10-K405

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

  /X/              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   for the fiscal year ended December 31, 1995

                                       OR

  / /             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-13560

                       CORRECTIONS CORPORATION OF AMERICA
               (Exact name of Company as specified in its charter)

           DELAWARE                                         62-1156308
(State or other jurisdiction of 
incorporation or organization               (I.R.S. Employer Identification No.)

 102 WOODMONT BOULEVARD                                     37205
 NASHVILLE, TENNESSEE                                     (Zip Code)
 (Address of principal executive offices)

         Company's telephone number, including area code: (615) 292-3100

           Securities registered pursuant to Section 12(b) of the Act:

         Title of Each Class                          Name of Each Exchange on
   Common Stock, $1.00 par value                          Which Registered
 Warrants to Purchase Common Stock                    New York Stock Exchange

           Securities registered pursuant to Section 12(g) of the Act:

                                      None

         Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Company
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                    Yes  x  No
                                        ---    ---  

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Company's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
                                    Yes  x   No
                                        ---     ---

         The aggregate market value of the voting stock held by non-affiliates
of the Company was $1,378,408,000 as of March 1, 1996, based upon the closing
price of such stock as reported on the New York Stock Exchange ("NYSE") on that
day. There were 33,747,237 shares of common stock, $1.00 par value, outstanding
at March 1, 1996.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Parts of the Registrant's Proxy Statement for its 1996 Annual Meeting
of Stockholders are incorporated by reference in Part III of this Annual Report.
Parts of the Registrant's Annual Report to Stockholders for the fiscal year
ended December 31, 1995 are incorporated by reference into Parts II and IV of
this Annual Report.



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                                     PART I

ITEM 1.  BUSINESS

GENERAL

         The Company is the leading developer and manager of privatized
correctional and detention facilities in the United States, the United Kingdom
and Australia. At December 31, 1995, the Company had contracts to manage 47
correctional and detention facilities with an aggregate design capacity of
28,607 beds. Effective January 31, 1996, the Company terminated a contract for a
250 bed facility, resulting in 46 beds currently under contract. These
facilities are located in eleven states of the United States, Puerto Rico,
Australia and the United Kingdom. Of these 46 facilities, 38 are in operation
and nine were under development by the Company (with one scheduled to commence
operations in the first quarter of 1996, two scheduled to commence operations in
the third quarter of 1996, two scheduled to commence operations in the fourth
quarter of 1996 and four scheduled to commence operations in 1997). Since
December 31, 1994, the Company has substantially increased its revenues through
the acquisition of other companies as well as the opening of additional
facilities, while improving operating profitability. The Company began 1995 with
13,404 beds under contract, and through new contract awards and acquisitions,
ended 1995 with 28,607 beds under contract. Of those 28,607 beds, 3,400 came on
line in the fourth quarter, representing the largest number of openings in any
one quarter of the Company's history. The Company's revenues have grown from
approximately $95 million for the 1992 fiscal year to approximately $207 million
for the 1995 fiscal year, representing an annual compounded growth rate of
approximately 31%.

         The management services provided by the Company to governmental
agencies include the integrated design, construction and management of new
correctional and detention facilities and the redesign, renovation and
management of older facilities. In addition to providing the fundamental
residential services relating to the inmates, the Company's facilities offer a
large variety of rehabilitation and education programs including basic
education, job and life skills training and chemical dependency counseling and
treatment. The Company also provides health care (including medical, dental and
psychiatric services), institutional food services, transportation requirements,
and work and recreational programs. In addition, through its wholly-owned
subsidiary, TransCor America, Inc., the Company provides inmate transportation
services for numerous governmental agencies. The Company is also expanding
its youth detention services. Management of the Company believes that its proven
ability to deliver a full range of high quality correctional and detention
facility management services on a cost-effective basis to governmental agencies
provides such agencies with sufficient incentives to choose the Company when
awarding new contracts or renewing existing contracts.


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         In addition to the opening of new facilities, over the last two years,
the Company has expanded its service capabilities and broadened its geographic
presence in the United States market through a series of strategic acquisitions
of prison management companies and individual facilities as well as the
acquisition of an inmate transportation company. The Company intends to continue
to pursue strategic acquisitions of prison management companies and facilities
when the proposed acquisition enhances stockholder value. (See "Recent
Acquisitions".)

         In addition to its domestic operations, the Company has obtained and is
pursuing construction and management contracts for correctional and detention
facilities outside the United States and presently operates facilities in the
United Kingdom and Australia. At December 31, 1995, the Company had contracts to
manage one facility in the United Kingdom and two facilities in Australia.

         The Company is a Delaware corporation and is the successor to a
Tennessee corporation of the same name incorporated in January 1983. The
Company's principal executive offices are located at 102 Woodmont Boulevard,
Nashville, Tennessee 37205 and its telephone number is (615) 292-3100.

BUSINESS STRATEGY

         The Company intends to increase revenues and enhance its position as
the leading developer and manager of privatized correctional and detention
facilities through the following business strategies.

         Efficient and Effective Management of Facilities. The Company will
continue to provide low cost, high quality management of its facilities. The
Company believes that its quality of personnel, efficient application of
financial resources and adherence to proven policies and procedures enables it
to design, develop and manage correctional and detention facilities at costs
lower than governmental agencies that are responsible for performing such
services. The Company believes that its reputation as an innovative and
effective manager of facilities enhances its ability to market its services and
capitalize on a larger scope of opportunities with a variety of governmental
agencies.

         The Company also recognizes the importance of the facility
administrator and the facility's management team in the successful financial
performance of its facilities. Management believes that the Company's reputation
as the leading developer and manager of privatized correctional and detention
enables it to attract highly-qualified facility administrators. Each facility
management team operates each facility in accordance with a company-wide policy
and procedure regimen, derived from American Correctional Association ("ACA")
standards, designed to ensure the delivery of consistent, high quality services
in each of its facilities. The Company seeks to minimize operating expenses by
designing its facilities to optimize correctional officer staffing consistent
with facility security requirements. The Company further controls operating
expenses through the use of electronic surveillance and other technology.


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         Development of Domestic Business Opportunities. As a result of the
growth in the demand for privatized correctional and detention facilities, the
Company has been selective in the projects it pursues. The Company pursues
projects based on probability of success, geographic location, size, potential
profitability, political and community acceptability. This approach allows the
Company to enhance its market share and optimize resource allocation,
profitability and financial return.

         The Company plans to pursue its domestic business opportunities in two
ways. First, the Company will follow the traditional competitive route where a
Request for Proposal ("RFP") is issued by a government agency and a number of
companies respond. Management believes that this approach will produce the
majority of new contract awards to the Company. The second course involves the
development of new facilities in locations where there is a clearly defined,
long-term need for beds, but where a competitive bidding procedure is not
required. This approach has proven successful for the Company and management
believes it evolves out of the Company's strong client relationships and solid
reputation for quality corrections. The Company's goal is to add at least 1,000
beds per year on a non-competitive basis. The Company believes its solid
reputation and relatively low financial leverage and substantial liquidity
provide competitive advantages in competing for such contracts.

         Using both of these approaches, the Company intends to continue its
focus on high security jails and prisons that are 500 to 1,000 beds or larger.
Management believes that the Company's experience and reputation in managing
large facilities will enable it to capitalize on the trend of governments to
privatize larger facilities.

         Strategic Acquisitions. The Company believes that its recent
acquisitions have significantly enhanced its position as the leading developer
and manager of privatized correctional and detention facilities while increasing
operating efficiencies. Accordingly, the Company intends to continue to pursue
strategic acquisitions of other managers of privatized correctional and
detention facilities when the proposed acquisition enhances stockholder value.

         Expanded Scope of Services. The Company intends to continue to
implement a wide variety of specialized services that address the unique needs
of various segments of the inmate population. Because the facilities operated by
the Company differ with respect to security levels, ages, genders and cultures
of inmates, the Company focuses on the particular needs of an inmate population
and tailors its services based on local conditions and the Company's ability to
provide such services on a cost-effective basis. In addition to core residential
services, the Company offers rehabilitative and education services such as
counseling, basic education, chemical dependency treatment, job skill training
and life skills/transition planning services, all aimed at reducing recidivism.
The Company believes that its success in delivering these specialized services
will enable it to address the changing needs of its customers. By offering a
broad range of specialized services, the Company seeks to provide a solution to
the public's and government's desire to reduce recidivism and ultimately the
cost of crime.


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         Expansion into International Markets. The Company believes the majority
of its new business will come from within the United States. However, research
conducted by the Company's international strategic partner, Sodexho S.A.
indicates that interest in private-sector corrections in other nations is
developing. While management will not detract from its domestic business to
pursue international activities more aggressively, the Company will participate
in selected international projects it finds attractive. The Company also
believes that in order to compete effectively in international markets it must
enter into alliances with strategic local partners with access to local
opportunities and familiarity with local business practices. In 1989, the
Company, along with two Australian partners, formed Corrections Corporation of
Australia, Pty. Ltd. ("CC AUS"), an Australian company, to pursue the prison
management business in Australia. In 1991, the Company and Chubb Security
Holdings Australia Limited ("Chubb Security") bought the other one-third
interest from the third initial investor. In 1995, the Company purchased Chubb
Security's interest. After consideration of several strategic alternatives
related to CC AUS, the Company sold the 50% interest to Sodexho S.A. in 1995.
The Company now has a 50% ownership interest in CC AUS. In February 1990, CC AUS
opened the Borallon Correctional Centre, a 389 inmate facility in Borallon,
Queensland, Australia. In 1995, CC AUS was selected by the Department of Justice
in Victoria, Australia to design, build and operate a 125 bed facility which is
scheduled to open in August 1996. In 1994, CC AUS entered into two contracts to
provide court escort services (inmate transport services) in Australia and
intends to bid on additional contracts to perform such services in Australia and
elsewhere.

         In 1988, the Company, along with two British partners, formed UK
Detention Services ("UKDS"), a United Kingdom joint venture for the management
of detention facilities and prisons. In 1992, UKDS bid for and received the
contract to manage H.M. Prison Blakenhurst, a 649 inmate correctional facility,
which opened in May, 1993. The Company believes it is well positioned to
participate in the growth opportunities which exist in the United Kingdom
through UKDS.

         In June 1994, the Company entered into an international strategic
alliance with Sodexho S.A. ("Sodexho"), a French conglomerate, which in addition
to other businesses, provides various contract management services. Among other
business ventures, Sodexho provides contract services to the French prisons and
has business operations in 60 countries. The purpose of the alliance is to
pursue prison management business outside of the United States, Australia and
the United Kingdom. Pursuant to the terms of the joint venture agreement between
the Company and Sodexho, the Company will continue to develop on its own, all
prison management business in the United States and its territories. In the rest
of the world, the Company and Sodexho will share the prison management business
opportunities through local joint venture entities to be established and pursue
opportunities in particular countries, generally on a 50/50 basis. Management
for the Company believes that the formation of the Sodexho relationship is one
of many indicators of the growing interest in and attractiveness of correctional
privatization in the international markets and that it is well positioned to
participate in these markets through the Sodexho alliance.

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         Cost Reduction Programs. An important component of the Company's
strategy is to position itself as a low cost, high quality provider of prison
management services in all of its markets. As cost containment pressures
increase, the Company will continue to focus on improving operating performance
and efficiency through the following key operating initiatives: (i)
standardization of supply and service purchasing practices and usage; (ii)
improvement of inmate management, resource consumption and reporting procedures;
and (iii) improvement in salary and wage expenses by monitoring staff levels and
developing productivity standards. The Company intends to continue to apply
these operating cost initiatives throughout its existing facilities and in new
facilities.

         Limiting Capital Risk. The Company currently owns 12 of the facilities
it manages and leases the remaining 34 facilities. The Company has been an
innovator in assisting in the development of tax exempt financing techniques
that governmental agencies may use to finance the construction of correctional
and detention facilities. As a result, under these structures, the Company is
generally neither a borrower nor a lender in the financing. The Company believes
that these financing techniques are being used increasingly by various
governmental agencies. Notwithstanding the foregoing, in response to the
requirements of current and prospective clients, the Company expects to make
capital investments in certain facilities.

RECENT ACQUISITIONS

         The Company has expanded its service capabilities and broadened its
geographic presence in the United States market through a series of strategic
acquisitions over the last year (collectively, the "Acquisitions").

         TransCor America, Inc. On December 29, 1994, the Company acquired
TransCor America, Inc., a Tennessee corporation ("TransCor"), in a voluntary
share exchange transaction (the "TransCor Exchange") accounted for as a pooling
of interests. In the TransCor Exchange, shareholders of TransCor received an
aggregate of 2,600,000 (post-split) newly issued restricted shares of the
Company's common stock for their outstanding shares of TransCor stock. Of the
shares issued, 260,000 are held in escrow for the resolution of certain
precombination contingencies. TransCor operates as a wholly-owned subsidiary of
the Company and provides inmate transportation services for numerous
governmental agencies nationwide.

         Concept Incorporated. On April 25, 1995, the Company acquired Concept
Incorporated, a Delaware corporation ("Concept"), in a share exchange
transaction (the "Concept Exchange") accounted for as a pooling of interests. In
the Concept Exchange, stockholders of Concept received an aggregate of 2,724,992
(post-split) newly issued restricted shares of the Company's common stock for
their outstanding shares of Concept common stock. Of the shares issued, 272,500
are held in escrow for the resolution of certain precombination contingencies.
Prior to the Concept Exchange, Concept was a privately held prison management
company which had eight facilities with approximately 4,400 beds under contract
throughout the United States.

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         Corrections Partners, Inc. On August 18, 1995, the Company purchased
Correction Management Affiliates, Inc., a Delaware corporation ("CMA"), and
Correctional Services Group, Inc., a Missouri corporation ("CSG"), in a merger
of both companies into wholly-owned subsidiaries of the Company (the "CPI
Mergers"). In the CPI Mergers, shareholders of CMA and CSG received an aggregate
of 1,400,000 (post-split) newly issued restricted shares of the Company's common
stock for their outstanding shares of CMA and CSG common stock. Of the shares
issued, 140,000 are held in escrow for the resolution of certain precombination
contingencies. Prior to the CPI Mergers, CMA and CSG owned 100% of the issued
and outstanding common stock of Corrections Partners, Inc., a Delaware
corporation ("CPI"). Prior to the CPI Mergers, CPI was a privately held prison
management company which had seven facilities with approximately 2,900 beds
under contract throughout the United States.

MARKET

         In the United States, there is a growing trend toward privatization of
government services and functions, including corrections and detention, as
governments of all types have faced continuing pressure to control costs and
improve the quality of services. Further, as a result of the number of crimes
committed each year and the corresponding number of arrests, incarceration costs
generally grow faster than any other part of government's budgets. In an attempt
to address these pressures, governmental agencies responsible for correctional
and detention facilities are increasingly privatizing facilities. From 1984 to
1994, the number of beds under management at privatized adult correctional and
detention facilities throughout the world increased from 885 to approximately
49,000, with the majority of this growth occurring since 1989. During 1995, the
number of beds under management at privatized adult correctional and detention
facilities increased to 63,000. The number of beds in juvenile offender
facilities has also increased dramatically. While the number of beds under
private management continues to grow, the total number of beds under private
management constitutes approximately four percent of the total jail and prison
beds in the United States. To date, numerous counties, 20 states and the Federal
government have incorporated the private sector into their criminal justice
systems. Fifteen more states are currently considering privatization. Management
believes that because the private sector accounts for only four percent of the
corrections industry, there is substantial room for growth for the Company.

         Management also believes that the increase in the demand for privatized
correctional and detention facilities is a result, in large part from the
general shortage of beds available in correctional and detention facilities.
According to reports issued by the United States Department of Justice, Bureau
of Justice Statistics ("DOJ"), the number of inmates housed in United States
federal, state and local prison facilities increased from 696,000 at December
31, 1980 to 1,544,000 at December 31, 1994, an increase of more than 122%. At
December 31, 1992, the date at which the most recent statistics were available,
the DOJ reports that the federal prison system in the United States was
operating at approximately 137% of its rated capacity. Reports also indicate
that inmates convicted of violent crimes generally serve only one-third of their
sentence, with 65% of them being repeat offenders. Accordingly, there is a
perceived public demand for, among other things, longer prison sentences, as
well as prison terms for juvenile

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offenders, resulting in even more overcrowding in United States correctional and
detention facilities. In addition, as a result of increased costs, some
governments have been forced to limit public services and to seek more
cost-effective means of providing the remaining services. Since correctional and
detention facilities are viewed as an essential service, fiscal pressures have
pushed governments to seek to deliver these services more cost effectively.
Finally, numerous courts and other governmental entities in the United States
have mandated that additional services offered to inmates be expanded and living
conditions be improved. Many governments do not have the readily-available
resources to make the changes necessary to meet such mandates.

         According to the Private Corrections Project, Center for Studies in
Criminology and Law, University of Florida ("Privatization Reports"), 19 states
and Puerto Rico had awarded management contracts to private companies at
December 31, 1994. At December 31, 1995, there were a total of 92 adult
facilities with a design capacity more than 63,595 beds privatized in the United
States, of which the Company was awarded 39 facilities with a design capacity of
26,941 beds. These facilities include (i) INS detention facilities and United
States Marshal detention facilities privatized by federal agencies, (ii) state
prisons, community corrections facilities, intermediate sanction facilities,
pre-release centers, work program facilities and state jail facilities
privatized by state agencies, and (iii) city jail facilities and transfer
facilities privatized by local agencies. There are also numerous privatized
juvenile offender facilities of which the Company has contracts to operate four
facilities with a design capacity of 503 beds.

         The demand for privately-managed correctional and detention centers is
also increasing internationally. Management believes that many countries are
faced with the same fiscal pressures as the United States and as a result, are
seeking more cost-effective means of providing prison management services. This
is evidenced by the increase in number of privatized beds in the United Kingdom
and Australia. At December 31, 1995, there were a total of eleven privatized
facilities in the United Kingdom and Australia, with a design capacity of 5,738
beds, and the Company, through its joint ventures, UKDS and CC AUS, has
contracts to manage three of these facilities with a design capacity of 1,163
beds.

         For similar economic reasons, the demand for privatized prisoner
transport services is also increasing domestically and internationally. The
Company believes that more and more government agencies will look for more
cost-effective means of providing these ancillary services.

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FACILITIES

         The following table summarizes certain information with respect to
facilities under management by the Company or a subsidiary or joint venture of
the Company at March 1, 1996.



                                       DESIGN        SECURITY      COMMENCEMENT                  RENEWAL
FACILITY NAME/LOCATION                CAPACITY         LEVEL        OF CONTRACT      TERM         OPTION
                                                                                 
Bartlett State Jail                     1,000          Multi          10/95            8/98     (1) 2 year
Bartlett, Texas
Bay Correctional Facility                 750         Medium           8/95            8/98     (1) 2 year
Panama City, Florida
Bay County Jail                           276          Multi          10/85         10/2005            ___
Panama City, Florida
Bay County Jail Annex                     401          Multi           4/86         10/2005            ___
Panama City, Florida
Blakenhurst, HM Prison                    649         Medium           5/93            5/98     (3) 3 year
Redditch, England
BM Moore Pre-Release Center               500          Multi           6/95            8/97     (1) 2 year
Overton, Texas
Borallon Correctional Centre              389          Multi           1/90          4/2000
Queensland, Australia
Bridgeport PreParole Transfer             200        Minimum          11/87            8/97     (1) 2 year
Facility
Bridgeport, Texas
Brownfield Intermediate Sanction          200          Multi           7/92            8/97     (1) 2 year
Facility
Brownfield, Texas
Central Arizona Detention Center        1,024          Multi          10/94         10/2014           --
Florence, Arizona
Citrus County, Florida                    300          Multi          10/96            9/98     (1) 3 year
Lecanto, Florida
Cleveland Pre Release Center              520          Multi           9/89            8/98     (1) 2 year
Cleveland, Texas



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                                       DESIGN        SECURITY      COMMENCEMENT                  RENEWAL
FACILITY NAME/LOCATION                CAPACITY         LEVEL        OF CONTRACT      TERM         OPTION
                                                                                 
Davidson County Juvenile                   48        Secure           5/94          4/99            ----
Detention Facility
Nashville, Tennessee
Eden Detention Center                   1,006        Multi            10/95         10/2015         ----
Eden, Texas
Eloy Detention Center                   1,000        Medium           7/94          7/97        (2) 1 year
Eloy, Arizona
Great Plains Correctional Facility        768        Medium           10/91         5/99            ----
Hinton, Oklahoma
Guayama Correctional Center             1,000        Medium           12/96         12/2000     (1) 5 year
Guayama, Puerto Rico
Hernando County Jail                      302        Multi            10/88         10/2000         ----
Brooksville, Florida
Houston Processing Center                 411        Medium           4/84          9/96            ----
Houston, Texas
Labette County Conservation               104        Minimum          2/91          6/97        (1) 2 year
Camp
Oswego, Kansas
Laredo Processing Center                  258        Medium           3/85          12/96           ----
Laredo, Texas
Leavenworth Dentention Center             327        Maximum          6/92          6/96        (1) 1 year
Leavenworth, Kansas
Liberty County, Texas Facility            382        Multi            11/96         11/99       (1) 2 year
Liberty, Texas
Metro Detention Facility                1,092        Multi            2/92          2/97            ----
Nashville, Tennessee
Mineral Wells Pre-Parole                1,049        Minimum          7/89          8/97        (1) 2 year
Transfer Facility
Mineral Wells, Texas
New Mexico Women's                        322        Multi            6/89          6/97        (6) 2 year
Correctional Facility
Grants, New Mexico



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                                       DESIGN        SECURITY      COMMENCEMENT                  RENEWAL
FACILITY NAME/LOCATION                CAPACITY         LEVEL        OF CONTRACT      TERM         OPTION
                                                                                 
Santa Fe Dentention Center               201             Multi         8/86            6/97         ----
Santa Fe, New Mexico
Shelby Training Center                   200            Secure         5/86          4/2015         ----
Memphis, Tennessee
Silverdale Facilities                    414             Multi        10/84            9/96     (5) 4 year
Chattanooga, Tennessee
Youth Central Correctional             1,506            Medium         3/92            3/97         ----
Center
Clifton, Tennessee
Southwest Indiana Youth Village          140            Secure         4/95          4/2000         ----
Vinconnes, Indiana
Tall Trees                                63        Non-secure         1/84          1/2004         ----
Memphis, Tennessee
Torrance County Detention                286             Multi        12/90         12/2000         ----
Facility
Estancia, New Mexico
Venus Pre-Release Center               1,000             Multi         8/89            8/98     (1) 2 year
Venus, Texas
West Tennessee Detention                 440             Multi         9/90          9/2000         ----
Facility
Mason, Tennessee
Winn Correctional Center               1,474            Medium         3/90            3/98     (1) 2 year
Winnfield, Louisiana


FACILITY MANAGEMENT CONTRACTS

         The Company is compensated on the basis of the number of inmates held
in each of its facilities. Contracts may vary to provide fixed per diem rates or
monthly fixed rates. Of the Company's 36 facilities in operation, 32 of the
Company's facility management contracts provide that the Company will be
compensated at an inmate per diem rate based upon actual or minimum guaranteed
occupancy levels and four of the management contracts are based on monthly fixed
rates. In either case, the compensation is invoiced in accordance with
applicable law and is paid on a monthly basis. Occupancy rates for a particular
facility will be low when first opened or when expansions are first available.
However, after a facility gets beyond the opening period,

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the occupancy rate tends to stabilize. For 1995, the average occupancy, based on
rated capacity, was 93.9% for all facilities operated by the Company.

         In addition, the Company's contracts generally require the Company to
operate each facility in accordance with all applicable local, state, and
federal laws, and the rules and regulations promulgated thereunder. The Company
is required by its contracts to maintain certain levels of insurance coverage
for general liability, workers' compensation, vehicle liability and property
loss or damage. In the event that the Company does not maintain such insurance,
the contracting agency may terminate the contract. See "Item 1. Business -
Insurance." The Company is required also to indemnify the contracting agencies
for claims and costs arising out of the Company's operations and in certain
cases, to maintain performance bonds.

         The Company's facility contracts are short term in nature, with terms
of federal contracts generally ranging from one to two years and not exceeding
five years, and containing multiple renewal options. The terms of local and
state contracts may be for longer periods with additional renewal options. Most
facility contracts also generally contain clauses which allow the governmental
agency to terminate a contract without cause. The Company's facility contracts
are generally subject to annual or bi-annual legislative appropriation of funds.
A failure by a governmental agency to receive appropriations could result in
termination of the contract by such agency or a reduction in the management fee
payable to the Company. To date, none of the Company's contracts have been
terminated by a governmental agency with or without cause, although there can be
no assurance that this will continue in the future. To date, all renewal options
under the Company's management contracts have been exercised.

OPERATING PROCEDURES

         Pursuant to the terms of its management contracts, the Company is
responsible for the overall operation of its facilities, including staff
recruitment, general administration of the facilities, security and supervision
of the offenders and facility maintenance. The Company also provides a variety
of rehabilitative and educational programs at its facilities. Inmates at most
facilities managed by the Company may receive basic education through academic
programs designed to improve inmate's literary levels and the opportunity to
acquire General Education Development ("GED") certificates. The Company also
offers vocational training to inmates who lack marketable job skills. In
addition, the Company offers life skills transition planning programs that
provide inmates job search training and employment skills, health education,
financial responsibility training, parenting and other skills associated with
becoming productive citizens. At several of its facilities, the Company also
offers counseling, education and/or treatment to inmates with alcohol and drug
abuse problems.

         The Company operates each facility in accordance with the Company-wide
policies and procedures and the standards and guidelines established by the ACA
Commission on Accreditation. The ACA is an independent organization comprised of
professionals in the corrections industry which establishes guidelines of
standards by which a correctional institution may gain accreditation. The ACA
standards, which the ACA believes safeguard the life, health


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and safety of offenders and personnel, are the basis of the accreditation
process and define policies and procedures for operating programs. The standards
describe specific objectives to be accomplished and cover such areas as
administration, personnel and staff training, security, medical and health care,
food service, inmate supervision and physical plant requirements. The ACA
standards are the most widely accepted correctional standards. The Company has
sought and received ACA accreditation for 16 of the facilities it currently
manages. The Company intends to apply for ACA accreditation for all of its
future facilities. The accreditation process is usually completed in 18 to 24
months after a facility is opened.

FACILITY DESIGN, CONSTRUCTION AND FINANCE

         In addition to its facility management services, the Company also
provides consultation to various governmental agencies with respect to the
design and construction of new correctional and detention facilities and the
redesign and renovation of older facilities. Since its inception in January
1983, the Company has designed and constructed 21 of its 36 operating
corrections facilities for various federal, state, city and county governmental
agencies. The Company manages all of the facilities it has designed and
constructed or redesigned and renovated.

