived assets pursuant to Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." For assets held and used in operations, realization is assessed based on management's estimates of future

F-11

operating results and cash flows. As of December 31, 2003, management of the Company has evaluated its long-term assets and believes that these assets are realizable and that no impairment allowance is necessary.

Revenue Recognition

        Substantially all of the Company's revenues are derived from contracts with federal, state and local government agencies, which pay either per diem rates based upon the number of occupant days or hours served for the period, on a take-or-pay basis, management fee basis, cost-plus reimbursement or fee-for-service basis. Revenues are recognized as services are provided under established contractual agreements to the extent collection is considered probable.

        Management believes the Company's revenue recognition practices are in conformity with the guidelines prescribed in Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 104, "Revenue Recognition."

Pre-opening and start-up costs

        The Company incurs pre-opening and start expenses including payroll, benefits, training and other operating costs prior to opening a new or expanded facility and during the period of operation while occupancy is ramping up. These costs vary by contract. Newly opened facilities are staffed according to applicable regulatory or contractual requirements when the Company begins receiving offenders or clients. Offenders or clients are typically assigned to a newly opened facility on a phased-in basis over a one-to-six month period. The Company's start-up period for new juvenile operations is 12 months from the date the Company begins recognizing revenue unless break-even occupancy is achieved before then. The Company's start-up period for new adult operations is nine months from the date the Company begins recognizing revenue unless break-even occupancy is achieved before then.

Business Concentration

        Contracts with federal, state and local governmental agencies account for nearly all of the Company's revenues. The loss of, or a significant decrease in, business from one or more of these governmental agencies could have a material adverse effect on the Company's financial condition and results of operations. For the years ended December 31, 2003, 2002 and 2001, 21.7%, 20.9% and 20.2%, respectively, of the Company's consolidated revenues were derived from contracts with the Federal Bureau of Prisons (BOP), the only customer constituting more than 10.0% of revenues during each of these periods.

Insurance Coverage

        The Company maintains insurance coverage for various aspects of its business and operations. The Company retains a portion of the losses that occur through the use of deductibles and retention under its self-insurance policies. Management regularly reviews the estimates of reported and unreported claims and provides for losses through insurance reserves. As claims develop and additional information becomes available, adjustments to loss reserves may occur.

F-12

Accounting for Stock-Based Compensation

        The Company accounts for its stock-based compensation plans in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25). In accordance with the provisions of APB No. 25, stock-based employee compensation cost is not reflected in net income, as all options granted under those plans had an exercise price equal to or in excess of the market value of the underlying common stock on the date of grant. The following table illustrates, in accordance with Statement of Financial Accounting Standard (SFAS) No. 148, the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," to stock-based employee compensation:

		Year ended December 31,
		2003		2002		2001
		(In thousands, expect per share amounts)
Net income, as reported		$	3,970	$	6,362	$	4,659
Less: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects(1)			1,289		1,925		1,636
Pro forma net income		$	2,681	$	4,437	$	3,023
Earnings per share:
	Basic, as reported	$	.31	$	.49	$	.48
	Basic, pro forma		.21		.34		.31
	Diluted, as reported		.30		.48		.46
	Diluted, pro forma		.21		.34		.30
Weighted-average fair value per share of options granted(1)		$	6.02	$	6.87	$	6.77

(1)

See Note 10 for additional information regarding the computations presented above.

        The FASB has recently proposed to mandate expense recognition for stock options and other types of equity-based compensation based on the fair value of the options at the grant date. Additionally, the FASB is evaluating alternatives regarding how to develop a measure of the fair value of an option. Based on the final outcome of the FASB proposal, the Company may be required to recognize expense related to stock options and other types of equity-based compensation in future periods. Additionally, the Company may be required to change its current method for determining the fair value of stock options. Members of congress have recently introduced legislation which would limit the proposed standard.

Income Taxes

        The Company utilizes the liability method of accounting for income taxes as required by SFAS No. 109, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases based on enacted tax rates. In providing for deferred taxes, management considers current tax regulations, estimates of future

F-13

taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax planning strategies vary, adjustments to the carrying value of tax assets and liabilities may occur.

Earnings Per Share

        Basic earnings per share (EPS) is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution from common stock equivalents such as stock options and warrants. For the years ended December 31, 2003, 2002 and 2001, there were 371,145 shares ($12.86 average price), 317,016 shares ($14.48 average price) and 145,384 shares ($15.80 average price), respectively, of stock options that were not included in the computation of diluted EPS because to do so would have been anti-dilutive.

Financial Instruments

        The Company considers the fair value of all its financial instruments not to be materially different from their reported carrying values at the end of each year based on management's estimate of the Company's ability to borrow funds under terms and conditions similar to those of the Company's existing debt. However, the Company may incur a loss if debt is repaid prior to its scheduled maturity.

Derivative Instruments

        Derivative instruments are recognized in accordance with the provisions of SFAS No. 149, "Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities." The Company has only entered into derivative contracts that are classified as hedges. These hedges are recorded at their fair value with changes in fair value reported in other comprehensive income. See Note 11 to the consolidated financial statements.

Use of Estimates

        The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States. The purpose of these financial statements require that management make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities. Management of the Company evaluates its estimates on an on-going basis, based on historical experience and on various other assumptions that are believed to be reasonable based on the information available. Actual results could differ from these estimates under different assumptions or conditions. The significant estimates made by management in the accompanying financial statements include the allowance for doubtful accounts, accruals for insurance and legal claims, accruals for compensated employee absences and the realizability of long-lived tangible and intangible assets.

3. Changes in accounting principles

Change in Accounting Principle Effective January 1, 2003

        Effective January 1, 2003 the Company adopted the new requirements of SFAS No. 145, "Recission of SFAS No. 4, 44, 64, Amendment of FASB Statement No. 13, and Technical Corrections." Among other things, SFAS No. 145 requires the gains and losses on the extinguishment of debt to no

F-14

longer be classified as extraordinary items as previously required under SFAS No. 4. The Company recorded an extraordinary charge of approximately $2.9 million, net of income taxes of approximately $2.0 million, in 2001 for the early retirement of debt. As a result of the adoption of the provisions of SFAS No. 145, the Company reclassified total costs of approximately $4.9 million to loss on extinguishment of debt and reclassified the related $2.0 million income tax benefit to the provision for income taxes. These reclassifications are reflected in the 2001 amounts on the Consolidated Statements of Operations and Comprehensive Income (Loss).

Change in Accounting Principle Effective January 1, 2002

        Effective January 1, 2002 the Company adopted SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets". The new rules under these statements require that the purchase method of accounting be used for all business combinations and specifies the criteria for the recognition of intangible assets separately from goodwill. Under the new rules, goodwill is no longer amortized but is subject to an impairment test annually. Other intangible assets that meet the new criteria under the new rules will continue to be amortized over their remaining useful lives.

        The following table reflects, on a pro forma basis, the results of operations as though goodwill was no longer amortized, as a result of the adoption of SFAS No. 142, as of January 1, 2001:

		Year ended December 31,
		2003		2002		2001
		(In thousands, except per share amounts)
Reported income before cumulative effect of changes in accounting principles		$	3,970	$	7,327	$	3,889
Goodwill amortization, net of tax			—		—		518
Adjusted income before cumulative effect of changes in accounting principles			3,970		7,327		4,407
Reported net income			3,970		6,362		4,659
Goodwill amortization, net of tax			—		—		518
Adjusted net income		$	3,970	$	6,362	$	5,177
Basic earnings per share:
	Adjusted income before cumulative effect of changes in accounting principles	$	.31	$	.57	$	.40
	Adjusted net income	$	.31	$	.49	$	.54
Diluted earnings per share:
	Adjusted income before cumulative effect of changes in accounting principles	$	.30	$	.55	$	.39
	Adjusted net income	$	.30	$	.48	$	.51

        The Company determined the fair market of the applicable reporting unit's net assets in accordance with SFAS No. 142 and recorded a cumulative effect of change in accounting principle charge of approximately $965,000, net of an income tax benefit of approximately $671,000, at January 1, 2002 for the impairment of goodwill as a result of the adoption of SFAS No. 142.

F-15

        There were no changes to goodwill during the year ended December 31, 2003. The changes in the carrying amount of goodwill for the year ended December 31, 2002 was as follows:

	Secure		Juvenile			Pre-Release			Total
	(Dollars in thousands)
Balance as of December 31, 2001	$	1,509	$	1,915		$	5,933		$	9,357
Impairment charge		—		(855	)		(781	)		(1,636	)
Balance as of December 31, 2002	$	1,509	$	1,060		$	5,152		$	7,721

        Management evaluated its existing goodwill according to the provisions of SFAS No. 142 and believes there is not an impairment to the Company's existing goodwill as of December 31, 2003.

        Other intangible assets at December 31, 2003 and 2002 consisted of the following:

	2003			2002
	(Dollars in thousands)
Non-compete agreements	$	9,420		$	8,300
Accumulated amortization		(3,854	)		(2,959	)
Non-compete agreements, net	$	5,556		$	5,341

        In conjunction with the Company's acquisition of the Jos-Arz Residential Treatment Center management contract in June 2003, the Company entered into two non-compete agreements totaling $1.0 million with the previous operators of the facility. These agreements have terms of 5 years. For the year ended December 31, 2003, the Company recognized amortization expense of approximately $17,000 related to these agreements.

        Amortization expense for the Company's non-compete agreements was approximately $895,000 for the year ended December 31, 2003 and $878,000 for each of the years ended December 31, 2002 and 2001. Amortization expense for the Company's non-compete agreements is expected to be approximately $1.1 million for each of the next five years.

Change in Accounting Principle Effective January 1, 2001

        Effective January 1, 2001, the Company changed its method of accounting for durable supplies whereby the Company capitalizes durable operating supply purchases such as uniforms, linens and books and amortizes these costs to operating expense over an estimated period of benefit of 18 months. Effective January 1, 2001, the Company capitalized a portion of previously expensed durable operating supplies and, as a result, recognized a benefit of approximately $770,000 (net of an income tax provision of approximately $535,000) which has been reflected as a cumulative effect of a change in accounting principle in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

4. New accounting pronouncements

        In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), which addresses the consolidation of variable interest entities as defined in the Interpretation. The Company's adoption of FIN 46 did not change the Company's accounting for the

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2000 synthetic lease transaction and the 2001 Sale and Leaseback Transaction which are consolidated for reporting purposes. The Company has no other arrangements subject to the provisions of FIN 46. It is reasonably possible that the Company may enter into future arrangements for the development of new facilities or to operate facilities which may become subject to the provisions of FIN 46 and, in some cases, may be required to consolidate the related activities, facilities and financings.

        In April 2003, the FASB issued SFAS No. 149 "Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities." This statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. Other provisions of this statement that related to SFAS No. 133 implementation issues should continue to be applied in accordance with their respective effective dates. The Company adopted SFAS No. 149 on July 1, 2003 and with no significant impact on its results of operations or financial position.

        In May 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. The Company adopted SFAS No. 150 on June 30, 2003 with no significant impact on its results of operations or financial position.

        In May 2003, the Emerging Issues Task Force (EITF) reached a consensus on EITF 01-8 "Determining Whether an Arrangement Contains a Lease." EITF 01-8 provides guidance for determining whether an arrangement contains a lease that is within the scope of SFAS No. 13. The Company adopted EITF 01-8 on June 30, 2003 with no significant impact on its results of operations or financial position.

5. Property and equipment

        Property and equipment were as follows:

	December 31,
	2003			2002
	(Dollars in thousands)
Land	$	27,168		$	26,354
Prepaid facility use		71,323			71,323
Buildings and improvements		161,894			154,910
Furniture and equipment		25,770			17,328
Construction in progress		22,381			16,364
		308,536			286,279
Accumulated depreciation and amortization		(40,633	)		(30,829	)
	$	267,903		$	255,450

        In September 2003, the Company repurchased furniture and equipment leased under a sale and leaseback transaction completed in 1999 for approximately $4.8 million. The Company is depreciating this furniture and equipment over 3 years.

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        Construction in progress at December 31, 2003 consisted primarily of construction and renovation costs for the Moshannon Valley Correctional Center, the New Mexico Regional Correctional Center, the Southern Peaks Treatment Center, the Las Vegas Center, the Central California Treatment Center and information technology and software development costs. Construction in progress at December 31, 2002 consisted primarily of development and construction costs for the Moshannon Valley Correctional Center.

        The Company evaluates the realization of property and equipment according to the provisions of SFAS No. 144. In connection with the Company's evaluation, management makes judgments regarding future operating results and cash flows associated with individual facilities. Additionally, should management decide to sell a facility, realization is evaluated based on the estimated sales price. The Company is currently evaluating alternative uses for the New Morgan Academy and finalizing negotiations on a revised contract with the BOP for the Moshannon Valley Correctional Center. Realization of the Company's investment in both of these facilities is based on management's judgements and expectations related to legislative activities, economic events and other factors. Management has also evaluated the realization of its other facilities and does not believe that an impairment exists related to any of the Company's facilities as of December 31, 2003 including the New Morgan Academy and the Moshannon Valley Correctional Center. See Note 12.

6. Accounts payable and accrued liabilities

        Accounts payable and accrued liabilities consisted of the following:

	December 31,
	2003		2002
	(Dollars in thousands)
Accounts payable	$	12,353	$	10,910
Accrued compensation		7,101		6,668
Accrued interest payable		6,459		6,728
Accrued taxes payable		3,258		—
Accrued insurance		3,268		3,598
Resident funds		2,302		2,064
Other		1,836		2,654
	$	36,577	$	32,622

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7. Income taxes

        The following is an analysis of the Company's deferred tax assets and liabilities:

		December 31,
		2003			2002
		(Dollars in thousands)
Deferred tax assets:
	Accrued liabilities and allowances	$	4,115		$	3,589
	Deferred compensation		31			427
	Other		—			718
			4,146			4,734
Deferred tax liabilities:
	Depreciation and amortization		6,591			4,894
	Prepaid expenses		734			716
	Other		415			778
			7,740			6,388
	Net deferred tax liability	$	(3,594	)	$	(1,654	)

        The components of the Company's income tax provision were as follows:

	Year ended December 31,
	2003		2002			2001
	(Dollars in thousands)
Current provision (benefit)	$	820	$	6,240		$	(191	)
Deferred provision (benefit)		1,940		(1,959	)		3,684
		2,760		4,281			3,493
Continuing operations		2,760		4,952			2,958
Cumulative effect of changes in accounting principles		—		(671	)		535
	$	2,760	$	4,281		$	3,493

        The following is a reconciliation of income taxes at the statutory federal income tax rate of 35% to the income tax provision recorded by the Company:

	Year ended December 31,
	2003		2002		2001
	(Dollars in thousands)
Computed taxes at statutory rate	$	2,356	$	3,725	$	2,396
Amortization of non-deductible intangibles		—		—		119
State income taxes, net of federal benefit		281		380		562
Other		123		176		416
	$	2,760	$	4,281	$	3,493

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8. Credit facilities

        The Company's long-term debt consisted of the following:

		December 31,
		2003			2002
		(Dollars in thousands)
Debt of Cornell Companies, Inc.:
	Revolving Line of Credit due July 2005 with an interest rate of prime plus 2.0% or LIBOR plus 3.0%	$	2,000		$	—
	Capital lease obligations		8			37
Subtotal			2,008			37
Debt of Special Purpose Entities:
	Synthetic Lease Investor Note A due July 2005 with an interest rate of LIBOR plus 3.25%		42,255			41,117
	Synthetic Lease Investor Note B due July 2005 with an interest rate of LIBOR plus 3.50%		8,335			8,134
	8.47% Bonds due 2016		183,000			190,600
Subtotal			233,590			239,851
Consolidated total debt			235,598			239,888
Less: current maturities			(8,306	)		(7,630	)
Consolidated long-term debt		$	227,292		$	232,258

        The Company's 2000 Credit Facility, as amended, originally provided for borrowings of up to $45.0 million under a revolving line of credit. The commitment amount is reduced by $1.6 million quarterly beginning in July 2002 and by outstanding letters of credit. The available commitment amount under the amended 2000 Credit Facility was approximately $28.2 million at December 31, 2003. The Company had outstanding letters of credit of approximately $5.1 million at December 31, 2003. The amended 2000 Credit Facility matures in July 2005 and bears interest, at the election of the Company, at either the prime rate plus a margin of 2.0%, or a rate which is 3.0% above the applicable LIBOR rate. The amended 2000 Credit Facility is collateralized by substantially all of the Company's assets, including the stock of all of the Company's subsidiaries; does not permit the payment of cash dividends; and requires the Company to comply with certain leverage, net worth and debt service coverage covenants. Additionally, the Company is limited to $2.5 million annually for the repurchase of its common stock with an aggregate limit of $7.5 million. The Company has obtained an amendment from the lenders under the amended 2000 Credit Facility extending the scheduled construction completion date for the Moshannon Valley Correctional Center. This amendment is effective through June 30, 2005. The Company and its lenders agreed subsequent to December 31, 2003 to amend the debt covenants to facilitate compliance despite the loss of the Southern Peaks Treatment Center escrowed funds (see Note 9 to the consolidated financial statements). Included in the Company's cash and cash equivalents at December 31, 2003 is approximately $39.8 million that is invested in a separate account that is available to the Company for investment purposes or working capital with the approval of the lenders under the amended 2000 Credit Facility. This separate account is maintained, in part, to assure future credit availability.

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        Additionally, the amended 2000 Credit Facility provides the Company with the ability to enter into synthetic lease agreements for the acquisition or development of operating facilities. This synthetic lease financing arrangement provides for funding to the lessor under the operating leases of up to $100.0 million, of which approximately $52.4 million had been utilized as of December 31, 2003. The Synthetic Lease Investor's Note A and Note B have total credit commitments of $81.4 million and $15.1 million, respectively. The Company pays commitment fees at a rate of 0.5% annually for the unused portion of the synthetic lease financing capacity. The Synthetic Lease Investor's Notes A and B are cross-collateralized with the Company's revolving line of credit and contain cross-default provisions.

        On August 14, 2001, MCF issued $197.4 million of 8.47% taxable revenue bonds due August 1, 2016. Interest on the bonds is payable by MCF semi-annually on February 1 and August 1, commencing February 1, 2002, and principal is due in escalating annual installments commencing August 1, 2002. In connection with the bonds, the Company would be required to make deposits into a security deposit fund if the Company failed to maintain specified quarterly cash flow coverage ratios. Deposits in the security deposit fund would be used to pay future principal and interest on the bonds. As of December 31, 2003, the Company was not required to make any such deposits.

        On August 14, 2001, the Company repaid the $50.0 million of outstanding 7.74% Senior Secured Notes with a portion of the proceeds from the 2001 Sale and Leaseback Transaction.

        Scheduled maturities of the Company's consolidated long-term debt were as follows:

			Cornell Companies, Inc.		Synthetic Lease Investor		MCF		Consolidated
			(Dollars in thousands)
For the year ending December 31,
	2004		$	6	$	—	$	8,300	$	8,306
	2005			2,002		50,590		9,000		61,592
	2006			—		—		9,700		9,700
	2007			—		—		10,500		10,500
	Thereafter			—		—		145,500		145,500
		Total	$	2,008	$	50,590	$	183,000	$	235,598

9. Commitments and contingencies

Financial Guarantee

        During the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and provide general indemnifications. The Company's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company believes the risk of loss to be remote.

F-21

Operating Leases

        The Company leases office space, certain facilities and furniture and equipment under long-term operating leases. Rent expense for all operating leases for the years ended December 31, 2003, 2002 and 2001, was approximately $9.9 million, $9.0 million and $11.4 million, respectively.

        Under the amended 2000 Credit Facility, the Company entered into operating lease agreements that are considered to be a virtual special purpose entity for the acquisition or development of operating facilities. This synthetic lease financing arrangement provides for funding from the virtual special purpose entity under the operating leases of up to $100.0 million, of which approximately $52.4 million had been utilized as of December 31, 2003 for the purchase of a building in California, construction of the New Morgan Academy and construction costs to date for the Moshannon Valley Correctional Center. The leases under this arrangement each have a term of the lesser of five years or July 2005, include purchase and renewal options, and provide for residual value guarantees for each lease that average 81.4% of the total cost and would be due by the Company upon termination of the leases. Upon termination of a lease, the Company could either exercise a purchase option, or the facilities could be sold to a third party. The Company expects the fair market value of the leased facilities to substantially reduce or eliminate the Company's potential obligation under the residual value guarantee. At December 31, 2003, there were two operating leases under this arrangement. Lease payments under the lease financing arrangements are variable and are adjusted for changes in interest rates. The properties and related indebtedness have been consolidated by the Company prior to the effective date of FIN 46 because the equity holder in the virtual special purpose entity had insufficient equity in the project for the Company to meet off-balance sheet financing requirements. The treatment did not change subsequent to the effective date of FIN 46.

        As of December 31, 2003, the Company had the following rental commitments under noncancelable operating leases:

			(Dollars in thousands)
For the year ending December 31,
	2004		$	5,783
	2005			4,364
	2006			3,855
	2007			3,530
	2008			2,744
	Thereafter			21,657
		Total	$	41,933

401(k) Plan

        The Company has a defined contribution 401(k) plan. The Company's matching contribution currently represents 50% of a participant's contribution, up to the first 6% of the participant's salary. The Company recorded contribution expense of approximately $1.2 million for each of the years ended December 31, 2003 and 2002 and approximately $1.1 million for the year ended December 31, 2001.

F-22

Legal Proceedings

Southern Peaks Treatment Center

        In June 2003 the Company entered into an agreement to purchase a correctional facility to be built in Colorado—the Southern Peaks Treatment Center (the "Center")—upon completion of its construction. In late August 2003, in connection with the transaction, the Company deposited approximately $12.9 million of the purchase price (the "Funds") into what it believed to be an escrow account to assure the developer's construction lender of the Company's ability and willingness to purchase the Center upon completion. After funding the account, and after repeated unsuccessful attempts by the Company and its counsel to obtain confirmation of the wire transfer and the interest accrued since the date of the wire transfer, the Company was informed in early December 2003 that (1) the bank purportedly serving as escrow agent claimed that its signature to the escrow agreement had been forged and that the escrow agreement was not an obligation of the bank; (2) the Funds were not held in an escrow account at the bank, but were held instead in one of the construction lender's bank accounts; and (3) certain of the Funds had been released from such bank account prior to completion of the Center, in contravention of the terms of the escrow agreement.

        The Company began an investigation to locate the Funds and to determine the circumstances that resulted in their misappropriation. In the process of trying to locate the Funds and establish a valid escrow arrangement, the construction lender and the developer of the Center represented to the Company that the Funds were then being held in a bank in Florida which had agreed to be the escrow agent under a new escrow agreement. Subsequently, the bank in Florida confirmed to the Company that an account had been established with deposits totaling $12.9 million and that it was willing to serve as the escrow agent under a new escrow agreement. After executing a new escrow agreement with the Florida bank, the Company learned that the available funds in the new escrow account totaled only $5.0 million. The Florida bank later advised the Company that the remaining $7.9 million of deposits in the new escrow account had been deposited in the form of a check drawn on a foreign bank account. The foreign check, although deposited for collection, was never paid.

        Accordingly, on January 5, 2004, the Company initiated legal proceedings in the lawsuit styled Cornell Corrections of California, Inc. v. Longboat Global Advisors, LLC, et al., No.2004 CV79761 in the Superior Court of Fulton County, Georgia under theories of fraud, conversion, breach of contract and other theories to determine the location of and to recover the Funds. The Company has obtained temporary restraining orders freezing any and all financial accounts of the construction lender, one of its principals and certain other defendants identified during discovery. The frozen accounts include one of the construction lender's bank accounts which contains approximately $250,000.

        Approximately $2.3 million of the funds have been expended on the project, which have been classified as construction in progress at December 31, 2003. There can be no assurances that any of the missing funds will be recovered. Accordingly, based on current information, the Company believes its potential maximum exposure is approximately $5.4 million (which has been recognized as a loss and is included in general and administrative expenses for the year ended December 31, 2003) plus any attorneys' fees and costs associated with its investigation and the legal proceedings discussed above. The Company is unable at this time to determine the ultimate outcome of this matter.

F-23

Shareholder Lawsuits

        In March and April 2002, the Company, Steven W. Logan (the Company's former President and Chief Executive Officer), and John L. Hendrix (the Company's Chief Financial Officer), were named as defendants in four federal putative class action lawsuits styled as follows: (1) Graydon Williams, On Behalf of Himself and All Others Similarly Situated v. Cornell Companies, Inc, et al., No. H-02-0866, in the United States District Court for the Southern District of Texas, Houston Division; (2) Richard Picard, On Behalf of Himself and All Others Similarly Situated v. Cornell Companies, Inc., et al., No. H-02-1075, in the United States District Court for the Southern District of Texas, Houston Division; (3) Louis A. Daly, On Behalf of Himself and All Others Similarly Situated v. Cornell Companies, Inc., et al., No. H-02-1522, in the United States District Court for the Southern District of Texas, Houston Division, and (4) Anthony J. Scolaro, On Behalf of Himself and All Others Similarly Situated v. Cornell Companies, Inc., et al., No. H-02-1567, in the United States District Court for the Southern District of Texas, Houston Division. The aforementioned lawsuits were putative class action lawsuits brought on behalf of all purchasers of the Company's common stock between March 6, 2001 and March 5, 2002 and relate to the Company's restatement in 2002 of certain financial statements. The lawsuits involved disclosures made concerning two prior transactions executed by the Company: the 2001 Sale and Leaseback Transaction and the 2000 synthetic lease transaction. These four lawsuits were consolidated into the Graydon Williams action and Flyline Partners, LP was appointed lead plaintiff. As a result, a consolidated complaint was filed by Flyline Partners, LP. Richard Picard and Anthony Scolaro were also named as plaintiffs. Since then, the court has allowed plaintiffs to file an amended consolidated complaint. The amended consolidated complaint alleges that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), Rule 10b-5 promulgated under Section 10(b) of the Exchange Act, Section 20(a) of the Exchange Act, Section 11 of the Securities Act of 1933 (the "Securities Act") and/or Section 15 of the Securities Act. The amended consolidated complaint seeks, among other things, restitution damages, compensatory damages, rescission or a rescissory measure of damages, costs, expenses, attorneys' fees and expert fees. A motion to dismiss is currently pending.

        In March 2002, the Company, its directors, and its former independent auditor Arthur Andersen LLP, were sued in a derivative action styled as William Williams, Derivatively and on Behalf of Nominal Defendant Cornell Companies, Inc. v. Anthony R. Chase, et al., No. 2002-15614, in the 127th Judicial District Court of Harris County, Texas. The lawsuit related to the Company's restatement in 2002 of certain financial statements. The lawsuit alleged breaches of fiduciary duty by all of the individual defendants and asserted breach of contract and professional negligence claims only against Arthur Andersen LLP. This lawsuit has been dismissed without prejudice by agreement.

        In May and June 2002, the Company and its directors were sued in three other derivative lawsuits styled as follows: (1) Juan Guitierrez, Derivatively on Behalf of Cornell Companies, Inc. v. Steven W. Logan, et. al., No. H-02-1812, in the United Stated District Court for the Southern District of Texas, Houston Division; (2) Thomas Pagano, Derivatively on Behalf of Cornell Companies, Inc. v. Steven W. Logan, et. al., No. H-02-1896, in the United Stated District Court for the Southern District of Texas, Houston Division; and (3) Jesse Menning, Derivatively on Behalf of Cornell Companies, Inc. v. Steven W. Logan, et. al., No. 2002-28924, in the 164th Judicial District Court of Harris County, Texas. These lawsuits relate to the Company's restatement in 2002 of certain financial statements. These lawsuits all allege breaches of fiduciary duty and waste of corporate assets by all of the defendants. A motion to dismiss the Guitierrez and Pagano lawsuits was filed. The court dismissed the Pagano action as

F-24

duplicative of the Guitierrez action. The motion to dismiss the Guitierrez action is still pending. The Menning action has been dismissed, but with an agreement that the plaintiff's claims as to Cornell are tolled until 30 days following the final resolution of the Guitierrez case, including any appeals.

        The plaintiffs in these cases have not quantified their claim of damages and the outcome of the matters discussed above cannot be predicted with certainty. However, the Company believes it has good defenses and intends to vigorously defend against the claims asserted in these actions. The Company has not recorded any loss accruals related to these claims as of December 31, 2003.

        On January 27, 2004, the Company received a letter from William Williams, the plaintiff in the William Williams action discussed above, demanding that the Company pursue breach of fiduciary duty claims against various officers and directors based on the 2001 Sale and Leaseback Transaction and the subsequent restatement. The Company has issued a preliminary response to the letter indicating that the Board will consider the request and inform Mr. Williams of its decision.

        Certain insurance policies held by the Company to cover potential director and officer liability may limit the Company's cash outflows in the event of a decision adverse to the Company in the matters discussed above. However, if an adverse decision in these matters exceeds the insurance coverage or if the insurance coverage is deemed not to apply to these matters, an adverse decision to the Company in these matters could have a material adverse effect on the Company, its financial condition, its results of operations and its future prospects.

Securities and Exchange Commission Investigation

        Following the restatement of the Company's 2001 financial statements in 2002, the SEC initiated an investigation into the circumstances leading to this restatement. Following the SEC's initial inquiry in 2002 the SEC made no further inquiry with respect to the investigation until July 2003. Since July 2003, the Company has received additional information requests from the SEC. The Company has cooperated, and intends to continue to fully cooperate, with the SEC's investigation.

        Depending on the scope, timing and result of the SEC investigation, management's attention and the Company's resources could be diverted from operations, which could adversely affect the Company's operating results and contribute to future stock price volatility. The SEC investigation could also require that the Company take other actions not currently contemplated. In addition, the SEC investigation or its outcome may increase the costs of defending or resolving current litigation.

        The SEC has not given the Company any indication as to the outcome of its investigation. If the SEC makes a determination adverse to the Company, the Company and its officers and directors may face penalties,

Other

        Additionally, the Company currently and from time to time is subject to claims and suits arising in the ordinary course of business, including claims for damages for personal injuries or for wrongful restriction of or interference with offender privileges and employment matters. The outcome of such matters cannot be predicated with certainty, based on the information known to date, management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company's financial position, operating results or cash flow. including, but not limited to, monetary fines and injunctive relief. The Company has not recorded a loss accrual as of December 31, 2003

F-25

related to this matter. In addition, in the event of an adverse determination by the SEC against the Company or its officers or directors, federal and/or state agencies may be reluctant to enter into or prohibited from entering into contracts for the Company's services. Any such reaction from the Company's customer base could have a material adverse effect on its business.

10. Stockholders' equity

Common Stock Offering

        On November 30, 2001, the Company completed an offering of its common stock. Net proceeds to the Company from the sale of the 3,450,000 shares of newly issued Common Stock were approximately $43.8 million. Proceeds from the offering were used to repay indebtedness of $39.4 million with the remainder for general working capital purposes.

Stockholder Rights Plan

        On May 1, 1998, the Company adopted a stockholder rights plan. Under the plan, each stockholder of record at the close of the business day on May 11, 1998, received one Preferred Stock Purchase Right (Right) for each share of common stock held. The Rights expire on May 1, 2008. Each Right initially entitles the stockholder to purchase one one-thousandth of a Series A Junior Participating Preferred Share for $120.00. Each Preferred Share has terms designed to make it economically equivalent to one thousand common shares. The Rights will become exercisable only in the event a person or group acquires 15% or more of the Company's common stock or commences a tender or exchange offer which, if consummated, would result in that person or group owning 15% or more of the Company's common stock. If a person or group acquires a 15% or more position in the Company, each Right (except those held by the acquiring party) will then entitle its holder to purchase, at the exercise price, common stock of the Company having a value of twice the exercise price. The effect will be to entitle the holder to buy the common stock at 50% of the market price. Also, if following an acquisition of 15% or more of the Company's common stock, the Company is acquired by that person or group in a merger or other business combination transaction, each Right would then entitle its holder to purchase common stock of the acquiring company having a value of twice the exercise price. The effect will be to entitle the Company's stockholders to buy stock in the acquiring company at 50% of the market price. The Company may redeem the Rights at $0.01 per Right at any time prior to the acquisition of 15% or more of its common stock by a person or group.

Preferred Stock

        Preferred stock may be issued from time to time by the Board of Directors of the Company, which is responsible for determining the voting, dividend, redemption, conversion and liquidation features of any preferred stock.

Options

        In December 2000, the Company adopted the 2000 Broad-Based Employee Plan (2000 Plan). Pursuant to the 2000 Plan, the Company may grant non-qualified stock options to its employees, directors and eligible consultants for up to the greater of 400,000 shares or 4% of the aggregate number of shares of common stock issued and outstanding immediately after grant of any option under the 2000 Plan. The 2000 Plan options vest up to five years and expire ten years from the grant date. In

F-26

May 1996, the Company adopted the 1996 Stock Option Plan and amended and restated the plan in April 1998 (1996 Plan). Pursuant to the 1996 Plan, the Company may grant non-qualified and incentive stock options for up to the greater of 1,932,119 shares or 15.0% of the aggregate number of shares of common stock outstanding. The 1996 Plan options vest up to seven years and expire seven to ten years from the grant date. The Compensation Committee of the Board of Directors, which is comprised of independent directors, is responsible for determining the exercise price and vesting terms for the granted options. The 1996 Plan and 2000 Plan option exercise prices can be no less than the market price of the Company's common stock on the date of grant.

        In conjunction with the issuance of the Subordinated Notes in July 2000, the Company issued warrants to purchase 290,370 shares of the common stock at an exercise price of $6.70. The Company recognized the fair value of these warrants of $1.1 million as additional paid-in capital. The warrants may only be exercised by payment of the exercise price in cash to the Company, by cancellation of an amount of warrants equal to the fair market value of the exercise price, or by the cancellation of Company indebtedness owed to the warrant holder. During 2001, 168,292 shares of Common Stock were issued in conjunction with the exercise and cancellation of 217,778 warrants. At December 31, 2003, 72,592 warrants remained outstanding.

        The following is a summary of the status of the Company's 2000 Plan, 1996 Plan and other options at December 31, 2003, 2002 and 2001, and changes during the years then ended:

	2003				2002				2001
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at beginning of year	1,409,845		$	9.20	1,178,624		$	7.98	1,294,048		$	7.70
Granted	215,475			10.02	388,400			10.87	70,000			9.76
Exercised	(327,695	)		6.50	(95,059	)		2.11	(156,923	)		5.64
Forfeited or canceled	(165,661	)		12.63	(62,120	)		13.99	(28,501	)		12.26
Outstanding at end of year	1,131,964		$	9.55	1,409,845		$	9.20	1,178,624		$	7.98
Exercisable at end of year	615,701			9.55	681,787			8.65	602,839			7.61
Weighted average fair value of options granted			$	6.02			$	6.87			$	6.77

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10. Stockholders' equity

        The following table summarizes information about the Company's outstanding stock options at December 31, 2003:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Life (Years)	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$3.75 to $5.64	250,211	6.9	$	4.56	169,328	$	4.64
7.59 to 9.99	335,650	8.3		8.95	207,560		8.70
10.13 to 15.19	466,700	6.9		11.80	159,410		12.80
15.60 to 24.38	79,403	5.6		15.73	79,403		15.73
	1,131,964	7.2	$	9.63	615,701	$	9.55

        For purposes of the pro forma disclosures in Note 2, under SFAS No. 123, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. The following weighted average assumptions were used for grants in 2003, 2002 and 2001, respectively: risk-free interest rates of 3.6%, 5.1% and 5.0%; dividend rates of $0, $0 and $0; expected lives of 7.0, 7.0 and 10.0 years; expected volatility of 56.43%, 57.58% and 53.35%.

        The Black-Scholes option pricing model and other existing models were developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of, and are highly sensitive to, subjective assumptions including the expected stock price volatility. The Company's employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate. The FASB has recently proposed to mandate expense recognition for stock options and other types of equity-based compensation based on the fair value of the options at the grant date. Additionally, the FASB is evaluating alternatives regarding how to develop a measure of the fair value of an option. Based on the final outcome of the FASB proposal, the Company may be required to recognize expense related to stock options and other types of equity-based compensation in future periods. Additionally, the Company may be required to change its current method for determining the fair value of stock options. Members of congress have recently introduced legislation which would limit the proposed standard.

Notes from Shareholders

        On July 8, 1996, the Company's former president (see below) and the Company founder, a director of the Company until October 2003, each exercised options to purchase an aggregate 82,750 and 137,110, respectively, of shares of Class A Common Stock and Class B Common Stock at an aggregate price of $180,638 and $274,220, respectively. In connection with each exercise, each former officer entered into a promissory note with the Company for the respective aggregate exercise amounts. The promissory notes bore interest at an annual rate of 6.63%. In September 2002, the Company purchased at fair value 35,000 shares of its common stock from the Company's former president at a cost of approximately $283,000. In connection with that stock purchase, the Company's former president repaid $283,000 representing the accrued interest and a portion of the outstanding related principal loan balance. In December 2002 the Company's former president surrendered stock options with a fair value of approximately $77,000 which was used to repay a portion of his remaining balance. The fair value of these stock options were expensed by the Company in the year ended December 31,

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2002. In 2003 the Company's former president surrendered stock options with a fair value of approximately $23,000 which was used to repay the remaining balance of his note. In October 2003, the Company's founder repaid the principal and accrued interest of approximately $441,000 outstanding on his note. The Company recognized approximately $22,000, $41,000 and $42,000 of interest income related to these shareholder notes for the years ended December 31, 2003, 2002 and 2001, respectively. As of December 31, 2003, all notes from shareholders had been repaid.

Treasury Stock

        During the years ended December 31, 2003 and 2002, the Company repurchased in the open market 106,500 and 242,100 shares, respectively, of its common stock under a share repurchase program at an aggregate cost of $1.2 million and $2.2 million, respectively. Additionally, in September 2002, the Company purchased at fair value 35,000 shares of its common stock from the Company's former president at a cost of approximately $283,000. In 2002, the Board of Directors authorized the repurchase of an aggregate $10.0 million of the Company's outstanding shares. The annual repurchase of shares is limited to $2.5 million, and an aggregate limit of $7.5 million, under the Company's amended 2000 Credit Facility. As of December 31, 2003, the Company can purchase additional shares of treasury stock valued at approximately $0.8 million.

Employee Stock Purchase Plan

        Effective as of January 1, 2000, the Company has an employee stock purchase plan whereby employees can make contributions to purchase the Company's common stock. Purchases of common stock are made annually at the lower of the beginning or end of year market value, less a 15.0% discount. For the years ended December 31, 2003, 2002 and 2001, employee contributions of approximately $356,000, $399,000 and $214,000 were used to purchase 46,486, 82,581 and 46,767 shares, respectively, of the Company's common stock.

Deferred Bonus Plan

        In the fourth quarter of 2001, the Company established a deferred bonus plan for certain employees. Pursuant to the plan, approximately $4.7 million was deposited on behalf of individual participants into a rabbi trust account, which included approximately $3.6 million in cash and $1.1 million in Company treasury stock. The treasury stock portion of the rabbi trust is to remain as treasury stock, while the participants may give investment directions to the trustee as to the cash portion, subject to certain limitations. The investments of the rabbi trust represent assets of the Company and are included in the accompanying Consolidated Balance Sheets based on the nature of the assets held. Assets placed into the rabbi trust are irrevocable; therefore they are restricted as to the Company's use under the terms of the trust and the deferred bonus plan. Amounts held in the rabbi trust are generally distributable upon vesting. At December 31, 2003, restricted assets and other current assets included approximately $205,000 and $176,000, respectively, of deposits in a rabbi trust. For the year ended December 31, 2002, approximately $1.3 million was paid from plan assets as a result of the withdrawal of the Company's former president from the plan due to his resignation as president in September 2002. Additionally, approximately $1.0 million of deferred bonus plan assets were forfeited and returned to the Company as a result of his resignation.

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        The plan generally vests 100.0% upon the achievement of an aggregate amount of monthly credits (based on a fixed monthly earnings milestone) expected to occur at the end of five years beginning October 1, 2001. Vesting will accelerate to 60.0% at the end of three years if certain earnings targets are achieved. Based on the expected earnings period, compensation expense and the related compensation liability for the aggregate plan value are being recognized over five years. To the extent the vesting is extended or accelerated based on the achievement of the financial milestones, recognition of compensation expense will be adjusted on a prospective basis. For the years ended December 31, 2003 and 2002, the Company expensed approximately $502,000 and $92,000, respectively, under the deferred bonus plan.

        While periodic gains on the value of each participant's investments held in the rabbi trust are recorded currently in income, an equal amount of compensation expense and related compensation liability is recorded, since participants are fully vested in such gains. Periodic losses incurred by participants in their invested balances are recorded as incurred. Such losses in excess of a participant's recorded compensation expense are guaranteed by the participants with a full-recourse obligation to the Company. These guarantees function to offset the loss on investments to the extent the obligations are not reserved for collectibility by the Company.

        Amounts held in treasury stock have been recorded at cost. An equal amount has been established as deferred compensation and additional paid-in capital in the accompanying statement of stockholders' equity. The balance in the deferred bonus plan is amortized to compensation expense over the expected vesting period of five years.

11. Derivative financial instruments and guarantees

Debt Service Reserve Fund and Debt Service Fund

        In August 2001, MCF completed a bond offering to finance the 2001 Sale and Leaseback Transaction. In connection with this bond offering, two reserve fund accounts were established by MCF pursuant to the terms of the indenture: (1) MCF's Debt Service Reserve Fund, aggregating $23.8 million at December 31, 2003, was established to make payments on MCF's outstanding bonds in the event the Company (as lessee) should fail to make the scheduled rental payments to MCF and (2) MCF's Debt Service Fund, aggregating $14.7 million at December 31, 2003, used to accumulate the monthly lease payments that MCF receives from the Company until such funds are used to pay MCF's semi-annual bond interest and annual bond principal payments. Both reserve fund accounts are subject to the agreements with the MCF Equity Investors whereby guaranteed rates of return of 3.0% and 5.08%, respectively, are provided for in the balance of the Debt Service Reserve Fund and the Debt Service Fund. The guaranteed rates of return are characterized as cash flow hedge derivative instruments. At inception, the derivatives had an aggregate fair value of $4.0 million, which has been recorded as a decrease to the equity investment in MCF made by the MCF Equity Investors (MCF minority interest) and as a deferred liability in the accompanying Consolidated Balance Sheets. Changes in the fair value of the derivative instruments are recorded as an adjustment to deferred liability and reported as other comprehensive income in the accompanying Consolidated Statements of Operations and Comprehensive Income. At December 31, 2003, the fair value of these derivative instruments was approximately $2.5 million. As a result, the accompanying Consolidated Statements of Operations and Comprehensive Income/(Loss) include accumulated other comprehensive income (loss)

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of approximately ($368,000) and $1.9 million for the years ended December 31, 2003 and 2002, respectively. There is no difference between net income and comprehensive income for 2001.

        In connection with MCF's bond offering, the MCF Equity Investor provided a guarantee of the Debt Service Reserve Fund if a bankruptcy of the Company were to occur and a trustee for the estate of the Company were to include the Debt Service Reserve Fund as an asset of the Company's estate. This guarantee is characterized as an insurance contract and is being amortized to expense over the life of the debt.

12. Projects under development, construction or renovation

        In January 2003, the Company executed a five-year lease for the New Mexico Regional Correctional Center in Albuquerque, New Mexico. The 1,000 bed facility consists of two units, the South Tower and the North Tower, which each have a service capacity of 500 beds. The Company is currently renovating the South Tower and anticipates opening the 500 bed unit in July 2004. The Company will then renovate the North Tower. Management currently anticipates that the facility will reach full capacity of 1,000 beds by December 2004. As of December 31, 2003, the Company had spent approximately $1.0 million on renovations and expects to spend an additional $2.8 million to complete the renovations of both units. For the year ended December 31, 2003, the Company incurred pre-opening and start-up expenses of approximately $321,000.

        In June 2003, the Company entered into an agreement with a developer to purchase a 160 bed residential treatment center for juveniles, named the Southern Peaks Treatment Center, upon completion of construction of the facility by the developer. In August 2003, the Company funded approximately $12.9 million into an escrow account for the purchase of the real property. The Company recognized a charge of approximately $5.4 million to general and administrative expenses in the fourth quarter of 2003 related to the portion of these funds which were diverted and have not been recovered.

        In September 2003, the Company entered into negotiations with the state of South Dakota to the lease the former State Training School in Plankinton, South Dakota to operate a 40 bed juvenile justice center, the Plankinton Regional Detention Center, and a 82 bed residential juvenile treatment center, the Plankinton Regional Treatment Center. The Company will make some minor renovations to the facilities at an estimated cost of approximately $400,000. As of December 31, 2003, the Company had not finalized the lease agreements or obtained contracts for services at the facilities. However, management believes there is demand for the Company services to be provided at these facilities and anticipates operating the detention center in April 2004 and the treatment center in August 2004.

        The Company closed the New Morgan Academy in the fourth quarter of 2002 and is currently considering several options ranging from the sale of the facility to the utilization of the facility for another type of program. As of December 31, 2003, management of the Company is focusing its efforts on reactivating the facility. The primary use currently under consideration is using the facility to house illegal non-criminal adult detainees or to house non-criminal juvenile aliens. Management is discussing these opportunities with the Bureau of Immigration and Customs Enforcement (BICE), who has indicated a level of interest but necessary budget appropriations have not been made and the parties have not progressed to contract phase. There can be no assurance that the Company will be successful in securing a contract with BICE. Further, before the Company could house adult detainees, the Company will likely need to obtain a change in the zoning of the Academy, which is currently zoned

F-31

only for the housing of juveniles. There can be no assurances that the Company will be able to secure the contemplated zoning change or to do so on terms favorable to the Company. Management of the Company believes that there is a market for the services the Company could provide at per diem rates that will support the recovery of the cost structure of the facility. However, the Company will continue to evaluate any offers to buy or lease the facility. The Company is maintaining a small staff to secure and maintain the facility while the Company considers its options for the use or sale of the facility. The Company expects to incur operating expenses of approximately $150,000 per month for payroll, property taxes and other operating costs until the facility is utilized for an alternative program or until the facility is sold. Additionally, the Company is incurring interest expense of approximately $140,000 per month related to the borrowings for the facility and depreciation expense of approximately $46,000 per month for the building.

        The carrying value of the property and equipment at the New Morgan Academy was approximately $30.4 million at December 31, 2003. Management performed a probability-weighted recoverability analysis and believes that, based on its analysis, the long-lived assets at the New Morgan Academy are recoverable from the range of alternative courses of action. Accordingly, pursuant to the provisions of SFAS No. 144, an impairment allowance is not deemed necessary as of December 31, 2003. However, management estimates that, were the Company to sell the facility, it is reasonably possible that the Company would not be able to fully recover the carrying value of its long-lived assets for this facility.

        In March 2003, the Company reached an agreement with the Commonwealth of Pennsylvania that resolved all outstanding administrative issues relative to the contract awarded to the Company by the BOP to operate the Moshannon Valley Correctional Center. In October 2003, the Company received final approval from the BOP of a revised building design for the facility. Construction plans are being developed for the new design and work is expected to begin in the second quarter of 2004. In the interim, the Company is negotiating a contract amendment with the BOP to accommodate the revised facility design and update the contract for changes since it was originally signed. If and when an amendment to the contract with the BOP is successfully negotiated, the agreement would allow the Company to move forward with the construction and operation of the facility.

        As of December 31, 2003, the Company had incurred approximately $18.2 million for design, construction and land development costs and capitalized interest related to the Moshannon Valley Correctional Center contract. The Company is in the process of submitting a claim to the BOP for reimbursement of costs related to the original construction efforts incurred beginning in 1999. The Company estimates additional capital investment of approximately $74.0 million to complete construction of the facility. Financing of the facility is subject to re-approval of the project by the lenders under the Company's amended 2000 Credit Facility and agreement by such lenders to amend certain financial covenants and provisions of the amended 2000 Credit Facility. In the event the Company's lenders are unwilling to re-approve the project or to adopt the necessary amendments, or if the Company's cash and current financing arrangements do not provide sufficient financing to fund construction costs related to the project, the Company anticipates that it will need to obtain additional sources of financing.

        According to the BOP contract, as amended, the Company was required to complete the construction of the project by January 15, 2004. The Company did not complete construction by that date and anticipates obtaining another long-term contract amendment from the BOP extending the construction deadline. In the event the Company is not able to negotiate a contract amendment with

F-32

the BOP, then the BOP may have the right to assert that the Company has not completed construction of the facility within the time frame provided in the BOP contract, as amended. Management expects that the contract will be amended to address cost and construction timing matters resulting from the extended delay. In the event that the BOP decides not to continue with the construction of the Moshannon Valley Correctional Center and terminates the contract, management believes that the Company has the right to and will recover its invested costs. In the event any portion of these costs are determined not to be recoverable upon contract termination by the BOP, such costs would be charged to expense.

        Separate from a possible recovery in the event that the BOP terminates the Moshannon Valley Correctional Center contract, the Company is pursuing a claim for reimbursement of a portion of its expenses incurred in connection with the issuance of the Stop-Work Order and the delay of the project (included among these expenses is approximately $1.4 million in accounts receivable for expenses incurred by the Company after the June 1999 issuance of the Stop -Work Order). This reimbursement claim is independent of the amendment to the contract—i.e., if the BOP agrees to an amendment of the contract, the Company will still pursue its claim—and the Company is currently negotiating this claim with the BOP. The BOP has asserted that it is only responsible for reimbursing a portion of these costs—that portion of the investment lost due to the issuance of the Stop-Work Order. Although the Company believes that the BOP will reimburse substantially more than the $1.4 million in account receivable at December 31, 2003, it is uncertain how much the BOP will agree to pay in connection with the Company's claim for reimbursement. Any amounts not reimbursed by the BOP, the Company will expense that portion of costs that cannot be capitalized with respect to the Company's remaining real property interest.

13. Related party transactions

        One of the directors of the Company is a partner in a law firm that provides legal services to the Company. The Company pays legal fees for such services. Legal fees paid to this law firm were approximately $1.1 million, $1.5 million and $2.7 million for the years ended December 31, 2003, 2002 and 2001, respectively.

        In July 1996, the Company entered into promissory notes with the Company's former president and the Company's founder, a director of the Company until October 2003. The promissory notes bear interest at an annual rate of 6.63%, mature in June 2004 with no interim interest or principal payments, are full recourse and collateralized by shares of the Company's common stock. These notes were repaid prior to December 31, 2003.

        In connection with the Company president's resignation in September 2002, the outstanding principal and interest balance of approximately $76,000 and $35,000, respectively, was repaid. In October 2003, the principal and related accrued interest receivable related to the Company founder's note of $270,000 and $129,000, respectively, was repaid. The Company recognized approximately $17,000, $29,000 and $29,000 of interest income related to these notes for the years ended December 31, 2003, 2002 and 2001.

        Effective September 1, 1999, the Company entered into a consulting agreement with the Company's founder, who was a director of the Company through October 2003. As compensation for consulting services, the Company agreed to an annual payment of at least $255,000 for each of the first four years of the seven-year initial term of the consulting agreement with an annual salary of at least

F-33

$180,000 for each of the last three years of the seven-year initial term of the consulting agreement. The Company has an option to renew the consulting agreement for an additional three-year term at an annual salary of at least $300,000 for each of the three years of the renewal term. As additional compensation, the Company agreed to an annual bonus, subject to certain limitations, equal to $75,000 during the first four years of the seven-year initial term and an annual bonus of $60,000 during the last three years of the seven-year initial term and during any renewal term. The Company also agreed to grant options to purchase an aggregate 120,000 shares of the Company's common stock in four equal annual installments beginning September 1, 2000. The options have an exercise price equal to the fair market value of the Company's common stock on the date of grant and vest at the time such options are granted, subject to certain limitations on exercise. For the year ended December 31, 2003, the Company's founder accepted a $100,000 cash payment in lieu of unexercised options. This payment was expensed by the Company in 2003. As part of the consulting agreement discussed above, the Company entered into a non-compete agreement with the Company's founder. The non-compete agreement has a term of 10 years and requires the Company to pay a monthly fee of $10,000 for the seven-year initial term of the consulting agreement. The Company capitalized the monthly payments and amortizes the amounts over the 10-year term of the consulting agreement. The Company recognized amortization expense related to this agreement of approximately $84,000 for each of the years ended December 31, 2003, 2002 and 2001.

        The Company maintains a life insurance policy for the Company's founder and made payments related to this policy of approximately $223,000, $214,000 and $215,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

        The Company also compensated the Company's founder for director fees in amounts of $12,000, $30,000 and $22,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

        Total payments made for the above consulting and non-compete agreements, board of director fees and expense reimbursements for the Company's founder were approximately $531,000, $477,000 and $428,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

        The Company also has a non-compete agreement with a director of the Company in connection with the acquisition of The Abraxas Group, Inc. in September 1997. Under this agreement, the Company is required to pay annual installments of $60,000 beginning January 2, 1998. These payments can and have been accelerated upon the mutual agreement of the director and the Company. As of December 31, 2003, the balance of this non-compete agreement had been paid in full. The Company made payments under this agreement of $200,000, $80,000, and $200,000 for the years ended December 31, 2003, 2002 and 2001, respectively

14. Segment disclosure

        The Company's three operating divisions are its reportable segments. The adult secure institutional services segment consists of the operation of secure adult incarceration facilities. The juvenile segment consists of providing residential treatment and educational programs and non-residential community-based programs to juveniles between the ages of ten and 17 who have either been adjudicated or suffer from behavioral problems. The adult community-based corrections and treatment services segment consists of providing pre-release and halfway house programs for adult offenders who are either on probation or serving the last three to six months of their sentences on parole and preparing for re-entry into society at large as well as community-based treatment and education programs as an alternative to

F-34

incarceration. All of the Company's customers and long-lived assets are located in the United States of America. The accounting policies of the Company's reportable segments are the same as those described in the summary of significant accounting policies in Note 2 to the consolidated financial statements. Intangible assets are not included in each segment's reportable assets, and the amortization of intangible assets is not included in the determination of a segment's operating income. The Company evaluates performance based on income or loss from operations before general and administrative expenses, incentive bonuses, amortization of intangibles, interest and income taxes. Corporate and other assets are comprised primarily of cash, accounts receivable, deposits, property and equipment, deferred taxes, deferred costs and other assets.

        The only significant noncash items reported in the respective segments' income from operations is depreciation and amortization (excluding intangibles) (in thousands).

			Year ended December 31,
			2003			2002			2001
Revenue:
	Adult secure institutional		$	102,120		$	99,549		$	99,791
	Juvenile			118,797			124,967			116,262
	Adult community-based			50,715			50,629			49,197
Total revenue			$	271,632		$	275,145		$	265,250
Pre-opening and start-up expenses:
	Adult secure institutional		$	321		$	—		$	—
	Juvenile			3,077			—			3,858
	Adult community-based			—			—			—
Total pre-opening and start-up expenses			$	3,398		$	—		$	3,858
Depreciation and amortization:
	Adult secure institutional		$	3,868		$	3,558		$	3,222
	Juvenile			2,698			2,615			2,149
	Adult community-based			1,538			1,391			1,451
	Amortization of intangibles			895			878			1,525
	Corporate and other			1,700			1,337			931
Total depreciation and amortization			$	10,699		$	9,779		$	9,278
Income from operations:
	Adult secure institutional		$	25,396		$	26,586		$	22,347
	Juvenile			13,598			17,402			16,857
	Adult community-based			10,789			11,609			10,514
		Subtotal		49,783			55,597			49,718
	General and administrative expenses			(23,415	)		(21,480	)		(15,291	)
	Incentive bonuses			—			—			(1,000	)
	Amortization of intangibles			(895	)		(878	)		(1,525	)
	Corporate and other			(1,089	)		(1,662	)		(884	)
Total income from operations			$	24,384		$	31,577		$	31,018

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Capital expenditures:
	Adult secure institutional	$	5,742	$	4,098	$	4,083
	Juvenile		11,176		1,566		7,117
	Adult community-based		2,173		2,006		675
	Corporate and other		3,213		3,444		2,293
Total capital expenditures		$	22,304	$	11,114	$	14,168
Assets:
	Adult secure institutional	$	152,229	$	156,315	$	155,085
	Juvenile		110,748		96,239		102,766
	Adult community-based		57,787		58,071		57,962
	Intangible assets, net		13,287		13,062		15,456
	Corporate and other		114,106		117,604		113,538
Total assets		$	448,157	$	441,291	$	444,807

15. Selected quarterly financial data (unaudited)

			1st Quarter			2nd Quarter		3rd Quarter		4th Quarter			Year
			(In thousands, except per share amounts)
2003:
	Revenues		$	66,026		$	67,586	$	68,642	$	69,378		$	271,632
	Income from operations			7,779			8,196		6,732		1,677	(2)		24,384
	Net income (loss)			1,957			2,177		1,442		(1,606	)(2)		3,970
	Earnings (loss) per share:
		Basic	$	.15		$	.17	$	.11	$	(.12	)	$	.31
		Diluted	$	.15		$	.17	$	.11	$	(.12	)	$	.30
2002:
	Revenues		$	68,475		$	69,077	$	69,634	$	67,959		$	275,145
	Income from operations			6,375			7,888		7,992		9,322			31,577
	Income before cumulative effect of changes in accounting principles(1)			635			1,974		1,793		2,925			7,327
	Net income (loss)			(330	)		1,974		1,793		2,925			6,362
	Earnings per share before cumulative effect of changes in accounting principles:
		Basic	$	.05		$	.15	$	.14	$	.23		$	.57
		Diluted	$	.05		$	.15	$	.14	$	.21		$	.55
	Earnings per share:
		Basic	$	(.03	)	$	.15	$	.14	$	.23		$	.49
		Diluted	$	(.03	)	$	.15	$	.14	$	.22		$	.48

F-36

2003 Balance Sheet Data:
	Working capital	$	99,003	$	101,065	$	89,122	$	86,214	$	86,214
	Total assets		435,139		443,988		445,664		448,157		448,157
	Long-term debt, net of current portion		232,254		232,894		234,594		227,292		227,292
	Stockholders' equity		162,375		167,246		167,351		166,235		166,235
2002 Balance Sheet Data:
	Working capital	$	99,915	$	100,277	$	92,749	$	95,988	$	95,988
	Total assets		435,836		438,838		428,237		441,291		441,291
	Long-term debt, net of current portion		239,310		239,310		231,724		232,258		232,258
	Stockholders' equity		153,024		154,745		158,330		159,952		159,952

(1)

The Company adopted SFAS No. 142 in January 2002 and recorded a net-of-tax charge of approximately $1.0 million as a cumulative effect of a change in accounting principle. See Note 3 to the consolidated financial statements.

(2)

Includes a loss of approximately $5.4 million related to the Southern Peaks Treatment Center escrow deposit. The after tax effect of the loss reduced net income by approximately $3.2 million. See Note 12 to the consolidated financial statements.

16. Guarantor Disclosures

        The Company is currently in the process of completing an offering of $112 million of senior notes (Senior Notes). The Senior Notes will be guaranteed by each of the Company's subsidiaries (Guarantor Subsidiaries) except for MCF (Non-Guarantor Subsidiary). These guarantees are joint and several obligations of the Guarantor Subsidiaries. The following condensed consolidating financial information presents the financial condition, results of operations and cash flows of the Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiary (MCF), together with the consolidating adjustments necessary to present the Company's results on a consolidated basis.

F-37

Cornell Companies, Inc.

Condensed Consolidating Balance Sheets

As of December 31, 2003

			Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiary		Eliminations			Consolidated
			(Dollars in thousands)
Assets
Current assets:
	Cash and cash equivalents		$	39,827		$	289	$	55	$	—		$	40,171
	Accounts receivable			110			55,980		451		—			56,541
	Restricted assets			205			7,301		14,679		—			22,185
	Prepaids and other			10,472			1,728		—		—			12,200
		Total current assets		50,614			65,298		15,185		—			131,097
Property and equipment, net				2,443			108,916		163,086		(6,542	)		267,903
Other assets:
	Debt service reserve fund			—			—		23,800		—			23,800
	Deferred costs and other			23,133			15,340		9,952		(23,068	)		25,357
	Investment in subsidiaries			38,777			1,856		—		(40,633	)		—
		Total assets	$	114,967		$	191,410	$	212,023	$	(70,243	)	$	448,157
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable and accrued liabilities		$	26,912		$	5,248	$	6,512	$	(2,095	)	$	36,577
	Current portion of long-term debt			5			1		8,300		—			8,306
		Total current liabilities		26,917			5,249		14,812		(2,095	)		44,883
Long-term debt, net of current portion				2,000			50,592		174,700		—			227,292
Deferred tax liabilities				7,006			—		—		—			7,006
Other long-term liabilities				6,176			68		19,888		(23,391	)		2,741
Intercompany				(93,367	)		93,367		—		—			—
		Total liabilities		(51,268	)		149,276		209,400		(25,486	)		281,922
Stockholders' equity				166,235			42,134		2,623		(44,757	)		166,235
		Total liabilities and stockholders' equity	$	114,967		$	191,410	$	212,023	$	(70,243	)	$	448,157

F-38

Cornell Companies, Inc.

Condensed Consolidating Statements of Operations

Twelve months ended December 31, 2003

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated
	(Dollars in thousands)
Revenues	$	18,124		$	304,812		$	18,001		$	(69,305	)	$	271,632
Operating expenses		21,222			257,457			32			(68,975	)		209,736
Pre-opening and start-up expenses		—			3,398			—			—			3,398
Depreciation and amortization		84			6,563			4,222			(170	)		10,699
General and administrative expenses		23,289			—			126			—			23,415
Income (loss) from operations		(26,471	)		37,394			13,621			(160	)		24,384
Overhead allocation		(25,270	)		25,270			—			—			—
Interest, net		(4,672	)		6,912			15,371			43			17,654
Equity earnings in subsidiaries		4,416			—			—			(4,416	)		—
Income (loss) before provision for income taxes		7,887			5,212			(1,750	)		(4,619	)		6,730
Provision (benefit) for income taxes		3,917			(357	)		—			(800	)		2,760
Net income (loss)	$	3,970		$	5,569		$	(1,750	)	$	(3,819	)	$	3,970

F-39

Cornell Companies, Inc.