         Pursuant to the Company's design, build and manage contracts, it is
responsible for overall project development and completion. Typically, the
Company develops the conceptual design for a project, then hires architects,
engineers and construction companies to complete the development. When designing
a particular facility, the Company utilizes, with appropriate modifications,
prototype designs the Company has used in developing other projects. Management
of the Company believes that the use of such prototype designs allows it to
reduce cost overruns and construction delays. Because the Company's facility
designs increase the area of vision under surveillance by guards and make use of
additional electronic surveillance, the staffing efficiencies are greatly
enhanced.

         Various methods of construction financing may be used by a contracting
governmental agency, including, but not limited to the following: (i) one-time
general revenue appropriation by the government agency for the cost of the new
facility; (ii) general obligation bonds that are secured by either a limited or
unlimited tax levied by the issuing governmental entity; or (iii) lease revenue
bonds or certificates of participation secured by an annual lease payment that
is subject to annual or bi-annual legislative appropriation of funds. If the
project is financed using direct governmental appropriations, using proceeds of
the sale of bonds or other obligations issued prior to the award of the project
or by the Company directly, then financing is in place when the contract
relating to the construction or renovation project is executed. If the project
is financed using project-specific tax-exempt bonds or other obligations, the
construction contract is generally subject to the sale of such bonds or
obligations. Substantial expenditures for construction will not be made on such
a project until the tax-exempt bonds or other obligations are sold and if such
bonds or obligations are not sold, construction and, therefore, management of
the facility may either be delayed until alternate financing is procured or
development of the project will be entirely suspended. When the Company is
awarded a facility management contract, appropriations for the first annual or
bi-annual period of the contract's term have generally


                                       13


   14



already been approved, and the contract is subject to governmental
appropriations for subsequent annual or bi-annual periods. Of the domestic
facilities currently managed by the Company, 10 are funded by the government
using one of the above-described financing vehicles, 15 are directly leased by
the Company from a governmental agency and 12 are owned by the Company.

FACILITIES UNDER CONSTRUCTION

         The following table presents information concerning facilities that are
currently under construction or are being expanded with respect to which the
Company has agreements to provide certain management and operation services:



         Location                                    Use                        Bed Capacity
         --------                                    ---                        ------------
                                                                                 
Ponce, Puerto Rico                          Adult Prison/Youthful                    1,500
                                            Offender Prison

         Construction has begun on a 1,500-bed medium-security prison in Ponce,
         Puerto Rico. The Commonwealth of Puerto Rico is financing and will own
         the facility and construction is scheduled for completion in the fourth
         quarter of 1996. The prison will house Puerto Rican inmates under the
         custody of the Administration of Corrections.

Holdenville, Oklahoma                       State Prison                               960
(Hughes County)

         Construction has begun on a 960-bed medium-security prison in Hughes
         County, Oklahoma. The Industrial Development Authority of Holdenville,
         Oklahoma is financing and will own the facility and construction is
         scheduled for completion in the first quarter of 1996. The prison will
         house State of Oklahoma inmates.

Greenwood, Mississippi                      State Prison                             1,034
(Leflore County)

         Construction has begun on a 1,034-bed medium security prison in Leflore
         County, Mississippi. The State of Mississippi is financing and will own
         the facility and construction is scheduled for completion in the third
         quarter of 1996. The prison will house State of Mississippi inmates.

Lake City, Florida                          Youthful Offender                           350
(Columbia County)

         Construction has begun on a 350-bed youthful offender facility in Lake
         City, Florida. The State of Florida is financing and will own the
         facility and construction is scheduled for completion in the first
         quarter of 1997. The facility will house 19-24 year old State of
         Florida inmates.


                                       14


   15
                                                                                 
Whiteville, Tennessee                       State Prison                             1,504
(Hardeman County)

         Construction has begun on a 1,504-bed medium security prison in
         Whiteville, Tennessee. Hardeman County is financing and will own the
         facility and construction is scheduled for completion in the third
         quarter of 1997. It is anticipated that the facility will house State
         of Tennessee inmates.

Okeechobee, Florida                         Juvenile Center                            100
(Okeechobee County)

         Construction has begun on a 100-bed maximum security juvenile center in
         Okeechobee, Florida. The State of Florida is financing and will own the
         facility and construction is scheduled for completion in the first
         quarter of 1997. The facility will house State of Florida juveniles.




ORGANIZATIONAL SYSTEM

         The Company has developed a monitoring and evaluation system which,
combined with a centralized organizational structure, positions the Company for
expansion without requiring substantial additions of management personnel or
reducing quality. The Company devotes considerable resources to assuring
compliance with contractual and other requirements and maintaining the highest
level of quality assurance at each facility through a system of formal
reporting, corporate oversight, site reviews and inspection by on-site facility
administrators.

         Under its facilities management contracts, the Company usually provides
the contracting governmental agency the services, personnel and materials
necessary for the operation, maintenance and security of the facility and the
custody of inmates. The Company offers full logistical support to the facilities
it manages, including security, health care services, transportation, building
and ground maintenance, education, treatment and counseling services, and
institutional food services. Except for certain aspects of health care services,
which are generally subcontracted, all of the facilities support services are
provided by the Company's personnel.

         The Company's business development department is responsible for
marketing the Company's service to governmental clients. Marketing
responsibilities include identifying new clients, preparing and delivering
formal presentations, identifying project construction partners and potential
financing sources, developing proposals and interfacing with the Company's
customers from contract award through the receipt of inmates.

         The operations department, in conjunction with the legal department,
supervises compliance of each facility to operational standards of applicable
management contracts and of professional and governmental agencies. The
operations department also establishes and monitors the policies and procedures
of the Company. The department's responsibilities include


                                       15


   16



developing specific policies and procedures manuals, monitoring all management
contracts, ensuring compliance with applicable labor and affirmative action
standards, training and administering all personnel, purchasing supplies and
developing educational, vocational, counseling and life skills inmate programs.
The Company provides meals for inmates at the facilities it operates in
accordance with regulatory, client and nutritional requirements. These catering
responsibilities include hiring and training staff, monitoring food operations,
purchasing food and supplies, and maintaining equipment, as well as adhering to
all applicable safety and nutritional standards and codes.

         The Company's finance department oversees the implementation and
development of the billing system for each client and for insuring the prompt,
systematic payment of all Company obligations under the individual management
contracts. This department also monitors and analyzes budgetary and purchasing
procedures, tax reporting requirements and fiscal management policies.

MARKETING

         The Company engages in extensive marketing efforts. The Company
believes that it is the industry leader in promulgating the benefits of
privatization of prisons and other correctional and detention facilities.
Marketing efforts are conducted and coordinated by the Company's business
development department and CEO with the aid, where appropriate, of certain
independent consultants.

         The Company views governmental agencies responsible for federal, state
and local correctional facilities in the United States and governmental agencies
responsible for correctional facilities in Puerto Rico, the United Kingdom and
Australia as its primary potential customers. The Company's secondary customers
include other foreign governmental agencies.

         The Company generally receives inquiries from or on behalf of
governmental agencies that are considering privatization of certain facilities
or that have already decided to contract with private enterprise. When it
receives such an inquiry, the Company determines whether there is an existing
need for the Company's services and whether the legal and political climate in
which the inquiring party operates is conducive to serious consideration of
privatization and then conducts an initial cost analysis to further determine
project feasibility.

         Generally, governmental agencies responsible for correctional and
detention services procure goods and services through Requests for Proposals
("RFPs") or Requests for Qualification ("RFQs"). Most of the Company's
activities in the area of securing new business are in the form of responding to
RFPs. As part of the Company's process of responding to RFPs, management meets
with appropriate personnel from the agency making the request to best determine
the agency's distinct needs. If the project fits within the Company's strategy,
the Company will then submit a written response to the RFP. The Company competes
primarily on the basis of the quality of service provided, its experience in
managing facilities, the reputation of its personnel, and its ability to design,
finance and construct new facilities, if appropriate. A typical RFP


                                       16


   17



requires bidders to provide detailed information, including, but not limited to,
the following: the service to be provided by the bidder, its experience and
qualification, and the price at which the bidder is willing to provide the
services (which services may include the renovation, improvement or expansion of
an existing facility or the planning, design and construction of a new
facility). The Company has and intends to in the future, engage independent
consultants to assist it in responding to RFPs. Based on the proposals received
in response to an RFP, the agency will award a contract to the successful
bidder. In addition to issuing formal RFPs, local jurisdictions may make use of
a procedure known as Purchase of Services or RFQ. If the agency selects the RFQ
process, the requesting agency selects a firm believed to be most qualified to
provide the requested services and then negotiates the terms of the contract
with that firm, including the price at which its services are to be provided.
However, there is no assurance that negotiations will result in a contract for
the selected firm.

         The marketing process for facility management consists of several
critical events. These include issuance of an RFP by a governmental agency,
submission of a response to the RFP by the Company, the award of the contract by
a governmental agency and the commencement of construction or management of the
facility. The Company's experience has been that a substantial period of time
may elapse from the initial inquiry to receipt of a new contract. As the concept
of privatization has gained wider acceptance, however, the length of time from
inquiry to the award of a contract has shortened. The length of time required to
award a contract is also affected, in some cases, by the need to introduce
enabling legislation. Generally, if the facility for which an award has been
made must be constructed, the Company's experience has been that management of a
newly-constructed facility typically commences between 12 and 28 months after
the governmental agency's award.

         While the Company focuses primarily on the traditional competitive
marketing approach described above, it also pursues the development of new
facilities in those areas where a competitive bid process is not required.

         In addition to marketing its services to local, state and federal
authorities, the Company markets its services internationally. Through the
international alliance formed with Sodexho, the Company is currently marketing
its management services in Australia, Germany, Hungary, Canada, Panama, and
Mexico.

         The marketing efforts of TransCor for transportation services vary from
those of the Company as TransCor's marketing approach generally consists of mass
mailings, phone calls, and personal visits to approximately 1,000 state and
local governmental agencies as well as attendance at local, state and national
trade shows.

BUSINESS PROPOSALS

         As of March 15, 1996, the Company was pursuing 10 facility prospects
with a total of 11,000 beds, for which it has not submitted proposals and 10
prospects for a total of 7,500 beds for which written responses to RFPs were
submitted. The Company also is pursuing other


                                       17


   18



projects for which it has not yet submitted, and may not submit, a response to
an RFP. The domestic projects that the Company is pursuing are in fifteen
states. Additionally, the Company is actively pursuing business in Australia and
Great Britain through joint ventures in those countries. The Company is also
pursuing other foreign facility prospects through its alliance with Sodexho. No
assurance can be given that the Company will receive additional awards with
respect to proposals submitted.

         When a contract requires construction of a new facility, the Company's
success depends, in part, upon its ability to acquire real property for its
facilities on desirable terms and at satisfactory locations. Management expects
that many such locations will be in or near populous areas and therefore
anticipates legal action and other forms of opposition from residents in areas
surrounding each proposal site. The Company may incur significant expenses in
responding to such opposition and there can be no assurance of success.

         Through TransCor, the Company is also pursuing a large number of
transportation contracts with various state and local governmental agencies. No
assurance can be given that TransCor will receive additional awards with respect
to the proposals submitted.

MAJOR CUSTOMERS

         The Company's customers consist of local, state and federal
correctional and detention authorities. The following table sets forth, for the
periods indicated, the percentage of the Company's revenues from certain
facilities of the Company:



                                                                               Percentage of Revenues
                                                                             --------------------------
                                                                             Year ended      Year ended
                  Customer                Location                            12/31/95        12/31/94
                  -------------           ----------------------             ----------       ---------
                                                                                      
                  U.S. Marshals           Mason, Tennessee,                   11%              13%
                  Service                 Santa Fe, New Mexico,
                                          Estancia, New Mexico,
                                          Brooksville, Florida,
                                          Nashville, Tennessee,
                                          Panama City, Florida,
                                          Leavenworth, Kansas and
                                          Florence, Arizona



                                       18


   19





                                                                                               
                  State of Texas                     Houston, Texas,                    18%               24%
                                                     Venus, Texas,
                                                     Cleveland, Texas,
                                                     Laredo, Texas
                                                     Bridgeport, Texas
                                                     Mineral Wells, Texas
                                                     Sweetwater, Texas
                                                     Brownfield, Texas
                                                     Overton, Texas, and
                                                     Bartlett, Texas
            
                  State of Tennessee                 Memphis, Tennessee and              9%                11%
                                                     Clifton, Tennessee


No other single customer accounted for 10% or more of the Company's total
revenues in the above-referenced fiscal years.

BACKLOG

         Most of the Company's contracts provide for the Company to be
compensated on a per diem/per capita basis, which fluctuates daily. However,
certain contracts guarantee a minimum utilization over the term of such
contracts. The Company's backlog, as shown below, reflects only guaranteed
revenues pursuant to the Company's guaranteed contracts over the term of such
contracts, using current per diem/per capita rates, and disregarding any
renewals of such contracts and adjustments to such rates as a result of
inflation. As of December 31, 1995, the Company's backlog, determined as
described above, was $297,431,000, of which $81,754,000 is expected to be filled
during the year ending December 31, 1996. As of December 31, 1994, the Company's
backlog, computed as described above, was $351,033,000.

EMPLOYEES

         At December 31, 1995, the Company employed 5,337 full-time employees
and 206 part-time employees. Of such full-time employees, 77 were employed at
the Company's headquarters and 5,260 were employed at the Company's facilities
and its transportation subsidiary. The Company employs personnel in the
following areas: clerical and administrative, including facility
administrators/wardens, security, food service, medical, transportation and
scheduling, maintenance, teachers, counselors and other support services.

         Each of the Company's facilities is managed as a separate operational
facility by the facility administrator or warden. All facilities follow a
standardized code of policies and procedures. The Company has never experienced
a strike or work stoppage. Beginning in 1992, six facilities were approached by
one particular union to organize the work force. The union was defeated or
withdrew in five facilities. In March 1993, the Company reached an agreement
with the union to represent 73 correctional officers at the Silverdale facility
and this contract was


                                       19


   20



decertified in March 1994. In January 1996, the Company reached an agreement
with a union to represent 38 non-security personnel at Shelby Training Center.
Overall, in the opinion of management, employee relations are considered good.

EMPLOYEE TRAINING

         Under the laws applicable to the Company's operations, and the
Company's internal policy, the Company's corrections officers are required to
complete a minimum amount of training prior to independent assignment. In most
cases, officers must undergo at least 160 hours of training by the Company
before being allowed to work alone in a position that will bring them in contact
with inmates or detainees. Florida law requires that corrections officers
receive a minimum of 411 hours of training. At least 280 hours of training is
required for United Kingdom officers and 240 hours of training is required for
Australian officers in order to enable such officers to work in positions that
will bring them into contact with inmates. All non-security staff receive 80
hours of initial training. The Company's training programs meet or exceed all
applicable requirements.

         The Company's training is comprised of approximately 40 hours of
instruction concerning the Company's policies, operational procedures and
management philosophy. An additional 120 hours concerning legal issues, rights
of inmates and detainees, techniques of communication and supervision,
improvement of interpersonal skills and job training relating to the particular
position to be filled are provided. Employees of facilities taken over by the
Company who are offered continued employment undergo at least 40 hours of
training by the Company before reporting to work for the Company. Each of the
Company's employees who has contact with inmates receives a minimum of 40 hours
of additional training each year, and each facility management employee of the
Company receives at least 40 hours of training each year.

         TransCor, the Company's transportation subsidiary, also has training
requirements for its employees. Each new employee must undergo 40 hours of
training, prior to job performance, including drivers training and safety,
correctional training and policy and procedures guidelines. Each employee then
performs four weeks of on-the-job training with an experienced transportation
agent. TransCor maintains continuing training for all employees of 16 to 32
hours per year.

REGULATIONS

         The industry in which the Company operates is subject to national,
federal, state and local regulations in the United States, United Kingdom and
Australia which are administered by various regulatory authorities. Prospective
providers of correctional and detention services must comply with a variety of
applicable state and local regulations including education, health care and
safety regulations. The Company's contracts typically include extensive
reporting requirements and require supervision and on-site monitoring by
representatives of contracting governmental agencies. Certain states such as
Florida and Texas deem prison guards to be peace officers and require company
personnel to be licensed and may make them subject to background


                                       20


   21



investigation. State law also typically requires corrections officers to meet
certain training standards.

         In addition, many state and local governments are required to enter
into a competitive bidding procedure before awarding contracts for products or
services. The laws of certain jurisdictions may also require the Company to
award subcontracts on a competitive basis or to 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 have a material adverse effect on the
Company's business, financial condition and results of operations. Furthermore,
the current and future operations of the Company may be subject to additional
regulations as a result of, among other factors, new statutes and regulations
and changes in the manner in which existing statutes and regulations are or may
be interpreted or applied. Any such additional regulations could have a material
adverse effect on the Company's business, financial condition and results of
operations.

COMPETITION

         Private sector participants in the correction and detention industry
range from firms that provide limited service, such as design and construction
firms, consulting firms and management firms, and firms such as the Company that
provide a full range of services including financing, designing, constructing,
renovating and managing new and existing facilities. Some private sector
participants are limited to half-way house facilities such as pre-parole
transfer centers. The Company's facilities range from pre-parole transfer
facilities to jails and prisons with maximum security prisoners.

         The Company competes primarily on the basis of the quality and range of
services offered, its experience in managing facilities, the reputation of its
personnel, and its ability to design, finance and construct new facilities. The
business in which the Company engages is one that other entities may enter
easily without substantial capital investment or experience in management of
correctional or detention facilities. Private sector competitors of the Company
include, among others, Wackenhut Corrections Corporation, Esmor Correctional
Services, Inc., United States Corrections Corp., Group 4 International
Corrections Service and Securicor Group. Some of the Company's international
competitors are larger and have greater resources than the Company. The Company
also competes in some local markets with small local companies that may have a
better understanding of the local conditions and may be better able to gain
political and public acceptance. In addition, the Company competes with
governmental agencies that are responsible for correctional facilities.

         The primary competitors in the prison transportation business are local
and state governmental agencies and retired law enforcement personnel who
provide limited transportation services.


                                       21


   22



INSURANCE

         The Company maintains a $15,000,000 general liability insurance policy
for all of its operations. To date, no payments have been made under the
Company's general liability insurance policies because of any action brought as
a result of the operation of any of its facilities. The Company also maintains
insurance in amounts it deems adequate to cover property and casualty risks,
workers' compensation and directors and officers liability. There can be no
assurance that the aggregate amount and kinds of the Company's insurance are
adequate to cover all risks it may incur or that insurance will be available in
the future.

         Each of the Company's facility management contracts and the statutes of
certain states require the maintenance of insurance. The Company's contracts
provide that in the event that the Company does not maintain such insurance, the
contracting agency may terminate its agreement with the Company. The Company
believes it is in compliance in all material respects with respect to these
requirements.

LITIGATION

         The Company is currently, and from time to time, 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,
inmate privileges. In the opinion of management, the outcome of the proceedings
to which it is currently a party will not have a material adverse effect upon
its operations or financial condition.



                                       22


   23



RISK FACTORS

         In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company is including the following
cautionary statements identifying important facts that could cause the Company's
actual results to differ materially from those projected in forward looking
statements of the Company made by, or on behalf of, the Company.

         Regulations. The Company's contracts require the Company to operate
each facility in accordance with the current standards and guidelines of the
American Correctional Association and all applicable local, state and federal
laws and the rules and regulations promulgated thereunder. The Company's
business is subject to various state, federal and international laws and the
rules and regulations promulgated thereunder. These regulations address the
manner in which the Company can conduct its operations thereby affecting its
operating costs and revenues. The Company may be subjected to substantial
penalties if it fails to comply with such regulations. Governmental authorities
may conduct investigations in order to insure that the Company is in compliance
with regulations or to evaluate an inmate's complaint. There can be no assurance
that future allegations will not lead to investigations or that any such
investigation will not lead to claims against the Company. An adverse change in
governmental regulations could have a material adverse effect on the Company's
business by limiting the income that the Company may generate on existing and
new facilities management contracts.

         Competition. The Company competes directly with outside entities that
may have available greater financial resources. Moreover, the business in which
the Company operates is one that other entities may enter easily, thereby
creating additional competition. In some areas, competition may include
governmental agencies that manage detention or correctional facilities.

         Risk of Expansion. The Company's substantial growth has been partially
due to the opening of new facilities. A slow-down in this expansion could have
an adverse impact upon the future earnings of the Company. The Company's
continued ability to expand will depend on a number of factors, including
selection and availability of suitable locations for facilities, the hiring and
training of sufficiently skilled management personnel, the availability of
adequate financing and other factors. Some factors beyond the control of the
Company include governmental and public reaction to the privatization of prisons
and crime rates and sentencing policies in locations in which the Company may
operate. There is no assurance that the Company will be able to open all of its
planned new facilities or that, if open, the facilities can be operated
profitably.

         Integration of Acquisitions. The Company's substantial growth is also
due in part to the Acquisitions. During 1995, the Company added a total of 7,300
beds under construction as a result of the Concept Share Exchange and the CPI
Merger. Given the magnitude of these Acquisitions, there can be no assurance
that the challenge of assimilating the Acquisitions and managing the larger
overall business operations will not have an adverse effect on the Company's
results of operations.


                                       23


   24



         Dependence on Senior Management. The success of the Company's
operations will depend largely upon the continued services of its senior
management, including Doctor R. Crants, Chairman and Chief Executive Officer.
The loss of service of one or more of the Company's senior management could have
an adverse effect on the Company's business. The Company's loan agreement
provides that Mr. Crants or a successor reasonably acceptable to the Company's
lenders must be employed as Chief Executive Officer. The Company has an
employment agreement with Mr. Crants.

         Volatility of Market Price. From time to time, there may be significant
volatility in the market price for the Company's Common Stock. Quarterly
operating results of the Company or of other private prison operators, changes
in general conditions in the economy, the financial market for the private
prison industry, natural disasters or other developments affecting the Company
or its competitors could cause the market price of the Company's Common Stock to
fluctuate substantially. In addition, in recent years the stock market has
experienced extreme price and volume fluctuations. This volatility has had a
significant effect on the market prices of the securities issued by many
companies for reasons unrelated to their operating performance.

         Cash Flow Subject to Funding by Government. The Company's cash flow is
subject to the receipt of sufficient funding and timely payment by applicable
governmental entities. If the appropriate governmental agency does not receive
sufficient appropriations to cover its contractual obligations, a contract may
be terminated or the management fee may be deferred or reduced. Any delays in
payment could have an adverse effect on the Company's cash flow.

         Impediments to Privatization of Prisons. Some state governments and
departments of the federal government are legally barred from transferring
responsibility for management of correctional and detention facilities to the
private sector. In addition, certain groups, such as organized labor and local
sheriffs, have occasionally opposed the privatization of prisons. Another risk
is that political changes in a market in which the Company is operating could
lead to a change in a particular government's position on privatization.

         Fluctuating Occupancy Rates. A significant amount of the Company's
revenues are based upon occupancy rates, while the Company incurs substantial
fixed costs. Because a large portion of the Company's revenues derive from per
diem payments based upon occupancy rates, a decline in occupancy rates could
lead to a decline in revenues and profitability. The average occupancy rate at
CCA facilities under per diem contracts in fiscal year 1995 was 93.9%.
Nonetheless, no assurance can be given that occupancy rates will not decline in
the future.

EXECUTIVE OFFICERS

         The following table sets forth certain information concerning the
executive officers of the Company.


                                       24


   25





                                                                                                
    NAME                              AGE            POSITION                                    
- ----------------                      ---            --------                                  
                                                                                        
Doctor R. Crants                       51            Chairman of the Board;                      
                                                     Chief Executive Officer; Director

Thomas W. Beasley                      53            Chairman Emeritus of the Board;             
                                                     Director

T. Don Hutto                           60            Senior Managing Director                  
                                                      of International Operations

David L. Myers                         52            President

Darrell K. Massengale                  35            Chief Financial Officer;
                                                     Secretary and Treasurer;
                                                     Vice President, Finance

Dennis E. Bradby                       46            Vice President, Education Services

Robert G. Britton                      55            Vice President, Operations

Linda G. Cooper                        45            Vice President, Legal Affairs

Peggy W. Lawrence                      40            Vice President, Investor Relations

John D. Rees                           49            Vice President, Business
                                                     Development

Linda A. Staley                        51            Vice President, Project
                                                     Development

Gay E. Vick, III                       48            Vice President and Managing
                                                     Director of International
                                                     Operations


         Doctor R. Crants, a founder of the Company, was elected Chief Executive
Officer and Chairman of the Board of the Company in June 1994. From June 1987 to
June 1994, he served as President, Chief Executive Officer and Vice Chairman of
the Board of Directors of the Company. From January 1983 through June 1987, Mr.
Crants served as Secretary and Treasurer of the Company. He has served as a
director of the Company since 1983. Mr. Crants served as a director of Sahara
Resorts, a destination resort company from January 1985 through 1990. Mr. Crants
has served as President of Tri Insurance, Inc. since June 1985 and as a director
of that company since January 1985. He served as President and director of
Tennessee Media South,


                                       25


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Inc., a consulting firm in the broadcasting industry, from 1980 through January
1984. Mr. Crants graduated from the United States Military Academy at West Point
in 1966, and received joint Masters in Business Administration and Juris Doctor
degrees from the Harvard Business School and Harvard Law School, respectively,
in 1974.

         Thomas W. Beasley, a founder of the Company, was elected Chairman
Emeritus of the Board of Directors of the Company in June 1994. From June 1987
to June 1994, he served as Chairman of the Board. Mr. Beasley served as
President of the Company from January 1983 to June 1987. He has served as a
director since 1983. From 1978 through June 1985, Mr. Beasley was President of
Tri Insurance, Inc., a property and casualty insurance agency, and since June
1985, has served as its Vice President. Mr. Beasley has served as a director of
Tri Insurance, Inc. since 1978. Mr. Beasley also serves as a director of Dixon
Springs Investment Company, a real estate investment company. From 1974 through
1978, Mr. Beasley served as Chairman of the Tennessee Republican Party, and he
continues to be active in Tennessee politics. Mr. Beasley graduated from the
United States Military Academy at West Point in 1966 and received a Doctor of
Jurisprudence degree from Vanderbilt University School of Law in 1973.

         T. Don Hutto, a founder of the Company, was elected Vice Chairman of
the Board of Directors and Senior Managing Director of International Operations
of the Company in June 1994. From July 1988 to June 1994, he was engaged by the
Company as International Projects Manager to oversee and supervise the Company's
business activities in the United Kingdom, France, Australia, New Zealand, and
Canada, as well as other projects as directed by the Company's President. From
April 1984 to July 1988, Mr. Hutto served as Executive Vice President of the
Company, and from January 1983 to April 1984 he served as Vice President. He has
served as a director of the Company since 1983. From January 1982 through
January 1983, Mr. Hutto served as President of H & H Associates, a consulting
firm specializing in corrections and criminal justice. Mr. Hutto served as
Commissioner, Department of Corrections of Virginia, from 1976 through December
1981 and Commissioner of Corrections of Arkansas from 1971 to 1976. He has also
held a management position in the corrections department of the State of Texas.
He is the past president of the American Correctional Association ("ACA"), and a
past president of both the Association of State Correctional Administrators and
the Southern States Correctional Association. Mr. Hutto is the 1987 recipient of
the E.R. Cass Award, the highest award given by the ACA for lifetime achievement
in corrections. Mr. Hutto graduated from East Texas State University in 1958.

         David L. Myers became President of the Company in June 1994. From
December 1986 to June 1994, he served as Vice President, Facility Operations of
the Company. From September 1985 to December 1986, he served as Administrator of
the Company's Bay County, Florida facility. From 1968 to 1985, Mr. Myers was
employed with the Texas Department of Corrections, starting as a corrections
officer in 1968 and progressing in 1973 to warden of a maximum security prison.
He graduated from Sam Houston State University in 1969.

         Darrell K. Massengale joined the Company in February 1986 and in March
1991 became its Vice President, Finance, Secretary, and Treasurer. In June 1994,
he was also elected Chief


                                       26


   27



Financial Officer of the Company. From February 1986 to March 1991, Mr.
Massengale served as Controller of the Company. He is a certified public
accountant who was employed by the accounting firm of KPMG Peat Marwick from
1982 through 1986. Mr. Massengale graduated from Middle Tennessee State
University in 1982 and became a certified public accountant in 1985.

         Dennis E. Bradby has served as Vice President, Education Services for
the Company since June 1991. From April 1986 through June 1991, Mr. Bradby
served as the Company's Vice President, Operational Support Systems. From
January through April 1986, Mr. Bradby served as the Facility Administrator of
the Company's Hamilton County Work House and, from March 1984 through January
1986, as the Facility Administrator of the Company's Houston Immigration
Detention Facility. He served as Regional Manager of the Virginia State
Department of Corrections from 1977 through March 1984 and as the Assistant
Superintendent of that department from 1974 through 1978. Mr. Bradby also served
as Assistant Superintendent of the Juvenile Detention Facility in Norfolk,
Virginia from 1973 through 1974. Mr. Bradby graduated from Norfolk State
University in 1972.

         Robert G. Britton was elected Vice President, Operations for the
Company in June 1994. From January 1986 to June 1994, he served as Vice
President, Business Development for the Company. From April 1985 to January
1986, Mr. Britton served as Vice President, Operations for the Company. From
March 1983 to March 1985, Mr. Britton served as Director of Corrections of
Dallas County, Texas and from August 1981 to March 1983 as the President of
Prison Management Systems, Inc., a subsidiary of American Medical International
Corporation (a hospital management company). From 1979 to 1981, Mr. Britton
served as the Director of the Alabama Department of Corrections. Mr. Britton
graduated from Sam Houston State University in 1965.

         Linda G. Cooper joined the Company in April 1987 as Senior Legal
Counsel. In May 1988, she was elected Assistant Secretary for the Company and in
January 1989 became its Vice President, Legal Affairs. From December 1981 to
March 1987 she served as staff attorney and then deputy general counsel for the
Kentucky Corrections Cabinet. Ms. Cooper received a Juris Doctor degree from the
University of Kentucky in 1979.

         Peggy W. Lawrence became Vice President, Investor Relations in January
1995. From June 1985 to January 1995, she served as Vice President,
Communications for the Company. From March 1987 to June 1989, she served as
Director of Communications for the Company. From January 1985 to March 1987, she
served as an account executive for Dye, Van Mol and Lawrence Public Relations.
From January 1980 to January 1985, Ms. Lawrence served as Vice President,
Research at Morgan Keegan & Co., an investment banking firm. Ms. Lawrence
graduated from the University of Tennessee at Knoxville in 1977 and became a
Chartered Financial Analyst in 1984.

         John D. Rees was elected Vice President, Business Development for the
Company in June 1994. From 1967 until 1986 when he joined the Company, Mr. Rees
served as warden of the


                                       27


   28



Kentucky State Reformatory. Mr. Rees holds a Master of Science degree from
Florida State University and a Bachelor of Arts degree from the University of
Kentucky with majors in criminology, correctional administration and sociology.

         Linda A. Staley was elected Vice President, Project Development for the
Company in June 1994. She joined the Company in 1985 as Director, Project
Development. Prior to joining the Company, Ms. Staley spent 18 years working for
federal governmental agencies, including the Department of Justice and the
Immigration and Naturalization Service (INS) in the contracting and procurement
field. Ms. Staley attended Wayne State College where she studied business
administration.

         Gay E. Vick, III was elected Vice President and Managing Director for
the Company's International Operations in June 1994. From January 1987 to June
1994, he served as Vice President, Project Development for the Company. From
April 1984 to December 1986, Mr. Vick served as Vice President, Design and
Construction. From April 1983 to April 1984 he served as President of Vick and
Harris, Ltd., where he master planned correctional and detention facilities. He
serves as a director of Corrections Corporation of Australia and Viccor Pty.
Ltd. and as Chairman of Corrections Corporation of New Zealand. Mr. Vick
graduated from Virginia Tech Institute in 1970.

ITEM 2.           PROPERTIES

         The Company believes that all of its properties are well-maintained and
in good repair. The condition of the properties is adequate for the purpose for
which they are maintained. Of the Company's 34 domestic facilities, 12 are owned
and 22 are leased as of March, 1996.

         The location and name of and the rated capacity of, each of the
Company's facilities at March 1, 1996, grouped by State, are set forth in the
following table:



                                                                                 No. of              Owned or
State                   City              Name                                   Beds                Managed
- -----                   ----              ----                                   ----                -------
                                                                                           
Arizona                 Eloy              Eloy Dentention Center                 1,000               Owned
                        Florence          Central Arizona                        1,024               Owned
                                          Detention Center

Florida                 Panama City       Bay Correctional Facility                750               Managed
                        Panama City       Bay County Jail                          276               Managed
                        Panama City       Bay County Jail Annex                    401               Owned
                        Brooksville       Hernando County Jail                     302               Managed
                        Lecanto           Citrus County, Florida                   300               Managed
Indiana                 Vincennes         Southwest Indiana Youth                  140               Managed
                                          Village


                                       28



   29






                                                                                 No. of              Owned or
State                   City              Name                                   Beds                Managed
- -----                   ----              ----                                   ----                -------
                                                                                           
Kansas                  Leavenworth       Leavenworth Detention Center             327               Owned
                        Oswego            Labette County Conservation              104               Managed
                                          Camp
Louisiana               Winnfield         Winn Correctional Center               1,474               Managed
New Mexico              Estancia          Torrance County Detention                286               Owned
                        Grants            New Mexico Women's                       322               Owned
                                          Correctional Facility
                        Santa Fee         Santa Fee Detention Center               201               Managed
Oklahoma                Hinton            Great Plans Correctional                 768               Managed
                                          Facility
Puerto Rico             Guayama           Guayama Correctional Center            1,000               Managed
Tennessee               Chattanooga       Silverdale Facilities                    414               Managed
                        Clifton           South Central Correctional             1,506               Managed
                        Mason             West Tennessee Detention                 440               Owned
                                          Facility
                        Memphis           Shelby Training Center                   200               Owned
                        Memphis           Tall Trees                                63               Managed
                        Nashville         Davidson County Juvenile                  48               Managed
                                          Detention Facility
                        Nashville         Metro Detention Facility               1,092               Managed
Texas                   Bartlett          Bartlett State Jail                    1,000               Managed
                        Bridgeport        Bridgeport PreParole Transfer            200               Owned
                                          Facility
                        Brownfield        Brownfield Intermediate                  200               Managed
                                          Sanction Facility
                        Cleveland         Cleveland Pre Release Center             520               Managed
                        Eden              Eden Detention Center                  1,006               Managed
                        Houston           Houston Processing Center                411               Owned
                        Laredo            Laredo Processing Center                 258               Owned
                        Liberty           Liberty County, Texas Facility           382               Managed
                        Mineral Wells     Mineral Wells Pre-Parole               1,119               Owned
                                          Transfer Facility
                        Overton           BM Moore Pre-Release                     500               Managed
                                          Center
                        Venus             Venus Pre-Release Center               1,000               Managed


       The Company maintains its corporate headquarters in approximately 21,600
square feet of office space at 102 Woodmont Boulevard, Nashville, Tennessee
37205, at a rate comparable for similar space in the area. In addition, the
Company also leases approximately 13,000 square feet of office space in
Brentwood, Tennessee. The Company's wholly-owned subsidiary, TransCor,

                                       29


   30



leases approximately 15,000 square feet of office space and a maintenance
facility comprising approximately 8,000 square feet at 1510 Fort Negley
Boulevard, Nashville, Tennessee, at a rate comparable for similar space in the
area. TransCor also leases approximately 2,000 square feet of office space in
Cocoa, Florida. The Company's wholly-owned subsidiary, Concept, leases
approximately 10,700 square feet of office space at 14206 North Brook Street,
San Antonio, Texas, at a rate comparable for similar space in the area. The
Company's wholly-owned subsidiary, CPI, leases approximately 4,500 square feet
of office space at 1900 Church Street, Nashville, Tennessee at a rate comparable
for similar space in the area.

ITEM 3.      LEGAL PROCEEDINGS

       Information with respect to this Item is incorporated herein by reference
to Item 1 "Business - Litigation".

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

       No matters were submitted to a vote of stockholders during the fourth
quarter of 1995.

                                     PART II

ITEM 5.      MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
             STOCKHOLDER MATTERS.

       (a) The Common Stock has been traded on the New York Stock Exchange under
the symbol "CXC" since December 30, 1994. From July 7, 1987 to December 29,
1994, the Common Stock traded on the NASDAQ National Market System under the
symbol "CCAX". The following table sets forth the quarterly high and low closing
sales prices as reported on (i) the NASDAQ National Market System from January
1, 1992 through December 29, 1994 and (ii) the New York Stock Exchange from
December 30, 1994 through December 31, 1995. In October 1995, the Company
authorized a 2-for-1 stock split on its common stock effective October 31, 1995.
The stock split was paid in the form of a one-share dividend for every share of
common stock held by stockholders of record on October 16, 1995. All references
herein to the Common Stock are on a post-split basis. The closing stock price
for the Company's Common Stock on the New York Stock Exchange was $37.13 on
December 29, 1995.



       1993                                                                    High               Low
       ----                                                                    ----               ---
                                                                                               
       First Quarter                                                            5.13                3.25
       Second Quarter                                                           5.13                3.56
       Third Quarter                                                            4.13                3.13



                                       30


   31



                                                                                       
       Fourth Quarter                                                           4.50                3.50

       
       1994
       ----
       First Quarter                                                            8.19                4.63
       Second Quarter                                                           8.38                6.25
       Third Quarter                                                            8.75                7.69
       Fourth Quarter                                                           8.75                6.44


       1995
       ----
       First Quarter                                                           15.31                8.25
       Second Quarter                                                          18.81               14.69
       Third Quarter                                                           24.31               17.69
       Fourth Quarter                                                          38.38               23.44


       (b) As of March 25, 1996, there were 898 holders of record of the Common
Stock and 368 holders of record of the Company's warrants to purchase Common
Stock.

       (c) The Company has not paid any cash dividends to its common
stockholders since its inception and does not anticipate paying any cash
dividends to its common stockholders in theforeseeable future. The Company
intends to retain earnings to provide funds for its operations and growth.
Future cash dividend policy will be determined by the Board of Directors based
on conditions then existing, including the Company's earnings and financial
condition, capital requirements and other relevant factors. In addition, cash
dividends may not be paid without the consent of the Company's lenders.

       In September 1992, the Company issued a warrant dividend to its common
stockholders. Stockholders received one warrant for every five shares of common
stock held on the record date (the "Warrants"). The Warrants initially carried a
four-year term and became exercisable after April 30, 1993. The Warrants are
exercisable at $8.50 per share and prior to the stock split were exercisable for
one share of common stock. In September 1993, the expiration date of the
Warrants was extended to September 14, 1997. As of March 1, 1996, there were
1,627,355 Warrants outstanding.

       In connection with the October 1995 stock split, the terms of the
Company's Warrants to purchase Common Stock were adjusted proportionately. As
revised, each Warrant is convertible into two shares of Common Stock of the
Company for a total conversion price of $8.50. The market trading price of the
Warrants was unaffected by the split.


                                        31
   32

ITEM 6.      SELECTED FINANCIAL DATA

       The selected historical financial data for the five fiscal years ended
December 31, 1995 are 


                                       32
   33

derived from the consolidated financial statements of the Company. Because the
Company accounted for the Acquisitions as pooling of interests transactions,
certain of the historical financial data of the Company includes historical
results of operations of TransCor, Concept, CMA and CSG. The years ended
December 31, 1993, 1994 and 1995 have been restated to reflect the effect of the
TransCor, Concept, CMA and CSG business combinations. For the years ended
December 31, 1992 and 1991, the financial statements were not restated for any
of the business combinations due to the immaterial impact. All information
contained in the following table should be read in conjunction with the
consolidated financial statements and related notes of the Company included
herein.

                                       33


   34



                       CORRECTIONS CORPORATION OF AMERICA
                      (In thousands, except per share data)



                                                                  Years Ended December 31,
                                         -------------------------------------------------------------------------
         INCOME STATEMENT                   1991           1992            1993              1994             1995
                                            ----           ----            ----              ----             ----

                                                                                                 
Revenues:                                $  67,883         $112,099        $132,534        $152,375        $207,241

Expenses:

    Operating                               55,449           89,392         108,026         123,540         158,814
    General and administrative               7,505            9,653           7,885           9,413          14,288
    Depreciation and amortization            3,126            5,886           5,759           5,753           6,524
                                         ---------         --------        --------        --------        --------
                                            58,575          104,931         121,670         138,706         179,626
                                         ---------         --------        --------        --------        --------

Contribution from operations                 9,308            7,168          10,864          13,669          27,615

Interest expense, net                        3,666            4,264           4,424           3,439           3,952
                                         ---------         --------        --------        --------        --------

         Income (loss) before
            income taxes                    (1,863)           2,582           6,440          10,230          23,663

Income tax provision                           -                 50             832           2,312             933
                                         ---------         --------        --------        --------        --------

Net income (loss)                           (1,863)           2,532           5,618           7,918          14,333

Preferred stock dividends                      -                 71             425             204             -
                                         ---------         --------        --------        --------        --------

Net income (loss) allocable to
  common stockholders                    $  (1,863)        $  2,461        $  5,183        $  7,714        $ 14,333
                                         =========         ========        ========        ========        ========

Net income (loss) per share:

    Primary                              $   (0.10)        $    .11        $    .20        $    .25        $    .38
    Fully diluted                        $   (0.10)        $    .10        $    .20        $    .25        $    .36

Weighted average shares
    outstanding:                            18,432           22,908          25,881          30,954          37,555

Working capital                          $   8,098         $ 11,074        $ 12,540        $ 12,587        $ 11,093

Total assets                             $  96,735         $103,295        $109,285        $141,792        $213,478

Long-term obligations,
  less current portion                   $  57,811         $ 56,277        $ 50,558        $ 47,984        $ 74,865

Redeemable convertible
  preferred stock                        $   5,000         $  5,000        $  5,000        $  ---          $  ---

Total stockholders' equity               $  25,174         $ 27,928        $ 34,182        $ 61,757        $ 96,704




                                       34


   35



ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATIONS

GENERAL

       The Company's recent operating results were significantly affected by its
strategic acquisitions. As discussed in Note 2 to the accompanying consolidated
financial statements, the Company completed the acquisition of TransCor on
December 30, 1994, the acquisition of Concept on April 25, 1995 and the mergers
of CMA and CSG (and their subsidiary, CPI) on August 18, 1995. Each of these
business combinations was accounted for as a pooling of interests and,
accordingly, the operations of TransCor, Concept and CMA and CSG have been
combined in the accompanying consolidated financial statements. The discussion
herein is based upon the combined operations of the Company, TransCor, Concept,
CMA and CSG for all periods presented in the accompanying consolidated financial
statements. To enhance understandability, discussion and analysis of financial
conditions and results of operations of the separate companies is included,
where necessary.

       The Company presently has contracts to manage 46 correctional and
detention facilities with an aggregate design capacity of 28,607 beds. Of these
46 facilities, 37 are currently in operation and nine are under development by
the Company. The Company, through its UK joint venture, UKDS, manages one
facility in the United Kingdom and, through its Australian joint venture, CC
AUS, manages one facility in Australia. Commencing in the second quarter of
1996, CC AUS will manage a 125-bed facility in Victoria, Australia. The
Company's ownership interests in UKDS and CC AUS are accounted for under the
equity method. Of the nine facilities under development by the Company, five are
scheduled to commence operations during 1996 (one in the first quarter, two in
the third quarter and two in the fourth quarter) and four are scheduled to
commence operations during 1997. In addition, at March 8, 1996, the Company had
outstanding written responses to Request for Proposals for 10 projects with an
aggregate design capacity of 7,500 beds.

       The following table sets forth the number of facilities under contract or
award at the end of the periods shown.



                                                                                     End of Fiscal
                                                                      ----------------------------------------          
                                                                         1995           1994            1993
                                                                      ---------       ---------       --------

                                                                                           
Contracts(1)...........................................                      47              39             28
Facilities in operation................................                      38              31             26
Design capacity of contracts...........................                  28,607          19,735         12,254
Design capacity of facilities in operation.............                  20,252          13,404         10,368
Compensated resident days(2)...........................               4,799,562       3,768,095      3,338,411


- ---------------
(1)  Comprised of facilities in operation and facilities under development for
     which contracts have been finalized.

(2)  Compensated resident days for a period ended are calculated, for per diem
     rate facilities, as the number of beds occupied by residents on a daily
     basis during the period ended and, for fixed rate facilities, as the design
     capacity of the facility multiplied by the number of days the facility was
     in operation during the period.


                                       35


   36



       The Company derives substantially all of its revenues from the management
of correctional and detention facilities for national, federal, state and local
governmental agencies in the United States and abroad.

       Geographic Market Concentration. The Company currently manages facilities
in nine states and Puerto Rico. Management revenues by state, as a percentage of
the Company's total revenues for years ended December 31, 1995 and 1994,
respectively, are as follows:



                                            Percentage of                                      Percentage of
                         No. of              Fiscal 1995                    No. of              Fiscal 1994
State                  Facilities          Total Revenues                 Facilities          Total Revenues
- -----                  ----------          ---------------                ----------           --------------
                                                                                     
Alabama                     0                     .4%                          1                     .9%
Arizona                     2                   16.5%                          2                    4.0%
Florida                     5                    7.8%                          3                    6.9%
Indiana                     1                    1.4%                          0                   --
Kansas                      2                    4.6%                          2                    5.7%
Louisiana                   1                    6.1%                          1                    7.6%
New Mexico                  3                    8.4%                          3                    9.5%
Oklahoma                    1                    1.9%                          1                    1.9%
Puerto Rico                 1                     .1%                          0                   --
Tennessee                   8                   25.2%                          8                   30.9%
Texas                      12                   22.7%                          8                   27.9%


       To the extent favorable or unfavorable changes in regulations or market
conditions occur in these markets, such changes would likely have a
corresponding impact on the Company's results of operations.

       Revenues for operation of correctional and detention facilities are
recognized as the services are provided, based on a net rate per day per inmate
("per diem" rate) or on a fixed monthly rate. Of the Company's 37 facilities in
operation, 33 are compensated on a per diem basis and four are compensated at
fixed monthly rates. The per diem rates or fixed monthly rates vary according to
the type of facility and the extent of services provided at the facility.
Transportation revenues are based on a per mile charge or a fixed fee per trip.

       The Company incurs all facility operating expenses, except for certain
debt service and lease payments with respect to certain facilities that the
Company does not own or lease. The Company owns 12 of the facilities it manages.
The Company manages 25 facilities that are owned or leased by a governmental
agency, construction of which as been financed by the agency through one or more
of a variety of methods.

       Facility payroll and related taxes constitute the majority of facility
operating expenses. Substantially all other operating expenses consist of food,
clothing, medical services, utilities, supplies, maintenance, insurance and
other general operating expenses. As inmate populations


                                       36


   37



increase following the start-up of a facility, operating expenses generally
decrease as a percentage of related revenues. Each facility is fully staffed at
the time it is open or taken over by the Company, although it may be operating
at a relatively low occupancy rate.

       General and administrative costs consist of salaries of officers and
other corporate headquarters personnel, legal, accounting and other professional
fees (including pooling expenses), travel expenses, executive office rental, and
promotional and marketing expenses. The most significant component of these
costs relates to the hiring of experienced corrections and administrative
personnel necessary for the implementation and maintenance of the facility
management and transportation contracts.

       Contribution from operations for each facility depends upon the
relationship between operating costs, the rate at which the Company is
compensated per manday, and the occupancy rate. The per diem or fixed rate is
fixed by contract and approximately two-thirds of all operating costs are fixed
costs. Therefore, contribution from operations will vary from period to period
as occupancy rates fluctuate. Contribution from operations will be affected
adversely as the Company increases the number of newly-constructed or expanded
facilities under management and experiences initial low occupancy rates.

       After a management contract has been awarded, the Company incurs facility
start-up costs that consist principally of initial employee training, travel and
other direct expenses incurred in connection with the contract. These costs are
capitalized and amortized on a straight-line basis over the shorter of the term
of the contract plus renewals, or five years. Depending on the contract,
start-up costs are either fully recoverable as pass-through costs or are
billable to the contracting agency over the original term of the contract plus
renewals. The Company has historically financed start-up costs through available
cash, cash from operations and borrowings under the Company's revolving credit
facility.

       Newly opened facilities are staffed according to contract requirements
when the Company begins receiving inmates. Inmates are typically assigned to a
newly opened facility on a regulated, structured basis over a one-to-three month
period. Until expected occupancy levels are reached, operating losses may be
incurred.

                                       37


   38



RESULTS OF OPERATIONS

       The following table sets forth, for the periods indicated, the percentage
of revenues of certain items in the Company's statement of operations and the
percentage change from period to period in such items:



                                                                                          Period-to-Period
                                                                                         Percentage Changes
                                                                                     ---------------------------         
                                                       December 31,                       1995            1994
                                               ---------------------------              Compared        Compared
                                                1995       1994      1993                to 1994         to 1993
                                               -------     ------    -----           --------------    ----------
                                                                                      
INCOME STATEMENT
Revenues                                        100.0%     100.0%     100.0%               36.0%           15.0%
Expenses:
       Operating                                 76.6       81.1       81.5                28.6            14.4
       General and administrative                 6.9        6.1        6.0                51.8            19.4
       Depreciation and amortization              3.2        3.8        4.3                13.4             (.1)
                                               ------     ------     ------
Contribution from operations                     13.3        9.0        8.2               102.0            25.8
                                               ------     ------     ------
Interest expense, net                             1.9        2.3        3.3                14.9           (22.3)
                                                -----      -----     ------
Income before income taxes                       11.4       11.4        4.9               131.3            58.9
Provision for income taxes                        4.5        1.5         .7               303.5           177.9
                                               ------     ------     ------
Net Income                                        6.9        5.2        4.2                81.0            41.2
Preferred stock dividends                          .0         .1         .3              (100.0)          (52.0)
                                                -----     ------     -------
Net Income allocable to
       common stockholders                        6.9%       5.1%       3.9%               85.8%           48.8%
                                                ======     ======     ======


YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1994

       Revenues. Total revenues increased 36% from 1994 to 1995 with increases
in both management and transportation services. Management revenues increased
37% in 1995, or $53,213,000. The 37% increase is due to new facilities opened
and expansions of existing facilities that occurred in 1994 and 1995 by the
Company and the related acquisitions. In 1995, the Company opened five new
facilities representing 3,390 beds and assumed management of three facilities
representing 1,688 beds. The Company also realized the full-year effect of three
facilities added in 1994 representing 1,560 beds. The third contributing factor
to growth was the expansion of 13 existing facilities providing 1,887 new beds.
Due to the growth in beds, compensated mandays increased 27% in 1995 from
3,768,095 to 4,799,562. Average occupancy remained stable at 93.9% for 1995 as
compared to 93.5% for 1994.

       Transportation revenues increased $1,653,000 or 21% in 1995 as compared
to 1994. The 1995 growth was due to a continued marketing effort that expanded
the customer base and resulted in increased compensated mileage.


                                       38


   39



       During the first quarter of 1995, the Company purchased the remaining 50%
of CC AUS from its original joint venture partner. After consideration of
several strategic alternatives related to CC AUS, the Company sold 50% of the
entity to Sodexho during the second quarter of 1995. The Company accounted for
the 100% ownership period on the equity basis of accounting and recognized an
after-tax gain of $783,000 on the sale.

       Facility Operating Expenses. Salary and related employee benefits
constituted approximately 50% and 55% of facility operating expenses for 1995
and 1994, respectively. Facility operating expenses increased by 29% to
$158,814,000 in 1995 compared to $123,540,000 in 1994. This increase was due to
the additional beds on line that increased compensated mandays and the growth in
the transportation services. The average management operating cost per manday
was $31.59 for 1995 as compared to $31.40 for 1994. The increase in average cost
per manday was due to the significant number of new beds brought on line in
1995. As the five new facilities were opened, the full complement of fixed costs
was being incurred prior to full occupancy. As a percentage of revenues,
however, facility operating expenses decreased to 77% from 81%. This decrease is
primarily attributable to the expansion of various facilities that added lower
incremental operating expenses and improved economies of scale.

       General and Administrative. General and administrative costs increased
52% in 1995 to $14,288,000 as compared to $9,413,000 in 1994. Included in 1995
were approximately $950,000 of non-recurring pooling expenses related to the
acquisitions. The Company has also expanded its management staff to manage its
significant growth. Staff have been added to bring new business on line,
resulting in cost being incurred prior to revenue being realized. Also, as all
transition issues are finalized from the acquired operations and the duplicate
services are consolidated, general and administrative costs should decrease as a
percentage of revenues.

       Depreciation and Amortization. Depreciation and amortization increased by
$771,000, to $6,524,000 in 1995 as compared to $5,753,000 in 1994. The 1995
increase is due to the growth in total beds in facilities owned by the Company.

       Interest Expenses, Net. Interest expense , net, increased 15% in 1995 due
to the assumption of debt related to the Eloy Detention Center in Eloy, Arizona.
In July, 1995 the Company acquired the remaining 50% of the investment in a
partnership and assumed the assets and debts.

       Income Taxes. In 1995, the Company's effective income tax rate increased
to 39% as compared to 23% in 1994. This increase in taxes was due to the
Company's complete utilization of net operating loss carryforwards, therefore
becoming subject to full statutory tax rates.

YEAR ENDED DECEMBER 31, 1994 COMPARED WITH YEAR ENDED DECEMBER 31, 1993

       Total revenues increased 15% in 1994 over 1993. Management revenues
increased from $126,749,000 in 1993 to $144,466,000 in 1994 representing a 14%
improvement. Transportation revenues increased 37% going from $5,785,000 in 1993
to $7,909,000 in 1994. The increase in management revenues was due to three
facilities with 1,560 beds being opened in 1994 and the


                                       39


   40



expansion of three existing facilities representing 838 beds. Compensated
mandays increased from 3,338,411 in 1993 to 3,768,095 in 1994 for a 13%
increase, while average occupancy rose from 92.0% to 93.5% for the same period.