Condensed Consolidating Statements of Cash Flows

Twelve months ended December 31, 2003

		Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations		Consolidated
		(Dollars in thousands)
Cash flows from operating activities:
	Net cash provided by (used in) operating activities	$	(4,633	)	$	20,960		$	9,884		$	—	$	26,211
Cash flows from investing activities:
	Capital expenditures		(1,137	)		(21,167	)		—			—		(22,304	)
	Payments to restricted escrow arrangement, net		(10,385	)		—			—			—		(10,385	)
	Payments of non-compete agreements		—			(1,000	)		—			—		(1,000	)
	Payments to restricted debt payment account, net		—			—			(2,275	)		—		(2,275	)
	Net cash used in investing activities		(11,522	)		(22,167	)		(2,275	)		—		(35,964	)
Cash flows from financing activities:
	Proceeds from long-term debt and bonds		23,000			1,339			—			—		24,339
	Payments on long-term debt		(21,000	)		—			—			—		(21,000	)
	Payments of MCF bonds		—			—			(7,600	)		—		(7,600	)
	Payments on capital lease obligations		(31	)		—			—			—		(31	)
	Payments of debt issuance and other financing costs		(31	)		—			—			—		(31	)
	Collection of payments of shareholder notes		440			—			—			—		440
	Proceeds from exercise of stock options and warrants		2,427			—			—			—		2,427
	Purchases of treasury stock		(1,230	)		—			—			—		(1,230	)
	Net cash provided by (used in) financing activities		3,575			1,339			(7,600	)		—		(2,686	)
Net increase (decrease) in cash and cash equivalents			(12,580	)		132			9			—		(12,439	)
Cash and cash equivalents at beginning of period			52,407			157			46			—		52,610
Cash and cash equivalents at end of period		$	39,827		$	289		$	55		$	—	$	40,171

F-40

Cornell Companies, Inc.

Condensed Consolidating Balance Sheets

As of December 31, 2002

			Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiary		Eliminations			Consolidated
			(Dollars in thousands)
Assets
Current assets:
	Cash and cash equivalents		$	52,407		$	157	$	46	$	—		$	52,610
	Accounts receivable			712			59,246		77		—			60,035
	Restricted assets			300			2,064		12,403		—			14,767
	Prepaids and other			7,697			1,131		—		—			8,828
		Total current assets		61,116			62,598		12,526		—			136,240
Property and equipment, net				1,272			93,619		167,309		(6,750	)		255,450
Other assets:
	Debt service reserve fund			—			—		24,157		—			24,157
	Deferred costs and other			17,367			13,440		10,543		(15,906	)		25,444
	Investment in subsidiaries			34,729			1,856		—		(36,585	)		—
		Total assets	$	114,484		$	171,513	$	214,535	$	(59,241	)	$	441,291
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable and accrued liabilities		$	21,477		$	5,680	$	6,759	$	(1,294	)	$	32,622
	Current portion of long-term debt			30			—		7,600		—			7,630
		Total current liabilities		21,507			5,680		14,359		(1,294	)		40,252
Long-term debt, net of current portion				7			49,251		183,000		—			232,258
Deferred tax liabilities				4,954			—		—		—			4,954
Other long-term liabilities				8,093			20		12,406		(16,644	)		3,875
Intercompany				(80,029	)		80,029		—		—			—
		Total liabilities		(45,468	)		134,980		209,765		(17,938	)		281,339
Stockholders' equity				159,952			36,533		4,770		(41,303	)		159,952
		Total liabilities and stockholders' equity	$	114,484		$	171,513	$	214,535	$	(59,241	)	$	441,291

F-41

Cornell Companies, Inc.

Condensed Consolidating Statements of Operations

Twelve months ended December 31, 2002

		Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated
		(Dollars in thousands)
Revenues		$	18,243		$	321,714		$	18,008		$	(82,820	)	$	275,145
Operating expenses			17,992			276,791			28			(82,502	)		212,309
Depreciation and amortization			(39	)		5,662			4,222			(66	)		9,779
General and administrative expenses			21,374			—			106			—			21,480
Income (loss) from operations			(21,084	)		39,261			13,652			(252	)		31,577
Overhead allocation			(26,754	)		26,754			—			—			—
Interest, net			(4,398	)		7,162			15,960			574			19,298
Equity earnings in subsidiaries			3,946			—			—			(3,946	)		—
Income (loss) before provision for income taxes			14,014			5,345			(2,308	)		(4,772	)		12,279
Provision (benefit) for income taxes			6,687			(441	)		—			(1,294	)		4,952
Income (loss) before extraordinary change			7,327			5,786			(2,308	)		(3,478	)		7,327
	Cumulative effect of changes in accounting principles, net		—			(965	)		—			—			(965	)
Net income (loss)		$	7,327		$	4,821		$	(2,308	)	$	(3,478	)	$	6,362

F-42

Cornell Companies, Inc.

Condensed Consolidating Statements of Cash Flows

Twelve months ended December 31, 2002

		Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations		Consolidated
		(Dollars in thousands)
Cash flows from operating activities:
	Net cash provided by operating activities	$	366		$	8,741		$	10,657		$	—	$	19,764
Cash flows from investing activities:
	Capital expenditures		—			(10,075	)		(1,039	)		—		(11,114	)
	Payments to restricted debt payment account, net		—			—			(2,184	)		—		(2,184	)
	Return of restricted assets from deferred bonus plan		1,000			—			—			—		1,000
	Net cash provided by (used in) investing activities		1,000			(10,075	)		(3,223	)		—		(12,298	)
Cash flows from financing activities:
	Proceeds from long-term debt and bonds		—			1,083			—			—		1,083
	Payments of long-term debt		—			—			(6,800	)		—		(6,800	)
	Payments on capital lease obligations		(113	)		—			—			—		(113	)
	Proceeds from payments on shareholder notes		173			—			—			—		173
	Distributions to equity owners of consolidated special purpose entity		—			—			(614	)		—		(614	)
	Proceeds from exercise of stock options and warrants		600			—			—			—		600
	Purchases of treasury stock		(2,429	)		—			—			—		(2,429	)
	Net cash provided by (used in) financing activities		(1,769	)		1,083			(7,414	)		—		(8,100	)
Net increase (decrease) in cash and cash equivalents			(403	)		(251	)		20			—		(634	)
Cash and cash equivalents at beginning of period			52,810			408			26			—		53,244
Cash and cash equivalents at end of period		$	52,407		$	157		$	46		$	—	$	52,610

F-43

We have not authorized any dealer, salesperson or other person to give you written information other than this prospectus or to make representations as to matters not stated in this prospectus. You must not rely on unauthorized information. This prospectus is not an offer to sell the notes or our solicitation of your offer to buy the notes in any jurisdiction where that would not be permitted or legal. Neither the delivery of this prospectus nor any sales made hereunder after the date of this prospectus shall create an implication that the information contained herein or the affairs of the company have not changed since the date of this prospectus.

Until                        , all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unused allotments or subscriptions.

Cornell Companies, Inc.
$112,000,000
Offer to Exchange
Registered 10³/4% Senior Notes Due 2012
for
All Outstanding 10³/4% Senior Notes Due 2012

PROSPECTUS

                        , 2004

PART II

Item 20. Indemnification of Directors and Officers.

Delaware Registrants

        The following registrants are corporations incorporated in the state of Delaware: Cornell Companies, Inc., CCG I Corporation, Cornell Abraxas Group, Inc., Cornell Corrections Management, Inc., Cornell Corrections of Rhode Island, Inc., Cornell Corrections of Texas, Inc., Cornell International, Inc. and WBP Leasing, Inc. Consistent with Section 145(a) of the Delaware General Corporation Law (the "DGCL"), a Delaware corporation may indemnify and, in certain cases, must indemnify, any person who was or is made a party to any action by reason of the fact that he is or was a director, officer, employee or agent of Cornell, or is or was serving at the request of Cornell as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (1) in the case of a non-derivative action, against judgments, fines, amounts paid in settlement, and expenses (including attorneys' fees) incurred actually and reasonably by him as a result of such action, and (2) in the case of a derivative action, against expenses (including attorneys' fees), if in either type of action he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation.

        This indemnification does not apply, (1) in a derivative action, to matters as to which it is adjudged that the director, officer, employee or agent is liable to Cornell, unless upon court order it is determined that, in view of all the circumstances of the case and despite such adjudication of liability, he is fairly and reasonably entitled to indemnity for expenses, and (2) in a non-derivative action, to any criminal proceeding in which such person had reasonable cause to believe his conduct was unlawful.

Cornell Companies, Inc. Certificate of Incorporation

        Cornell's Restated Certificate of Incorporation, as amended, provides that director of Cornell shall not be personally liable to Cornell or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the director's duty of loyalty to Cornell or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL or (4) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of Cornell, in addition to the limitation on personal liability described above, shall be limited to the fullest extent permitted by the amended DGCL. Further, any repeal or modification of such provision of the Certificate of Incorporation by the stockholders of Cornell shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of Cornell existing at the time of such repeal or modification. Additionally, the Certificate of Incorporation provides that Cornell will indemnify its officers and directors to the fullest extent permitted by the DGCL.

Cornell Companies, Inc. Bylaws

        Cornell's Amended and Restated Bylaws generally provide for indemnification, to the fullest extent authorized by the DGCL, of its officers, directors, legal representatives, employees or agents and persons serving at the request of Cornell in such capacities for other business organizations against all expense, liability and loss (including without limitation, attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by reason of his position with Cornell or such other business organizations. The Bylaws further provide that the right to indemnification is a contract right and includes the right for Cornell to pay the expenses incurred in defending any such proceeding in advance of its final disposition and consistent with the DGCL. In addition, the Bylaws provide that Cornell may, by action of its board of directors, provide

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indemnification to employees and agents of Cornell, individually or as a group, with the same scope and effect as the indemnification of directors and officers provided for in the Bylaws.

Indemnification Agreements

        Cornell maintains Indemnification Agreements with each of its officers and directors. The Indemnification Agreements provide that Cornell shall indemnify the officer or director and hold him harmless from any losses and expenses which, in type or amount, are not insured under the directors and officers' liability insurance maintained by Cornell. The Indemnification Agreements generally provide that Cornell indemnifies the officer or director against losses and expenses as a result of a claim or claims made against him for any breach of duty, neglect, error, misstatement, misleading statement, omission or other act done or wrongfully attempted by the officer or director or any of the foregoing alleged by any claimant or any claim against the officer or director solely by reason of him being an officer or director of Cornell, subject to certain exclusions. The Indemnification Agreements also provide certain procedures regarding the right to indemnification and for the advancement of expenses.

Insurance

        Cornell maintains a policy of liability insurance to insure its officers and directors against losses resulting from certain acts committed by them in their capacities as officers and directors of Cornell.

Certificate of Incorporation and Bylaws of Other Delaware Corporation Registrants

        The certificates of incorporation and/or bylaws of CCG I Corporation, Cornell Abraxas Group, Inc., Cornell Corrections Management, Inc., Cornell Corrections of Rhode Island, Inc., Cornell Corrections of Texas, Inc., Cornell International, Inc. and WBP Leasing, Inc. provide that such corporation indemnify its officers and directors to the fullest extent permitted by Delaware law.

Delaware Limited Liability Company Registrants

        Cornell Companies Administration, LLC and Cornell Companies Management Holdings, LLC are limited liability companies organized under the laws of the State of Delaware. Section 18-808 of the Delaware Limited Liability Company Act provides that a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement.

        The Limited Liability Company Agreements of both Cornell Companies Administration, LLC and Cornell Companies Management Holdings, LLC (the "Agreement"), provide that, to the fullest extent allowed under the laws of the State of Delaware, the company shall indemnify the manager(s) and the company's officers and employees from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the company as set forth in the Agreement in which a manager, officer or employee may be involved, or is threatened to be involved, as a party or otherwise, regardless of whether arising from any act or omission which constituted the sole, partial or concurrent negligence (whether active or passive) of a manager, officer or employee, unless it is established that: (1) the act or omission of such manager, officer or employee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (2) the manager, officer or employee actually received an improper personal benefit in money, property or services; or (3) in the case of any criminal proceeding, the manager, officer or employee had reasonable cause to believe that the act or omission was unlawful.

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The termination of any proceeding by judgment, order or settlement does not create a presumption that the manager, officer or employee did not meet the requisite standard of conduct set forth in the Agreement. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the manager, officer or employee acted in a manner contrary to that specified in the Agreement. Any indemnification pursuant to the Agreement shall be made only out of the assets of the company, including insurance proceeds, if any.

Delaware Limited Partnership Registrants

        Cornell Companies Management, LP and Cornell Companies Management Services, Limited Partnership are limited partnerships organized under the laws of the State of Delaware. Section 17-108 of The Delaware Revised Uniform Limited Partnership Act provides that a limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever, subject to the standards and restrictions, if any, that are set forth in its limited partnership agreement.

        The Limited Partnership Agreements of both Cornell Companies Management, LP and Cornell Companies Management Services, Limited Partnership (the "Agreement"), provide that the partnership shall indemnify the general partner and each of its affiliates, from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the partnership as set forth in the Agreement in which the general partner or any of its affiliates, may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the general partner, or any of its affiliates, was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the general partner did not reasonably believe that the general partner, while acting as general partner, was acting in the best interests of the limited partners or, in all other cases, was acting in opposition of the limited partner's best interests; (iii) the general partner or its affiliates, actually received an improper personal benefit in money, property or services; or (iv) in the case of any criminal proceeding, the general partner or its affiliates, had reasonable cause to believe that the act or omission was unlawful. The termination of any proceeding by judgment, order or settlement does not create a presumption that the general partner or its affiliates, did not meet the requisite standard of conduct set forth in the Agreement. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the general partner or its affiliates, acted in a manner contrary to that specified in the Agreement. Any indemnification pursuant to the Agreement shall be made only out of the assets of the partnership, including insurance proceeds, if any.

Alaska Registrant

        Cornell Corrections of Alaska, Inc., is an Alaska corporation. Section 10.06.490 of the Alaska Business Corporation Act provides that a corporation may indemnify a person who was, is, or is threatened to be made a party to a completed, pending or threatened action or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. Alaska law also provides that a corporation may indemnify a person who was, is or is threatened action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the

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corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of an action or proceeding referred to above, or in defense of a claim, issue or matter in the action or proceeding, Alaska law provides that the director, officer, employee or agent shall be indemnified against expenses and attorneys' fees actually and reasonably incurred in connection with the defense.

        The articles of incorporation of Cornell Corrections of Alaska, Inc., provide that directors of the corporation shall not be personally liable to the corporation or its shareholders for monetary damages for acts or omissions that occur after the effective date of the articles of incorporation nor the breach of their fiduciary duty as a director provided, however, that such exemption from liability shall not apply to (i) a breach of a director's duty of loyalty to the corporation or its shareholders; (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (iii) willful or neg1igent conduct involved in the payment of dividends or the repurchase of stock from other than lawfully available funds; or (iv) a transaction from which the director derives an improper personal benefit.

California Registrant

        Cornell Corrections of California, Inc., is a California corporation. Section 204 of the California Corporations Code provides that a corporation may set forth in its articles of incorporation provisions (i) eliminating or limiting the personal liability of a director for monetary damages in an action brought by or in the right o the corporation for breach of a director's duties to the corporation and its shareholders, as set forth in Section 309 of the California Corporations Code, so long as such indemnification is subject to certain limitations and conditions as provided therein and (ii) authorizing, whether by bylaw, agreement or otherwise, the indemnification of agents (as defined in Section 317 of the California Corporations Code) in excess of that expressly permitted by Section 317 for those agents of the corporation for breach of duty to the corporation and its stockholders, so long as such indemnification is subject to certain limitations and conditions as provided therein. Section 317 of the California Corporations Code provides that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interest of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of the person was unlawful. This section also provides that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the corporation to procure a judgment in its power by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of the actions if that person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its shareholders, where such indemnification is subject to certain limitations and conditions as provided therein.

        The bylaws of Cornell Corrections of California, Inc. provide that such corporation may indemnify its officers and directors to the maximum extent allowed by California law.

Illinois Registrant

        Cornell Interventions, Inc., is an Illinois corporation. Section 8.75 of the Illinois Business Corporation Act provides that a corporation may indemnify a person who was, is, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil,

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criminal, administrative, or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.. Illinois law also provides that a corporation may indemnify a person who was, is or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the corporation, provided that no indemnification shall be made with respect to any claim, issue, or matter as to which such person has be adjudged to have been liable to the corporation, unless, and only to the extent that the court in which such action or suit was brought shall determine upon application, that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. To the extent that a present or former director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of an action, suit or proceeding referred to above, or in defense of a claim, issue or matter in the action or proceeding, Illinois law provides that the director, officer, employee or agent shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred in connection therewith, if the person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation.

        The articles of incorporation and bylaws of Cornell Interventions, Inc. eliminates the personal liability of directors of the corporation to the fullest extent permissible under the Illinois Business Corporation Act.

General

        The above discussion of the organizational documents of the registrants and the laws of the jurisdictions of incorporation or organization of the registrants, as applicable, is not intended to be exhaustive and is respectively qualified in its entirety by such organizational documents and laws.

        With respect to possible indemnification of directors, officers and controlling persons of the registrants for liabilities arising under the Securities Act pursuant to such provisions, the registrants are aware that the Commission has publicly taken the position that such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Item 21. Exhibits and Financial Statement Schedules.

(a)

Exhibits.

Exhibit Number	Description
1.1*	Purchase Agreement dated as of June 17, 2004, among Cornell Companies, Inc., the guarantors named therein and J. P. Morgan Securities, Inc., Comerica Securities, Inc., Piper Jaffray Co. and SouthTrust Securities, Inc., (collectively, the Initial Purchasers).

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3.1	Restated Certificate of Incorporation of Cornell, dated as of September 30, 1996 (incorporated by reference to Cornell's Annual Report on Form 10-K for the year ended December 31, 1996).
3.2*	Certificate of Amendment of Restated Certificate of Incorporation of Cornell, dated May 25, 2000.
3.3*	Amended and Restated Bylaws of Cornell Companies, Inc., dated as of April 16, 2002.
3.4*	Certificate of Incorporation of CCG I Corporation, dated August 5, 1997.
3.5*	Bylaws of CCG I Corporation
3.6*	Certificate of Incorporation of Cornell Abraxas Group, Inc., dated as of August 18, 1997.
3.7*	Certificate of Amendment of Certificate of Incorporation of Cornell Abraxas Group, Inc., dated August 21, 1997.
3.8*	Certificate of Amendment of Certificate of Incorporation of Cornell Abraxas Group, Inc., dated April 8, 1999.
3.9*	Bylaws of Cornell Abraxas Group, Inc.
3.10*	Certificate of Formation of Cornell Companies Administration, LLC, dated as of March 27, 2002.
3.11*	Limited Liability Company Agreement of Cornell Companies Administration, LLC, dated as of March 27, 2002.
3.12*	Certificate of Limited Partnership of Cornell Companies Management, LP, dated as of March 29, 2002.
3.13*	Limited Partnership Agreement of Cornell Companies Management, LP, dated as of June 5, 2002.
3.14*	Certificate of Formation of Cornell Companies Management Holdings, LLC, dated as of December 18, 2001.
3.15*	Limited Liability Company Agreement of Cornell Companies Management Holdings, LLC, dated December 18, 2001.
3.16*	Certificate of Limited Partnership of Cornell Companies Management Services, Limited Partnership, dated as of December 18, 2001.
3.17*	Limited Partnership Agreement of Cornell Companies Management Services, Limited Partnership, dated as of December 18, 2001.
3.18*	Certificate of Incorporation of Cornell Corrections Management, Inc., dated as of September 4, 1992.
3.19*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections Management, Inc., dated as of July 10, 1995.
3.20*	Bylaws of Cornell Corrections Management, Inc.
3.21*	Articles of Incorporation of Cornell Corrections of Alaska, Inc., dated as of August 3, 1998.
3.22*	Bylaws of Cornell Corrections of Alaska, Inc.
3.23*	Articles of Incorporation of Cornell Corrections of California, Inc., dated as of April 20, 1977.

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3.24*	Certificate of Amendment of Articles of Incorporation of Cornell Corrections of California, Inc., dated as of July 21, 1995.
3.25*	Bylaws of Cornell Corrections of California, Inc.
3.26*	Certificate of Incorporation of Cornell Corrections of Rhode Island, Inc., dated as of October 27, 1992.
3.27*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Rhode Island, Inc., dated as of July 10, 1995.
3.28*	Bylaws of Cornell Corrections of Rhode Island, Inc.
3.29*	Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of October 27, 1992.
3.30*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of January 1, 1994.
3.31*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of July 10, 1995.
3.32*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of May 9, 1996.
3.33*	Bylaws of Cornell Corrections of Texas, Inc.
3.34*	Certificate of Incorporation of Cornell International, Inc., dated as of August 3, 2001.
3.35*	Bylaws of Cornell International, Inc.
3.36*	Articles of Incorporation of Cornell Interventions, Inc., dated as of May 11, 1999.
3.37*	Bylaws of Cornell Interventions, Inc.
3.38*	Certificate of Incorporation of WBP Leasing, Inc., dated as of August 29, 1997.
3.39*	Bylaws of WBP Leasing, Inc.
4.1	Indenture (including form of Note) dated as of June 24, 2004, by and between Cornell Companies, Inc., the guarantors named therein and JPMorgan Chase Bank, as Trustee (incorporated by reference to Cornell's Current Report on Form 8-K filed June 25, 2004).
4.2	Registration Rights Agreement dated as of June 24, 2004, among Cornell Companies, Inc., the guarantors named therein and the Initial Purchasers (incorporated by reference to Cornell's Current Report on Form 8-K filed June 25, 2004).
5.1*	Opinion of Locke Liddell & Sapp LLP.
12.1*	Computation of Ratio of Earnings to Fixed Charges.
23.1*	Consent of PricewaterhouseCoopers LLP.
23.4*	Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1).
24.1*	Power of Attorney—CCG I Corporation (included on signature page)
24.2*	Power of Attorney—Cornell Abraxas Group, Inc. (included on signature page)
24.3*	Power of Attorney—Cornell Companies Administration, LLC (included on signature page)
24.4*	Power of Attorney—Cornell Companies Management, LP (included on signature page)

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24.5*	Power of Attorney—Cornell Companies Management Holdings, LLC (included on signature page)
24.6*	Power of Attorney—Cornell Companies Management Services. Limited Partnership (included on signature page)
24.7*	Power of Attorney—Cornell Corrections Management, Inc. (included on signature page)
24.8*	Power of Attorney—Cornell Corrections of Alaska, Inc. (included on signature page)
24.9*	Power of Attorney—Cornell Corrections of California, Inc. (included on signature page)
24.10*	Power of Attorney—Cornell Corrections of Rhode Island, Inc. (included on signature page)
24.11*	Power of Attorney—Cornell Corrections of Texas, Inc. (included on signature page)
24.12*	Power of Attorney—Cornell International, Inc. (included on signature page)
24.13*	Power of Attorney—Cornell Interventions, Inc. (included on signature page)
24.14*	Power of Attorney—WPB Leasing, Inc. (included on signature page)
25.1*	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank to act as Trustee under the indenture (103/4% Senior Notes due 2012).
25.2*	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank to act as Trustee under the indenture (Guarantees for 103/4% Senior Notes due 2012).
99.1*	Form of Letter to Holders of Old Notes.
99.2*	Form of Letter of Transmittal (with accompanying Substitute Form W-9 and related Guidelines).
99.3*	Form of Notice of Guaranteed Delivery.
99.4*	Form of Letter to Registered Holders and The Depository Trust Company Participants.
99.5*	Form of Letter to Clients (with form of Instructions to Registered Holder and/or The Depository Trust Company Participant).
99.6*	Form of Exchange Agent Agreement.

*

Filed herewith.

        All supporting schedules have been omitted because they are not required or the information required to be set forth therein is included in the consolidated financial statements or in the notes thereto.

Item 22. Undertakings.

(a)

The undersigned Registrant hereby undertakes:



(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:



(i)

To include any prospectus required by Section 10(a)(3) of the Securities Act;



(ii)

To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information

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set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act, if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this Registration Statement; provided, however, that the undertakings set forth in paragraphs (1)(i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by reference in this registration statement.



(2)

That, for the purpose of determining any liability under the Securities Act each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time be deemed to be the initial bona fide offering thereof.



(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.



(b)

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



(c)

The undersigned Registrant hereby undertakes:



(1)

To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.



(d)

The undersigned Registrant hereby undertakes:



(1)

That, prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

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(2)

That every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



(e)

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.



(f)

The undersigned Registrant hereby undertakes:



(1)

To respond to requests for information that is incorporated by reference in the prospectus pursuant to Item 4, 10(b), 11, 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.



(2)

To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.

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SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933, the Registrant, Cornell Companies, Inc., has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CORNELL COMPANIES, INC.
By:	/s/  HARRY J. PHILLIPS, JR. Harry J. Phillips, Jr. Chief Executive Officer and Chairman of the Board

        We, the undersigned officers and directors of Cornell Companies, Inc., hereby severally constitute and appoint Harry J. Phillips, Jr. our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Cornell Companies, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature	Title	Date
/s/  HARRY J. PHILLIPS, JR. Harry J. Phillips, Jr.	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	September 3, 2004
/s/  THOMAS R. JENKINS Thomas R. Jenkins	President and Chief Operating Officer	September 3, 2004
/s/  JOHN R. NIESER John R. Nieser	Treasurer and Acting Chief Financial Officer (Principal Financial Officer)	September 3, 2004
/s/  ANTHONY R. CHASE Anthony R. Chase	Director	September 3, 2004
/s/  D. STEPHEN SLACK D. Stephen Slack	Director	September 3, 2004

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/s/  TUCKER TAYLOR Tucker Taylor	Director	September 3, 2004
/s/  ROBERT F. VAGT Robert F. Vagt	Director	September 3, 2004
/s/  MARCUS A. WATTS Marcus A. Watts	Director	September 3, 2004

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SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933, each of the CCG I Corporation, Cornell Corrections Management, Inc., Cornell Corrections of Alaska, Inc., Cornell Corrections of California, Inc., Cornell Corrections of Rhode Island, Inc., Cornell Corrections of Texas, Inc., Cornell International, Inc. and WBP Leasing, Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CCG I CORPORATION CORNELL CORRECTIONS MANAGEMENT, INC. CORNELL CORRECTIONS OF ALASKA, INC. CORNELL CORRECTIONS OF CALIFORNIA, INC. CORNELL CORRECTIONS OF RHODE ISLAND, INC. CORNELL CORRECTIONS OF TEXAS, INC. CORNELL INTERNATIONAL, INC. WBP LEASING, INC.
By:	/s/  JOHN R. NIESER John R. Nieser Acting Chief Financial Officer and Treasurer

        We, the undersigned officers and directors of CCG I Corporation, Cornell Corrections Management, Inc., Cornell Corrections of Alaska, Inc., Cornell Corrections of California, Inc., Cornell Corrections of Rhode Island, Inc., Cornell Corrections of Texas, Inc., Cornell International, Inc. and WBP Leasing, Inc., hereby severally constitute and appoint John N. Nieser our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable CCG I Corporation, Cornell Corrections Management, Inc., Cornell Corrections of Alaska, Inc., Cornell Corrections of California, Inc., Cornell Corrections of Rhode Island, Inc., Cornell Corrections of Texas, Inc., Cornell International, Inc. and WBP Leasing, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

II-13

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of each of the CCG I Corporation, Cornell Corrections Management, Inc., Cornell Corrections of Alaska, Inc., Cornell Corrections of California, Inc., Cornell Corrections of Rhode Island, Inc., Cornell Corrections of Texas, Inc., Cornell International, Inc. and WBP Leasing, Inc. and in the capacities and on the date indicated.

Signature	Title	Date
/s/  HARRY J. PHILLIPS, JR. Harry J. Phillips, Jr.	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	September 3, 2004
/s/  THOMAS R. JENKINS Thomas R. Jenkins	President, Chief Operating Officer and Director	September 3, 2004
/s/  JOHN R. NIESER John R. Nieser	Treasurer, Acting Chief Financial Officer and Director (Principal Financial Officer)	September 3, 2004

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SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933, the Registrant, Cornell Abraxas Group, Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CORNELL ABRAXAS GROUP, INC.
By:	/s/  JOHN R. NIESER John R. Nieser Acting Chief Financial Officer and Treasurer

        We, the undersigned officers and directors of Cornell Abraxas Group, Inc., hereby severally constitute and appoint John N. Nieser our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Cornell Abraxas Group, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of each of the Cornell Abraxas Group, Inc. and in the capacities and on the date indicated.

Signature	Title	Date
/s/  THOMAS R. JENKINS Thomas R. Jenkins	President, Chief Operating Officer and Director (Principal Executive Officer)	September 3, 2004
/s/  JOHN R. NIESER John R. Nieser	Treasurer, Acting Chief Financial Officer and Director (Principal Financial Officer)	September 3, 2004
/s/  JOHN C. GODLESKY
John C. Godlesky	Senior Vice President and Director	September 3, 2004
/s/  ARTHUR K. MEISSNER Arthur K. Meissner	Director	September 3, 2004

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SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933, the Registrant, Cornell Interventions, Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CORNELL INTERVENTIONS, INC.
By:	/s/  JOHN R. NIESER John R. Nieser Acting Chief Financial Officer and Treasurer

        We, the undersigned officers and directors of Cornell Interventions, Inc., hereby severally constitute and appoint John N. Nieser our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Cornell Interventions, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of each of the Cornell Interventions, Inc. and in the capacities and on the date indicated.

Signature	Title	Date
/s/  THOMAS R. JENKINS Thomas R. Jenkins	President, Chief Operating Officer and Director (Principal Executive Officer)	September 3, 2004
/s/  JOHN R. NIESER John R. Nieser	Treasurer, Acting Chief Financial Officer and Director (Principal Financial Officer)	September 3, 2004
/s/  JOHN C. GODLESKY John C. Godlesky	Vice President and Director	September 3, 2004
/s/  ARTHUR K. MEISSNER Arthur K. Meissner	Director	September 3, 2004

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SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933,each of the Cornell Companies Administration, LLC and Cornell Companies Management Holdings, LLC has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CORNELL COMPANIES ADMINISTRATION, LLC CORNELL COMPANIES MANAGEMENT     HOLDINGS, LLC
By:	/s/  JOHN R. NIESER John R. Nieser Sole Manager

        We, the undersigned officers and directors of Cornell Companies Administration, LLC and Cornell Companies Management Holdings, LLC, hereby severally constitute and appoint John N. Nieser our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Cornell Companies Administration, LLC and Cornell Companies Management Holdings, LLC to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of each of the Cornell Abraxas Group, Inc. and Cornell Interventions, Inc.and in the capacities and on the date indicated.

Signature	Title	Date
/s/  JOHN R. NIESER John R. Nieser	Sole Manager (Principal Executive Officer and Principal Financial Officer)	September 3, 2004

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SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933, the Registrant, Cornell Companies Management, LP, has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CORNELL COMPANIES MANAGEMENT, LP
By:	CORNELL COMPANIES ADMINISTRATION, LLC its general partner
	By:	/s/  JOHN R. NIESER John R. Nieser Sole Manager

        We, the undersigned officers and directors of Cornell Companies Management, LP, hereby severally constitute and appoint Harry J. Phillips, Jr. our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Cornell Companies Management, LP to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature	Title	Date
/s/  JOHN R. NIESER John R. Nieser	Sole Manager of Cornell Companies Administration, LLC, its general partner (Principal Executive Office and Principal Financial Officer)	September 3, 2004

II-18

SIGNATURES AND POWER OF ATTORNEY

        Pursuant to the requirements of the Securities Act of 1933, the Registrant, Cornell Companies Management Services, Limited Partnership, has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on September 3, 2004.

CORNELL COMPANIES MANAGEMENT SERVICES,   LIMITED PARTNERSHIP
By:	CORNELL COMPANIES MANAGEMENT, LP its general partner
	By:	CORNELL COMPANIES ADMINISTRATION, LLC, its general partner
		By:	/s/  JOHN R. NIESER John R. Nieser Sole Manager

        We, the undersigned officers and directors of Cornell Companies Management Services, Limited Partnership, hereby severally constitute and appoint Harry J. Phillips, Jr. our true and lawful attorney with full power to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-4 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement and any related registration statements filed pursuant to Rule 462(b), and to file the same, with exhibits thereto and other documents in connection therewith, and generally to do all such things in our name and behalf in our capacities as officers and directors to enable Cornell Companies Management Services, Limited Partnership to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to said Registration Statement and any and all amendments thereto.

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature	Title	Date
/s/  JOHN R. NIESER John R. Nieser	Sole Manager of Cornell Companies Administration, LLC, general partner of Cornell Companies Management, LP, its general partner (Principal Executive Office and Principal Financial Officer)	September 3, 2004

II-19

EXHIBIT INDEX

Exhibit Number	Description
1.1*	Purchase Agreement dated as of June 17, 2004, among Cornell Companies, Inc., the guarantors named therein and J. P. Morgan Securities, Inc., Comerica Securities, Inc., Piper Jaffray Co. and SouthTrust Securities, Inc., (collectively, the Initial Purchasers).
3.1	Restated Certificate of Incorporation of Cornell, dated as of September 30, 1996 (incorporated by reference to Cornell's Annual Report on Form 10-K for the year ended December 31, 1996).
3.2*	Certificate of Amendment of Restated Certificate of Incorporation of Cornell, dated May 25, 2000.
3.3*	Amended and Restated Bylaws of Cornell Companies, Inc., dated as of April 16, 2002.
3.4*	Certificate of Incorporation of CCG I Corporation, dated August 5, 1997.
3.5*	Bylaws of CCG I Corporation
3.6*	Certificate of Incorporation of Cornell Abraxas Group, Inc., dated as of August 18, 1997.
3.7*	Certificate of Amendment of Certificate of Incorporation of Cornell Abraxas Group, Inc., dated August 21, 1997.
3.8*	Certificate of Amendment of Certificate of Incorporation of Cornell Abraxas Group, Inc., dated April 8, 1999.
3.9*	Bylaws of Cornell Abraxas Group, Inc.
3.10*	Certificate of Formation of Cornell Companies Administration, LLC, dated as of March 27, 2002.
3.11*	Limited Liability Company Agreement of Cornell Companies Administration, LLC, dated as of March 27, 2002.
3.12*	Certificate of Limited Partnership of Cornell Companies Management, LP, dated as of March 29, 2002.
3.13*	Limited Partnership Agreement of Cornell Companies Management, LP, dated as of June 5, 2002.
3.14*	Certificate of Formation of Cornell Companies Management Holdings, LLC, dated as of December 18, 2001.
3.15*	Limited Liability Company Agreement of Cornell Companies Management Holdings, LLC, dated December 18, 2001.
3.16*	Certificate of Limited Partnership of Cornell Companies Management Services, Limited Partnership, dated as of December 18, 2001.
3.17*	Limited Partnership Agreement of Cornell Companies Management Services, Limited Partnership, dated as of December 18, 2001.
3.18*	Certificate of Incorporation of Cornell Corrections Management, Inc., dated as of September 4, 1992.
3.19*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections Management, Inc., dated as of July 10, 1995.
3.20*	Bylaws of Cornell Corrections Management, Inc.
3.21*	Articles of Incorporation of Cornell Corrections of Alaska, Inc., dated as of August 3, 1998.

3.22*	Bylaws of Cornell Corrections of Alaska, Inc.
3.23*	Articles of Incorporation of Cornell Corrections of California, Inc., dated as of April 20, 1977.
3.24*	Certificate of Amendment of Articles of Incorporation of Cornell Corrections of California, Inc., dated as of July 21, 1995.
3.25*	Bylaws of Cornell Corrections of California, Inc.
3.26*	Certificate of Incorporation of Cornell Corrections of Rhode Island, Inc., dated as of October 27, 1992.
3.27*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Rhode Island, Inc., dated as of July 10, 1995.
3.28*	Bylaws of Cornell Corrections of Rhode Island, Inc.
3.29*	Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of October 27, 1992.
3.30*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of January 1, 1994.
3.31*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of July 10, 1995.
3.32*	Certificate of Amendment of Certificate of Incorporation of Cornell Corrections of Texas, Inc., dated as of May 9, 1996.
3.33*	Bylaws of Cornell Corrections of Texas, Inc.
3.34*	Certificate of Incorporation of Cornell International, Inc., dated as of August 3, 2001.
3.35*	Bylaws of Cornell International, Inc.
3.36*	Articles of Incorporation of Cornell Interventions, Inc., dated as of May 11, 1999.
3.37*	Bylaws of Cornell Interventions, Inc.
3.38*	Certificate of Incorporation of WBP Leasing, Inc., dated as of August 29, 1997.
3.39*	Bylaws of WBP Leasing, Inc.
4.1	Indenture (including form of Note) dated as of June 24, 2004, by and between Cornell Companies, Inc., the guarantors named therein and JPMorgan Chase Bank, as Trustee (incorporated by reference to Cornell's Current Report on Form 8-K filed June 25, 2004).
4.2	Registration Rights Agreement dated as of June 24, 2004, among Cornell Companies, Inc., the guarantors named therein and the Initial Purchasers (incorporated by reference to Cornell's Current Report on Form 8-K filed June 25, 2004).
5.1*	Opinion of Locke Liddell & Sapp LLP.
12.1*	Computation of Ratio of Earnings to Fixed Charges.
23.1*	Consent of PricewaterhouseCoopers LLP.
23.4*	Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1).
24.1*	Power of Attorney—CCG I Corporation (included on signature page)
24.2*	Power of Attorney—Cornell Abraxas Group, Inc. (included on signature page)
24.3*	Power of Attorney—Cornell Companies Administration, LLC (included on signature page)
24.4*	Power of Attorney—Cornell Companies Management, LP (included on signature page)

24.5*	Power of Attorney—Cornell Companies Management Holdings, LLC (included on signature page)
24.6*	Power of Attorney—Cornell Companies Management Services. Limited Partnership (included on signature page)
24.7*	Power of Attorney—Cornell Corrections Management, Inc. (included on signature page)
24.8*	Power of Attorney—Cornell Corrections of Alaska, Inc. (included on signature page)
24.9*	Power of Attorney—Cornell Corrections of California, Inc. (included on signature page)
24.10*	Power of Attorney—Cornell Corrections of Rhode Island, Inc. (included on signature page)
24.11*	Power of Attorney—Cornell Corrections of Texas, Inc. (included on signature page)
24.12*	Power of Attorney—Cornell International, Inc. (included on signature page)
24.13*	Power of Attorney—Cornell Interventions, Inc. (included on signature page)
24.14*	Power of Attorney—WPB Leasing, Inc. (included on signature page)
25.1*	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank to act as Trustee under the indenture (103/4% Senior Notes due 2012).
25.2*	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of JPMorgan Chase Bank to act as Trustee under the indenture (Guarantees for 103/4% Senior Notes due 2012).
99.1*	Form of Letter to Holders of Old Notes.
99.2*	Form of Letter of Transmittal (with accompanying Substitute Form W-9 and related Guidelines).
99.3*	Form of Notice of Guaranteed Delivery.
99.4*	Form of Letter to Registered Holders and The Depository Trust Company Participants.
99.5*	Form of Letter to Clients (with form of Instructions to Registered Holder and/or The Depository Trust Company Participant).
99.6*	Form of Exchange Agent Agreement.

*

Filed herewith.

EX-1.1

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Exhibit 1.1

$112,000,000

CORNELL COMPANIES, INC.

10³/4% Senior Notes due 2012

Purchase Agreement

June 17, 2004

J.P. Morgan Securities Inc.
  As Representative of the
  several Initial Purchasers listed
  in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017

Ladies and Gentlemen:

        Cornell Companies, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the several Initial Purchasers listed in Schedule 1 hereto (the "Initial Purchasers"), for whom you are acting as representative (the "Representative"), $112,000,000 principal amount of its 10³/4% Senior Notes due 2012 (the "Securities"). The Securities will be issued pursuant to an Indenture to be dated as of June 24, 2004 (the "Indenture") among the Company, the guarantors listed in Schedule 2 hereto (the "Guarantors") and JPMorgan Chase Bank, as trustee (the "Trustee"), and will be guaranteed on an unsecured senior basis by each of the Guarantors (the "Guarantees").

        The Securities will be sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon an exemption therefrom. The Company has prepared a preliminary offering memorandum dated June 4, 2004 (the "Preliminary Offering Memorandum") and will prepare an offering memorandum dated the date hereof (the "Offering Memorandum") setting forth information concerning the Company and the Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company to the Initial Purchasers pursuant to the terms of this Agreement. The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Offering Memorandum.

        Holders of the Securities (including the Initial Purchasers and their direct and indirect transferees) will be entitled to the benefits of a Registration Rights Agreement, to be dated the Closing Date (as defined below) and substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Guarantors will agree to file one or more registration statements with the Securities and Exchange Commission (the "Commission") providing for the registration under the Securities Act of the Securities or the Exchange Securities referred to (and as defined) in the Registration Rights Agreement.

        The Company hereby confirms its agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:

        1.    Purchase and Resale of the Securities.    (a) The Company agrees to issue and sell the Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Securities set forth opposite such Initial Purchaser's name in Schedule 1 hereto at a price equal to 95.685% of the principal amount thereof plus accrued interest, if any, from June 24, 2004 to

the Closing Date. The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.

(b)

The Company understands that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Offering Memorandum. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:



(i)

it is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a "QIB") and an accredited investor within the meaning of Rule 501(a) under the Securities Act;



(ii)

neither it, nor to its knowledge any person acting on its behalf, has solicited offers for, or offered or sold, or will solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act ("Regulation D") or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and



(iii)

neither it, nor to its knowledge any person acting on its behalf, has solicited offers for, or offered or sold, or will solicit offers for, or offer or sell, the Securities as part of their initial offering except:



a.

within the United States to persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act ("Rule 144A") and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; or



b.

outside the United States in accordance with the restrictions set forth in Annex A hereto.



(c)

Each Initial Purchaser acknowledges and agrees that the Company and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 5(f) and 5(g), counsel for the Company and counsel for the Initial Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers, and compliance by the Initial Purchasers with their agreements, contained in paragraph (b) above (including Annex A hereto), and each Initial Purchaser hereby consents to such reliance.



(d)

The Company acknowledges and agrees that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser in each case subject to and in accordance with the terms and provisions of this Agreement (including Annex A hereto).

        2.    Payment and Delivery.    (a) Payment for and delivery of the Securities will be made at the offices of Simpson Thacher & Bartlett LLP at 10:00 A.M., New York City time, on June 24, 2004, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Company may agree upon in writing. The time and date of such payment and delivery is referred to herein as the "Closing Date".

(b)

Payment for the Securities shall be made by wire transfer in immediately available funds to the account(s) specified by the Company to the Representative against delivery to the nominee of The Depository Trust Company, for the account of the Initial Purchasers, of one or more global notes representing the Securities (collectively, the "Global Note"), with any transfer taxes payable in connection with the sale of the Securities duly paid by the Company. The Global Note will be made available for inspection by the Representative not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.

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        3.    Representations and Warranties of the Company and the Guarantors.    The Company and the Guarantors jointly and severally represent and warrant to each Initial Purchaser that:

(a)

Offering Memorandum.    The Preliminary Offering Memorandum, as of its date, did not, and the Offering Memorandum, as of its date, did not, and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum or the Offering Memorandum.



(b)

Financial Statements.    The financial statements and the related notes thereto included in the Preliminary Offering Memorandum and the Offering Memorandum present fairly in all material respects the financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby; and the other historical financial information included in the Preliminary Offering Memorandum and the Offering Memorandum has been derived from the accounting records of the Company and its subsidiaries and presents fairly in all material respects the information shown thereby.



(c)

No Material Adverse Change.    Since the date of the most recent financial statements of the Company included in the Preliminary Offering Memorandum and the Offering Memorandum, (i) there has not been any change in the capital stock (except for scheduled issuance of common stock and options to directors and grants and exercises of options under the Company's equity plans as set forth on Schedule 3 to this Agreement) or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Preliminary Offering Memorandum and the Offering Memorandum.



(d)

Organization and Good Standing.    The Company and each of its subsidiaries have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of the Company and its subsidiaries taken as a whole or on the performance by the Company and the

3

Guarantors of their obligations under the Securities and the Guarantees (a "Material Adverse Effect"). The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Schedule 2 to this Agreement.

(e)

Capitalization.    The Company has an authorized capitalization as set forth in the Preliminary Offering Memorandum and the Offering Memorandum under the heading "Capitalization" (except as modified by subsequent issuances of shares of capital stock of the Company, if any, pursuant to reservations, agreements or employee benefit plans as set forth in the Offering Memorandum or pursuant to the exercise of options or warrants as set forth in the Offering Memorandum, in each case, as set forth in Schedule 3 to this Agreement). All of the issued shares of capital stock, partnership interests, membership interests or other equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party except as may be created in connection with the Credit Agreement, to be dated as of the Closing Date, among the Company, each of the subsidiaries of the Company party thereto, the lenders party thereto and JPMorgan Chase Bank, as administrative agent (the "Senior Secured Credit Agreement").



(f)

Due Authorization.    The Company and each of the Guarantors have full organizational right, power and authority to execute and deliver this Agreement, the Securities, the Indenture (including each Guarantee set forth therein), the Exchange Securities and the Registration Rights Agreement (collectively, the "Transaction Documents") and to perform their respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions described therein has been duly and validly taken.



(g)

The Indenture.    The Indenture has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or similar laws now or hereafter in effect affecting creditors' rights generally and general principles of equity (regardless of whether considered in a proceeding in equity or at law) (collectively, the "Enforceability Exceptions"); and on the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.



(h)

The Securities and the Guarantees.    The Securities have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the Guarantees have been duly authorized by each of the Guarantors and, when the Securities have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of each of the Guarantors, enforceable against each of the Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

4

(i)

The Exchange Securities.    On the Closing Date, the Exchange Securities (including the related guarantees) will have been duly authorized by the Company and each of the Guarantors and, when duly executed, authenticated, issued and delivered as described in the Registration Rights Agreement, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, as issuer, and each of the Guarantors, as guarantor, enforceable against the Company and each of the Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.



(j)

Purchase and Registration Rights Agreements.    This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors; and the Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, subject to the Enforceability Exceptions, and except that no representation or warranty is made as to the enforceability of the indemnification and contribution provisions of such Registration Rights Agreement.



(k)

Descriptions of the Transaction Documents.    Each Transaction Document conforms in all material respects to the description thereof contained in the Preliminary Offering Memorandum and the Offering Memorandum.



(l)

No Violation or Default.    Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.



(m)

No Conflicts.    The execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions described in the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) assuming the accuracy of the representations and warranties of the Initial Purchasers contained herein, result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries, except, in the case of clauses (i) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

5

(n)

No Consents Required.    No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required on the part of the Company or any of its subsidiaries for the execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which it is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions described in the Transaction Documents, except for such consents, approvals, authorizations, orders and registrations or qualifications as may be required (i) under applicable state securities laws in connection with the purchase and resale of the Securities by the Initial Purchasers and (ii) with respect to the Exchange Securities (including the related guarantees) under the Securities Act and applicable state securities laws as contemplated by the Registration Rights Agreement.



(o)

Legal Proceedings.    Except as described in the Preliminary Offering Memorandum and the Offering Memorandum, (i) there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is or, to the Company's knowledge, may be a party or to which any property of the Company or any of its subsidiaries is or, to the Company's knowledge, may be the subject that, individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect and, (ii) to the Company's knowledge, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others.



(p)

Independent Accountants.    PricewaterhouseCoopers LLP and Arthur Andersen LLP who have certified certain financial statements of the Company and its subsidiaries are and were, when serving as the Company's independent auditor, respectively, independent public accountants with respect to the Company and its subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and its interpretations and rulings thereunder.



(q)

Title to Real and Personal Property.    The Company and its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.



(r)

Title to Intellectual Property.    The Company and its subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses as presently or contemplated to be conducted; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and its subsidiaries have not received any notice of any claim of infringement of or conflict with any such rights of others.

6

(s)

Investment Company Act.    Neither the Company nor any of its subsidiaries is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Offering Memorandum none of them will be, an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, "Investment Company Act").



(t)

Taxes.    The Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in the Preliminary Offering Memorandum and the Offering Memorandum, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets.



(u)

Licenses and Permits.    The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Preliminary Offering Memorandum and the Offering Memorandum, except where the failure to possess or make the same could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and except as described in the Preliminary Offering Memorandum and the Offering Memorandum, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.



(v)

No Labor Disputes.    No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the best knowledge of the Company and each of the Guarantors, is contemplated or threatened, except for any such disturbance that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.



(w)

Compliance With Environmental Laws.    The Company and its subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, "Environmental Laws"); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except in any such case for any such failure to comply with, or failure to receive required permits, licenses or approvals, or liability, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.



(x)

Compliance With ERISA.    Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and its affiliates has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred,

7

whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions, except in each case as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(y)

Accounting Controls.    The Company and its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.



(z)

Insurance.    The Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company and its subsidiaries and their respective businesses; and neither the Company nor any of its subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.



(aa)

No Unlawful Payments.    Neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company and each of the Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.



(bb)

Solvency.    On and immediately after the Closing Date, the Company (after giving effect to the issuance of the Securities and the other transactions related thereto as described in the Offering Memorandum) will be Solvent. As used in this paragraph, the term "Solvent" means, with respect to a particular date, that on such date (i) the present fair market value (or present fair saleable value) of the assets of the Company is not less than the total amount required to pay the liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance of the Securities as contemplated by this Agreement and the Offering Memorandum, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature; (iv) the Company is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company is engaged; and (v) the Company is not a defendant in any civil action that could reasonably be expected to result in a judgment that the Company is or could reasonably be expected to become unable to satisfy.

8

(cc)

No Restrictions on Subsidiaries.    As of the Closing Date, no subsidiary of the Company will be prohibited, directly or indirectly, under any agreement or other instrument to which it will be a party or subject to as of that date (other than under the Indenture and the Senior Secured Credit Agreement), from paying any dividends to the Company, from making any other distribution on such subsidiary's capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary's properties or assets to the Company or any other subsidiary of the Company.



(dd)

No Broker's Fees.    Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Initial Purchaser for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Securities.



(ee)

Rule 144A Eligibility.    On the Closing Date, the Securities will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.



(ff)

No Integration.    Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.



(gg)

No General Solicitation or Directed Selling Efforts.    None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engaged in any directed selling efforts within the meaning of Regulation S under the Securities Act ("Regulation S"), and all such persons have complied with the offering restrictions requirement of Regulation S.



(hh)

Securities Law Exemptions.    Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 1(b) (including Annex A hereto) and their compliance with their agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial Purchasers in the manner contemplated by this Agreement and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act.



(ii)

Sarbanes-Oxley Act of 2002.    The Company has complied with the requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and to the knowledge of the Company, the Company's directors and officers, in their capacities as such, have also complied with such provisions of the Sarbanes-Oxley Act of 2002 in all material respects.



(jj)

No Stabilization.    Neither the Company nor any of the Guarantors has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.



(kk)

Margin Rules.    Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in the Offering Memorandum will violate

9

Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

(ll)

Forward-Looking Statements.    No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Preliminary Offering Memorandum and the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.



(mm)

Statistical and Market Data.    Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Preliminary Offering Memorandum and the Offering Memorandum is not based on or derived from sources that are reliable and accurate in all material respects.

        4.    Further Agreements of the Company and the Guarantors.    The Company and each of the Guarantors jointly and severally covenant and agree with each Initial Purchaser that:

(a)

Delivery of Copies.    The Company will deliver to the Initial Purchasers as many copies of the Preliminary Offering Memorandum and the Offering Memorandum (including all amendments and supplements thereto) as the Representative may reasonably request.



(b)

Amendments or Supplements.    Before making or distributing any amendment or supplement to the Preliminary Offering Memorandum or the Offering Memorandum, the Company will furnish to the Representative and counsel for the Initial Purchasers a copy of the proposed amendment or supplement for review, and will not distribute any such proposed amendment or supplement to which the Representative reasonably objects.



(c)

Notice to the Representative.    The Company will advise the Representative promptly, and confirm such advice in writing, (i) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.



(d)

Ongoing Compliance of the Offering Memorandum.    If at any time prior to the completion of the initial offering of the Securities (i) any event shall occur or condition shall exist as a result of which the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply with law, the Company will immediately notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to the Offering Memorandum as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented will not, in the light of the circumstances existing when the

10

Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum will comply with law.

(e)

Blue Sky Compliance.    The Company will qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representative shall reasonably request and will continue such qualifications in effect so long as required for the offering and resale of the Securities; provided that neither the Company nor any of the Guarantors shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.



(f)

Clear Market.    During the period from the date hereof through and including the date that is 180 days after the date hereof, the Company and each of the Guarantors will not, without the prior written consent of the Representative, offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Company or any of the Guarantors and having a tenor of more than one year other than debt incurred under any credit facility.



(g)

Use of Proceeds.    The Company will apply the net proceeds from the sale of the Securities as described in the Offering Memorandum under the heading "Use of Proceeds".



(h)

Supplying Information.    While the Securities remain outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company and each of the Guarantors will, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.



(i)

PORTAL and DTC.    The Company will assist the Initial Purchasers in arranging for the Securities to be designated Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and for the Securities to be eligible for clearance and settlement through The Depository Trust Company ("DTC").



(j)

No Resales by the Company.    Until the issuance of the Exchange Securities, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act.



(k)

No Integration.    Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.



(l)

No General Solicitation or Directed Selling Efforts.    None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed selling efforts within the

11

meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S.

(m)

No Stabilization.    Neither the Company nor any of the Guarantors will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

        5.    Conditions of Initial Purchasers' Obligations.    The obligation of each Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject to the performance by the Company and each of the Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions:

(a)

Representations and Warranties.    The representations and warranties of the Company and the Guarantors contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Company, the Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.



(b)

No Downgrade.    Subsequent to the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the Securities or any other debt securities or preferred stock issued or guaranteed by the Company or any of the Guarantors by any "nationally recognized statistical rating organization", as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other debt securities or preferred stock issued or guaranteed by the Company or any of the Guarantors (other than an announcement with positive implications of a possible upgrading).



(c)

No Material Adverse Change.    Subsequent to the execution and delivery of this Agreement, no event or condition of a type described in Section 3(c) hereof shall have occurred or shall exist, which event or condition is not described in the Offering Memorandum (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement and the Offering Memorandum.



(d)

Officer's Certificate.    The Representative shall have received on and as of the Closing Date a certificate of an executive officer of the Company and of each Guarantor who has specific knowledge of the Company's or such Guarantor's financial matters and is satisfactory to the Representative (i) confirming that such officer has carefully reviewed the Offering Memorandum and, to the knowledge of such officer, the representation set forth in Section 3(a) hereof is true and correct, (ii) confirming that the other representations and warranties of the Company and the Guarantors in this Agreement are true and correct and that the Company and the Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date and (iii) to the effect set forth in paragraphs (b) and (c) above.

12

(e)

Comfort Letters.    On the date of this Agreement and on the Closing Date, PricewaterhouseCoopers LLP shall have furnished to the Representative, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, containing statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Preliminary Offering Memorandum and the Offering Memorandum; provided that the letter delivered on the Closing Date shall use a "cut-off" date no more than three business days prior to the Closing Date.



(f)

The Company shall have furnished to the Initial Purchasers a certificate, dated the date hereof, of its Vice President and Chief Financial Officer and its Chief Accounting Officer and Corporate Controller, with respect to financial information relating to fiscal years audited by Arthur Andersen, providing "Management Comfort", in form and substance reasonably satisfactory to the Initial Purchasers, to the effect set forth in Annex B hereto.



(g)

Opinion of Counsel for the Company and Guarantors.    Locke Liddell & Sapp LLP, counsel for the Company, shall have furnished to the Representative, at the request of the Company, their written opinion, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex C hereto.



(h)

Opinion of Alaska Counsel for Cornell Corrections of Alaska, Inc.    Birch, Horton, Bittner and Cherot, a Professional Corporation, Alaska counsel for Cornell Corrections of Alaska, Inc., a Guarantor, shall have furnished to the Representative, at the request of the Company, their written opinion, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex D hereto.

Opinion of California Counsel for the Cornell Corrections of California, Inc.    Cox, Castle & Nicholson LLP, California counsel for Cornell Corrections of California, Inc., a Guarantor, shall have furnished to the Representative, at the request of the Company, their written opinion, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex E hereto.

Opinion of Illinois Counsel for Cornell Interventions, Inc.    Bell, Boyd & Lloyd LLC, Illinois counsel for Cornell Interventions, Inc., a Guarantor, shall have furnished to the Representative, at the request of the Company, their written opinion, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex F hereto.

(i)

Opinion of Corporate Counsel of the Company.    Vince Mouer, Corporate Counsel and Secretary of the Company, shall have furnished to the Representative, at the request of the Company, his written opinion, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex G hereto.



(j)

Opinion of Counsel for the Initial Purchasers.    The Representative shall have received on and as of the Closing Date an opinion of Simpson Thacher & Bartlett LLP, counsel for the Initial Purchasers, with respect to such matters as the Representative may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

13

(k)

No Legal Impediment to Issuance.    No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees.



(l)

Good Standing.    The Representative shall have received on and as of the Closing Date satisfactory evidence of the good standing of the Company and its subsidiaries in their respective jurisdictions of organization and their good standing in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication, from the appropriate governmental authorities of such jurisdictions.



(m)

Registration Rights Agreement.    The Initial Purchasers shall have received a counterpart of the Registration Rights Agreement that shall have been executed and delivered by a duly authorized officer of the Company and each of the Guarantors.



(n)

PORTAL and DTC.    The Securities shall have been approved by the NASD for trading in the PORTAL Market and shall be eligible for clearance and settlement through DTC.



(o)

Additional Documents.    On or prior to the Closing Date, the Company and the Guarantors shall have furnished to the Representative such further certificates and documents as the Representative may reasonably request.

        All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers.

        6.    Indemnification and Contribution.

(a)

Indemnification of the Initial Purchasers.    The Company and each of the Guarantors jointly and severally agree to indemnify and hold harmless each Initial Purchaser, its affiliates that assist in the distribution of Securities, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser either directly or through the Representative expressly for use therein; provided, that with respect to any such actual or alleged untrue statement in or omission from the Preliminary Offering Memorandum, the indemnity agreement contained in this paragraph (a) shall not inure to the benefit of any Initial Purchaser to the extent that the sale to the person asserting any such loss, claim, damage or liability was an initial resale by such Initial Purchaser and any such loss, claim, damage or liability of or with respect to such Initial Purchaser results from the fact that both (i) a copy of the Offering Memorandum was not sent or given to such person at or prior to the written confirmation of the sale of such Securities to such person and (ii) the untrue

14

statement in or omission from such Preliminary Offering Memorandum was corrected in the Offering Memorandum unless, in either case, such failure to deliver the Offering Memorandum was a result of non-compliance by the Company with the provisions of Section 4(a) hereof.

(b)

Indemnification of the Company.    Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, each of the Guarantors and their respective directors and officers and each person, if any, who controls the Company or any of the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Initial Purchaser furnished to the Company in writing by such Initial Purchaser either directly or through the Representative expressly for use in the Preliminary Offering Memorandum and the Offering Memorandum (or any amendment or supplement thereto), it being understood and agreed that the only such information consists of the following: the statements concerning the Initial Purchasers contained in the third paragraph, the fifth and sixth sentences of the eighth paragraph and the tenth paragraph, in each case under the heading of "Plan of distribution."



(c)

Notice and Procedures.    If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the "Indemnified Person") shall promptly notify the person against whom such indemnification may be sought (the "Indemnifying Person") in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 6 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 6. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 6 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Initial Purchaser, its affiliates that assist in the distribution of Securities, directors and officers and any control persons of such Initial Purchaser shall be designated in writing by J.P. Morgan Securities Inc. and any such separate firm for the

15

Company, the Guarantors and any control persons of the Company and the Guarantors shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this Section 6, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request, (ii) the Indemnifying Person shall have received notice of the terms of such settlement at least 20 days prior to such settlement being entered into and (iii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; provided that the Indemnifying Person shall not be liable for any settlement effected without its consent if the Indemnifying Person, prior to the date of such settlement, reimburses such Indemnified Person in accordance with such request for the amount of such legal and other expenses. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

(d)

Contribution.    If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein (other than as a result of the limitations imposed on indemnification described in such subsections), then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Initial Purchasers on the other in connection with the actual or alleged statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Securities and the total discounts and commissions received by the Initial Purchasers in connection therewith, as provided in this Agreement, bear to the aggregate offering price of the Securities. The relative fault of the Company and the Guarantors on the one hand and the Initial Purchasers on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any Guarantor or by the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

16

(e)

Limitation on Liability.    The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 6, in no event shall an Initial Purchaser be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser with respect to the offering of the Securities exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations to contribute pursuant to this Section 6 are several in proportion to their respective purchase obligations hereunder and not joint.



(f)

Non-Exclusive Remedies.    The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

        7.    Termination.    This Agreement may be terminated in the absolute discretion of the Representative, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the over-the-counter market; (ii) trading of any securities issued or guaranteed by the Company or any of the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representative, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement and the Offering Memorandum.