       The increase of 37% in transportation revenues was due to a marketing
effort that expanded customer base and resulted in increased compensated
mileage.

       Facility Expenses. Facility operating expenses increased 14% to
$123,540,000 in 1994 as compared to $108,026,000 in 1993. This increase was due
to increased compensated mandays and the growth in the transportation services.
As a percentage of revenues, operating expenses decreased to 81% from 82% in
1993. This decrease was primarily attributable to the expansion of various
facilities that added lower incremental operating expense and improved economies
of scale.

       General and Administrative. General and administrative costs increased
$1,528,000 or 19% in 1994 as compared to 1993. The increase resulted from the
expanded activity necessary to administer the increased beds and transportation
contracts under management.

       Depreciation and Amortization. Depreciation and amortization remained
stable from 1993 to 1994 due to the full depreciation of equipment in some of
the Company's older facilities.

       Interest Expense, Net. Interest expense, net, decreased 22% in 1994. The
1994 decrease was due to the Company reducing debt by $9,800,000 with the
proceeds from common stock and through normal periodic principal payments.

       Income Taxes. In 1994, the Company's effective income tax rate increased
to 23% as compared to 13% in 1993. This increase in taxes was due to the
Company's increased utilization of net operating loss carryforwards, therefore
resulting in the Company being subject to full statutory rates for part of 1994.

LIQUIDITY AND CAPITAL RESOURCES

       The Company's business is capital intensive in relation to the
development of a correctional facility. The Company's efforts to obtain
contracts, construct additional facilities and maintain its day-to-day
operations have required the continued acquisition of funds through borrowings
and equity offerings. The Company has financed these activities through the sale
of capital stock, subordinated convertible notes and senior secured debt,
through the issuance of taxable and tax-exempt bonds, by bank borrowings, and by
assisting governmental agencies in the issuance of municipal bonds.

       Cash flow from operations for 1995 was approximately $17,766,000 as
compared to $11,637,000 in 1994 and $12,916,000 in 1993. The Company has
strengthened its cash flow through its expanded business, additional focus on
larger, more profitable facilities, the expansion of existing facilities where
economies of scale can be realized, and the continuing effort of cost


                                       40


   41



containment. Cash flow from operations has allowed the Company to fund growth
and to continue to retire debt on an accelerated basis.

       The Company's current ratio decreased to 1.31 in 1995 as compared to 1.51
in 1994. The reason for the decrease was due to the Company investing excess
cash flow into the expansion of certain facilities and the current portion of
long-term debt increasing approximately $4,700,000 relative to the assumption of
debt for the UCLP acquisition. The ratio of long-term debt to total
capitalization was 77% at December 31, 1995 and 78% at December 31, 1994. In
October 1995, the Company declared a two-for-one stock split. All references to
number of shares have been adjusted for this stock split.

       In June 1994, the Company entered into an international alliance with
Sodexho, S.A., a French conglomerate, the purpose of which is to pursue prison
management business outside the United States, Australia and the United Kingdom.
In conjunction with the alliance, Sodexho purchased 1,400,000 shares of common
stock at $7.50 per share and a $7,000,000 Convertible Subordinated Note bearing
interest at 8.5%. Sodexho also received 1,100,000 Warrants at $15.80 per warrant
that expire December 1998. Each warrant entitles Sodexho to two common shares
upon exercise. The Company plans to use the proceeds from these future
financings to fund new capital projects. In consideration of the placement of
the aforementioned securities and these future financings, the Company agreed to
pay Sodexho $3,960,000 over a four-year period ending 1998.

       In addition, in June 1995, as a result of its preemptive right triggered
in connection with the issuance of shares of common stock to the stockholders of
Concept, Sodexho purchased 545,000 shares of common stock from the Company at a
purchase price of $15.25 per share. Also during 1995, the Company and Sodexho
entered into a forward contract whereby Sodexho would purchase up to $20,000,000
of convertible subordinated notes at any time prior to December, 1997. The notes
will bear interest at LIBOR plus 1.35% and will be convertible into common
shares at a conversion price of $13.65 per share.

       The Company's working capital revolving credit facility with a U.S. bank
matures May 31, 1997. The credit facility provides for borrowings of up to
$25,000,000 for working capital and certain letters of credit. The credit
facility bears interest, at the election of the Company, at either the bank's
prime rate or a rate which is 2% above the applicable 30, 60 or 90 day LIBOR
rate. Interest is payable monthly with respect to prime rate loans and at the
expiration of the applicable LIBOR period with respect to LIBOR-rate based
loans. The credit facility is secured by certain accounts receivable and real
and personal property at certain of the Company's facilities. There are no
prepayment penalties associated with the credit facility. The credit facility
requires the Company, among other things, to maintain maximum leverage ratios
and a minimum debt service coverage ratio. The facility also limits certain
payments and distributions. In February 1994, the Company received a
construction loan from the bank totaling $13,600,000, with the proceeds used to
construct the Central Arizona Detention Center in Florence, Arizona. The loan
requires equal monthly principal payments based on a ten-year amortization. As
of December 31, 1995, there was $12,580,000 outstanding on the construction
loan. As of December 31, 1995, there was

                                       41


   42



$14,500,000 borrowed against the facility. Letters of credit totaling $2,775,000
have been issued leaving the unused commitment at $7,725,000.

       In February 1996, the Company issued $30,000,000 of its convertible
subordinated notes to an investor. The proceeds were used to repay the
outstanding principal under the Company's working capital credit facility and
construction loan. The notes bear interest at 7.5%, payable quarterly and
require the Company to maintain specific ratio requirements relating to net
worth, cash flow and debt coverage. In March, 1996, as a result of its
preemptive right triggered in connection with the issuance of convertible
subordinated notes, Sodexho notified the Company of its intent to purchase
$20,000,000 of convertible subordinated notes under the same terms and
conditions.

       In connection with the construction and development of certain
facilities, the Company caused a U.S. Bank to issue two letters of credit
totaling $59,500,000. The letters of credit support certain industrial
development bonds, the proceeds of which were used to construct such facilities.
The Company guaranteed to the Bank the repayment in full of any amounts drawn on
such letters of credit as a result of a default under the related bonds. In the
event the Company is required to fund amounts pursuant to these guarantees then
the Company will obtain ownership rights to these facilities. The Company's
reimbursement obligations are secured by all of the collateral that secures the
Company's credit facility with the U.S. Bank described above and are
cross-defaulted with such credit facility.

       The Company anticipates making cash investments in connection with future
acquisitions and expansions. In addition, in accordance with the developing
trend of private prison managers toward making strategic financial investments
in facilities, the Company plans to use a portion of its cash to finance
start-up costs, leasehold improvements and equity investments in facilities, if
appropriate in connection with undertaking new contracts. The Company believes
that the cash flow from operations and amounts available under its credit
facility will be sufficient to meet its capital requirements for the foreseeable
future. Furthermore, management believes that additional resources may be
available to the Company through a variety of other financing methods.

INFLATION

       Many of the Company's facility contracts provide periodic adjustments in
the compensation paid to the Company in accordance with changes in the consumer
price index during such period. Management does not believe that inflation has
had a material adverse effect on the revenues or expenses of the Company.

IMPACT OF ACCOUNTING PRONOUNCEMENTS

       In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of." This
statement imposes stricter criteria for long-term assets by requiring that such
assets be probable of future recovery at each balance sheet

                                       42


   43



date. The Company anticipates adopting SFAS 121 effective January 1, 1996, and
does not expect that adoption will have a material impact on the results of
operations, financial condition or cash flows of the Company.

       In October 1995, the FASB issued SFAS 123, "Accounting for Stock-Based
Compensation." This statement requires new disclosures in the notes to the
financial statements about stock-based compensation plans based on the fair
value of equity instruments granted. Companies also may base the recognition of
compensation cost for instruments issued under stock-based compensation plans on
these fair values. The Company anticipates adopting SFAS 123 effective January
1, 1996, but currently does not plan to change the method of accounting for
these plans.

                                       43


   44



ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
       


                          INDEX TO FINANCIAL STATEMENTS



                                                                                                       Page
                                                                                                       ----
                                                                                                
                  Report of Independent Public Accountants.......................................      F-1

                  Consolidated Balance Sheets at December 31, 1995
                  and 1994.......................................................................      F-2

                  Consolidated Statements of Operations for the years
                  ended December 31, 1995, 1994, and 1993........................................      F-3

                  Consolidated Statements of Stockholders' Equity
                  for the years ended December 31, 1995, 1994,
                  and 1993.......................................................................      F-4

                  Consolidated Statements of Cash Flows for the years
                  ended December 31, 1995, 1994, and 1993........................................      F-5

                  Notes to Consolidated Financial Statements.....................................      F-9




                                       44


   45
                       CORRECTIONS CORPORATION OF AMERICA
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                        AS OF DECEMBER 31, 1995 AND 1994

                                  TOGETHER WITH

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


   46




                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
Corrections Corporation of America and Subsidiaries:

We have audited the accompanying consolidated balance sheets of CORRECTIONS
CORPORATION OF AMERICA AND SUBSIDIARIES as of December 31, 1995 and 1994, and
the related statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1995. 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 generally accepted auditing
standards. 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 Corrections Corporation of
America and Subsidiaries as of December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

As discussed in Note 8 to the consolidated financial statements, effective
January 1, 1993, the Company changed its method of accounting for income taxes.



/s/  Arthur Andersen LLP



Nashville, Tennessee
February 20, 1996

                                      F-1

   47




               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1995 AND 1994

                                 (IN THOUSANDS)



                                ASSETS                            1995          1994
                                ------                            ----          ---- 
CURRENT ASSETS:

                                                                             
  Cash, cash equivalents and restricted cash                   $   2,714     $   4,609
  Accounts receivable, net of allowances                          39,661        26,875
  Prepaid expenses                                                 1,569         1,551
  Deferred tax assets                                              1,646         3,285
  Other                                                            1,020           933
                                                               ---------     ---------
       Total current assets                                       46,610        37,253
                
RESTRICTED INVESTMENTS                                               443            69
OTHER ASSETS                                                      19,642        11,418
PROPERTY AND EQUIPMENT, NET                                      137,019        82,934
INVESTMENT IN DIRECT FINANCING LEASE                               9,764        10,118
                                                               ---------     --------- 
                                                               $ 213,478     $ 141,792
                                                               =========     =========

                       LIABILITIES AND STOCKHOLDERS' EQUITY
                       ------------------------------------
CURRENT LIABILITIES:

  Accounts payable                                             $  10,757     $   8,768
  Accrued salaries and wages                                       3,480         3,273
  Accrued property taxes                                           1,623         1,462
  Other accrued expenses                                           8,637         5,404
  Current portion of long-term debt                               11,020         5,759
                                                               ---------     ---------
     Total current liabilities                                    35,517        24,666

LONG-TERM DEBT, NET OF CURRENT PORTION                            74,865        47,984
DEFERRED TAX LIABILITIES                                           4,164         3,628
OTHER NONCURRENT LIABILITIES                                       2,228         3,757
                                                                --------     ---------
     Total liabilities                                           116,774        80,035
                                                               ---------     ---------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

  Common stock - $1 par value; 50,000 shares authorized           32,270        29,690
  Additional paid-in capital                                      48,830        28,508
  Retained earnings                                               15,641         3,866
  Treasury stock, at cost                                            (37)         (307)
                                                               ---------     ---------
     Total stockholders' equity                                   96,704        61,757
                                                               ---------     ---------
                                                               $ 213,478     $ 141,792
                                                               =========     =========
 



The accompanying notes are an integral part of these statements.

                                      F-2

   48
               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



                                                 1995        1994        1993
                                               --------    --------    --------    
                                                                   
REVENUES                                       $207,241    $152,375    $132,534

EXPENSES:

    Operating                                   158,814     123,540     108,026
    General and administrative                   14,288       9,413       7,885
    Depreciation and amortization                 6,524       5,753       5,759
                                               --------    --------    -------- 

CONTRIBUTION FROM OPERATIONS                     27,615      13,669      10,864

INTEREST EXPENSE, NET                             3,952       3,439       4,424
                                               --------     -------     -------

INCOME BEFORE INCOME TAXES                       23,663      10,230       6,440

PROVISION FOR INCOME TAXES                        9,330       2,312         832
                                               --------     -------      ------

NET INCOME                                       14,333       7,918       5,608

PREFERRED STOCK DIVIDENDS                          --           204         425
                                               --------     -------      ------

NET INCOME ALLOCABLE TO COMMON STOCKHOLDERS

                                               $ 14,333    $  7,714    $  5,183
                                               ========    ========    ========

NET INCOME PER COMMON SHARE:

    Primary                                    $    .38    $    .25    $    .20
                                               ========    ========    ========
    Fully diluted                              $    .36    $    .25    $    .20
                                               ========    ========    ========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

                                                 37,555      30,954      25,881
                                               ========    ========     =======


The accompanying notes are an integral part of these statements.


                                      F-3
   49




               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                 (IN THOUSANDS)




                                                                COMMON STOCK                        
                                               -------------------------------------------         
                                                    ISSUED               TREASURY STOCK       ADDITIONAL   RETAINED      TOTAL      
                                               ------------------       ------------------     PAID-IN     EARNINGS   STOCKHOLDERS'
                                               SHARES     AMOUNT        SHARES    AMOUNT       CAPITAL     (DEFICIT)     EQUITY
                                               ======    ========       ======   ========      ========   ==========  ============

                                                                                                        
BALANCE, DECEMBER 31, 1992                     23,774    $ 23,774           -     $      -     $ 13,604     $ (8,314)    $ 29,064
    Purchase of treasury stock, at cost             -           -         (79)        (392)           -            -         (392)
    Stock options and warrants exercised          526         526           5           52          (84)        (167)         327
    Preferred stock dividends                       -           -           -            -            -         (425)        (425)
    Net income                                      -           -           -            -            -        5,608        5,608
                                               ------    --------         ---     --------     --------     --------     --------
BALANCE, DECEMBER 31, 1993                     24,300      24,300         (74)        (340)      13,520       (3,298)      34,182

    Issuance of common stock                    1,856       1,856           -            -        8,243            -       10,099
    Stock options exercised and 
      warrants converted to stock               1,716       1,716          35           33          286         (550)       1,485
    Income tax benefits of incentive 
      stock option exercises                        -           -           -            -          593            -          593
    Conversion of long-term debt 
      and preferred stock                       1,818       1,818           -            -        5,866            -        7,684
    Preferred stock dividends                       -           -           -            -            -         (204)        (204)
    Net income                                      -           -           -            -            -        7,918        7,918
                                               ------    --------         ---     --------     --------     --------     --------
BALANCE, DECEMBER 31, 1994                     29,690      29,690         (39)        (307)      28,508        3,866       61,757

    Issuance of common stock                      579         579           -            -        7,763            -        8,342
    Stock options exercised and warrants 
      repurchased or converted to stock         1,114       1,114          37          270        2,813       (2,558)       1,639
    Income tax benefits of incentive 
      stock option exercises                        -           -           -            -        3,987            -        3,987
    Conversion of long-term debt                  887         887           -            -        5,759            -        6,646
    Net income                                      -           -           -            -            -       14,333       14,333
                                               ------    --------         ---     --------     --------     --------     --------
BALANCE, DECEMBER 31, 1995                     32,270    $ 32,270          (2)    $    (37)    $ 48,830     $ 15,641     $ 96,704
                                               ======    ========         ===     ========     ========     ========     ========


The accompanying notes are an integral part of these statements.


                                      F-4

   50




               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                 (IN THOUSANDS)



                                                                              1995               1994                1993
                                                                            -------             -------            -------
CASH FLOWS FROM OPERATING ACTIVITIES:

                                                                                                              
       Net income                                                           $ 14,333            $ 7,918             $ 5,608
       Adjustments to reconcile net income to net
          cash provided by operating activities:

              Depreciation and amortization                                    6,524              5,753               5,759
              Deferred and other noncash income taxes                          6,162                878                (122)
              Loss (gain) on disposal of assets                               (1,284)                11                 179
              Equity in earnings of unconsolidated entities                     (619)              (422)               (334)
              Changes in assets and liabilities, net of acquisitions:

                 Accounts receivable                                         (12,750)            (7,901)                 40
                 Prepaid expenses                                                (18)               (70)              1,778
                 Other current assets                                            (87)              (259)                (30)
                 Accounts payable                                              1,991              4,537                 655
                 Accrued expenses                                              3,514              1,192                (617)
                                                                            --------            -------             -------
                    Net cash provided by operating activities                 17,766             11,637              12,916
                                                                            --------            -------             -------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Additions of property and equipment                                      (25,926)           (24,891)             (2,381)
    Acquisition of UCLP                                                       (5,250)                 -                   -
    Decrease (increase) in restricted cash and
       investments                                                              (619)                (7)                958
    Increase in other assets                                                  (8,500)            (1,836)               (667)
    Investment in affiliates, net                                             (3,717)              (426)                144
    Proceeds from disposals of assets                                          3,763                 25                  15
    Issuance of notes receivable                                                   -               (900)                  -
    Payments received on direct financing lease and
       notes receivable                                                          328                286                 257
                                                                            --------           --------             ------- 
                    Net cash used in investing activities                    (39,921)           (27,749)             (1,674)
                                                                            ========           ========             =======





                                   (Continued)


                                      F-5
   51
               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                   (Continued)



                                                                   1995         1994         1993
                                                                 --------     -------      -------               

                                                                                       
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of long-term debt                     $  7,111     $ 15,974     $  9,953
    Payments on long-term debt                                     (8,648)     (14,159)     (17,409)
    Payments on notes payable to stockholders                           -         (403)        (476)
    Proceeds from line of credit, net                              13,715          270          211
    Payment of debt issuance costs                                   (260)           -            -
    Payments of dividends                                               -         (291)        (494)
    Proceeds from issuance of common stock                          7,859       10,571            -
    Proceeds from exercise of stock options and warrants
                                                                      868        1,137          327
    Purchase of treasury stock and warrants                          (630)           -         (392)
                                                                 --------      -------      -------
          Net cash provided by (used in) financing activities      20,015       13,099       (8,280)
                                                                 --------      -------      -------


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               (2,140)      (3,013)       2,962

CASH AND CASH EQUIVALENTS, BEGINNING OF YEARS                       4,285        7,298        4,336
                                                                 --------     --------     --------

CASH AND CASH EQUIVALENTS, END OF YEAR                           $  2,145     $  4,285     $  7,298
                                                                 ========     ========     ========

SUPPLEMENTAL DISCLOSURES OF CASH
    FLOW INFORMATION:

       Cash paid during the year for:

            Interest (net of amounts capitalized)                $  5,145     $  4,854     $  5,706
                                                                 ========     ========     ========
            Income taxes                                         $  3,060     $  1,572     $    327
                                                                 ========     ========     ========





                                   (Continued)

                                      F-6
   52


               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                   (Continued)



                                                                           1995               1994                1993
                                                                         -------            -------             -------
                                                                                                       
SUPPLEMENTAL SCHEDULE OF NONCASH    
INVESTING AND FINANCING ACTIVITIES:

       The Company entered into an international alliance 
        and equity participation which included the deferral 
        of the payment of certain issuance costs:

              Other assets                                               $        -         $(3,488)            $         -
              Other accrued expenses                                              -             990                       -
              Other noncurrent liabilities                                        -           2,970                       -
              Additional paid-in capital                                          -            (472)                      -
                                                                         ----------         -------             -----------
                                                                         $        -         $     -             $         -
                                                                         ==========         =======             ===========

       Long-term debt was converted into common stock through 
        the exercise of stock warrants:

              Other assets                                               $    27            $     9             $         -
              Long-term debt                                              (1,428)              (357)                      -
              Common stock                                                   400                100                       -
              Additional paid-in capital                                   1,001                248                       -
                                                                         -------            -------             -----------
                                                                         $     -            $     -             $         -
                                                                         =======            =======             ===========

       Redeemable convertible preferred stock was converted 
        into common stock:

              Other assets                                               $     -            $   290             $         -
              Preferred stock                                                  -             (5,000)                      -
              Common stock                                                     -              1,400                       -
              Additional paid-in capital                                       -              3,310                       -
                                                                         -------            -------             -----------
                                                                         $     -            $     -             $         -
                                                                         =======            =======             ===========

                                   (Continued)


                                      F-7
   53




               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                   (Continued)




                                                                           1995               1994                1993
                                                                        ---------           --------            --------
                                                                                                    
       Long-term debt was converted into common stock:
              Other assets                                            $    53               $    26             $     -
              Long-term debt                                           (6,700)               (3,000)                  -
              Common stock                                                887                   419                   -
              Additional paid-in capital                                5,760                 2,555                   -
                                                                      -------               -------             -------
                                                                      $     -               $     -             $     -
                                                                      =======               =======             =======

          The Company acquired property and equipment by 
            assuming long-term debt:
                Property and equipment                                $(27,392)             $     -             $     -
                Long-term debt                                          27,392                    -                   -
                                                                      --------              -------             -------
                                                                      $      -              $     -             $     -
                                                                      ========              =======             =======



        The accompanying notes are an integral part of these statements.


                                       F-8
   54



               CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1995, 1994 AND 1993

1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Corrections Corporation of America (together with its subsidiaries,
      referred to as the "Company"), a Delaware corporation, operates and
      manages prisons and other correctional facilities and provides prisoner
      transportation services for governmental agencies. The Company provides a
      full range of related services to governmental agencies, including
      managing, financing, designing and constructing new facilities and
      redesigning and renovating older facilities. The consolidated financial
      statements include the accounts of the Company and its wholly-owned
      subsidiaries, TransCor America, Inc. ("TransCor"), Concept Incorporated
      ("Concept"), Corrections Management Affiliates, Inc. ("CMA"), Correctional
      Services Group, Inc. ("CSG"), CCA International, Inc. and Technical and
      Business Institute of America, Inc. CCA International, Inc. has two
      wholly-owned subsidiaries, CCA France, Inc. and CCA (UK) Limited. Concept
      has two wholly-owned subsidiaries, Mineral Wells R.E. Holding Corp.
      ("Mineral Wells") and United-Concept Inc. ("United-Concept"). Concept
      together with Mineral Wells wholly owns United-Concept Limited
      Partnership ("UCLP"). CMA together with CSG wholly owns Corrections
      Partners, Inc. ("CPI"). The accompanying consolidated financial statements
      and note information reflect the accounting for the acquisitions in 1994
      and 1995 of TransCor, Concept, CMA and CSG in transactions accounted for
      as pooling-of-interests and the acquisition in 1995 of United-Concept and
      UCLP accounted for as a purchase. All intercompany transactions and
      balances have been eliminated.

      At December 31, 1995, the Company also has a 50% interest in Corrections
      Corporation of Australia PTY LTD ("CC Australia"). CC Australia provides
      services similar to the Company in Australia and surrounding countries. At
      December 31, 1995, CCA (UK) Limited has a one-third interest in UK
      Detention Services Limited ("UKDS"), a United Kingdom joint venture. UKDS
      provides services similar to the Company in the United Kingdom. The
      Company accounts for these investments under the equity method. Assets and
      liabilities are converted from their functional currency into the U.S.
      dollar utilizing the conversion rate in effect at the balance sheet date.
      Revenue and expense items are converted using the weighted average rate
      during the period. The excess of the Company's investment in
      unconsolidated subsidiaries over the underlying equity is being amortized
      over twenty-five years.



                                      F-9
   55





      Deferred project development costs consist of costs that can be directly
      associated with a specific anticipated contract and, if recovery from that
      contract is probable, are deferred until the anticipated contract has been
      awarded. Internal costs incurred in securing new clients including costs
      of responding to requests for proposals are expensed as incurred. At the
      time the contract is awarded to the Company, the deferred project
      development costs are either capitalized as part of property and equipment
      or are amortized over five years as project development costs. Costs of
      unsuccessful or abandoned contracts are charged to depreciation and
      amortization expense when their recovery is not considered probable.
      Facility start-up costs, principally costs of initial employee training,
      travel and other direct expenses incurred in connection with opening of
      new facilities, to the extent recoverable under the applicable contract,
      are deferred and recorded as other assets. Start-up costs are amortized on
      a straight-line basis over the lesser of the initial term of the contract
      plus renewals or five years.

      Debt issuance costs are amortized on a straight-line basis over the life
      of the related debt. This amortization is charged to depreciation and
      amortization expense.

      Property and equipment is carried at cost. Betterments, renewals and
      extraordinary repairs that extend the life of the asset are capitalized;
      other repairs and maintenance are expensed. Interest is capitalized to the
      asset to which it relates in connection with the construction of major
      facilities. The cost and accumulated depreciation applicable to assets
      retired are removed from the accounts and the gain or loss on disposition
      is recognized in income. Depreciation is computed by the straight-line
      method for financial reporting purposes and accelerated methods for tax
      reporting purposes based upon the estimated useful lives of the related
      assets.

      Investment in direct financing lease represents the portion of the
      Company's management contract with a governmental agency that represents
      payments on building and equipment leases. The lease is accounted for
      using the financing method and, accordingly, the minimum lease payments to
      be received over the term of the lease less unearned income are
      capitalized as the Company's investment in the lease. Unearned income is
      recognized as income over the term of the lease using the interest method.

      Income taxes are accounted for under the provisions of Statement of
      Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
      Taxes," which was adopted by the Company effective January 1, 1993. This
      statement generally requires the Company to record deferred income taxes
      for the differences between book and tax bases of its assets and
      liabilities.



                                      F-10
   56




      The Company maintains contracts with various governmental entities to
      manage their facilities for fixed per diem rates or monthly fixed rates.
      The Company also maintains contracts with various federal, state and local
      governmental entities for the housing of inmates in Company owned
      facilities at fixed per diem rates. These contracts usually contain
      expiration dates with renewal options ranging from annual to multi-year
      renewals. Most of these contracts have current terms that require renewal
      every two to five years. The Company expects to renew these contracts for
      periods consistent with the remaining renewal options allowed by the
      contracts or other reasonable extensions. The Company records revenues
      based on these per diem rates and the number of inmates housed during the
      revenue period.

      To meet the reporting requirements of SFAS 107, "Disclosures About Fair
      Value of Financial Instruments," the Company calculates the fair value of
      financial instruments using quoted market prices. At December 31, 1995,
      there were no material differences in the book values of the Company's
      financial instruments and their related fair values, except for the
      Company's convertible subordinated notes (see Note 7) and the forward
      contract for convertible subordinated notes (see Note 12), which based on
      the underlying equity securities, have an estimated fair market value of
      approximately $150,000,000.

      For purposes of the statements of cash flows, the Company excludes
      restricted cash from cash and cash equivalents. The Company considers all
      highly liquid debt instruments with a maturity of three months or less to
      be cash equivalents.

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.

      In March, 1995, the Financial Accounting Standards Board ("FASB") issued
      SFAS 121, "Accounting for the Impairment of Long-Lived Assets and
      Long-Lived Assets to be Disposed Of." This statement imposes stricter
      criteria for long-term assets by requiring that such assets be probable of
      future recovery at each balance sheet date. The company anticipates
      adopting SFAS 121 effective January 1, 1996, and does not expect that
      adoption will have a material impact on the results of operations,
      financial condition or cash flows of the Company.