        8.    Defaulting Initial Purchaser.    (a) If, on the Closing Date, any Initial Purchaser defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Initial Purchasers to purchase such Securities on such terms. If other persons become obligated or agree to purchase the Securities of a defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or the Company may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Initial Purchasers may be necessary in the Offering Memorandum or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Offering Memorandum that effects any such changes. As used in this Agreement, the term "Initial Purchaser" includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 8, purchases Securities that a defaulting Initial Purchaser agreed but failed to purchase.

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(b)

If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder plus such Initial Purchaser's pro rata share (based on the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made.



(c)

If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Initial Purchasers. Any termination of this Agreement pursuant to this Section 8 shall be without liability on the part of the Company or the Guarantors, except that the Company and each of the Guarantors will continue to be liable for the payment of expenses as set forth in Section 9 hereof and except that the provisions of Section 6 hereof shall not terminate and shall remain in effect.



(d)

Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may have to the Company, the Guarantors or any non-defaulting Initial Purchaser for damages caused by its default.

        9.    Payment of Expenses.    (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company and each of the Guarantors jointly and severally agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Securities and any taxes payable in that connection; (ii) the costs incident to the preparation and printing of the Preliminary Offering Memorandum and the Offering Memorandum (including any amendment or supplement thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Company's and the Guarantors' counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities under the laws of such jurisdictions as the Representative may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating agencies for rating the Securities; (vii) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); (viii) all expenses and application fees incurred in connection with the application for the inclusion of the Securities on the PORTAL Market and the approval of the Securities for book-entry transfer by DTC; and (ix) all expenses incurred by the Company in connection with any "road show" presentation to potential investors, provided that the Initial Purchasers will pay 50% of the aircraft expenses incurred in connection with such road show.

(b)

If (i) this Agreement is terminated pursuant to Section 7, (ii) the Company for any reason fails to tender the Securities for delivery to the Initial Purchasers or (iii) the Initial Purchasers decline to purchase the Securities for any reason permitted under this Agreement, the Company and each of the Guarantors jointly and severally agrees to reimburse the Initial Purchasers for all out-of-pocket costs and expenses (including the fees and expenses of their

18

counsel) reasonably incurred by the Initial Purchasers in connection with this Agreement and the offering contemplated hereby.

        10.    Persons Entitled to Benefit of Agreement.    This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and any controlling persons referred to herein and the officers and directors of the Company and the Guarantors, and the affiliates, officers and directors of each Initial Purchaser referred to in Section 6 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Securities from any Initial Purchaser shall be deemed to be a successor merely by reason of such purchase.

        11.    Survival.    The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the Guarantors and the Initial Purchasers contained in this Agreement or made by or on behalf of the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the Guarantors or the Initial Purchasers.

        12.    Certain Defined Terms.    For purposes of this Agreement, (a) except where otherwise expressly provided, the term "affiliate" has the meaning set forth in Rule 405 under the Securities Act; (b) the term "business day" means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term "Exchange Act" means the Securities Exchange Act of 1934, as amended; and (d) the term "subsidiary" has the meaning set forth in Rule 405 under the Securities Act.

        13.    Miscellaneous.    (a) Authority of the Representative.    Any action by the Initial Purchasers hereunder may be taken by J.P. Morgan Securities Inc. on behalf of the Initial Purchasers, and any such action taken by J.P. Morgan Securities Inc. shall be binding upon the Initial Purchasers.

(b)

Notices.    All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Initial Purchasers shall be given to the Representative c/o J.P. Morgan Securities Inc., 270 Park Avenue, New York, New York 10017 (fax: 212-270-1063); Attention: Gerry Murray. Notices to the Company and the Guarantors shall be given to them at Cornell Companies Inc., 1700 West Loop South, Suite 1500, Houston, Texas 77027, (fax: 713-235-9101); Attention: John Hendrix.



(c)

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



(d)

Counterparts.    This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.



(e)

Amendments or Waivers.    No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.



(f)

Headings.    The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

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        If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

Very truly yours,
CORNELL COMPANIES, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary
CCG I CORPORATION
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary
CORNELL ABRAXAS GROUP, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Senior Vice President and Chief Financial Officer
CORNELL COMPANIES ADMINISTRATION, LLC
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Sole Manager

CORNELL COMPANIES MANAGEMENT, LP
By:	Cornell Companies Administration, LLC, its general partner
	By:	/s/  JOHN L. HENDRIX
		Name:	John L. Hendrix
		Title:	Sole Manager

CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Sole Manager

CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP
By:	Cornell Companies Management, LP, its general partner
	By:	Cornell Companies Administration, LLC, its general partner
		By:	/s/  JOHN L. HENDRIX
			Name:	John L. Hendrix
			Title:	Sole Manager

CORNELL CORRECTIONS MANAGEMENT, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary

CORNELL CORRECTIONS OF ALASKA, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary
CORNELL CORRECTIONS OF CALIFORNIA, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary
CORNELL CORRECTIONS OF RHODE ISLAND, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary
CORNELL CORRECTIONS OF TEXAS, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary

CORNELL INTERNATIONAL, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary
CORNELL INTERVENTIONS, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Senior Vice President and Chief Financial Officer
WBP LEASING, INC.
By:	/s/  JOHN L. HENDRIX
	Name:	John L. Hendrix
	Title:	Executive Vice President, Chief Financial Officer and Assistant Secretary

Accepted: June 17, 2004
J.P. MORGAN SECURITIES INC.
For itself and on behalf of the several Initial Purchasers listed in Schedule 1 hereto.
By:	/s/  ADAM BERNARD Name: Adam Bernard Title: Vice President

Schedule 1

Initial Purchaser		Principal Amount
J.P. Morgan Securities Inc.		$	105,280,000
Comerica Securities, Inc.		$	2,240,000
Piper Jaffray & Co.		$	2,240,000
SouthTrust Securities, Inc.		$	2,240,000
	Total	$	112,000,000

Schedule 2

Guarantors

Name	Jurisdiction of Organization
CCG I Corporation	Delaware
Cornell Abraxas Group, Inc.	Delaware
Cornell Companies Administration, LLC	Delaware
Cornell Companies Management, LP	Delaware
Cornell Companies Management Holdings, LLC	Delaware
Cornell Companies Management Services, Limited Partnership	Delaware
Cornell Corrections Management, Inc.	Delaware
Cornell Corrections of Alaska, Inc.	Alaska
Cornell Corrections of California, Inc.	California
Cornell Corrections of Rhode Island, Inc.	Delaware
Cornell Corrections of Texas, Inc.	Delaware
Cornell International, Inc.	Delaware
Cornell Interventions, Inc.	Illinois
WBP Leasing, Inc.	Delaware

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Guarantors

EX-3.2

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Exhibit 3.2

CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CORNELL CORRECTIONS, INC.

        Cornell Corrections, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify as follows:

        1.     The amendment to the Corporation's Restated Certificate of Incorporation set forth below was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware and has been consented to and authorized by the holders of at least a majority of the outstanding capital stock entitled to vote thereon at a duly called meeting of the stockholders of the Corporation held on May 25, 2000.

        2.     Article First of the Corporation's Restated Certificate of Incorporation is amended to read as follows:

        "The name of the Corporation is Cornell Companies, Inc. (the "Corporation"}."

        IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed this 25^th day of May, 2000.

	/s/ JOHN L. HENDRIX
	John L. Hendrix, Chief Financial Officer
Acknowledged by:
/s/ KEVIN B. KELLY
Kevin B. Kelly, Secretary

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CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF CORNELL CORRECTIONS, INC.

EX-3.3

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Exhibit 3.3

AMENDED AND RESTATED BYLAWS

OF

CORNELL COMPANIES, INC.

ADOPTED APRIL 16, 2002

AMENDED AND RESTATED BYLAWS OF
CORNELL COMPANIES, INC.

Table of Contents

ARTICLE I OFFICES			1
	1.1	REGISTERED OFFICE	1
	1.2	OTHER OFFICES	1
ARTICLE II MEETINGS OF STOCKHOLDERS			1
	2.1	PLACE OF MEETINGS	1
	2.2	ANNUAL MEETINGS	1
	2.3	SPECIAL MEETINGS	1
	2.4	NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS	1
	2.5	REGISTERED HOLDERS OF SHARES; CLOSING OF SHARE TRANSFER RECORDS; AND RECORD DATE	3
	2.6	QUORUM	3
	2.7	VOTING BY STOCKHOLDERS	3
	2.8	PROXIES	4
	2.9	NO STOCKHOLDER ACTION WITHOUT MEETING	4
ARTICLE III DIRECTORS			4
	3.1	DUTIES AND POWERS	4
	3.2	NUMBER AND ELECTION OF DIRECTORS	4
	3.3	VACANCIES	5
	3.4	RESIGNATIONS	5
	3.5	CHAIRMAN	5
	3.6	MEETINGS	5
	3.7	QUORUM	5
	3.8	ACTIONS WITHOUT A MEETING	5
	3.9	TELEPHONIC MEETINGS	5
	3.10	COMMITTEES	5
	3.11	REIMBURSEMENT OF EXPENSES	6
	3.12	PROTECTION FOR RELIANCE	6
	3.13	CONSIDERATION OF SOCIAL, ECONOMIC AND OTHER FACTORS IN EVALUATING A BID	6
ARTICLE IV OFFICERS			6
	4.1	GENERAL	6
	4.2	ELECTION	6
	4.3	DUTIES	7
	4.4	EXECUTIVE CHAIRMAN	7
	4.5	CHIEF EXECUTIVE OFFICER	7
	4.6	PRESIDENT	7
	4.7	CHIEF FINANCIAL OFFICER	7
	4.8	CHIEF OPERATING OFFICER	7
	4.9	VICE PRESIDENTS	7
	4.10	SECRETARY AND ASSISTANT SECRETARIES	8
	4.11	TREASURER AND ASSISTANT TREASURERS	8
	4.12	REMOVAL	8
	4.13	VOTING SECURITIES OWNED BY THE CORPORATION	8

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ARTICLE V STOCK
	5.1	FORM OF CERTIFICATES	8
	5.2	SIGNATURES	9
	5.3	LOST CERTIFICATES	9
	5.4	TRANSFERS	9
	5.5	BENEFICIAL OWNERSHIP	9
	5.6	DIVIDENDS	9
ARTICLE VI INDEMNIFICATION			9
	6.1	GENERAL	9
	6.2	EXPENSES	10
	6.3	ADVANCES	10
	6.4	REQUEST FOR INDEMNIFICATION	10
	6.5	NONEXCLUSIVITY OF RIGHTS	10
	6.6	INSURANCE AND SUBROGATION	10
	6.7	SEVERABILITY	11
	6.8	CERTAIN PERSONS NOT ENTITLED TO INDEMNIFICATION	11
	6.9	DEFINITIONS	11
ARTICLE VII NOTICES			11
	7.1	NOTICES	11
	7.2	WAIVER OF NOTICE	12
ARTICLE VIII MISCELLANEOUS			12
	8.1	FISCAL YEAR	12
	8.2	AMENDMENTS	12

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AMENDED AND RESTATED BYLAWS OF
CORNELL COMPANIES, INC.

ARTICLE I
OFFICES

        1.1   REGISTERED OFFICE. The registered office of Cornell Companies, Inc., a Delaware corporation (the "Corporation"), is The Corporation Trust Company, 1209 Orange Street, in the City of Wilmington, County of New Castle, State of Delaware, 19801.

        1.2   OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors of the Corporation (the "Board of Directors") may from time to time determine.

ARTICLE II
MEETINGS OF STOCKHOLDERS

        2.1   PLACE OF MEETINGS. Annual or special meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as may be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. If not so designated or stated, such meeting shall be held at the registered office of the Corporation.

        2.2   ANNUAL MEETINGS. The annual meeting of stockholders shall be held on such date and at such time as may be designated from time to time by the Board of Directors and stated in the notice of such meeting. At the annual meeting, the stockholders shall elect by a plurality vote a Board of Directors and transact such other business as may properly be brought before the meeting. Written notice of the annual meeting of stockholders of the Corporation stating the place, date and hour of the meeting shall be sent to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting. Failure to hold the annual meeting shall not work a forfeiture or dissolution of the Corporation or affect otherwise valid corporate acts.

        2.3   SPECIAL MEETINGS. Unless otherwise prescribed by the Delaware General Corporation Law ("DGCL") or by the Certificate of Incorporation of the Corporation (as amended or restated from time to time, the "Certificate of Incorporation"), special meetings of stockholders of the Corporation for any purpose or purposes may be called at any time by the Chairman of the Board of Directors or by any two or more directors of the Corporation. Written notice of the special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting.

        2.4   NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.

        (a)   NOMINATION OF DIRECTORS. Only persons who are nominated in accordance with the following procedures shall be eligible to serve as directors. Nominations of persons for election to the Board of Directors of the Corporation at a meeting of stockholders may be made (i) by or at the direction of the Board of Directors, or (ii) by any stockholder of the Corporation entitled to vote in the election of directors at the meeting who complies with the notice procedures set forth in this Section 2.4(a). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not less than ninety (90) days prior to the first anniversary of the date of the previous year's annual meeting of stockholders; provided, however, that if no annual meeting of stockholders was held in the previous year or if the date of the annual meeting is advanced by more than thirty (30) days prior to, or delayed by more than sixty (60) days after, such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the close of business on

the tenth (10th) day following the day on which the date of such meeting has been first "publicly disclosed" (in the manner provided in the last sentence of this Section 2.4(a) by the Corporation). Any stockholder's notice pursuant to this Section 2.4(a) shall set forth (i) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as director if elected); and (ii) as to the stockholder giving notice (A) the name and address, as they appear on the Corporation's books, of such stockholder and (B) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not properly brought before the meeting and in accordance with the provisions of these Amended and Restated Bylaws (these "Bylaws"), and if he or she should so determine, he or she shall so declare to the meeting and any such nomination not properly brought before the meeting shall be disregarded. For purposes of these Bylaws, "publicly disclosed" or "public disclosure" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission.

        (b)   NOTICE OF BUSINESS. Except as set forth in Section 2.4(a), at any meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 2.4(b). For business to be properly brought before a stockholder meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than 50 days prior to the meeting; provided, however, that in the event that less than 55 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received no later than the close of business on the tenth (10th) day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at a stockholder meeting except (i) in accordance with the procedures set forth in this Section 2.4(b) or (ii) with respect to nominations of persons for election as directors of the Corporation, in accordance with the provisions of Section 2.4(a) hereof. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of these Bylaws, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.4(b), a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of

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1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section.

        2.5   REGISTERED HOLDERS OF SHARES; CLOSING OF SHARE TRANSFER RECORDS; AND RECORD DATE.

        (a)   REGISTERED HOLDERS AS OWNERS. Unless otherwise provided under Delaware law, the Corporation may regard the person in whose name any shares issued by the Corporation are registered in the stock transfer records of the Corporation at any particular time (including, without limitation, as of a record date fixed pursuant to paragraph (b) of this Section 2.5) as the owner of those shares at that time for purposes of voting those shares, receiving distributions thereon or notices in respect thereof, transferring those shares, exercising rights of dissent with respect to those shares, entering into agreements with respect to those shares, or giving proxies with respect to those shares; and neither the Corporation nor any of its officers, directors, employees or agents shall be liable for regarding that person as the owner of those shares at that time for those purposes, regardless of whether that person possesses a certificate for those shares.

        (b)   RECORD DATE. For the purpose of determining stockholders of the Corporation entitled to notice of or to vote at any meeting of stockholders of the Corporation or any adjournment thereof, or entitled to receive a distribution by the Corporation (other than a distribution involving a purchase or redemption by the Corporation of any of its own shares) or a share dividend, or in order to make a determination of stockholders of the Corporation for any other proper purpose, the Board of Directors may fix in advance a date as the record date for any such determination of stockholders of the Corporation, such date in any case to be not more than 60 days and, in the case of a meeting of stockholders, not less than 10 days, prior to the date on which the particular action requiring such determination of stockholders of the Corporation is to be taken. The Board of Directors shall not close the books of the Corporation against transfers of shares during the whole or any part of such period.

If the Board of Directors does not fix a record date for any meeting of the stockholders of the Corporation, the record date for determining stockholders of the Corporation entitled to notice of or to vote at such meeting shall be at the close of business on the day next preceding the day on which notice is given, or, if in accordance with Section 7.2 of these Bylaws notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

        2.6   QUORUM. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders of the Corporation for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders of the Corporation, the stockholders of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

        2.7   VOTING BY STOCKHOLDERS.

        (a)   VOTING ON MATTERS OTHER THAN THE ELECTION OF DIRECTORS. With respect to any matters as to which no other voting requirement is specified by the DGCL, the Certificate of Incorporation or these Bylaws, the affirmative vote required for stockholder action shall be that of a majority of the shares present in person or represented by proxy at the meeting

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(as counted for purposes of determining the existence of a quorum at the meeting). In the case of a matter submitted for a vote of the stockholders of the Corporation as to which a stockholder approval requirement is applicable under the stockholder approval policy of any stock exchange or quotation system on which the capital stock of the Corporation is traded or quoted, the requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any provision of the Internal Revenue Code, in each case for which no higher voting requirement is specified by the DGCL, the Certificate of Incorporation or these Bylaws, the vote required for approval shall be the requisite vote specified in such stockholder approval policy, the Exchange Act or Internal Revenue Code provision, as the case may be (or the highest such requirement if more than one is applicable). For the approval of the appointment of independent public accountants (if submitted for a vote of the stockholders of the Corporation), the vote required for approval shall be a majority of the votes cast on the matter.

        (b)   VOTING IN THE ELECTION OF DIRECTORS. Unless otherwise provided in the Certificate of Incorporation or these Bylaws in accordance with the DGCL, directors shall be elected by a plurality of the votes cast by the holders of outstanding shares of capital stock of the Corporation entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present.

        (c)   OTHER. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders of the Corporation, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot.

        2.8   PROXIES. Each stockholder of the Corporation entitled to vote at a meeting of stockholders of the Corporation may authorize another person or persons to act for him or her by proxy. Proxies for use at any meeting of stockholders of the Corporation shall be filed with the Secretary, or such other officer as the Board of Directors may from time to time determine by resolution, before or at the time of the meeting. All proxies shall be received and taken charge of and all ballots shall be received and canvassed by the secretary of the meeting who shall decide all questions relating to the qualification of voters, the validity of the proxies and the acceptance or rejection of votes, unless an inspector or inspectors shall have been appointed by the chairman of the meeting, in which event such inspector or inspectors shall decide all such questions.

        2.9   NO STOCKHOLDER ACTION WITHOUT MEETING. From and after the first date as of which the Corporation has a class or series of capital stock registered under the Exchange Act, no action required to be taken or that may be taken at any annual or special meeting of the stockholders of the Corporation may be taken without a meeting, and the power of the stockholders of the Corporation of the Corporation to consent in writing to the taking of any action by written consent without a meeting is specifically denied, except for action by unanimous written consent, which is expressly allowed.

ARTICLE III
DIRECTORS

        3.1   DUTIES AND POWERS. The business, affairs and property of the Corporation shall be managed by or under the directorship of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law, the Certificate of Incorporation or these Bylaws authorized or required to be exercised or done by the stockholders of the Corporation.

        3.2   NUMBER AND ELECTION OF DIRECTORS. The number of directors of the Corporation shall be determined in the manner provided in the Corporation's Certificate of Incorporation. Directors shall be elected for one (1) year or other terms as specified in the Corporation's Certificate of Incorporation, and each director elected shall hold office during the term for which he or she is elected

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and until his or her successor is elected and qualified, subject, however, to his or her prior death, resignation, retirement or removal for cause from office.

        3.3   VACANCIES. Any vacancies occurring in the Board of Directors and newly created directorships shall be filled in the manner provided in the Corporation's Certificate of Incorporation.

        3.4   RESIGNATIONS. Any director of the Corporation may resign at any time upon written notice to the Corporation. To be effective, such notice of resignation need not be formally accepted by the Board of Directors. A director of the Corporation need not be a stockholder of the Corporation or a resident of the State of Delaware.

        3.5   CHAIRMAN. The Board of Directors may elect from among its members a Chairman (such Chairman may also be the Executive Chairman) who shall preside over all meetings of the Board of Directors and stockholders of the Corporation. In his absence or inability to act, the Executive Chairman shall preside over the meetings of the Board of Directors and the stockholders. The Chairman shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him or her by the Board of Directors.

        3.6   MEETINGS. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, or by the President or by any two or more directors of the Corporation. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than 48 hours before the date of the meeting, by telephone, telegram or facsimile on 24 hours' notice or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. Unless otherwise required by law, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

        3.7   QUORUM. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

        3.8   ACTIONS WITHOUT A MEETING. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

        3.9   TELEPHONIC MEETINGS. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.9 shall constitute presence in person at such meeting.

        3.10 COMMITTEES. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors of the Corporation as alternate members of any committee, who may replace any absent or disqualified

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member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. Each committee shall keep regular minutes and report to the Board of Directors when required.

        3.11 REIMBURSEMENT OF EXPENSES. The directors of the Corporation shall be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary or other consideration as director. No such reimbursement shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees shall be allowed like reimbursement for attending committee meetings.

        3.12 PROTECTION FOR RELIANCE. Any member of the Board of Directors, or any member of any committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

        3.13 CONSIDERATION OF SOCIAL, ECONOMIC AND OTHER FACTORS IN EVALUATING A BID. The Board of Directors of the Corporation, when evaluating any offer of another party to (a) purchase or exchange any securities or property for any outstanding equity securities of the Corporation, (b) merge or consolidate the Corporation with another corporation, or (c) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, shall, in connection with the exercise of its judgment in determining what is in the best interests of the Corporation and its stockholders, give due consideration not only to the price or other consideration being offered but also to all other relevant factors, including without limitation (i) the financial and managerial resources and future prospects of the party, (ii) the possible effects on the business of the Corporation and its subsidiaries and on the employees, customers, suppliers and creditors of the Corporation and its subsidiaries, and (iii) the effects on the communities in which the Corporation's facilities are located.

ARTICLE IV
OFFICERS

        4.1   GENERAL. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President and a Secretary. The Board of Directors, in its discretion, may also choose a Chief Financial Officer, a Treasurer and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders or directors of the Corporation.

        4.2   ELECTION. The Board of Directors shall elect or appoint the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are elected and qualified, or until the earlier of their resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the

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affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.

        4.3   DUTIES. The officers of the Corporation shall have such powers and duties as generally pertain to their offices, except as modified herein or by the Board of Directors, as well as such powers and duties as from time to time may be conferred by the Board of Directors.

        4.4   EXECUTIVE CHAIRMAN. The Executive Chairman, who need not be chosen from among the directors, shall have active, executive management of the operations of the Corporation, subject, however, to the control of the Board of Directors. The Executive Chairman shall have the authority to manage and direct the duties and responsibilities of any other officer or employee of the Corporation. The Executive Chairman shall also preside at all meetings of the stockholders of the Corporation and the Board of Directors, unless the Board of Directors has appointed a Chairman of the Board, who would preside at all such meetings of the stockholders and the Board of Directors. He or she shall, in general, perform all duties incident to the office of the Executive Chairman and such other duties as from time to time may be assigned to him or her by the Board of Directors.

        4.5   CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall, subject to the control of the Board of Directors and the Executive Chairman, have general executive management of the operations of the Corporation. At the request of the Executive Chairman, the Chief Executive Officer may temporarily act in his or her place. In the case of the death of the Executive Chairman, or in the case of his or her absence or inability to act without having designated the Chief Executive Officer to act temporarily in his or her place, the Chief Executive Officer shall perform the duties of the Executive Chairman as designated by the Board of Directors. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by the Board of Directors or Executive Chairman.

        4.6   PRESIDENT. The President shall, subject to the control of the Board of Directors, the Executive Chairman and the Chief Executive Officer, assist the Executive Chairman and the Chief Executive Officer with the general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by the Board of Directors, the Executive Chairman or the Chief Executive Officer.

        4.7   CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be the principal financial officer of the Corporation; shall have charge and custody of and be responsible for all funds of the Corporation and deposit all such funds in the name of the Corporation in such depositories as may be designated by the Board of Directors; shall receive and give receipts for moneys due and payable to the Corporation from any source; and, in general, shall perform all the duties incident to the office of the Chief Financial Officer and such other duties as from time to time may be assigned to him by the Board of Directors or by the Executive Chairman.

        4.8   CHIEF OPERATING OFFICER. The Chief Operating Officer shall assist the Executive Chairman, the Chief Executive Officer and the President in the operations of the Corporation and shall have such powers and perform such duties as the Board of Directors, the Executive Chairman, the Chief Executive Officer or the President may from time to time prescribe.

        4.9   VICE PRESIDENTS. At the request of the President or in his or her absence or in the event of his inability or refusal to act, any Vice President may perform the duties of the President and, when so acting, such officer shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. If there is no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President and,

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when so acting, such officer shall have all the powers of and be subject to all the restrictions upon the President.

        4.10 SECRETARY AND ASSISTANT SECRETARIES. The Secretary or an Assistant Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders of the Corporation and record all the proceedings at such meetings in a book or books to be kept for that purpose, and the Secretary or an Assistant Secretary shall also perform similar duties for the standing committees when required. The Secretary or an Assistant Secretary shall give, or cause to be given, notice of all meetings of the stockholders of the Corporation and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board, the President or any Vice President. If a Secretary or Assistant Secretary shall be unable or shall refuse to cause to be given notice of any meeting of the stockholders of the Corporation or any special meeting of the Board of Directors, then either the Board of Directors, the Chairman of the Board, the President or any Vice President may choose another officer to cause such notice to be given. The Secretary or an Assistant Secretary shall see that all corporate books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

        4.11 TREASURER AND ASSISTANT TREASURERS. The Treasurer or an Assistant Treasurer shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer or an Assistant Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chairman of the Board, the Executive Chairman, the Chief Executive Officer, the President or the Chief Financial Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer or Assistant Treasurer and of the financial condition of the Corporation.

        4.12 REMOVAL. Any officer may be removed, with or without cause, by the Board of Directors. Any such removal shall be without prejudice to any rights such officer may have pursuant to any employment contract he or she may have with the Corporation. Any vacancy in an office may be filled by the Board of Directors.

        4.13 VOTING SECURITIES OWNED BY THE CORPORATION. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name and on behalf of the Corporation by the Chairman of the Board, the President or any Vice President, and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time, confer like powers upon any other person or persons.

ARTICLE V
STOCK

        5.1   FORM OF CERTIFICATES. The shares of stock of the Corporation shall be represented by certificates of stock, signed in the name of the Corporation (i) by the Chairman of the Board, the President or a Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares of stock in the Corporation owned by the holder named in the certificate.

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        5.2   SIGNATURES. Where a certificate is countersigned by (i) a transfer agent other than the Corporation or its employee or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

        5.3   LOST CERTIFICATES. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the delivery to the Secretary of the Corporation of an affidavit of the fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

        5.4   TRANSFERS. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be canceled before a new certificate shall be issued.

        5.5   BENEFICIAL OWNERSHIP. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

        5.6   DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting thereof, and may be paid in cash, in property or in shares of capital stock of the Corporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

ARTICLE VI
INDEMNIFICATION

        6.1   GENERAL. The Corporation shall indemnify and hold harmless an Indemnitee (as this and all other capitalized words used in this Article VI not previously defined in these Bylaws are defined in Section 6.9 hereof) from and against any and all judgments, penalties, fines (including excise taxes), amounts paid in settlement and, subject to Section 6.2, Expenses (including all interest, assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties, amounts paid in settlement or Expenses) arising out of any event or occurrence related to the fact that Indemnitee is or was a director or officer of the Corporation. The Corporation may, but shall not be required to, indemnify and hold harmless an Indemnitee from and against any and all judgments, penalties, fines (including excise taxes), amounts paid in settlement and, subject to Section 6.2, Expenses (including all interest, assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties, amounts paid in settlement or Expenses) arising out of any

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event or occurrence related to the fact that Indemnitee is or was an employee or agent of the Corporation or is or was serving in another Corporate Status.

        6.2   EXPENSES. If Indemnitee is, by reason of his or her serving as a director, officer, employee or agent of the Corporation, a party to and is successful, on the merits or otherwise, in any Proceeding, the Corporation shall indemnify such person against all Expenses actually and reasonably incurred by such person or on his or her behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to any Matter in such Proceeding, the Corporation shall indemnify Indemnitee against all Expenses actually and reasonably incurred by such person or on his or her behalf relating to such Matter. The termination of any Matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such Matter. If Indemnitee is, by reason of any Corporate Status other than his or her serving as a director, officer, employee or agent of the Corporation, a party to and is successful, on the merits or otherwise, in any Proceeding, the Corporation may, but shall not be required to, indemnify such person against all Expenses actually and reasonably incurred by such person or on his or her behalf in connection therewith. To the extent that the Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding, the Corporation may, but shall not be required to, indemnify such person against all Expenses actually and reasonably incurred by such person or on his or her behalf in connection therewith.

        6.3   ADVANCES. In the event of any threatened or pending Proceeding in which Indemnitee is a party or is involved and that may give rise to a right of indemnification under this Article VI, following written request to the Corporation by Indemnitee, the Corporation may, but shall not be required to, pay to Indemnitee amounts to cover Expenses reasonably incurred by Indemnitee in such Proceeding in advance of its final disposition upon the receipt by the Corporation of (i) a written undertaking executed by or on behalf of Indemnitee providing that Indemnitee will repay the advance if it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Corporation as provided in these Bylaws and (ii) satisfactory evidence as to the amount of such Expenses.

        6.4   REQUEST FOR INDEMNIFICATION. To request indemnification, Indemnitee shall submit to the Secretary of the Corporation a written claim or request. Such written claim or request shall contain sufficient information to reasonably inform the Corporation about the nature and extent of the indemnification or advance sought by Indemnitee. The Secretary of the Corporation shall promptly advise the Board of Directors of such request.

        6.5   NONEXCLUSIVITY OF RIGHTS. This Article VI shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled to under applicable law, the Certificate of Incorporation, these Bylaws, any agreement, a vote of stockholders or a resolution of directors of the Corporation, or otherwise. No amendment, alteration or repeal of this Article VI or any provision hereof shall be effective as to any Indemnitee for acts, events and circumstances that occurred, in whole or in part, before such amendment, alteration or repeal. The provisions of this Article VI shall continue as to an Indemnitee whose Corporate Status has ceased for any reason and shall inure to the benefit of his or her heirs, executors and administrators. Neither the provisions of this Article VI nor those of any agreement to which the Corporation is a party shall be deemed to preclude the indemnification of any person who is not specified in this Article VI as having the potential to receive indemnification or is not a party to any such agreement, but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL.

        6.6   INSURANCE AND SUBROGATION. To the extent the Corporation maintains an insurance policy or policies providing liability insurance for directors or officers of the Corporation, an Indemnitee who is a director or officer of the Corporation shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of coverage available for any such director or officer under such policy or policies. In the event of any payment hereunder, the Corporation shall be

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subrogated to the extent of such payment to all the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights. The Corporation shall not be liable under this Article VI to make any payment of amounts otherwise indemnifiable hereunder if, and to the extent that, Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

        6.7   SEVERABILITY. If any provision or provisions of this Article VI shall be held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby; and, to the fullest extent possible, the provisions of this Article VI shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

        6.8   CERTAIN PERSONS NOT ENTITLED TO INDEMNIFICATION. Notwithstanding any other provision of this Article VI, no person shall be entitled to indemnification or advancement of Expenses under this Article VI with respect to any Proceeding, or any Matter therein, brought or made by such person against the Corporation.

        6.9   DEFINITIONS. For purposes of this Article VI:

        (a)   "CORPORATE STATUS" describes the status of a person who is or was a director, officer, employee or agent of the Corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Corporation. For purposes of this Agreement, "serving at the written request of the Corporation" includes any service by Indemnitee which imposes duties on, or involves services by, Indemnitee with respect to any employee benefit plan or its participants or beneficiaries.

        (b)   "EXPENSES" shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

        (c)   "INDEMNITEE" includes any person who is, or is threatened to be made, a witness in or a party to any Proceeding as described in Section 6.1 or 6.2 hereof by reason of his Corporate Status.

        (d)   "MATTER" is a claim, a material issue or a substantial request for relief.

        (e)   "PROCEEDING" includes any action, suit, alternate dispute resolution mechanism, hearing or any other proceeding, whether civil, criminal, administrative, arbitrative, investigative or mediative, any appeal in any such action, suit, alternate dispute resolution mechanism, hearing or other proceeding and any inquiry or investigation that could lead to any such action, suit, alternate dispute resolution mechanism, hearing or other proceeding, except one initiated by an Indemnitee to enforce his or her rights under this Article VI.

ARTICLE VII
NOTICES

        7.1   NOTICES. Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder at his or her address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be

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deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex, facsimile or cable.

        7.2   WAIVER OF NOTICE. Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws to be given to any director, member of a committee or stockholder of the Corporation, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VIII
MISCELLANEOUS

        8.1   FISCAL YEAR. The fiscal year of the Corporation shall end on December 31 of each year.

        8.2   AMENDMENTS. These Bylaws may be altered, amended or repealed or new bylaws may be adopted only in the manner provided in the Corporation's Certificate of Incorporation.

Amended and Restated April 16, 2002.

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AMENDED AND RESTATED BYLAWS OF CORNELL COMPANIES, INC.
Table of Contents
AMENDED AND RESTATED BYLAWS OF CORNELL COMPANIES, INC.

EX-3.4

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Exhibit 3.4

CERTIFICATE OF INCORPORATION
OF
CCG I CORPORATION

Article One

        The name of the corporation is CCG I CORPORATION.

Article Two

        The address of its registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is "he Corporation Trust Company.

Article Three

        The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

Article Four

        The total number of shares of stock which the corporation shall have authority to issue is 10,000 shares of common stock, and the par value of each such share is $0.01.

Article Five

        The name and mailing address of the incorporator is as follows:

NAME	MAILING ADDRESS
Mitchell A. Tiras	3400 Texas Commerce Tower 600 Travis Houston, Texas 77002

Article Six

        The names and mailing addresses of the persons who are to serve as directors of the corporation until the first annual meeting of stockholders or until their successor or successors are elected and qualified is as follows:

NAME	MAILING ADDRESS
William J. Schoeffield, Jr.	4801 Woodway, Suite 100E Houston, Texas 77056-1805
Steven W. Logan	4801 Woodway, Suite 100E Houston, Texas 77056-1805
David M. Cornell	4801 Woodway, Suite 100E Houston, Texas 77056-1805
Marvin W. Wiebe, Jr.	4801 Woodway, Suite 100E Houston, Texas 77056-1805

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Article Seven

        Directors need not be elected by written ballot unless required by the bylaws of the corporation.

Article Eight

        In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to adopt. amend or repeal bylaws of the corporation.

Article Nine

        The corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute. All rights conferred upon stockholders herein are granted subject to this reservation.

Article Ten

        No director shall personally be liable to the corporation or the stockholders for monetary damages for any breach of his fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or the stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law. (iii) under section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law or other applicable law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law or such other applicable law, as so amended. Any repeal or modification of this article by the stockholders shall not adversely affect any right or protection of a director existing at the time of such repeal or modification.

        I, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 5th day of August, 1997.

/s/ MITCHELL A. TIRAS

Mitchell A. Tiras

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CERTIFICATE OF INCORPORATION OF CCG I CORPORATION

EX-3.5

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Exhibit 3.5

CCGI CORPORATION

BYLAWS

ARTICLE I

OFFICES

        Section 1. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.

        Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

        Section 1.    All meetings of the stockholders shall be held at such place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting.

        Section 2.    Annual meetings of stockholders shall be held on the 1st day of August of each year, if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting. At such annual meeting the stockholders shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

        Section 3.    Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the, meeting.

        Section 4.    The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

        Section 5.    Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the chief executive officer and shall be called by the chief executive officer or secretary at the request of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

        Section 6.    Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than 60 days before the date of the meeting, to each stockholder entitled to vote at such meeting.

        Section 7.    Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

        Section 8.    The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute.or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

        Section 9.    When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes of Delaware or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

        Section 10.    Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy^, shall be voted after three years from its date unless the proxy provides for a longer period.

        Section 11.    Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the,taking of the corporate action without a meeting by less than unanimous written consent shall be givers to those stockholders who have not consented in writing.

ARTICLE III

DIRECTORS

        Section 1.    There shall at all times be at least one director of the corporation. The number of directors shall from time to time be fixed and determined by the directors and shall be set forth in the notice of any meeting of stockholders held for the purpose of electing directors

        Section 2.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner, displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. Any director may be removed either for or without. cause at any special meeting of the stockholders duly called and held for such purpose.

        Section 3.    The business of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

        Section 4.    The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

        Section 5.    The first meeting of each newly elected board of directors shall be held at the place of, and immediately following, the annual meeting of the stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time and place, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

        Section 6.    Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

        Section 7.    Special meetings of the board may be called by the chief executive officer on 48 hours' notice to each director, either personally or by mail or by telegram. Special meetings shall be called by the chief executive officer or secretary in like manner and on like notice on the written request of two directors. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the sole purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting, except that notice shall be given of any proposed amendment to these bylaws if it is to be adopted at any special meeting or with respect to any other matter where notice is required by statute.

        Section 8.    At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

        Section 9.    Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

        Section 10.    Members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

        Section 11.    The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all property and assets of the. corporation, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

        Section 12.    Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

        Section 13.    The board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No. such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV

NOTICES

        Section 1.    Whenever, under the provisions of the statutes of Delaware or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given personally or by telegram.

        Section 2.    Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

        Section 1.    The officers of the corporation shall be chosen by the board of directors and shall be a chief executive officer, a president, a chief operating officer, one or more- vice presidents (any one or more of whom may be designated executive vice president or senior vice president), a chief financial officer, a secretary and a treasurer. Any number of offices may be held by the same person. Such officers shall be chosen by the board of directors at its first meeting after each annual meeting of stockholders.

        Section 2.    The board of directors may from time to time appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

        Section 3.    The salaries of all officers and agents of the corporation shall be fixed by the board of directors or pursuant to its direction.

        Section 4.    The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

        Section 5.    Chief Executive Officer: The chief executive officer, who need not be chosen from among the directors, shall have active, executive management of the operations of the corporation, subject, however, to the control of the board of directors. He shall have the exclusive authority to manage and direct the duties and responsibilites of any other officer or employee of the corporation. He shall, in general, perform all duties incident to the office of the chief executive officer and such other duties as from time to time may be assigned to him by the board of directors

        Section 6.    The President: The president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the chief executive officer may from time to time delegate to him. At the request of the chief executive officer, the president may temporarily act in

his place. In the case of the death of the chief executive officer, or in the case of his absence or inability to act without having designated the president to act temporarily in his place, the president shall perform the duties of the chief executive officer as designated by the board of directors.

        Section 7.    Chief Operating Officer: The chief operating officer shall assist the chief executive officer and the president in the operations of the corporation and shall have suchpo'vers and perform such duties as the board of directors may from time to time prescribe..

        Section 8.    The Vice President: Each vice president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the chief executive officer or the president may from time to time delegate to him. At the—request of the president, any vice president may temporarily act in his place.

        Section 9.    The Chief Financial Officer: The chief financial officer shall be the principal financial officer of the corporation; shall have charge_. and custody of and be responsible for all funds of the corporation and deposit all such funds in the name of the corporation in such corporations, trust companies or other depositories as shall be. selected by the board of directors; shall receive and give receipts for moneys due and payable to the corporation from any source; and, in general, shall perform all the duties incident to the office of the chief finacial officer and such other duties as from time to time may be assigned to him by the board of directors or by the chief executive officer. The chief financial officer shall render to the chief executive officer and the board of directors, whenever the same shall be required, an account of all his transactions as treasurer and of the financial condition of the corporation. He shall, if required to do so by the board of directors, give the corporation a bond in such amount and with such surety or sureties as may be ordered by the board of directors, for the faithful performance of the duties of his office and for the.restoration to the corporation, in the case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

        Section 10.    The Secretary: The secretary shall keep or cause to be kept in books provided. for that purpose, minutes of the meetings of the shareholders and of the board of directors; shall see that all notices are duly given in accordance with the provisions of these bylaws and as required by law; shall be custodian of the records and of the seal of the corporation and see that the seal is affixed to all the documents, the execution of which on behalf of the corporation under its seal is required; and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned to him by the board of directors or by the chief executive officer.

        Section 11.    The Treasurer: The treasurer shall assist the chief financial officer in the performance of the duties of the chief financial officer and shall perform any such other duties as may from time to time be assigned to him by the board of directors.

ARTICLE VI

CERTIFICATES OF STOCK

        Section 1.    Every holder of stock in the corporation shall be entitled to have a certificate, signed by the president or a vice president, and the treasurer or an assistant treasurer, or the secretary or an assistant secretary, of the. corporation, certifying the number of shares owned by him in the corporation. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock; provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and

relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

        Section 2.    Any of or all the signatures on any stock certificate issued by the corporation may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue.

        Section 3.    The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity_. against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

        Section 4.    Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

        Section 5.    In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any changes, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to, any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

        Section 6.    The corporation shall be entitled to treat the registered owner of any share or shares of stock as the absolute owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

INDEMNIFICATION AND INSURANCE

        Section 1.    The corporation shall indemnify any person who was or is a party or who was or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the. right of the corporation), by reason of the fact that he is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea

of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

        Section 2.    The corporation shall indemnify any person who was or is a party or who was or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually. and reasonably, incurred by him in connection with the defense or settlement of such action or suit if le acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.

        Section 3.    To the extent that any person who is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or who is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article VII, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Any other indemnifcation under Sections 1 and 2 of this Article VII shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the applicable standard of conduct set forth therein has been met. Such determination shall be made (a) by the board of directors of the corporation by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such quorum is not obtainable, or, even if obtainable a Quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders of the corporation.

        Section 4.    Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, advisory director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation pursuant to this Article VII.

        Section 5.    The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article VII shall not be deemed exclusive of any other right to which those seeking indemnification or advancement of expenses may be entitled from the corporation or any other entity under any statute, other bylaw, agreement, provision of the corporation's certificate of incorporation, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII and shall continue as to a person who has ceased to be a director, advisory director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. However, any amount actually received as the proceeds of any such other indemnification shall be deducted from the amount, if any, which he may be entitled to receive pursuant to this Article VII.

        Section 6.    By action of its board of directors, notwithstanding any interest of the directors in the action, to the full extent permitted by the General Corporation Law of the State of Delaware, the

corporation may purchase and maintain insurance, in such amounts and against such risks as the board of directors deems appropriate, on behalf of any person who is or was a director, advisory director or officer of the corporation, or of any entity a majority of the voting stock of which is owned by the corporation, or who is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as^, such, whether or not the corporation would have the power or would be required to indemnify him against such liability under the provisions of this Article VII, or of the corporation's certificate of incorporation or of the General Corporation Law of the State of Delaware.

ARTICLE VIII

GENERAL PROVISIONS

        Section 1.    Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

        Section 2.    Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

        Section 3.    All checks, notes and contracts of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

        Section 4.    The fiscal year of the corporation shall be fixed by resolution of the board of directors.

        Section 5.    The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal maybe used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

        Section 6.    Any payments made to an officer of the corporation such as salary, commission, bonus, interest, or rent, or entertainment expenses incurred by him, which shall be disallowed in whole_. or in part as a deductible expense by the Internal Revenue Service, shall be reimbursed by such officer to the corporation to the full extent of such disallowance. It shall be the duty of the directors, as a board, to enforce payment of each such amount disallowed.

ARTICLE IX

AMENDMENTS

        Section 1.    These bylaws may be altered, amended or repealed or new bylaws maybe adopted by the board of directors at any regular meeting of the board of directors or at any special meeting of the board of directors if notice of such alteration, amendment, repeal or adoption of new bylaws is contained in the notice of such special meeting.

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CCGI CORPORATION BYLAWS

EX-3.6

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Exhibit 3.6

CERTIFICATE OF INCORPORATION
OF
CORNELL CORRECTIONS OF PENNSYLVANIA, INC.

Article One

        The name of the corporation is CORNELL CORRECTIONS OF PENNSYLVANIA, INC.

Article Two

        The address of its registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

Article Three

        The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

Article Four

        The total number of shares of stock which the corporation shall have authority to issue is 10,000 shares of common stock, and the par value of each such share is $0.01.

Article Five

        The name and mailing address of the incorporator is as follows:

NAME	MAILING ADDRESS
Mitchell A. Tiras	3400 Texas Commerce Tower 600 Travis Houston, TX 77002

Article Six

        The names and mailing addresses of the persons who are to serve as directors of the corporation until the first annual meeting of stockholders or until their successor or successors are elected and qualified is as follows—

NAME	MAILING ADDRESS
David M. Comell	4801 Woodway, Suite 100E Houston, Texas 77056-1805
William J. Schoeffield, Jr.	4801 Woodway, Suite 100E Houston, Texas 77056-1805
Steven W. Logan	4801 Woodway, Suite 100E Houston, Texas 77056-1805
Marvin W. Wiebe, Jr.	4801 Woodway, Suite 100E Houston, Tcxas 77056-1805

Article Seven

        Directors need not be elected by written ballot unless required by the bylaws of the corporation.

Article Eight

        In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to adopt, amend or repeal bylaws of the corporation.

Article Nine

        The corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute. All rights conferrcd upon stockholders herein arc granted subject to this reservation.

Article Ten

        No director shall personally be liable to the corporation or the stockholders for monetary damages for any breach of his fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or the stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law or other applicable law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law or such other applicable law, as so amended. Any repeal or modification of this article by the stockholders shall not adversely affect any right or protection of a director existing at the time of such repeal or modification.

        I, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 18th day of August, 1997.

/s/ MITCHELL A. TIRAS

Mitchell A. Tiras

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CERTIFICATE OF INCORPORATION OF CORNELL CORRECTIONS OF PENNSYLVANIA, INC.

EX-3.7

Exhibit 3.7

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

BEFORE PAYMENT OF CAPITAL

OF

CORNELL CORRECTIONS OF PENNSYLVANIA, INC.

        The undersigned, being the incorporator of CORNELL CORRECTIONS OF PENNSYLVANIA, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

        DO HEREBY CERTIFY:

        FIRST: That Article One of the Certificate of Incorporation be and it hereby is amended to read as follows:

        The name of the corporation is ABRAXAS GROUP, INC.

        SECOND: That the corporation has not received any payment for any of its stock.

        THIRD: That the amendment was duly adopted in accordance with the provisions of section 241 of the General Corporation Law of the State of Delaware.

        IN WITNESS WHEREOF, I have signed this certificate this 21st day of August, 1997.

/s/  MITCHELL A. TIRAS Mitchell A Tiras

EX-3.8

Exhibit 3.8

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ABRAXAS GROUP, INC.

        Abraxas Group, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation "), does hereby certify as follows:

        1.     The amendment to the Corporation's Certificate of Incorporation set forth below was duly adopted in accordance with the provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware and has been consented to and authorized by the sole stockholder entitled to vote by written consent given in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

        2.     Article I of the Corporation's Certificate of Incorporation is amended to read as follows:

        "The name of the Corporation is Cornell Abraxas Group, Inc."

        IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed this 8th day of April, 1999.

	/s/  STEVEN W. LOGAN Steven W. Logan, Chief Financial Officer
Acknowledged by:
/s/  KEVIN KELLY Kevin B. Kelly, Assistant Secretary

EX-3.9

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Exhibit 3.9

ABRAXAS GROUP, INC.

BYLAWS

ARTICLE I

OFFICES

        Section 1.    The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.

        Section 2.    The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

        Section 1.    All meetings of the stockholders shall be held at such place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting.

        Section 2.    Annual meetings of stockholders shall be held on the 1st day of August of each year, if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting. At such annual meeting the stockholders shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

        Section 3.    Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting.

        Section 4.    The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

        Section 5.    Special meetings of the stockholders, for any purpose or purposes, unless. otherwise prescribed by statute or by the certificate of incorporation, may be called by the chief executive officer and shall be called by the chief executive officer or secretary at the request of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital "stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

        Section 6.    Written notice of a special meeting stating the place,.. date and hour of the meeting and the purpose or purposes for, which the meeting is called, shall be given not less than ten nor more than 60 days before the date of the meeting, to each stockholder entitled to vote at such meeting.

        Section 7.    Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

        Section 8.    The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by_. statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business. may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

        Section 9.    When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes of Delaware or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

        Section 10.    Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders *be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted after three years from its date unless the proxy provides for a longer period.

        Section 11.    Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

        Section 1.    There shall at all times be at least one director of the corporation. The number of directors shall from time to time be fixed and determined by the directors and shall be set forth in the notice of any meeting of stockholders held for the purpose of electing directors.

        Section 2.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. Any director may be removed either for or without cause at any special meeting of the stockholders duly called and held for such purpose.

        Section 3.    The business of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

        Section 4.    The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

        Section 5.    The first meeting of each newly elected board of directors shall be held at the place of, and immediately following, the annual meeting of the stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time and place, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

        Section 6.    Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

        Section 7.    Special meetings of the board may be called by the chief executive officer on 48 hours' notice to each director, either personally or by mail or by telegram. Special meetings shall be called by the chief executive officer or secretary in like manner and on like notice on the written request of two directors. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the sole purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting, except that notice shall be given of any proposed amendment to these bylaws if it is to be adopted at any special meeting or with respect to any other matter where notice is required by statute.

        Section 8.    At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

        Section 9.    Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

        Section 10.    Members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

        Section 11.    The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation; and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all property and assets of the corporation, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or^, names as may be determined from time to time by resolution adopted by the board of directors.

        Section 12.    Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

        Section 13.    The board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any.:other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV

NOTICES

        Section 1.    Whenever, under the provisions of the statutes of Delaware or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given personally or by telegram.

        Section 2.    Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

        Section 1.    The officers of the corporation shall be chosen by the board of directors and shall be a chief executive officer, a president, a chief operating officer, one or more vice presidents (any one or more of whom may be designated executive vice. president or senior vice president), a chief financial officer, a secretary and a treasurer. Any number of offices may be held by the same person. Such officers shall be chosen by the board of directors, at its first meeting after each annual meeting of stockholders.

        Section 2.    The board of directors may from time to time appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and.shall -exercise such powers and perform such duties as shall be determined from time to time by the board.

        Section 3.    The salaries of all officers and agents of the corporation shall be fixed by the board of directors or pursuant to -its direction.

        Section 4.    The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

        Section 5.    Chief Executive Officer: The chief executive officer, who need not be chosen from among the directors, shall have active, executive management of the operations of the corporation, subject, however, to the control of the board of directors. He shall have the exclusive authority to manage and direct the duties and responsibilities of any other officer or employee of the corporation. He shall, in general, perform all duties incident to the office of the chief executive officer and such other duties as from time to time may be assigned to him by the board of directors

        Section 6.    The President: The president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the chief executive officer may from time to time delegate to him. At the request of the chief executive officer, the president may temporarily act in

his place. In the case of the death of the chief executive officer, or in the case of his absence or inability to act without having designated the president to act temporarily in his place, the president shall perform the duties of the chief executive officer as designated by the board of directors.

        Section 7.    Chief Operating Officer: The chief operating officer shall assist the chief executive officer and the president in the operations of the corporation and shall have such powers and perform such duties as the board of directors may from time to time prescribe.

        Section 8.    The Vice President: Each vice president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the chief executive officer or the president may from time to time delegate to him. At the request of the president, any vice president may temporarily act in his place.

        Section 9.    The Chief Financial Officer: The chief financial officer shall be the principal financial officer of the "corporation; shall have charge and custody of and be responsible for all funds of the corporation and deposit all such funds in the name of the corporation in such corporations, trust companies or other depositories as shall be selected by the board of directors; shall receive and give receipts for moneys due and payable to the corporation from any source; and, in general, shall perform all the duties incident to the office of the chief financial officer and such other duties as from tune to time may be assigned to him by the board of directors or by the chief executive officer. The chief financial officer shall render to the chief executive officer and the board of directors, whenever the same shall be required, an account of all his transactions as treasurer and of the financial condition of the corporation. He shall, if required to do so by the board of directors, give the corporation a bond in such amount and with such surety or sureties as may be ordered by the board of directors, for the faithful performance of the duties of his office and for the restoration to the corporation, in the case of his death, resignation,^-retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

        Section 10.    The Secretary: The secretary shall keep or cause to be kept in books provided for that purpose, minutes of the meetings of the shareholders and of the board of directors; shall see that all notices are duly given in accordance with the provisions of these bylaws and as required by law; shall be custodian of the records and of the seal of the corporation and see that the seal is affixed to all the documents, the execution of which on behalf of the corporation under its seal is required; and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned to him by the board of directors or by the chief executive officer.

        Section 9.    The Treasurer: The treasurer shall assist the chief financial officer in the performance of the duties of the chief financial officer and shall perform any such other duties as may from time to time be assigned to-him by the board of directors.

ARTICLE VI

CERTIFICATES OF STOCK

        Section 1.    Every holder of stock in the corporation shall be entitled to have a certificate, signed by the president or a vice president, and the treasurer or an assistant treasurer, or the secretary or an assistant secretary, of            the corporation, certifying the number of shares owned by him in the corporation. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock; provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and

relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

        Section 2.    Any of or all the signatures on any stock certificate issued by the corporation may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue.

        Section 3.    The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

        Section 4.    Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its. books.

        Section 5.    In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any changes, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to. any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

        Section 6.    The corporation shall be entitled to treat the registered owner of any share or shares of stock as the absolute owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part. of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII;

INDEMNIFICATION AND INSURANCE

        Section 1.    The corporation shall indemnify any person who was or is a party or who was or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other, than an action by or in the right of the corporation), by reason of the fact that he is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding; had-no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea

of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

        Section 2.    The corporation shall indemnify any person who was or is a party or who was or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.

        Section 3.    To the extent that any person who is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of - -which is owned by the corporation, or who is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article VII, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Any other indemnification under Sections 1 and 2 of this Article VII shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the applicable standard of conduct set forth therein has been met. Such determination shall be made (a) by the board of directors of the corporation by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders of the corporation.

        Section 4.    Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, advisory director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation pursuant to this Article VII.

        Section 5.    The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article VII shall not be deemed exclusive of any other right to which those seeking indemnification or advancement of expenses may be entitled from the corporation or any other entity under any statute, other bylaw, agreement, provision of the corporation's certificate of incorporation, vote of stockholders or disinterested directors or otherwise, both as, to action in his official capacity and as to action in another capacity while holding such office. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII and shall continue as to a person who has ceased to be a director, advisory director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. However, any amount actually received as the proceeds of any such other indemnification shall be deducted from the amount, if any, which he may be entitled to receive pursuant to this Article VII.

        Section 6.    By action of its board of directors, notwithstanding any interest of the directors in the action, to the full extent permitted by the General Corporation Law of the State of Delaware, the

corporation may purchase and maintain insurance, in such amounts and against such risks as the board of directors deems appropriate, on behalf of any person who is or was a director, advisory director or officer of the corporation, or of any entity a majority of the voting stock of which is owned by the corporation, or who is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or. not the corporation would have the power or would be requited to indemnify him against such liability under the provisions of this Article VII, or of the corporation's certificate of incorporation or of the General Corporation Law of the State of Delaware.

ARTICLE VIII

GENERAL PROVISIONS

        Section 1.    Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividend may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

        Section 2.    Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or-for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

        Section 3.    All checks, notes and contracts of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

        Section 4.    The fiscal year of the corporation shall be fixed by resolution of the board of directors.

        Section 5.    The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

        Section 6.    Any payments made to an officer of the corporation such as a salary, commission, bonus, interest, or rent, or entertainment expenses incurred by him, which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service, shall be reimbursed by such officer to the corporation to the full extent of such disallowance. It shall be the duty of the directors, as a board, to enforce payment of each such amount disallowed.

ARTICLE IX

AMENDMENTS

        Section 1.    These bylaws may be altered, amended or repealed or new bylaws may be adopted by the board of directors at any regular meeting of the board of directors or at any special meeting of the board of directors if notice of such alteration, amendment, repeal or adoption of new bylaws is contained in the notice of such special meeting.

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ABRAXAS GROUP, INC. BYLAWS

EX-3.10

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Exhibit 3.10

CERTIFICATE OF FORMATION
OF
CORNELL COMPANIES ADMINISTRATION, LLC

        I, the undersigned natural person of the age of eighteen years or more, acting as an authorized person of a limited liability company under the Delaware Limited Liability Company Act, as amended, do hereby submit the following Certificate of Formation for such limited liability company:

ARTICLE I

        The name of the limited liability company is Cornell Companies Administration, LLC.

ARTICLE II

        The address of the limited liability company's initial registered agent in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of its initial registered agent at such address is The Corporation Trust Company,

        IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of March, 2002.

/s/  EFREN A. ACOSTA Name: Efren A. Acosta
Authorized Person

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CERTIFICATE OF FORMATION OF CORNELL COMPANIES ADMINISTRATION, LLC

EX-3.11

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Exhibit 3.11

Limited Liability Company Agreement
of
Cornell Companies Administration, LLC
(a Delaware Limited Liability Company)

        This Limited Liability Company Agreement of Cornell Companies Administration, LLC dated as of March 27, 2002 (this "Agreement"), is hereby adopted, executed and agreed to by the persons listed below.

        1.    Formation.    Cornell Companies Administration, LLC (the "Company") was formed on the date hereof, as a Delaware limited liability company under and pursuant to the Delaware Limited Liability Company Act, as amended (the "Act").

        2.    Term.    The Company shall have a perpetual existence.

        3.    Purposes.    The purposes of the Company are to carry on any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall have all of the powers to conduct such business as permitted under the Act.

        4.    Member.    Cornell Companies, Inc., a Delaware corporation, is the sole member of the Company (the "Member").

        5.    Sharing Ratios.    The Member shall receive the allocation of all profits, losses, gains, deductions and credits with respect to the operations of the Company.

        6.    Contributions.    Without creating any rights in favor of any third party, the Member may, from time to time, make contributions of cash or property to the capital of the Company, but shall have no obligation to do so.

        7.    Distributions.    The Member shall be entitled (a) to receive all distributions (including, without limitation, liquidating distributions) made by the Company and (b) to enjoy all other rights, benefits and interests in the Company.

        8.    Management.    The management of the Company is fully reserved to one or more Managers, who shall serve at the pleasure of the Member. Any Manager may be removed by and replaced at any time by the Member. The Member may increase or decrease the number of Managers, but not below one, at any time. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Manager(s), who shall make all decisions and take all actions for the Company. The initial Manager of the Company shall be Kevin Kelly. Any action to be taken by the Manager(s) shall require the consent of each Manager. The Manager(s) may from time to time delegate to one or more persons such authority as the Manager(s) may deem advisable and may elect one or more persons as a president, vice president, secretary, treasurer or any other title of an officer ("Officers") of the Company as determined by the Manager(s) to act on behalf of the Company with respect to any matter or matters delegated to such person by the Manager(s). No officer need be a resident of the State of Delaware. In the event the Manager(s) appoint a person as an officer of the Company, the Manager(s) shall be deemed to have assigned and may thereafter assign titles to particular Officers. Unless the Manager(s) decide otherwise, all officers of the Company, as between themselves and the Company, shall have such authority, perform such duties and manage the Company as provided below.

        (a)    The President.    The President shall have the active, executive management of the operations of the Company, subject, however, to the control of the Manager(s). The President shall, in general, perform all duties incident to the office of president and such other duties as from time to time may be assigned to him or her by the Manager(s).

        (b)    The Vice President.    The Vice President shall have such powers and perform such duties as the Manager(s) may from time to time prescribe or as the President may from time to time delegate to him or her. At the request of the President, the Vice President may temporarily act in

place of the President. In the case of the death, absence, or inability to act of the President, the Manager(s) may designate the Vice President to perform the duties of the President.

        (c)    The Secretary.    The Secretary shall keep or cause to be kept the minutes of.any Company meetings; shall see that all notices are duly given in accordance with the provisions of applicable law; shall be custodian of the records and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned by the Manager(s) or by the President.

        (d)    The Treasurer.    The Treasurer shall be the principal financial officer of the Company; shall have charge and custody of. and be responsible for all funds of the Company and deposit all such funds in the name of the Company in such banks, trust companies or other depositories as shall be selected by the Manager(s); shall receive and give receipts for moneys due and payable to the Company from any source; and, in general, shall perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned by the Manager(s) or by the President. The Treasurer shall render to the President and the Manager(s), whenever the same shall be required, an account of all transactions accomplished as Treasurer and of the financial condition of the Company.

        9.    Tax Matters.    The Company and the Manager(s) shall comply with all requirements of the Internal Revenue Code of 1986, as amended, with respect to the Company.

        10.    Indemnification.    To the extent allowed under the laws of the State of Delaware, the Company shall indemnify the Manager(s) and the Company's Officers and employees from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable. legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Company as set forth in this Agreement in which a Manager, Officer or employee may be involved, or is threatened to be involved, as a party or otherwise, REGARDLESS OF WHETHER ARISING FROM ANY ACT OR OMISSION WHICH CONSTITUTED THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE (WHETHER ACTIVE OR PASSIVE) OF A MANAGER, OFFICER OR EMPLOYEE, unless it is established that: (1) the act or omission of such Manager, Officer or employee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (2) the Manager, Officer or employee actually received an improper personal benefit in money, property or services; or (3) in the case of any criminal proceeding, the Manager, Officer or employee had reasonable cause to believe that the act or omission was' unlawful. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Manager, Officer or employee did not meet the requisite standard of conduct set forth in this Section 10. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Manager, Officer or employee acted in a manner contrary to that specified in this Section 10. Any indemnification pursuant to this Section 10 shall be made only out of the assets of the Company, including insurance proceeds, if any.

        11.    Transfers.    The Member may freely transfer all or any part of its membership interest in the Company at any time, and any such transferee shall become an additional or substituted Member of the Company, as applicable, with full rights of a Member as set forth herein and in the Act.

        12.    Dissolution.    The Company shall dissolve and its affairs shall be wound up at such time, if any, as the Member may elect or as may be required under the Act. No other event, will cause the Company to dissolve.