      Certain reclassifications of 1994 and 1993 amounts have been made to
      conform with the 1995 presentation.


                                      F-11
   57




 2.   MERGERS AND ACQUISITIONS

      On August 18, 1995, the Company issued 1,400,000 shares of its common
      stock for all the outstanding shares of CMA and CSG. CMA and CSG operate
      and manage prisons and other correctional facilities for governmental
      agencies. Of the shares issued, 140,000 are held in escrow for the
      resolution of precombination contingencies.

      On April 25, 1995, the Company issued 2,724,992 shares of its common stock
      for all the outstanding shares of Concept. Concept operates and manages
      prisons and other correctional facilities for governmental agencies. Of
      the shares issued, 272,500 are held in escrow for the resolution of
      precombination contingencies.

      On December 30, 1994, the Company issued 2,600,000 shares of its common
      stock for all the outstanding shares of TransCor, a prisoner
      transportation company. Of the shares issued, 260,000 are held in escrow
      for the resolution of certain precombination contingencies.

      These transactions were accounted for as pooling-of-interests, and
      accordingly, the accompanying consolidated financial statements for 1995,
      1994 and 1993 have been restated to include the accounts of CMA and CSG.
      The Company has previously filed restated financial statements for
      TransCor and Concept. Pooling expenses of approximately $950,000 are
      included in general and administrative expense in the 1995 statement of
      operations. A reconciliation of separately reported revenues and net
      income is as follows (in thousands):



                                 (UNAUDITED)
                              SIX MONTHS ENDED   YEARS ENDED DECEMBER 31,
                                   JUNE 30,      -----------------------
                                     1995           1994        1993
                              ----------------    --------    ---------

                                                   
   Revenues:
   Corrections Corporation of
       America                   $  89,520     $ 144,060     $ 126,634
   CMA and CSG combined              5,876         8,315         5,900
                                 ---------     ---------     ---------
                                 $  95,396     $ 152,375     $ 132,534
                                 =========     =========     =========
Net Income:
   Corrections Corporation of
       America                   $   5,450     $   8,158     $   5,383
   CMA and CSG combined               (304)         (240)          225
                                 ---------     ---------     --------- 
                                 $   5,146     $   7,918     $   5,608
                                 =========     =========     =========



      In the preparation of the consolidated financial statements, the Company
      made certain immaterial adjustments and reclassifications to the
      historical financial statements of TransCor, Concept, CMA and CSG to be
      consistent with the accounting policies of the Company.

      As discussed in Note 6, the Company exercised its option to acquire the
      remaining 50% of its investment in UCLP during 1995. The acquisition was
      accounted for using the purchase method. The purchase price has been
      allocated to assets acquired and liabilities assumed based on the
      estimated fair market value at the date of the acquisition. The operations
      of UCLP on a 


                                      F-12
   58


      consolidated basis prior to the acquisition are not material to the
      Company's results of operations.

 3.   OTHER ASSETS

      Other assets consist of the following (in thousands):



                                                                 DECEMBER 31,
                                                               ---------------
                                                               1995       1994
                                                             -------     ------
                                                                

Deferred project development costs                          $ 1,230    $   613
Project development costs, less accumulated amortization
    of  $487 and $683, respectively                           2,275        692

Facility start-up costs, less accumulated amortization
    of $2,728 and $2,141, respectively                        6,705      2,189

Debt issuance costs, less accumulated amortization of
    $1,289 and $1,380, respectively                           1,669      1,461

Deferred placement fees                                       2,404      2,404

Investments in affiliates                                     3,756      2,590 

Notes receivable                                                890        900
Other assets                                                    713        569
                                                            -------    -------
                                                            $19,642    $11,418
                                                            =======    =======



      The notes receivable bear interest at the weighted average rate of 11.14%.
      $700,000 is secured by a third mortgage on a facility and is due in
      January 1999. The remaining balance is due in monthly principal and
      interest payments through April 1999.

      During the first quarter of 1995, the Company purchased the remaining 50%
      of CC Australia from its original joint venture partner. After
      consideration of several strategic alternatives related to CC Australia,
      the Company sold 50% of the entity to Sodexho, S.A. ("Sodexho"), a French
      conglomerate, during the second quarter of 1995. The Company accounted for
      the 100% ownership period on the equity basis of accounting and recognized
      an after-tax gain of $783,000 on the sale.


                                      F-13
   59
4.    PROPERTY AND EQUIPMENT

      Property and equipment, at cost, consist of the following (in thousands):



                                      DECEMBER 31,
                                 -----------------------
                                    1995          1994
                                 ---------     ---------

                                               
Land                             $   3,953     $   2,916
Buildings and improvements         114,863        83,103
Equipment                           13,486         9,492
Office furniture and fixtures        2,262         1,850
Construction in progress            23,083         1,583
                                 ---------     ---------
                                   157,647        98,944
Less accumulated depreciation      (20,628)      (16,010)
                                 ---------     ---------
                                 $ 137,019     $  82,934
                                 =========     =========



      Depreciation expense was $4,428,000, $3,469,000 and $3,011,000 for 1995,
      1994 and 1993, respectively.


5.    INVESTMENT IN DIRECT FINANCING LEASE

      At December 31, 1995, the investment in direct financing lease represents
      a building and equipment lease between the Company and the state of New
      Mexico for the New Mexico Women's Correctional Facility.

      A schedule of minimum future rentals to be received under the direct
      financing lease at December 31, 1995 is as follows (in thousands):



                                                                              DIRECT
                                                                            FINANCING
                                                                           LEASE RENTAL
                                                                            RECEIVABLE
                                                                           ------------
                                                                               
                                1996                                             $ 1,420
                                1997                                               1,420
                                1998                                               1,420
                                1999                                               1,420
                                2000                                               1,420
                             Thereafter                                           12,066
                                                                                  ------
                Total minimum obligation                                          19,166
                Less unearned income                                              (9,048)
                                                                                  ------
                Present value of direct financing lease                           10,118
                Less current portion                                                (354)
                                                                                  ------
                Long-term portion at December 31, 1995                           $ 9,764
                                                                                 =======


                                      F-14
   60


      The agreement contains a provision that allows the state to purchase the
      building and equipment for predetermined prices at specific intervals
      during the contract period.

      Beginning in 1996, CCA began leasing to the State of New Mexico an
      addition to the New Mexico Women's Correctional Facility. This new lease
      will be added to the direct financing lease above. The minimum future
      rentals to be received under the additional lease, which are not included
      in the schedule above, total approximately $3,590,000, excluding unearned
      income.

 6.   INVESTMENT IN UCLP

      At December 31, 1994, Concept and its affiliates owned 49.9% of UCLP and
      Concept owned 50% of the common stock of United- Concept, which owned .2%
      of UCLP and was the managing general partner of UCLP. In addition, Concept
      had an option to purchase from its partner in UCLP the other 50%
      partnership interests in UCLP and the other 50% of the common stock of
      United-Concept. On July 17, 1995, Concept exercised its option and
      acquired the remaining interests of UCLP for $5,250,000.

      United-Concept has issued and outstanding 1,000 shares of common stock (of
      which Concept owns 1,000 shares) and one share of voting preferred stock,
      which is owned by The First National Bank of Chicago under an indenture
      agreement related to the financing of the Eloy Facility. Each share of
      stock, common and preferred, has one vote. The preferred stock does not
      participate in income distribution by United-Concept and has a $10
      liquidation value. The by-laws of United-Concept require 100% shareholder
      approval of significant corporate actions, and also require an independent
      director. Concept is entitled to 100% of the income of UCLP, but the
      independent director effectively has veto power over certain actions of
      United-Concept.

      The Company's investment in UCLP was accounted for under the equity method
      from inception through July 17, 1995. Since July 17, 1995, the Company is
      entitled to 100% of the income and has responsibility for all the debt and
      for satisfying the contractual obligation of UCLP. As a result, the
      Company has included UCLP in the consolidated financial statements.


                                      F-15
   61




      Condensed financial information of UCLP as of December 31, 1994, and for
the year then ended is as follows (in thousands):



                                                                          
           Net revenue                                                   $ 1,886
                                                                         =======
           Net income                                                       $335
                                                                         =======  
           Current assets                                                 $2,560
           Noncurrent assets                                              30,131
                                                                         -------
                                                                         $32,691
                                                                         =======
           Current liabilities                                            $4,501
           Payable to Concept                                              1,288 
           Noncurrent liabilities                                         25,965
           Partners' capital                                                 937
                                                                         -------
                                                                         $32,691
                                                                         =======


7.    LONG-TERM DEBT

      Long-term debt consists of the following (in thousands):



                                                                                              DECEMBER 31,
                                                                                 -----------------------------------
                                                                                     1995                    1994
                                                                                 ------------           ------------
                                                                                                   
       Industrial Development Revenue Bonds, principal payments of
           $235 annually through November 1, 2005, interest at
           8.875%, payable semi-annually, collateralized by
           property and equipment with a carrying value of                        
           $6,766 at December 31, 1995 and by revenues from
           a contract.                                                            $2,385                  $2,620

       Senior Secured Notes, principal payments of $2,000 annually through
           1997, increasing to $3,000 in 1998 with the unpaid balance
           due in 2000, interest payable semi-annually at 11.08%,
           collateralized by property and equipment with a carrying
           value of $8,486 at December 31, 1995 and by revenues
           from certain contracts.                                                12,215                  15,643





                                      F-16


   62




                                                                                                    DECEMBER 31,
                                                                                     
                                                                                             1995                    1994 
                                                                                           --------                -------- 
                                                                                                                   
      Secured Notes Payable, principal payments due annually in various amounts
         through 1997, interest payable monthly at 9.6%, collateralized by
         property and equipment with a carrying value of $11,171 at December 31,
         1995 and by revenues from a contract.

                                                                                             $2,981                  $4,223   

      Bank Loan, principal and interest payable in monthly installments of $113
         through February 1, 2000, at which time the entire principal and any
         unpaid accrued interest is due, interest at the bank's prime rate (8.5%
         at December 31, 1995), or LIBOR plus 2% (7.9% at December 31, 1995),
         collateralized by property and equipment with a carrying value of
         $31,967 at December 31, 1995 and by revenues from a contract.

                                                                                             12,580                   6,081
     Notes payable to a bank, principal and interest at 10%, payable monthly
         until maturity in March 2000, collateralized by property and equipment
         with a carrying value of $31,650 at December 31, 1995 and by revenues from
         a contract.

                                                                                             25,608                       -

      Line of credit payable to a bank, principal due May 1997, interest payable
         monthly at the bank's prime rate (8.5% at December 31, 1995), or LIBOR
         plus 2% (7.9% at December 31, 1995), collateralized by property and
         equipment with a carrying value of $43,399 at December 31, 1995.

                                                                                             14,500                       -

      Line of credit payable to a bank, principal paid in full in May 1995,
         interest paid at the bank's prime rate (9.0% in May 1995).                               -                     785

      Note payable to UCLP, principal paid in full in July
         1995, interest paid at 10%.                                                              -                     892





                                      F-17


   63






                                                                                          DECEMBER 31,
                                                                                 -------------------------------
                                                                                   1995                    1994
                                                                                 -------                 -------
                                                                                                         
      Convertible Subordinated Notes, principal due at maturity in 1999 with
         call provisions beginning in 1997, interest payable semi-annually at
         8.5%                                                                    $7,000                 $13,700
      Convertible Subordinated Notes, principal due at
         maturity in 1998, interest payable quarterly at
         8.5%.                                                                    7,500                   7,500

      Other                                                                       1,116                   2,299
                                                                                -------                  ------
                                                                                 85,885                  53,743
      Less current portion                                                      (11,020)                 (5,759)
                                                                                -------                  ------
                                                                                $74,865                 $47,984
                                                                                =======                  ======


      At December 31, 1995, the Company's line of credit facility provides for
      borrowings up to $25,000,000. The facility consists of a working capital
      line, which includes letters of credit. Letters of credit totaling
      $2,775,000 have been issued to secure the Company's workers' compensation
      insurance policy, performance bonds and utility deposits. The unused
      commitment at December 31, 1995 was $7,725,000. The facility is subject to
      renewal on May 31, 1997.

      Restricted cash of $569,000 and $324,000 at December 31, 1995 and 1994,
      respectively, represents cash held in an investment trust related to the
      Company's liability insurance policy and deposits to sinking funds
      established for the funding of current year principal and interest on
      certain bonds.

      The Company does not maintain any significant formal or informal
      compensating balance arrangements with financial institutions.

      The Convertible Subordinated Notes are convertible into the Company's
      common stock at prices ranging from $3.39 to $7.17 per share. The Company
      may require conversion under certain conditions after the stock has a
      market value of 150% of the conversion price for a specified period. In
      1995 and 1994, Convertible Subordinated Notes with a face value of
      $6,700,000 and $3,000,000, respectively were converted into 887,000 and
      419,000, respectively, shares of common stock.

      The provisions of the credit facility, bonds, and notes contain
      restrictive covenants, the most restrictive of which are limits on the
      payment of dividends, incurrence of additional indebtedness, investments
      and mergers. The agreements also require that the Company maintain
      specific ratio requirements relating to cash flow, tangible net worth,
      interest coverage and earnings.

      The Company was in compliance with the covenants at December 31, 1995.



                                      F-18
   64




      The Company capitalized interest of $717,000, $377,000 and $226,000 in
      1995, 1994 and 1993, respectively. Interest expense, net is comprised of
      the following for each year (in thousands):



                                                                                   1995                1994             1993
                                                                                  ------             --------         ---------    

                                                                                                                 
Interest expense                                                                  $ 5,534            $ 4,954           $ 5,842
Interest income                                                                    (1,582)            (1,515)           (1,418)
                                                                                  -------            -------           --------    
                                                                                  $ 3,952            $ 3,439           $ 4,424



      Maturities of long-term debt for the next five years and thereafter are:
      1996 - $11,020,000; 1997 - $27,037,000; 1998 - $20,582,000; 1999 -
      $14,229,000; 2000 - $11,794,000 and thereafter - $1,197,000.

 8.   INCOME TAXES

      The Company adopted SFAS 109 effective January 1, 1993. No adjustment for
      the cumulative effect of the accounting change was required and the
      Company elected not to restate prior years.

      Deferred income taxes reflect the net tax effects of temporary differences
      between the carrying amounts of assets and liabilities for financial
      reporting purposes and the amounts used for income tax purposes. The
      provision for income taxes is comprised of the following components (in
      thousands):



                                                                                         FOR THE YEARS ENDED DECEMBER 31,
                                                                                    ------------------------------------------      
                                                                                     1995              1994              1993
                                                                                    ------            ------            ------
                                                                                                              
      CURRENT PROVISION    
             Federal                                                               $2,853             $1,319              $864
             State                                                                    315                115                90
                                                                                   ------             ------              ----
                                                                                    3,168              1,434               954
                                                                                   ------              -----              ----  
       INCOME TAXES CHARGED TO  EQUITY

             Federal                                                                3,567                531                 -
             State                                                                    420                 62                 -
                                                                                    -----              -----              ----
                                                                                    3,987                593                 -
                                                                                    -----              -----              ----
      DEFERRED PROVISION

             Federal                                                                1,946                 99             (108)
             State                                                                    229                186              (14)
                                                                                   ------             ------             ---- 
                                                                                    2,175                285             (122)
                                                                                   ------             ------             ----    
            Provision for income taxes                                             $9,330             $2,312             $832
                                                                                   ======             ======             ====
                                                                



    


                                      F-19
   65




      Significant components of the Company's deferred tax assets and
liabilities are as follows (in thousands):



                                                                            DECEMBER 31,
                                                                   ---------------------------
                                                                     1995                 1994
                                                                   -------              -------
                                                                                  
CURRENT DEFERRED TAX ASSETS

Asset reserves and liabilities not yet deductible
   for tax                                                          $1,473               $  855
Alternative minimum tax carryforward                                   173                  972
Net operating loss carryforwards                                         -                1,458
                                                                   --------             -------

          Net current deferred tax assets                           $1,646               $3,285
                                                                   ========             =======
NONCURRENT DEFERRED TAX ASSETS

Other                                                               $   35               $   27
                                                                    ------               ------
          Total noncurrent deferred tax assets                          35                   27
                                                                    ------               ------
NONCURRENT DEFERRED TAX LIABILITIES

Tax in excess of book depreciation and amortization                  3,565               3,467
Income items not yet taxable and other                                 634                 188
                                                                    ------              ------
          Total noncurrent deferred tax liabilities                  4,199               3,655
                                                                    ------              ------
          Net noncurrent deferred tax liabilities                   $4,164              $3,628
                                                                    ======              ======
        


      At December 31, 1993, a valuation allowance had been recorded equal to the
      remaining deferred tax assets after considering deferred tax assets that
      can be realized through offsets to existing taxable temporary differences.
      In 1994, the valuation allowance was eliminated due to the Company's
      realization of the tax operating loss carryforwards. At December 31, 1995
      and 1994, there is no valuation allowance.



                                      F-20
   66




      A reconciliation of the statutory federal income tax rate and the
      effective tax rate as a percentage of pretax income for the years ended
      December 31 is as follows:



                                                                    1995            1994           1993
                                                                   ------          ------         ------
                                                                                            
 Statutory federal rate                                             34.0%           34.0%          34.0%
 State taxes, net of federal tax benefit                             4.0             4.0            4.0
 Utilization of net operating loss carryforward                      -             (15.4)         (25.1)
 Non-deductible items, primarily related to pooling
      expenses                                                       1.4             -              -
                                                                    -----          -----           ----
                                                                    39.4%           22.6%          12.9%
                                                                    ====           =====           ====




 9.   EARNINGS PER SHARE

      Primary net income per common share is computed using the weighted average
      number of shares of common stock and common stock equivalents outstanding.
      Stock warrants and stock options are considered common stock equivalents.
      The convertible subordinated notes are not common stock equivalents. In
      computing fully diluted net income per common share, the convertible
      subordinated notes are considered dilutive using the if-converted method.
      In 1994 and 1993, the convertible subordinated notes were antidilutive.
      The following table presents information necessary to calculate fully
      diluted earnings per share for the years ended December 31, 1995, 1994 and
      1993 (in thousands, except per share amounts):



                                           1995       1994       1993
                                          ------     ------     -------
                                                        
Net income allocable to common
  stockholders                              $14,333    $ 7,714    $ 5,183
Interest expense applicable to
  convertible subordinated notes, net of
  tax                                           740          -          -
                                            -------    -------    -------
Adjusted net income                         $15,073    $ 7,714    $ 5,183
                                            =======    =======    =======

Fully diluted weighted average common
  shares outstanding                         38,679     31,220     26,422
Conversion of convertible subordinated
  notes                                       3,123          -          -
                                             ------     ------     ------
Adjusted fully diluted common shares
  outstanding                                41,802     31,220     26,422
                                            =======     ======     ======
Fully diluted earnings per share            $   .36    $   .25    $   .20
                                            =======    =======    =======




                                      F-21



   67




10.   STOCKHOLDERS' EQUITY

      Preferred Stock -

      The Company has authorized 1,000,000 shares of $1 par value preferred
      stock.

      In December 1991, the Company sold 50,000 shares of Series A preferred
      stock for $5,000,000. The preferred stock earned dividends at 8.5% and
      were paid quarterly from January 31, 1993 through June 23, 1994. Each
      share of the Series A preferred stock was convertible into 28 shares of
      common stock. In June 1994, the Series A preferred stock was converted at
      par value into 1,400,000 shares of common stock. At December 31, 1995, no
      preferred stock was issued or outstanding.

      Stock Split -

      On October 4, 1995, the Board of Directors declared a two-for-one stock
      split of the Company's common stock to be effective on October 31, 1995.
      An amount equal to the par value of the common shares outstanding as of
      October 31, 1995, was transferred from additional paid-in capital to the
      common stock account. All references to number of shares and to per share
      data in the consolidated financial statements have been adjusted for this
      stock split.

      Stock Warrants -

      The Company has issued stock warrants to certain affiliated and
      unaffiliated parties for providing certain financing, consulting and
      brokerage services to the Company and to stockholders as a dividend. Stock
      warrants outstanding at December 31, 1995 are as follows:



      DATE OF              NUMBER OF             EXERCISE             EXPIRATION
     ISSUANCE              WARRANTS                PRICE                 DATE
    ----------             ---------             --------             ----------
                                                                  
        6/22/92               73,314       $8.50/share                    9/14/97
         9/4/92            1,935,777       $8.50/share                    9/14/97
        12/2/92               43,988       $8.50/share                    9/14/97
        4/30/93               98,038       $8.50/share                    9/14/97
        6/23/94            1,100,000       $15.80/share                  12/31/98



      Each warrant entitles the warrant holder to two common shares upon
      exercise. The warrants are exercisable from date of issuance except for
      the warrants issued June 22, 1992, September 4, 1992 and December 2, 1992,
      which were exercisable beginning April 30, 1993.

      In 1995, 268,138 warrants were exercised at prices ranging from $7.14 to
      $8.50 per share. In 1995, the Company purchased 60,000 warrants at the
      market price of $18 per share from a warrant holder. In 1994, 185,242
      warrants were exercised at prices ranging from $2.83 to $8.50 per share.

                                      F-22
   68





      Stock Option Plans -

      The Company has incentive and nonqualified stock option plans under which
      options may be granted to "key employees" as designated by the Board of
      Directors. The options are granted with exercise prices that equal market
      value on the date of grant. The options are exercisable after the later of
      two years from date of employment or one year after the date of grant
      until ten years after the date of the grant.

      The Company's Board of Directors approved a stock repurchase program for
      up to an aggregate of 200,000 shares of the Company's stock for the
      purpose of funding the employee stock options, stock ownership and stock
      award plans.

      Stock option transactions relating to the Company's incentive and
      nonqualified stock option plans are summarized below (in thousands, except
      per share amounts):



                                                                                 DECEMBER 31,
                                                                  ---------------------------------------------------

                                                                  1995                  1994                   1993
                                                                -------               --------               --------  
                                                                                                      
Outstanding at beginning of period                                1,735                 3,191                  2,655
Granted                                                             624                    89                    673
Exercised                                                          (377)               (1,530)                  (130)
Canceled                                                            (24)                  (15)                    (7)
                                                                 ------                ------                 ------
Outstanding at end of period                                      1,958                 1,735                  3,191
                                                                 ======                ======                 ======
Available for future grant                                        1,909                   510                    558
                                                                 ======                ======                 ======      
Exercisable                                                       1,340                 1,693                  2,523
                                                                 ======                ======                 =======
Option price range                                               $ 2.08                $ 1.93                 $  .10
                                                                   TO                     to                    to
                                                                 $29.25                $ 8.32                 $ 5.99



      In addition to the plans mentioned above, the Company has a nonqualified
      stock option plan to encourage stock ownership by selected employees of
      the Company. Pursuant to the plan, stock options may be granted to key
      employees upon authorization by the Board of Directors. The aggregate
      number of options that may be granted under the plan is 720,000. As of
      December 31, 1995, 360,000 options were outstanding at option prices
      ranging from $2.71 to $3.33 per share. Subsequent to December 31, 1995,
      240,000 of these options were exercised.

      During 1995, the Company agreed to issue 168,512 shares of common stock to
      certain key employees as a deferred stock award. The award becomes fully
      vested ten years from the date of grant based on continuous employment
      with the Company. The Company is expensing the $3,670,000 of awards over
      the vesting period.


                                      F-23
   69




      In October 1995, the FASB issued SFAS 123, "Accounting for Stock-Based
      Compensation." This statement requires new disclosures in the notes to the
      financial statements about stock-based compensation plans based on the
      fair value of equity instruments granted. Companies also may base the
      recognition of compensation cost for instruments issued under stock-based
      compensation plans on these fair values. The Company anticipates adopting
      SFAS 123 effective January 1, 1996, but currently does not plan to change
      the method of accounting for these plans.

      Employee Stock Ownership Plan -

      The Company has an Employee Stock Ownership Plan whereby each employee of
      the Company who is at least 18 years of age is eligible for membership in
      the plan as of January 1 of their first anniversary year in which they
      have completed at least 1,000 hours of service.

      Benefits, which become 40% vested after four years of service and 100%
      vested after five years of service, are paid on death, retirement or
      termination. The Board of Directors has discretion in establishing the
      amount of the Company contributions. The Company's contributions to the
      plan may be in the form of common stock, cash or other property.
      Contributions to the plan amounted to $1,366,000, $1,059,000 and $915,000
      for the years ended December 31, 1995, 1994 and 1993, respectively.

11.   REVENUES AND EXPENSES

      Approximately 99% of the Company's revenues for the years ended December
      31, 1995, 1994 and 1993, relate to amounts earned from federal, state and
      local governmental management and transportation contracts.

      The Company had revenues of 23%, 17% and 22% from the federal government
      and 49%, 54% and 51% from state governments for the years ended December
      31, 1995, 1994 and 1993, respectively. One state government had revenues
      of 18%, 24% and 24% for the years ended December 31, 1995, 1994 and 1993,
      respectively. In addition, another state government had revenues of 11%
      and 10% for the years ended December 31, 1994 and 1993, respectively.

      Accounts receivable include $37,057,000 and $23,570,000 due from federal,
      state and local governments at December 31, 1995 and 1994, respectively.
      Accounts receivable and accounts payable at December 31, 1995 consisted of
      the following (in thousands):




                                                      ACCOUNTS           
                                                     RECEIVABLE          PAYABLE
                                                     ----------          --------

                                                                     
   Trade                                            $32,544            $ 7,267
   Construction                                       4,513              3,490
   Other                                              2,604                  -
                                                    -------            -------
                                                    $39,661            $10,757
                                                    =======            =======



      Salaries and related benefits represented 58%, 55% and 54% of operating
      expenses for the years ended December 31, 1995, 1994 and 1993,
      respectively.

                                      F-24
   70


12.   INTERNATIONAL ALLIANCE

      The Company has entered into an International Alliance (the "Alliance")
      with Sodexho to pursue prison management business outside the United
      States, Australia and the United Kingdom. In conjunction with the
      Alliance, Sodexho purchased an equity position in the Company by acquiring
      several instruments. In 1994, the Company sold Sodexho 1,400,000 shares of
      common stock at $7.50 per share and a $7,000,000 convertible subordinated
      note bearing interest at 8.5%. Sodexho also received 1,100,000 warrants at
      $15.80 per warrant that expire December 1998. Each warrant entitles
      Sodexho to two common shares upon exercise. In consideration of the
      placement of the aforementioned securities, the Company agreed to pay
      Sodexho $3,960,000 over a four-year period ending in 1998. These fees
      include debt issuance costs and private placement equity fees. These fees
      have been allocated to the various instruments and are charged to debt
      issuance costs or equity as the respective financings are completed.
      Sodexho is subject to a standstill agreement that limits their ownership
      to 25% in the Company and has certain preemptive rights to retain its
      percentage ownership.

      In 1995, Sodexho purchased 545,000 shares of common stock for $15.25 per
      share pursuant to their contractual preemptive right. Also during 1995,
      the Company and Sodexho entered into a forward contract whereby Sodexho
      would purchase up to $20,000,000 of convertible subordinated notes at any
      time prior to December 1997. The notes will bear interest at LIBOR plus
      1.35% and will be convertible into common shares at a conversion price of
      $13.65 per share.

13.   RELATED PARTY TRANSACTIONS

      The Company had a note receivable from its chief executive officer of
      $100,000 at December 31, 1994. Interest at the prime rate plus 1% is
      charged annually. The note was repaid in 1995.

      TransCor and Concept had notes payable to stockholders of $100,000 at
      December 31, 1994. The Companies repaid notes payable to stockholders of
      $100,000 and $403,000 in 1995 and 1994, respectively. Interest expense
      totaled approximately $3,000 and $34,000 on notes payable to stockholders
      in 1995 and 1994, respectively.

      The Company pays legal fees to a law firm of which one of the partners is
      a stockholder and a member of the Board of Directors of the Company. Legal
      fees, including fees related to the Company's mergers and acquisitions,
      paid to the law firm amounted to $675,069 and $140,025 in 1995 and 1994,
      respectively.



                                      F-25
   71






14.   COMMITMENTS AND CONTINGENCIES

      The Company leases certain office space and equipment under long-term
      operating leases expiring through 2001. Rental expense was approximately
      $5,904,000, $3,490,000 and $2,237,000 for the years ended December 31,
      1995, 1994 and 1993, respectively.

      Minimum rental commitments for noncancelable leases are as follows (in
thousands):



       YEAR                                                    AMOUNT
      ------                                                  --------
                                                                         
       1996                                                   $2,075
       1997                                                    2,089
       1998                                                    1,833
       1999                                                      715
       2000                                                      347


      The nature of the Company's business results in claims and litigation
      alleging that the Company is liable for damages arising from the conduct
      of its employees or others. In the opinion of management, there are no
      pending legal proceedings that would have a material effect on the
      consolidated financial position or results of operations of the Company.

      The Company has an employment agreement with its chief executive officer
      through September 30, 1997. The agreement includes a non-compete agreement
      covering the same period and requires payments during the period if
      employment is terminated. The Company also has other employment
      agreements, with similar non-compete agreements and payments, with
      officers of the Company that terminate from December 31, 1996 to December
      31, 1999.

      Each of the Company's management contracts and the statutes of certain
      states require the maintenance of insurance. The Company maintains various
      insurance policies including employee health, workers' compensation and
      general liability insurance. These policies are fixed premium policies
      with various deductible amounts that are self-funded by the Company.
      Reserves are provided for estimated incurred claims within the deductible
      amounts.



                                      F-26
   72




      The Company guarantees $263,000 of a performance bond for CC Australia.
      The Company has provided a $1,000,000 performance bond in connection with
      UKDS's management contract with the United Kingdom. The amount provided is
      proportional to the Company's ownership interest in UKDS.

      The Company also has letters of credit outstanding on its credit facility
      as mentioned in Note 7. In connection with the construction and
      development of certain facilities, the Company caused a U.S. Bank (the
      "Bank") to issue two letters of credit totaling $59,500,000. The letters
      of credit support certain industrial development bonds, the proceeds of
      which were used to construct such facilities. The Company guaranteed to
      the Bank the repayment in full of any amounts drawn on such letters of
      credit as a result of a default under the related bonds. In the event the
      Company is required to fund amounts pursuant to these guarantees then the
      Company will obtain ownership rights to these facilities. The Company's
      reimbursement obligations are secured by all of the collateral that
      secures the Company's line of credit facility with the Bank described in
      Note 7 and are cross-defaulted with such credit facility.

15.   EVENT SUBSEQUENT TO DECEMBER 31, 1995 (UNAUDITED)

       On February 29, 1996, the Company sold $30,000,000 of convertible notes
   bearing interest at 7.5%. The Company used the proceeds to repay the
   principal outstanding under the Company's bank loan and line of credit
   (balances of $12,580,000 and $14,500,000, respectively, at December 31,
   1995).

                                      F-27
   73
ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

                  There have been no disagreements with the Company's
accountants on any matter of accounting principles and practices or financial
statement disclosures. Arthur Andersen LLP was selected to serve in such
capacity during the fiscal year 1995 and has been selected to serve in such
capacity during the fiscal year 1996.

                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

                  The information required by this item will appear in, and is
incorporated by reference from, the sections entitled "Proposals for Stockholder
Action - Proposal 1. Election of Directors" and "Management - Directors and
Executive Officers" included in the Company's definitive Proxy Statement
relating to the 1996 Annual Meeting of Stockholders, which will be filed with
the Securities and Exchange Commission pursuant to Regulation 14A.


ITEM 11.          EXECUTIVE COMPENSATION

                  The information required by this item will appear in the
sections entitled "Executive Compensation", included in the Company's definitive
Proxy Statement relating to the 1996 Annual Meeting of Stockholders, which
information, other than the Compensation Committee Report and Performance Graph
required by Items 402(k) and (l) of Regulation S-K, is incorporated herein by
reference.

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

                  The information required by this item will appear in, and is
incorporated by reference from, the section entitled "Security Ownership of
Directors, Officers and Principal Stockholders" included in the Company's
definitive Proxy Statement relating to the 1996 Annual Meeting of Stockholders,
which will be filed with the Securities and Exchange Commission pursuant to
Regulation 14A.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  The information required by this item will appear in, and is
incorporated by reference from, the sections entitled "Certain Relationships and
Related Transactions" included in the Company's definitive Proxy Statement
relating to the 1996 Annual Meeting of Stockholders, which will be filed with
the Securities and Exchange Commission pursuant to Regulation 14A.

                                   PART IV

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
                  FORM 8-K

            (a)   The following documents are filed as part of this Report:

                  (1)  Financial Statements.
                       No financial statements have been filed with this
                       Form 10-K other than those incorporated by reference
                       in Item 8.

                  (2)  Financial Statement Schedules.
                       All schedules specified in the accounting regulations of
                       the Securities and Exchange Commission have been omitted
                       because they are either inapplicable or are not
                       required.

                  (3)  The Exhibits are listed in the Index of Exhibits
                       Required by Item 601 of Regulation S-K included
                       herewith, which is incorporated herein by reference.


            (b)   No reports on Form 8-K were filed during the last quarter of
                  the period covered by this Report.

            (c)   Certain Exhibits. See Item 14(a)(3) above.

            (d)   Certain Financial Statements. See Item 14(a) (1 and 2) above.


                                       45


   74






                               INDEX OF EXHIBITS

         Exhibits marked with an * are filed herewith.  Exhibits following
exhibit number 10(kkkkk) are numbered beginning with 10.100.  Other exhibits
have previously been filed with the Commission and are incorporated herein by
reference.  Exhibits marked with + are management contracts filed pursuant to
Item 601(b)(10) of Regulation S-K.  Effective December 31, 1995, contracts or
amendments to contracts relating to a particular individual facility operated
by the Company will not be included herewith as such contracts are made in the
ordinary course of the Company's business and are not required by Item
601(b)(10) of Regulation S-K.  Exhibits marked with a ## are compensation plans
required to be filed pursuant to Item 601(b)(10) of Regulation S-K.

        
Exhibit                                                              
Number                       Description                            
                                                                              


3(a)             Certificate of Incorporation of the Company. (1)

3(b)             Amended and Restated By-Laws of the Company. (4)

3(c)             Certificate of Designation relating to the Series A Preferred
                 Stock. (14)

3(d)*            Certificate of Amendment to the Certificate of Incorporation
                 of the Company dated May 26, 1995.

4(a)             Form of 8.5% Convertible Subordinated  Note due November 7,
                 1999 made payable to Toronto Dominion Investments, Inc. in the
                 aggregate principal amount of $7,000,000.  (12)

4(b)             Form of 8.5% Convertible Subordinated Notes in the aggregate
                 principal amount of $4,000,000, together with a schedule
                 identifying the respective holders, execution dates, maturity
                 dates, principal amounts, and conversion prices thereof.  (12)

4(c)             Form of 11.08% Senior Secured Notes, in the aggregate
                 principal amount of $20,000,000, due November 30, 2000 made
                 payable to Teachers Insurance and Annuity Association of
                 America, Massachusetts Mutual Life Insurance Company,
                 Massmutual Corporate Investors and Massmutual Participation
                 Investors.  (13)

4(d)             Form of Warrant for the purchase of common stock of the
                 Company, expiring November 30,2000 issued to Teachers
                 Insurance and Annuity Association of America, Massachusetts
                 Mutual Life Insurance Company, Massmutual Corporate Investors
                 and Massmutual Participation Investors.  (13)



   75





Exhibit                                                              
Number                       Description                            
                                                                     


4(e)             Stock Purchase Agreement, dated as of December 23, 1991,
                 relating to the shares of Series A Preferred Stock issued to
                 General Electric Capital Corporation and related Registration
                 Rights Agreement and Certificate of Designation. (14)

4(f)             8.5% Convertible Extendable Subordinated Notes originally due
                 September 30, 1998, dated as of June 22, 1992 in the aggregate
                 principal amount of $2,500,000, made payable to Pacific Mutual
                 Life Insurance Company and PM Group Life Insurance Company.
                 (16)

4(g)             8.5% Convertible Extendable Subordinated Notes originally due
                 September 30, 1998, dated as of December 2, 1992 in the
                 aggregate principal amount of $1,500,000, made payable to
                 Pacific Mutual Life Insurance Company and PM Group Life
                 Insurance Company. (16)

4(h)             Warrant Agreement, dated August 21, 1992, by and between the
                 Company and First Union National Bank of North Carolina
                 relating to the warrants described in Exhibit 4(i) (15).

4(i)             Form of Warrant Certificate issued to the Company's
                 shareholders of record on September 4, 1992. (15)

4(j)             Form of Stock Purchase Warrant for the purchase of Common
                 Stock issued to the respective holders set forth in the
                 schedule attached thereto, together with the execution dates,
                 exercise prices and number of underlying shares. (16)

4(k)             Stock Purchase Warrants for the purchase of Common Stock of
                 the Company issued to the respective holders set forth in the
                 schedule attached thereto, together with the execution dates,
                 exercise prices and number of underlying shares. (16)

4(l)             8.5% Convertible Extendable Subordinated Notes originally due
                 September 30, 1998, dated as of April 29, 1993 in the
                 aggregate principal amount of $2,500,000, made payable to
                 Pacific Mutual Life Insurance Company and PM Group Life
                 Insurance Company.(17)

4(m)             Stock Purchase Warrants for the purchase of Common Stock of
                 the Company issued to Pacific Mutual Life Insurance Company
                 and PM Group Life Insurance Company on April 29, 1993.(17)


   76


Exhibit                                                            
Number                       Description                           
                                                                     

4(n)             Amendment No. 1 to Warrant Agreement dated August 31, 1993 by
                 and between the Company and First Union National Bank of North
                 Carolina relating to the Warrants described on Exhibit
                 (i).(17)

4(o)             8.5% Convertible Subordinated Note due November 7, 1999 made
                 payable to Sodexho S.A. in the aggregate principal amount of
                 $7,000,000.(18)

4(p)             Stock Purchase Warrant for the purchase of Common Stock of the
                 Company issued to Sodexho, S.A. on June 23, 1994.(19)

4(q)*            Warrant Repurchase Agreement, dated February 1, 1995, between
                 First Union National Bank of Tennessee and the Company.

4(r)*            Form of Amended 8.5% Convertible Extendable Subordinated Notes
                 originally due September 30, 1998, dated as of June 22, 1992
                 in the aggregate principal amount of $2,500,000, made payable
                 to Cudd & Co. and Atwell & Co. (Original Exhibit No. 4(f)).

4(s)*            Form of Amended 8.5% Convertible Extendable Subordinated Notes
                 originally due September 30, 1998, dated as of December 2,
                 1992 in the aggregate principal amount of $1,500,000, made
                 payable to Cudd & Co. and Atwell & Co. (Original Exhibit No.
                 4(g)).

4(t)*            Form of Amended 8.5% Convertible Extendable Subordinated Notes
                 originally due September 30, 1998, dated as of April 29, 1993
                 in the aggregate principal amount of $3,500,000, made payable
                 to Cudd & Co. and Atwell & Co. (Original Exhibit No. 4(l).

4(u)*            Form of 7.5% Convertible, Subordinated  Note due February 28,
                 2002 made payable to PMI Mezzanine Fund, L.P. in the aggregate
                 principal amount of $30,000,000.


   77


Exhibit                                                             
Number                       Description                            
                                                                     


10(c) ##         Corrections Corporation of America Stock Option Plan dated
                 January 23, 1985, as amended by First Amendment to Corrections
                 Corporation of America Stock Option Plan, together with forms
                 of Incentive Stock Option Agreement and Non-Qualified Stock
                 Option   Agreement. (1)

10(d) ##         Non-Qualified Stock Option Plan of the Company, dated January
                 16, 1986, and related form of Non-Qualified Stock Option
                 Agreement. (1)

10(e) ##         Corrections Corporation of America 1988 Flexible Stock Option
                 Plan. (7)

10(f)            Loan Agreement, dated July 1, 1985, between the Company and
                 the Industrial Development Board of the City of Memphis and
                 County of Shelby, Tennessee, relating to $6,000,000 Industrial
                 Revenue Bonds, Series A (Corrections Corporation of America
                 Project) 1985, related Trust Indenture and related Guaranty,
                 dated July 1, 1985, between the Company and Commerce Union
                 Bank. (1)

10(k)            Consulting Agreement, dated January 5, 1984, between the
                 Company and Massey Burch Investment Group, Inc., as amended.
                 (1)

10(l)+           Bay County Detention Facilities Contract between the Company
                 and Bay County, Florida, dated September 3, 1985, together
                 with letter of compliance, dated July 23, 1986. (1)

10(m)+           Contract between the Company and The County of Shelby,
                 Tennessee (Tall Trees), dated January 25, 1984 as amended
                 April 15, 1985, and related Lease Agreement dated January 25,
                 1984. (1)

10(n)+           Contract between the Company and The County of Shelby,
                 Tennessee and related Lease Agreement, each dated April 15,
                 1985. (1)

10(o)+           Hamilton County, Tennessee Corrections Facilities Agreement by
                 and among the Company, Hamilton County, Tennessee, and Dalton
                 Roberts, County Executive, dated September 20, 1984. (1)

10(q)+           Contract between the Company and the United States of America
                 dated October 5, 1984, as amended, relating to Laredo, Texas
                 facility. (1)


   78


Exhibit                                                              
Number                       Description                            
                                                                     


10(r)+           Contract between the Company and the United States of America,
                 dated October 6, 1983, relating to the Houston, Texas
                 facility. (1)

10(s)+           Management and Services Contract and Lease, dated August 6,
                 1986, between the Company and Santa Fe County, New Mexico. (1)

10(t)            First Amendment to Loan Agreement, dated July 1, 1985 between
                 the Company and the Industrial Development Board of the City
                 of Memphis and County of Shelby, Tennessee. (2)

10(u)            Contract between the Company and Education Corporation of
                 America, dated May 26, 1986. (2)

10(v)            Memorandum of Understanding regarding privatization of
                 France's penitentiary system. (2)

10(y)            First Amendment to Consulting Agreement between the Company
                 and Massey Burch Investment Group, Inc. (3)

10(z)            Loan Agreement, dated November 1, 1986,  between the Company
                 and Bay County, Florida relating to $4,500,000 Bay County,
                 Florida  Industrial Development Correctional  Facilities
                 Revenue Bonds, Series A (Corrections Corporation of America
                 Project) and related Indenture of Trust. (5)

10(aa) ##        Second Amendment to Corrections Corporation of America Stock
                 Option Plan of Company, dated March 27, 1987, together with
                 form of Incentive Stock Option Agreement. (6)

10(bb)+          Contract for Pre-Parole Transfer Program  Services, dated July
                 3, 1987, by and between the Company and the Texas Board of
                 Pardons and Paroles, as extended for an additional period of
                 one year, on October 20, 1987. (9)

10(ee)           Joint Venture Agreement, dated August 27, 1986, by and among
                 the Company, Jean-Louis Vullierme and Pierre
                 Dejardin-Verkinder. (9)



   79


Exhibit                                                           
Number                       Description                           
                                                                     


10(ff)           Shareholders' Agreement (the "COGESIP Agreement"), dated
                 November 7, 1986, by and between the Company, Spie
                 Batignolles, S.A. ("Spie") and Banque Worms, relating to the
                 formation of Compagnie de Gestion de Systemes d'Interet
                 Public, S.A. ("COGESIP"). (9)

10(gg)           Agreement, dated December 18, 1986 by and among the Company,
                 Spie, Banque Worms and Lyonnaise des Eaux, S.A. ("Lyonnaise"),
                 relating to the admission of Lyonnaise as a participant in
                 COGESIP. (9)

10(hh)           Letter Agreement, dated December 18, 1986, by and among the
                 Company, Spie, Banque Worms and Lyonnaise, evidencing the
                 agreement of Lyonnaise to be joined as a party to the COGESIP
                 Agreement. (9)

10(ii)           Memorandum of Understanding, dated August 27, 1987, by and
                 among the Company, Jean-Louis vullierme and Pierre
                 Dejardin-Verkinder. (9)

10(jj)           Agreement, dated August 31, 1987, by and among the Company,
                 Spie, Lyonnaise and Banque Worms. (9)

10(kk)           Memorandum, dated January 19, 1988, by and among the Company,
                 CCA International, Inc., Sir Robert McAlpine & Sons Limited
                 and John Mowlem & Company PLC. (9)

10(ll)           Agreement, dated February 22, 1988, by and among the Company,
                 Jean-Louis Vullierme and Pierre Dejardin-verkinder. (9)

10(mm)           Agreement, dated February 22, 1988, by and between CCA
                 International, Inc. and  Initiative Industriali S.P.A. (9)

10(nn)+          Management and Services Contract for Detention Facilities,
                 dated effective as of March 1, 1988, by and between the
                 Company and Hernando County, Florida. (9)

10(qq) ##        Third Amendment to Corrections Corporation of America Stock
                 Option Plan dated March 18, 1988. (8)


   80


Exhibit                                                            
Number                       Description                           
                                                                     


10(rr)           Employment Agreement, dated July 8, 1988, by and between the
                 Company and Mr. Hutto. (11)

10(ss)+          Continuation of Contract by and between the Company and the
                 United States of America, dated October 1, 1988, relating to
                 the Houston, Texas facility.  (11)

10(uu)+          Operation and Management Services Agreement for Liberty County
                 and Johnson County Pre-Release Centers by and between the
                 Texas Department of Corrections and the Company, dated April
                 28, 1988. (11)

10(vv)+          Management Services Agreement by and between the New Mexico
                 Corrections Department and the Company, dated July 1, 1988,
                 relating to the Grants, New Mexico facility. (11)

10(ww)+          Professional Management Agreement by and between Reeves
                 County, Texas and the Company, dated August 29, 1988, relating
                 to the Reeves County, Texas facility. (11)

10(xx)           U.S. Government Lease for Real Property by and between the
                 United States of America and the Company, dated April 10,
                 1984, relating to the Houston facility. (11)

10(yy)+          Contract for Inmate Confinement between the City of Santa Fe
                 and the Company, dated July 1, 1988, relating to the Santa Fe
                 facility. (11)

10(zz) ##        Corrections Corporation of America 1989 Stock Bonus Plan. (12)

10(bbb)          Shareholders, Agreement, dated September 27, 1989, by and
                 among the Company, John Holland Holdings Limited, and Wormald
                 Security Australia Pty. Ltd., relating to the formation of
                 Corrections Corporation of Australia, Pty. Ltd. (12)

10(ccc)          Memorandum Varying Agreement, dated September 27, 1989,
                 relating to the amendment of the Shareholders' Agreement,
                 dated September 27, 1989, by and among the Company, John
                 Holland Holdings Limited, and Wormald Security Australia Pty.
                 Ltd. (12)


   81


Exhibit                                                            
Number                       Description                           
                                                                     


10(ddd)+         Contract, dated October 10, 1989, by and between Corrections
                 Corporation of Australia Pty. Ltd. and the Queensland
                 Corrective Services Commission, relating to the operation and
                 management of the Borallon Correctional Centre. (12)

10(eee)          Letter of Guaranty, dated October 27, 1989, between the
                 Company and National Australia Bank Limited, relating to the
                 guaranty by the Company of certain advances made by National
                 Australia Bank Limited to Corrections Corporation to
                 Australia,  Pty. Ltd. (12)

10(fff)          Assignment and Assumption Agreement, dated March 2, 1990, by
                 and between the Company and Esmor, Inc.'s relating to the
                 assignment of Esmor, Inc.'s leasehold interest in real
                 property located in San Diego County, California   and the
                 assignment of Esmor Inc.'s contract with the Immigration and
                 Naturalization Service for the construction and operation of
                 an INS Detention Facility. (12)

10(ggg)+         Management Services Contract, dated February 1, 1990, by and
                 between the Company and the State of Louisiana, Department of
                 Public Safety and Corrections, relating to the Winn Parish,
                 Louisiana facility. (12)

10(hhh)+         Letter Agreement, dated December 27, 1989, From the Company to
                 the Immigration and Naturalization Service, relating to the
                 continuation of services at the Laredo, Texas facility. (12)

10(iii)+         Letter Agreement, dated December 27, 1989, between the Company
                 and the Immigration and Naturalization Service, relating to
                 the continuation of services at the Houston, Texas facility.
                 (12)

10(jjj)+         Management and Services Contract and Lease, dated August 6,
                 1989, by and between the Company and the Board of
                 Commissioners of Santa Fe County, relating to the management
                 of the Santa Fe, New Mexico facility. (12)

10(mmm) ##       First Amendment to Corrections Corporation of America 1988
                 Flexible Stock Option Plan, dated June 8, 1989. (12)

10(nnn) ##       First Amendment to the Corrections Corporation of America
                 Non-Qualified Stock Option Plan, dated June 8, 1989. (12)





   82


Exhibit                                                              
Number                       Description                            
                                                                     


10(ooo)          Amendment, dated September 16, 1989, to Employment Agreement,
                 dated July 8, 1988, between the Company and Mr. Hutto. (12)

10(ppp)+         Agreement, dated October 26, 1990, between the Texas
                 Department of Criminal Justice Pardons and Paroles Division,
                 relating to the Houston Texas facility. (13)

10(qqq)+         Management Services Contract, dated July 30, 1990, between The
                 City of Mason and the Company, relating to the management of
                 the facility in The City of Mason, Tipton County, Tennessee,
                 and all amendments and documents related thereto, including
                 that certain Assignment dated December 12, 1990 by the City of
                 Mason of its rights under the Contract between the City of
                 Mason and the U.S. Marshals Service. (13)

10(rrr)+         Design, Construction and Management Services Contract, dated
                 October 10, 1990, between The Metropolitan Government of
                 Nashville and Davidson County and the Company, relating to the
                 Deberry, Davidson County, facility. (13)

10(sss)          Management Services Contract, dated November 9, 1990, between
                 The County of Torrance and the Company, relating to the
                 management of the Torrance County, New Mexico facility. (13)

10(ttt)          Loan Agreement, dated June 21, 1990, by and between the
                 Company and Dominion Bank of Middle Tennessee, relating to a
                 loan in the aggregate principal amount of up to $7,000,000;
                 Promissory Note; Security Agreement; and Deed of Trust and
                 Security  Agreement, as amended by First Amendment to Loan
                 Agreement dated March 7, 1991. (13)



   83


Exhibit
Number                       Description
                                                                     


10(uuu)          Note Purchase Agreement, dated as of December 6, 1990, by and
                 among the Teachers Insurance and Annuity Association of
                 America, Massachusetts Mutual Life Insurance Company,
                 Massmutual Corporate Investors, Massmutual Participation
                 Investors, and the Company, relating to  the issuance of notes
                 in the aggregate  principal amount of $20,000,000; Security
                 Agreement; Trust Agreement; Collection  Account Agreement; and
                 Deed of Trust, as  amended by First Amendment to Note Purchase
                 Agreement dated March 21, 1991. (13)

10(vvv)+         Award/Contract, dated July 1, 1990 by and between the U.S.
                 Marshals Service and CDC/CCA, a joint venture, relating to
                 services at a proposed facility at Leavenworth, Kansas, and
                 related assignment and novation agreements. (13)

10(www)          Agreement of Purchase and Sale of Assets,  dated May 28, 1991,
                 by and among P.B.I. Schools, Inc., Pontiac Business
                 Institute-Oxford, Inc., Howard Weaver and Technical and
                 Business Institute of America, Inc., a wholly-owned subsidiary
                 of the Company, and   related Bill of Sale, Assignment of
                 Accounts Receivable and Promissory Note. (14)

10(yyy)+         Pardons and Paroles Division Pre-Parole Transfer Facility
                 Management and Operations Agreement, dated August 20, 1991, by
                 and between the Company and the Texas Department of Criminal
                 Justice, Pardons and Parole Division, relating to the Houston,
                 Texas facility. (14)

10(zzz)          Agreement dated January 10, 1991 by and between the Company
                 and Correctional Development Corporation ("CDC"), Assignment
                 and Assumption, Termination of Joint Venture, Indemnification
                 and Hold Harmless, and Waiver Agreement, dated as of February
                 20, 1991 between the Company and CDC, and related Novation
                 Agreement, dated as of February 20, 1991, by and among the
                 Company, CCA/CDC Joint Venture and the United States.(17)

10(aaaa)+        Operation and Management Services Agreement, Liberty County
                 and Johnson County Pre-Release Centers, by and between Texas
                 Department of Criminal Justice Institutional Division and the
                 Company, dated September 1, 1991. (14)



   84


Exhibit
Number                       Description 
                                                                     


10(bbbb)                  Standard Transfer Form, dated September 8, 1991,
                          between the Company and Houghton Holdings Limited
                          (formerly John Holland  Holdings Limited) relating to
                          the purchase by the Company of 7,500 shares in
                          Corrections Corporation of Australia Pty. Ltd. and
                          related Amended and Restated Letter of Guaranty. (14)

10(cccc)+                 Contract, dated September 18, 1991, by and between
                          The Immigration and Naturalization Service and the
                          Company relating to the Houston, Texas facility. (14)

10(dddd)+                 Contract, dated December 20, 1991, by and between The
                          Immigration and Naturalization  Service and the
                          Company relating to the Laredo, Texas facility. (14)

10(eeee)+                 Contract, dated January 24, 1992, by and between the
                          State of Tennessee Department of Correction and the
                          Company relating to  the Wayne County facility, and
                          related addendums. (14)

10(ffff)+                 Addendum to Management Services Contract for
                          Detention Facilities between Hernando County, Florida
                          and the Company, dated  January 28, 1992. (14)

10(gggg)+                 Modification, dated February 21, 1992, to the Design,
                          Construction and Management Services Contract between
                          the Company and The Metropolitan Government of
                          Nashville and Davidson County.  (14)

10(hhhh)                  Amendment dated March 26, 1992 to the Note Purchase
                          Agreement described in Exhibit 10(uuu).  (14)

10(iiii) ##               Corrections Corporation of America Amended and
                          Restated Employee Stock Ownership Plan.(14)