        13.    Amendment.    This Agreement may be amended at any time by and with the consent of the Member.

        14.    Governing Law.    THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (EXCLUDING ITS CONFLICT-OF-LAWS RULES).

        IN WITNESS WHEREOF, the undersigned have executed this Limited Liability Company Agreement as of the date first written above.

MEMBER:
Cornell Companies, Inc., a Delaware corporation
By:	/s/  KEVIN KELLY
Name: Kevin Kelly Title: Treasurer and Secretary
MANAGER:
/s/  KEVIN KELLY Name: Kevin Kelly

SCHEDULE 1

Name, Address, Initial Capital Contribution and Sharing Ratio

Name and Address	Initial Capital Contribution	Sharing Ratio
Cornell Companies, Inc. 1700 West Loop South Suite 1500 Houston, TX 77027	An undivided interest in and to all of the issued and outstanding membership interests in Cornell Companies Management, LLC, a Delaware limited liability company	100	%

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SCHEDULE 1

EX-3.12

Exhibit 3.12

CORNELL COMPANIES MANAGEMENT, LP
CERTIFICATE OF LIMITED PARTNERSHIP

        Cornell Companies Administration, LLC, a Delaware limited liability company, serving as the sole general partner of Cornell Companies Management, LP, a Delaware limited partnership, hereby certifies that:

1.

The name of the limited partnership is Cornell Companies Management, LP.



2.

The address of the Partnership's registered office is Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle. The name of the registered agent for service of process in the State of Delaware at this address is The Corporation Trust Company.



3.

The name and mailing address of the sole general partner is as follows:

Cornell Companies Administration, LLC
1700 West Loop South
Suite 1500
Houston, TX 77027

        IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited Partnership on the 29th day of March, 2002.

Cornell Companies Management, LP, a Delaware limited partnership
By:	Cornell Companies Administration, LLC, a Delaware limited liability company
	By:	/s/  KEVIN KELLY
	Name:	Kevin Kelly
	Title:	Manager

EX-3.13

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Exhibit 3.13

CORNELL COMPANIES MANAGEMENT, LP
(A Delaware Limited Partnership)

LIMITED PARTNERSHIP AGREEMENT

THESE PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
PURSUANT TO THE PROVISIONS OF ANY STATE SECURITIES ACT

CERTAIN RESTRICTIONS ON TRANSFERS OF INTERESTS
ARE SET FORTH HEREIN

1

AGREEMENT OF LIMITED PARTNERSHIP
OF
CORNELL COMPANIES MANAGEMENT, LP

        This Agreement dated effective as of the 25th day of June, 2002, is made and entered into by and among Cornell Companies Administration, LLC, a Delaware limited liability company, as General Partner, and the Person listed on the signature pages attached hereto, as a Limited Partner, and such Persons who become Partners of the Partnership as hereinafter provided.

ARTICLE I

DEFINITIONS

        The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the terms used in this Agreement:

"Additional Capital Contribution" means, as to any Partner, any amount contributed, required to be contributed or deemed to be contributed to the capital of the Partnership by the Partner pursuant to Section 3.1(b).

"Adjusted Capital Account" means, with respect to any Partner, such Partner's Capital Account as of any relevant date after giving effect to the following adjustments:

        (a)   Credit to such Capital Account any amounts which such Partner is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); and

        (b)   Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

        The foregoing definition of "Adjusted Capital Account" is intended to comply with the provisions of Treasury Regulations Sections 1.704-1(b)(2)(ii)(d) and 1.704-2 and shall be interpreted consistently therewith.

"Adjusted Capital Account Deficit" means, with respect to any Partner, the deficit balance, if any, in that Partner's Adjusted Capital Account.

"Affiliate" means, with respect to any party hereto, (a) any person controlled by, controlling, or under common control with such party, (b) any person owning or controlling twenty percent (20%) or more of the outstanding voting securities of such party, (c) any officer, director, partner or manager of such party or of any Person specified in (a) or (b) above, and (d) any Entity in which any officer, director, partner or manager of such party is an officer, director or manager.

"Agreement" means this Agreement of Limited Partnership, as may be amended or supplemented from time to time.

"Assignee" means a Person or Entity to whom a Limited Partner's Partnership Interest has been transferred, by assignment or otherwise, and who thereby has an interest in the Partnership equivalent to that of a Limited Partner but (a) limited to the rights and obligations appurtenant to a Partnership Interest as a Limited Partner to share in the income, loss and distributions, including liquidating distributions and (b) otherwise subject to the limitations under the Partnership Act on the rights of an assignee who has not become a substituted Limited Partner in accordance with this Agreement.

"Available Funds" means Partnership cash on hand, as of the date of the computation and as determined by all of the Partners, including (without limitation) cash derived from any one or more of the following sources: (a) Capital Contributions of the Partners made pursuant to the

2

terms of this Agreement, (b) all Partnership operating income and (c) the proceeds from any sale, financing, refinancing, condemnation or casualty.

"Bankruptcy" or "Bankrupt" means any Person who is insolvent, who has filed a voluntary petition in bankruptcy or against whom a third party has filed an involuntary petition in bankruptcy and the same has not been dismissed within thirty (30) days.

"Book Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except (a) the initial Book Value of any asset contributed by a Partner to the Partnership shall be the fair market value of such asset, as determined by all of the Partners; (b) the Book Value of all Partnership assets shall be adjusted in the event of a revaluation as provided in Section 3.5(d); (c) the Book Value of any Partnership asset distributed to any Partner shall be the fair market value of such asset on the date of distribution as determined by all of the Partners; and (d) such Book Value shall be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

"Capital Account" means with respect to any Partner, the account maintained for such Partner in a manner which the General Partner determines is in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).

"Capital Contributions" means the total of all capital contributions of the Partners pursuant to Section 3.1, including, but not limited to, the Initial Capital Contributions and the Additional Capital Contributions.

"Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of Delaware pursuant to Section 2.4, as amended from time to time.

"Code" means the United States Internal Revenue Code of 1986, as amended from time to time.

"Depreciation" means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period (as a result of property contributions or adjustments to such values), Depreciation shall be adjusted as necessary so as to be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period is zero, Depreciation for such year or other period shall be determined with reference to such beginning Book Value using any reasonable method selected by the General Partner.

"Disposition" means, with respect to any asset (including, but not limited to, Partnership Interests or any portion thereof), a sale, assignment, transfer, conveyance, gift, exchange, or other disposition of such asset, whether such disposition be voluntary, involuntary or by operation of law.

"Distributable Cash Flow" means, cash available to the Partnership from any source (other than proceeds of liquidation) after (i) paying or making adequate provision for any debts or liabilities of the Partnership or any Operating Cash Expenses and (ii) establishing reserves to meet current or reasonably expected obligations of the Partnership to the extent that the General Partner shall determine such reserves to be reasonably necessary or advisable.

"Entity" means any Person other than a natural person.

"Fiscal Year" means the fiscal year of the Partnership as established in Section 8.6 hereof.

3

"General Partner" means Cornell Companies Administration, LLC, a Delaware limited liability company, or any successor or successors to all or any part of such General Partner's interest, each in the capacity as a general partner of the Partnership.

"Initial Capital Contribution" means, as to any Partner, the amount contributed to the capital of the Partnership by a Partner pursuant to Section 3.1(a).

"Limited Partner" means each Person or Entity who executes this Agreement and is reflected as a Limited Partner below or who becomes an additional or substituted Limited Partner pursuant to this Agreement, each in the capacity as a limited partner of the Partnership.

"Majority in Interest" means, with respect to any group of Partners, a combination of such Partners who, in the aggregate, own more than fifty percent (50%) of the Sharing Ratios owned by all of such group of Partners.

"Minimum Gain" means, with respect to all nonrecourse liabilities of the Partnership, the minimum amount of gain that would be realized by the Partnership if the Partnership disposed of the Partnership property subject to such liability in full satisfaction thereof computed in accordance with Treasury Regulations Section 1.704-2(d).

"Minimum Gain Share" means, for each Partner, such Partner's share of Minimum Gain for the Fiscal Year (after taking into account any decrease in Minimum Gain for such year), such share to be determined under Treasury Regulations Section 1.704-2(g).

"Nonrecourse Deductions" means, for each Fiscal Year or other period, an amount of Partnership deductions that are characterized as "nonrecourse deductions" under Treasury Regulations Section 1.704-2(c).

"Operating Cash Expenses" means, with respect to any Fiscal Year, the amount of cash disbursed by the Partnership in such period in the ordinary course of its business, including, without limitation, the principal and interest payments on all debt, if any, and such other principal and interest payments required to be made in connection with any loan to the Partnership or any loan secured by a lien on any of the Partnership's property, but not including distributions to any Partner in respect of such Partner's Partnership Interest.

"Partner" means a General Partner or a Limited Partner.

"Partner Nonrecourse Debt" means any nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4)) of the Partnership for which any Partner bears the economic risk of loss, in accordance with Treasury Regulations Sections 1.704-2(b)(4) and 1.752-2.

"Partner Nonrecourse Debt Minimum Gain" means, for each Partner, the amount of Minimum Gain for the Fiscal Year or other period attributable to such Partner's Partner Nonrecourse Debt determined in accordance with Treasury Regulations Section 1.704-2(i)(2).

"Partner Nonrecourse Deductions" means any Losses or other losses or deductions of the Partnership that must be allocated to a Partner who bears the economic risk of loss for the partner nonrecourse liability to which the Losses or other losses or other deductions relate, determined in accordance with Treasury Regulations Section 1.704-2(i)(1).

"Partnership" means the limited partnership established by this Agreement.

"Partnership Act" means the Delaware Revised Uniform Limited Partnership Act, as from time to time amended or superceded.

"Partnership Interest" means with respect to any Partner, all of such Partner's ownership interest as a Limited Partner or General Partner in the Partnership at any particular time including all of the rights and obligations of such Partner under this Agreement and the Partnership Act.

4

"Person" or "person" means an individual, a corporation, a sole proprietorship, a partnership, a limited liability company, an association, a trust, a joint venture, or any other entity or organization.

"Profits" and "Losses" means, for each Fiscal Year or other period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

        (a)   Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

        (b)   Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss;

        (c)   Gain or loss resulting from any Disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property Disposed of, notwithstanding that the adjusted tax basis of such property differs from such Book Value;

        (d)   In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of "Depreciation" herein; and

        (e)   Notwithstanding any other provision of this definition, any items which are specifically allocated pursuant to Section 4.2(c) shall not be taken into account in computing Profits and Losses.

"Sharing Ratio" means with respect to any Partner, the percentage assigned to such Partner in accordance with Section 3.6.

"Treasury Regulations" means the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

ARTICLE II

GENERAL PROVISIONS

        2.1    Formation of the Partnership.    The Partners hereby form a limited partnership pursuant to the Partnership Act.

        2.2    Name.    The name of the Partnership is Cornell Companies Management, LP. The business of the Partnership shall be conducted under its name, or any other name as determined by the General Partner to be in the best interest of the Partnership.

        2.3    Principal Office, Registered Agent, Registered Office.    The principal office of the Partnership shall be at 1700 West Loop South, Suite 1500, Houston, Texas. The initial registered agent and registered office of the Partnership are set forth in the Certificate of Limited Partnership. The General Partner may at any time change the location of the Partnership's office and may establish additional offices, if it deems advisable. The General Partner shall promptly give the Limited Partners written notice of any change in location of the principal office of the Partnership.

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        2.4    Term.    The Partnership shall commence business on the date of the original filing of the Certificate of Limited Partnership and its existence shall be perpetual unless terminated sooner as herein provided.

        2.5    Other Acts and Filings.    The Partners shall from time to time execute or cause to be executed all such certificates or other documents, and do or cause to be done all such filing, recording, publishing or other acts, as the General Partner may deem to be appropriate to comply with the requirements of law for the formation and/or operation of a limited partnership in the State of Delaware and all other jurisdictions where the Partnership shall desire to conduct business and to preserve the limited liability of the Limited Partners to the fullest possible extent.

        2.6    Purposes and Character of Business; Powers.    The purposes and character of the business of the Partnership are to transact any lawful business that may be conducted by a Delaware limited partnership. The Partnership shall carry out the foregoing activities pursuant to the arrangements set forth in this Agreement.

ARTICLE III

CAPITAL CONTRIBUTIONS

        3.1    Capital Contributions of the Partners.

        (a)    Initial Capital Contributions.    Each of the Partners' predecessors-in-interest, Cornell Companies, Inc., a Delaware corporation (the "Parent"), has made certain contributions to the Partnership, and each Partner shall be deemed to have made the portion of this Initial Capital Contribution attributable to the Partner's share of its Partnership Interest received from the Parent.

        (b)    Additional Capital Contributions.    No Partner shall be required to make Additional Capital Contributions to the Partnership. However, at the request of the General Partner, the Limited Partners may make Additional Capital Contributions to the Partnership for any reason the General Partner determines to further the business of the Partnership. Upon the contribution of an Additional Capital Contribution, such contributing Partner shall receive a credit to its Capital Account in the amount of such contribution.

        (c)   If any Partner makes a payment directly to a creditor or another Partner in satisfaction of any indebtedness of the Partnership pursuant to any indemnity, guaranty or contribution obligation of such Partner which has been approved by the General Partner in respect of Partnership indebtedness, or if any collateral interest granted by such Partner to such creditor or other Partner which has been approved by the General Partner to secure any such indebtedness shall be foreclosed and the proceeds of such foreclosure shall be applied to reduce or satisfy such indebtedness and any foreclosure-related expenses, such Partner shall be deemed to have made an Additional Capital Contribution equal to such amount.

        3.2    Partnership Capital.

        (a)   Except as may be otherwise specifically provided in this Agreement, no Partner shall be paid interest on any Capital Contribution to the Partnership.

        (b)   No Partner shall have the right to demand or withdraw all or any part of its Capital Contribution or to receive any return on any portion of its Capital Contribution, except as may be otherwise specifically provided in this Agreement.

        (c)   Under circumstances involving a return of any Capital Contribution, no Partner shall have the right to receive property other than cash.

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        (d)   Except as otherwise expressly provided herein, no Partner shall have any priority over any other Partner as to the return of its contributions to capital or as to compensation by way of income.

        3.3    Liability of Partners.

        (a)   No Limited Partner shall be liable for the debts, liabilities, contracts or any other obligation of the Partnership, except to the extent expressly provided herein or in the Partnership Act. No Partner shall be liable for the debts or liabilities of any other Partner.

        (b)   No Partner shall be required to contribute to the capital of, or loan, the Partnership any funds.

        (c)   The General Partner shall not be liable for the return of all or any portion of the Capital Contributions of any Partner.

        3.4    Loans by Partners or Affiliates.    Subject to obtaining any approvals required under this Agreement for the Partnership to borrow funds, any Partner or Affiliate may (but shall not be obligated to) at any time, upon obtaining the consent of the General Partner, loan money to the Partnership to finance Partnership operations, to finance or refinance the assets of the Partnership, to pay the debts and obligations of the Partnership, or for any other Partnership purpose. If any Partner or an Affiliate lends funds to the Partnership, such Partner or Affiliate shall be entitled to receive interest on such loan at an interest rate to be agreed upon by such Partner or Affiliate and the General Partner.

        3.5    Capital Accounts.

        (a)   A Capital Account shall be established and maintained for each Partner.

        (b)   A Partner's Capital Account shall be credited with (i) the amount of cash and the initial Book Value of any property contributed by such Partner to the Partnership, including, but not limited to, any and all Capital Contributions, (ii) such Partner's allocable share of Profits, income and gain and (iii) the amount of any Partnership liabilities that are expressly assumed by such Partner or that are secured by any Partnership property distributed to such Partner.

        (c)   A Partner's Capital Account shall be debited with (i) the amount of cash and the Book Value of any Partnership property distributed to such Partner pursuant to any provision of this Agreement, (ii) such Partner's allocable share of Losses, deductions and other losses and (iii) the amount of any liabilities of such Partner that are expressly assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership.

        (d)   Upon the occurrence of certain events (as described in Treasury Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4) and 1.704-2), the General Partner may increase or decrease the Capital Accounts of the Partners to reflect a revaluation of Partnership property on the Partnership's books.

        (e)   The Capital Account of each Partner shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires a Partnership Interest directly from a Partner, or whose Partnership Interest shall be increased by means of a transfer to it of all or part of the interest of another Partner, shall have a Capital Account which includes the Capital Account balance of the Partnership Interest so acquired or transferred.

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        (f)    In the event that any Partner makes a loan to the Partnership, such loan shall not be considered a contribution to the capital of the Partnership and shall not increase the Capital Account of the lending Partner. Repayment of such loans shall not be deemed withdrawals from the capital of the Partnership.

        (g)   Any fees, salary or similar compensation payable to a Partner pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution to such Partner for such purposes. Such payments to a Partner shall not reduce the Capital Account of such Partner, except to the extent of its distributive share of any Partnership Losses or other downward capital adjustment resulting from such payment.

        (h)   From time to time the General Partner may make such modifications to the manner in which the Capital Accounts are computed to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 provided that such modification is not likely to have a material effect on the amounts distributable to any Partner pursuant to this Agreement.

        (i)    The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

        (j)    No Partner shall be obligated to restore a deficit balance in its Capital Account upon dissolution of the Partnership or upon liquidation of its interest in the Partnership, whichever is earlier.

        3.6    Sharing Ratios.    The Sharing Ratio of each Partner is set forth opposite its respective name on Schedule 1, attached hereto and hereby made a part of this Agreement. The Sharing Ratios set forth on Schedule 1 may be amended from time to time by the General Partner to reflect any adjustments to such Sharing Ratios as provided in this Agreement.

        3.7    Partnership Debt.    The Partnership will endeavor to obtain financing on a nonrecourse basis as to any individual Partner. However, in the event any debt obligation of the Partnership requires a guarantee of a Partner or the posting of a letter of credit, and all of the Partners do not agree upon request of the General Partner to guarantee such Partnership obligation and/or post such letter of credit in proportion to its Sharing Ratio, then any Partner guaranteeing such obligation or posting such letter of credit may receive a reasonable fee for such guarantee or letter of credit in an amount determined by such Partner and the General Partner.

ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS

        4.1    Distributions.    Except as otherwise provided in Section 9.2, Distributable Cash Flow shall be distributed to the Partners in accordance with their respective Sharing Ratios, at such times and in such amounts as determined by the General Partner.

        4.2    Allocations of Profits and Losses.

        (a)    Profits.    Except as provided in Section 4.2(c), Profits for any Fiscal Year will be allocated to the Partners in accordance with their respective Sharing Ratios.

        (b)    Losses.    Except as provided in Section 4.2(c), Losses for any Fiscal Year will be allocated to the Partners in accordance with their respective Sharing Ratios.

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        (c)    Special Allocations.    Except as otherwise provided in this Agreement, the following special allocations will be made in the following order and priority:

        (1)    Partnership Minimum Gain Chargeback.    Notwithstanding any other provision of this Section, if there is a net decrease in Partnership Minimum Gain during any taxable year or other period for which allocations are made, the Partners will be specially allocated items of Partnership income and gain for that period (and, if necessary, subsequent periods). The amount allocated to each Partner under this Section 4.2(c)(1) shall be an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain during such year or other period determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 4.2(c)(1) is intended to comply with the partnership minimum gain chargeback requirements of the Treasury Regulations and the exceptions thereto and will be interpreted consistently therewith.

        (2)    Partner Nonrecourse Debt Minimum Gain Chargeback.    Notwithstanding any other provision of this Section (other than Section 4.2(c)(1) which shall be applied first), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any taxable year or other period for which allocations are made, any Partner with a share of such Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt (determined under Treasury Regulations Section 1.704-(2)(i)(5)) as of the beginning of the year shall be specially allocated items of Partnership income and gain for that period (and, if necessary, subsequent periods) in proportion to the portion of such Partner's share of the net decrease in the Partner Nonrecourse Debt Minimum Gain with respect to such Partner Nonrecourse Debt that is allocable to the Disposition of Partnership property subject to such Partner Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(g). This Section is intended to comply with the partner nonrecourse debt minimum gain chargeback requirements of the Treasury Regulations and the exceptions thereto and shall be interpreted consistently therewith.

        (3)    Qualified Income Offset.    A Partner who unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Partnership income and gain in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Partner as quickly as possible.

        (4)    Nonrecourse Deductions.    Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated among the Partners in accordance with each Partner's Sharing Ratio.

        (5)    Partner Nonrecourse Deductions.    Notwithstanding anything to the contrary in this Agreement, any Partner Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which the Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i).

        (6)    Code Section 754 Adjustments.    To the extent an adjustment to the adjusted tax basis of any Partnership asset under Code Sections 734(b) or 743(b) is required to be taken into account in determining Capital Accounts under Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis), and the gain or loss will be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted under Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

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        (7)    Depreciation Recapture.    In the event there is any recapture of Depreciation or investment tax credit, the allocation of gain or income attributable to such recapture shall be shared by the Partners in the same proportion as the deduction for such Depreciation or investment tax credit was shared.

        (8)    Reallocation.    To the extent Losses allocated to a Partner would cause the Partner to have an Adjusted Capital Account Deficit at the end of any Fiscal Year, the Losses will be reallocated to the General Partner. If the General Partner receives an allocation of Losses otherwise allocable to a Limited Partner in accordance with this Section, such General Partner shall be allocated Profits in subsequent Fiscal Years necessary to reverse the effect of such allocation of Losses. Such allocation of Profits (if any) shall be made before any allocations under Section 4.2(a) but after any other allocations under Section 4.2(c).

        (9)    Interest in Partnership.    Notwithstanding any other provision of this Agreement, no allocation of Profit or Loss or item of Profit or Loss will be made to a Partner if the allocation would not have "economic effect" under Treasury Regulations Section 1.704-1(b)(2)(ii) or otherwise would not be in accordance with the Partner's interest in the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(3) or 1.704-1(b)(4)(iv). The General Partner will have the authority to reallocate any item in accordance with this Section 4.2(c)(9).

        (d)    Curative Allocations.    The allocations set forth in Sections 4.2(c)(1) through (9) (the "Regulatory Allocations") are intended to comply with certain requirements of Treasury Regulations Section 1.704-1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which the Partners intend to divide Partnership distributions. Accordingly, the General Partner is authorized to further allocate Profits, Losses, and other items among the Partners so as to prevent the Regulatory Allocations from distorting the manner in which Partnership distributions would be divided among the Partners under Sections 4.1 and 9.2 but for application of the Regulatory Allocations. In general, the reallocation will be accomplished by specially allocating other Profits, Losses and items of income, gain, loss and deduction, to the extent they exist, among the Partners so that the net amount of the Regulatory Allocations and the special allocations to each Partner is zero. The General Partner will have discretion to accomplish this result in any reasonable manner that is consistent with Code Section 704 and the related Treasury Regulations.

        (e)    Tax Allocations—Code Section 704(c).    In accordance with Code Section 704(c) and the related Treasury Regulations, income, gain, loss and deduction with respect to any property contributed to the capital of the Partnership, solely for tax purposes, will be allocated among the Partners so as to take account of any variation between the adjusted basis to the Partnership of the property for federal income tax purposes and the initial Book Value. If the Book Value of any Partnership asset is adjusted, subsequent allocations of income, gain, loss and deduction with respect to that asset will take account of any variation between the adjusted basis of the asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c) and the related Treasury Regulations. Any elections or other decisions relating to allocations under this Section 4.2(e) will be made in any manner that the General Partner determines reasonably reflects the purpose and intention of this Agreement. Allocations under this Section are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses or other items or distributions under any provision of this Agreement.

        (f)    Other Allocation Rules.    The following rules will apply to the calculation and allocation of Profits, Losses and other items:

        (1)   Except as otherwise provided in the Agreement, all Profits, Losses and other items allocated to the Partners will be allocated among them in proportion to their Sharing Ratios.

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        (2)   For purposes of determining the Profits, Losses or any other item allocable to any period, Profits, Losses and other items will be determined on a daily, monthly or other basis, as determined by the General Partner using any permissible method under Code Section 706 and the related Treasury Regulations.

        (3)   Except as otherwise provided in this Agreement, all items of Partnership income, gain, loss, deduction, credit and other allocations not provided for in this Agreement will be divided among the Partners in the same proportions as they share Profits and Losses.

        (g)    Partner Acknowledgment.    The Partners agree to be bound by the provisions of this Section in reporting their shares of Partnership income and loss for income tax purposes.

        4.3    Compliance with Code.    The foregoing provisions of this Article relating to the allocation of Profits, Losses and other items for federal income tax purposes are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations. Notwithstanding anything to the contrary, nothing in this Article shall apply if it lacks "economic effect."

        4.4    Allocations upon Transfer of Partnership Interest.    Profits or Losses attributable to any Partnership Interest which has been transferred during any Partnership Fiscal Year shall be allocated between the transferor and the transferee as follows:

        (a)   For the days in such Fiscal Year prior to and including the date of the transfer, to the transferor.

        (b)   For the days in such Fiscal Year subsequent to the date of the transfer, to the transferee.

ARTICLE V

RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER

        5.1    Management and Control of the Partnership.    The General Partner shall manage and control all of the business operations and affairs of the Partnership and shall make all decisions affecting the Partnership business on all matters concerning the Partnership. Any Partnership action permitted or required by this Agreement to be made or taken by the General Partner shall be binding on all the Partners.

        5.2    Authority of the General Partner as to Third Persons.    Any Person dealing with the Partnership, the General Partner or any Partner may rely upon a certificate signed by the General Partner, thereunto duly authorized, concerning:

        (a)   The identity of such Partner;

        (b)   The existence or nonexistence of any fact or facts that constitute conditions precedent to acts by the General Partner or the Partners or in any other manner germane to the affairs of the Partnership;

        (c)   The Person or Persons who are authorized to execute and deliver any instrument or document of the Partnership; or

        (d)   Any act or failure to act by the Partnership or concerning any other matter whatsoever involving the Partnership, or any Partner as it regards Partnership business.

        5.3    Reimbursement of Expenses and Compensation of the General Partner.

        (a)   The General Partner or its designated Affiliate may be paid compensation for its services rendered in managing the business and affairs of the Partnership.

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        (b)   The General Partner or its designated Affiliate shall be entitled to reimbursement by the Partnership from time to time for all reasonable out-of-pocket expenses which are incurred by such Partner in connection with the business and affairs of the Partnership.

        5.4    Devotion of Time.    The General Partner shall devote such time, services and efforts as may be reasonably necessary for the proper furtherance, management, operation, maintenance and care of the Partnership business. The General Partner shall not be required to devote its entire time to the business of the Partnership.

        5.5    Right of Competition.    Each Partner, in its individual capacity or otherwise, and its respective principals and Affiliates, shall be free to engage and conduct or participate in any business or activity whatsoever, including, without limitation, the business conducted by the Partnership, without any accountability or obligation whatsoever to the Partnership or to any other Partner.

        5.6    Liability of the General Partner.    It is the intent of this Section 5.6 to restrict the liability and fiduciary duties of the General Partner to the maximum extent permitted under applicable law and the Partnership Act. Neither the Partnership nor any Partner shall have any claim against the General Partner by reason of any act or omission of the General Partner, provided that such act or omission was performed by the General Partner in the belief that the General Partner was acting within the scope of its authority under this Agreement and that such act or omission did not involve the General Partner's bad faith, willful misconduct or fraud. Notwithstanding the above, the General Partner shall have no liability hereunder for failing to act if such act required the consent of some or all of the Limited Partners and the required consent to such action was not granted. Any amendment, modification or repeal of this Section 5.6 or any provision in this Section 5.6 shall be prospective only and shall not in any way affect the limitations on the General Partner's liability to the Partnership and the Limited Partners under this Section 5.6 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

        5.7    Indemnification and Exculpation of the General Partner.    The Partnership shall indemnify the General Partner and each of its Affiliates, from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which the General Partner or any of its Affiliates, may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the General Partner, or any of its Affiliates, was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the General Partner did not reasonably believe that the General Partner, while acting as general partner, was acting in the best interests of the Limited Partners or, in all other cases, was acting in opposition of the Limited Partner's best interests; (iii) the General Partner or its Affiliates, actually received an improper personal benefit in money, property or services; or (iv) in the case of any criminal proceeding, the General Partner or its Affiliates, had reasonable cause to believe that the act or omission was unlawful. The termination of any proceeding by judgment, order or settlement does not create a presumption that the General Partner or its Affiliates, did not meet the requisite standard of conduct set forth in this Section 5.7. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the General Partner or its Affiliates, acted in a manner contrary to that specified in this Section 5.7. Any indemnification pursuant to this Section 5.7 shall be made only out of the assets of the Partnership, including insurance proceeds, if any.

        5.8    Transaction with Partners and Affiliates.    In addition to transactions specifically contemplated by the terms and provisions of this Agreement, the Partnership may enter into other transactions with

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any Partner or an Affiliate thereof or of the Partnership, provided that the terms of the transaction are fair and reasonable to the Partnership. To determine whether or not a transaction is fair and reasonable to the Partnership, the General Partner may consider the interests of any relevant Person, including any Partner or an affiliate thereof or the Partnership. In the absence of bad faith, willful misconduct or fraud by the General Partner, any transaction approved or effected by the General Partner on the Partnership's behalf with any Partner or an Affiliate thereof or of the Partnership, will be deemed to be fair and reasonable and not constitute a breach of the General Partner's fiduciary duty to the Partnership or to any Partner.

        5.9    Resolving Conflicts of Interest.    Unless expressly provided otherwise in this Agreement, if a potential conflict of interest arises between the General Partner or any of its owners or Affiliates, on the one hand, and the Partnership or any other Partner, on the other hand, the General Partner shall resolve the conflict of interest and any such resolution or course of action in respect of the conflict of interest shall be permitted and deemed approved, ratified and confirmed by all Partners, and shall not constitute a breach of this Agreement, of any other agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution or course of action is or (by operation of this Agreement) is deemed to be fair and reasonable to the Partnership. In connection with resolving any conflict of interest, the General Partner may consider (i) the relative interests of any Person (including its own interest) to the conflict, agreement, transaction or situation and the benefits and burdens relating to the interests; (ii) any customary or accepted industry practices or historical dealings with a particular Person; (iii) any applicable generally accepted accounting practices or principles; and (iv) such additional factors as the General Partner deems relevant, reasonable or appropriate under the circumstances. Nothing in this Agreement shall require the General Partner to consider the interests of any Person other than the Partnership and its Partners.

        5.10    Conversion in Anticipation of Public Offering.    Notwithstanding anything in this Agreement to the contrary, and in addition to the rights of the General Partner granted in this Agreement, in anticipation of a public offering of the Partnership Interests, the General Partner may engage, or cause the Partnership to engage, in any transaction or combination of transactions for the purpose of reorganizing, converting or otherwise changing the form of the Partnership into a corporation or other business entity. If the General Partner engages or causes the Partnership to engage in any transaction described in this section, no Limited Partner, as such, may veto or have any other power that may limit the General Partner's authority under this section. A reorganization, conversion or change in form under this section may not affect the Partnership's overall business or operations, and the equity interests in the successor corporation or other entity must be based on the Partners' proportionate interests in the Partnership.

        5.11    Officers.

        (a)    Number.    The principal officers of the Partnership may consist of any or all of the following: the President, one or more Vice Presidents, the Treasurer and the Secretary, and such other officers and assistant officers and agents as may be deemed necessary and elected or appointed by the General Partner, at such time and in such manner and for such terms as the General Partner may prescribe. Any two or more offices may be held by the same person. The compensation of the officers shall be determined by the General Partner.

        (b)    General Duties.    All officers and agents of the Partnership, as between themselves and the Partnership, shall have such authority, perform such duties and manage the Partnership as may be provided in this Agreement or as may be determined by the General Partner not inconsistent with this Agreement.

        (c)    Election, Term of Office and Qualifications.    The officers shall be chosen by the General Partner. Each officer shall hold office until a successor is chosen and qualified or until the death, resignation or removal of such officer.

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        (d)    Removal.    Any officer or agent appointed by the General Partner may be removed (with or without cause) by the General Partner whenever in its sole judgment the best interest of the Partnership will be served by such removal.

        (e)    Resignation.    Any officer may resign at any time by giving written notice to the General Partner. Such resignation shall take effect at the time specified in the notice, and, unless otherwise specified in the notice, the acceptance of such resignation shall not be necessary to make it effective. Such resignation shall be without prejudice to the contract rights, if any, of the Partnership.

        (f)    Vacancies.    Any vacancy in any office because of death, resignation, removal or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in this Agreement for election or appointment to such office.

        (g)    The President.    The President shall have active management of the operations of the Partnership, subject, however, to the control of the General Partner. The President shall, in general, perform all duties incident to the office of President and such other duties as from time to time may be assigned by the General Partner.

        (h)    The Vice President.    Each Vice President shall have such powers and perform such duties as the General Partner may from time to time prescribe or as the President may from time to time delegate to such officer. At the request of the President, any Vice President may temporarily act in place of the President. In the case of the death, absence, or inability to act of the President, the General Partner may designate any Vice President to perform the duties of the President. The General Partner may appoint different types of vice presidents with different day-to-day management responsibility over the operations of the Partnership, including but not limited to the power to employ persons to accomplish the purposes of the Partnership.

        (i)    The Secretary.    The Secretary shall keep or cause to be kept in books provided for that purpose, minutes of the meetings of the Partners; shall see that all notices are duly given in accordance with the provisions of this Agreement and as required by law; shall be custodian of the records and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned by the General Partner or the President.

        (j)    The Treasurer.    The Treasurer shall be the principal financial officer of the Partnership; shall have charge and custody of and be responsible for all funds of the Partnership and deposit all such funds in the name of the Partnership in such banks, trust companies or other depositories as shall be selected by the General Partner; shall receive and give receipts for moneys due and payable to the Partnership from any source; and, in general, shall perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned by the General Partner or the President. The Treasurer shall render to the General Partner, whenever the same shall be required, an account of all transactions accomplished as Treasurer and of the financial condition of the Partnership. The Treasurer shall, if required to do so by the General Partner, give the Partnership a bond in such amount and with such surety or sureties as may be ordered by the General Partner, for the faithful performance of the duties of office and for the restoration to the Partnership, in the case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind belonging to the Partnership which are held or controlled by the Treasurer.

        (k)    Other Officers.    The General Partner may create any other office it deems appropriate and may assign titles, duties and responsibilities to such officers as it determines in its sole discretion.

        (l)    Indemnification.    The officers shall be indemnified by the Partnership in such amounts and using any procedure as the General Partner determines.

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ARTICLE VI

RIGHTS AND STATUS OF LIMITED PARTNER

        6.1    General.    The Limited Partners have the rights and status of limited partners as provided in the Partnership Act. The Limited Partners may not take part in the management or control of the Partnership business, or sign for or bind the Partnership, such power being vested exclusively in the General Partner as provided herein.

        6.2    Limitation on Liability.    Except as provided under the Partnership Act, no Limited Partner shall have any personal liability whatsoever, whether to the Partnership, the General Partner or any creditor of the Partnership, for the debts of the Partnership, or any of its losses beyond the amount of the Limited Partners' Initial Capital Contribution and Additional Capital Contribution, if any. Accordingly, each Limited Partner's Partnership Interest shall be fully paid and nonassessable.

        6.3    Bankruptcy, Death.    Neither the Bankruptcy, death, disability, dissolution, liquidation or declaration of incompetence of a Limited Partner shall dissolve the Partnership, but the rights of a Limited Partner to share in the Profits and Losses of the Partnership and to receive distributions of Partnership funds, shall, on the happening of such an event, devolve upon the Limited Partner's estate, legal representative, or successors in interest, as the case may be, subject to this Agreement, and the Partnership shall continue as a limited partnership. In no event shall the estate, representative or successors in interest become a substitute Limited Partner, except in accordance with Article VII.

ARTICLE VII

TRANSFER OF PARTNERSHIP INTEREST

        7.1    Restriction on Transfer.

        (a)   Except upon the written approval of the General Partner or as expressly permitted herein, no Partner may Dispose of all or any portion of its Partnership Interest or any beneficial right or interest therein, or contract to do or permit any of the foregoing, whether voluntarily or by operation of law, and any attempt to do so shall be void.

        (b)   Notwithstanding anything to the contrary contained herein, unless all of the Partners consent, no Partner may Dispose of all or any portion of its Partnership Interest if such Disposition:

        (1)   when added to the total of all other Dispositions of Partnership Interests within the preceding twelve (12) months, would result in the Partnership being considered to have terminated within the meaning of Code Section 708; or

        (2)   would violate any federal securities laws or any applicable state securities laws (including suitability standards).

        (c)   In order to effectuate the purpose of this Section 7.1, each Partner agrees that to the extent its interest in the Partnership is at any time held by any Entity, such Partner will seek to transfer such interest only through a direct transfer of such interest in the manner contemplated in this Section 7.1, and that no transfer or other Disposition will be effected, directly or indirectly, unless approved by the General Partner.

        7.2    Assignees.

        (a)   The Partnership shall not recognize for any purpose any purported sale, assignment or transfer of all or any fraction of the interest of a Partner unless the provisions of this Article have been satisfied, all costs of such assignment have been paid by the assigning Partner, such Disposition is exempt from registration under the Securities Act of 1933, as amended, and any

15

other applicable state or federal securities act, such Disposition will not have any tax consequences to the Partnership or any Partner and there is delivered to all of the non-transferring Partners, upon request of the General Partner, an opinion of counsel acceptable to the General Partner with respect to such securities exemption and tax consequences, and there is filed with the Partnership a written and dated notification of such Disposition, in form satisfactory to the General Partner, executed by both the seller, assignor or transferor and the purchaser, Assignee or transferee and such notification (1) contains the acceptance by the purchaser, Assignee or transferee of and agreement to be bound by all the terms and provisions of this Agreement and (2) represents that such Disposition was made in accordance with all applicable securities laws and regulations (including suitability standards). Any Disposition shall be recognized by the Partnership as effective on the date of such notification if the date of such notification is within fifteen (15) days of the date on which such notification is filed with the Partnership, and otherwise shall be recognized as effective on the date such notification is filed with the Partnership.

        (b)   Any Partner who assigns all its interest in the Partnership shall cease to be a Partner, except that, unless and until a substituted Partner has been admitted into the Partnership, the assigning Partner shall retain the statutory rights of the assignor of a partner's interest under the Partnership Act.

        (c)   A Person who is the Assignee of all or any fraction of the interest of a Partner, but does not become a substituted Partner, and desires to make a further assignment of such interest, shall be subject to all the provisions of this Article to the same extent and in the same manner as any Partner desiring to make an assignment of its interest.

        7.3    Substituted Partner.

        (a)   Except as otherwise provided in this Article VII, no Partner shall have the right to substitute in its place a purchaser, Assignee, transferee, donee, heir, legatee or other recipient of all or any portion of the Partnership Interest of such Partner. Any other such purchaser, Assignee, transferee, donee, legatee, distributee or other recipient of an interest shall be admitted to the Partnership as a substituted Partner only with the consent of the General Partner.

        (b)   No Person shall become a substituted Partner until such Person has satisfied the requirements of this Article and until that time shall have no right to vote on, consent to or approve any matter or decision with respect to the Partnership; provided, however, that for the purpose of allocating Profits, Losses and other items and distributing Distributable Cash Flow, a Person shall be treated as having become, and as appearing in the records of the Partnership as a Partner on such date as the sale, assignment or transfer to such person was recognized by the Partnership pursuant to Section 7.2.

        7.4    Basis Adjustment.    Upon the transfer of all or part of an interest in the Partnership, at the request of the transferee of the interest, the General Partner with the consent of all of the Partners may cause the Partnership to elect, pursuant to Section 754 of the Code, to adjust the basis of the Partnership properties as provided in Section 734 and 743 of the Code. The Partnership may require the requesting transferee to bear all of the accounting and administrative costs as a condition to its consent.

ARTICLE VIII

BANK ACCOUNTS, BOOKS OF ACCOUNT, REPORTS AND FISCAL YEAR

        8.1    Bank Accounts; Investments.    The General Partner shall establish one or more bank accounts in the name of the Partnership into which all Partnership funds shall be deposited. No other funds shall be deposited into these accounts. However, pending their withdrawal for Partnership purposes,

16

Partnership funds may be invested in such securities and money market funds as the General Partner may select.

        8.2    Books and Records.    The General Partner shall keep complete and accurate books of account and records relative to the Partnership's business. The books and records of the Partnership shall be kept on the method of reporting for tax and financial reporting purposes as determined by the General Partner. The Partnership books and records shall at all times be maintained at the principal business office of the Partnership or its accountants and shall be available for examination at such office by any Partner or its duly authorized representatives during regular business hours. Any Partner, at its own expense, may cause an audit of the books and records of the Partnership during regular business hours and shall furnish a written report thereof to the other Partners.

        8.3    Tax Returns and Information.    The Partners intend for the Partnership to be treated as a partnership for tax purposes. The General Partner shall prepare or cause to be prepared all federal, state and local income and other tax returns which the Partnership is required to file. The method of computing Depreciation for tax purposes, and the decision whether to exercise or to revoke any or all of the elections available to the Partnership under the Code, shall be made by all of the Partners. Each of the Partners shall supply to the Partnership the information necessary to properly give effect to any such election.

        8.4    Tax Matters Partner.    The General Partner will serve as the tax matters partner of the Partnership pursuant to Section 6231(a)(7) of the Code.

        8.5    Fiscal Year.    The Fiscal Year of the Partnership shall be the calendar year.

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

        9.1    Events Causing Dissolution.

        (a)   The Partnership shall be dissolved upon the happening of any of the following events:

        (1)   The entry of a final judgment, order or decree of a court of competent jurisdiction adjudicating the Partnership to be Bankrupt, and the expiration without appeal of the period, if any, allowed by applicable law in which to appeal therefrom;

        (2)   The Bankruptcy, liquidation or dissolution of the General Partner or any other withdrawal event by the General Partner under the Partnership Act;

        (3)   The election to dissolve the Partnership by the General Partner; or

        (4)   The entry of a decree of judicial dissolution under the Partnership Act.

        (b)   Dissolution of the Partnership shall be effective as of the day on which the event occurs giving rise to the dissolution, but the Partnership shall not terminate until there has been a winding up of the Partnership's business and affairs, and the assets of the Partnership have been distributed as provided in Section 9.2.

        (c)   Notwithstanding anything contained to the contrary in Section 9.1(a), if a dissolution of the Partnership would otherwise occur due to the occurrence of an event of dissolution under Sections 9.1(a)(2), the Partnership may be reconstituted if either (i) there remains at least one General Partner and such remaining General Partner or General Partners elect to continue the business of the Partnership or (ii) within ninety (90) days of such event of dissolution a Majority in Interest of the Partners agree in writing to continue the business of the Partnership and, to the extent they desire, or if there is no remaining General Partner, the Limited Partners agree to the

17

appointment of one or more new General Partners effective as of the date of such event of dissolution.

        9.2    Liquidation; Sale of Substantially all of the Assets.

        (a)   Upon dissolution of the Partnership, the General Partner may cause any part or all of the Partnership assets to be sold in such manner as the General Partner shall reasonably determine in an effort to obtain the best prices for such assets (provided, however, that the General Partner may distribute Partnership assets in kind to the Partners to the extent practicable). During the liquidation period, the General Partner shall have the right to continue to operate and otherwise to deal with Partnership property to the same extent the General Partner has such right prior to dissolution of the Partnership. In the event that the sole remaining General Partner has dissolved, withdrawn or becomes Bankrupt or legally incapacitated, a Majority in Interest of the Limited Partners may, within thirty (30) days after any such occurrence, appoint a Person to perform the functions of the General Partner in liquidating the assets of the Partnership and winding up its affairs.

        (b)   In settling accounts after dissolution, the assets of the Partnership shall be paid or distributed in the following order:

        (1)   To third party creditors, in the order of priority as provided by law;

        (2)   Then, to the Partners for any unreimbursed costs and expenses owing to the Partners pursuant to this Agreement;

        (3)   Then, to the repayment of any loans, with interest, made by any Partner to the Partnership, and if more than one Partner has any outstanding loans owing from the Partnership, such repayment shall be made, pro rata, in accordance with the total amount outstanding to each Partner;

        (4)   Then, an amount equal to the then remaining positive balances in the Capital Accounts of the Partners shall be distributed to the Partners in proportion to the amount of such balances; and

        (5)   Then, any remainder shall be distributed to the Partners, pro rata, in accordance with their respective Sharing Ratios.

        9.3    Distributions in Kind.    If any assets of the Partnership are distributed in kind pursuant to this Agreement, such assets shall be distributed to the Partners entitled thereto as tenants-in-common in the same proportions as the Partners would have been entitled to cash distributions if such property had been sold for cash at its fair market value and the net proceeds thereof distributed to the Partners. In the event that distributions in kind are made to the Partners, the Capital Account balances of such Partners shall be adjusted to reflect the Partners' allocable share of gain or loss which would have resulted if the distributed property had been sold at its fair market value.

ARTICLE X

POWER OF ATTORNEY

        10.1    Appointment of the General Partner as Attorney-in-Fact.

        (a)   Each Limited Partner, by the execution of this Agreement, irrevocably constitutes and appoints the General Partner, its true and lawful agent and attorney-in-fact with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents, instruments and conveyances that may be necessary

18

or appropriate to carry out the provisions or purposes of this Agreement, including without limitation:

        (1)   all certificates and other instruments, including, but not limited to, counterparts of this Agreement, and any amendment thereof that the General Partner deems appropriate to qualify or continue the Partnership as a partnership or a partnership in which the Limited Partner will have limited liability comparable to that provided by the Partnership Act, in the jurisdictions in which the Partnership may conduct business;

        (2)   any amendment, supplement or restatement of this Agreement approved by the Partners in accordance with Section 11.5;

        (3)   all instruments that the General Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of this Agreement; and

        (4)   all conveyances and other instruments that the General Partner deems appropriate to reflect the dissolution and termination of the Partnership.

        (b)   The appointment of the General Partner by each Limited Partner as agent and attorney-in-fact shall be deemed irrevocable and to be a power coupled with an interest and shall survive the legal incapacity of any Person hereby giving such power and the Disposition of all or any part of the Partnership Interest of such Person; provided, however, that in the event of the Disposition by a Limited Partner of all its interest, the foregoing power of attorney shall survive such Disposition only until such time as the transferee shall have been admitted to the Partnership as a Limited Partner, and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.

ARTICLE XI

MISCELLANEOUS

        11.1    Notices.    All notices given pursuant to this Agreement shall be in writing and shall either be mailed by first class mail, postage prepaid, registered or certified with return receipt requested, or delivered in person to the intended addressee, or sent by telecopy followed by confirmatory letter. Notice so mailed shall be effective upon the expiration of three business days after its deposit. Notice given in any other manner shall be effective only if and when received by the addressee. For purposes of notice, the address of the Partners shall be as stated under their names on the attached Schedule 1; provided, however, that each Partner shall have the right to change its address for notice hereunder to any other location by the giving of ten (10) days notice to the General Partner (or in the case of the General Partner, to the other Partners) in the manner set forth above.

        11.2    Governing Law; Submission to Jurisdiction.    This Agreement shall be governed by and construed in accordance with the substantive federal laws of the United States and the internal laws of the State of Delaware.

        11.3    Successors and Assigns.    This Agreement shall be binding upon and shall inure to the benefit of the Partners, and their respective heirs, legal representatives, successors and assigns; provided, however, that nothing contained herein shall negate or diminish the restrictions set forth in Article VII.

        11.4    Entire Agreement.    This Agreement, including the schedules and exhibits, if any, contains the entire agreement among the Partners relating to the subject matter hereof and all prior agreements relative hereto which are not contained herein are terminated.

        11.5    Amendments.    Amendments or modifications may be made to this Agreement only by setting the same forth in a document duly executed by all of the Partners, and any alleged amendment

19

or modification herein which is not so documented shall not be effective as to any Partner. Notwithstanding the foregoing, the General Partner (under its power of attorney), without the approval of the Limited Partner, may amend this Agreement in any way that does not affect materially the Limited Partner's fundamental economic interests in the Partnership.

        11.6    Severability.    This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any provision of this Agreement or the application thereof to any Person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain among the Partners as expressed herein, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

        11.7    Gender and Number.    Whenever required by the context, as used in this Agreement, all personal pronouns shall include the other genders whether using the masculine, feminine or neuter gender, and the singular shall include the plural.

        11.8    Exhibits and Schedules.    Each exhibit and schedule to this Agreement is incorporated herein for all purposes.

        11.9    Creditors Not Benefited.    Nothing in this Agreement is intended to nor shall it benefit any creditor of the Partnership. No creditor of the Partnership will be entitled to require the General Partner to solicit or accept any loan or Additional Capital Contribution for the Partnership or to enforce any right which the Partnership or any Partner may have against a Partner, whether arising under this Agreement or otherwise.

        11.10    Captions.    The Article and Section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent or for any purpose, to limit or define the text of any Article or Section.

        11.11    Counterparts.    This Agreement may be executed in counterparts, each of which shall be an original but all of which shall constitute but one document.

        11.12    Estoppel Certificate.    Each Partner shall at any time and from time to time upon not less than 20 days' prior written notice from the General Partner execute, acknowledge, and send to the Partnership a statement in writing certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the Agreement is in full force and effect as modified and stating the modifications) and stating whether or not as to all Partners any is in default in keeping, observing or performing any of the terms contained in this Agreement, and if in default, specifying each default (limited, as regards the other's defaults, to those defaults of which the certifying Partner has knowledge).

[Separate signature pages attached]

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        EXECUTED to be effective the day, month and year above first written.

General Partner:	Cornell Companies Administration, LLC
	By:	/s/ KEVIN KELLY Kevin Kelly, Manager
Limited Partner:	Cornell Companies Management Holdings, LLC
	By:	/s JOAN L. DOBRZYNSKI Joan L. Dobrzynski, Manager

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SCHEDULE 1

        Names, Addresses and Sharing Ratios of the Partners

Names and Addresses of Partners	Sharing Ratio
General Partner:
Cornell Companies Administration, LLC 1700 West Loop South, Suite 1500 Houston, TX 77027 Attn: Kevin Kelly, Manager	1.00	%
Limited Partner:
Cornell Companies Management Holdings, LLC c/o Delaware Trust Capital Management 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Attn: Joan L. Dobrzynski, Manager	99.0	%

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AGREEMENT OF LIMITED PARTNERSHIP OF CORNELL COMPANIES MANAGEMENT, LP
SCHEDULE 1

EX-3.14

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Exhibit 3.14

CERTIFICATE OF FORMATION
OF
CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC

        I, the undersigned natural person of the age of eighteen years or more, acting as an authorized person of a limited liability company under the Delaware Limited Liability Company Act, as amended, do hereby submit the following Certificate of Formation for such limited liability company:

ARTICLE I

        The name of the limited liability company is Cornell Companies Management Holdings, LLC.

ARTICLE II

        The address of the limited liability company's initial registered agent in the State of Delaware is 1209 Orange Street, in the 'City of Wilmington,' County of New Castle. The name of its initial registered agent at such address is The Corporation Trust Company.

        IN WITNESS WHEREOF, I have hereunto set my hand this 18^th day of December, 2001.

/s/ JAMES HOWARD Name: James Howard

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CERTIFICATE OF FORMATION OF CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC

EX-3.15

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Exhibit 3.15

Limited Liability Company Agreement
of
CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC
(a Delaware Limited Liability Company)

        This Limited Liability Company Agreement of Cornell Companies Management Holdings, LLC dated as of December 18, 2001 (this "Agreement"), is hereby adopted, executed and agreed to by the persons listed below.

        1.    Formation.    Cornell Companies Management Holdings, LLC (the "Company") was formed on the date hereof, as a Delaware limited liability company under and pursuant to the Delaware Limited Liability Company Act, as amended (the "Act"

        2.    Term.    The Company shall have a perpetual existence.

        3.    Purposes.    The purposes of the Company are to carry on any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall have all of the powers to conduct such business as permitted under the Act.

        4.    Member.    Cornell Companies, Inc., a Delaware corporation, is the sole member of the Company.

        5.    Sharing Ratios.    The Member shall receive the allocation of all profits, losses, gains, deductions and credits with respect to the operations of the Company.

        6.    Contributions.    Without creating any rights in favor of any third party, the Member may, from time to time, make contributions of cash or property to the capital of the Company, but shall have no obligation to do so.

        7.    Distributions.    The Member shall be entitled (a) to receive all distributions (including, without limitation, liquidating distributions) made by the Company and (b) to enjoy all other rights, benefits and interests in the Company.

        8.    Management.    The management of the Company is fully reserved to one or more Managers, who shall serve at the pleasure of the Member. Any Manager may be removed by and replaced at any time by the Member. The Member may increase or decrease the number of Managers, but not below one, at any time. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Manager(s), who shall make all decisions and take all actions for the Company. The initial Manager of the Company shall be Kevin Kelly. Any action to be taken by the Manager(s) shall require the consent of each Manager. The Manager(s) may from time to time delegate to one or more persons such authority as the Manager(s) may deem advisable and may elect one or more persons as a president, vice president, secretary, treasurer or any other title of an officer (".'Officers") of the Company as determined by the Manager(s) to act on behalf of the Company with respect to any matter or matters delegated to such person by the Manager(s). No officer need be a resident of the State of Delaware. In the event the Manager(s) appoint a person as an officer of the Company, the Manager(s) shall be deemed to have assigned and may thereafter assign titles to particular Officers. Unless the Manager(s) decide otherwise all officers of the Company, as between themselves and the Company, shall have such authority, perform such duties and manage the Company as provided below.

        (a)    The President.    The President shall have the active, executive management of the operations of the Company, subject however to the control of the Manager(s). The President shall, in general, perform all duties incident to the office of president and such other duties as from time to time may be assigned to him or her by the Manager(s).

        (b)    The Vice President.    The Vice President shall have such powers and perform such duties as the Manager(s) may from time to time prescribe or as the President may from time to time

delegate to him or her. At the request of the President, the Vice President may temporarily act in place of the President. In the case of the death, absence, or inability to act of the President, the Manager(s) may designate the Vice President to perform the duties of the President.

        (c)    The Secretary.    The Secretary shall keep or cause to be kept the minutes of any Company meetings; shall see that all notices are duly given in accordance with the provisions of applicable law; shall be custodian of the records and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned by the Manager(s) or by the President.

        (d)    The Treasurer.    The Treasurer shall be the principal financial officer of the Company; shall have charge and custody of and be responsible for all funds of the Company and deposit all such funds in the name of the Company in such banks, trust companies or other depositories as shall be selected by the Manager(s); shall receive and give receipts for moneys due and payable to the Company from any source; and, in general, shall perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned by the Manager(s) or by the President. The Treasurer shall render to the President and the Manager(s), whenever the same shall be required, an account of all transactions accomplished as treasurer and of the financial condition of the Company.

        9.    Tax Matters.    The Company and the Manager(s) shall comply with all requirements of the Internal Revenue Code of 1986, as amended, with respect to the Company.

        10.    Indemnification.To the extent allowed under the laws of the State of Delaware, the Company shall indemnify the Manager(s) and the Company's Officers and employees from and against any and all losses, claims, damages, liabilities, joint or. several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Company as set forth in this Agreement in which a Manager, Officer or employee may be involved, or is threatened to be involved, as a party or otherwise, REGARDLESS OF WHETHER ARISING FROM ANY ACT OR OMISSION WHICH CONSTITUTED THE SOLE, PARTIAL OR CONCURRENT NEGLIGENCE (WHETHER ACTIVE OR PASSIVE). OF A MANAGER, OFFICER OR EMPLOYEE, unless it is established that: (1) the act or omission of such Manager, Officer or employee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (2) the Manager, Officer or employee actually received an improper personal benefit in money, property or services; or (3) in the case of any criminal proceeding, the Manager, Officer or employee had reasonable cause to believe that the act or omission was unlawful. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Manager, Officer or employee did not meet the requisite standard of conduct set forth in this Section 10. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Manager, Officer or employee acted in a manner contrary to that specified in this Section 10. Any indemnification pursuant to this Section 10 shall be made only out of the assets of the Company, including insurance proceeds, if any.

        11.    Transfers.    The Member may freely transfer all or any part of its membership interest in the Company at any time, and any such transferee shall become an additional or substituted Member of the Company, as applicable, with full rights of a Member as set forth herein and in the Act.

        12.    Dissolution.    The Company shall dissolve and its affairs shall be wound up at such time, if any, as the Member may elect or as may be required under the Act. No other event will cause the Company to dissolve.

        13.    Amendment.    This Agreement may be amended at any time by and with the consent of the Member.

        14.    Governing Law.    THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (EXCLUDING ITS CONFLICT-OF-LAWS RULES).

[The remainder of this page is intentionally blank]

SCHEDULE 1

Name, Address, Initial Capital Contribution and Sharing Ratio

Name and Address	Initial Capital Contribution		Sharing Ratio
Cornell Companies, Inc. 1700 West Loop South Suite 1500 Houston, TX 77027	$	1,000	100	%

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Limited Liability Company Agreement of CORNELL COMPANIES MANAGEMENT HOLDINGS, LLC (a Delaware Limited Liability Company)
SCHEDULE 1

EX-3.16

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Exhibit 3.16

CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP
CERTIFICATE OF LIMITED PARTNERSHIP

        Cornell Companies Management, LLC, a Delaware limited liability company, serving as the sole general partner of Cornell Companies Management Services, Limited Partnership, a Delaware limited partnership, hereby certifies that:

1.

The name of the limited partnership is Cornell Companies Management Services, Limited Partnership,



2.

The address of the Partnership's registered office is Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle. The name of the registered agent for service of process in the State of Delaware at this address is The Corporation Trust Company.



3.

The name and mailing address of the sole general partner is as follows:

Cornell Companies Management, LLC
1700 West Loop South
Suite 1500
Houston, TX 77027

        IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited Partnership on the 18^th day of December, 2001.

[Remainder of page intentionally blank]

Comell Companies Management Services, Limited Partnership, a Delaware limited partnership
By:	Comell Companies Management, LLC, a Delaware limited liability company
	By:	/s/ KEVIN KELLY
	Name: Kevin Kelly Title: Manager

2

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CORNELL COMPANIES MANAGEMENT SERVICES, LIMITED PARTNERSHIP CERTIFICATE OF LIMITED PARTNERSHIP

EX-3.17

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Exhibit 3.17

CORNELL COMPANIES MANAGEMENT SERVICES
LIMITED PARTNERSHIP
(A Delaware Limited Partnership)

LIMITED PARTNERSHIP AGREEMENT

THESE PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
PURSUANT TO THE PROVISIONS OF ANY STATE SECURITIES ACT

CERTAIN RESTRICTIONS ON TRANSFERS OF INTERESTS ARE SET FORTH HEREIN

Table of Contents

		Page
ARTICLE I DEFINITIONS		1
ARTICLE II GENERAL PROVISIONS		4
	2.1 Formation of the Partnership	4
	2.2 Name	4
	2.3 Principal Office, Registered Agent, Registered Office	4
	2.4 Term	5
	2.5 Other Acts and Filings	5
	2.6 Purposes and Character of Business; Powers	5
ARTICLE III CAPITAL CONTRIBUTIONS		5
	3.1 Capital Contributions of the Partners.	5
	3.2 Partnership Capital.	5
	3.3 Liability of Partners.	6
	3.4 Loans by Partners or Affiliates	6
	3.5 Capital Accounts.	6
	3.6 Sharing Ratios	7
	3.7 Partnership Debt	7
ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS		7
	4.1 Distributions	7
	4.2 Allocations of Profits and Losses.	7
	4.3 Compliance with Code	10
	4.4 Allocations upon Transfer of Partnership Interest	10
ARTICLE V RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER		10
	5.1 Management and Control of the Partnership	10
	5.2 Authority of the General Partner as to Third Persons	10
	5.3 Reimbursement of Expenses and Compensation of the General Partner.	11
	5.4 Devotion of Time	11
	5.5 Right of Competition	11
	5.6 Liability of the General Partner	11
	5.7 Indemnification and Exculpation of the General Partner	11
	5.8 Transaction with Partners and Affiliates	12
	5.9 Resolving Conflicts of Interest	12
	5.10 Conversion in Anticipation of Public Offering	12
	5.11 Officers.	12
ARTICLE VI RIGHTS AND STATUS OF LIMITED PARTNER		14
	6.1 General	14
	6.2 Limitation on Liability	14
	6.3 Bankruptcy, Death	14
ARTICLE VII TRANSFER OF PARTNERSHIP INTEREST		14
	7.1 Restriction on Transfer.	14
	7.2 Assignees.	15
	7.3 Substituted Partner.	15
	7.4 Basis Adjustment	15
ARTICLE VIII BANK ACCOUNTS, BOOKS OF ACCOUNT, REPORTS AND FISCAL YEAR		16
	8.1 Bank Accounts, Investments	16
	8.2 Books and Records	16
	8.3 Tax Returns and Information	16

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	8.4 Tax Matters Partner	16
	8.5 Fiscal Year	16
ARTICLE IX DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP		16
	9.1 Events Causing Dissolution.	19
	9.2 Liquidation; Sale of Substantially all of the Assets.	17
	9.3 Distributions in Kind	17
ARTICLE X POWER OF ATTORNEY		18
	10.1 Appointment of the General Partner as Attorney-in-Fact.	18
ARTICLE XI MISCELLANEOUS		18
	11.1 Notices	18
	11.2 Governing Law; Submission to Jurisdiction	18
	11.3 Successors and Assigns	19
	11.4 Entire Agreement	19
	11.5 Amendments	19
	11.6 Severability	19
	11.7 Gender and Number	19
	11.8 Exhibits and Schedules	19
	11.9 Creditors Not Benefited	19
	11.10 Captions	19
	11.11 Counterparts	19
	11.12 Estoppel Certificate	19

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AGREEMENT OF LIMITED PARTNERSHIP
OF
CORNELL COMPANIES MANAGEMENT SERVICES LIMITED PARTNERSHIP

        This Agreement dated effective as of the 18th day of December, 2001, is made and entered into by and among Cornell Companies Management, LLC, a Delaware limited liability company, as General Partner, and the Person listed on the signature pages attached hereto, as a Limited Partner, and such Persons who become Partners of the Partnership as hereinafter provided.