10(jjjj)                  Loan Agreement, dated March 17, 1992, by and between
                          the Company and Canada Life Assurance Company,
                          relating to a loan in the aggregate principal amount
                          of $6,500,000; Promissory Note; First Mortgage and
                          Security Agreement, and Assignment of Lease, Rents,
                          Management and Securities Agreement. (16)

10(kkkk)                  Amended and Restated Loan Agreement, dated as of
                          December 22, 1992 by and between the Company and
                          First Union National Bank of



   85


Exhibit                                                              
Number                       Description                            
                                                                     


                          Tennessee, relating to a loan in the aggregate
                          principal amount of $5,000,000; Third Amended and
                          Restated Working Capital Note; First Amendment to
                          Line of Credit Property Deed of Trust, Security
                          Agreement and Financing Statement. (16)

10(llll)                  Third Amendment to Loan Agreement, dated February 26,
                          1992, by and between the Company and Dominion Bank of
                          Middle Tennessee. (16)

10(mmmm)                  Fourth Amendment to Loan Agreement, dated June 5,
                          1992, by and between the Company and Dominion Bank of
                          Middle Tennessee. (16)

10(nnnn)                  Employment Agreement, dated as of September 28, 1992,
                          between the Company and Doctor R. Crants.  (16)

10(oooo)                  Amended and Restated Promissory Note, dated November
                          6, 1992, executed by Doctor R. Crants, to the order
                          of the Corporation in the aggregate principal amount
                          of $300,000. (16)

10(pppp)                  Amendment dated June 26, 1992 to Note Purchase
                          Agreement described in Exhibit 10(uuu). (16)

10(qqqq)+                 Addendum to the Management and Services Contract for
                          Detention Facilities between the Company and Hernando
                          County, Florida, dated January 28, 1992. (16)

10(rrrr)                  Notice of Termination, dated June 18, 1992, from the
                          Company relating to the termination of the contract
                          between the State of Tennessee Department of Youth
                          Development and the Company for the management of the
                          Mountain View Youth Development Center, effective
                          December 31, 1992. (16)

10(ssss)+                 Amendment No. 4 to the Management and Services
                          Contract and Lease between the Company and Santa Fe
                          Board of County Commissioners, dated August 6, 1992.
                          (16)

10(tttt)+                 Heads of Agreement, dated November 27, 1992, between
                          the Secretary of State for the Home Department of 50
                          Queen Anne's Gate London SW1H 9AT and UK Detention
                          Services Limited relating to the Blakenhurst
                          facility. (16)


   86


Exhibit                                                              
Number                       Description                            
                                                                     



10(uuuu)+                 Contract Amendment No. 2 to the Management Service
                          Contract, dated December 14, 1992 between the Company
                          and the State of Louisiana, Department of Public
                          Safety and Corrections relating to the Winn Parish
                          facility. (16)

10(vvvv)+                 Management and Operations Agreement, dated December
                          22, 1992 between the Company and Texas Department of
                          Criminal Justice, Pardons and Paroles Division
                          relating to the Houston, Texas facility. (16)

10(wwww)+                 Renewal Option Exercise, dated February 11, 1993 of
                          the Immigration and Naturalization Service, relating
                          to the continuation of services at the Laredo, Texas
                          facility. (16)

10(xxxx)+                 Renewal Option Exercise, dated February 11, 1993 of
                          the Immigration and Naturalization Service, relating
                          to the continuation of services at the Houston, Texas
                          facility. (16)

10(yyyy) ##               Corrections Corporation of America Non-Employee
                          Director Stock Option Plan.(17)

10(zzzz) ##               Employment Agreement, dated as of April 1, 1994, by
                          and between the Company and T. Don Hutto.(17)

10(aaaaa)                 Stock Repurchase Agreement, dated April 1, 1993 by
                          and between the Company and Doctor R.  Crants.(17)

10(bbbbb)                 First Amendment to Amended and Restated Loan
                          Agreement, dated April 30, 1993, by and between the
                          Company and First Union National Bank of Tennessee;
                          Overadvance Credit and Term Note; Real Property Deed
                          of Trust, Security Agreement and Financing
                          Statement.(17)


   87


Exhibit                                                              
Number                       Description                            
                                                                     

10(ccccc)                 Notice of Redemption, Special Warranty Deed, Bill of
                          Sale and Assignment, Lease Termination Agreement and
                          related releases, in connection with the defeasance
                          of the $12,000,000 Correctional Facilities Industrial
                          Revenue Bonds, Series 1989 (Corrections Corporation
                          of America Project).(17)

10(ddddd)                 Amendment No. 1 to the Management Services Contract
                          between the Company and the State of Louisiana,
                          Department of Public Safety and Corrections, dated
                          December 14, 1992.(17)

10(eeeee)+                Letter dated December 16, 1992 relating to the
                          renewal of the Management Services Contract between
                          the Company and the State of Louisiana, Department of
                          Public Safety and Corrections.(17)

10(fffff)+                Operation and Management Services Agreement dated
                          September 1, 1993 by and between the Company and the
                          Texas Department of Criminal Justice relating to the
                          Liberty County and Johnson County Pre-Release
                          Centers.(17)

10(ggggg)+                Extension of Management and Operations Agreement,
                          dated September 1, 1993, by and between the Company
                          and the Texas Department of Criminal Justice relating
                          to the Houston, Texas facility.(17)

10(hhhhh)+                Inmate Housing Agreement, dated September 9, 1993 by
                          and between the Company and the Texas Department of
                          Criminal Justice, Institutional Division, relating to
                          the Laredo, Texas facility.(17)

10(iiiii)+                Management and Operations Agreement dated September
                          1, 1993 by and between the Company and the Texas
                          Department of Criminal Justice, Institutional
                          Division, relating to the Houston, Texas
                          facility.(17)

10(jjjjj)+                Exercise of Contract Option, dated December 21, 1993
                          by the Immigration and Naturalization Service
                          relating to the Laredo, Texas facility.(17)


   88


Exhibit                                                              
Number                       Description                            
                                                                     


10(kkkkk)        Construction Loan and Security Agreement, dated February 28,
                 1994 by and between the Company and First Union National Bank
                 of Tennessee; Construction Loan Note; and Deed of Trust,
                 Security Agreement and Fixture Filing.(17)

10.100+          Amendment of Solicitation/Modification of Contract dated March
                 23, 1994 between the Company and the U.S. Department of
                 Justice, relating to the Laredo, Texas facility.(24)

10.101+          Management Services Agreement, dated as of March 30, 1994
                 between the Company and the Administration of Corrections of
                 the Commonwealth of Puerto Rico, Puerto Rico Public Buildings
                 Authority, relating to the Guayama, Puerto Rico facility. (24)

10.102 ##        First Amendment to Corrections Corporation of America 1991
                 Flexible Stock Option Plan dated March 11, 1994.(24)

10.103+          Intergovernmental Service Agreement effective as of April 1,
                 1994 between the Company and the United States Marshals
                 Service, relating to the Pinal County facility.(24)

10.104+          Agreement for Inmate Confinement dated April 14, 1994 between
                 the Company and New Mexico Corrections Department relating to
                 the Torrance County facility.(24)

10.105+          Emergency Contract for Inmate Confinement dated April 14, 1994
                 between the Company and New Mexico Corrections Department
                 relating to the Torrance County facility.(24)

10.106+          Agreement dated May 2, 1994 between the State of North
                 Carolina Department of Correction and the City of Mason,
                 Tennessee relating to the Mason County facility.(24)

10.107+          Amendment of Solicitation/Modification of Contract dated May
                 31, 1994 between the Company and the U.S.  Department of
                 Justice, relating to the Laredo, Texas facility.(24)

10.108+          Contract dated May 31, 1994 between the Company and The
                 Department of Services for Children, Youth and Their Families
                 relating to the Shelby Training Center.(24)



   89


Exhibit
Number                       Description
                                                                     


10.109 ##        Amendments to the Amended and Restated Corrections Corporation
                 of America Employee Savings and Stock Ownership Plan dated
                 June 3, 1994.(24)

10.110+          Modification of Intergovernmental Agreement dated June 1, 1994
                 between the Company and the U.S.  Marshals Service relating to
                 the Santa Fe Juvenile Detention Center.(24)

10.111+          Contract for Inmate Confinement dated June 1, 1994 between the
                 Company and Nambe Pueblo, New Mexico relating to the Santa Fe
                 facility.(24)

10.112           International Joint Venture Agreement, dated June 23, 1994,
                 between the Company and Sodexho, S.A.(20)

10.113           Securities Purchase Agreement, dated June 23, 1994, between
                 the Company and Sodexho, S.A., including form of 8.5% Note,
                 form of Warrant, and form of 8.75% Notes.(21)

10.114           Stockholders Agreement, dated June 23, 1994, between the
                 Company and Sodexho, S.A.(22)

10.115+          Amendment of Solicitation/Modification of Contract, dated June
                 29, 1994 between the Company and the United States Marshals
                 Service.(24)

10.116+          Contract for Inmate Confinement dated July 1, 1994 between the
                 Company and the City of Santa Fe, New Mexico.(24)

10.117+          Contract for Inmate Confinement dated July 13, 1994 between
                 the Company and Eddie County, New Mexico, relating to the
                 Torrance County facility.(24)



   90


Exhibit                                                              
Number                       Description                            
                                                                     


10.118+          Management Services Agreement, dated as of August 2, 1994
                 between the Company and the Administration of Corrections of
                 the Commonwealth of Puerto Rico, Puerto Rico Public Buildings
                 Authority, relating to the Ponce, Puerto Rico facility.(24)

10.119+          Amendment of Solicitation/Modification of Contract, dated
                 August 3, 1994 with the Department Justice Federal Bureau of
                 Prisons.(24)

10.120+          Contract for Inmate Confinement effective September 1, 1994
                 between the Company and Torrance County, New Mexico.(24)

10.121+          Contract for Inmate Confinement dated September 1, 1994
                 between the Company and Pojoaque Tribal Police, relating to
                 the Santa Fe Detention Center.(24)

10.122+          Inmate Housing Payment Agreement dated September 1, 1994
                 between the Company and the Texas Department of Criminal
                 Justice Institutional Division relating to the Houston, Texas
                 facility.(24)

10.123+          Intergovernmental Cooperative Agreement, dated September 14,
                 1994 between the Company and the United States Marshals
                 Service, relating to the Pinal County facility.(24)

10.124+          Modification of Intergovernmental Agreement, dated October 1,
                 1994 between the Company and the United States Marshals
                 Service, relating to the Pinal County facility.(24)

10.125+          Amendment of Solicitation/Modification of Contract, dated
                 October 1, 1994 between the Company and the United States
                 Marshals Service relating to the Leavenworth facility.(24)

10.126+          Memorandum of Understanding dated October 13, 1994 between the
                 Company and New Mexico Corrections Department and Torrance
                 County, New Mexico, relating to the Torrance County
                 facility.(24)

10.127+          Provider Agreement dated October 14, 1994 between the Company
                 and the Department of Youth Development relating to the Tall
                 Trees facility.(24)


   91


Exhibit                                                             
Number                       Description                            
                                                                     

10.128+          Modification of Contract dated October 20, 1994 between the
                 Company and the Department of Justice, Immigration and
                 Naturalization Service, relating to the Houston, Texas
                 facility.(24)

10.129+          Agreement, dated as of November 30, 1994 between the Company
                 and the State of Alaska doing business in Florence, Arizona
                 relating to the Pinal County facility.(24)

10.130+          Amendment of Solicitation/Modification of Contract, dated
                 December 17, 1994 of the Department of Justice/Bureau of
                 Prisons.(24)

10.131+          Modification of Contract dated December 20, 1994 between the
                 Company and the Department of Justice, Immigration and
                 Naturalization Service, relating to the Laredo, Texas
                 facility.(24)

10.132           Share Exchange Agreement by and among the Company, TransCor
                 America, Inc. and the Shareholders of TransCor America, Inc.,
                 dated December 30, 1994.(23)

10.133+          Operation and Management Services Contract between the Company
                 and The State of Florida, Correctional Privatization
                 Commission, relating to the Bay County, Florida facility.(24)

10.134+          Management and Services Contract for Detention Facilities
                 between the Company and Hernando County, Florida.(24)

10.135+          First Amendment to the Design, Construction and Management
                 Services Contract between the Company and The Metropolitan
                 Government of Nashville and Davidson County.(24)

10.136+          Contract for Juvenile Confinement effective January 1, 1995
                 between the Company and Tipton County, Tennessee.(24)

10.137+          Amendment One to the Operation and Management Services
                 Agreement Dallas County Mode II State Jail Felony Facility
                 dated February 15, 1995 between the Company and Dallas County
                 Community Supervision and Corrections Department.(24)

10.138 ##       Amended and Restated Corrections Corporation of America 1989
                 Stock Bonus Plan dated February 20, 1995.(24)


   92

Exhibit                                                              
Number                       Description                            
                                                                     


10.139           Corrections Corporation of America 1995 Employee Stock
                 Incentive Plan effective as of March 20, 1995.(26)

10.140*          Stock Purchase Agreement, dated March 31, 1995, between the
                 Company and Chubb Security Holdings Australia Limited A.C.N.
                 003 590 921.

10.141           Share Exchange Agreement, dated as of April 25, 1995, among
                 the Company, Concept Incorporated, and the Stockholders of
                 Concept Incorporated.(25)

10.142*          Note Purchase Agreement dated as of June 22, 1992, among
                 Pacific Mutual Life Insurance Company, PM Group Life Insurance
                 Company and the Company as amended by Amendment No. 1 to the
                 Note Purchase Agreement, dated as of August 25, 1992,
                 Amendment No. 2 to the Note Purchase Agreement, dated as of
                 October 29, 1992, Amendment No. 3 to Note Purchase Agreement,
                 dated as of April 29, 1993 and Amendment No. 4 to the Note
                 Purchase Agreement, dated as of April 25, 1995.

10.143*          Stock Purchase Agreement, dated as of June 9, 1995, between
                 Sodexho S.A. and the Company concerning sale of shares of
                 Corrections Corporation of Australia Pty. Ltd. A.C.N. 010 921
                 641.

10.144*          Stock Purchase Agreement, dated as of June 29, 1995, between
                 Sodexho S.A. and the Company.

10.145*          Amendment No. 1 to Securities Purchase Agreement, dated as of
                 July 11, 1995, between Sodexho S.A. and the Company.

10.146*          Amended and Restated Loan Agreement, dated as of July 13,
                 1995, between First Union National Bank of Tennessee and the
                 Company as amended by First Amendment to Amended and Restated
                 Loan Agreement dated as of September 28, 1995.

10.147*          Letter of Credit, dated July 13, 1995, issued by First Union
                 Bank of North Carolina to the Company.

10.148*          Purchase Agreement, dated July 17, 1995, between Concept
                 Incorporated and Landmark Organization Southwest, Inc.


   93

Exhibit                                                              
Number                       Description                            
                                                                     

10.149*          Purchase Agreement, dated July 17, 1995, between Concept
                 Incorporated and  U.C. Eloy, Inc.

10.150           Agreement and Plan of Merger, dated as of August 18, 1995,
                 among the Company, CMA Acquisition, Inc., CSG Acquisition,
                 Inc., Correction Management Affiliates, Inc., Correctional
                 Services Group, Inc., the shareholders of Correction
                 Management Affiliates, Inc. and the shareholders of
                 Correctional Services Group, Inc.(27)

10.151*          Shareholders' Agreement, dated as of October 17, 1995, among
                 Corrections Corporation of Australia Pty.  Ltd., the Company,
                 and Sodexho S.A.

10.152*          First Amendment to Stock Purchase Agreement, dated October 17,
                 1995, between Sodexho S.A. and the Company.

10.153*          First Amendment to Amended and Restated Corrections
                 Corporation of America 1989 Stock Bonus Plan, dated November
                 3, 1995.

10.154*          Letter of Credit, dated as of December 15, 1995, issued by
                 First Union Bank of North Carolina to the Company.

10.155*          Note Purchase Agreement, dated as of February 29, 1996,
                 between the Company and PMI Mezzanine Fund, L.P.

21.              The Company has the following six wholly-owned subsidiaries:
                 CCA International, Inc., Technical and Business Institute of
                 America, inc., TransCor America, Inc., Concept Incorporated,
                 Correction Management Affiliates, Inc. and Correctional
                 Services Group, Inc.

23.*             Consent of Experts.  
                                               
24.              Power of Attorney. 

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

(1)              Incorporated herein by reference to exhibit of same number to
                 Company's Registration Statement on Form S-1, filed August 15,
                 1986 (Reg.  No. 33-8052).


   94




(2)              Incorporated herein by reference to exhibit of same number to
                 Amendment No. 1 to the Company's Registration Statement on
                 Form S-1, filed September 19, 1986 (Reg.  No. 33-8052).

(3)              Incorporated herein by reference to exhibit of same number to
                 Amendment No. 2 to the Company's Registration Statement on
                 Form S-1, filed October 1, 1986 (Reg.  No. 33-8052).

(4)              Incorporated herein by reference to Exhibit 4(b) to the
                 Company's Registration Statement on Form S-8, filed March 16,
                 1987 (Reg.  No. 33-12503).

(5)              Incorporated herein by reference to Exhibit 10(z) to the
                 Company's Annual Report on Form 10-K with respect to the
                 fiscal year ended December 31, 1986 (File No. 0-15719).

(6)              Incorporated herein by reference to Exhibit 10(cc) to the
                 Company's Annual Report on Form 10-K with respect to the
                 fiscal year ended December 31, 1986 (File No. 0-15719).

(7)              Incorporated herein by reference to Exhibit A to the Company's
                 definitive Proxy Statement relating to the 1988 Annual Meeting
                 of Stockholders (File No. 0-15719).

(8)              Incorporated herein by reference to Exhibit B to the Company's
                 definitive Proxy Statement relating to the 1988 Annual Meeting
                 of Stockholders (File No. 0-15719).

(9)              Incorporated herein by reference to exhibit of same number to
                 the Company's Annual Report on Form 10-K with respect to the
                 fiscal year ended December 31, 1987 (File No. 0-15719).

(10)             Incorporated herein by reference to Exhibit 10(cc) to the
                 Company's Annual Report on Form 10-K with respect to the
                 fiscal year ended December 31, 1987 (File No. 0-15719).

(11)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1988 (File No. 0-15719).

(12)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1989 (File No. 0-15719).

(13)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1990 (File No. 0-15719).




   95



(14)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1991 (File No. 0-15719).

(15)             Incorporated herein by reference to Exhibit 1 to the Company's
                 Registration Statement on Form 8-A, filed August 21, 1992
                 (File No. 0-15719).

(16)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1992 (File No. 0-15719).

(17)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1993 (File No. 0-15719).

(18)             Incorporated herein by reference to Exhibit 2 to the Company's
                 Report on Form 8-K filed June 30, 1994 (File No. 0-15719).

(19)             Incorporated herein by reference to Exhibit 2 to the Company's
                 Report on Form 8-K filed June 30, 1994 (File No. 0-15719).

(20)             Incorporated herein by reference to Exhibit 1 to the Company's
                 Report on Form 8-K filed June 30, 1994 (File No. 0-15719).

(21)             Incorporated herein by reference to Exhibit 2 to the Company's
                 Report on Form 8-K filed June 30, 1994 (File No. 0-15719).

(22)             Incorporated herein by reference to Exhibit 3 to the Company's
                 Report on Form 8-K filed June 30, 1994 (File No. 0-15719).

(23)             Incorporated herein by reference to Exhibit 3 to the Company's
                 Report on Form 8-K filed January 12, 1995 (File No. 1-13560).

(24)             Incorporated herein by reference to exhibit of the same number
                 to the Company's Annual Report on Form 10-K with respect to
                 the fiscal year ended December 31, 1994 (File No. 1-13560).

(25)             Incorporated herein by reference to Exhibit 2 to the Company's
                 Report on Form 8-K filed  May 10, 1995 (File No. 1-13560).

(26)             Incorporated herein by reference to Exhibit 4.3 to the
                 Company's Registration Statement on Form S-8 filed July 20,
                 1995 (Reg. No. 33-61173).

(27)             Incorporated herein by reference to Exhibit 1  the Company's
                 Report on Form 8-K filed  August 31, 1995 (File No. 1-13560).



   96
                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                              CORRECTIONS CORPORATION OF AMERICA

Date: March 25, 1996            By: /s/ Doctor R. Crants
                                    ------------------------------
                                    Doctor R. Crants, Chairman of the Board and
                                    Chief Executive Officer

                               POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints DOCTOR R. CRANTS and DARRELL K. MASSENGALE, and
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to the Annual
Report on Form 10-K of Corrections Corporation of America for the fiscal year
ended December 31, 1995, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission and the New York Stock Exchange, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dated indicated.

Date: March 25, 1996                /s/ Doctor R. Crants
                                    --------------------------------------------
                                    Doctor R. Crants, Chairman of the Board,
                                    Chief Executive Officer and Director
                                    (principal executive officer)

Date: March 25, 1996                /s/ Darrell K. Massengale
                                    --------------------------------------------
                                    Darrell K. Massengale, Vice President,
                                    Finance; Chief Financial Officer;
                                    Secretary and Treasurer (principal financial
                                    and accounting officer)

   97
Date: March 25, 1996                    /s/ Thomas W. Beasley
                                        ---------------------------------------
                                        Thomas W. Beasley, Chairman Emeritus
                                        and Director

Date: March 25, 1996                    /s/ T. Don Hutto
                                        ---------------------------------------
                                        T. Don Hutto, Vice Chairman of the Board
                                        and Director

Date: March 25, 1996                    /s/ William F. Andrews
                                        ---------------------------------------
                                        William F. Andrews, Director

Date: March 25, 1996                    /s/ Richard H. Fulton
                                        ---------------------------------------
                                        Richard H. Fulton, Director

Date: March 25, 1996                    /s/ Samuel W. Bartholomew, Jr.
                                        ---------------------------------------
                                        Samuel W. Bartholomew, Jr., Director

Date: March 25, 1996                    /s/ Jean-Pierre Cuny
                                        ---------------------------------------
                                        Jean-Pierre Cuny, Director

Date: March 25, 1996                    /s/ W. Blake Brock
                                        ---------------------------------------
                                        W. Blake Brock, Controller

EX-3.(D)

   1
                                                                 EXHIBIT 3(d)


                          CERTIFICATE OF AMENDMENT
                                   TO THE
                        CERTIFICATE OF INCORPORATION
                                     OF
                     CORRECTIONS CORPORATION OF AMERICA


         CORRECTIONS CORPORATION OF AMERICA, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,

         DOES HEREBY CERTIFY:

         FIRST:  That at a duly called meeting held on March 20, 1995, the
Board of Directors of the Corporation duly adopted resolutions setting forth a
proposed amendment to the Certificate of Incorporation of the Corporation,
declaring said amendment to be advisable and submitting the proposed amendment
to the stockholders of the Corporation for consideration thereby.  The
resolution setting forth the proposed amendment is as follows:

                 RESOLVED, that the Certificate of Incorporation of this
         Corporation be amended by deleting the second sentence of Article IV
         of the Certificate of Incorporation of the Corporation in its entirety
         and substituting in lieu thereof the following:

                 "IV.     The total number of shares which the Corporation
         shall have the authority to issue is Fifty-One Million (51,000,000)
         shares, consisting of Fifty Million (50,000,000) shares of Common
         Stock having One Dollar ($1.00) par value per share ("Common Stock")
         and One Million (1,000,000) shares of Preferred Stock having One
         Dollar ($1.00) par value per share ("Preferred Stock")."

         SECOND: That thereafter, pursuant to resolution of the Board of
Directors of the Corporation, the amendment was submitted to a vote of the
stockholders of the Corporation and that the necessary number of shares as
required by statute were voted in favor of the amendment at the annual meeting
of stockholders held on May 26, 1995, called and held upon notice in accordance
with Section 222 of the Delaware General Corporation Law, as amended.

         THIRD:  That said amendment was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law, as amended.


   2

         IN WITNESS WHEREOF, Corrections Corporation of America has caused this
Certificate to be signed by Doctor R.  Crants, its Chairman, and Darrell K.
Massengale, its Secretary, this 26th day of May, 1995.


                                   CORRECTIONS CORPORATION OF AMERICA
                                   
                                   
                                   By:/s/ Doctor R. Crants           
                                      -------------------------------
                                      Doctor R. Crants, Chairman

Attest:

/s/ Darrell K. Massengale       
- --------------------------------
Darrell K. Massengale, Secretary


                              ACKNOWLEDGEMENTS


State of Tennessee, County of Davidson.

         Before me, ________________________________, a Notary Public of the
state and county aforesaid, personally appeared Doctor R. Crants, with whom I
am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who, upon oath, acknowledged himself to be the Chairman of
Corrections Corporation of America, a Delaware corporation, the within named
bargainor, a corporation, and that he as such Chairman executed, on behalf of
the corporation, the foregoing instrument as the act and deed of the
corporation and that the facts stated therein are true.

         Witness my hand and seal, at office in Nashville, Tennessee, this ____
day of May, 1995.


                                    ___________________________________
                                    Notary Public


[SEAL]

My Commission Expires:  __________          



   3


State of Tennessee, County of Davidson.

         Before me, ________________________________, a Notary Public of the
state and county aforesaid, personally appeared Darrell K. Massengale, with
whom I am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who, upon oath, acknowledged himself to be the Secretary, of
Corrections Corporation of America, a Delaware corporation, the within named
bargainor, a corporation, and that he as such Secretary executed, on behalf of
the corporation, the foregoing instrument as the act and deed of the
corporation and that the facts stated therein are true.

         Witness my hand and seal, at office in Nashville, Tennessee, this ____
day of May, 1995.


                                   ___________________________________
                                   Notary Public

[SEAL]

My Commission Expires: _____________

EX-4.(Q)

   1
                                                                EXHIBIT 4(q)

                        WARRANT REPURCHASE AGREEMENT

         This Warrant Repurchase Agreement is made and entered into this 1st
day of February, 1995, by and between First Union National Bank of Tennessee, a
national banking association ("Seller"), and Corrections Corporation of
America, a Delaware corporation headquartered in Nashville, Tennessee
("Buyer").

         FOR AND IN CONSIDERATION of the mutual covenants contained herein and
other good and valuable consideration, the parties hereto agree as follows:

         1.      Recitals.  Seller desires to sell to Buyer, and Buyer is
willing to purchase from Seller, warrants to purchase 60,000 shares of Common
Stock of Buyer owned by Seller (the "Warrants"), all in accordance with the
terms of this Agreement.

         2.      Redemption of The Warrants.  Seller hereby agrees to sell and
assign, and Buyer hereby agrees to purchase all of the Warrants at the closing
on the terms and conditions set forth herein.

         3.      Payment of Purchase Price.  The purchase price (the "Purchase
Price") for the Warrants shall be the product of 60,000 times the difference
between (i) the closing bid price of Buyer's Common Stock as reported on the
New York Stock Exchange on January 5, 1995 ($18.00), and (ii) $7.50, which
represents the current exercise price for the Shares of Common Stock underlying
the Warrants.  At the Closing, Buyer shall deliver to Seller by wire transfer
or cash an amount equal to the Purchase Price.  At the Closing, Seller shall
deliver to Buyer the certificate(s) evidencing the Warrants.