ARTICLE I

DEFINITIONS

        The following definitions shall for all purposes, unless otherwise clearly indicated, apply to the terms used in this Agreement:

        "Additional Capital Contribution" means, as to any Partner, any amount contributed, required to be contributed or deemed to be contributed to the capital of the Partnership by the Partner pursuant to Section 3.1(b).

        "Adjusted Capital Account" means, with respect to any Partner, such Partner's Capital Account as of any relevant date after giving effect to the following adjustments:

        (a)   (a) Credit to such Capital Account any amounts which such Partner is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); and

        (b)   (b) Debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

        The foregoing definition of "Adjusted Capital Account" is intended to comply with the provisions of Treasury Regulations Sections 1.704-1(b)(2)(ii)(d) and 1.704-2 and shall be interpreted consistently therewith.

        "Adjusted Capital Account Deficit" means, with respect to any Partner, the deficit balance, if any, in that Partner's Adjusted Capital Account.

        "Affiliate" means, with respect to any party hereto, (a) any person controlled by, controlling, or under common control with such party,. (b) any person owning or controlling twenty percent (20%) or more of the outstanding voting securities of such party, (c) any officer, director, partner or manager of such party or of any Person specified in (a) or (b) above, and (d) any Entity in which any officer, director, partner or manager of such party is an officer, director or manager.

        "Agreement" means this Agreement of Limited Partnership, as may be amended or supplemented from time to time.

        "Assignee" means a Person or Entity to whom a Limited Partner's Partnership Interest has been transferred, by assignment or otherwise, and who thereby has an interest in the Partnership equivalent to that of a Limited Partner but (a) limited to the rights and obligations appurtenant to a Partnership Interest as a Limited Partner to share in the income, loss and distributions, including liquidating distributions and (b) otherwise subject to the limitations under the Partnership Act on the rights of an assignee who has not become a substituted Limited Partner in accordance with this Agreement.

        "Available Funds" means Partnership cash on hand, as of the date of the computation and as determined by all of the Partners, including (without limitation) cash derived from any one or more of the following sources: (a) Capital Contributions of the Partners made pursuant to the

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terms of this Agreement, (b) all Partnership operating income and (c) the proceeds from any sale, financing, refinancing, condemnation or casualty.

        "Bankruptcy" or "Bankrupt" means any Person who is insolvent, who has filed a voluntary petition in bankruptcy or against whom a third party has filed an involuntary petition in bankruptcy and the same has not been dismissed within thirty (30) days.

        "Book Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except (a) the initial Book Value of any asset contributed by a Partner to the Partnership shall be the fair market value of such asset, as determined by all of the Partners; (b) the Book Value of all Partnership assets shall be adjusted in the event of a revaluation as provided in Section 3.5(d); (c) the Book Value of any Partnership asset distributed to any Partner shall be the fair market value of such asset on the date of distribution as determined by all of the Partners; and (d) such Book Value shall be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

        "Capital Account" means with respect to any Partner, the account maintained for such Partner in a manner which the General Partner determines is in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).

        "Capital Contributions" means the total of all capital contributions of the Partners pursuant to Section 3.1, including, but not limited to, the Initial Capital Contributions and the Additional Capital Contributions.

        "Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of Delaware pursuant to Section 2.4, as amended from time to time.

        "Code" means the United States Internal Revenue Code of 1986, as amended from time to time.

        "Corporate Services Agreement" means the agreement among the Partnership and the Clients (as defined therein) to perform the Services (as defined therein), the form of which is attached as Exhibit A.

        "Depreciation" means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period (as a result of property contributions or adjustments to such values), Depreciation shall be adjusted as necessary so as to be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization, or other cost recovery deduction for such year or other period is zero, Depreciation for such year or other period shall be determined with reference to such beginning Book Value using any reasonable method selected by the General Partner.

        "Disposition" means, with respect to any asset (including, but not limited to, Partnership Interests or any portion thereof), a sale, assignment, transfer, conveyance, gift, exchange, or other disposition of such asset, whether such disposition be voluntary, involuntary or by operation of law.

        "Distributable Cash Flow" means, cash available to the Partnership from any source (other than proceeds of liquidation) after (i) paying or making adequate provision for any debts or liabilities of the Partnership or any Operating Cash Expenses and (ii) establishing reserves to meet current or reasonably expected obligations of the Partnership to the extent that the General Partner shall determine such reserves to be reasonably necessary or advisable.

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        "Entity" means any Person other than a natural person.

        "Fiscal Year" means the fiscal year of the Partnership as established in Section 8.6 hereof.

        "General Partner" means Cornell Companies Management, LLC, a Delaware limited liability company, or any successor or successors to all or any part of such General Partner's interest, each in the capacity as a general partner of the Partnership.

        "Initial Capital Contribution" means, as to any Partner, the amount contributed to the capital of the Partnership by a Partner pursuant to Section 3.1(a).

        "Limited Partner" means each Person or Entity who executes this Agreement and is reflected as a Limited Partner below or who becomes an additional or substituted Limited Partner pursuant to this Agreement, each in the capacity as a limited partner of the Partnership.

        "Majority in Interest" means, with respect to any group of Partners, a combination of such partners who, in the aggregate, own more than fifty percent (50%) of the Sharing Ratios owned by all of such group of Partners.

        "Minimum Gain" means, with respect to all nonrecourse. liabilities of the Partnership, the minimum amount of gain that would be realized by the Partnership if the Partnership disposed of the Partnership property subject to such liability in full satisfaction thereof computed in accordance with Treasury Regulations Section 1.704-2(d).

        "Minimum Gain Share" means, for each Partner, such Partner's share of Minimum Gain for the Fiscal Year (after taking into account any decrease in Minimum Gain for such year), such share to be determined under Treasury Regulations Section 1.704-2(g).

        "Nonrecourse Deductions" means, for each Fiscal Year or other period, an amount of Partnership deductions that are characterized as "nonrecourse deductions" under Treasury Regulations Section 1.704-2(c).

        "Operating Cash Expenses" means, with respect to any Fiscal Year, the amount of cash disbursed by the Partnership in such period in the ordinary course of its business, including, without limitation, the principal and interest payments on all debt, if any, and such other principal and interest payments required to be made in connection with any loan to the Partnership or any loan secured by a lien on any of the Partnership's property, but not including distributions to any Partner in respect of such Partner's Partnership Interest.

        "Partner" means a General Partner or a Limited Partner.

        "Partner Nonrecourse Debt" means any nonrecourse debt (as defined in Treasury Regulations Section 1.704-2(b)(4)) of the Partnership for which any Partner bears the economic risk of loss, in accordance with Treasury Regulations Sections 1.704-2(b)(4) and 1.752-2.

        "Partner Nonrecourse Debt Minimum Gain" means, for each Partner, the amount of Minimum Gain for the Fiscal Year or other period attributable to such Partner's Partner Nonrecourse Debt determined in accordance with Treasury Regulations Section 1.704-2(i)(2).

        "Partner Nonrecourse Deductions" means any Losses or other losses or deductions of the Partnership that must be allocated to a Partner who bears the economic risk of loss for the partner nonrecourse liability to which the Losses or other losses or other deductions relate, determined in accordance with Treasury Regulations Section 1.704-2(i)(1).

        "Partnership" means the limited partnership established by this Agreement.

        "Partnership Act" means the Delaware Revised Uniform Limited Partnership Act, as from time to time amended or superceded.

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        "Partnership Interest" means with respect to any Partner, all of such Partner's ownership interest as a Limited Partner or General Partner in the Partnership at any particular time including all of the rights and obligations of such Partner under this Agreement and the Partnership Act.

        "Person" or "Person" means an individual, a corporation, a sole proprietorship, a partnership, a limited liability company, an association, a trust, a joint venture, or any other entity or organization.

        "Profits" and "Losses" means, for each Fiscal Year or other period, an amount equal to the Partnership's taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

        (a)   Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

        (b)   Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition, shall be subtracted from such taxable income or loss;

        (c)   Gain or loss resulting from any Disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property Disposed of, notwithstanding that the adjusted tax basis of such property differs from such Book Value;

        (d)   In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of "Depreciation" herein; and

        (e)   Notwithstanding any other provision of this definition, any items which are specifically allocated pursuant to Section 4.2(c) shall not be taken into account in computing Profits and Losses.

        "Sharing Ratio" means with respect to any Partner, the percentage assigned to such Partner in accordance with Section 3.6.

        "Treasury Regulations" means the Income Tax Regulations promulgated under the Code, as such regulations. may be amended from time to time (including corresponding provisions of succeeding regulations).

ARTICLE II

GENERAL PROVISIONS

        2.1    Formation of the Partnership.    The Partners hereby form a limited partnership pursuant to the Partnership Act.

        2.2    Name.    The name of the Partnership is Cornell Companies Management Services Limited Partnership. The business of the Partnership shall be conducted under its name, or any other name as determined by the General Partner to be in the best interest of the Partnership.

        2.3    Principal Office, Registered Agent, Registered Office.    The principal office of the Partnership shall be at 1700 West Loop South, Suite 1500, Houston, Texas. The initial registered agent and

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registered office of the Partnership are set forth in the Certificate of Limited Partnership. The General Partner may at any time change the location of the Partnership's office and may establish additional offices, if it deems advisable. The General Partner shall promptly give the Limited Partners written notice of any change in location of the principal office of the Partnership.

        2.4    Term.    The Partnership shall commence business on the date of the original filing of the Certificate of Limited Partnership and its existence shall be perpetual unless terminated sooner as herein provided.

        2.5    Other Acts and Filings.    The Partners shall from time to time execute or cause to be executed all such certificates or other documents, and do or cause to be done all such filing, recording, publishing or other acts, as the General Partner may deem to be appropriate to comply with the requirements of law for the formation and/or operation of a limited partnership in the State of Delaware and all other jurisdictions where the Partnership shall desire to conduct business and to preserve the limited liability of the Limited Partners to the fullest possible extent.

        2.6    Purposes and Character of Business; Powers.    The purposes and character of the business of the Partnership are to perform the Services, as defined in the Corporate Services Agreement, and to transact any lawful business that may be conducted by a Delaware limited partnership. The Partnership shall carry out the foregoing activities pursuant to the arrangements set forth in this Agreement.

ARTICLE III

CAPITAL CONTRIBUTIONS

        3.1    Capital Contributions of the Partners.

        (a)    Initial Capital Contributions.    Upon formation of the Partnership, each of the Partners shall contribute cash or property to the Partnership in the amount and in the manner set forth as the Initial Capital Contribution of such Partner on Schedule 1 attached hereto and hereby made apart hereof. Such cash or property shall be the Initial Capital Contributions of the Partners to the Partnership and, upon making such contribution, each Partner shall receive its Partnership Interest and its Sharing Ratio. The Partners agree to make their respective Initial Capital Contributions.

        (b)    Additional Capital Contributions.    No Partner shall be required to make Additional Capital Contributions to the Partnership. However, at the request of the General Partner, the Limited Partners may make Additional Capital Contributions to the Partnership for any reason the General Partner determines to further the business of the Partnership. Upon the contribution of an Additional Capital Contribution, such contributing Partner shall receive a credit to its Capital Account in the amount of such contribution.

        (c)    If any Partner makes a payment directly to a creditor or another Partner in satisfaction of any indebtedness of the Partnership pursuant to any indemnity, guaranty or contribution obligation of such Partner which has been approved by the General Partner in respect of Partnership indebtedness, or if any collateral interest granted by such Partner to such creditor or other Partner which has been approved by the General Partner to secure any such indebtedness shall be foreclosed and the proceeds of such foreclosure shall be applied to reduce or satisfy such indebtedness and any foreclosure-related expenses, such Partner shall be deemed to have made an Additional Capital Contribution equal to such amount.

        3.2    Partnership Capital.

        (a)   Except as may be otherwise specifically provided in this Agreement, no Partner shall be paid interest on any Capital Contribution to the Partnership.

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        (b)   No Partner shall have the right to demand or withdraw all or any part of its Capital Contribution or to receive any return on any portion of its Capital Contribution, except as may be otherwise specifically provided in this Agreement.

        (c)   Under circumstances involving a return of any Capital Contribution, no Partner shall have the right to receive property other than cash.

        (d)   Except as otherwise expressly provided herein, no Partner shall have any priority over any other Partner as to the return of its contributions to capital or as to compensation byway of income.

        3.3    Liability of Partners.

        (a)   No Limited Partner shall be liable for the debts, liabilities, contracts or any other obligation of the Partnership, except to the extent expressly provided herein or in the Partnership Act. No Partner shall be liable for the debts or liabilities of any other Partner.

        (b)   No Partner shall be required to contribute to the capital of, or loan, the Partnership any funds.

        (c)   The General Partner shall not be liable for the return of all or any portion of the Capital Contributions of any Partner.

        3.4    Loans by Partners or Affiliates.    Subject to obtaining any approvals required under this Agreement for the Partnership to borrow funds, any Partner or Affiliate may (but shall not be obligated to) at any time, upon obtaining the consent of the General Partner, loan money to the Partnership to finance Partnership operations, to finance or refinance the assets of the Partnership, to pay the debts and obligations of the Partnership, or for^-any other Partnership purpose. If any Partner or an Affiliate lends funds to the Partnership, such Partner or Affiliate shall be entitled to receive interest on such loan at an interest rate to be agreed upon by such Partner or Affiliate and the General Partner.

        3.5    Capital Accounts.

        (a)   A Capital Account shall be established and maintained for each Partner.

        (b)   A Partner's Capital Account shall be credited with (i) the amount of cash and the initial Book Value of any property contributed by such Partner to the Partnership, including, but not limited to, any and all Capital Contributions, (ii) such Partner's allocable share of Profits, income and gain and (iii) the amount of any Partnership liabilities that are expressly assumed by such Partner or that are secured by any Partnership property distributed to such Partner.

        (c)   A Partner's Capital Account shall be debited with (i) the amount of cash and the Book Value of any Partnership property distributed to such Partner pursuant to any provision of this Agreement, (ii) such Partner's allocable share of Losses, deductions and other losses and (iii) the amount of any liabilities of such Partner that are expressly assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership.

        (d)   Upon the occurrence of certain events (as described in Treasury Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(4) and 1.704-2), the General Partner may increase or decrease the Capital Accounts of the Partners to reflect a revaluation of Partnership property on the Partnership's books.

        (e)   The Capital Account of each Partner shall be determined after giving effect to all transactions which have been effected prior to the time when such determination is made giving rise to the allocation of Profits and Losses and to all contributions and distributions theretofore made. Any Person who acquires a Partnership Interest directly from a Partner, or whose

6

Partnership Interest shall be increased by means of a transfer to it of all or part of the interest of another Partner, shall have a Capital Account which includes the Capital Account balance of the Partnership Interest so acquired or transferred.

        (f)    In the event that any Partner makes a loan to the Partnership, such loan shall not be considered a contribution to the capital of the Partnership and shall not increase the Capital Account of the lending Partner. Repayment of such loans shall not be deemed withdrawals from the capital of the Partnership.

        (g)   Any fees, salary or similar compensation payable to a Partner pursuant to this Agreement shall be deemed a guaranteed payment for federal income tax purposes and not a distribution to such Partner for such purposes. Such payments to a Partner shall not reduce the Capital Account of such Partner, except to the extent of its distributive share of any Partnership Losses or other downward capital adjustment resulting from such payment.

        (h)   From time to time the General Partner may make such modifications to the manner in which the Capital Accounts are computed to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2 provided that such modification is not likely to have a material effect on the amounts distributable to any Partner pursuant to this Agreement.

        (i)    The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

        (j)    No Partner shall be obligated to restore a deficit balance in its Capital Account upon dissolution of the Partnership or upon liquidation of its interest in the Partnership, whichever is earlier.

        3.6    Sharing Ratios.    The Sharing Ratio of each Partner is set forth opposite its respective name on Schedule 1, attached hereto and hereby made a part of this Agreement. The Sharing Ratios set forth on Schedule 1 may be amended from time to time by the General Partner to reflect any adjustments to such Sharing Ratios as provided in this Agreement.

        3.7    Partnership Debt.    The Partnership will endeavor to obtain financing on a nonrecourse basis as to any individual Partner. However, in the event any debt obligation of the Partnership requires a guarantee of a Partner or the posting of a letter of credit, and all of the Partners do not agree upon request of the General Partner to guarantee such Partnership obligation and/or post such letter of credit in proportion to its Sharing Ratio, then. any Partner guaranteeing such obligation or posting such letter of credit may receive a reasonable fee for such guarantee or letter of credit in an amount determined by such Partner and the General Partner.

ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS

        4.1    Distributions.    Except as otherwise provided in Section 9.2, Distributable Cash Flow shall be distributed to the Partners in accordance with their respective Sharing Ratios, at such times and in such amounts as determined by the General Partner.

        4.2    Allocations of Profits and Losses.

        (a)    Profits.    Except as provided in Section 4.2(c), Profits for any Fiscal Year will be allocated to the Partners in accordance with their respective Sharing Ratios.

        (b)    Losses.    Except as provided in Section 4.2(c), Losses for any Fiscal Year will be allocated to the Partners in accordance with their respective Sharing Ratios.

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        (c)    Special Allocations.    Except as otherwise provided in this Agreement, the following special allocations will be made in the following order and priority:

        (1)    Partnership Minimum Gain Chargeback.    Notwithstanding any other provision of this Section, if there is a net decrease in Partnership Minimum Gain during any taxable. year or other period for which allocations are made, the Partners will be specially allocated items of Partnership income and gain for that period (and, if necessary, subsequent periods). The amount allocated to each Partner under this Section 4.2(c)(1) shall be an amount equal to such Partner's share of the net decrease in Partnership Minimum Gain during such year or other period determined in accordance with Treasury Regulations Section 1.704-2(g)(2). This Section 4.2(c)(1) is intended to comply with the partnership minimum gain chargeback requirements of the Treasury Regulations and the exceptions thereto and will be interpreted consistently therewith.

        (2)    Partner Nonrecourse Debt Minimum Gain Chargeback.    Notwithstanding any other provision of this Section (other than Section 4.2(c)(1) which shall be applied first), if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any taxable year or other period for which allocations are made, any Partner with a share of such Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt (determined under Treasury Regulations Section 1.704-(2)(i)(5)) as of the beginning of the year shall be specially allocated items of Partnership income and gain for that period (and, if necessary, subsequent periods) in proportion to the portion of such Partner's share of the net decrease in the Partner Nonrecourse Debt Minimum Gain with respect to such Partner Nonrecourse Debt that is allocable to the Disposition of Partnership property subject to such Partner Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(g). This Section is intended to comply with the partner nonrecourse debt minimum gain chargeback requirements of the Treasury Regulations and the exceptions thereto and shall be interpreted consistently therewith.

        (3)    Qualified Income Offset.    A Partner who unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations Sections 1.704-I (b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Partnership income and gain in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Partner as quickly as possible.

        (4)    Nonrecourse Deductions.    Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated among the Partners in accordance with each Partner's Sharing Ratio.

        (5)    Partner Nonrecourse Deductions.    Notwithstanding anything to the contrary in this_.Agreement, any Partner Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which the Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i).

        (6)    Code Section 754 Adjustments.    To the extent an adjustment to the adjusted tax basis of any Partnership asset under Code Sections 734(b) or 743(b) is required to be taken into account in determining Capital Accounts under Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis), and the gain or loss will be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted under Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

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        (7)    Depreciation Recapture.    In the event there is any recapture of Depreciation or investment tax credit, the allocation of gain or income attributable to such recapture shall be shared by the Partners in the same proportion as the deduction for such Depreciation or investment tax credit was shared.

        (8)    Reallocation.    To the extent Losses allocated to a Partner would cause the Partner to have an Adjusted Capital Account Deficit at the end of any Fiscal Year, the Losses will be reallocated to the General Partner. If the General Partner receives an allocation of Losses otherwise allocable to a Limited Partner in accordance with this Section, such General Partner shall be allocated Profits in subsequent Fiscal Years necessary to reverse the effect of such allocation of Losses. Such allocation of Profits (if any) shall be made before any allocations under Section 4.2(a) but after any other allocations under Section 4.2(c).

        (9)    Interest in Partnership.    Notwithstanding any other provision of this Agreement, no allocation of Profit or Loss or item of Profit or Loss will be made to a Partner if the allocation would not have "economic effect" under Treasury Regulations Section 1.704-1(b)(2)(ii) or otherwise would not be in accordance with the Partner's interest in the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(3) or 1.704-1(b)(4)(iv). The General Partner will have the authority to reallocate any item in accordance with this Section 4.2(c)(9).

        (d)    Curative Allocations.    The allocations set forth in Sections 4.2(c)(l) through _f (the "Regulatory Allocations") are intended to comply with certain requirements of Treasury Regulations Section 1.704-1(b) and 1.704-2. The Regulatory Allocations may not be consistent with the manner in which the Partners intend to divide Partnership distributions. Accordingly, the General Partner is authorized to further allocate Profits, Losses, and other items among the Partners so as to prevent the Regulatory Allocations from distorting the manner in which Partnership distributions would be divided among the Partners under Sections 4.1 and 9.2 but for application of the Regulatory Allocations. In general, the reallocation will be accomplished by specially allocating other Profits, Losses and items of income, gain, loss and deduction, to the extent they exist, among the Partners so that the net amount of the Regulatory Allocations and the special allocations to each Partner is zero. The General Partner will have discretion to accomplish this result in any reasonable manner that is consistent with Code Section 704 and the related Treasury Regulations.

        (e)    Tax Allocations—Code Section 704(c).    In accordance with Code Section 704(c) and the related Treasury Regulations, income, gain, loss and deduction with respect to any property contributed to the capital of the Partnership, solely for tax purposes, will be allocated among the Partners so as to take account of any variation between the adjusted basis to the Partnership of the property for federal income tax purposes and the initial Book Value. If the Book Value of any Partnership asset is adjusted, subsequent allocations of income, gain, loss and deduction with respect to that asset will take account of any variation between the adjusted basis of the asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c) and the related Treasury Regulations. Any elections or other decisions relating to allocations under this Section 4.2(e) will be made in any manner that the General Partner determines reasonably reflects the purpose and intention of this Agreement. Allocations under this Section are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Profits, Losses or other items or distributions under any provision of this Agreement.

        (f)    Other Allocation Rules.    The following rules will apply to the calculation and allocation of Profits, Losses and other items:

        (1)   Except as otherwise provided in the Agreement, all Profits, Losses and other items allocated to the Partners will be allocated among them in proportion to their Sharing Ratios.

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        (2)   For purposes of determining the Profits, Losses or any other item allocable to any period, Profits, Losses and other items will be determined on a daily, monthly or other basis, as determined by the General Partner using any permissible method under Code Section 706 and the related Treasury Regulations.

        (3)   Except as otherwise provided in this Agreement, all items of Partnership income, gain, loss, deduction, credit and other allocations not provided for in this Agreement will be divided among the Partners in the same proportions as they share Profits and Losses.

        (g)    Partner Acknowledgment.    The Partners agree to be bound by the provisions of this Section in reporting their shares of Partnership income and loss for income tax purposes.

        4.3    Compliance with Code.    The foregoing provisions of this Article relating to the allocation of Profits, Losses and other items for federal income tax purposes are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations. Notwithstanding anything to the contrary, nothing in this Article shall apply if it lacks "economic effect."

        4.4    Allocations upon Transfer of Partnership Interest.    Profits or Losses attributable to any Partnership Interest which has been transferred during any Partnership Fiscal Year shall be allocated between the transferor and the transferee as follows:

        (a)   For the days in such Fiscal Year prior to and including the date of the transfer, to the transferor.

        (b)   For the days in such Fiscal Year subsequent to the date of the transfer, to the transferee.

ARTICLE V

RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER

        5.1    Management and Control of the Partnership.    The General Partner shall manage and control all of the business operations and affairs of the Partnership and shall make all decisions affecting the Partnership business on all matters concerning the Partnership. Any Partnership action permitted or required by this Agreement to be made or taken by the General Partner shall be binding on all the Partners.

        5.2    Authority of the General Partner as to Third Persons.    Any Person dealing with the Partnership, the General Partner or any Partner may rely upon a certificate signed by the General Partner, thereunto duly authorized, concerning:

        (a)   The identity of such Partner;

        (b)   The existence or nonexistence of any fact or, facts that constitute conditions precedent to acts by the General Partner or the Partners or in any other manner germane to the affairs of the Partnership;

        (c)   The Person or Persons who are authorized to execute and deliver. any instrument or document of the Partnership; or

        (d)   Any act or failure to act by the Partnership or concerning any other matter whatsoever involving the Partnership, or any Partner as it regards Partnership business.

        5.3    Reimbursement of Expenses and Compensation of the General Partner.

        (a)   The General Partner or its designated Affiliate may be paid compensation for its services rendered in managing the business and affairs of the Partnership in the manner provided in the Corporate Services Agreement. The fee or compensation paid to the General Partner or its

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designated Affiliate under this Section 5.3(a) may be adjusted from time to time in the manner provided in the Corporate Services Agreement. Such amount paid under this Section 5.3(a) shall be pro rated if such amount is paid for less than a full calendar month.

        (b)   The General Partner or its designated Affiliate shall be entitled to reimbursement by the Partnership from time to time for all reasonable out-of-pocket expenses which are incurred by such Partner in connection with the business and affairs of the Partnership.

        5.4    Devotion of Time.    The General Partner. shall devote such time, services and efforts as may be reasonably necessary for the proper furtherance, management, operation, maintenance and care of the Partnership business. The General Partner shall not be required to devote its entire time to the business of the Partnership.

        5.5    Right of Competition.    Each Partner, in its individual capacity or otherwise, and its respective principals and Affiliates, shall be free to engage and conduct or participate in any business or activity whatsoever, including, without limitation, the business conducted by the Partnership, without any accountability or obligation whatsoever to the Partnership or to any other Partner.

        5.6    Liability of the General Partner.    It is the intent of this Section 5.6 to restrict the liability and fiduciary duties of the General Partner to. the maximum extent permitted under applicab'.e law and the Partnership Act. Neither the Partnership nor any Partner shall have any claim against the General Partner by reason of any act or omission of the General Partner, provided that such act or omission was performed by the General Partner in the belief that the General Partner was acting within the scope of its authority under this Agreement and that such act or omission did not involve the General Partner's bad faith, willful misconduct or fraud. Notwithstanding the above, the General Partner shall have no liability hereunder for failing to act if such act required the consent of some or all of the Limited Partners and the required consent to such action was not granted. Any amendment, modification or repeal of this Section 5.6 or any provision in this Section 5.6 shall be prospective only and shall not in any way affect the limitations on the General Partner's liability to the Partnership and the Limited Partners under this Section 5.6 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

        5.7    Indemnification and Exculpation of the General Partner.    The Partnership shall indemnify the General Partner and each of its Affiliates, from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which the General Partner or any of its Affiliates, may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the General Partner, or any of its Affiliates, was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the General Partner did not reasonably believe that the General Partner, while acting as general partner, was acting in the best interests of the Limited Partners or, in all other cases, was acting in opposition of the Limited Partner's best interests; (iii) the General Partner or its Affiliates, actually received an improper personal benefit in money, property or services; or (iv) in the case of any criminal proceeding, the General Partner or its Affiliates, had reasonable cause to believe that the actor omission was unlawful. The termination of any proceeding by judgment, order or settlement does not create a presumption that the General Partner or its Affiliates, did not meet the requisite standard of conduct set forth in this Section 5.7. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the General Partner or its Affiliates, acted in a manner contrary to that

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specified in this Section 5.7. Any indemnification pursuant to this Section 5.7 shall be made only out of the assets of the Partnership, including insurance proceeds, if any.

        5.8    Transaction with Partners and Affiliates.    In addition to transactions specifically contemplated by the terms and provisions of this Agreement, the Partnership may enter into other transactions with any Partner or an Affiliate thereof or of the Partnership, provided that the terms of the transaction are fair and reasonable to the Partnership. To determine whether or not a transaction is fair and reasonable to the Partnership, the General Partner may consider the interests of any relevant Person, including any Partner or an affiliate thereof or the Partnership. In the absence of bad faith, willful misconduct or fraud by the General Partner, any transaction approved or effected by the General Partner on the Partnership's behalf with any Partner or an Affiliate thereof or of the Partnership, will be deemed to be fair and reasonable and not constitute a breach of the General Partner's fiduciary duty to the Partnership or to any Partner.

        5.9    Resolving Conflicts of Interest.    Unless expressly provided otherwise in this Agreement, if a potential conflict of interest arises between the General Partner or any of its owners or Affiliates, on the one hand, and the Partnership or any other Partner, on the other hand, the General Partner shall resolve the conflict of interest and any such resolution or course of action in respect of the conflict of interest shall be permitted and deemed approved, ratified and confirmed by all Partners, and shall not constitute a breach of this Agreement, of any other agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution or course of action is or (by operation of this Agreement) is deemed to be fair and reasonable to the Partnership. In connection with resolving any conflict of interest, the General Partner may consider (i) the relative interests of any Person (including. its own interest) to the conflict, agreement, transaction or situation and the benefits and burdens relating to the interests; (ii) any customary or accepted industry practices or historical dealings with a particular Person; (iii) any applicable generally accepted accounting practices or principles; and (iv) such additional factors as the General Partner deems relevant, reasonable or appropriate under the circumstances. Nothing in this Agreement shall require the General Partner to consider the interests of any Person other than the Partnership and its Partners.

        5.10    Conversion in Anticipation of Public Offering.    Notwithstanding anything in this Agreement to the contrary, and in addition to the rights of the General Partner granted in this Agreement, in anticipation of a public offering of the Partnership Interests, the General Partner may engage, or cause the Partnership to engage, in any transaction or combination of transactions for the purpose of reorganizing, converting or otherwise changing the form of the Partnership into a corporation or other business entity. If the General Partner engages or causes the Partnership to engage in any transaction described in this section, no Limited Partner, as such, may veto or have any other power that may limit the General Partner's authority under this section. A reorganization, conversion or change in form under this section may not affect the Partnership's overall business or operations, and the equity interests in the successor corporation or other entity must be based on the Partners' proportionate interests in the Partnership.

        5.11    Officers.

        (a)    Number.    The principal officers of the Partnership may consist of any or all of the following: the President, one or more Vice Presidents, the Treasurer and the Secretary, and such other officers and assistant officers and agents as may be deemed necessary and elected or appointed by the General Partner, at such time and in such manner and for such terms as the General Partner may prescribe. Any two or more offices may be held by the same person. The compensation of the officers shall be determined by the General Partner.

        (b)    General Duties.    All officers and agents of the Partnership, as between themselves and the Partnership, shall have such authority, perform such duties and manage the Partnership as may

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be provided in this Agreement or as may be determined by the General Partner not inconsistent with this Agreement.

        (c)    Election, Term of Office and Qualifications.    The officers shall be chosen by the General Partner. Each officer shall hold office until a successor is chosen and qualified or until the death, resignation or removal of such officer.

        (d)    Removal.    Any officer or agent appointed by the General Partner may be removed (with or without cause) by the General Partner whenever in its sole judgment the best interest of the Partnership will be served by such removal.

        (e)    Resignation.    Any officer may resign at any time by giving written notice to the General Partner. Such resignation shall take effect at the time specified in the notice, and, unless otherwise specified in the notice, the acceptance of such resignation shall not be necessary to make it effective. Such resignation shall be without prejudice to the contract rights, if any, of the Partnership.

        (f)    Vacancies.    Any vacancy in any office because of death, resignation, removal or any other cause shall be filled for the unexpired portion of the term in the manner prescribed in this Agreement for election or appointment to such office.

        (g)    The President.    The President shall have active management of the operations of the Partnership, subject, however, to the control of the General Partner. The President shall, in general, perform all duties incident to the office of President and such other duties as from time to time may be assigned by the General Partner.

        (h)    The Vice President.    Each Vice President shall have such powers and perform such duties as the General Partner may from time to time prescribe or as the President may from time to time delegate to such officer. At the request of the President, any Vice President may temporarily act in place of the President. In the case of the death, absence, or inability to act of the President, the General Partner may designate any. Vice President to perform, the duties of the President. The General Partner may appoint different types of vice presidents with different day-to-day management responsibility over the operations of the Partnership, including but not limited to the power to employ persons to accomplish the purposes of the Partnership.

        (i)    The Secretary.    The Secretary shall keep or cause to be kept in books provided for that purpose, minutes of the meetings of the Partners; shall see that all notices are duly given in accordance with the provisions of this Agreement and as required by law; shall be custodian of the records and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned by the General Partner or the President.

        (j)    The Treasurer.    The Treasurer shall be the principal financial officer of the Partnership; shall have charge and custody of and be responsible for all funds of the Partnership and deposit all such funds in the name of the Partnership in such banks, trust companies or other depositories as shall be selected by the. General Partner; shall receive and give receipts for moneys due and payable to the Partnership from any source; and, in general, shall perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned by the General Partner or the President. The Treasurer shall render to the General Partner, whenever the same shall be. required, an account of all transactions accomplished as Treasurer and of the financial condition of the Partnership. The Treasurer shall, if required to do so by the General Partner, give the Partnership a bond in such amount and with such surety or sureties as may be ordered by the General Partner, for the faithful performance of the duties of office and for the restoration to the Partnership, in the case of death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind belonging to the Partnership which are held or controlled by the Treasurer.

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        (k)    Other Officers.    The General Partner may create any other office it deems appropriate and may assign titles, duties and responsibilities to such officers as it determines in its sole discretion.

        (l)    Indemnification.    The officers shall be indemnified by the Partnership in such amounts and using any procedure as the General Partner determines.

ARTICLE VI

RIGHTS AND STATUS OF LIMITED PARTNER

        6.1    General.    The Limited Partners have the rights and status of limited partners as provided in the Partnership Act. The Limited Partners may not take part in the management or control of the Partnership business, or sign for or bind the Partnership, such power being vested exclusively in the General Partner as provided herein.

        6.2    Limitation on Liability.    Except as provided under the Partnership Act, no Limited Partner shall have any personal liability whatsoever, whether to the Partnership, the General Partner or any creditor of the Partnership, for the debts of the Partnership, or any of its losses beyond the amount of the Limited Partners' Initial Capital Contribution and Additional Capital Contribution, if any. Accordingly, each Limited Partner's Partnership Interest shall be fully paid and nonassessable.

        6.3    Bankruptcy, Death.    Neither the Bankruptcy, death, disability, dissolution, liquidation or declaration of incompetence of a Limited Partner shall dissolve the Partnership, but the rights of a Limited Partner to share in the Profits and Losses of the Partnership and to receive distributions of Partnership funds, shall, on the happening of such an event, devolve upon the Limited Partner's estate, legal representative, or successors in interest, as the case may be, subject to this Agreement, and the Partnership shall continue as a limited partnership. In no event shall the estate, representative or successors in interest become a substitute Limited Partner, except in accordance with Article VII.

ARTICLE VII

TRANSFER OF PARTNERSHIP INTEREST

        7.1    Restriction on Transfer.

        (a)   Except upon the written approval of the General Partner or as expressly permitted herein, no Partner may Dispose of all or any portion of. its Partnership Interest or any beneficial right or interest therein, or contract to do or permit any of the foregoing, whether voluntarily or by operation of law, and any attempt to do so shall be void.

        (b)   Notwithstanding anything to the contrary contained herein, unless all of the Partners consent, no Partner may Dispose of all or any portion of its Partnership Interest if such Disposition:

        (1)   when added to the total of all other Dispositions of Partnership Interests within the preceding twelve (12) months, would result in the Partnership being considered to have terminated within the meaning of Code Section 708; or

        (2)   would violate any federal securities laws or any applicable state securities laws (including suitability standards).

        (c)   In order to effectuate the purpose of this Section 7.1, each Partner agrees that to the extent its interest in the Partnership is at any time held by any Entity, such Partner will seek to transfer such interest only through a direct transfer of such interest in the manner contemplated in this Section 7.1, and that no transfer or other Disposition will be effected, directly or indirectly, unless approved by the General Partner.

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        7.2    Assignees.

        (a)   The Partnership shall not recognize for any purpose any purported sale, assignment or transfer of all or any fraction of the interest of a Partner unless the provisions of this Article have been satisfied, all costs of such assignment have been paid by the assigning Partner, such Disposition is exempt from registration under the Securities Act of 1933, as amended, and any other applicable state or federal securities act, such Disposition will not have any tax consequences to the Partnership, or any Partner and there is delivered to all of the non-transferring Partners, upon request of the General Partner, an opinion of counsel acceptable to the General Partner with respect to such securities exemption and tax consequences, and there is filed with the Partnership a written and dated notification of such Disposition, in form satisfactory to the General Partner, executed by both the seller, assignor or transferor and the purchaser, Assignee or transferee and such notification (1) contains the acceptance by the purchaser, Assignee or transferee of and agreement to be bound by all the terms and provisions of this Agreement and (2) represents that such Disposition was made in accordance with all applicable securities laws and regulations (including suitability standards). Any Disposition shall be recognized by the Partnership as effective on the date of such notification if the date of such notification is within fifteen (15) days of the date on which such notification is filed with the Partnership, and otherwise shall be recognized as effective on the date such notification is filed with the Partnership.

        (b)   Any Partner who assigns all its interest in the Partnership shall cease to be a Partner, except that, unless and until a substituted Partner has been admitted into the Partnership, the assigning Partner shall retain the statutory rights of the assignor of a partner's interest under the Partnership Act.

        (c)   A Person who is the Assignee of all or any fraction of the interest of a Partner, but does not become a substituted Partner, and desires to make a further assignment of such interest, shall be subject to all the provisions of this Article to the same extent and in the same manner as any Partner desiring to make an assignment of its interest.

        7.3    Substituted Partner.

        (a)   Except as otherwise provided in this Article VII, no Partner shall have the right to substitute in its place a purchaser, Assignee, transferee, donee, heir, legatee or other recipient of all or any portion of the Partnership Interest of such Partner. Any other such purchaser, Assignee, transferee, donee, legatee, distributee or other recipient of an interest shall be admitted to the Partnership as a substituted Partner only with the consent of the General Partner.

        (b)   No Person shall become a substituted Partner until such Person has satisfied the requirements of this Article and until that time shall have no right to vote on, consent to or approve any matter or decision with respect to the Partnership; provided, however, that for the purpose of allocating Profits, Losses and other items and distributing Distributable Cash Flow, a Person shall be treated as_. having become, and as appearing in the records of the Partnership as a Partner on such date as the sale, assignment or transfer to such person was recognized by the Partnership pursuant to Section 7.2.

        7.4    Basis Adjustment.    Upon the transfer of all or part of an interest in the Partnership, at the request of the transferee of the interest, the General Partner with the consent of all of the Partners may cause the Partnership to elect, pursuant to Section 754 of the Code, to adjust the basis of the Partnership properties as provided in Section 734 and 743 of the Code. The Partnership may require the requesting transferee to bear all of the accounting and administrative costs as a condition to its consent.

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ARTICLE VIII

BANK ACCOUNTS, BOOKS OF ACCOUNT, REPORTS AND FISCAL YEAR

        8.1    Bank Accounts, Investments.    The General Partner shall establish one or more bank accounts in the name of the Partnership into which all Partnership funds shall be deposited. No other funds shall be deposited into these accounts. However, pending their withdrawal for Partnership purposes, Partnership funds may be invested in such securities and money market funds as the General Partner may select.

        8.2    Books and Records.    The General Partner shall keep complete and accurate books of account and records relative to the Partnership's business. The books and records of the Partnership shall be kept on the method of reporting for tax and financial reporting purposes as determined by the General Partner. The Partnership books and records shall at all times be maintained at the principal business office of the Partnership or its accountants and shall be available for examination at such office by any Partner or its duly authorized representatives during regular business hours. Any Partner, at its own expense, may cause an audit of the books and records of the Partnership during regular business hours and shall furnish a written report thereof to the other Partners.

        8.3    Tax Returns and Information.    The Partners intend for the Partnership to be treated as a partnership for tax purposes. The General Partner shall prepare or cause to be prepared all federal, state and local income and other tax returns which the Partnership is required to file. The method of computing Depreciation for tax purposes, and the decision whether to exercise or to revoke any or all of the elections available to the Partnership under the Code, shall be made by all of the Partners. Each of the Partners shall supply to the Partnership the information necessary to properly give effect to any such election.

        8.4    Tax Matters Partner.    The General Partner will serve as the tax matters partner of the Partnership pursuant to Section 623 1(a)(7) of the Code.

        8.5    Fiscal Year.    The Fiscal Year of the Partnership shall be the calendar year.

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION OF THE PARTNERSHIP

        9.1    Events Causing Dissolution.

        (a)   The Partnership shall be dissolved upon the happening of any of the following events:

        (1)   The entry of a final judgment, order or decree of a court of competent jurisdiction adjudicating the Partnership to be Bankrupt, and the expiration without appeal of the period, if any, allowed by applicable law in which to appeal therefrom;

        (2)   The Bankruptcy, liquidation or dissolution of the General Partner or any other withdrawal event by the General Partner under the Partnership Act;

        (3)   The election to dissolve the Partnership by the General Partner; or

        (4)   The entry of a decree of judicial dissolution under the Partnership Act.

        (b)   Dissolution of the Partnership shall be effective as of the day on which the event occurs giving rise to the dissolution, but the Partnership shall not terminate until there has been a winding up of the Partnership's business and affairs, and the assets of the Partnership have been distributed as provided in Section 9.2.

        (c)   Notwithstanding anything contained to the contrary in Section 9.1(a), if a dissolution of the Partnership would otherwise occur due to the occurrence of an event of dissolution under

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Sections 9.1(a)(2), the Partnership may be reconstituted if either (i) there remains at least one General Partner and such remaining General Partner or General Partners elect to continue the business of the Partnership or (ii) within ninety (90) days of such event of dissolution a Majority in Interest of the Partners agree in writing to continue the business of the Partnership and, to the extent they desire, or if there is no remaining General Partner, the Limited Partners agree to the appointment of one or more new General Partners effective as of the date of such event of dissolution.

        9.2    Liquidation; Sale of Substantially all of the Assets.

        (a)   Upon dissolution of the Partnership, the General Partner may cause any part or all of the Partnership assets to be sold in such manner as the General Partner shall reasonably determine in an effort to obtain the best prices for such assets (provided, however, that the General Partner may distribute Partnership assets in kind to the Partners to the extent practicable). During the liquidation period, the General Partner shall have the right to continue to operate and otherwise to deal with Partnership property to the same extent the General Partner_.has such right prior to dissolution of the Partnership. In the event that the sole remaining General Partner has dissolved, withdrawn or becomes Bankrupt or legally incapacitated, a Majority in Interest of the Limited Partners may, within thirty (30) days after any such occurrence, appoint a Person to perform the functions of the General Partner in liquidating the assets of the Partnership and winding up its affairs.

        (b)   In settling accounts after dissolution, the assets of the Partnership shall be paid or distributed in the following order:

        (1)   To third party creditors, in the order of priority as provided by law;

        (2)   Then, to the Partners for any unreimbursed costs and expenses owing to_. the Partners pursuant to this Agreement;

        (3)   Then, to the repayment of any loans, with interest, made by any Partner to the Partnership, and if more than one Partner has any outstanding loans owing from the Partnership, such repayment shall be made, pro rata, in accordance with the total amount outstanding to each Partner;

        (4)   Then, an amount equal to the then remaining positive balances in the Capital Accounts of the Partners shall be distributed to the Partners in proportion to the amount of such balances; and

        (5)   Then, any remainder shall be distributed to the Partners, pro rata, in accordance with their respective Sharing Ratios.

        9.3    Distributions in Kind.    If any assets of the Partnership are distributed in kind pursuant to this Agreement, such assets shall be distributed to the Partners entitled thereto as tenants in common in the same proportions as the Partners would have been entitled to cash distributions if such property had been sold for cash at its fair market value and the net proceeds thereof distributed to the Partners. In the event that distributions in kind are made to the Partners, the Capital Account balances of such Partners shall be adjusted to reflect the Partners' allocable share of gain or loss which would have resulted if the distributed property had been sold at its fair market value.

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ARTICLE X

POWER OF ATTORNEY

        10.1    Appointment of the General Partner as Attorney-in-Fact.

        (a)   Each Limited Partner, by the execution of this Agreement, irrevocably constitutes and appoints the General Partner, its true and lawful agent and attorney-in-fact with full power and authority in its name, place and stead to execute, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents, instruments and conveyances that may he necessary or appropriate to carry out the provisions or purposes of this Agreement, including without limitation:

        (1)   all certificates and other instruments, including, but not limited to, counterparts of this Agreement, and any amendment thereof that the General Partner deems appropriate to qualify or continue the Partnership as a partnership or a partnership in which the Limited Partner will have limited liability comparable to that provided by the Partnership Act, in the jurisdictions in which the Partnership may conduct business;

        (2)   any amendment, supplement or restatement of this Agreement approved by the Partners in accordance with Section 11.5;

        (3)   all instruments that the General Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of this Agreement; and

        (4)   all conveyances and other instruments that the General Partner deems appropriate to reflect the dissolution and termination of the Partnership.

        (b)   The appointment of the General Partner by each Limited Partner as agent and attorney-in-fact shall be deemed irrevocable and to be a power coupled with an interest and shall survive the legal incapacity of any Person hereby giving such power and the Disposition of all or any part of the Partnership Interest of such Person; provided, however, that in the event of the Disposition by a Limited Partner of all its interest, the foregoing power of attorney shall survive such Disposition only until such time as the transferee shall have been admitted to the Partnership as a Limited Partner, and all required documents and instruments shall have been duly executed, filed and recorded to effect such substitution.

ARTICLE XI

MISCELLANEOUS

        11.1    Notices.    All notices given pursuant to this Agreement shall be in writing and shall either be mailed by first class mail, postage prepaid, registered or certified with return receipt requested, or delivered in person to the intended addressee, or sent by telecopy followed by confirmatory letter. Notice so mailed shall be effective upon the expiration of three business days after its deposit. Notice given in any other manner shall be effective only if and when received by the addressee. For purposes of notice, the address of the Partners shall be as stated under their names on the attached Schedule 1;provided, however, that each Partner shall have the right to change its address for notice hereunder to any other location by the giving of ten (10) days notice to-the General Partner (or in the case of the General Partner, to the other Partners) in the manner set forth above.

        11.2    Governing Law; Submission to Jurisdiction.    This Agreement shall be governed by and construed in accordance with the substantive federal laws of the United States and the internal laws of the State of Delaware.

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        11.3    Successors and Assigns.    This Agreement shall be binding upon and shall inure to the benefit of the Partners, and their respective heirs, legal representatives, successors and assigns; provided, however, that nothing contained herein shall negate or diminish the restrictions set forth in Article VII.

        11.4    Entire Agreement.    This Agreement, including the schedules and exhibits, if any, contains the entire agreement among the Partners relating to the subject matter hereof and all prior agreements relative hereto which are not contained herein are terminated.

        11.5    Amendments.    Amendments or modifications may be made to this Agreement only by setting the same forth in a document duly executed by all of the Partners, and any alleged amendment or modification herein which is not so documented shall not be effective as to any Partner. Notwithstanding the foregoing, the General Partner (under its power of attorney), without the approval of the Limited Partner, may amend this Agreement in any way that does not affect materially the Limited Partner's fundamental economic interests in the Partnership.

        11.6    Severability.    This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any provision of this Agreement or the application thereof to any Person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain among the Partners as expressed herein, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby, but rather shall be enforced to 'the greatest extent permitted by law.

        11.7    Gender and Number.    Whenever required by the context, as used in this Agreement, all personal pronouns shall include the other genders whether using the masculine, feminine or neuter gender, and the singular shall include the plural.

        11.8    Exhibits and Schedules.    Each exhibit and schedule to this Agreement is incorporated herein for all purposes.

        11.9    Creditors Not Benefited.    Nothing in this Agreement is intended to nor shall it benefit any creditor of the Partnership. No creditor of the Partnership will be entitled to require the General Partner to solicit or accept any loan or Additional Capital Contribution for the Partncrship or to enforce any right which the Partnership or any Partner may have against a Partner, whether arising under this Agreement or otherwise.

        11.10    Captions.    The Article and Section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent or for any purpose, to limit or define the text of any Article or Section.

        11.11    Counterparts.    This Agreement may be executed in counterparts, each of which shall be an original but all of which shall constitute but one document.

        11.12    Estoppel Certificate.    Each Partner shall at any time and from time to time upon not less than 20 days' prior written notice from the General Partner execute, acknowledge, and send to the Partnership a statement in writing certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the Agreement is in full force and effect as modified and stating the modifications) and stating whether or not as to all Partners any is in default in keeping, observing or performing any of the terms contained in this Agreement, and if in default, specifying each default (limited, as regards the other's defaults, to those defaults of which the certifying Partner has knowledge).

[Separate signature pages attached]

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        EXECUTED to be effective the day, month and year above first written.

General Partner	Cornell Companies Management, LLC
	By:
		/s/ Kevin Kelly	, Manager
Limited Partner
	By:	/s/ Kevin Kelly Cornell Companies, Inc.

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SCHEDULE 1

        Names, Addresses, Initial Capital Contributions and Sharing Ratios of the Partners

Names and Addresses of Partners	Initial Contribution	Sharing Ratio
General Partner:
Cornell Companies Management, LLC 1700 West Loop South, Suite 1500 Houston, TX 77027 Attn: Kevin Kelly, Manager	$10.00	1.00	%
Limited Partner:
Cornell Companies, Inc. 1700 West Loop South, Suite 1500 Houston, TX 77027 Attn: Kevin Kelly, Manager	All of the Limited Partner's right, title and interest in and to the assets and property required to perform, or reasonably related to performing, the Services, as defined in the Corporate Services Agreement.	99.0	%

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Table of Contents
AGREEMENT OF LIMITED PARTNERSHIP OF CORNELL COMPANIES MANAGEMENT SERVICES LIMITED PARTNERSHIP
SCHEDULE 1

EX-3.18

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Exhibit 3.18

CERTIFICATE OF INCORPORATION

OF

CORNELL COX MANAGEMENT, INC.

ARTICLE I

        The name of the corporation is Cornell Cox Management, Inc (the "Corporation").

ARTICLE II

        The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE III

        The nature of the business to be conducted and the purpose to be promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "DGCL").

ARTICLE IV

        The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is 1,000 shares of Common Stock par value $.01 per share (the "Common 'Stock"). Each share of Common Stock shall entitle the holder thereof to one vote at all meetings of stockholders of the Corporation.

ARTICLE V

        In furtherance of; and not in limitation of, the powers conferred by the DGCL, the directors shall have concurrent power with the stockholders of the Corporation to make, alter, amend or repeal the Bylaws of the Corporation.

ARTICLE VI

        The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and shall qualify are:

Name	Address
David M. Cornell	4801 Woodway, Suite 400W Houston, Texas 77056
Norman R. Cox, Jr.	8023 Vantage Drive, Suite 970 San Antonio, Texas 78230
Peter A. Leidel	535 Madison Avenue New York, New York 10022

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ARTICLE VII

        A director of the Corporation shall not be personally liable to the Corporation or its stockholder for monetary damages. for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, as the same exists or hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action which further eliminates or limits the personal liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the DGCL as so amended. Any repeal or modification of this Article VII by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

ARTICLE VIII

        Whenever a compromise or settlement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in* summaty way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of section. 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation as the case may be, and also on this Corporation.

ARTICLE IX

        The name and mailing address of the incorporator is John D. Held, One Shell Plaza, Houston, Texas 77002. The powers of the incorporator shall terminate upon the filing of this Certificate.

        I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 4th day of September, 1992.

/s/  JOHN D. HELD Incorporator

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CERTIFICATE OF INCORPORATION OF CORNELL COX MANAGEMENT, INC.

EX-3.19

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Exhibit 3.19

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CORNELL COX MANAGEMENT, INC.

        Cornell Cox Management, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

        FIRST: That the board of directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the following Amendment to the Certificate of Incorporation of said corporation:

        RESOLVED, that the Certificate of Incorporation of Cornell Cox Management. Inc. be amended by changing Article I thereof so that, as amended, said Article shall read as follows:

        "The name of the corporation is Cornell Corrections Management, Inc. (the "Corporation")."

        SECOND: That, in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, in lieu of a meeting and vote of stockholders, the sole holder of all of the outstanding stock of the Corporation has given its written consent to said Amendment.

        THIRD: That the aforesaid Amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

        IN WITNESS WHEREOF, said Cornell Cox Management, Inc. has caused this Certificate to be signed by David M. Comell, its Chairman, and attested by Steven W. Logan, its Secretary, this 10 day of July, 1995.

	CORNELL COX MANAGEMENT, INC.
	By:	/s/  DAVID M. CORNELL David M. Cornell, Chairman
ATTEST:
/s/  STEVEN W. LOGAN     Steven W. Logan, Secretary

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CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF CORNELL COX MANAGEMENT, INC.

EX-3.20

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Exhibit 3.20

BY-LAWS

OF

CORNELL COX MANAGEMENT, INC.

(hereinafter called the "Corporation")

ARTICLE I: OFFICES

Section 1.    Registered Office.

        The registered office of the Corporation shall be located at 1209 Orange Street, in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.    Other Offices.

        The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.

ARTICLE II: MEETINGS OF STOCKHOLDERS

Section 1.    Place of Meetings.

        Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.    Annual Meeting.

        The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of meeting, at which meeting the stockholders shall elect a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than 60 days before the date of the meeting.

Section 3.    Special Meetings.

        Unless otherwise prescribed by law or by the Certificate of Incorporation, special meetings of stockholders, for any purpose or purposes, may be called by either the Chairman of the Board of Directors or the President and shall be called by such officer– at the request in writing of a majority of the Board of Directors or at the request in writing of stockholders owning not less than 25% of the capital stock of the Corporation:– issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Written notice of the special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting, not less than ten nor more than 60 days before the date of such meeting.

Section 4.    Quorum.

        Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of stockholders for the transaction of

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business. If, however, such quorum shall not be present or represented at any meeting of stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting..

Section 5.    Voting.

        Unless otherwise required by law, the Certificate of Incorporation or these By-Laws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share standing in his name on the books of the corporation. Votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 6.    List of Stockholders Entitled to Vote.

        The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder of the Corporation who is present.

Section 7.    Stock Ledger.

        The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled (i) to examine the stock ledger, the list required by Section 6 of this Article II or the books of the Corporation and (ii) to vote in person or by proxy at any meeting of stockholders.

ARTICLE III: DIRECTORS

Section 1.    Number and Election of Directors.

        The business and affairs of the Corporation shall be managed by a Board of Directors consisting of not less than one nor more than 11 directors. The initial number of directors on the Board of Directors at the time of the adoption of these Bylaws shall be three. The number of directors of the Corporation may be increased or decreased from time to time by resolution adopted by the Board of Directors, but no decrease by the Board of Directors shall have the effect of shortening the term of any incumbent director. Except as provided in Section 2 of this Article III, the directors shall be elected by a plurality of the votes cast at annual meetings of stockholders. A director shall hold office until the next annual meeting and until his successor is duly elected and qualified or until his earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders.

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Section 2.    Vacancies.

        Vacancies and newly created directorships resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified or until their earlier resignation or removal.

Section 3.    Duties and Powers.

        The business of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.

Section 4.    Meetings.

        The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or any director. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than 48 hours before the date of the meeting, by telephone or telegram on 24 hours' notice.

Section 5.    Quorum.

        Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 6.    Actions of Board.

        Unless otherwise provided by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all the members of the Board of Directors consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

Section 7.    Meetings by Means of Conference Telephone.

        Unless otherwise provided by the Certificate of Incorporation or these By-Laws, members of the Board of Directors or any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting.

ARTICLE IV: OFFICERS

Section 1.    General.

        The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board of Directors (who must be a director), a President and a Secretary. The Board of Directors, in its discretion, may also choose a Treasurer and one or more Vice Presidents, Assistant

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Secretaries, Assistant Treasurers and other officers. Any number of offices, may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation, nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

Section 2.    Election.

        The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors.

Section 3.    Voting Securities Owned by the Corporation.

        Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name and on behalf of the Corporation by the Chairman of the Board of Directors, the President, any Vice President, the Secretary or any Assistant Secretary, or the Treasurer or any Assistant Treasurer who may, in the name of and on behalf of the Corporation, take all such action as he deems advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4.    Chairman of the Board of Directors.

        The Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation and shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman of the Board shall have general supervision and control of the business, affairs and properties of the Corporation and its general officers. Except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors.

Section 5.    President.

        The President shall be the Chief Operating Officer of the Corporation and, subject to the control of the Board of Directors and the Chairman of the Board of Directors, shall have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall have the power to appoint and remove all subordinate officers, agents and employees, except those elected or appointed by the Board of Directors, and shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when^.so authorized by these By-Laws, the Board of Directors or the President. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors.

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Section 6.    Vice Presidents.

        At the request of the President or in his absence or in the event of his inability or refusal to act, the Vice Presidents, if there be any (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe.

Section 7.    Secretary.

        The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 8.    Treasurer.

        The Treasurer, if there is one, shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meeting, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors,^- the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 9.    Assistant Secretaries.

        Except as may be otherwise provided in these By-Laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 10.    Assistant Treasurers.

        Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall

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perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 11.    Other Officers.

        Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V: STOCK.

Section 1.    Certificates Representing Stock

        The shares of the Corporation shall be represented by certificates of stock, signed by the Chairman of the Board of Directors or the President or other officer designated by the Board of Directors and countersigned by the Secretary; and if such certificates of stock are signed or countersigned by a transfer agent other than the Corporation, or by a registrar other than the Corporation, such signature of the President and such countersignature of the Secretary, or either of them, may be executed in facsimile, engraved or printed. In case any officer who has signed or whose facsimile signature has been placed upon any share certificate shall have ceased to be such officer because of death, resignation or otherwise before the certificate is issued, it may be issued by the Corporation with the same effect as if the officer had not ceased to be such at the date of its issue. Said certificates of stock shall be in such form as the Board of Directors may from time to time prescribe.

Section 2.    Lost Certificates.

        The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond or other indemnity deemed satisfactory by the Board of Directors in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 3.    Transfers.

        Stock of the Corporation shall be transferable in the manner prescribed by law and in these bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his or her attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued.

Section 4.    Record Date.

        In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of

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Directors may fix, in advance, a record date, which shall not be more than 60 days nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 5.    Beneficial Owners.

        The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, regardless of whether it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VI: NOTICES

Section 1.    Notices.

        Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws to be given to any director or stockholder, such notice may be given by mail, addressed to such director or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telecopy, telex or cable.

Section 2.    Waivers of Notice.

        Whenever any notice is required by law, the Certificate of Incorporation or these By-Laws to be given to any director or stockholder, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated_. therein, shall be deemed equivalent thereto.

ARTICLE VII: INDEMNIFICATION

        The Corporation shall indemnify and advance expenses under this Article VII to the fullest extent permitted by applicable law in effect on the date of adoption of these By-laws by the Board of Directors and to such greater extent as applicable law may thereafter permit.

Section 1.    Obligation to Indemnify in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to

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be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2.    Obligation to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 3.    Authorization of Indemnification.

        Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (iii) by the stockholders. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case.

Section 4.    Good Faith Defined.

        For purposes of any determination under Section 3 of this Article VII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another - enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standards of conduct set forth in Section 1 or 2 of this Article VII, as the case may be.

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Section 5.    Indemnification by a Court.

        Notwithstanding any contrary determination in the specific case under Section 3 of this Article VII, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth, in Section 1 or 2 of this Article VII, as the case may be. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application.

Section 6.    Expenses Payable in Advance.

        Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VII.

Section 7.    Non-exclusivity and Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VII shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or 2 of this Article VII but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law.

Section 8.    Insurance.

        The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, regardless of whether the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VII.

Section 9.    Meaning of "Corporation" for Purposes of Article VII.

        For purposes of this Article VII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

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Section 10.    Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

ARTICLE VIII: AMENDMENTS

Section 1.    Amendments by Stockholders.

        These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted, by the stockholders entitled to cast at least a majority of the votes which all stockholders are entitled to cast.

Section 2.    Amendments by Directors.

        These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by action of a majority of directors then in office.

ARTICLE IX: GENERAL PROVISIONS

Section 1.    Disbursements.

        All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 2.    Fiscal Year.

        The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 3.    Corporate Seal.

        The corporate seal shall have inscribed thereon the name of the Corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced.

As adopted on November 12, 1992.

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BY-LAWS OF CORNELL COX MANAGEMENT, INC. (hereinafter called the "Corporation")

EX-3.21

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EXHIBIT 3.21

ARTICLES OF INCORPORATION

OF

CORNELL CORRECTIONS OF ALASKA, INC.

(An Alaska Business Corporation Incorporated
Under the Alaska Corporations Code: AS 10.06 et seq.)

        The undersigned, a citizen of State of Alaska and natural person of the age of eighteen years or more, acting as incorporator of this Corporation under the Alaska Corporations Code (Alaska Statute 10.06 et seq.), does hereby adopt the following Articles of Incorporation for such Corporation:

ARTICLE I. CORPORATE NAME

        The name of the Corporation shall be CORNELL CORRECTIONS OF ALASKA, (hereinafter referred to as the "Corporation").

ARTICLE II. CORPORATE EXISTENCE

        The Corporation shall have perpetual duration.

ARTICLE III PURPOSES AND POWERS

        The purpose for which this Corporation is organized is to engage in the business of operating private prison facilities, and any other lawful act, business, trade, or activity for which corporations may be organized under the Alaska Corporations Code.

        The Corporation. shall have the authority to engage in any and all such activities as are incidental or conducive to the foregoing purpose or purposes of the Corporation and to exercise any and all powers authorized. or permitted under any laws that may be now or hereafter applicable or available to the Corporation.

ARTICLE IV. ALIEN AFFILIATES

        There are no alien affiliates of this Corporation.

ARTICLE V. SHARES

        The aggregate number of shares which the Corporation may issue shall be one hundred thousand (100,000) shares of common stock.

ARTICLE VI. REGISTERED OFFICE AND AGENT

        The name of the Corporation's initial registered agent and the address of the initial registered office is:

Birch, Horton, Bittner and Cherot
ATTN: Kathryn A. Black
1127 West 7th Avenue
Anchorage, Alaska 99501

ARTICLE VII. DIRECTORS

        The number of Directors constituting the Board of Directors of the Corporation shall be determined in accordance with the provisions of the Alaska Corporations Code and set out in the Bylaws of the Corporation.

ARTICLE VIII. DIRECTOR LIABILITY

        Directors of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for acts or omissions that occur after the effective date of these Articles of Incorporation nor the breach of their fiduciary duty as a Director provided, however, that such exemption from liability shall not apply to (i) a breach of a Director's duty of loyalty to the Corporation or its shareholders; (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (iii) willful or neg1igent conduct involved in the payment of dividends or the repurchase of stock from other than lawfully available funds; or (iv) a transaction from which the Director derives an improper personal benefit.

ARTICLE IX. BYLAW AMENDMENTS

        The Bylaws of the Corporation may he adopted, amended, or repealed, in the manner prescribed by law, either by approval of the shareholders or the Board of Directors, except as otherwise provided by law.

ARTICLE X. INCORPORATOR

        The name and address of the incorporator of this Corporation is as follows:

Kathryn A. Black
Birch, Horton, Bittner and Cherot
1127 West 7th Avenue
Anchorage, Alaska 99501

        IN WITNESS WHEREOF, the undersigned, being the sole original incorporator hereinabove named, has executed these Articles of Incorporation this 3rd day of August, 1998.

/s/  KATHRYN A. BLACK Kathryn A. Black

VERIFICATION

        I, Kathryn A. Black, say on oath or affirm that I have read the foregoing Articles of Incorporation of Cornell Corrections of Alaska, Inc., and believe all statements made in such Articles of Incorporation are true.

        DATED this 3rd day of August, 1998, at Anchorage, Alaska.

/s/  KATHRYN A. BLACK Kathryn A. Black

        SUBSCRIBED AND SWORN TO before me this 3rd day of August, 1998, at Anchorage, Alaska.

/s/  LINDA C. [ILLEGIBLE] Notary Public in and for Alaska
My commission expires: 11-8-98

The S.I.C. Code for this Corporation is
8999, Miscellaneous Services.

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ARTICLES OF INCORPORATION OF CORNELL CORRECTIONS OF ALASKA, INC.

EX-3.22

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EXHIBIT 3.22

BYLAWS
OF
CORNELL CORRECTIONS OF ALASKA, INC.

1.    CORPORATE OFFICES

1.1    Business Office.    The principal office of the corporation shall be located at any place whether within or outside the State of Alaska as designated in the corporation's most current Annual Report filed with the Commissioner of Commerce. The corporation may have such other offices, either within or without the State of Alaska as the board of directors may designate or as the business of the corporation may require from time to time.

1.2    Registered Office.    The registered office of the corporation, required by A.S. 10.06.150, shall be located within the State of Alaska and may be, but need not be identical with the principal office. The address of the registered office may be changed from time to time.

        2.    SHAREHOLDERS

2.1    Annual Meeting.    The annual meeting of the shareholders of the corporation shall be held at a time and date as determined by the board of directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting.

2.2    Special Meetings.    Special meetings of the shareholders, for any purpose or purposes, described in the meeting notice, may be called by the board of directors or the president, and shall be called by the president at the request of the holders of not less than fifty percent (50%) of all outstanding votes of entitled to be cast on any issue at the meeting.

2.3    Place of Shareholder Meeting.    The board of directors may designate any place, either within or without the State of Alaska as the place of meeting for any annual or any special meeting of the shareholders, unless by written consents, which may be in the form of waivers of notice or otherwise, all shareholders entitled to vote at the meeting designate a different place, whether within or without the State of Alaska, as the place for the holding of such meeting. If no designation is made by either the directors or unanimous action of the voting shareholders, the place of meeting shall be the principal office of the corporation in the State of Alaska.

2.4    Notice of Meeting.    Written notice stating the place, day, and hour of the meeting and, in case of a special meeting, the purpose or purposes. for which the meeting was called, shall unless otherwise prescribed by statute or waived by the shareholders, be delivered not less than ten (10) days before the date of the meeting, either personally or confirmed by telecopy, by or at the direction of the President, or the Secretary, or the persons calling the meeting, to each shareholder of record entitled to vote at such meeting.

2.5    Closing of Transfer Books or Fixing of Record Date.    For the purpose of "determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors of the corporation may provide that the stock transfer books shall be closed for a stated period, but not to exceed, in any case thirty (30) days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least thirty (30) days immediately preceding such meeting. In lieu of closing the stock transfer books, the board of directors may fix in advance a date as the record date for any such determination of shareholders. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the board of directors

declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof.

2.6    Voting Lists.    The officer or agent having charge of the stock transfer books for shares of the corporation shall make a complete list of shareholders entitled to vote at each meeting of shareholders or any adjournment thereof, arranged in alphabetical order, with the address and the number of shares held by each. Such list shall be produced and kept open at the. time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof.

2.7    Quorum.    A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at. a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice."—At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough: shareholders to leave less than a quorum.

2.8    Proxies.    At all meetings of shareholders, a shareholder may vote in person or by proxy executed in writing by the shareholder or his or her duly authorized attorney in fact. Such proxy shall be filed with the secretary of the corporation before or at the time of the meeting. No proxy shall be valid after six (6) months from the date of its execution, unless otherwise provided in the proxy.

2.9    Voting of Shares.    Subject to the provisions of the Articles of Incorporation, each, outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders.

2.10    Voting of Shares. by Certain Holders.    Shares standing in the name of another corporation may be voted by such officer, agent, or proxy as the bylaws of such corporation may prescribe or, in the absence of such provisions, as the board of directors of such corporation may determine, or, in the absence of such determination, by the president or chairman of such corporation.

2.11    Informal Action by Shareholders.    Unless otherwise provided by law, any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by. all of the shareholders entitled to vote with respect to the subject matter thereof.

3.    BOARD OF DIRECTORS

3.1    General Powers.    The board of directors shall manage the property and business of^-the corporation and shall have and may exercise all of the powers of the corporation, except such as are reserved to or may be conferred upon the shareholders of the corporation. The directors shall have the power to make and change from time to time rules and regulations not inconsistent with these bylaws for the management of the business and affairs of the corporation.

3.2    Number, Tenure and Qualifications.    The number of directors shall not be less than three unless all of. the outstanding shares are owned, beneficially and of record by less than three shareholders,.-in which event the number of Directors shall not be less than the number of shareholders. Each director shall hold office until the next annual meeting of shareholders and until his or her successor shall have been elected and qualified, In the event of the death, resignation, or removal of a director, his or her successor or replacement shall be chosen at a

special meeting or at the next annual meeting of the shareholders. A chairman of the board of directors may be selected by the directors.

3.3    Regular Meetings.    A regular meeting of the board of directors shall be held without other notice than these Bylaws immediately after, and at the same place as, the annual meeting of shareholders. The board of directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution.

3.4    Special Meetings.    Special meetings of the board of directors may be called by any director, who may fix the place for holding any special meeting of the board of directors called by him or her.

3.5    Notice.    Notice of any special meeting shall be given at least ten (10) days previously thereto by written notice delivered personally or by telecopy to each director at his or her business address.—Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

3.6    Quorum.    The quorum of the board of directors shall consist. of a majority of directors, and any resolution or other action taken at a meeting of the board of directors shall be adopted by an affirmative vote of a majority of the directors present, except as otherwise provided in the bylaws or the Articles of Incorporation. Meetings of the board of directors may be held by telephone conference calls.

3.7    Action Without a Meeting.    Any action that may be taken by the board of directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so to be taken, shall be signed by all the directors.

3.8    Vacancies.    Any vacancy occurring in the board of directors may be filled by a person or persons elected at a special or annual meeting of the shareholders. A director elected to fill a vacancy caused by death, resignation, or removal, or by reason of an increase in the number of directors shall be elected for the unexpired terms of his or her predecessor or other directors in the office.

3.9    Compensation.    By resolution of the board of directors, each director may be paid his or her expenses, if any, of attendance at each meeting of the board of directors, including reasonable travel expenses. Otherwise, directors shall serve without compensation. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

3.10    Presumption of Assent.    A director of the corporation who is present at a meeting of the board of directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent shall be entered in the minutes of the meeting or unless he. or she shall file his or her written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

3.11    Removal.    Any director may be removed with or without cause at any time by the shareholders at a special meeting called for that purpose and may be removed for cause by action of the board of directors.

4.    OFFICERS

4.1    Number.    The officers of the corporation shall be a President, a Vice President, a Secretary, and a Treasurer,.each of whom shall be appointed by the board of directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the board of directors.

4.2    Election and Term of Office.    The officers of the corporation to be elected by the board of directors shall be elected annually by the board of directors at the first meeting of the board of directors held after each meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided.

4.3    Removal.    Any officer may be removed at the discretion of - -the board of directors.

4.4    Vacancies.    A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, may be filled by the board of directors for the unexpired portion of. the term.

4.5    President.    The President shall be the principal executive officer of. the corporation and, subject to the -control of the board of. directors, shall in general supervise and.control all of the business and affairs of the corporation. The President shall, when present, preside at all meetings of the shareholders and of the board of directors. He or she may sign, with the Secretary or.any other proper officer of the corporation thereunto authorized by the board of directors, certificates for shares of the corporation, any deeds, mortgages, bonds, contracts or other instruments which the board of directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or by these bylaws or the Articles of Incorporation or some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the board of directors from time to time.

4.6    Vice President.    In the event of the death of the President or the inability of the President to serve, the Vice President shall perform the duties of the President until the succeeding President is elected, and while so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice President shall perform such other duties as from time to time may be assigned to him or her by the board of directors.

4.7    Secretary.    The Secretary shall: (a) keep the minutes of the proceedings of the shareholders and of the board of directors in one or more books. provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents, the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; (e) sign with the President, certificates of shares of the corporation, the issuance of which shall have been authorized by resolution of the board of directors; (f) have general charge of the stock transfer books of the corporation; and (g) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by the board of directors.

4.8    Treasurer.    The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies, or other depositories as shall be selected by the board of directors; and (c) in general perform all of the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him or her by the President or by the board of directors. If required by.the board of directors, the Treasurer shall give a bond for the faithful discharge of his or her duties in such sum and with such surety or sureties as the board of directors shall determine.

4.9    Salaries.    The salaries of the officers shall be fixed from time to time by the board of directors and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the corporation

5.    CONTRACTS, LOANS, CHECKS, AND DEPOSITS

5.1    Contracts.    The board of directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances or restricted by agreement, the bylaws, or the Articles of Incorporation.

5.2    Loans.    No loans shall be contracted on behalf of the corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the board of directors. Such authority may be general or confined to specific instances and, as limited by agreement, these bylaws, or the

5.3    Checks, Drafts, Etc.    All checks, drafts or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the board of directors.

5.4    Deposits.    All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the board of directors may select.

6.    CERTIFICATES FOR SHARES AND THEIR TRANSFER

6.1    Certificates for Shares.    Certificate s representing shares of the corporation shall be in such form as shall be determined by the board of directors. Such certificates shall be signed by the President and by the Secretary or by such other officers authorized by law and by the board of directors to do so, and sealed with the corporate seal.. All certificates of shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in the case of a lost, destroyed, or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the corporation as the board of directors may prescribe.

6.2    Transfer of Shares.    Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes.

7.    FISCAL YEAR

        The fiscal year of the corporation shall begin on the first day of January and end on the last day of December of each year, unless the board of directors, by resolution, establishes a different fiscal year.

8.    DIVIDENDS

        The board of directors may from time to time declare, and the corporation may pay, dividends on` its outstanding shares in the manner and upon the terms and conditions provided by law and the Articles of Incorporation.

9.    WAIVER OF NOTICE

        Unless otherwise provided by law, whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of these bylaws or under the provisions of the Articles of Incorporation or under the provisions of the Alaska Business Corporation Act, a waiver thereof in.writing, signed by the person or persons entitled to such notice, whether before or after the time stated herein shall be deemed equivalent to the giving of such notice.

10.    AMENDMENTS

        These bylaws may be altered, amended, or repealed and new bylaws may be adopted by the board of directors at any regular or special meeting of the board of directors.

11.    CORPORATE SEAL

        The board of directors shall provide a corporate seal which shall be circular in form and shall have inscribed. thereon the name of the corporation and the state of incorporation and the words "Corporate Seal."

        ADOPTED as of the 5th day of August, 1998.

	/s/  DAVID M. CORNELL President
ATTEST:
/s/  KEVIN KELLY Secretary

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BYLAWS OF CORNELL CORRECTIONS OF ALASKA, INC.

EX-3.23

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Exhibit 3.23

ARTICLES OF INCORPORATION

OF

ECLECTIC COMMUNICATIONS, INC.

ARTICLE I

        That the name of this corporation is:

ECLECTIC COMMUNICATIONS, INC.

ARTICLE II

        The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

ARTICLE III

        The name and address in the State of California of this corporation's initial agent for service of process is: Arthur R. McDonald, 3719 W. Judy Lane, Visalia, California 93277.

ARTICLE IV

        A.    That this corporation is authorized to issue one class of shares of stock which will consist of 100,000 shares.

        B.    PREEMPTIVE RIGHTS:    Each shareholder or subscriber to shares of this corporation shall be entitled to full preemptive or preferential rights, as such rights have been heretofore defined by the laws of the State of California, to purchase and/or subscribe for his proportionate part of any shares which may be issued at any time by this corporation.

        DATED: April 20, 1977.

	/s/ ARTHUR R. MCDONALD
	Arthur R. McDonald
I hereby declare that I am the person who executed the foregoing Articles of Incorporation, which execution is my act and deed.
	/s/ ARTHUR R. MCDONALD
	Arthur R. McDonald

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ARTICLES OF INCORPORATION OF ECLECTIC COMMUNICATIONS, INC.

EX-3.24

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Exhibit 3.24

CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
ECLECTIC COMMUNICATIONS, INC.

        The undersigned certify that:

        1.     They are the president and secretary, respectively, of Eclectic Communications, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of California.

        2.     Article I of the Articles of Incorporation of Eclectic Communications is amended to read as follows:

        "The name of this corporation is Cornell Corrections of California, Inc."

        3.     The board of directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the foregoing Amendment to the Certificate of Incorporation of said corporation.

        4.     In accordance with the provisions of Sections 603 and 902 of the General Corporation Law of the State of California, in lieu of a meeting and vote of stockholders, the sole holder of all of the outstanding stock of the Corporation has given its written consent to said Amendment.

        We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of our own knowledge, this 21^st day of July, 1995.

/s/ DAVID M. CORNELL

David M. Cornell, President

/s/ STEVEN W. LOGAN

Steven W. Logan, Secretary

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CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF ECLECTIC COMMUNICATIONS, INC.

EX-3.25

Exhibit 3.25

BYLAWS

OF

ECLECTIC COMMUNICATIONS, INC.

ARTICLE I

OFFICES

        Section 1.    PRINCIPAL OFFICES.    The board of directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside California and. the corporation has one or more business offices in California, the board shall fix and designate a principal business office in California.

        Section 2.    OTHER OFFICES.    Branch or subordinate offices may be established at any time at any place by the board of directors.

ARTICLE II

MEETING OF SHAREHOLDERS

        Section 1.    PLACE OF MEETINGS.    Meetings of shareholders shall be held at any place within or outside the State of California designated by the board of directors. In the absence of any such designation, shareholders' meetings shall be held at the principal executive office of the corporation.

        Section 2.    ANNUAL MEETING.    The annual meeting of shareholders shall be held each year on a date and at a time designated by the board of directors. The date so designated shall be within 5 months after the end of the corporation's fiscal year, and within 15 months after the last annual meeting, At each annual meeting, directors shall be elected and any other proper business within the power of the shareholders may be transacted.

        Section 3.    SPECIAL MEETING.    A special meeting of the shareholders may be called at any time by the board of directors, by the chairman of the board, by the president or vice president, or by one or more shareholders holding shares that in the aggregate' are entitled to cast ten percent or more of the votes at that meeting.

        If a special meeting is called by anyone other than the board of directors, the person or persons calling the meeting shall make a request in writing, delivered personally or sent by registered mail or by telegraphic or other facsimile transmission, to the chairman of the board or the president, or secretary, specifying the time and date of the meeting (which is not less than 35 nor more than 60 days after receipt of the request)—and the general nature of the business proposed to be transacted. Within 20 days after receipt, the officer receiving the request shall cause notice to be given to the shareholders entitled to vote, in accordance with Sections 4 and 5 of this Article II, stating that a meeting will be held at the time requested by the person(s) calling the meeting, and stating the general nature of the business proposed to be transacted. If notice is not given within 20 days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph shall be construed as limiting, fixing, or affecting the time when a meeting of shareholders called by action of the board may be held.

        Section 4.    NOTICE OE    SHAREHOLDERS' MEETINGS.    All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 5 of this Article II not fewer than 10 nor more than 60 days before the date of the meeting. Shareholders entitled to notice shall be

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determined in accordance with Section..l I of this Article II, The notice shall specify the place, date, and hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters which the board of directors, at the time of giving the notice, intends to present for action by the shareholders. If directors are to be elected, the notice shall include the names of all nominees whom the board intends, at the time of the notice, to present for election.

        The notice shall also state the,general nature of any proposed action to be taken at the meeting to approve any of the following matters:

          (i)  A transaction in which a director has a financial interest, within the meaning of section 310 of the California Corporations Code;

         (ii)  An amendment of the articles of incorporation under section 902 of that Code;

        (iii)  A reorganization under section 1201. of that Code;

        (iv)  A voluntary dissolution under section 1900 of that Code; or

         (v)  A distribution in dissolution that requires approval of the outstanding shares under section 2007 of that Code.

        Section 5.    MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.    Notice of any shareholders` meeting shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address appearing on the corporation's books or given by the shareholder to the corporation for purposes of notice.' If no address appears on the corporation's books or has been given as specified above, notice shall b^-e either (1) sent by first-class =a;1 addressed to the shareholder at the corporation's principal executive office, or (2) published at least once in a newspaper of general circulation in the county where the corporation's principal executive office is located. Notice is deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication.

        If any notice or report mailed to a shareholder at the address appearing oa the corporation's books, is returned marked to indicate that the United States Postal Service is unable to deliver the document to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if the corporation holds the document available for the shareholder on written demand at the corporation's principal executive office for a period of one year from the date the notice or report was given to all other shareholders.

        An affidavit of the mailing, or other authorized means of giving notice or delivering a document., of any notice of shareholders' meeting, report, or other document sent to shareholders, may be executed by the corporation's secretary, assistant secretary, or transfer agent, and shall be filed and maintained in the minute book of the corporation.

        Section 6.    QUORUM.    The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

        Section 7.    ADJOURNED MEETING: NOTICE.    Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of, the shares represented at that meeting, either in person or by proxy, but in the absence of a_. quorum, no other business may be transacted at that meeting, except as provided in Section 6 of this Article II.

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        When any meeting of shareholders; either annual or special, is adjourned to another time or place, notice of the adjourned meeting need not be given if the time and place are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than 45 days from the date set for the original meeting, in which case the board of directors shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting, in accordance with Sections 4 and 5 of this Article II. At any adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting.

        Section 8:    VOTING.    The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with Section 11. of this Article II, subject to the provisions of sections 702 through 704 of the Corporations Code of California, (relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership). The shareholders' vote may be by voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded^-by any shareholder before the voting has begun. On any matter other than the election of directors, any shareholder may vote part of the shares in favor of *the. proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares that the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is present (or if a quorum has been present earlier at the meeting but some shareholders have withdrawn), the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitute a majority of the number of shares required for a quorum, shall be the act of the shareholders unless the vote of a greater number or voting by classes is required by law or by the articles of incorporation.

        At a shareholders' meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of votes which that shareholder normally. would be entitled to cast), unless the candidates' names have been placed in nomination before commencement of the voting and a shareholder has given notice at the meeting, before the voting has begun, of the shareholder's intention to cumulate votes. If any shareholder has given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nomination,.and may give one candidate a number of vote equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled, or distribute the shareholder's votes on the same principle among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.

        Section 9.    WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS.    The transactions of any meeting of shareholders, either annual or special, however_. called and noticed and wherever held, shall be as valid as though they were had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if each person entitled to vote who was not present in person or by proxy, either before or after the meeting, signs a written waiver of notice or a - -consent to holding the meeting or an approval of the minutes of the meeting. The waiver of notice or, consent need not specify either the business to be transacted or the purpose of any annual or special meeting of the shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in section 601(f) of the California Corporations Code, the waiver of notice or consent is required to state the general nature of the action or proposed action, All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

        A shareholder's attendance at a meeting also constitutes a waiver of notice of that meeting, unless the shareholder at the beginning of the meeting objects to the transaction of any business on the ground that the meeting was not lawfully called or convened. In addition, attendance at a meeting does

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not constitute a waiver of any right to object to consideration of matters required by law to be included in the notice of the meeting which were not so included, if that objection is expressly made at the meeting.

        Section 10.    SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.    Any action that could be taken at an annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or. take that action at a meeting at which all shares entitled to vote on that action were present and voted.

        Directors may be elected by written consent* of the shareholders without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that vacancies on the board (other than vacancies created by removal) not filed by the board may be filled by the written consent of the, holders of a majority of the outstanding shares entitled to vote.

        All consents shall be filed with the secretary of the corporation and shall be maintained in the corporate records. Any shareholder or other authorized person who has given a written consent may revoke it by a writing received by the secretary of the corporation before written consents of the_. number of shares required to authorize the proposed action have been filed with the secretary.

        Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of any corporate action approved by shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. As to approvals required by California Corporations Code section 310 (transactions in which a director has a financial interest), section 317 (indemnification of corporate agents), section 1201 (corporate reorganization), or section 2007 (certain distributions on dissolution), notice of the approval shall be given at least ten days before the consummation of any action authorized by the approval. Notice shall be given in the manner specified in Section 5 of this Article II.

        Section 11.    RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING AND GIVING CONSENT.

        (a)   For purposes of determining the shareholders entitled to receive notice of and vote at a shareholders' meeting or give written consent to corporate action. without a meeting, the board may fix in advance a record date that is not more than 60 nor less than 10 days before the date of a shareholders' meeting, or not more than 60 days before any other action.

        (b)   If no record date is fixed:

          (i)  The record date for determining shareholders entitled to receive notice of and vote at a shareholders' meeting shall be the business day next preceding the day on which notice is given, or if notice is waived as provided in Section 9 of this Article II, the business day next preceding the day on which the meeting is held.

         (ii)  The record date for determining shareholders entitled-to give consent to corporate action in writing without a meeting, if no. prior action has been taken by the board, shall be the day on which the first written consent is given.

        (iii)  The record date for determining shareholders for any other purpose shall be as set forth in Section 1 of Article VIII of these bylaws.

        (c)   A determination of shareholders of record entitled to receive notice of and vote at a shareholders' meeting shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting. However, the board shall fix a new record date if the adjournment is to a date more than 45 days after the date set for the original meeting.

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        (d)   Only shareholders of record on the corporation's books at the close of business on the record date shall be entitled to any of the notice and voting rights listed in subsection (a) of this section, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise required by law.

        Section 12.    PROXIES.    Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation. A proxy, shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder's attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of 11 months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) of the Corporations Code of California.

ARTICLE III

DIRECTORS

        Section 1.    POWERS.    Subject to the provisions of the California General Corporation Law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors.

        Without prejudice to these general powers, and subject to the same limitations, the board of directors shall have the power to:

        (a)   Select and remove all officers, agents, and employees of the corporation; prescribe any powers and duties for them that are consistent with law, with the articles of incorporation, and with these bylaws; fix their compensation; and require from them security for faithful service.

        (b)   Change the principal executive office or the principal business office in the State of California from one location to another; cause the corporation to be qualified to do business in any other state, territory, dependency, or country and conduct business within or outside the State of California; and designate any place within or outside the State of California for the holding of any shareholders' meeting or meetings, including annual meetings.

        (c)   Adopt, make, and use a corporate seal; prescribe the forms of certificates of. stock; and alter the form -of the seal and certificates..

        (d)   Authorize the issuance of shares of stock of the corporation on any lawful terms, in consideration of money paid, labor done, services actually rendered, debts or securities canceled, or tangible or intangible property actually received.

        (e)   Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed and delivered for the corporation's purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecation, and other evidences of debt and securities.

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        Section 2.    NUMBER AND OUALIEICATION OF DIRECTORS.    The authorized number of directors shall be (a) one, so long as the corporation has one shareholder, (b) two, so long as the corporation has two shareholders, and (c) three, so long as the corporation has more than two shareholders, unless otherwise provided in the articles of incorporation or until changed by a duly adopted amendment to the articles of incorporation or by amendment to this bylaw adopted by the vote or written consent of a majority of the outstanding shares entitled to vote. However, an amendment that would reduce the authorized number of directors to a number less than five cannot be adopted if the votes cast against its adoption at a shareholders' meeting or-the shares not consenting to an action by written consent are equal to more than one-sixth of the outstanding shares entitled to vote.

        Section 3.    ELECTION AND TERM OF OFFICE OF DIRECTORS.    Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified.

        No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires.

        Any or all directors may be removed at any time_. without cause by the shareholders in the manner provided by law.

        Section 4.    VACANCIES.    A vacancy in the board of directors shall be deemed to exist (a) If a "director dies, resigns, or is removed by the shareholders or an appropriate court, as provided in sections 303 or 304 of the California Corporations Code; (b) if the board of directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any shareholders' meeting at which one or more directors are elected the shareholders fail to elect the full authorized number of directors to be voted for at that meeting.

        Any director may resign effective on giving written notice to the chairman of the board, the president, the secretary, or the board of directors, unless the notice specifies a later effective date. If the resignation is effective at a future time, the board may elect a successor to take office when the resignation becomes effective,

        Except for a vacancy caused by the removal of a director,' vacancies on the board may be filled by a majority of the directors then in office, whether or not they constitute a quorum, or by a sole remaining director. A vacancy on the board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created when the board declares the office of a director vacant as provided in clause (b) of the. first paragraph of this section of the bylaws may be filled by the board of directors.

        The shareholders may elect a director at any time to fill a vacancy not filled by the board of directors.

        The term of office of a director elected to R a vacancy shall run until the next annual meeting of the shareholders, and such a director shall hold office until a successor is elected and qualified.

        Section 5.    PLACE OF MEETINGS: TELEPHONE MEETINGS.    Regular meetings of the board of directors may be held at any place within or outside the State of California as designated from time to time by the board, In the absence of a designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or outside the State of California designated in the notice of the meeting, or if the notice does not state a place, or if there is no notice, at the principal executive office of the corporation. Any meeting, regular

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or special, may be held by conference telephone or similar communication equipment, provided that all directors participating can hear one another.

        Section 6.    ANNUAL DIRECTORS' MEETING.    Immediately after each annual shareholders' meeting, the board of directors shall hold a regular meeting at the same place, or at any other place that has been designated by the board' of directors, to consider matters of organization, election of officers, and other business as desired. Notice of this meeting shall not be required unless some place other than the place of the annual shareholders' meeting has been designated.

        Section 7.    OTHER REGULAR MEETINGS.    Other regular meetings of the board of directors shall be held without call at times to be fixed by the board of directors from time to time. Such regular meetings may be held without notice.

        Section 8.    SPECIAL MEETINGS.    Special meetings of the board of directors may be called for any purpose or purposes at any time by the chairman of the board, the president, any vice president, the secretary, or any two directors.

        Special meetings shall be held on four days' notice by mail or forty-eight hours' notice delivered personally or by telephone or telegraph. Oral notice given personally or by telephone may be transmitted either to the director or to a person at the director's office who can reasonably be expected to communicate it promptly to the director, Written notice, if used, shall be addressed to, each director at the address shown on the corporation's records. The notice need not specify the purpose of the meeting, nor need it specify the place if the meeting is^. to be held at the principal executive office of the corporation.

        Section 9.    QUORUM.    A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 11 of this Article IIZ, Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the-board of_. directors, subject "to the provisions of Corporations Code of California section 310 (as to approval of contracts or transactions in which a director has a direct or indirect material financial interest), section 311 (as to appointment of committees), and section 317(e) (as to indemnification of directors). A meeting at which a quorum is initially present may continue to transact business, notwithstanding -the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

        Section 10.    WAIVER OF NOTICE.    Notice of a meeting, although otherwise required, need not be given to any director who (a) either before or after the meeting signs a waiver of notice or a consent to holding the meeting without being given notice, (b) signs an approval of the minutes of the meeting, or (c) attends the meeting without protesting the lack of notice before or at the beginning of the meeting. Waivers of notice or consents need not specify the purpose of the meeting. All waivers, consents, mnd approvals of the minutes shall be filed with the corporate records or made a part of the minutes of the meeting.

        Section 11.    ADJOURNMENT TO ANOTHER TIME OR PLACE.    Whether or not a quorum is present, a majority of the directors present may adjourn any meeting to another time or place.

        Section 12.    NOTICE OF ADJOURNED MEETING.    Notice of the time and place or resuming a meeting that has been adjourned need not be given unless the adjournment is for more than 24 hours, in which case notice shall be given, before the time set for resuming the adjourned meeting, to the directors who were not present at the time of the adjournment. Notice need hot be given in any case to directors who were present at the time of adjournment.

        Section 13.    ACTION WITHOUT A MEETING.    Any action required or permitted to be taken by the board of directors may be taken without a meeting, if all members of the board of directors shall individually or collectively consent in writing to that action. Any action by written consent shall have

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the same force and effect as a unanimous vote of the board of directors. All written consents shall be filed with the minutes of the proceedings of the board of directors.

        Section 14.    FEES AND COMPENSATION OF DIRECTORS.    Directors and members of committees of the board may be compensated for their services, and shah be reimbursed for expenses, as fixed or determined by resolution of the board of directors. This section shall not be construed to preclude any director from serving the corporation in any other capacity, as an officer, agent, employee, or otherwise, and receiving compensation for those services.

ARTICLE IV

COMMITTEES

        Section 1.    EXECUTIVE AND OTHER COMMITTEES OF THE BOARD.    The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate an executive committee or one or more other committees, each consisting of two or more directors, The board may designate one or more directors as alternate members of any committee, to replace any absent member at a committee meeting. The appointment of committee members or alternate members requires the vote of a majority of the authorized number of directors. A committee may be granted any or all of the powers and authority of the board, to the extent provided in the resolution of the board of directors establishing the committee, except with respect to:

        (a)   Approving any action for which the California Corporations Code also requires the approval of the shareholders or of the outstanding shares board;

        (b)   Filling vacancies on the board of directors or any committee of the board;

        (c)   Fixing directors' compensation for serving on the board or a committee of the board;

        (d)   Adopting, amending, or repealing bylaws;

        (e)   Amending or repealing any resolution of the board of directors which by its express terms is not so amendable or repealable;

        (f)    Making distributions to shareholders, except at a rate or in a periodic amount or within a price range determined by the board of directors; or

        (g)   Appointing other committees of the board or their members.

        Section 2.    MEETINGS AND ACTION OF COMMITTEES.    Meetings and action of committees shall be governed by, and held and taken in accordance with, bylaw provisions applicable to meetings and actions of the board of directors, with such changes in the context of those bylaws as are necessary to substitute the^- committee and its members for the board of directors and its members, except that (a) the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee; (b) special meetings of committees may also be called by resolution of the board of directors; and (c) notice of special meetings of committees shall also be given to all alternative members who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the governance of any committee not inconsistent with the provisions. of these bylaws.

ARTICLE V

OFFICERS

        Section 1.    OFFICERS.    The officers of the corporation shall be a chief executive officer, a secretary, and a chief financial officer. The. corporation may also have, at the discretion of the board of

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directors, a chairman of the board, a president, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. Any. number of offices may be held by the same person.

        Section 2.    ELECTION OF OFFICERS.    The officers of the corporation, -except for subordinate officers appointed in accordance with the provisions of Section 3 of this Article V, shall be chosen by the board of directors, and shall serve at the pleasure of the board of directors.

        Section 3.    SUBORDINATE OFFICERS.    The board of directors may appoint, and may empower the chief executive officer to appoint other officers as. required, by the business of the corporation, whose duties shall be as provided in the bylaws, or as determined from time to time by the board of directors or the chief executive officer.

        Section 4.    REMOVAL AND RESIGNATION OF OFFICERS.    Any officer chosen by the board of directors may be removed at any time, with or without cause or notice, by the board of directors. Subordinate officers appointed by persons other than the board under Section 3 of this Article V may be removed at any time, with or without cause. or notice, by the board of directors or by the officer by whom appointed. Officers may be employed for a specified term under a contract of employment if authorized by the board of directors; such officers may any time under this section, and shall have no claim against the corporation or individual officers or board members because of the removal except any right to monetary compensation to which the officer may be entitled under the contract of employment.

        Any officer may resign at any time by. giving written notice to. the corporation. Resignations shall take effect on the date of receipt of the notice, unless a later time is specified in the notice. Unless otherwise specified in the notice, acceptance of the resignation is not necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation to monetary damages under any "contract of employment to which the officer is a party.

        Section 5.    VACANCIES IN OFFICES.    A vacancy in any office resulting from an officer's death, resignation, removal, disqualification, or from any other cause shall be filled in the manner prescribed in these bylaws for regular election or appointment to that office.

        Section 6.    CHAIRMAN OF THB BOARD:    The chief executive officer of the corporation shall be the chairman of the board, and shall, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the board of directors or prescribed by the bylaws.

        Section 7.    CHIEF EXECUTIVE OFFICER.    The chief executive officer shall be the corporation's general manager and, subject to the control of the board of directors, shall have general supervision, direction, and control over the corporation's business and its officers. The managerial powers and duties of the chief executive officer shall include, but^. are not limited to, all the general powers and duties of management usually vested in the office of chief executive officer of a corporation, and the chief executive officer shall have other powers and duties as prescribed by the board of directors or the bylaws. The chief executive officer shall preside at all meetings of_. the shareholders and, shall also preside at meetings of the board of directors. In the absence or disability of the chief executive officer, the chief executive officer's duties and responsibilities shall be carried out by the president. When so acting, the president shall have all the powers of and be subject to all the restrictions on the chief executive officer.

        Section 8.    VICE PRESIDENTS.    If desired, one or more vice presidents may be chosen by the board of directors in accordance with the provisions for electing officers set forth in Section 2 of this Article V. Vice. presidents of the corporation shall have such powers and perform such duties as

9

prescribed from time to time by the board of directors, the bylaws, or the chief executive officer (or president if there is no chief executive

        Section 9.    SECRETARY.

        (a)   Minutes. The secretary shall be present at all shareholders' meetings and all board meetings and shall take the minutes of the meeting. If the secretary is unable to_.be present, the secretary or the presiding officer of the meeting shall designate another person to take the minutes of the meeting.

        The secretary shall keep, or cause to be kept, at the principal executive office or such other place as designated by the board of directors, a book of minutes of all meetings and actions of the shareholders, of the board of directors, and of committees of the board, The minutes of each meeting shall state the time and place the meeting was held; whether it was regular or special; if special, how it was called or authorized; the names.of directors present at board or committee meetings; the number of shares, present or represented at shareholders' meetings; and an accurate account of the proceedings.

        (b)   Record of Shareholders. The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the transfer agent or registrar, a record or duplicate record of shareholders. This record shall show the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of share certificate's issued to each shareholder, and the number and date of-cancellation of any certificates surrendered for cancellation.

        (c)   Notice of Meetings. The secretary shall give notice, or cause notice to be given, of all shareholders' meetings, board meetings, and meetings of committees of the board for which notice is required by statute or by the bylaws. If the secretary or other person authorized by the secretary to give notice fails to act, notice of any meeting may be given by any other officer of the corporation.

        (d)   Qther Duties. The secretary shall keep the seal -of the corporation, if any, in safe custody. The secretary shall have such other powers and perform other duties as prescribed by the board of directors or by the bylaws.

        Section 10.    CHIEF FINANCIAL OFFICER.    The chief financial officer shall keep or cause to be kept adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and. shares. The books of account shall at all reasonable times be open to inspection by any director.

        The chief financial officer shall (1) deposit corporate funds and other valuables in the corporation's name and to its credit with depositaries designated by—the board of directors; (2) make disbursements of corporate funds as authorized by the board; (3) render a statement of the corporation's financial condition and an account of all transactions conducted as chief financial officer whenever requested by the president or the board of directors; (4) have other powers and perform other duties as prescribed by the board of directors or the bylaws.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS

        The corporation shall, to the maximum extent permitted by the California General Corporation Law, have power to indemnify each of its agents against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that any such person is or was an agent of the corporation, and shall have power to advance to each such agent expenses incurred in defending any such proceeding to the maximum extent permitted by that law. For purposes of this Article, an "agent" of the corporation includes any person who is or was a director, officer, employee, or other agent of the corporation, or is or was serving at' the request

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of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee, or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise serving at the request of such predecessor corporation.

ARTICLE VII

RECORDS AND REPORTS

        Section 1.    MAINTENANCE OF SHAREHOLDER RECORD AM INSPECTION BY SHAREHOLDERS.    The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar, as determined by resolution of the board of directors, a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder.

        A shareholder or shareholders holding at least five percent in the aggregate of the outstanding voting shares of the corporation have the right to do either or both of the following:

        (a)   Inspect and copy the record of shareholders' names and addresses and shareholdings during usual business hours, on five days' prior written demand on the corporation, or

        (b)   Obtain from the corporation's transfer agent, on written demand and tender of the transfer agent's usual charges for this service, a List of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand. This list shall be made available within five days after (i) the date of demand, or (ii) the specified later date as of which the list is to be compiled. The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. Any inspection and copying under this section may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.

        Section 2.    MAINTENANCE AND INSPECTION OF BYLAWS.    The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the bylaws as amended to date.

        Section 3.    MAINTENANCE AND INSPECTION OF MINUTES AND ACCOUNTING RECORDS.    The minutes of proceedings of the shareholders, board of directors, and committees -of the board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or places as designated by the board of directors. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection on the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the corporation.

        Section 4.    INSPECTION BY-DIRECTORS.    Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made

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in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

        Section 5.    ANNUAL REPORT TO SHAREHOLDERS.    Inasmuch as, and for as long as, there are fewer than 100 shareholders, the requirement of an annual report to shareholders referred to in section 1501 of the California Corporations Code is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the board of directors from issuing annual or other periodic reports to the shareholders, as the board considers appropriate.

        Section 6.    FINANCIAL STATEMENTS.    The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the corporation on file in the corporation's principal executive office for 12 months; these documents shall be exhibited at all reasonable times, or copies provided; to any shareholder on demand.

        If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than 120 days after the close of the fiscal year the corporation shall deliver or mail to the shareholder, within 30 days after receipt of the request, a balance sheet as of the end of that fiscal year and an income statement and statement of changes in financial position for that fiscal year.

        A shareholder or shareholders holding five percent or more of the outstanding shares of any class of stock of the corporation may request in writing an income statement for the most recent three-month, six-month, or nine-month period (ending more than 30 days before the date of the request) of the current fiscal year, and a balance sheet of the corporation as of the end of that period. If such documents are not already prepared, the chief financial officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within 30 days after receipt of the request. A balance sheet, income, statement, and statement of changes in financial position for the last fiscal year shall also be included, unless the corporation has, sent the shareholders an annual report for the last fiscal year.

        Quarterly income statements and balance sheets referred to in this section shall be accompanied by the report, if any, of independent accountants engaged by the corporation or the certificate of an authorized corporate officer stating that the financial statements were prepared without audit from the corporation's books -and records.

        Section 7.    ANNUAL STATEMENT OF GENERAL INFORMATION.    

        (a)   Every year, during the calendar month in which the original articles of incorporation were filed with the California Secretary of State, or during the preceding five calendar months, the corporation shall file a statement with the Secretary of State on the prescribed form, setting forth the authorized number of directors; the names and complete business or residence addresses of all incumbent directors; the names and complete business or residence addresses of the chief executive officer, "the secretary, and the chief financial officer; the street address of the corporation's principal executive office or principal business office in this state; a statement of the general type of business constituting the principal business activity of the corporation; and a designation of the agent of the corporation for the purpose of service of process, all in compliance with section 1502 of the Corporations Code of California.

        (b)   Notwithstanding the provisions of paragraph (a) of this section, if there has been no change in the information contained in the corporation's last annual statement on file in the Secretary of State's office, the corporation may, in lieu of fling the annual statement described in paragraph (a) of this section, advise the Secretary of State, on the appropriate form, that no changes in the required information have occurred during the applicable period.

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ARTICLE VIII

GENERAL CORPORATE MATTERS

        Section 1.    RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.    For purposes of determining the shareholders entitled to receive payment of dividends or other distributions or allotment of rights, or entitled to exercise any rights in respect of any other lawful action (other than voting at and receiving notice of shareholders' meetings and giving written consent of the shareholders without a meeting), the board of directors may fix in advance a record date which shall be not more than 60 nor less than 10 days before the date of the dividend payment, distribution, allotment, or other action. If a record date is so fixed, only shareholders of record at the close of business on that date shall be entitled to receive the dividend, distribution, or allotment of rights, or to exercise the other rights, as the case may be, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise provided by statute.

        If the board of directors does not so fix a record date in advance, the record date shall be at the close of business on the later of (1) the day on which the board of directors adopts the applicable resolution or (2) the 60th day before the date of the dividend payment, distribution, allotment of rights, or other action.

        Section 2.    AUTHORIZED SIGNATORIES FOR CHECKS.    All checks, drafts, other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the corporation shall be signed or endorsed by such person or persons and in such manner authorized from time to time by resolution of the board of directors.

        Section 3.    EXECUTING CORPORATE CONTRACTS AND INSTRUMENTS.    Except as otherwise provided in the articles or in these bylaws, the board of directors by resolution may authorize any officer, officers, agent, or agents to enter into any contract or to execute any instrument in the name of and on behalf of the corporation. This authority may be general or it may be confined to one or more specific matters. No officer, agent, employee, or other person purporting to act on behalf of the corporation shall have any power or authority to bind the corporation in any way, to pledge the corporation's credit, or to render the corporation liable for any purpose or in any amount, unless that person was acting with authority duly granted by the board of directors as provided in these bylaws, or unless an unauthorized act was later ratified by the corporation.

        Section 4.    CERTIFICATES FOR SHARES.    A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when any of the shares are fully paid.

        In addition to certificates for full paid shares, the board of directors may authorize the issuance of certificates for shares that are partly paid and subject to call for the remainder of the purchase price, provided that the certificates representing partly paid shares shall state the total amount of the consideration to be paid for the shares and the amount actually paid.

        All certificates shall certify the number of shares and the class or series of shares represented by the certificate. All certificates shall be signed in the name of the corporation by (1) either the chairman of the board of directors, the vice chairman of the board of directors, the president, or any vice president, and (2) either the chief financial officer, any assistant treasurer, the secretary, or any assistant secretary.

        Any or all of the signatures on the certificate may be facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on a certificate shall have ceased to be that officer, transfer agent, or registrar before that certificate is issued, the certificate may be issued by the corporation with the same effect as if that person were an officer, transfer agent, or registrar at the date of issue.

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        Section 5.    LOST CERTIFICATES.    Except as provided in this Section 5, no new certificates for shares shall be issued to replace old certificates unless the old certificate is surrendered to the corporation for cancellation at the same time. If share certificates or certificates for any other security have been lost, stolen, or destroyed, the board of directors may authorize the issuance of replacement certificates on terms and conditions as required by the board, which may include a requirement that the owner give the corporation a bond (or other adequate security) sufficient to indemnify the corporation against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft, or destruction of the old certificate or the issuance of the replacement certificate.

        Section 6.    SHARES OF OTHER CORPORATIONS: HOW VOTED.    Shares of other corporations standing in the name of this corporation shall be voted by one of the following persons, listed in order of preference: (1) chief executive officer, or person designated by the chief executive officer; (2) president or person designated by the president; (3) secretary, or person designated by the secretary; (4) chief financial officer, or person designated by the chief financial officer; (5) other person designated by the board of directors. The authority to vote shares granted by this section includes the authority to execute a proxy in the name of the corporation for purposes of voting the shares.

        Section 7.    CONSTRUCTION AND DEFINITIONS.    Unless the context requires otherwise, the general provisions, rules of construction, and definitions in sections 100 through 195 of the California Corporations Code shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person.

ARTICLE IX

AMENDMENTS

        Except as otherwise required by law or by the articles of incorporation, these bylaws may be amended or repealed, and new bylaws may be adopted, by the board of directors or by the holders of a majority of the outstanding shares entitled to vote.

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EX-3.26

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Exhibit 3.26

CERTIFICATE OF INCORPORATION

OF

CORNELL COX MANAGEMENT RHODE ISLAND, INC.

ARTICLE I

        The name of the corporation is Cornell Cox Management Rhode Island, Inc. (the "Corporation").

ARTICLE II

        The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE III

        The nature of the business to be conducted and the purpose to be promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "DGCL").

ARTICLE IV

        The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is 1,000 shares of Common Stock, par value 5.01 per share (the "Common Stock"). Each share of Common Stock shall entitle the holder thereof to one vote at all meetings of stockholders of the Corporation.

ARTICLE V

        In furtherance of, and not in limitation of, the powers conferred by the DOCL., the directors shall have concurrent power with the stockholders of the Corporation to make, alter, amend or repeal the Bylaws of the Corporation.

ARTICLE VI

        The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and shall qualify are:

Name	Address
David M. Cornell	4801 Woodway, Suite 400W Houston, Texas 77056
Norman R. Cox, Jr.	8023 Vantage Drive, Suite 970 San Antonio, Texas 78230
Peter A. Leidel	535 Park Avenue New York, New York 10022

ARTICLE VII

        A director of the Corporation shall not be personally liable to the Corporation or its stockholder for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under

Section 174 of the DGCI, as the same exists or hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action which further eliminates or limits the personal liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the DGCL as so amended. Any repeal or modification of this Article VII by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

ARTICLE VIII

        Whenever a compromise or settlement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and Its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation as the case may be, and also on this Corporation.

ARTICLE IX

        The name and mailing address of the incorporator is John D. Held, One Shell Plaza, Houston, Texas 77002. The powers of the incorporator shall terminate upon the filing of this Certificate.

        I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 27th day of October, 1992.

/s/ JOHN D. HELD

Incorporator

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CERTIFICATE OF INCORPORATION OF CORNELL COX MANAGEMENT RHODE ISLAND, INC.

EX-3.27

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Exhibit 3.27

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CORNELL COX MANAGEMENT RHODE ISLAND, INC.

        Cornell Cox Management Rhode Island, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

        FIRST: That the board of directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the following Amendment to the Certificate of Incorporation of said corporation:

        RESOLVED, that the Certificate of Incorporation of Cornell Cox Management Rhode Island, Inc. be amended by changing Article I thereof so that, as amended, said Article shall road as follows:

        "The name of the corporation is Cornell Corrections of Rhode Island, Inc. (the "Corporation"),"

        SECOND: That, in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, in lieu of a meeting and vote of stockholders, the sole holder of all of the outstanding stock of the Corporation has given its written consent to said Amendment.

        THIRD: That the aforesaid Amendment was duly adopted in accordance with the applicable provisions of Sections 2.42 and 228 of the General Corporation Law of the State of Delaware.

        IN WITNESS WHEREOF, said Cornell Cox Management Rhode Island, Inc. has caused this Certificate to be signed by David M. Cornell, its Chairman, and attested by Steven W. Logan, its Secretary, this 10 day of July, 1995.

	CORNELL COX MANAGEMENT RHODE ISLAND, INC.
	By:	/s/ DAVID M. CORNELL
		David M. Cornell, Chairman
ATTEST:
/s/ STEVEN W. LOGAN
Steven W. Logan, Secretary

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CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF CORNELL COX MANAGEMENT RHODE ISLAND, INC.

EX-3.28

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Exhibit 3.28

BY-LAWS

OF

CORNELL COX MANAGEMENT RHODE ISLAND, INC.

(hereinafter called the "Corporation")

ARTICLE I: OFFICES

Section 1.    Registered Office.

        The registered office of the Corporation shall be located at 1209 Orange Street, in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.    Other Offices.

        The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.

ARTICLE II: MEETINGS OF STOCKHOLDERS

Section 1.    Place of Meetings.

        Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice_.thereof.

Section 2.    Annual Meeting.

        The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of meeting, at which meeting the stockholders shall elect a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than 60 days before the date of the meeting.

Section 3.    Special Meetings.

        Unless otherwise prescribed by law or by the Certificate of Incorporation, special meetings of stockholders, for any purpose or purposes, may be called by either the Chairman of the Board of Directors or the President and shall be called by such officer at the request in writing of a majority of the Board of Directors or at the request in writing of stockholders owning not less than 25% of the capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Written notice of the special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting, not less than ten nor more than 60 days before the date of such meeting.

Section 4.    Quorum.

        Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting,

until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

Section 5.    Voting.

        Unless otherwise required by law, the Certificate of Incorporation or these By-Laws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each stockholder represented at a meeting of stockholders shall be entitled to cast one. vote for each share standing in his name on the books of the corporation. Votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 6.    List of Stockholders Entitled to Vote.

        The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, showing the address of each stockholder' and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose: germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder of the Corporation who is present.

Section 7.    Stock Ledger.

        The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled (i) to examine the stock ledger, the list required by Section 6 of this Article II or the books of the Corporation and (ii) to vote in person or by proxy at any meeting of stockholders.

ARTICLE III: DIRECTORS

Section 1.    Number and Election of Directors.

        The business and affairs of the Corporation shall be managed by a Board of Directors consisting of not less than one nor more than 11 directors. The initial number of directors on the Board of Directors at the time of the adoption 6f these Bylaws shall be three. The number of directors of the Co oration ma be increased or decreased from time to time by resolution adopted by the Board of Directors, but no decrease b the e Board of Directors shall have the effect of shortening the term of any incumbent director. Except as provided in Section 2 of this Article III, the directors shall be elected by a plurality of the votes cast at annual meetings of stockholders. A director shall hold office until the next annual meeting and until his successor is duly elected and qualified or until his earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders.

Section 2.    Vacancies.

        Vacancies and newly created directorships resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office, though less than a quorum, or by a

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sole remaining director and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified or until their earlier resignation or removal.

Section 3.    Duties and Powers.

        The business of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.

Section 4.    Meetings.

        The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by, the Chairman of the Board, the President or any director. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than 48 hours before the date of the meeting, by telephone or telegram on- 24 hours notice.

Section 5.    Quorum.

        Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 6.    Actions of Board.

        Unless otherwise provided by the Certificate of Incorporation, or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all the members of the Board of Directors consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

Section 7.    Meetings by Means of Conference Telephone.

        Unless otherwise provided by the Certificate of Incorporation or these By-Laws, members of the Board of Directors or any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting Pursuant to this Section 7 shall constitute presence in person at such meeting.

ARTICLE IV: OFFICERS

Section 1.    General

        The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board of Directors (who must be a director), a President and a Secretary. The Board of Directors, in its discretion, may also choose a Treasurer and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation, nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

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Section 2.    Election.

        The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors.

Section 3.    Voting Securities Owned by the Corporation.

        Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name and on behalf of the Corporation by the Chairman of the Board of Directors, the-President, any Vice President, the Secretary or any Assistant Secretary, or the Treasurer or any Assistant Treasurer who may, in the name of and on behalf of the Corporation, take all such action as he deems advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4.    Chairman of the Board of Directors.

        The Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation and shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman of the Board shall have general supervision and control of the business, affairs and properties of the Corporation and its general officers. Except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors.

Section 5.    President.

        The, President. shall be the Chief Operating Officer of the Corporation and, subject to the control of the Board of Directors and the Chairman of the Board of Directors, shall have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall have the power to appoint and remove all subordinate officers, agents and employees, except those elected or appointed by the Board of Directors, and shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted bylaw to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors.

Section 6.    Vice Presidents.

        At the request of the President or in his absence or in the event of his inability or refusal to act, the Vice Presidents, if there be any (in the order designated by-he Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the

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restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as_. the Board of Directors from time to time may prescribe.

Section 7.    Secretary.

        The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary " shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board. of Directors, and shall perform such other duties as may be prescribed by. the Board of Directors or President, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any-instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the. Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 8.    Treasurer.

        The Treasurer, if there is one, shall have the custody of the corporate funds and securities and shall. keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meeting, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the.^-Corporation, in case of his death, resignation, retirement or removal from office, of all books papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 9.    Assistant Secretaries.

        Except as may be otherwise provided in these By-Laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Secretary, and in the absence of the Secretary or in the event of his disability or refusal to act, - -shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 10.    Assistant Treasurers.

        Assistant Treasurers, if there be any, shall perform such. duties and have such powers as from time to time may be assigned to them by the Board of Directors, the president, any Vice-President, or the Treasurer, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books,

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papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 11.    Other Officers.

        Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V: STOCK

Section 1.    Certificates Representing Stock

        The shares of the Corporation shall be represented by certificates of stock, signed by the Chairman of the Board of Directors or the President or other officer designated by the Board of Directors and countersigned by the Secretary; and if such certificates of stock are signed or countersigned by a transfer agent other than the Corporation, or, by a registrar other than the Corporation, such signature of the President and such countersignature. of the Secretary, or either of them, may be executed in facsimile, engraved or printed. In case any officer who has signed or whose facsimile signature has been placed upon any share certificate shall have ceased to be such officer because of death,. resignation or otherwise before the certificate is issued, it may be issued by the Corporation with the same effect as if the officer had not ceased to be such at the date of its issue. Said certificates of stock shall be in such form as the Board of Directors may from time to time prescribe.

Section 2    Lost Certificates.

        The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making, of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond or other indemnity deemed satisfactory by the Board of Directors in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 3.    Transfers

        Stock of the Corporation shall be transferable in the manner prescribed by law and in these bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his or her attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be cancelled -before a new certificate shall be issued.

Section 4.    Record Date.

        In order that the Corporation may determine the stockholders entitled* to notice of or to vote at any. meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record, date, which shall not be more than 60 days nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

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Section 5.    Beneficial Owners.

        The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, regardless of whether it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VI: NOTICES

Section 1.    Notices.

        Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws to be given to any director or stockholder, such notice may lie given by mail, addressed to such director or stockholder, at his address as it appears on -the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given, personally or by telegram, telecopy, telex or cable.

Section 2    Waivers of Notice.

        Whenever any notice is required by law, the Certificate of Incorporation or these By-Laws to be given to any director or stockholder, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VII: INDEMNIFICATION

        The Corporation shall indemnify and advance expenses under this Article VII to the fullest extent permitted by applicable law in effect on the date of.adoption of these Bv-laws by the Board of Directors and to such greater extent as applicable law may thereafter permit.

Section 1.    Obligation to Indemnify in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2.    Obligation to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation

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        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted inn good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 3.    Authorization of Indemnification.

        Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that "indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (iii) by the stockholders. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case.

Section 4.    Good Faith Defined.

        For purposes of any determination under Section 3 of this Article VII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust or other enterprise of which such person is or was serving at the request of the Corporation as a director,. officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standards of conduct set forth in Section 1 or 2 of this Article VII, as the case may be.

Section 5.    Indemnification by a Court.

        Notwithstanding any contrary determination in the specific case under Section 3 of this Article VII, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VII. The basis of such

8

indemnification by a court shall be a determination by such court that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or 2 of this Article VII, as the case may be. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application.

Section 6.    Expenses Payable in Advance.

        Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VII.

Section 7.    Non-exclusivity and Survival of Indemnification

        The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VII shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or 2 of this Article VII but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law.

Section 8.    Insurance.

        The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of. his status as such, regardless of whether the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VII.

Section 9.    Meaning of "Corporation" for Purposes of Article VII.

        For purposes of this Article VII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is, or was a director, officer employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

Section 10.    Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless. otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

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ARTICLE VIII: AMENDMENTS

Section 1.    Amendments by Stockholders.

        These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted, by the stockholders entitled to cast at least a majority of the votes which all stockholders, are entitled to cast.

Section 2.    Amendments by Directors.

        These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by action of a majority of directors then in office.

ARTICLE IX: GENERAL PROVISIONS

Section 1.    Disbursements.

        All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 2.    Fiscal Year.

        The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 3.    Corporate Seal.

        The corporate seal shall have inscribed thereon the name of the Corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced.

As adopted on November 12, 1992.

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BY-LAWS OF CORNELL COX MANAGEMENT RHODE ISLAND, INC. (hereinafter called the "Corporation")

EX-3.29

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Exhibit 3.29

CERTIFICATE OF INCORPORATION

OF

CMA ACQUISITION, INC.

ARTICLE I

        The name of the corporation is CMA Acquisition, Inc. (the "Corporation").

ARTICLE II

        The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE III

        The nature of the business to be conducted and the purpose to be promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "DGCL").

ARTICLE IV

        The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is 1,000 shares of Common Stock, par value $.01 per share (the "Common Stock"). Each share of Common Stock shall entitle the holder thereof to one vote at all meetings of stockholders of the Corporation.

ARTICLE V

        In furtherance of, and not in limitation of, the powers conferred by the DOCL, the directors shall have concurrent power with the stockholders of the Corporation to make, alter, amend or repeal the Bylaws of the Corporation.

ARTICLE VI

        The names and mailing addresses of the persons who are to serve as directors until the first annual meeting of stockholders or until their successors are elected and shall qualify are:

Name	Address
David M, Cornell	4801 Woodway, Suite 400W Houston, Texas 77056
Norman R. Cox, Jr.	8023 Vantage Drive, Suite 970 San Antonio, Texas 78230
Peter A, Leidel	535 Park Avenue New York, New York 10022

ARTICLE VII

        A director of the Corporation shall not be personally liable to the Corporation or its stockholder for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to;the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCI, as the same exists or hereafter may be amended, or (iv) for any transaction

from which the director derived an improper personal benefit If the DGCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action which further eliminates or limits, the personal liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the DGCL as so amended. Any repeal or modification of this Article VII by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

ARTICLE VIII

        Whenever a compromise or settlement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or. of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization. shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation as the case may be, and also on this Corporation.

ARTICLE IX

        The name and mailing address of the incorporator is John D. Held, One Shell Plaza, Houston, Texas 77002, The powers of the incorporator shall terminate upon the filing of this Certificate.

        I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 27th day of October, 1992.

/s/  JOHN D. HELD Incorporator

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CERTIFICATE OF INCORPORATION OF CMA ACQUISITION, INC.

EX-3.30

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Exhibit 3.30

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

CMA ACQUISITION, INC.

        CMA ACQUISITION, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify that:

        First: The Board of Directors of the Corporation by unanimous written consent dated and effective as of January 1^st, 1994 adopted resolutions proposing and declaring advisable an amendment to Article I of the Certificate of Incorporation of the Corporation, to change the name of the Corporation, and recommending the adoption of such amendment to the stockholders of the Corporation, such amendment reading in its entirety as follows:

"ARTICLE I

        The name of the corporation is Cornell Cox Management Florida, Inc. (the "Corporation"),"

        Second: Thereafter, the foregoing amendment to the Certificate of Incorporation of the Corporation was adopted by the stockholders of the Corporation by a written consent of the sole stockholder dated and effective as of January 1^st, 1994.

        Third: The aforesaid amendment to the Certificate of Incorporation of the Corporation has been duly adopted in accordance with Sections 242 and 228(a) of the General Corporation Law of the State of Delaware.

        IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed in its corporate name by its President and attested by its Secretary dated and effective as of the 1^st day of January, 1994.

		CMA ACQUISITION, INC.
		By:	/s/  NORMAN R. COX, JR.
		Name: Norman R. Cox, Jr.             President
ATTEST:
By:	/s/  DAVID M. CORNELL Name: David M. Cornell             Secretary

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CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF CMA ACQUISITION, INC.

EX-3.31

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Exhibit 3.31

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CORNELL COX MANAGEMENT FLORIDA, INC.

        Cornell Cox Management Florida, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

        FIRST: That the board of directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the following Amendment to the Certificate of Incorporation of said corporation:

        RESOLVED, that the Certificate of Incorporation of Cornell Cox Management Florida, Inc. be amended by changing Article I thereof so that, as amended, said Article shall read as follows:

        "The name of the corporation is Cornell Corrections of Florida, Inc. (the "Corporation")."

        SECOND: That, in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, in lieu of a meeting and vote of stockholders, the sole holder of all of the outstanding stock of the Corporation has given its written consent to said Amendment.

        THIRD. That the aforesaid Amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

        IN WITNESS WHEREOF, said Cornell Cox Management Florida, Inc. has caused this Certificate to be signed by David M. Cornell, its Chairman, and attested by Steven W. Logan, its Secretary, this 10 day of July, 1995.

	CORNELL COX MANAGEMENT FLORIDA, INC.
	By:	/s/ DAVID M. CORNELL David M. Cornell, Chairman
ATTEST:
/s/ STEVEN W. LOGAN Steven W. Logan, Secretary

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CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF CORNELL COX MANAGEMENT FLORIDA, INC.

EX-3.32

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Exhibit 3.32

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CORNELL CORRECTIONS OF FLORIDA, INC.

        Cornell Corrections of Florida, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

        FIRST: That the board of directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the following Amendment to the Certificate of Incorporation of said corporation:

        RESOLVED, that the Certificate of Incorporation of Cornell Corrections of Florida, Inc, be amended by changing Article I thereof so that, as amended, said Article shall read as follows:

        "The name of the Corporation is Cornell Corrections of Texas, Inc. (the "Corporation")."

        SECOND: That, in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware, in lieu of a meeting and vote of stockholders, the sole holder of all of the outstanding stock of the Corporation has given its written consent to said Amendment.

        THIRD: That the aforesaid Amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

        IN WITNESS WHEREOF, said Cornell Corrections of Florida, Inc. has caused this Certificate to be signed by David M. Cornell, its Chairman, and attested by Steven W. Logan, its Secretary, this 9— day of May. 1996.

	CORNELL CORRECTIONS OF FLORIDA, INC.
	By:	/s/  DAVID M. CORNELL David M. Cornell, Chairman
ATTEST:
/s/  STEVEN W. LOGAN Steven W. Logan, Secretary

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CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF CORNELL CORRECTIONS OF FLORIDA, INC.

EX-3.33

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Exhibit 3.33

BY-LAWS

OF

CMA ACQUISITION, INC.

(hereinafter called the "Corporation")

ARTICLE I: OFFICES

Section 1.    Registered Office.

        The registered office of the Corporation shall be located at 1209 Orange Street, in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.    Other Offices.

        The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.

ARTICLE II: MEETINGS OF STOCKHOLDERS

Section 1.    Place of Meetings.

        Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.    Annual Meeting.

        The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of meeting, at which meeting the stockholders shall elect a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than 60 days before the date of the meeting.

Section 3.    Special Meetings.

        Unless otherwise prescribed by law or by the Certificate of Incorporation, special meetings of stockholders, for any purpose or purposes, may be called by either the Chairman of the Board of Directors or the President and shall be called by such officer at the request in writing of a majority of the Board of Directors or at the request in writing of stockholders owning not less than 25% of the capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Written notice of the special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting, not less than ten nor more than 60 days before the date of such meeting.

Section 4.    Quorum.

        Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of stockholders for the transaction of

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business. If, however, such quorum shall not be present or represented at any meeting of stockholders, the" stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

Section 5.    Voting.

        Unless otherwise required by law, the Certificate of Incorporation or these By-Laws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share standing in his name on the books of the corporation. Votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 6.    List of Stockholders Entitled to Vote.

        The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be.specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder of the Corporation who is present.

Section 7.    Stock Ledger.

        The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled (i) to examine the stock ledger, the list required by Section 6 of this Article II or the books of the Corporation and (ii) to vote in person or by proxy at any meeting of stockholders.

ARTICLE III: DIRECTORS

Section 1.    Number and Election of Directors.

        The business and affairs of the Corporation shall be managed by a Board of Directors consisting of not less than one nor more than 11 directors. The initial number of directors on the Board of Directors at the time of the adoption of these Bylaws shall be three. The number of directors of the Corporation may be increased or decreased from time to time by resolution adopted by the Board of Directors, but no decrease by the Board of Directors shall have the effect of shortening the term of any incumbent director. Except as provided in Section 2 of this Article III, the directors shall be elected by a plurality of the. votes cast at annual meetings of stockholders. A director shall hold office until the next annual meeting and until his successor is duly elected and qualified or until his earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders.

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Section 2.    Vacancies.

        Vacancies and newly created directorships resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified or until their earlier resignation or removal.

Section 3.    Duties and Powers.

        The business of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.

Section 4.    Meetings.

        The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be. held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or any director. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than 48 hours before the date of the meeting, by telephone or telegram on 24 hours notice.

Section 5.    Quorum.

        Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute. a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 6.    Actions of Board

        Unless otherwise provided by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all the members of the Board of Directors consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

Section 7.    Meetings by Means of Conference Telephone.

        Unless otherwise provided by the Certificate of Incorporation or these By-Laws, members of the Board of Directors or any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting.

ARTICLE IV: OFFICERS

Section 1.    General.

        The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board of Directors (who must be a director), a President and a Secretary. The Board of Directors, in its discretion, may also choose a Treasurer and one or more Vice Presidents, Assistant

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Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation, nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

Section 2.    Election.

        The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from. time to time by the Board of Directors; and. all officers of the Corporation shall hold office until their successors are chosen and qualified or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors.

Section 3.    Voting Securities Owned by the Corporation.

        Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned, by the Corporation may be executed in the name and on behalf of the Corporation by the Chairman of the Board of Directors, the President, any Vice President, the Secretary or any Assistant Secretary, or the Treasurer or any Assistant Treasurer who may, in the name of and on behalf of the Corporation, take all such action as he deems advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4.    Chairman of the Board of Directors.

        The Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation and shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman of the Board shall have general supervision and control of the business, affairs and properties of the Corporation and its general officers. Except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors.

Section 5.    President.

        The President shall be the Chief Operating Officer of the Corporation and, subject to the control of the Board of Directors and the Chairman of the Board of Directors, shall have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall have the power to appoint and remove all subordinate officers, agents and employees, -except those elected or appointed by the Board of Directors, and shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these By-Laws or by the Board of Directors..

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Section 6.    Vice Presidents.

        At the request of the President or in his absence or in the event of his inability or refusal to act, the Vice Presidents, if there be any (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe.

Section 7.    Secretary.

        The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to. be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders. and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 8.    Treasurer.

        The Treasurer, if there is one, shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of "the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meeting, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 9.    Assistant Secretaries.

        Except as may be otherwise provided in these By-Laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Secretary, and in the absence of the Secretary or in the event of his disability or, refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 10.    Assistant Treasurers.

        Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Treasurer, and in the absence of the Treasurer'or in the event of his disability or refusal to act, shall

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perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and far the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 11.    Other Officers.

        Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V: STOCK

Section 1.    Certificates Representing Stock

        The shares of the Corporation shall be represented by certificates of stock, signed by the Chairman of the Board of Directors or the President or other officer designated by the Board of Directors and countersigned by the Secretary; and if such certificates of stock are signed or countersigned by a transfer agent other than the Corporation, or, by a registrar other than the Corporation, such signature of the President and such countersignature of the Secretary, or either of them, may be executed in facsimile, engraved or printed. In case any officer who has signed or whose facsimile signature has been placed upon any share certificate shall have ceased to be such officer because of death, resignation or otherwise before the certificate is issued, it may be issued by the Corporation with the same effect as if the officer had not ceased to be such at the date of its issue. Said certificates of stock shall be in such form as the Board of Directors may from time to time prescribe.

Section 2.    Lost Certificates.

        The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in' its. discretion and as a condition precedent to the, issuance. thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond or other indemnity deemed satisfactory by the Board of Directors in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 3.    Transfers.

        Stock of the Corporation shall be transferable in the manner prescribed by law and in these bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his or her attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be cancelled before a new certificate shall be issued.

Section 4.    Record Date.

        In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of

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Directors may fix, in advance, a record date, which shall not be more than 60 days nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 5.    Beneficial Owners.

        The Corporation shall be entitled to recognize the exclusive right of a. person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or. other claim to or interest in such share or 'shares on the part of any other person, regardless of whether it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VI: NOTICES

Section 1.    Notices.

        Whenever written notice is required, by law, the Certificate of Incorporation or these By-Laws to be given to any director or stockholder, such notice may be given by mail, addressed to such director or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telecopy, telex or cable.

Section 2.    Waivers of Notice.

        Whenever any notice is required by law, the Certificate of Incorporation or these By-Laws to be given to any director or stockholder, a waiver thereof in writing, signed by. the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VII: INDEMNIFICATION

        The Corporation shall indemnify and advance expenses under this Article VII to the fullest extent permitted by applicable law in effect on the date of adoption of these By-laws by the Board of Directors and to such greater extent as applicable law may thereafter permit.

Section 1.    Obligation to Indemnify in Actions, Suits or Proceedings Other Than Those by or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or. investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to

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be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable-cause to believe that his conduct was unlawful.

Section 2.    Obligation to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify aay person who was or is a party or is threatened to be made a party to.any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurredby him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 3.    Authorization of Indemnification.

        Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or Section 2 of this Article. VII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (iii) by the stockholders. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in the defense of any claim, issue or matter therein,- he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case.

Section 4.    Good Faith Defined.

        For purposes of any determination under Section 3 of this Article VII, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect' to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise or on information supplied to him by the officers of the Corporation or another enterprise in the course. of their duties or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used.in this Section 4 shall mean any other corporation or any partnership, joint venture, trust or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standards of conduct set forth in Section 1 or 2 of this Article VII, as the case may be.

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Section 5.    Indemnification by 'a' Court.

        Notwithstanding any contrary determination in the specific case under Section 3 of this Article VII, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the. director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or 2 of this Article VII, as the case may be. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application.

Section 6.    Expenses Payable in Advance.

        Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VII.

Section 7.    Non-exclusivity and Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VII shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or 2 of this Article VII but whom the Corporation has the power or obligation to indemnify under the provisions of the Delaware General Corporation Law.

Section 8.    Insurance.

        The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, regardless of whether the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VII.

Section 9.    Meaning of "Corporation" for Purposes of Article VII.

        For purposes of this Article VII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

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Section 10.    Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

ARTICLE VIII: AMENDMENTS

Section 1.    Amendments by Stockholders.

        These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted, by the stockholders entitled to cast at least a majority of the votes which all stockholders are entitled to cast.

Section 2.    Amendments by Directors.

        These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by action of a. majority of directors then in office.

ARTICLE IX: GENERAL PROVISIONS

Section 1.    Disbursements.

        All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 2.    Fiscal Year.

        The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 3.    Corporate Seal.

        The corporate seal shall have inscribed thereon the name of the Corporation. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced.

As adopted on November 15, 1992.

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BY-LAWS OF CMA ACQUISITION, INC. (hereinafter called the "Corporation")

EX-3.34

Exhibit 3.34

CERTIFICATE OF INCORPORATION
OF
CORNELL INTERNATIONAL, INC.

Article One

        The name of the corporation is Cornell International, Inc.

Article Two

        The address of its registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

Article Three

        The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

Article Four

        The total number of shares of stock which the corporation shall have authority to issue is 10,000 shares of common stock, and the par value of each such share is $0.01.

Article Five

        The name and mailing address of the incorporator is as follows:

NAME	MAILING ADDRESS
.Efren A. Acosta	2400 Chase Tower 600 Travis Houston. TX 77002-3095

Article Six

        The names and mailing addresses of the persons who are to serve as the directors of the corporation until the first annual meeting of stockholders or until their successor or successors are elected and qualified are as follows:

NAME	MAILING ADDRESS
Steven W. Logan	1700 West Loop South, Suite 1500 Houston, Texas 77027
John L. Hendrix	1700 West Loop South, Suite 1500 Houston, Texas 77027

Article Seven

        Directors need not be elected by written ballot unless required by the bylaws of the corporation.

Article Eight

        In furtherance and not in )imitation of the powers conferred by statute, the board of directors is expressly authorized to adopt, amend or repeal bylaws of the corporation.

Article Nine

        The corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute, All rights con-ferred upon stockholders herein are granted subject to this reservation.

        I, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring

and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 3rd day of August, 2001.

/s/  EFREN A. ACOSTA Efren A. Acosta

EX-3.35

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Exhibit 3.35

BYLAWS

OF

CORNELL INTERNATIONAL, INC.

TABLE OF CONTENTS

		Page
ARTICLE I. OFFICES		1
	Section 1. Registered Office	1
	Section 2. Other Offices	1
ARTICLE II. MEETINGS OF STOCKHOLDERS		1
	Section 1. Place of Meetings	1
	Section 2. Annual Meeting	1
	Section 3. Special Meetings	1
	Section 4. Quorum	1
	Section 5. Voting	2
	Section 6. Action by Written Consent	2
	Section 7. List of Stockholders Entitled to Vote	2
	Section 8. Stock Ledger	2
ARTICLE III. DIRECTORS		2
	Section 1. Number and Election of Directors	2
	Section 2. Vacancies	3
	Section 3. Duties and Powers	3
	Section 4. Place of Meetings	3
	Section 5. Annual Meetings	3
	Section 6. Regular Meetings	3
	Section 7. Special Meetings	3
	Section 8. Quorum	4
	Section 9. Actions of the Board	4
	Section 10. Meetings by Means of Conference Telephone	4
	Section 11. Committees	4
	Section 12. Compensation	4
ARTICLE IV. NOTICES		4
	Section 1. Notices	4
	Section 2. Waiver	5
ARTICLE V. OFFICERS		5
	Section 1. General	5
	Section 2. Election	5
	Section 3. Voting Securities Owned by the Corporation	5
	Section 4. President	5
	Section 5. Vice President	6
	Section 6. Secretary	6
	Section 7. Treasurer	6
	Section 8. Assistant Secretaries	6
	Section 9. Assistant Treasurers	7
	Section 10. Other Officers	7
ARTICLE VI. STOCK		7
	Section 1. Certificates Representing Stock	7
	Section 2. Lost Certificates	70
	Section 3. Transfers	8
	Section 4. Record Date	8
	Section 5. Beneficial Owners	8
ARTICLE VII. INDEMNIFICATION		8
	Section 1. Obligation to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation	8

	Section 2. Obligation to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation	9
	Section 3. Authorization of Indemnification	9
	Section 4. Good Faith Defined	9
	Section 5. Indemnification by a Court	9
	Section 6. Expenses Payable in Advance	10
	Section 7. Non-exclusivity and Survival of Indemnification	10
	Section 8. Insurance	10
	Section 9. Meaning of "Corporation" for Purposes of Article VII	10
	Section 10. Meaning of Additional Terms	10
	Section 11. Survival of Indemnification	11
ARTICLE VIII. AMENDMENTS		11
	Section 1. Amendments	11
ARTICLE IX. GENERAL PROVISIONS		11
	Section 1. Dividends	11
	Section 2. Reserves	11
	Section 3. Disbursements	11
	Section 4. Fiscal Year	11
	Section 5. Corporate Seal	11
	Section 6. Disallowed Expenses	11

BYLAWS

OF

CORNELL INTERNATIONAL, INC.

(hereinafter called the "Corporation")

ARTICLE I OFFICES

Section 1.    Registered Office.

        The registered office of the Corporation shall be located at 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent at such address is The Corporation Trust Company.

Section 2.    Other Offices.

        The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II MEETINGS OF STOCKHOLDERS

Section 1.    Place of Meetings.

        Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2.    Annual Meeting.

        The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of meeting, at which meeting the stockholders shall elect a Board of Directors, and transact such other business as may properly be brought before the meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than 60 days before the date of the meeting.

Section 3.    Special Meetings.

        Unless otherwise prescribed by law or by the Certificate of Incorporation, special meetings of stockholders, for any purpose or purposes, may be called by the President and shall be called by the President or the Secretary at the request in writing of a majority of the Board of Directors or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Written notice of the special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each stockholder entitled to vote at such meeting, not less than ten nor more than 60 days before the date of such meeting. Business transacted at any special meeting of the stockholders shall be limited to the purposes stated in the notice.

Section 4.    Quorum.

        Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power

to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as original noticed. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice shall be given to each stockholder entitled to vote at the meeting.

Section 5.    Voting.

        Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Unless otherwise provided in the Certificate of Incorporation, each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share standing in his name on the books of the corporation. Votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 6.    Action by Written Consent.

        Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of the stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be singed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 7.    List of Stockholders Entitled to Vote.

        The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten_. days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder of the Corporation who is present.

Section 8.    Stock Ledger.

        The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled (i) to examine the stock ledger, the list required by Section 7 of this Article II or the books of the Corporation and (ii) to vote in person or by proxy at any meeting of stockholders.

ARTICLE III DIRECTORS

Section 1.    Number and Election of Directors.

        The business and affairs of the Corporation shall be managed by a Board of Directors consisting of not less than one director, as determined from time to time by resolution of the Board of Directors. Except as provided in the Certificate of Incorporation,, the director or directors, as the case may be,

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shall be elected by a plurality of the votes cast at an annual meetings of stockholders. A director shall hold office until the next annual meeting and until his successor is duly elected and qualified or until his earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders.

Section 2.    Vacancies.

        Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold 'office until the next annual election and until their successors are duly elected and qualified or until their earlier resignation or removal. If there are no directors in office, then an election of directors may be held in the manner provided by statute. Any director may be removed either for or without cause at any special meeting of the stockholders duly called and held for such purpose.

Section 3.    Duties and Powers.

        The business of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are nott by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 4.    Place of Meetings.

        The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5.    Annual Meetings.

        The first meeting of each newly elected Board of Directors shall be held at the place of, and immediately following, the annual meeting of the stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time and place, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.

'Section 6:    Regular Meetings.

        Regular meetings of the Board of Directors may b.e held without notice at such time and at such place as may from time to time be determined by the Board of Directors.

Section 7..    Special Meetings.

        Special meetings of the Board of Directors may be called by the President or on written request of two directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than 48 hours before the date of the meeting, by telephone, facsimile transmission or telegram on 24 hours' notice, unless the person calling the meeting determines that the facts and circumstances require in the best interests of the Corporation that such notice be shortened. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the sole purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of such meeting, except that notice shall be given of any proposed amendment to these Bylaws if it is to be adopted at any special meeting or with respect to any other matter where notice is required by statute.

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Section 8.    Quorum.

        Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at. which there is a, quorum shall be the act of the Board of Directors. If a quorum shall not be present at any, meeting of the Board "of' Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9.    Actions of the Board.

        Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all the members of the Board of Directors consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

Section 10.    Meetings by Means of Conference Telephone.

        Unless otherwise provided by the Certificate of Incorporation or these Bylaws, members of the Board of Directors or any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 10 shall constitute presence in person at such meeting.

Section 11.    Committees.

        The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference, to approving or adopting, or recommending to the stockholders, any action or matter expressly required by statute or otherwise to be submitted to the stockholders for approval, or adopting, amending or repealing any bylaw of the Corporation. Each committee shall keep regular minutes and report the same to the Board of Directors when required.

Section 12.    Compensation.

        The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary or other consideration as director. No such payment shall preclude any director from serving. the. Corporation in any order capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV NOTICES

Section 1.    Notices.

        Whenever, under the provisions of the statutes of Delaware or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such

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director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given personally or by telephone, telegram, facsimile transmission or other electronic means.

Section 2.    Waivers of Notice.

        Whenever any notice is required to be given under the provisions of the statutes of Delaware or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V OFFICERS

Section 1.    General.

        The officers of the Corporation shall be chosen by the Board of Directors and shall be a President and a Secretary. The Board of Directors, in its discretion, may also choose a Treasurer and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation nor need such officers be directors of the Corporation.

Section 2.    Election.

        The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors;' and all officers of the Corporation shall hold office until their successors are chosen and qualified or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the affirmative vote of a majority of the Board of Directors.

Section 3.    Voting Securities Owned by the Corporation.

        Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to the securities owned by the Corporation may be executed in the name and on behalf of the Corporation by the President, any Vice President, the Secretary or any Assistant Secretary, or the Treasurer or any Assistant Treasurer who may, in the name of and on behalf of the Corporation, take all such action as he deems advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4.    President.

        The President shall be the Chief Executive Officer of the Corporation and shall have general supervision and control of the business, affairs and properties of the Corporation and its general officers, and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall have the power to appoint and remove all subordinate officers, agents and employees, except those elected or appointed by the Board of Directors, and shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these Bylaws, the

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Board of Directors or the President. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws or by the Board of Directors.

Section 5.    Vice President.

        At the request of the President or in his absence or in the event of his inability or refusal to act, the Vice Presidents, if there be any (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have the powers of and be subject to all the restrictions upon the President.

Section 6.    Secretary.

        The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceeding thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special. meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or'the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary_. or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 7.    Treasurer.

        The Treasurer, if there is one, shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipt and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by. the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meeting, or when the Board of Directors so. requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of the Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 8.    Assistant Secretaries.

        Except as may be otherwise in those Bylaws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Secretary, and in the absence of the Secretary or in

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the event of his disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 9.    Assistant Treasurers.

        Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice-President, or the Treasurers, and in the absence of the Treasurer or in the event of his disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

Section 10.    Other Officers.

        Such other officers as to the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE VI STOCK

Section 1.    Certificates Representing Stock.

        The shares of stock of the Corporation shall be represented by certificates, signed by, or in the name of, the Corporation by the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. If the Corporation. shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock; provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

Section 2.    Lost Certificates.

        The Corporation may issue a new certificate in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Corporation shall require and/or to give

7

the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 3.    Transfers.

        Stock of the Corporation shall be transferable in the manner prescribed bylaw and in these Bylaws. 'Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be canceled before a new certificate shall be issued.

Section 4.    Record Date.

        In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 days nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that. the Board of Directors may fix a new record date for the adjourned meeting.

Section 5.    Beneficial Owners.

        The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to 'or interest in such share or shares on the part of any other person, regardless of whether it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VII INDEMNIFICATION

        The Corporation shall indemnify and advance expenses under this Article VII to the fullest extent permitted by applicable law in effect on the date of adoption of these. Bylaws and to such greater extent as applicable law may thereafter permit.

Section], Obligation to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the Corporation as a, director, officer, employee or agent of another corporation, partnership,, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by-him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

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Section 2.    Obligation to Indemnify in Actions, Suits or Proceedings by. or in the Right of the Corporation.

        Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or 'other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 3.    Authorization of Indemnification.

        Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding,^-or (ii) if such a quorum is not obtainable, or even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion or (iii) by the stockholders. To the extent, however, that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case.

Section 4.    Good Faith Defined.

        For purposes of any determination under Section 3 of this Article VII,^-a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Corporation or another enterprise or on information supplied to him by the officers of the Corporation or another enterprise in the course of their duties or on the advice of legal counsel for the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standards of conduct set forth in Section 1 or 2 of. this Article VII, as the case may be.

Section 5.    Indemnification by a Court.

        Notwithstanding any contrary determination in the specific case under Section 3 of this Article VII, and notwithstanding the^. absence of any determination thereunder, any director, officer, employee or

9

agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible tinder Sections 1 and 2 of this Article VII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Section 1 or 2 of this Article VII, as the case may be. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application.

Section 6.    Expenses Payable in Advance.

        Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VII.

Section 7.    Non-exclusivity and Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) or any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VII shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not_. specified in Section 1 or 2 of this Article VII but whom the Corporation has the power or^-obligation to indemnify under the provisions of the Delaware General Corporation Law.

Section 8.    Insurance.

        The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, regardless of whether the Corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VII.

Section 9.    Meaning of "Corporation" for Purposes of Article VII.

        For purposes of this Article VII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or -agents, so that any person who is or was a director, officer, employee, or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

Section 10.    Meaning of Additional Terms.

        For purposes of this Article VII, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any

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service as a director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in the manner "not opposed to the best interests of the Corporation" as referred to in this Article VII.

Section 11.    Survival of Indemnification.

        The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

ARTICLE VIII AMENDMENTS

Section 1.    Amendments.

        These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by action of a majority of directors then in office at any regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws is contained in the notice of such special meeting.

ARTICLE IX GENERAL PROVISIONS

Section 1.    Dividends.

        Dividends upon the capital stock of the Corporation, subject to the provisions. of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meetings, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation.

Section 2.    Reserves.

        Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conductive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it_. was created.

Section 3.    Disbursements.

        All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 4.    Fiscal Year.

        The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 5.    Corporate Seal.

        The corporate seal shall. have inscribed thereon the name of the Corporation and the words "Corporate Seal, Delaware." The seal may be used by causing it or, a facsimile thereof to be impressed or affixed or reproduced.

Section 6.    Disallowed Expenses.

        Any payments to an officer of the Corporation such as a salary, commission, bonus, interest, or rent, or entertainment expenses incurred by him, which shall be disallowed in whole or in part as a

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deductible expense by the internal Revenue Service, shall be reimbursed by such officer to the Corporation to the full extent of such disallowance. It shall be the duty of the directors, as a board, to enforce payment of each such amount disallowed.

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BYLAWS OF CORNELL INTERNATIONAL, INC.
TABLE OF CONTENTS
BYLAWS OF CORNELL INTERNATIONAL, INC. (hereinafter called the "Corporation")

EX-3.36

Exhibit 3.36

Form BCA-2.10	ARTICLES OF INCORPORATION
(Rev. Jan. 1995)	This space for use by Secretary of State
Jesse White Secretary of State Department of Business Services Springfield, IL 62756		SUBMIT IN DUPLICATE This space for use by Secretary of State
Payment must be made by certi-fied check, cashier's check, Illi-nois attorney's check, Illinois C.P.A.'s check or money order, Payable to "Secretary of State."		Date   Franchise Tax $ Filing Fee    $    Approved

1.	CORPORATE NAME:	CORNELL INTERVENTIONS, INC.
	(The corporate name must contain the word "corporation", "company," "incorporated," "limited" or an abbreviation thereof.)
2.	Initial Registered Agent:	CT CORPORATION SYSTEM
		First Name	Middle Initial	Last Name
	Initial Registered Office:	208 SOUTH LASALLE
		Number	Street	Suite #
		CHICAGO	60604	Cook
		City	Zip Code	County
3.	Purpose or purposes for which the corporation is organized: (If not sufficient space to cover this point, add one or more sheets of this size.)    THE TRANSACTION OF ANY OR ALL LAWFUL BUSINESSES FOR WHICH CORPORATIONS MAY BE INCORPORATED UNDER THE ILLINOIS BUSINESS CORPORATION ACT OF 1983, AS AMENDED
4.	Paragraph 1: Authorized Shares, Issues Shares and Consideration Received:

Class	Par Value per Share		Number of Shares Authorized	Number of Shares Proposed to be Issues	Consideration to be Received Therefor
Common	$	0.01	1,000	1,000	$	1,000
					$
					$
					$
TOTAL					$	1,000

Paragraph 2: The preferences, qualifications, limitations, restrictions and special or relative rights in respect of the shares of each class are: (If not sufficient space to cover this point, add one or more sheets of this size.)

SEE ATTACHED

5.	OPTIONAL:	(a)	Number of directors constituting the initial board of directors of the corporation
		(b)	Names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and qualify:
			Name	Residential Address	City, State, ZIP
6.	OPTIONAL:	(a)	It is estimated that the value of all property to be owned by the corporation for the following year wherever located will be:		$
		(b)	It is estimated that the value of the property to be located within the State of Illinois during the following year will be:		$
		(c)	It is estimated that the gross amount of business that will be transacted by the corporation during the following year will be:		$
		(d)	It is estimated that the gross amount of business that will be transacted from places of business in the State of Illinois during the following year will be:		$
7.	OPTIONAL:	OTHER PROVISIONS—SEE ATTACHED Attach a separate sheet of this size for any other provision to be included in the Articles of Incorporation, e.g., authorizing preemptive rights, denying cumulative voting, regulating internal affairs, voting majority requirements, fixing a duration other than perpetual, etc.
8.	NAME(S) & ADDRESS(ES) OF INCORPORATOR(S)
The undersigned incorporator(s) hereby declare(s), under penalties of perjury, that the statements made in the foregoing Articles of Incorporation are true.

Dated:	May 11, 1999
	/s/  DAVID R. DLUGIE Signature	525 W. Monroe St. Ste 1600Street
	DAVID R. DLUGIE, SOLE INCORPORATOR	Chicago		Illinois	60661
	(Type or Print Name)	City/Town		State	Zip Code
2.		2.
	Signature		Street
	(Type or Print Name)		City/Town	State	Zip Code
3.		3.
	Signature		Street
	(Type or Print Name)		City/Town	State	Zip Code
(Signatures must be in BLACK INK on original document. Carbon copy, photocopy or rubber stamp signatures may only be used on conformed copies.) NOTE: If a corporation acts as incorporator, the name of the corporation and the state of incorporation shall be shown and the execution shall be by its president or vice president and verified by him, and attested by its secretary or assistant secretary.

FEE SCHEDULE

•

The initial franchise tax is assessed at the rate of 15/100 of 1 percent ($1.50 per $1,000) on the paid-in capital represented in this state, with a minimum of $25.



•

The filing fee is $75.



•

The minimum total due (franchise tax + filing fee) is $100.
(Applies when the Consideration to be Received as set forth in item 4 foes not exceed $16,667)



•

The Department of Business Services in Springfield will provide assistance in calculating the total fees if necessary.
Illinois Secretary of State                Springfield, IL 62756
Department of Business Services Telephone        (217) 782-9522 or 782-9523

BCA 2.10 ARTICLE SEVEN ATTACHMENT

        Personal Liability of Directors—The personal liability of the directors of the corporation hereby is eliminated to the fullest extent permitted under the Illinois Business Corporation Act of 1983, as amended.

EX-3.37

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Exhibit 3.37

BYLAWS
OF
CORNELL INTERVENTIONS, INC., an Illinois corporation
(Adopted May 12, 1999)

TABLE OF CONTENTS

		Page Number
ARTICLE I
INDENTIFICATION; OFFICES
SECTION 1.01	Name	1
SECTION 1.02	Principal and Business Offices	1
SECTION 1.03	Registered Agent and Office	1
SECTION 1.04	Place of Keeping Corporate Records	1
ARTICLE II
SHAREHOLDERS
SECTION 2.01	Annual Meetings	1
SECTION 2.02	Special Meetings	1
SECTION 2.03	Place of all Shareholder Meetings	1
SECTION 2.04	Notice of Meetings	1
SECTION 2.05	Quorum and Adjourned Meetings	2
SECTION 2.06	Fixing of Record Date	2
SECTION 2.07	Voting Lists	2
SECTION 2.08	Voting	2
SECTION 2.09	Proxies	2
SECTION 2.10	Ratification of Acts of Directors and Officers	3
SECTION 2.11	Informal Action of Shareholders	3
SECTION 2.12	Organization	3
ARTICLE III
DIRECTORS
SECTION 3.01	Number and Tenure of Directors	3
SECTION 3.02	Election of Directors	3
SECTION 3.03	Annual and Regular Meetings	3

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SECTION 3.04	Special Meetings	4
SECTION 3.05	Notice of Special Meetings of the Board of Directors	4
SECTION 3.06	Waiver of Notice of Meetings of the Board of Directors	4
SECTION 3.07	Quorum	4
SECTION 3.08	Voting	4
SECTION 3.09	Vacancies	4
SECTION 3.10	Removal of Directors	4
SECTION 3.11	Informal Action of Directors	4
SECTION 3.12	Participation by Conference Telephone	4
ARTICLE IV
COMMITTEES
SECTION 4.01	General Provisions	5
SECTION 4.02	Executive Committee	5
ARTICLE V
OFFICERS
SECTION 5.01	General Provisions	5
SECTION 5.02	Election and Term of Office	5
SECTION 5.03	Removal of Officers	5
SECTION 5.04	The Chief Executive Officer	6
SECTION 5.05	The President	6
SECTION 5.06	The Chairman of the Board	6
SECTION 5.07	Vice Chairman of the Board	6
SECTION 5.08	The Vice President	6
SECTION 5.09	The Secretary	7
SECTION 5.10	The Assistant Secretary	7
SECTION 5.11	The Treasurer	7
SECTION 5.12	The Assistant Treasurer	7
SECTION 5.13	Other Officers, Assistant Officers and Agents	7
SECTION 5.14	Absence of Officers	7
SECTION 5.15	Compensation	7
ARTICLE VI
INDEMNIFICATION
SECTION 6.01	Right to Indemnify	8

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SECTION 6.02	Insurance	9
SECTION 6.03	Contract with the Corporation	9
ARTICLE VII
CERTIFICATES FOR SHARES
SECTION 7.01	Certificates of Shares	9
SECTION 7.02	Signatures of Former Officers, Transfer Agents or Registrars	9
SECTION 7.03	Transfer of Shares	10
SECTION 7.04	Lost, Destroyed or Stolen Certificates	10
ARTICLE VIII
DISTRIBUTIONS
SECTION 8.01	Distributions	10
SECTION 8.02	Dividends	10
SECTION 8.03	Reserves	10
ARTICLE IX
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 9.01	Contracts	10
SECTION 9.02	Loans	10
SECTION 9.03	Checks, Drafts, Etc	11
SECTION 9.04	Deposits	11
ARTICLE X
AMENDMENTS
SECTION 10	Amendments	11
ATTESTATION		11

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BY-LAWS
OF
CORNELL INTERVENTIONS, INC.
(Adopted May 12, 1999)

ARTICLE I

IDENTIFICATION; OFFICES

SECTION 1.01.    Name.    The name of the corporation is Cornell Interventions, Inc. (the "Corporation").

SECTION 1.02.    Principal and Business Offices.    The principal office of the Corporation in the State of Illinois will be located in the City of Chicago and County of Cook. The Corporation may have such principal and other business offices, either within or outside of the state of Illinois, as the Board of Directors may designate or as the Corporation's business may require from time to time.

SECTION 1.03.    Registered Agent and Office.    The Corporation's registered agent may be changed from time to time by or under the authority of the Board of Directors. The address of the Corporation's registered agent may change from time to time by or under the authority of the Board of Directors, or the registered agent. The business office of the Corporation's registered agent shall be identical to the registered office. The Corporation's registered office may be but need not be identical with the Corporation's principal office in the state of Illinois.

SECTION 1.04    Place of Keeping Corporate Records.    The records and documents required by law to be kept by the Corporation permanently shall be kept at the Corporation's principal office.

ARTICLE II

SHAREHOLDERS

SECTION 2.01.    Annual Meetings.    An annual meeting of the shareholders shall be held on the first Monday of May of each year, or on such other date as may be determined by resolution of the Board of Directors; provided, however, that if in any year such date is a legal holiday, such meeting shall be held on the next succeeding business day. At each annual meeting, the shareholders shall elect directors to hold office for the term provided in Section 3.02 of these By-laws.

SECTION 2.02.    Special Meetings.    A special meeting of the shareholders of the Corporation may be called by the President, the Board of Directors or by the holders of one-fifth of all of the outstanding shares entitled to vote on the matter for which the meeting is called.

SECTION 2.03.    Place of all Shareholder Meetings.    The Board of Directors may designate any place, either within or without the State of Illinois, as the place of meeting for any annual meeting or for any special meeting. If no such place is designated by the Board of Directors, the place of meeting will be the principal business office of the Corporation.

SECTION 2.04.    Notice of Meetings.    Unless waived as herein provided, written notice of each annual, regular or special meeting, stating the place, day and hour of the meeting and, in the case of a special meeting; the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) days nor more than sixty (60) days before the date of the meeting or in the case of a merger, consolidation, share exchange, dissolution or sale, lease or exchange of assets not less than twenty (20) days nor more than sixty (60) days before the date of the meeting, either personally, by mail, including electronic mail, or facsimile by or at the direction of the President, or the Secretary, or the persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the

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shareholder at his or her address as it appears on the records of the Corporation, with postage thereon prepaid. Attendance at any meeting in person or by proxy shall constitute waiver of notice thereof unless the person or proxy at the meeting objects to the holding of the meeting because notice was not given. A waiver of notice of a meeting in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein; shall be deemed equivalent to the giving of such notice. When a meeting is adjourned to another time or place in accordance with Section.2.05 of these By-Laws, notice need not be given of the, adjourned meeting if the time and place of the adjourned meeting is announced at the meeting at which the adjournment is taken.

SECTION 2.05.    Quorum and Adjourned Meetings.    Unless otherwise provided bylaw or in the Articles of Incorporation of the Corporation, a majority of the outstanding shares entitled to vote on a matter, represented either in person or by proxy, shall constitute a quorum for consideration of such matter at a meeting of shareholders. If less than a majority of the outstanding shares of the Corporation are represented at such meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the original meeting. The shareholders present at a meeting may continue to transact business until adjournment, notwithstanding the withdrawal of such number of shareholders as may leave less than a quorum.

SECTION 2.06.    Fixing of Record Date.    For purposes of determining the shareholders entitled to notice of or to vote at any meeting of shareholders, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or in order to make a determination of shareholders for any proper purpose, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders such date in any case to be not more than sixty (60) days and, for a meeting of shareholders, not less than ten (10) days, or in the.case of a merger, consolidation, share exchange, dissolution or. sale, lease or exchange of assets, not less than twenty (20) days, immediately preceding such meeting. If no record date is fixed pursuant to the foregoing, the day on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring the payment of any dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting.

SECTION 2.07.    Voting List.    The officer or agent having charge of the transfer book for shares of the Corporation shall make, within twenty (20) days after the record date of every meeting of shareholders or ten (10) days before such meeting, whichever is earlier, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the Corporation, and shall be subject to inspection by any shareholder, for any purpose germane to the meeting, and to copying at the shareholder's expense, at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder, for any purpose germane to the meeting, during the whole time of the meeting.

SECTION 2.08.    Voting.    Unless otherwise provided by the Articles of Incorporation of the Corporation, each outstanding share shall be entitled to one vote at a meeting of shareholders. A shareholder may vote either in person or by proxy. All questions, unless otherwise provided by law, by the Articles of Incorporation or the By-Laws of the Corporation, shall be decided by a majority of the votes thus cast.

SECTION 2.09.    Proxies.    A shareholder may appoint a proxy to vote or otherwise act for him or her, with or without a meeting, by signing an appointment form and delivering it to the person so appointed. All proxies shall expire eleven months from the date of execution thereof, unless otherwise provided in the proxy. Every proxy shall be revocable at the will of the shareholder executing it, except

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as otherwise provided by law, by a writing delivered to the Corporation stating that the proxy is so revoked or by a subsequent proxy executed by, or by attendance at the meeting and voting in person by, the person executing the proxy.

SECTION 2.10.    Ratification of Acts of Directors and Officers.    Except as otherwise provided by law or by the Articles of Incorporation of the Corporation, any transaction or contract or act of the Corporation or of the directors or the officer's of the Corporation may be ratified by the affirmative vote of the holders of the number of shares which would have been necessary to approve such transaction, contract or act at a meeting of shareholders, or by the written consent of shareholders in lieu of a meeting.

SECTION 2.11.    Informal Action of Shareholders.    Any action required to be taken at a meeting of the shareholders, or any action which may be taken at a meeting of the shareholders, may be taken without a meeting and without a vote, if a consent in writing, setting forth the action so taken, shall be signed (i) by all of the outstanding shareholders entitled to vote with respect to the subject matter thereof or (ii) by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voting if such consent is signed by less than all of the shareholders entitled to vote with respect to the subject matter thereof, then such consent shall become effective only if at least five (5) days prior to the execution of the consent a notice in writing is delivered to all of the shareholders entitled to vote with respect thereof, and after the effective date of the consent, prompt notice of the taking of the corporate action without a meeting by less than unanimous consent shall be delivered in writing to those shareholders who have not consented in writing.

SECTION 2.12.    Organization.    Such person as the Board of Directors may designate or, in the absence of such a designation, the president of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the shareholders and act as chairman of such meeting. In the absence of the secretary of the Corporation, the chairman of the meeting shall appoint a_. person to serve as secretary at the meeting.

ARTICLE III
DIRECTORS

SECTION 3.01.    Number and Tenure of Directors.    The number of directors of the Corporation shall consist of not less than one (1) nor more than five (5). The initial board shall consist of two (2) members. Each director shall hold office until such director's successor is elected and qualified or until such director's earlier resignation or removal. Any director may resign at any time upon written notice to the Board of Directors, its Chairman, the President or the Secretary of the Corporation.

SECTION 3.02.    Election of Directors.    Directors shall be elected at the annual meeting of shareholders. In all-elections for directors, every shareholder shall have the right to vote the -number of shares owned by such shareholder for as many persons as there are directors to be elected.

SECTION 3.03.    Annual and Regular Meetings.The annual meeting of the Board of Directors shall be held without other notice than this Bylaw on the same day and at the same place as the annual meeting of shareholders and immediately following such annual meeting of shareholders, or as soon thereafter as is practicable. Additional regular meetings of the Board of Directors shall be held at such times and places, within or without the State of Illinois, as the Board of Directors may determine, by resolution, from time to time. The Secretary shall give notice of each such resolution to any director who was not present at the time the same was adopted, but no further notice of such regular meeting need be given. The Chief Executive Officer shall preside at all meetings of the Board of Directors.

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SECTION 3.04.    Special Meetings.    Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, the President or at least one-third of the number of directors constituting the whole board. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Illinois, as the place for holding any special meeting of the Board of Directors called by them.

SECTION 3.05.    Notice of Special Meetings of the Board of Directors.    Notice of any special meeting of the Board of Directors shall be given at least two (2) days previous thereto by written notice to each director at his or her address. If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail so addressed, with first-class postage thereon prepaid. If sent by any other means (including electronic mail, facsimile, courier, or express mail, etc.), such notice shall be deemed to be delivered when actually delivered to the home or business address of the director.

SECTION 3.06    Waiver of Notice of Meetings of the Board of Directors.    Attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, a regular or special meeting of the board of Directors need be specified in the notice or waiver of notice of such meeting.

SECTION 3.07.    Quorum.    A majority of the total number of directors fixed by these Bylaws, or in the absence of a bylaw which fixes the number of directors, the number stated in the Articles of Incorporation or named by the incorporators, shall constitute a quorum for the transaction of business. If less than a majority of the directors are present at a meeting of the Board of Directors, a majority of the directors present may adjourn the meeting from time to time without further notice.

SECTION 3.08.    Voting.    The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by law, by the Articles of Incorporation of the Corporation or by these By-Laws.

SECTION 3.09.    Vacancies.    Vacancies in the Board of Directors may be filled by a majority vote of the Board of Directors or by an election either at an annual meeting or at a special-meeting of the shareholders called for that purpose. Any directors elected by the shareholders to fill a vacancy shall hold office for the balance of the' terms for which he or she was elected. A director appointed by the Board of Directors to fill a vacancy shall serve until the next meeting of shareholders at which directors are elected.

SECTION 3.10.    Removal of Directors.    A director, or the entire Board of Directors, may be removed, with or without cause, at a meeting of shareholders by the affirmative vote of the holders of a majority of the outstanding shares then entitled to vote at an election of directors; provided, however, that (i) the notice of such meeting shall state that a purpose of such meeting is to vote upon the removal of one or more of the directors named in the notice; and (ii) if less than the entire board is to be removed or if the shareholders cumulative their votes, no director may be removed, with or without cause, if the votes against * his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the Board of Directors.

SECTION 3.11.    Informal Action of Directors.    Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or committee., as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

SECTION 3.12.    Participation by Conference Telephone.    Members of the Board of Directors, or any committee designated by such board, may participate in a meeting of the Board of Directors, or committee thereof, by means of conference telephone or similar communications equipment as long as

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all persons participating in the meeting can speak with and hear each other, and participation by a director pursuant to this Section 3.12 shall constitute presence in person at such meeting.

ARTICLE IV
COMMITTEES

SECTION 4.01.    General Provisions.    A majority of the Board of Directors may create one or more committees and appoint members of the Board of Directors to serve on the committee or committees. Each committee shall have two or more members, who serve at the pleasure of the Board of directors. Except as limited by law, each committee shall have such authority as the Board of Directors may from time to time direct.

SECTION 4.02.    Executive Committee.    The Board of Directors may designate two or more directors to constitute an executive committee, which committee shall have and may exercise all of the authority of the Board of Directors in the management of the Corporation, provided such committee shall not have the authority of the Board of Directors in reference to amending the Articles of Incorporation, adopting a plan of merger or adopting a plan of consolidation with another corporation or corporations, recommending to the shareholders the sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of the property and assets of the Corporation, recommending to the shareholders a voluntary dissolution of the Corporation revocation thereof, amending, altering or-repealing the By-Laws of the -Corporation, electing or removing-officers of the Corporation or members of the executive committee, fixing the compensation of any member of the executive committee, declaring dividends or amending, altering or repealing any resolution of the Board of Directors which by its terms provided that it shall not be amended, altered or repealed by the executive committee. The designation of such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or him by law.

ARTICLE V

OFFICERS

SECTION 5.01.    General Provisions.    The Board of Directors shall elect a President and a Secretary of the Corporation. The Board of Directors may also elect a Chairman of the Board, one or more Vice Chairmen of the Board, one or more Vice Presidents, a Treasurer, one or more Assistant Secretaries and Assistant Treasurers and such additional officers as the Board of Directors may deem necessary or appropriate from time to time. Any two or more offices may be held by the same person. The officers elected by the Board of Directors shall have such duties as are hereafter described and such additional duties as the Board of Directors may from time to time prescribe.

SECTION 5.02.    Election and Term of Office.    The officers of the Corporation shall be elected annually by the Board of Directors at the regular meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers is not held at such meeting, such election shall be held as soon thereafter as may be convenient. New offices of the Corporation may be created and filled and vacancies in offices may be filled at any time, at a meeting or by the written consent of the Board of Directors. Unless removed pursuant to Section 6.03 of these By-Laws, each officer shall hold office until his successor has been duly elected and qualified, or until his earlier death or resignation. Election or appointment of an officer or agent shall not of itself create contract rights.

SECTION 5.03.    Removal of Officers..    Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever, in its judgment, the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person(s) so removed.

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SECTION 5.04.    The Chief Executive Officer.    The Board of Directors shall designate whether the Chairman of the Board, if one shall have been chosen, or the President shall be the Chief Executive Officer of the Corporation. If a Chairman of the Board has not been chosen, or if one has been chosen but not designated Chief Executive Officer, then the President shall be the Chief Executive Officer of the Corporation. The Chief Executive Officer shall be the principal executive officer of the Corporation and shall in general supervise and control all of the business and affairs of the Corporation, unless otherwise provided by the Board of Directors. The Chief Executive Officer shall preside at all meetings of the shareholders and of the Board of Directors and shall see that orders and resolutions of the Board of Directors are carried into effect. The Chief Executive Officer may sign bonds, mortgages, certificates for shares and all other contracts and documents whether or not under the, seal of the Corporation except in cases where the signing and execution thereof shall be expressly delegated by law, by the Board of Directors or by these By-Laws to some other officer or agent of, the Corporation. The Chief Executive Officer shall have general powers of_. supervision and shall be the final arbiter of all differences between officers of the Corporation and his decision as to any matter affecting the Corporation shall be final and binding as between the officers of the Corporation subject only to the Board of Directors.

SECTION 5.05.    The President.    In the absence of the Chief Executive Officer or in the event of his inability or refusal to act, if the Chairman of the Board has been designated Chief Executive Officer, the President shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. At all other times the President shall have the active management of the business of the Corporation under the general supervision of the Chief Executive Officer. The President shall have concurrent power with the Chief Executive Officer to sign bonds, mortgages, certificates for shares and other contracts and documents, whether or not under the seal of the Corporation except in cases where the signing and execution thereof shall be expressly delegated by law, by the Board of Directors, or by these By-Laws to some other officer or agent of the Corporation. In general, the President shall perform all duties incident to the office of president and such other duties as the Chief Executive Officer or the Board of Directors may from time to time prescribe..

SECTION 5.06.    The Chairman of the Board.    The Chairman of the Board, if one is chosen, shall be chosen from among the members of the board. If the Chairman of the Board has not been designated Chief Executive Officer, the Chairman of the Board shall perform such duties as may be assigned to the Chairman of the Board by the Chief Executive Officer or by the Board of Directors.

SECTION 5.07.    Vice Chairman of the Board.    In the absence of the Chief Executive Officer or in the event of his inability or refusal to act, if the Chairman of the Board has been designated Chief Executive Officer, the Vice Chairman, or if there be more than one, the Vice Chairmen, in the order determined by the Board of Directors, shall perform the duties of the Chief Executive Officer, and when so acting shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. At all other times, the Vice Chairman or Vice Chairmen shall perform such duties and have such powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 5.08.    The Vice President.    In the absence of the President or in the event of his inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Executive Vice President and then the other Vice President or Vice Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

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SECTION 5.09.    The Secretary.    The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer, under whose supervision he shall be. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.

SECTION 5.10.    The Assistant Secretary.    The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 5.11.    The Treasurer.    The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an. account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond (which shall be renewed every six (6) years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.

SECTION 5.12.    The Assistant Treasurer.    The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Chief Executive Officer or the Board of Directors may from time to time prescribe.

SECTION 5.13.    Other Officers, Assistant Officers and Agents.    Officers, Assistant Officers and Agents, if any, other than those whose duties are provided for in these bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors.

SECTION 5.14.    Absence of Officers.    In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board of Directors may delegate the powers or duties, or any of such powers or duties, of any officers or officer to any other officer or to any director:

SECTION 5.15.    Compensation.    The Board of Directors shall have the authority to establish reasonable compensation of all officers for services to the Corporation. Any payments made to an officer of the corporation such as a salary, commission, bonus, interest, or rent, or entertainment expenses incurred by him, which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service, shall be reimbursed by such officer to the corporation to the full extent of

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such disallowance. It shall be the duty of the directors, as a board, to enforce payment of each such amount disallowed.

ARTICLE VI

INDEMNIFICATION

SECTION 6.01.    Right to Indemnify.    The Corporation shall:

        (a)   to the fullest extent to which it is empowered to do so by The Illinois Business Corporation Act of 1983, as amended (the "Act"), or any other applicable laws as may from time to time be in effect, indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was a director and/or officer of the Corporation, or who is or was serving at the request of the Corporation as a director and/or officer of another Corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to the best interests of the Corporation; and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

        (b)   to the fullest extent to which it is empowered to do so by the Act or any other applicable laws as^- may from time to time be in effect, indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in a right of the Corporation to procure judgment in its favor by reason of the fact that such person is or was a director and/or officer of the Corporation, or is or was serving at the request of the Corporation as a director and/officer of another Corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in manner he or she reasonably believed to be in, or not opposed to the best interests of the Corporation, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Corporation, unless and only to the "extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all of the circumstances of the case;-such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper.

        (c)   to the extent that a director and/officer of the Corporation has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, indemnify such person against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.

        (d)   any indemnification under subsections (a) and (b) (unless ordered by a court) only as authorized in the specific case, upon a determination that indemnification of the director and/or officer is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsections (a) or (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable, or even if obtainable, if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the shareholders.

        (e)   or may pay expenses incurred in defending a civil or criminal action, suit or proceeding in advance of the final disposition of such action, suit or proceeding, as authorized by the Board of Directors in the specific case, upon receipt of an undertaking by or on behalf of the director and/or

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officer to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the Corporation as authorized in this Article VI.

        (f)    not deem the indemnification provided by this Article VI exclusive of any other rights to which those seeking indemnification may be entitled under any by-law, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director and/or officer, and shall inure to the benefit of the heirs, executors and administrators of such a person.

        (g)   if the Corporation has paid indemnity or has advanced expenses to a director and/or officer report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting.

SECTION 6.02.    Insurance.    The Corporation may purchase and maintain insurance on behalf of any person who is or was a director and/or officer of the Corporation, or is or was serving at the request of the Corporation as a director and/or officer of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such, whether or not the Corporation would have the power or the obligation to indemnify him against such liability under this Article VI.

SECTION 6.03.    Contract with the Corporation.    The provisions of this Article VI shall be deemed to be a contract between the Corporation and each director and/or officer who serves in any such capacity at any time while this Article VI and the relevant provisions of the Act or other applicable law, if any, are in effect, and any repeal or modification of any such law or of this Article VI shall not affect any rights or obligations then existing with-respect to any state -of facts then or heretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon such state of facts. However, the provisions of this Article VI shall not be deemed to be a contract between the Corporation and any directors or officers of any other Corporation (the "Second Corporation") which shall merge into or consolidate with this Corporation when this Corporation shall be the surviving or resulting Corporation, and any such directors or officers of the Second Corporation shall be indemnified to the extent required under Section 8.75 of the Act only at the discretion of the board of directors of this Corporation.

ARTICLE VII

CERTIFICATES FOR SHARES

SECTION 7.01.    Certificates of Shares.    Certificates representing shares of the Corporation shall be in the form determined from time to time by the Board of Directors. Such certificates shall be signed by the President or Vice-President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer and shall be sealed with the seal of the Corporation, or a facsimile thereof, if the Corporation uses a seal. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and the date of issue, shall be entered on the books of the Corporation. All certificates surrendered to the Corporation for transfer shall be cancelled, and no new certificates shall be issued until the former certificates for the same number of shares have been surrendered and canceled, except as provided in Section 7.3 of these By-Laws. No certificate representing a share of stock of the Corporation shall be issued until such share is fully paid.

SECTION 7.02.    Signatures of Former Officers, Transfer Agents or Registrars.    In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is—

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issued, it may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent or registrar at the date of issue..

SECTION 7.03.    Transfer of Shares.    Transfers of shares of the Corporation shall be made only on the books of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of certificate for such shares. Prior to due presentment of a. certificate for shares for registration of transfer, the Corporation may treat a registered owner of such shares as the person exclusively entitled to vote, to receive notifications and otherwise have and exercise all of the right and powers of an owner of shares.

SECTION 7.04.    Lost, Destroyed or Stolen Certificates.    Whenever a certificate representing shares of the Corporation has been lost, destroyed or stolen, the holder thereof may file in the office of the Corporation an affidavit setting forth, to the best of his knowledge and belief, the time, place, and circumstance of such loss, destruction or theft together with a statement of indemnity sufficient in the opinion of the Board of Directors to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of any such certificate. Thereupon the Board -may cause to be issued to such person or such person's legal representative a new certificate or a duplicate of the certificate alleged to have been lost, destroyed or stolen. In the exercise of its discretion, the Board of Directors may waive the indemnification requirements provided herein.

ARTICLE VIII

DISTRIBUTIONS

SECTION 8.01.    Distributions.    The Board of Directors of the Corporation may authorize, and the Corporation may make, distributions to its shareholders in the manner and upon the terms and conditions provided by law. The provisions of Section 2.06 of these By-Laws shall control for purposes of determining shareholders entitled to receive distributions, if any.

SECTION 8.02.    Dividends.    Dividends upon the capital stock of the corporation, subject to the provisions of the articles of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the articles of incorporation.

SECTION 8.03.    Reserves.    Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE IX

CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 9.01.    Contracts.    The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

SECTION 9.02.    Loans.    No loans, other than debt incurred in the ordinary course of business, shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

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SECTION 9.03.    Checks, Drafts, Etc.All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by one or more officers or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

SECTION 9.04.    Deposits.    All funds of the Corporation not otherwise employed-shall be deposited from time to time to. the credit of the^-Corporation in such banks,-trust companies or other depositories as the Board of Directors may select.

ARTICLE X

AMENDMENTS

SECTION 10.    Amendments.    These By-Laws shall be subject to alteration, amendment, repeal or the adopting of new By-Laws by the affirmative vote of the holders of a majority of the issued and outstanding shares of the Corporation or by the action of the Board of Directors of the Corporation, but no By-Law adopted by the shareholders may be altered, amended or repealed by the Board of Directors if the By-Laws so provide.

ATTESTATION

        The undersigned, being the Secretary of Cornell Interventions, Inc. does hereby certify the foregoing to be the Bylaws of the Corporation.

CORNELL INTERVENTIONS, INC.
By:	/s/  KEVIN B. KELLY Kevin B. Kelly, Secretary

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BYLAWS OF CORNELL INTERVENTIONS, INC. , an Illinois corporation (Adopted May 12, 1999)
TABLE OF CONTENTS
BY-LAWS OF CORNELL INTERVENTIONS, INC. (Adopted May 12, 1999)
ATTESTATION

EX-3.38

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Exhibit 3.38

CERTIFICATE OF INCORPORATION

OF

WBP LEASING, INC.

Article One

        The name of the corporation is WBP LEASING, INC.

Article Two

        The address of its registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

Article Three

        The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

Article Four

        The total number of shares of stock which the corporation shall have authority to issue is 10,000 shares of common stock, and the par value of each such share is $0.01.

Article Five

        The name and mailing address of the incorporator is as follows:

NAME	MAILING ADDRESS
Mitchell A. Tiras	3400 Texas Commerce Tower 600 Travis Houston, TX 77002

Article Six

        The names and mailing addresses of the persons who are to serve as directors of the corporation until the first annual meeting of stockholders or until their successor or successors are elected and qualified is as follows:

NAME	MAILING ADDRESS
David M. Cornell	4801 Woodway, Suite l00E Houston, Texas 77056-1805
William J. Schoeffield, Jr.	4801 Woodway, Suite 100E Houston, Texas 77056-1805
Steven W. Logan	4801 Woodway, Suite 100E Houston, Texas 77056-1805
Marvin W. Wiebe, Jr.	4801 Woodway, Suite 100E Houston, Texas 77056-1805

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Article Seven

        Directors need not be elected by written ballot unless required by the bylaws of the corporation.

Article Eight

        In furtherance and not in. limitation of the powers conferred by statute, the board of directors is expressly authorized to adopt, amend or repeal bylaws of the corporation.

Article Nine

        The corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute. All rights conferred upon stockholders herein are granted subject to this reservation.

Article Ten

        No director shall personally be liable to the corporation or the stockholders for monetary damages for any breach of his fiduciary duty as a director, except for liability (1) for any breach of the director's duty of loyalty to the corporation or the stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law or other applicable law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law or such other applicable law, as so amended. Any repeal or modification of this article by the stockholders shall not adversely affect any right or protection of a director existing at the time of such repeal or modification.

        I, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 29th day of August, 1997.

/s/  MITCHELL A. TIRAS Mitchell A. Tiras

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CERTIFICATE OF INCORPORATION OF WBP LEASING, INC.

EX-3.39

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Exhibit 3.39

WBP LEASING, INC.

BYLAWS

ARTICLE I

OFFICES

        Section 1.    The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware.

        Section 2.    The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

        Section 1.    All meetings of the stockholders shall be held at such place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting.

        Section 2.    Annual meetings of stockholders shall be held on the 1st day of August of each year, if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 A.M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting. At such annual meeting the stockholders shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

        Section 3.    Written notice of the annual meeting stating the place, date and. hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than 10 nor more than 60 days before the date of the meeting.

        Section 4.    The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list 'shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held.

The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

        Section 5.    Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the chief executive officer and shall be called by the chief executive officer or secretary at the request of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

        Section 6.    Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than 60 days before the date of the meeting, to each stockholder entitled to vote at such meeting.

        Section 7.    Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

        Section 8.    The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

        Section 9.    When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes of Delaware or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

        Section 10.    Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted after three years from its date unless the proxy provides for a longer period.

        Section 11.    Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

DIRECTORS

        Section 1.    There shall at all times be at least one director of the corporation. The number of directors shall from time to time be fixed and determined by the directors and shall be set forth in the notice of any meeting of stockholders held for the purpose of electing directors.

        Section 2.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. Any director may be removed either for or without cause at any special meeting of the stockholders duly called and held for such purpose.

        Section 3.    The business of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

        Section 4.    The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

        Section 5.    The first meeting of each newly elected board of directors shall be held at the place of, and immediately following, the annual meeting of the stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event such meeting is not held at such time and place, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

        Section 6.    Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

        Section 7.    Section 7. Special meetings of the board may be called by the chief executive officer on 48 hours' notice to each director, either personally or by mail or by telegram. Special meetings shall be called by the chief executive officer or secretary in like manner and on like notice on the written request of two directors. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the sole purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting, except that notice shall be given of any proposed amendment to these bylaws if it is to be adopted at any special meeting or with respect to any other matter where notice is required by statute.

        Section 8.    At all meetings of the board a majority of the directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

        Section 9.    Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

        Section 10.    Members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

        Section 11.    The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal. of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all property and assets of the corporation, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors.

        Section 12.    Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

        Section 13.    The board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of. directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

ARTICLE IV

NOTICES

        Section 1.    Whenever, under the provisions of the statutes of Delaware or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice maybe given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given personally or by telegram.

        Section 2.    Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

        Section 1.    The officers of the corporation shall be chosen by the board of directors and shall be a chief executive officer, a president, a chief operating officer, one or more vice presidents (any one or more of whom may be designated executive vice president or senior vice president), a chief financial officer, a secretary and a treasurer. Any number of offices may be held by the same person. Such officers shall be chosen by the board of directors at its first meeting after each annual meeting of stockholders.

        Section 2.    The board of directors may from time to time appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

        Section 3.    The salaries of all officers and agents of the corporation shall be fixed by the board of directors or pursuant to its direction.

        Section 4.    The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors.

        Section 5.    Chief Executive Officer: The chief executive officer, who need not be chosen from among the directors, shall have active, executive management of the operations of the corporation, subject, however, to the control of the board of directors. He shall have the exclusive authority to manage and direct the duties and responsibilities of any other officer or employee of the corporation. He shall, in general, perform all duties incident to the office of the chief executive officer and such other duties as from time to time may be assigned to him by the board of directors

        Section 6.    The President: The president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the chief executive officer may from time to time delegate to him. At the request of the chief executive officer, the president may temporarily act in

his place. In the case of the death of the chief executive officer, or in the case of his absence or inability to act without having designated the president to act temporarily in his place, the president shall perform the duties of the chief executive officer as designated by the board of directors.

        Section 7.    Chief Operating Officer: The chief operating officer shall assist the chief executive officer and the president in the operations of the corporation and shall have such powers and perform such duties as the board of directors may from time to time prescribe.

        Section 8.    The Vice President: Each vice president shall have such powers and perform such duties as the board of directors may from time to time prescribe or as the chief executive officer or the president may from time to time delegate to him. At the request of the president, any vice president may temporarily act in his place.

        Section 9.    The Chief Financial Officer: The chief financial officer shall be the principal financial officer of the corporation; shall have charge and custody of and be responsible for all funds of the corporation and deposit all such funds in the name of the corporation in such corporations, trust companies or other depositories as shall be selected by the board of directors; shall receive and give receipts for moneys due and payable to the corporation from any source; and, in general, shall perform all the duties incident to the office of the chief financial officer and such other duties as from time to time may be assigned to him by the board of directors or by the chief executive officer. The chief financial officer shall render to the chief executive officer and the board of directors, whenever the same shall be required, an account of all his transactions as treasurer and of the financial condition of the corporation. He shall, if required to do so by the board of directors, give the corporation a bond in such amount and with such surety or sureties as may be ordered by the board of directors, for the faithful performance of the duties of his office and for the restoration to the corporation, in the case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

        Section 10.    The Secretary: The secretary shall keep or cause to be kept in books provided for that purpose, minutes of the meetings of the shareholders and of the be and of directors; shall see that all notices are duly given in accordance with the provisions of these bylaws and as required by law; shall be custodian of the records and of the seal of the corporation and see that the seal is affixed to all the documents, the execution of which on behalf of the corporation under its seal is required; and, in general, shall perform all duties incident to the office of the secretary and such other duties as may from time to time be assigned to him by the board of directors or by the chief executive officer.

        Section 11.    The Treasurer: The treasurer shall assist the chief financial officer in the performance of the duties of the chief financial officer and shall perform any such other duties as may from time to time be assigned to him by the board of directors.

ARTICLE VI

CERTIFICATES OF STOCK

        Section 1.    Every holder of stock in the corporation shall be entitled to have a certificate, signed by the president or a vice president, and the treasurer or an assistant treasurer, or the secretary or an assistant secretary, of the corporation, certifying the number of shares owned by him in the corporation. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock; provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to Each stockholder who so requests the powers, designations, preferences and

relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

        Section 2.    Any of or all the signatures on any stock certificate issued by the corporation may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue.

        Section 3.    The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

        Section 4.    Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

        Section 5.    In order that the corporation may determine the stockholders. entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any changes, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.

        Section 6.    The corporation shall be entitled to treat the registered owner of any share or shares of stock as the absolute owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

INDEMNIFICATION AND INSURANCE

        Section 1.    The corporation shall indemnify any person who was or is a party or who was or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea

of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

        Section 2.    The corporation shall indemnify any person who was or is a party or who was or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.

        Section 3.    To the extent that any person who is or was a director, advisory director or officer of the corporation or of any entity a majority of the voting stock of which is owned by the corporation, or who is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article VII, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Any other indemnification under Sections 1 and 2 of this Article VII shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the applicable standard of conduct set forth therein has been met. Such determination shall be made (a) by the board of directors of the corporation by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders of the corporation.

        Section 4.    Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, advisory director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation pursuant to this Article VII.

        Section 5.    The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article VII shall not be deemed exclusive of any other right to which those seeking indemnification or advancement of expenses may be entitled from the corporation or any other entity under any statute, other bylaw, agreement, provision of the corporation's certificate of incorporation, vote. of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII and shall continue as to a person who has ceased to be a director, advisory director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. However, any amount actually received as the proceeds of any such other indemnification shall be deducted from the amount, if any, which he may be entitled to receive pursuant to this Article VII.

        Section 6.    Section 6. By action of its board of directors, notwithstanding any interest of the directors in the action, to the full extent permitted by the General Corporation Law of the State of

Delaware, the corporation may purchase and maintain insurance, in such amounts and against such risks as the board of directors deems appropriate, on behalf of any person who is or was a director, advisory director or officer of the corporation, or of any entity a majority of the voting stock of which is owned by the corporation, or who is or was serving at the request of the corporation as a director, advisory director or officer of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power or would be required to indemnify him against such liability under the provisions of this Article VII, or of the corporation's certificate of incorporation or of the General Corporation Law of the State of Delaware.

ARTICLE VIII

GENERAL PROVISIONS

        Section 1.    Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

        Section 2.    Before payment of any dividend, there may be set' aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a, reserve or reserves to meet contingencies, or far equalizing dividends,. or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

        Section 3.    All checks, notes and contracts of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.

        Section 4.    The fiscal year of the corporation shall be fixed by resolution of the board of directors.

        Section 5.    The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

        Section 6.    Any payments made to an officer of the corporation such as a salary, commission, bonus, interest, or rent, or entertainment expenses incurred by him, which shall be disallowed in whole or in part as a deductible expense by the Internal Revenue Service, shall be reimbursed by such officer to the corporation to the full extent of such disallowance. It shall be the duty of the directors, as a board, to enforce payment of each such amount disallowed.

ARTICLE IX

AMENDMENTS

        Section 1.    These bylaws may be altered, amended or repealed or new bylaws may be adopted by the board of directors at any regular meeting of the board of directors or at any special meeting of the board of directors if notice of such alteration, amendment, repeal or adoption of new bylaws is contained in the notice of such special meeting.

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WBP LEASING, INC. BYLAWS

EX-5.1

EXHIBIT 5.1

September 3 2004

Cornell Companies, Inc
1700 West Loop South, Suite 1500
Houston, Texas 77027

Gentlemen:

        We have acted as special counsel to Cornell Companies, Inc., a Delaware corporation (the "Company") and the subsidiaries of the Company named in Schedule I hereto (the "Guarantors"), in connection with the preparation and filing of the Registration Statement on Form S-4 by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), on September 3, 2004 (the "Registration Statement"), with respect to the issuance by the Company of up to $112,000,000 aggregate principal amount of its 10³/4% Senior Notes due 2012 (the "New Notes") in exchange for up to $112,000,000 in aggregate principal amount of its outstanding 10³/4% Senior Notes due 2012 (the "Old Notes") and the issuance by the Guarantors of guarantees (the "Guarantees") with respect to the New Notes. The New Notes and the Guarantees are to be issued in accordance with the provisions of the Indenture, dated as of June 24, 2004 (the "Indenture"), by and between the Company, the guarantors signatory thereto, and JPMorgan Chase Bank, as trustee (the "Trustee"). The New Notes and the Guarantees are to be issued pursuant to an exchange offer (the "Exchange Offer") by the Company to holders of the issued and outstanding Old Notes, as contemplated by the Exchange and Registration Rights Agreement, dated as of June 24, 2004 (the "Registration Rights Agreement"), by and between the Company, the guarantors signatory thereto, J.P. Morgan Securities Inc., Comerica Securities, Inc., Piper Jaffray & Co. and SouthTrust Securities, Inc.

        This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.

        In our capacity as counsel to the Company and the Guarantors in connection with the Exchange Offer, we have examined the Registration Statement, the Indenture (including each guarantee set forth therein) and the forms of the New Notes, each of which will be filed with the Commission as an exhibit to the Registration Statement. We have also examined originals, or copies certified or otherwise identified, of (i) the charter, bylaws or other governing documents of each of the Company and the Guarantors, each as amended to date, (ii) corporate records of the Company, including minute books of the Company as furnished to us by the Company, (iii) corporate or partnership records of each of the Guarantors, including minute books of each of the Guarantors furnished to us by the Guarantors, (iv) certificates of public officials and of representatives of the Company and the Guarantors, and (v) statutes and other instruments and documents as a basis for the opinions hereinafter expressed. In giving the opinions set forth below, we have relied upon certificates of officers or other representatives of the Company and the Guarantors with respect to the accuracy of the factual matters contained in such certificates.

        In making our examination, we have assumed that all signatures on documents examined by us are genuine, all documents submitted to us as originals are authentic and complete and all documents submitted to us as certified or photostatic copies conform to the originals thereof. We have assumed the legal capacity of natural persons and the accuracy of certificates of public officials. As to any facts material to the opinion expressed herein which we have not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of the Company and others.

        Our opinion set forth herein is limited to the laws of the State of New York (other than municipal and local ordinances and regulations) that are normally applicable to transactions of the type contemplated by the Exchange Offer and to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with

governmental authorities are relevant, to those required under such laws. We do not express any opinion with respect to the law of any jurisdiction other than as set forth above or as to the effect of any such other law on the opinion stated herein.

        Based upon and subject to the foregoing, and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that when the New Notes have been duly executed by the Company, authenticated by the Trustee in accordance with the terms of the Indenture, and delivered upon consummation of the Exchange Offer against receipt of Old Notes surrendered in exchange therefor in accordance with the terms of the Registration Rights Agreement and the Indenture, the New Notes and the Guarantees will constitute valid and binding obligations of the Company and the Guarantors, respectively, enforceable against them in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or other similar laws now or hereafter in effect affecting creditors' rights generally and general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law), including, without limitation, the possible unavailability of specific performance, injunctive relief or other equitable remedies and the concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which any proceeding therefor may be brought.

        Our opinion as to the enforceability of the provisions of the documents relating to the choice of New York law and New York forum is conditioned upon the assumption that such enforceability will be determined by a court of the State of New York.

        We express no opinion as to the enforceability of provisions in the documents providing for indemnification, contribution or exculpation, and we note that the enforceability of such provisions may be limited by public policy.

        We hereby consent to the filing of this opinion with the SEC as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the SEC. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law.

Very truly yours,

/s/ Locke Liddell & Sapp LLP

Schedule I

Guarantors

Exact Name of Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization
CCG I Corporation	Delaware
Cornell Abraxas Group, Inc.	Delaware
Cornell Companies Administration, LLC	Delaware
Cornell Companies Management, LP	Delaware
Cornell Companies Management Holdings, LLC	Delaware
Cornell Companies Management Services, Limited Partnership	Delaware
Cornell Corrections Management, Inc.	Delaware
Cornell Corrections of Alaska, Inc.	Alaska
Cornell Corrections of California, Inc.	California
Cornell Corrections of Rhode Island, Inc.	Delaware
Cornell Corrections of Texas, Inc.	Delaware
Cornell International, Inc.	Delaware
Cornell Interventions, Inc.	Illinois
WBP Leasing, Inc.	Delaware

EX-12.1

Exhibit 12.1

	Twelve months ended December 31,															Six months ended June
	1999			2000			2001			2002			2003			2003			2004
Earnings (losses):
Income (loss) before provision for income taxes and cumulative effect of changes in accounting principles and minority interest income (loss)	$	13,844		$	13,753		$	8,521		$	11,705		$	6,730		$	7,006		$	(666	)
Add: fixed charges as adjusted (from below)		10,322			19,725			25,587			23,698			22,580			11,647			10,739
		24,166			33,478			34,108			35,403			29,310			18,653			10,073
Fixed charges:
Interest expense		9,211			17,160			21,075			20,408			18,883			9,615			9,803
Amortization of debt issuance costs		511			1,332			2,012			1,113			1,157			578			578
Rent expense attributable to interest cost		1,800			3,233			3,800			3,000			3,300			1,854			1,058
Fixed charges		11,522			21,725			26,887			24,521			23,340			12,047			11,439
Less: capitalized interest		(1,200	)		(2,000	)		(1,300	)		(823	)		(760	)		(400	)		(700	)
Fixed charges as adjusted	$	10,322		$	19,725		$	25,587		$	23,698		$	22,580		$	11,647		$	10,739
Ratio of earnings to fixed charges		2.1			1.5			1.3			1.4			1.3			1.5			—

(1)

For the purposes of determining the ratio of earnings to fixed charges, earnings consist of earnings (loss) before income tax expense (benefit), and minority interest income (loss). Fixed charges consist of interest expense which includes capitalized interest and amortization of capitalized interest, amortization of debt issuance costs and that portion of rent expense attributable to interest costs. Due to the loss before provision for income taxes and cumulative effect of changes in accounting principles for the six months ended June 30, 2004, the ratio coverage was less than 1:1. In order to achieve a coverage of 1:1, the Company would have had to generate additional income of approximately $1.4 million for the six months ended June 30, 2004.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We hereby consent to the use in this Registration Statement on Form S-4 of Cornell Companies, Inc., of our report dated March 11, 2004, except for note 16 as to which the date is June 3, 2004, relating to the financial statements of Cornell Companies, Inc., which appears in such Registration Statement. We also consent to the references to us under the headings "Experts" and "Selected Historical Financial Information" in such Registration Statement.

PricewaterhouseCoopers LLP

Houston, Texas
September 3, 2004

EX-25.1

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Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE

o CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)

JPMORGAN CHASE BANK
(Exact name of trustee as specified in its charter)

New York (State of incorporation if not a national bank)	13-4994650 (I.R.S. employer identification No.)
270 Park Avenue New York, New York (Address of principal executive offices)	10017 (Zip Code)

Thomas F. Godfrey
Vice President and Assistant General Counsel
JPMorgan Chase Bank
1 Chase Manhattan Plaza, 25^th Floor
New York, NY 10081
Telephone: (212) 552-2192
(Name, address and telephone number of agent for service)

Cornell Companies, Inc.
(Exact name of obligor as specified in its charter)

Texas (State or other jurisdiction of incorporation or organization)	76-0433642 (I.R.S. employer identification No.)
1700 West Loop South, Suite 1500 Houston, Texas (Address of principal executive offices)	77027 (Zip Code)

10³/4% Senior Notes due 2012
(Title of the indenture securities)

GENERAL

Item 1. General Information.

Furnish the following information as to the trustee:

(a)   Name and address of each examining or supervising authority to which it is subject.

New York State Banking Department, State House, Albany, New York 12110.

Board of Governors of the Federal Reserve System, Washington, D.C., 20551

Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, New York

Federal Deposit Insurance Corporation, Washington, D.C., 20429.

(b)   Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with the Obligor and Guarantors.

If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation.

        None.

Items 3 through 15, inclusive, are not applicable by virtue of T-1 General Instruction B.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

2

Item 16. List of Exhibits

List below all exhibits filed as a part of this Statement of Eligibility.

        1.     A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.)

        2.     A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

        3.     None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2.

        4.     A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.)

        5.     Not applicable.

        6.     The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

        7.     A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority.

        8.     Not applicable.

        9.     Not applicable.

SIGNATURE

        Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Houston and State of Texas, on the 1st day of September, 2004.

JPMORGAN CHASE BANK
By
	/s/  REBECCA S. NEWMAN

3

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GENERAL
SIGNATURE

EX-25.2

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Exhibit 25.2

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE

o CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)

JPMORGAN CHASE BANK
(Exact name of trustee as specified in its charter)

New York (State of incorporation if not a national bank)	13-4994650 (I.R.S. employer identification No.)
270 Park Avenue New York, New York (Address of principal executive offices)	10017 (Zip Code)

Thomas F. Godfrey
Vice President and Assistant General Counsel
JPMorgan Chase Bank
1 Chase Manhattan Plaza, 25^th Floor
New York, NY 10081
Telephone: (212) 552-2192
(Name, address and telephone number of agent for service)

Cornell Companies, Inc.
(Exact name of obligor as specified in its charter)

See Table of Guarantors Below

Texas (State or other jurisdiction of incorporation or organization)	76-0433642 (I.R.S. employer identification No.)
1700 West Loop South, Suite 1500 Houston, Texas (Address of principal executive offices)	77027 (Zip Code)

Guarantees Relating to the 10³/4% Senior Notes due 2012
(Title of the indenture securities)

Table of Guarantors

Exact Name of Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
CCG I Corporation	Delaware	8744	76-0544498
Cornell Abraxas Group, Inc.	Delaware	8744	76-0545741
Cornell Companies Administration, LLC	Delaware	8744	None
Cornell Companies Management, LP	Delaware	8744	76-0700116
Cornell Companies Management Holdings, LLC	Delaware	8744	74-3024864
Cornell Companies Management Services, Limited Partnership	Delaware	8744	76-0700115
Cornell Corrections Management, Inc.	Delaware	8744	74-2650655
Cornell Corrections of Alaska, Inc.	Alaska	8744	76-0578707
Cornell Corrections of California, Inc.	California	8744	94-2411045
Cornell Corrections of Rhode Island, Inc.	Delaware	8744	74-2650654
Cornell Corrections of Texas, Inc.	Delaware	8744	74-2650651
Cornell International, Inc.	Delaware	8744	None
Cornell Interventions, Inc.	Illinois	8744	74-2918981
WBP Leasing, Inc.	Delaware	8744	76-0546892

2

GENERAL

Item 1. General Information.

Furnish the following information as to the trustee:

(a)   Name and address of each examining or supervising authority to which it is subject.

New York State Banking Department, State House, Albany, New York 12110.

Board of Governors of the Federal Reserve System, Washington, D.C., 20551

Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, New York

Federal Deposit Insurance Corporation, Washington, D.C., 20429.

(b)   Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with the Obligor and Guarantors.

If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation.

None.

Items 3 through 15, inclusive, are not applicable by virtue of T-1 General Instruction B.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

3

Item 16. List of Exhibits

List below all exhibits filed as a part of this Statement of Eligibility.

        1.     A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.)

        2.     A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

        3.     None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2.

        4.     A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.)

        5.     Not applicable.

        6.     The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

        7.     A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority.

        8.     Not applicable.

        9.     Not applicable.

SIGNATURE

        Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Houston and State of Texas, on the 1st day of September, 2004.

JPMORGAN CHASE BANK
By
	/s/  REBECCA S. NEWMAN

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Table of Guarantors
GENERAL
SIGNATURE

EX-99.1

Exhibit 99.1

Cornell Companies, Inc.
1700 West Loop South, Suite 1500
Houston, Texas 77027
(713) 623-0790

, 2004

To the Holders of Cornell Companies, Inc.'s
10³/4% Senior Notes due 2012:

        Cornell Companies, Inc., a Delaware corporation, is offering to exchange its 10³/4% Senior Notes due 2012 that have been registered under the Securities Act of 1933 (the "New Notes") for all outstanding 10³/4% Senior Notes due 2012 issued on June 24, 2004 (the "Old Notes"), upon the terms and subject to the conditions set forth in the enclosed prospectus dated                  , 2004 (the "Prospectus") and the related letter of transmittal (the "Letter of Transmittal" and, together with the Prospectus, the "Exchange Offer"). The Exchange Offer is conditioned upon a number of factors set out in the Prospectus under "The Exchange Offer — Conditions of the Exchange Offer."

        The Old Notes were issued on June 24, 2004 in an original aggregate principal amount of $112,000,000, the full principal amount of which remains outstanding. The maximum amount of New Notes that will be issued in exchange for Old Notes is $112,000,000.

        Please read carefully the Prospectus and the other enclosed materials relating to the Exchange Offer. If you require assistance, you should consult your financial, tax or other professional advisors. Holders who wish to participate in the Exchange Offer are asked to respond promptly by completing and returning the enclosed Letter of Transmittal, and all other required documentation, to JPMorgan Chase Bank, the exchange agent (the "Exchange Agent"), for the Exchange Offer.

        If you have questions regarding the terms of the Exchange Offer, please direct your questions to JPMorgan Chase Bank at 1-800-275-2048

        Thank you for your time and effort in reviewing this request.

Very truly yours,

CORNELL COMPANIES, INC.

1

EX-99.2

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Exhibit 99.2

Cornell Companies, Inc.

LETTER OF TRANSMITTAL

for

Tender of All Outstanding
10³/4% Senior Notes Due 2012
issued on June 24, 2004

in Exchange for

10³/4% Senior Notes Due 2012
That Have Been Registered Under the
Securities Act of 1933

        THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                              , 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

	Deliver to the Exchange Agent: JPMorgan Chase Bank 1-800-275-2048
By Overnight JPMorgan Chase Bank 2001 Bryan Street, Floor 10 Dallas, TX 75201 Attention: Frank Ivins or JPMorgan Chase Bank 4 New York Plaza, Ground Floor New York, NY 10004		By Fax 214-468-6494 Attn: Frank Ivins

Delivery of this instrument to an address other than as set forth above or transmission of instructions via a facsimile number other than the one listed above will not constitute a valid delivery. The instructions accompanying this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed.

        The undersigned hereby acknowledges receipt of the prospectus dated                        , 2004 (the "Prospectus") of Cornell Companies, Inc., a Delaware corporation ("Cornell"), and this Letter of Transmittal, which together describe the offer of Cornell (the "exchange offer") to exchange 10³/4% Senior Notes due 2012 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a registration statement of which the Prospectus is a part, for a like principal amount of 10³/4% Senior Notes due 2012 issued on June 24, 2004 (the "Old Notes"). Certain terms used but not defined herein have the respective meanings given to them in the Prospectus.

        Cornell reserves the right, at any time or from time to time, to extend the exchange offer at its discretion, in which event the term "expiration date" shall mean the latest date to which the exchange offer is extended. Cornell shall give notice of any extension by giving oral, confirmed in writing, or written notice to the exchange agent and by making a public announcement by press release to the Dow Jones News Service prior to 9:00 a.m., New York City time, on the first business day after the previously scheduled expiration date. The term "business day" shall mean any day that is not a Saturday, Sunday or day on which banks are authorized by law to close in the State of New York.

        This Letter of Transmittal is to be used by a holder of Old Notes if (i) Old Notes are to be physically forwarded herewith to the exchange agent or (ii) if delivery of Old Notes is to be made by book-entry transfer to the account maintained by the exchange agent at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the Prospectus under the caption "The Exchange Offer—Procedures for Tendering Old Notes." Tenders by book-entry transfer may also be made by delivering an agent's message (as defined in the Prospectus) pursuant to DTC's Automated Tender Offer Program in lieu of this Letter of Transmittal. Holders of Old Notes whose Old Notes are not immediately available, or who are unable to deliver their Old Notes and all other documents required by this Letter of Transmittal to the exchange agent on or prior to the expiration date, or who are unable to complete the procedure for book-entry transfer on a timely basis, must tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer—Procedures for Tendering Old Notes Guaranteed Delivery." See Instruction 2. Delivery of documents to the book-entry transfer facility does not constitute delivery to the exchange agent.

        The term "holder" with respect to the exchange offer means any person in whose name Old Notes are registered on the books of Cornell or any other person who has obtained a properly completed bond power from the registered holder. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the exchange offer. Holders who wish to tender their Old Notes must complete this Letter of Transmittal in its entirety.

Please read the entire Letter of Transmittal and the Prospectus carefully before checking any box below.

The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance for additional copies of the Prospectus and this Letter of Transmittal may be directed to the Exchange Agent.

        List below the Old Notes to which this Letter of Transmittal relates. If the space below is inadequate, list the registered numbers and principal amounts on a separate signed schedule and affix the list to this Letter of Transmittal.

DESCRIPTION OF OLD NOTES TENDERED
		Tendered Old Note(s)
Name(s) and Address(es) of Registered Holder(s) Exactly as Name(s) Appear(s) on Old Notes. (Please Fill in, if Blank).		Principal Represented Tendered**	Principal Amount	Registered Numbers(s)*	Aggregate Amount by Bond(s)
*	Need not be completed by book-entry holders.
**	Unless otherwise indicated, any tendering holder of Old Notes will be deemed to have tendered the entire aggregate principal amount represented by such Old Notes. All tenders will be accepted only in integral multiples of $1,000.

o

CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.

o

CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

        Name of Tendering Institution:

        Account Number:

        Transaction Code Number:

o

CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

        Name(s) of registered holder(s) of Old Notes:

        Date of Execution of Notice of Guaranteed Delivery:

        Window ticket number (if available):

        Name of Eligible Institution that Guaranteed Delivery:

        Account number (if delivered by book-entry transfer):

o

CHECK HERE IF YOU ARE BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

        Name:

        Address:

SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

        Subject to the terms and conditions of the exchange offer, the undersigned hereby tenders to Cornell for exchange the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned hereby exchanges, assigns and transfers to Cornell all right, title and interest in and to the Old Notes tendered for exchange hereby. The undersigned hereby irrevocably constitutes and appoints the exchange agent, the agent and attorney-in-fact of the undersigned (with full knowledge that the exchange agent also acts as the agent of Cornell in connection with the exchange offer) with respect to the tendered Old Notes with full power of substitution to:

•

deliver such Old Notes, or transfer ownership of such Old Notes on the account books maintained by DTC, to Cornell and deliver all accompanying evidences of transfer and authenticity, and



•

present such Old Notes for transfer on the books of Cornell and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes,

all in accordance with the terms of the exchange offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Old Notes tendered hereby and to acquire the New Notes issuable upon the exchange of such tendered Old Notes, and that Cornell will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are accepted for exchange by Cornell.

        The undersigned acknowledge(s) that this exchange offer is being made in reliance upon interpretations contained in no-action letters issued to third parties by the staff of the Securities and Exchange Commission (the "SEC"), including Exxon Capital Holdings Corporation, SEC No-Action Letter (available April 13, 1988), Morgan Stanley & Co. Incorporated, SEC No-Action Letter (available June 5, 1991) (the "Morgan Stanley Letter") and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993), that the New Notes issued in exchange for the Old Notes pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by holders thereof (other than a broker-dealer who purchased Old Notes exchanged for such New Notes directly from Cornell to resell pursuant to Rule 144A or any other available exemption under the Securities Act or a person that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holders' business and such holders are not participating in, and have no arrangement with any person to participate in the distribution of such New Notes. The undersigned specifically represent(s) to Cornell that:

•

any New Notes acquired in exchange for Old Notes tendered hereby are being acquired in the ordinary course of business of the person receiving such New Notes;



•

the undersigned is not participating in, and has no arrangement with any person to participate in, the distribution of New Notes;



•

neither the undersigned nor any such other person is an "affiliate" (as defined in Rule 405 under the Securities Act) of Cornell or a broker-dealer tendering Old Notes acquired directly from Cornell for resale pursuant to Rule 144A or any other available exemption under the Securities Act.

        If the undersigned is not a broker-dealer, the undersigned further represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act of 1933, as amended, in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned acknowledges that if the undersigned is participating in the exchange offer for the purpose of distributing the New Notes:

•

the undersigned cannot rely on the position of the staff of the SEC in the Morgan Stanley Letter and similar SEC no-action letters, and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes, in which case the registration statement must contain the selling

security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the SEC; and

•

failure to comply with such requirements in such instance could result in the undersigned incurring liability for which the undersigned is not indemnified by Cornell.

        The undersigned will, upon request, execute and deliver any additional documents deemed by the exchange agent or Cornell to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes tendered hereby, including the transfer of such Old Notes on the account books maintained by DTC.

        For purposes of the exchange offer, Cornell shall be deemed to have accepted for exchange validly tendered Old Notes when, as and if Cornell gives oral or written notice thereof to the exchange agent. Any tendered Old Notes that are not accepted for exchange pursuant to the exchange offer for any reason will be returned, without expense, to the undersigned at the address shown below or at a different address as may be indicated herein under "Special Delivery Instructions" promptly after the expiration date.

        All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns.

        The undersigned acknowledges that the acceptance of properly tendered Old Notes by Cornell pursuant to the procedures described under the caption "The Exchange Offer—Procedures for Tendering Old Notes" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and Cornell upon the terms and subject to the conditions of the exchange offer.

        Unless otherwise indicated under "Special Issuance Instructions," please issue the New Notes issued in exchange for the Old Notes accepted for exchange, and return any Old Notes not tendered or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail or deliver the New Notes issued in exchange for the Old Notes accepted for exchange and any Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the New Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any Old Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned recognizes that Cornell has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered holder(s) thereof if Cornell does not accept for exchange any of the Old Notes so tendered for exchange.

SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 5 and 6)

            To be completed ONLY (i) if Old Notes in a principal amount not tendered, or New Notes issued in exchange for Old Notes accepted for exchange, are to be issued in the name of someone other than the undersigned, or (ii) if Old Notes tendered by book-entry transfer that are not exchanged are to be returned by credit to an account maintained at DTC other than the account indicated above.

Issue New Notes and/or Old Notes to:

Name:
	(Please Print or Type)
Address:
	(Include Zip Code)
	(Tax Identification or Social Security Number)

o Credit unexchanged Old Notes delivered by book-entry transfer to DTC account number set forth below:

DTC account number:

(Complete Substitute Form W-9)

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5 and 6)

            To be completed ONLY if Old Notes in a principal amount not tendered, or New Notes issued in exchange for Old Notes accepted for exchange, are to be mailed or delivered to someone other than the undersigned, or to the undersigned at an address other than that shown below the undersigned's signature.

Mail or deliver New Notes and/or Old Notes to:

Name:	(Please Print or Type)
Address:
	(Include Zip Code)
	(Tax Identification or Social Security Number)

IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT OLD NOTES
ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 on Reverse Side)

X

X

(Signature(s) of Registered Holder(s) of Old Notes)

Dated:
, 2004

        (The above lines must be signed by the registered holder(s) of Old Notes as name(s) appear(s) on the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by a properly completed bond power from the registered holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Old Notes to which this Letter of Transmittal relate are held of record by two or more joint holders, then all such holders must sign this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must set forth his or her full title below and, unless waived by Cornell, submit evidence satisfactory to Cornell of such person's authority so to act. See Instruction 5 regarding the completion of this Letter of Transmittal, printed below.)

Name:

(Please Type or Print)

Capacity:

Address:

(Include Zip Code)

Area Code and Telephone No.:

SIGNATURE GUARANTEE

(If Required by Instruction 5)

Certain signatures must be guaranteed by an eligible institution.

Signature(s) guaranteed by an eligible institution:

(Authorized Signature)

(Title)

(Name of Firm)

(Address, Include Zip Code)

(Area Code and Telephone Number)

Dated:
, 2004

INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

        1.    Delivery of this Letter of Transmittal and Old Notes or Book-Entry Confirmations.    All physically delivered Old Notes or any confirmation of a book-entry transfer to the exchange agent's account at DTC of Old Notes tendered by book-entry transfer (a "book-entry confirmation"), as well as a properly completed and duly executed copy of this Letter of Transmittal (or facsimile hereof) or agent's message (as defined in the Prospectus) in lieu thereof, and any other documents required by this Letter of Transmittal, must be received by the exchange agent at its address set forth herein prior to 5:00 p.m., New York City time, on the expiration date. The method of delivery of the tendered Old Notes, this Letter of Transmittal and all other required documents to the exchange agent is at the election and risk of the holder and, except as otherwise provided below, the delivery will be deemed made only when actually received or confirmed by the exchange agent. Instead of delivery by mail, it is recommended that the holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure delivery to the exchange agent before the expiration date. No Letter of Transmittal or Old Notes should be sent to Cornell.

        2.    Guaranteed Delivery Procedures.    Holders who wish to tender their Old Notes and whose Old Notes are not immediately available or who cannot deliver their Old Notes, this Letter of Transmittal or any other documents required hereby to the exchange agent prior to the expiration date or who cannot complete the procedure for book-entry transfer on a timely basis and deliver an agent's message (as defined in the Prospectus), must tender their Old Notes according to the guaranteed delivery procedures set forth in the prospectus. Pursuant to such procedures:

•

such tender must be made by or through a firm that is a member of a registered national securities exchange or of the National Association of Securities Dealers Inc., a commercial bank or a trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "eligible institution");



•

prior to the expiration date, the exchange agent must have received from the eligible institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder of the Old Notes, the registration number(s) of such Old Notes and the total principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the expiration date, this Letter of Transmittal (or facsimile hereof) together with the Old Notes in proper form for transfer (or a book-entry confirmation) and any other documents required hereby, will be deposited by the eligible institution with the exchange agent; and



•

the certificates for all physically tendered shares of Old Notes, in proper form for transfer (or book-entry confirmation, as the case may be) and all other documents required hereby are received by the exchange agent three New York Stock Exchange trading days after the expiration date.

        Any holder of Old Notes who wishes to tender Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the exchange agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on the expiration date. Upon request of the exchange agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above.

        See "The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery" section of the Prospectus.

        3.    Tender by Holder.    Only a holder of Old Notes may tender such Old Notes in the exchange offer. Any beneficial owner of Old Notes who is not the registered holder and who wishes to tender should arrange with the registered holder to execute and deliver this Letter of Transmittal on his behalf

or must, prior to completing and executing this Letter of Transmittal and delivering his Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such beneficial owner's name or obtain a properly completed bond power from the registered holder.

        4.    Partial Tenders.    Tenders of Old Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Old Notes is tendered, the tendering holder should fill in the principal amount tendered in the third column of the box entitled "Description of Old Notes Tendered" above. The entire principal amount of Old Notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, then Old Notes for the principal amount of Old Notes not tendered and New Notes issued in exchange for any Old Notes accepted will be sent to the holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, promptly after the Old Notes are accepted for exchange.

        5.    Signatures on this Letter of Transmittal; Bond Powers and Endorsements; Guarantee of Signatures.    If this Letter of Transmittal (or facsimile hereof) is signed by the record holder(s) of the Old Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Old Notes without alteration, enlargement or any change whatsoever. If this Letter of Transmittal (or facsimile hereof) is signed by a participant in the DTC, the signature must correspond with the name as it appears on the security position listing as the holder of the Old Notes.

        If this Letter of Transmittal (or facsimile hereof) is signed by the registered holder or holders of Old Notes listed and tendered hereby and the New Notes issued in exchange therefor are to be issued (or any untendered principal amount of Old Notes is to be reissued) to the registered holder, the said holder need not and should not endorse any tendered Old Notes, nor provide a separate bond power. In any other case, such holder must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal, with the signatures on the endorsement or bond power guaranteed by an eligible institution.

        If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered holder or holders of any Old Notes listed, such Old Notes must be endorsed or accompanied by appropriate bond powers, in each case signed as the name of the registered holder or holders appears on the Old Notes.

        If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by Cornell, evidence satisfactory to Cornell of their authority to act must be submitted with this Letter of Transmittal.

        Endorsements on Old Notes or signatures on bond powers required by this Instruction 5 must be guaranteed by an eligible institution.

        No signature guarantee is required if:

•

this Letter of Transmittal (or facsimile hereof) is signed by the registered holder(s) of the Old Notes tendered herein (or by a participant in the DTC whose name appears on a security position listing as the owner of the tendered Old Notes) and the New Notes are to be issued directly to such registered holder(s) (or, if signed by a participant in the DTC, deposited to such participant's account at such DTC) and neither the box entitled "Special Delivery Instructions" nor the box entitled "Special Issuance Instructions" has been completed; or



•

such Old Notes are tendered for the account of an eligible institution.

In all other cases, all signatures on this Letter of Transmittal (or facsimile hereof) must be guaranteed by an eligible institution.

        6.    Special Issuance and Delivery Instructions.    Tendering holders should indicate, in the applicable box or boxes, the name and address (or account at the book-entry transfer facility) to which New Notes

or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated.

        7.    Transfer Taxes.    Cornell will pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the exchange offer. If, however, New Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the exchange offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder.

        EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD NOTES LISTED IN THIS LETTER OF TRANSMITTAL.

        8.    Tax Identification Number.    Federal income tax law requires that a holder of any Old Notes that are accepted for exchange must provide Cornell (as payor) with its correct taxpayer identification number ("TIN"), which, in the case of a holder who is an individual, is his or her social security number. If Cornell is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue Service. (If withholding results in an over-payment of taxes, a refund may be obtained). Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions.

        To prevent backup withholding, each tendering holder must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN), and that:

•

the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends; or



•

the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding.

If the Old Notes are registered in more than one name or are not in the name of the actual owner, see the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for information on which TIN to report.

        Cornell reserves the right in its sole discretion to take whatever steps are necessary to comply with Cornell's obligations regarding backup withholding.

        9.    Validity of Tenders.    All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by Cornell in its sole discretion, which determination will be final and binding. Cornell reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the acceptance of which would, in the opinion of Cornell or its counsel, be unlawful. Cornell also reserves the absolute right to waive any conditions of the exchange offer or defects or irregularities in tenders as to particular Old Notes. The interpretation of the terms and conditions by Cornell of the exchange offer (which includes this Letter of Transmittal and the instructions hereto) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as Cornell shall determine. Neither Cornell, the exchange agent nor any other person shall be under any duty to give

notification of defects or irregularities with regard to tenders of Old Notes nor shall any of them incur any liability for failure to give such information.

        10.    Waiver of Conditions.    Cornell reserves the absolute right to waive, in whole or in part, any of the conditions to the exchange offer set forth in the Prospectus.

        11.    No Conditional Tender.    No alternative, conditional, irregular or contingent tender of Old Notes or transmittal of this Letter of Transmittal will be accepted.

        12.    Mutilated, Lost, Stolen or Destroyed Old Notes.    Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the exchange agent at the address indicated above for further instructions.

        13.    Requests for Assistance or Additional Copies.    Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the exchange agent at the address or telephone number set forth on the cover page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the exchange offer.

        14.    Withdrawal.    Tenders may be withdrawn only pursuant to the withdrawal rights set forth in the Prospectus under the caption "The Exchange Offer—Withdrawal of Tenders."

IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF (TOGETHER WITH THE OLD NOTES DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL HARD COPY FORM) MUST BE RECEIVED BY THE EXCHANGE AGENT, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT, PRIOR TO THE EXPIRATION DATE.

PAYER'S NAME: JPMORGAN CHASE BANK

SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service		Part 1—PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	TIN:	Social Security Number or Employer Identification Number
Payer's Request for Taxpayer Identification Number ("TIN")		Part 2—TIN Applied For o
Certification: Under penalties of perjury, I certify that:
(1)	the number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); and
(2)	I am not subject to backup withholding either because: (a) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (b) the IRS has notified me that I am no longer subject to backup withholding; and
(3)	I am a U.S. person (including a U.S. resident alien).
Certification Instructions—You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you were no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.)

Signature
Date

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU IN CONNECTION WITH THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING
(OR WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of the exchange, thirty percent (28%) of all reportable payments made to me thereafter will be withheld until I provide a number.

Signature
Date

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number to Give the Payer.—Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.

For this type of account:			Give the SOCIAL SECURITY number of—	For this type of account:		Give the EMPLOYER IDENTIFICATION number of—
1.	An individual's account.		The individual	9.	A valid trust, estate, or pension trust	The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5)
2.	Two or more individuals (joint account)		The actual owner of the account or, if combined funds, any one of the individuals(1)	10.	Corporate account or LLC electing corporate status on Form 8832	The corporation
3.	Husband and wife (joint account)		The actual owner of the account or, if joint funds, either person(1)	11.	Religious, charitable, or educational organization account	The organization
4.	Custodian account of a minor (Uniform Gift to Minors Act)		The minor(2)	12.	Partnership or multi-member LLC account held in the name of the business	The partnership
5.	Adult and minor (joint account)		The adult or, if the minor is the only contributor, the minor(1)	13.	Association, club, or other tax-exempt organization	The organization
6.	Account in the name of guardian or committee for a designated ward, minor, or incompetent person		The ward, minor, or incompetent person(3)	14.	A broker or registered nominee	The broker or nominee
7.	a b	The usual revocable savings trust account (grantor is also trustee) So-called trust account that is not a legal or valid trust under State law	The grantor-trustee(1) The actual owner(1)	15.	Account with the Department of Agriculture in the name of a public entity (such as a State or local government, school, district, or prison) that receives agricultural program payments	The public entity
8.	Sole proprietorship account or single member LLC account		The owner(4)

(1)

List first and circle the name of the person whose number you furnish.

(2)

Circle the minor's name and furnish the minor's social security number.

(3)

Circle the ward's, minor's or incompetent person's name and furnish such person's social security number.

(4)

Show the name of the owner.

(5)

List first and circled the name of the legal trust, estate, or pension trust.

Note:  If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9

Page 2

Obtaining A Number

If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number.

Payees Exempt from Backup Withholding

Subject to certain exceptions, payees generally exempt from backup withholding on payments include the following:

•

A corporation.



•

A financial institution.



•

An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(b)(7).



•

The United States or any agency or instrumentality thereof.



•

A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof.



•

A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof.



•

An international organization or any agency, or instrumentality thereof.



•

A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S.



•

A real estate investment trust.



•

A common trust fund operated by a bank under section 584(a)



•

An exempt charitable remainder trust under section 664, or a non-exempt trust described in section 4947.



•

An entity registered at all times under the Investment Company Act of 1940.



•

A foreign central bank of issue.



•

A middleman known in the investment community as a nominee or listed in the most recent publication of the American Society of Corporate Secretaries, Inc. Nominee List.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

•

Payments to nonresident aliens subject to withholding under section 1441.



•

Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner.



•

Payments of patronage dividends where the amount received is not paid in money.



•

Payments made by certain foreign organizations.



•

Section 404(k) distributions by an ESOP.

Payments of interest not generally subject to backup withholding include the following:

•

Payments of interest on obligations issued by individuals.

Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer.

•

Payments of tax-exempt interest (including exempt-in-interest dividends under section 852).



•

Payments described in section 6049(b)(5) to non-resident aliens.



•

Payments on tax-free covenant bonds under section 1451.



•

Payments made by certain foreign organizations.



•

Mortgage interest paid to the payer.

Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.

Certain payments other than interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details see section 6041, 6041A, 6042, 6044, 6045, 6049, 6050A, and 6050N and their regulations.

Privacy Act Notice.—Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes and to help verify the accuracy of your return. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1)  Penalty for Failure to Furnish Taxpayer Identification Number.—If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2)  Civil Penalty for False Information With Respect to Withholding.—If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3)  Criminal Penalty for Falsifying Information.—Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE

QuickLinks

SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
IMPORTANT PLEASE SIGN HERE WHETHER OR NOT OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY (Complete Accompanying Substitute Form W-9 on Reverse Side)
INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9

EX-99.3

Exhibit 99.3

Cornell Companies, Inc.

NOTICE OF GUARANTEED DELIVERY

for

Tender of All Outstanding
10³/4% Senior Notes Due 2012
issued on June 24, 2004

in Exchange for

10³/4% Senior Notes Due 2012
That Have Been Registered
Under the Securities Act of 1933

        This form, or one substantially equivalent hereto, must be used by a holder to accept the exchange offer of Cornell Companies, Inc., a Delaware corporation ("Cornell"), and to tender 10³/4% Senior Notes Due 2012 issued on June 24, 2004 (the "Old Notes") to the exchange agent pursuant to the guaranteed delivery procedures described in "The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery" of the prospectus of Cornell, dated                        , 2004 (the "Prospectus"), and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes to tender Old Notes pursuant to such guaranteed delivery procedures must ensure that the exchange agent receives this Notice of Guaranteed Delivery prior to the expiration date (as defined below) of the exchange offer. Certain terms used but not defined herein have the meanings ascribed to them in the Prospectus or the Letter of Transmittal.

        THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                              , 2004, UNLESS EXTENDED (THE "EXPIRATION DATE"). OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is: JPMorgan Chase Bank 1-800-275-2048
By Overnight JPMorgan Chase Bank 2001 Bryan Street, Floor 10 Dallas, TX 75201 Attention: Frank Ivins or JPMorgan Chase Bank 4 New York Plaza, Ground Floor New York, NY 10004	By Fax 214-468-6494 Attn: Frank Ivins

Delivery of this Notice of Guaranteed Delivery to an address other than as set forth above, or transmission of instructions via facsimile other than as set forth above, will not constitute a valid delivery.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space in the box provided on the Letter of Transmittal for guarantee of signatures.

Ladies and Gentlemen:

        The undersigned hereby tenders to Cornell, upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus and in Instruction 2 of the Letter of Transmittal.

        The undersigned hereby tenders the Old Notes listed below:

Title of Series	Certificate Number(s) (if known) of Old Notes or Account Number at the Book Entry Transfer Facility	Aggregate Principal Amount Represented	Aggregate Principal Amount Tendered
Cornell's 103/4% Senior Notes due 2012

PLEASE SIGN AND COMPLETE

Name(s) of Record Holder(s):

Address(es):

Area Code and Telephone Number(s):

Signature(s):

Dated:
, 2004

        This Notice of Guaranteed Delivery must be signed by the holder(s) exactly as their name(s) appear on certificates for Old Notes or on a security position listing as the owner of Old Notes, or by person(s) authorized to become holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information.

PLEASE PRINT NAME(S) AND ADDRESS(ES)

Name(s):

Capacity:

Address(es):

GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)

                 The undersigned, a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or is a commercial bank or trust company having an office or correspondent in the United States, or is otherwise an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, guarantees deposit with the exchange agent of the Letter of Transmittal (or facsimile thereof), together with the Old Notes tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Old Notes into the exchange agent's account at the DTC as described in the Prospectus under the caption "The Exchange Offer—Procedures for Tendering Old Notes—Book-Entry Transfer" and in the Letter of Transmittal) and any other required documents, all by 5:00 p.m., New York City time, within three New York Stock Exchange trading days following the expiration date.

Name of Firm:

Address:
	(Include Zip Code)

Area Code and Telephone Number:

Name:

Title:
	(Please Type or Print)

Dated:
, 2004

DO NOT SEND OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.

INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

        1.    Delivery of this Notice of Guaranteed Delivery.    A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the exchange agent at its address set forth herein prior to the expiration date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the exchange agent is at the election and sole risk of the holder, and the delivery will be deemed made only when actually received by the exchange agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, the holders may wish to consider using an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedures, see Instruction 2 of the Letter of Transmittal.

        2.    Signatures on this Notice of Guaranteed Delivery.    If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Old Notes referred to herein, the signature must correspond with the name(s) written on the face of the Old Notes without alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of DTC whose name appears on a security position listing as the owner of the Old Notes, the signature must correspond with the name shown on the security position listing as the owner of the Old Notes.

        If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Old Notes listed or a participant of DTC, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appears on the Old Notes or signed as the name of the participant shown on DTC's security position listing.

        If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and submit with the Letter of Transmittal evidence satisfactory to Cornell of such person's authority to so act.

        3.    Requests for Assistance or Additional Copies.    Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the exchange agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the exchange offer.

EX-99.4

Exhibit 99.4

Cornell Companies, Inc.

TENDER OF ALL OUTSTANDING
10³/4% Senior Notes Due 2012
issued on June 24, 2004

in Exchange for

10³/4% Senior Notes Due 2012
that Have Been Registered Under the Securities Act of 1933

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                                                 , 2004 UNLESS EXTENDED (THE "EXPIRATION DATE").
        
TENDERS IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To Registered Holders and Depository Trust Company Participants:

        We are enclosing herewith the material listed below relating to the offer by Cornell Companies, Inc., a Delaware corporation ("Cornell"), to exchange its 10³/4% Senior Notes due 2012 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of Cornell's issued and outstanding 10³/4% Senior Notes due 2012 issued on June 24, 2004 (the "Old Notes") upon the terms and subject to the conditions set forth in the prospectus, dated                                                 , 2004 (the "Prospectus"), and the related Letter of Transmittal (which together constitute the "exchange offer").

        Enclosed herewith are copies of the following documents:

1.

Prospectus dated                                                 , 2004;



2.

Letter of Transmittal (together with accompanying Substitute Form W-9 and related Guidelines);



3.

Notice of Guaranteed Delivery;



4.

Letter that may be sent to your clients for whose account you hold Old Notes in your name or in the name of your nominee;



5.

Letter that may be sent from your clients to you with such clients' instruction with regard to the exchange offer (included in item 4. above); and



6.

Letter to the holders of Old Notes.

        We urge you to contact your clients promptly. Please note that the exchange offer will expire on the Expiration Date unless extended. The exchange offer is not conditioned upon any minimum number of Old Notes being tendered.

        Pursuant to the Letter of Transmittal, each holder of Old Notes will represent to Cornell that:

•

the New Notes acquired in exchange for Old Notes pursuant to the exchange offer are being acquired in the ordinary course of business of the person receiving such New Notes;



•

the holder is not participating in, and has no arrangement with any person to participate in, the distribution of New Notes within the meaning of the Securities Act;

•

neither the holder nor any such other person is an "affiliate" (within the meaning of Rule 405 under the Securities Act) of Cornell or a broker-dealer tendering Old Notes acquired directly from Cornell; and



•

if the holder is not a broker-dealer, that the holder is not engaged in and does not intend to engage in the distribution of the New Notes.

        If the holder is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it acknowledges that it will deliver a prospectus in connection with any resale of such Old Notes.

        The enclosed Letter to Clients contains an authorization by the beneficial owners of the Old Notes for you to make the foregoing representations.

        Cornell will not pay any fee or commission to any broker or dealer or to any other persons (other than the exchange agent) in connection with the solicitation of tenders of Old Notes pursuant to the exchange offer. Cornell will pay or cause to be paid any transfer taxes payable on the transfer of Old Notes to it, except as otherwise provided in Instruction 7 of the enclosed Letter of Transmittal.

        Additional copies of the enclosed materials may be obtained from the exchange agent by calling JPMorgan Chase Bank at 1-800-275-2048.

Very truly yours,

CORNELL COMPANIES, INC.

EX-99.5

Exhibit 99.5

Cornell Companies, Inc.

TENDER OF ALL OUTSTANDING
10³/4% Senior Notes Due 2012
issued on June 24, 2004

in Exchange for

10³/4% Senior Notes Due 2012
that Have Been Registered Under the Securities Act of 1933

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                                                 , 2004 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To Our Clients:

        We are enclosing a prospectus, dated                                                 , 2004 (the "Prospectus"), of Cornell Companies, Inc., a Delaware corporation ("Cornell"), and a related Letter of Transmittal (which together constitute the "exchange offer") relating to the offer by Cornell to exchange its 10³/4% Senior Notes due 2012 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended, for a like principal amount of Cornell's issued and outstanding 10³/4% Senior Notes due 2012 issued on June 24, 2004 (the "Old Notes"), upon the terms and subject to the conditions set forth in the exchange offer.

        The exchange offer is not conditioned upon any minimum number of Old Notes being tendered.

        We are the holder of record of Old Notes held by us for your account. A tender of such Old Notes can be made only by us as the record holder and pursuant to your instructions. The enclosed Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Old Notes held by us for your account.

        We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account pursuant to the terms and conditions of the exchange offer. We also request that you confirm that we may on your behalf make the representations and warranties contained in the Letter of Transmittal.

PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE.

INSTRUCTIONS TO REGISTERED HOLDER AND/OR
DEPOSITORY TRUST COMPANY PARTICIPANT

To Registered Holder and/or Participant of the Depository Trust Company:

        The undersigned hereby acknowledges receipt of the prospectus dated                                                 , 2004 (the "Prospectus"), of Cornell Companies, Inc., a Delaware corporation ("Cornell"), and the accompanying Letter of Transmittal, that together constitute the offer of Cornell (the "exchange offer") to exchange Cornell's 10³/4% Senior Notes due 2012 (the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for all of Cornell's issued and outstanding 10³/4% Senior Notes due 2012 issued on June 24, 2004 (the "Old Notes"). Certain terms used but not defined herein have the meanings ascribed to them in the Prospectus.

        This will instruct you, the registered holder and/or DTC participant, as to the action to be taken by you relating to the exchange offer with respect to the Old Notes held by you for the account of the undersigned.

        The aggregate face amount of the Old Notes held by you for the account of the undersigned is (fill in amount):

        $                                                 of the 10³/4% Senior Notes due 2012.

        With respect to the exchange offer, the undersigned hereby instructs you (check appropriate box):

o

To tender the following Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered) (if any): $                             .



o

not to tender any Old Notes held by you for the account of the undersigned.

        If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations, that:

•

the New Notes acquired in exchange for Old Notes pursuant to the exchange offer are being acquired in the ordinary course of business of the person receiving such New Notes;



•

the undersigned is not participating in, and has no arrangement with any person to participate in, the distribution of New Notes within the meaning of the Securities Act; and



•

neither the undersigned nor any such other person is an "affiliate" (within the meaning of Rule 405 under the Securities Act) of Cornell or a broker-dealer tendering Old Notes acquired directly from Cornell; and



•

if the undersigned is not a broker-dealer, that the undersigned is not engaged in and does not intend to engage in the distribution of the New Notes.

        If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes, it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes.

SIGN HERE

Name(s) of beneficial owner(s):

Signature(s):

Name(s):
	(Please Print)

Address(es):

Telephone Number(s):

Taxpayer Identification or Social Security Number(s):

Date:

EX-99.6

Exhibit 99.6

[Date]

Exchange Agent Agreement

JPMorgan Chase Bank
600 Travis Street, Suite 1150
Houston, Texas 77002-3009
Attention:            

Ladies and Gentlemen:

        [Name of issuer] (the "Company") proposes to make an offer (the "Exchange Offer") to exchange an aggregate principal amount of up to $                        of its     %            Due            (the "Registered Notes"), which have been registered under the Securities Act of 1933, as amended, for a like principal amount of the Company's outstanding    %    Due    (the "Private Notes"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus dated                         (the "Prospectus"), proposed to be distributed to all record holders of the Private Notes as of            . The Private Notes and the Registered Notes are collectively referred to herein as the "Notes".

        The Company hereby appoints JPMorgan Chase Bank to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to JPMorgan Chase Bank.

        The Exchange Offer is expected to be commenced by the Company on or about            . The Letter of Transmittal accompanying the Prospectus is to be used by the holders of the Private Notes to accept the Exchange Offer, and contains instructions with respect to the delivery of certificates for Private Notes tendered.

        The Exchange Offer shall expire at 5:00 P.M., New York City time, on            , or on such later date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (promptly confirmed in writing) or written notice to you before 9:00 A.M., New York City time, on the business day following the previously scheduled Expiration Date.

        The Company expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Private Notes not theretofore accepted for exchange, upon the occurrence of any of the events specified in the Prospectus under the caption "[The Exchange Offer—Conditions to the Exchange Offer]." The Company will give oral (promptly confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable.

        In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions:

        1.     You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus entitled "[The Exchange Offer]" and as specifically set forth herein and such duties which are necessarily incidental thereto.

        2.     You will establish an account with respect to the Private Notes at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, or, if you already have established an account with the Book-Entry Transfer Facility suitable for the Exchange Offer, you will identify such pre-existing account to be used in the Exchange Offer, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Private Notes by causing the Book-Entry Transfer Facility to transfer such Private Notes into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer.

        3.     You are to examine each of the Letters of Transmittal and certificates for Private Notes (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Private Notes to ascertain whether: (i) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and (ii) the Private Notes have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or any of the certificates for Private Notes are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need (i) for fulfillment of all requirements and (ii) to take any other action as may be necessary or advisable to cause such irregularity to be corrected.

        4.     With the approval of the Chairman of the Board, President or any Vice President of the Company (such approval, if given orally, to be promptly confirmed in writing) or any other party designated by such an officer in writing, you are authorized to waive any defects, irregularities or conditions of tender in connection with any tender of Private Notes pursuant to the Exchange Offer.

        5.     Tenders of Private Notes may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "[Procedures for Tendering Private Notes]," and Private Notes shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein.

        Notwithstanding the provisions of this paragraph 5, Private Notes which the Chairman of the Board, President or any Vice President of the Company or any other party designated by such officer in writing shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be promptly confirmed in writing).

        6.     You shall advise the Company with respect to any Private Notes delivered subsequent to the Expiration Date and accept its instructions with respect to disposition of such Private Notes.

        7.     You shall accept tenders:

        (a)   in case where the Private Notes are registered in two or more names only if signed by all named holders;

        (b)   in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and

        (c)   from persons other than the registered holder of Private Notes provided that customary transfer requirements, including any applicable transfer taxes, are fulfilled.

        You shall accept partial tenders of Private Notes where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Private Notes to the transfer agent for split-up and return any untendered Private Notes to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer.

        8.     Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice, if given orally, to be promptly confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Private Notes properly tendered and you, on behalf of the Company, will exchange such Private Notes for Registered Notes and cause such Private Notes to be canceled. Delivery of Registered Notes will be made on behalf of the Company by you at the rate of $1,000 principal amount of Registered Notes for each $1,000 principal amount of Private Notes tendered promptly after notice (such notice, if given orally, to be promptly confirmed in writing) of acceptance of such Private Notes by the Company; provided, however, that in all cases, Private Notes tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for such Private Notes (or confirmation of book-entry transfer into your account at the Book-Entry

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Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof or an Agent's Message (as defined in the Prospectus) in lieu thereof) with any required signature guarantees and any other required document. You shall issue Registered Notes only in denominations of $[1,000] or any integral multiple thereof.

        9.     Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Private Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date.

        10.   The Company shall not be required to exchange any Private Notes tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company not to exchange any Private Notes tendered shall be given (such notice, if given orally, shall be promptly confirmed in writing) by the Company to you.

        11.   If, pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Private Notes tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "[The Exchange Offer—Conditions to the Exchange Offer]" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Private Notes (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them.

        12.   All certificates for reissued Private Notes, unaccepted Private Notes or for Registered Notes shall be forwarded by (a) first-class mail, postage prepaid under a blanket surety bond protecting you and the Company from loss or liability arising out of the nonreceipt or nondelivery of such certificates or (b) by registered mail insured separately for the replacement value of each of such certificates.

        13.   You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders.

        14.   As Exchange Agent hereunder you:

        (a)   will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the certificates or the Private Notes represented thereby deposited with you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer;

        (b)   shall not be obligated to take any action hereunder which might in your reasonable judgment involve any expense or liability, unless you shall have been furnished with reasonable indemnity;

        (c)   shall not be liable to the Company for any action taken or omitted by you, or any action suffered by you to be taken or omitted, without negligence, wilful misconduct or bad faith on your part, by reason of or as a result of the administration of your duties hereunder in accordance with the terms and conditions of this Agreement or by reason of your compliance with the instructions set forth herein or with any written or oral instructions delivered to you pursuant hereto, and may rely on and shall be protected in acting in good faith in reliance upon any certificate, instrument, opinion, notice, letter, facsimile or other document or security delivered to you and reasonably believed by you to be genuine and to have been signed by the proper party or parties;

        (d)   may act upon any tender, statement, request, comment, agreement or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you in good faith reasonably believe to be genuine or to have been signed or represented by a proper person or persons;

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        (e)   may rely on and shall be protected in acting upon written or oral instructions from any officer of the Company with respect to the Exchange Offer;

        (f)    shall not advise any person tendering Private Notes pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Private Notes;

        (g)   may consult with your counsel and the written opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by you hereunder in good faith and in accordance with such written opinion of such counsel; and

        (h)   in no event will you be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits) even if you have been advised of the likelihood of such loss or damage and regardless of the form of action.

        15.   You shall take such action as may from time to time be requested by the Company or its counsel (and such other action as you may reasonably deem necessary) to furnish copies of the Prospectus, the Letter of Transmittal and the Notice of Guaranteed Delivery, as defined in the Prospectus, or such other forms as may be approved from time to time by the Company, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company will furnish you with copies of such documents as you may request. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention:            .

        16.   You shall advise by facsimile transmission or telephone, and promptly thereafter confirm in writing to                        ,             of the Company,                        , Esq. of                        , counsel for the Company, and such other person or persons as the Company may request, daily on each business day, and more frequently if reasonably requested, up to and including the Expiration Date, as to the number of Private Notes which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received; provided, however, that if, on a particular business day, no additional Private Notes have been tendered, no additional items have been received by you and such totals have not changed since you last provided such information as required above, you need not provide the information referred to above in this paragraph 16 on such day. In addition, you will also confirm, and cooperate in making available to, the Company or any such other person or persons as the Company requests from time to time prior to the Expiration Date of such other information as it or he or she reasonably requests. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Private Notes tendered and the aggregate principal amount of Private Notes accepted and deliver said list to the Company.

        17.   Letters of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and the time of receipt and shall, except as provided in paragraph 11, be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities (or, if earlier, until such time as such documents are delivered to the Company upon termination of this Agreement, pursuant to paragraph 29).

        18.   You hereby expressly waive any lien, encumbrance or right of set-off whatsoever that you may have with respect to funds deposited with you for the payment of transfer taxes by reason of amounts,

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if any, borrowed by the Company, or any of its subsidiaries or affiliates pursuant to any loan or credit agreement with you or for compensation owed to you hereunder.

        19.   For services rendered as Exchange Agent hereunder, you shall be entitled to compensation of $            and you shall be entitled to reimbursement of your reasonable out-of-pocket expenses (including reasonable attorneys' fees and expenses of your counsel, which fees are expected under normal circumstances to be not in excess of $5,000) incurred in connection with your services hereunder.

        20.   You hereby acknowledge receipt of the Prospectus, the Letter of Transmittal and the other documents associated with the Exchange Offer attached hereto and further acknowledge that you have examined each of them to the extent necessary to perform your duties hereunder. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to the duties, liabilities and indemnification of you as Exchange Agent which shall be controlled by this Agreement.

        21.   The Company agrees to indemnify and hold harmless you, in your capacity as Exchange Agent hereunder, and your officers, employees and agents, against any liability, cost or expense, including reasonable attorneys' fees, arising out of or in connection with any act, omission, delay or refusal made by you in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document believed by you in good faith to be valid and genuine and in accepting any tender or effecting any transfer of Private Notes believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept any tenders or effect any transfer of Private Notes or otherwise arising out of or in connection with your acting as Exchange Agent hereunder; provided, however, that the Company shall not be liable for indemnification or otherwise for any loss, liability, cost or expense to the extent arising out of your negligence, wilful misconduct or bad faith. In no case shall the Company be liable under this indemnity with respect to any claim against you unless the Company shall be notified by you, by letter or cable or by facsimile confirmed by letter, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or written notice of the commencement of any such action. The Company shall be entitled to participate at its own expense in the defense of any such claim or other action, and, if the Company so elects, the Company shall assume the defense of any suit brought to enforce any such claim. In the event that the Company shall assume the defense of any such suit, the Company shall not be liable for the fees and expenses of any additional counsel thereafter retained by you so long as the Company shall retain counsel reasonably satisfactory to you to defend such suit.

        22.   You shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Tax Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service.

        23.   You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Private Notes, your check in the amount of all transfer taxes so payable, and the Company shall reimburse you for the amount of any and all transfer taxes payable in respect of the exchange of Private Notes; provided, however, that, subject to such reimbursement by the Company, you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you.

        24.   This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall

5

inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto.

        25.   This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

        26.   In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be effected or impaired thereby.

        27.   This Agreement shall not be deemed or construed to be modified, amended, rescinded, canceled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally.

        28.   Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile) and shall be given to such party, addressed to it, at its address or telecopy number set forth below:

If to the Company:

Facsimile:
Attention:

With a copy to:

Facsimile:
Attention:

If to the Exchange Agent:

JPMorgan Chase Bank
600 Travis Street, Suite 1150
Houston, Texas 77002-3009

Facsimile: (713) 577-5200
Attention:            

        29.   Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Paragraphs 14(c), 18, 19, 21 and 23 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates for Notes, funds or property (including, without limitation, Letters of Transmittal and any other documents relating to the Exchange Offer) then held by you as Exchange Agent under this Agreement.

        30.   This Agreement shall be binding and effective as of the date hereof.

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        Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy.

[ISSUER]
By:
	Name: Title:

Accepted as of the date
first above written:

JPMORGAN CHASE BANK

By:
	Name: Title:

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