         4.      Warranties and Representations of Seller.  Seller represents
and warrants that it is the lawful owner of, and has good and marketable title
to, the Warrants; the Warrants are subject to no liens or encumbrances
whatsoever; and Seller has full power and authority to enter into this
Agreement and to convey the valid title of the Warrants to Buyer free and clear
of all liens, pledges and encumbrances whatsoever.  Neither the execution and
delivery of this Agreement nor the carrying out of the transactions
contemplated hereby will result in any violation of any term of any material
agreement or instrument to which the Seller is a party or by which it or any of
its properties is bound, or of any law or governmental order, rule or
regulation which is applicable to the Seller.  No consents or approvals of any
persons or entities, governmental or otherwise, are required which have not
been, or will not have been prior to the closing, obtained in respect of the
execution and delivery by the Seller of this Agreement and the carrying out of
the transactions contemplated hereby on the part of the Seller.

         5.      Indemnification by Seller.  Seller agrees to defend, indemnify
and hold harmless Buyer from, against in respect of any and all loss or damage
to Buyer in whole or in part resulting from:



   2

                 (a)  Any breach of any of the warranties by Seller contained
herein, or any misstatement or omission of fact, or failure to state the facts
necessary to make those statements made not misleading, in or under this
Agreement; and

                 (b)  Any liability or obligation arising out of any actions,
suits, proceedings, claims, demands, judgments, costs and expenses (including
court costs and reasonable legal and accounting fees) incident to any of the
foregoing.

         6.      Closing.  The Closing of the purchase and sale of the Warrants
(the "Closing") shall take place on February 1, 1995 or on such other date as
agreed to by the parties hereto.

         7.      Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Tennessee,
applicable to contracts made and to be performed therein.

         8.      Survival.  All provisions of this Agreement shall survive the
Closing.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.



                                    BUYER:
                                    
                                    CORRECTIONS CORPORATION OF AMERICA
                                    
                                    
                                    /s/ Darrell K. Massengale            
                                    -------------------------------------
                                    Darrell K. Massengale, Vice President,
                                    Finance and Chief Financial Officer
                                    
                                    
                                    
                                    SELLER:
                                    
                                    FIRST UNION NATIONAL BANK OF TENNESSEE
                                    
                                    
                                    /s/ David M. Resha                   
                                    -------------------------------------
                                    David M. Resha, Senior Vice President




                                      2

EX-4.(R)

   1
                                                                EXHIBIT 4(r)


                     CORRECTIONS CORPORATION OF AMERICA


                 8.5% CONVERTIBLE, EXTENDABLE, SUBORDINATED
                   NOTE ORIGINALLY DUE SEPTEMBER 30, 1998


                                                                     dated as of
No. 013                                                            June 22, 1992
                                                                               

                 SECTION 1.  PAYMENT OBLIGATION.  CORRECTIONS CORPORATION OF
AMERICA, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Corporation"), for value received, hereby
promises to pay to ATWELL & CO, or registered assigns (hereinafter referred to
as the "Holder"), the principal sum of Three Hundred Twenty-Five Thousand
Dollars ($325,000) on the Maturity Date, and to pay interest thereon from the
date hereof quarterly on September 30, December 31, March 31 and June 30 of
each year, commencing September 30, 1992, at (i) the Coupon Rate, or (ii) upon
the occurrence of a Triggering Event and until the date on which such
Triggering Event is cured or waived or until the date that is ninety (90) days
from initial occurrence of the Triggering Event, whichever is later, at the
Triggering Event Rate, until the principal hereof is paid to the person in
whose name this Note is registered at the close of business on the Business Day
immediately preceding the date such payment is due.  Payment of the principal
of and interest on this Note will be made by cashiers check or by wire transfer
of immediately available funds, in currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts,
at such address or to such account, as applicable, as shall be designated to
the Corporation by the Holder.

                 SECTION 2.  DEFINITIONS.  As used herein, the following terms
will be deemed to have the meanings set forth below:

         "BOARD" means the board of directors of the Corporation.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday, or
         Friday that is not a day on which banking institutions in Los Angeles,
         California are authorized or obligated by law or executive order to
         close.

         "CHANGE EVENT" shall mean:

                 (a) the acquisition by any individual, entity, or group
                 (within the meaning of Section 13(d)(3) or 14(d)(2) of the
                 Exchange Act) of beneficial ownership (within the meaning of
                 Rule 13d-3 promulgated under the Exchange Act) of 50% or more
                 of the combined voting power of the then outstanding voting
                 securities of the Corporation entitled to vote generally in
                 the election of directors, but excluding, for this purpose,
                 any such acquisition by (i) the Corporation or any of its
                 subsidiaries, (ii) any employee benefit plan (or related
                 trust) of the Corporation or


   2

                 its subsidiaries, or (iii) any corporation with respect to
                 which, following such acquisition, more than 50% of the
                 combined voting power of the then outstanding voting
                 securities of such corporation entitled to vote generally in
                 the election of directors is then beneficially owned, directly
                 or indirectly, by individuals and entities who were the
                 beneficial owners of voting securities of the Corporation
                 immediately prior to such acquisition in substantially the
                 same proportion as their ownership, immediately prior to such
                 acquisition, of the combined voting power of the then
                 outstanding voting securities of the Corporation entitled to
                 vote generally in the election of directors; or

                 (b) the Incumbent Board shall cease for any reason to
                 constitute as least fifty percent (50%) of the members of the
                 Board; or

                 (c) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then outstanding voting securities
                 entitled to vote generally in the election of  directors of
                 the corporation resulting from such reorganization, merger, or
                 consolidation; or

                 (d) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "CLOSING DATE" shall have the meaning ascribed thereto in Section 2.2
         of the Note Purchase Agreement.

         "COMMON STOCK" means the common stock of the Corporation, par value
         $1.00 per share.

         "CONVERSION PRICE" means $6.82 per share of Common Stock, subject to
         adjustment from time to time as herein set forth.

         "CONVERSION RATIO" means the number of Conversion Shares to be
         delivered upon conversion of One Hundred Dollars ($100) of principal
         amount of this Note.  Subject to the provisions for adjustment set
         forth herein, the Conversion Ration shall be determined as the
         quotient of (i) the principal amount of this Note to be converted,
         divided by (ii) the Conversion Price.  Subject to the provisions for
         adjustment set forth herein, the Conversion Ratio initially shall be
         14.66:1.0.

         "CONVERSION SHARES" means fully paid and nonassessable shares of
         Common Stock issuable upon conversion of the indebtedness evidenced by
         this Note.


                                       2
   3

         "CONVERTIBLE NOTES" means the Corporation's (a) $7,000,000 aggregate
         principal amount 8.5% Convertible Subordinated Notes due November 7,
         1999, and (b) the Corporation's $2,700,000 aggregate principal amount
         8.5% Convertible Subordinated Notes due on various dates, the latest
         of which is January 16, 2000.

         "COUPON RATE" means eight and one-half percent (8.5%) per annum.

         "CURRENT MARKET PRICE" when used with reference to shares of Common
         Stock, shall mean the closing price per share of Common Stock on such
         date and, when used with reference to shares of Common Stock for any
         period shall mean the average of the daily closing prices per share of
         Common Stock for such period.  The closing price for each day shall be
         the last quoted sale price or, if not so quoted, the average of the
         high bid and low asked prices in the over-the-counter market, as
         reported by the National Association of Securities Dealers, Inc.
         Automated Quotation System or such other system then in use, or, if on
         any such date the Common Stock is not quoted nor so reported, the
         average of the closing bide and asked prices as furnished by a
         professional market maker making a market in the Common Stock selected
         by the Board.  If the Common Stock is listed or admitted to trading on
         a national securities exchange, the closing price shall be the last
         sale price, regular way, or, in case no such sale takes place on such
         day, the average of the closing bid and asked prices, regular way, in
         either case as reported in the principal consolidated transaction
         reporting system with respect to securities listed or admitted to
         trading on the New York Stock Exchange or, if the Common Stock is not
         listed or admitted to trading on the New York Stock Exchange, as
         securities listed on the principal national securities exchange on
         which the Common Stock is listed or admitted to trading.  If the
         Common Stock is not publicly held or so listed or publicly traded,
         "Current Market Price" shall mean the fair market value per share of
         Common Stock as determined in good faith by the Board based on an
         opinion of an independent investment banking firm with an established
         national reputation as a valuer of securities, which opinion may be
         based on such assumptions as such firm shall deem to be necessary and
         appropriate.

         "EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1 of
         the Note Purchase Agreement.

         "EXCHANGE ACT" shall have the meaning set forth in Section 3.1 of the
         Note Purchase Agreement.

         "INCUMBENT BOARD" means the individuals who, as of the Closing Date,
         constitute the Board; provided, however, that any individual becoming
         a director subsequent to the Closing Date, whose election, or
         nomination for election by the Corporation's stockholders, was
         approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be deemed to be a member of the
         Incumbent Board.





                                       3


   4

         "MAJOR TRANSACTION" shall mean:

                 (a) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then outstanding voting securities
                 entitled to vote generally in the election of directors of the
                 Corporation resulting from such reorganization, merger, or
                 consolidation; or

                 (b) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "MANDATORY CONVERSION DATE" means the Business Day specified by the
         Corporation, in compliance with the provisions hereof, as the date on
         which all or a portion of the indebtedness evidenced by this Note will
         be converted into shares of Common Stock pursuant to the Corporation's
         right to compel such conversion.

         "MANDATORY CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit A and incorporated
         herein by this reference.

         "MANDATORY PREPAYMENT DATE" means the Business Day specified by the
         Holder, in compliance with the provision hereof, as the date on which
         all or a portion of the indebtedness evidenced by this Note must be
         prepaid pursuant to the Holder's right to compel such prepayment.

         "MANDATORY PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit B and incorporated
         herein by this reference.

         "MATURITY DATE" means (i) September 30, 1998, or (ii) September 30,
         1999, if the Holder of this Note elects, by written notice given to
         the Corporation at least sixty (60) days but not more than one hundred
         twenty (120) days prior to September 30, 1998, to extend the then
         extant "Maturity Date" to September 30, 1999, or (iii) September 30,
         2000, if the Holder of this Note elects, by written notice given to
         the Corporation at least sixty (60) days but not more than one hundred
         twenty (120) days prior to September 30, 1999, to extend the then
         extant "Maturity Date" to September 30, 2000.

         "NOTE" means this 8.5% convertible, extendable, subordinated note
         issued by the Corporation.


                                      4


   5

         "NOTE PURCHASE AGREEMENT" means that certain Note Purchase Agreement,
         dated as of June 22, 1992, between the Corporation, Pacific Mutual
         Life Insurance Company, and PM Group Life Insurance Company, as
         amended from time to time.

         "OPTIONAL CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit C and incorporated
         herein by this reference.

         "OPTIONAL PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit D and incorporated
         herein by this reference.

         "SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
         unpaid interest on  (a) indebtedness (other than indebtedness
         evidenced by the Convertible Notes, indebtedness that is subordinated
         in right of payment to one or more item or type of indebtedness of the
         Corporation, or indebtedness incurred in violation of the terms and
         conditions of the Note Purchase Agreement) of the Corporation,
         irrespective of whether secured and whether heretofore or hereafter
         (i) incurred for borrowed money, or (ii) evidenced by a note or
         similar instrument given in connection with the acquisition by the
         Corporation of any business, properties, or assets, including
         securities (but not including any account payable or other obligation
         created or assumed by the Corporation in the ordinary course of
         business in connection with the obtaining of materials or services),
         (b) any refundings, renewals, extensions, or deferrals of any of the
         indebtedness included as Senior Indebtedness by virtue of clause (a)
         hereof, and (c) obligations under capital leases; in each case for the
         payment of which the Corporation is liable directly or indirectly by
         guarantee, letter of credit, obligation to purchase or acquire, or
         otherwise, unless the terms of the instrument evidencing such
         indebtedness or capital lease or pursuant to which such indebtedness
         or capital lease is outstanding specifically provide that such
         indebtedness or capital lease is not superior in right of payment to
         the indebtedness evidenced by this Note.

         "TRADING DAY" means, if the Common Stock is listed or admitted to
         trading on any national securities exchange, a day on which such
         exchange is open for the transaction of business, otherwise, a
         Business Day.

         "TRANCHE C CLOSING DATE" shall have the meaning ascribed thereto in
         Section 3.1 of the Note Purchase Agreement.

         "TRIGGERING EVENT" means the occurrence of any Unmatured Event of
         Default or Event of Default described in clauses (i), (ii), and (iv)
         through (x), inclusive, of Section 7.1 of the Note Purchase Agreement.
         For purposes of determining the period during which the Triggering
         Event Rate shall be in effect, a Triggering Event shall not be deemed
         to have occurred until the date on which the Holder shall have given
         notice of the occurrence thereof to the Corporation.

         "TRIGGERING EVENT RATE" means ten and one-half percent (10.5%) per
         annum.



                                      5


   6


         "UNMATURED EVENT OF DEFAULT" shall mean any event or condition, the
         occurrence of which would, with the lapse of time or the giving of
         notice, or both, constitute an Event of Default.

                 SECTION 3.  OPTIONAL CONVERSION.  (a) Subject to and upon
compliance with the  provisions of this Note, the Holder is entitled, at its
option, at any time on or before the close of business on the Business Day
prior to the Maturity Date, or in case this Note or a portion hereof is called
for conversion by the Corporation in accordance with the terms hereof, or the
Corporation elects to prepay in accordance with the terms hereof, then until
and including, but not after, the close of business on the third Business Day
prior to the Mandatory Conversion Date or the Optional Prepayment Date, to
convert all or a portion of the principal amount of the indebtedness evidenced
by this Note into Conversion Shares.

                 (b) The principal amount of the indebtedness evidenced by this
Note or any portion of the principal amount of the indebtedness evidenced
hereby that is One Thousand Dollars ($1,000), an integral multiple of One
Thousand Dollars ($1,000), or the remaining balance of the principal amount of
the indebtedness evidenced by this Note may be converted into Conversion
Shares.  Subject to the provisions for adjustment set forth hereinafter, the
indebtedness evidenced by the Note shall be convertible into Conversion Shares
at a price per share equal to the Conversion Price and the number of Conversion
Shares to be deliverable to the Holder upon conversion of One Hundred Dollars
($100) of the principal amount of this Note shall be equal to the Conversion
Ratio.

                 (c) Conversion of all or a portion of the indebtedness
evidenced by this Note may be effected by the Holder upon the surrender to the
Corporation at the principal office of the Corporation in the State of
Tennessee or at the office of any agent or agents of the Corporation, as may be
designated by the Board, of this Note, duly endorsed or assigned to the
Corporation or in blank, accompanied by an Optional Conversion Notice to the
Corporation that the Holder elects to convert the principal amount of the
indebtedness evidenced by this Note or, if less than the entire principal
amount of the indebtedness evidenced by this Note is to be converted, the
portion thereof to be converted.  Such Optional Conversion Notice shall specify
the name or names in which the Holder wishes the certificate or certificates
for shares of Common Stock to be issued.  In case such notice shall specify a
name or names other than that of the Holder, such notice shall be accompanied
by payment of all transfer taxes payable upon the issuance of shares of Common
Stock in such name or names.  Other than such taxes, the Corporation will pay
any and all issue and other taxes (other than taxes based on income) that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the indebtedness evidenced by this Note.  No payment or
adjustment shall be made upon any conversion of this Note on account of any
dividends or other distributions payable on the Conversion Shares; provided,
however, that the Holder shall be entitled to receive the full amount of any
dividends or other distributions declared with respect to the Conversion Shares
with a record date on or after the effective date of such conversion.


                                      6


   7

                 As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note and the receipt of such notice
relating thereto and, if applicable, payment of all transfer taxes (or the
demonstration to the satisfaction of the Corporation that such taxes have been
paid), the Corporation shall deliver or cause to be delivered, either by
personal delivery or by certified or registered mail or by a recognized
overnight courier service, in any such case, properly insured, to the Holder in
accordance with the written instructions of the Holder (i) certificates
representing the number of Conversion Shares to which the Holder shall be
entitled, and (ii) if less than the entire principal amount of indebtedness
evidenced by this Note, for the balance of the indebtedness that is not being
so converted.  Such conversion shall be deemed to have been made at the close
of business on the date of giving such notice and of such surrender of this
Note so that the rights of the Holder (as a noteholder) with respect to the
principal amount being converted shall cease, and the person or persons
entitled to receive the Conversion Shares issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock
as of such day.  All accrued but unpaid interest through the Business Day
immediately preceding the date of such conversion with respect to the principal
amount of the indebtedness evidenced by this Note being converted shall be
payable upon conversion.

                 The Corporation shall not be required to convert, and no
surrender of this Note shall be effective for that purpose, while the transfer
books of the Corporation for the Common Stock are closed for any purpose (but
not for any period in excess of 15 days); but the surrender of this Note for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date this Note is surrendered, and at the
Conversion Ratio in effect at the date of such surrender.

                 (d) In case this Note is to be prepaid pursuant to the
mandatory prepayment provisions hereof, such right of conversion shall cease
and terminate as to the portion of this Note that is to be prepaid at the close
of business on the Business Day next preceding the date fixed for mandatory
prepayment unless the Corporation shall default in the payment of the Mandatory
Prepayment Amount.

                 (e) In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.

                 (f)      (i) The Corporation shall at all times reserve and
keep available for issuance upon the conversion of the indebtedness evidenced
by this Note, free from any preemptive rights, such number of its authorized
but unissued shares of Common Stock as will from time to time





                                      7


   8

be sufficient to permit the conversion of all of the indebtedness evidenced by
this Note, and shall take all action required to increase the authorized number
of shares of Common Stock if necessary to permit the conversion of all of the
indebtedness evidenced by this Note.

                          (ii)  If the Corporation shall issue shares of Common
Stock upon conversion of indebtedness evidenced by this Note as contemplated by
this Section 3, the Corporation shall issue together with each such share of
Common Stock any rights issued to holders of Common Stock of the Corporation,
irrespective of whether such rights shall be exercisable at such time, but only
if such rights are issued and outstanding and held by other holders of Common
Stock of the Corporation at such time and have not expired.

                 (g)      The Conversion Ratio will be subject to adjustment
from time to time as follows:

                          (i) In case the Corporation shall at any time or from
time to time after the Closing Date (A) pay a dividend, or make a distribution,
on the outstanding shares of Common Stock in shares of Common Stock, (B)
subdivide the outstanding shares of Common Stock, (C) combine the outstanding
shares of Common Stock into a smaller number of shares, or (D) issue by
reclassification of the shares of Common Stock any shares of capital stock of
the Corporation, then, and in each such case, the Conversion Ratio in effect
immediately prior to such event or the record date therefor, whichever is
earlier, shall be adjusted so that the Holder shall be entitled to receive the
number of shares of Common Stock (or other capital stock) of the Corporation
that the Holder would have owned or have been entitled to receive after the
happening of any of the events described above, had the indebtedness evidenced
by this Note been converted immediately prior to the happening of such event or
the record date therefor, whichever is earlier.  An adjustment made pursuant to
this clause (i) shall become effective (x) in the case of any such dividend or
distribution, immediately after the close of business on the record date for
the determination of holders of shares of Common Stock entitled to receive such
dividend or distribution, or (y) in the case of such subdivision,
reclassification, or combination, at the close of business on the day upon
which such corporate action becomes effective.  No adjustment shall be made
pursuant to this clause (i) in connection with any transaction to which
subsection (h) applies.

                          (ii) In case the Corporation shall issue shares of
Common Stock (or rights, warrants, or other securities convertible into or
exchangeable for shares of Common Stock) after the Closing Date at a price per
share (or having a conversion price per share) less than the Current Market
Price per share of Common Stock, as of the date of issuance of such shares or
of such convertible securities, then, and in each such case, the Conversion
Ratio shall be adjusted so that the Holder shall be entitled to receive, upon
the conversion hereof, the number of shares of Common Stock determined by
multiplying (A) the applicable Conversion Ratio on the day immediately prior to
such date by (B) a fraction, the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding on such date plus (2) the number
of additional shares of Common Stock issued (or into which the convertible
securities may convert), and the denominator of which shall be the sum of (x)
the number of shares of Common Stock




                                      8


   9

purchasable at the then Current Market Price per share with the aggregate
consideration received or receivable by the Corporation for the total number of
shares of Common Stock so issued (or into which the rights, warrants, or other
convertible securities may convert).


                          An adjustment made pursuant to this clause (ii) shall
be made on the next Business Day following the date on which any such issuance
is made and shall be effective retroactively to the close of business on the
date of such issuance.  For purposes of this clause (ii), the aggregate
consideration received or receivable by the Corporation in connection with the
issuance of shares of Common Stock shall be deemed to be equal to the sum of
the aggregate offering price (before deduction of underwriting discounts or
commissions and expenses payable to third parties) of all such Common Stock,
rights, warrants, and convertible securities plus the minimum aggregate amount,
if any, payable upon exercise of conversion of any such rights, warrants, and
convertible securities into shares of Common Stock.  The issuance of any shares
of Common Stock (whether treasury shares or newly issued shares) pursuant to
(a) a dividend or distribution on, or subdivision, combination or
reclassification of, the outstanding shares of Common Stock requiring an
adjustment in the conversion ratio pursuant to clause (i) of this subsection
(g), or (b) any restricted stock or stock option plan or program of the
Corporation, or (c) any option, warrant, right, or convertible security
outstanding as of the date hereof, or (d) the terms of a firmly committed
underwritten public offering, shall not be deemed to constitute an issuance of
Common Stock or convertible securities by the Corporation to which this clause
(ii) applies.


                          Upon the expiration of any unexercised options,
warrants, or rights to convert any convertible securities for which an
adjustment has been made pursuant to this clause (ii), the adjustment shall
forthwith be reversed to effect such rate of conversion as would have been in
effect at the time of such expiration or termination had such options, warrant,
rights or convertible securities, to the extent outstanding immediately prior
to such expiration or termination, never been issued.  If the purchase price
provided for in any option, warrant, or rights to convert any convertible
securities for which an adjustment has been made pursuant to this clause (ii),
the additional consideration, if any, payable upon the conversion or exchange
of any convertible securities for which an adjustment has been made, or the
rate at which any convertible securities referred to above are convertible into
or exchangeable for Common Stock shall, at any time, increase or decrease
(other than under or by reason of provisions designed to protect against
dilution), then, the Conversion Ratio in effect at the time of such event shall
forthwith be readjusted to the Conversion Ratio that would have been in effect
at such time and such options, warrants, or rights or convertible securities
still outstanding provided for such changed purchase price, additional
consideration, or conversion rate, as the case may be, at the time initially
granted, issued or sold.  No adjustment shall be made pursuant to this clause
(ii) in connection with any transaction to which subsection h applies.


                          (iii) In case the Corporation shall at any time or
from time to time after the  Closing Date declare, order, pay, or make a
dividend or other distribution (including, without limitation, any distribution
of stock or other securities or property or rights or warrants to subscribe for
securities of the Corporation or any of its subsidiaries by way of dividend or




                                     9


   10

spinoff), on its Common Stock, other than (A) dividends payable in cash in an
aggregate amount not to exceed 50% of net income from continuing operations
before extraordinary items of the Corporation, determined in accordance with
generally accepted accounting principles, during the period (treated as one
accounting period) commencing on March 31, 1992, and ending on the date such
dividend is paid; provided, that, to the extent required by the terms thereof,
such dividend shall have been previously consented to by the holders of the
notes issued pursuant to the Note Purchase Agreement, or (B) dividends or
distributions of shares of Common Stock which are referred to in clause (i) of
this subsection (g), then, and in each such case, the Conversion Ratio shall be
adjusted so that the Holder shall be entitled to receive, upon the conversion
hereof, the number of shares of Common Stock determined by multiplying (1) the
applicable Conversion Ratio on the day immediately prior to the record date
fixed for the determination of stockholders entitled to receive such dividend
or distribution by (2) a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock for the period of 20 Trading Days
preceding such record date, and the denominator of which shall be such Current
Market Price per share of Common Stock less the fair market value, as
determined in good faith by the Board, a certified resolution with respect to
which shall be mailed to the Holder, per share of Common Stock of such dividend
or distribution.  No adjustment shall be made pursuant to this clause (iii) in
connection with any transaction to which subsection (h) applies.

                          (iv) For purposes of this subsection (g), the number
of shares of Common Stock at any time outstanding shall not include any shares
of Common Stock then owned or held by or for the account of the Corporation.

                          (v) The term "dividend," as used in this
subsection (g), shall mean a dividend or other distribution upon stock of the 
Corporation.

                          (vi) Anything in this subsection (g) to the contrary
notwithstanding, the Corporation shall not be required to give effect to any
adjustment in the Conversion Ratio unless and until the net effect of one or
more adjustments (each of which shall be carried forward), determined as above
provided, shall have resulted in a change of the Conversion Ratio by at least
one one-hundredth (.01) of one share of Common Stock, and when the cumulative
net effect of more than one adjustment so determined shall be to change the
Conversion Ratio by at least one one-hundredth (.01) of one share of Common
Stock, such change in Conversion Ratio shall thereupon be given effect.

                          (vii) The certificate of any firm of independent
public accountants of recognized standing selected by the Board (which may be
the firm of independent public accountants regularly employed by the
Corporation) shall be presumptively correct for any computation made under this
subsection (g).

                          (viii) If the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment in the number of
shares of



                                       10

   11

Common Stock issuable upon exercise of the right of conversion granted by this
subsection (g) or in the Conversion Ratio then in effect shall be required by
reason of the taking of such record.

                 (h) In the case of any Major Transaction occurring at any
time, at the option of the Holder, the indebtedness evidenced by the Note shall
thereafter be convertible into, in whole and in part and in lieu of the Common
Stock issuable upon such conversion prior to consummation of such Major
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Major
Transaction by a holder of that number of shares of Common Stock into which
such indebtedness, or portion thereof, was convertible immediately prior to
such Major Transaction (including, on a pro rata basis, the cash, securities,
or property received by holders of Common Stock in any tender or exchange offer
that is a step in such Major Transaction).  In case securities or property
other than Common Stock shall be issuable or deliverable upon conversion as
aforesaid, then all references in this Section 3 shall be deemed to apply, so
far as appropriate and nearly as may be, to such other securities or property.

                 (i) In case at any time or from time to time the Corporation
shall pay any stock dividend or make any other non-cash distribution of the
holders of its Common Stock, or shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other right, or there shall be any capital reorganization or reclassification
of the Common Stock of the Corporation or consolidation or merger of the
Corporation with or into another corporation or other entity, or any sale or
conveyance to another corporation or other entity of the assets or property of
the Corporation as an entirety or substantially as an entirety, or there shall
be a voluntary or involuntary dissolution, liquidation, or winding up of the
Corporation, then, in any one or more of said cases the Corporation shall give
at least 20 days prior written notice (the time of mailing of such notice shall
be deemed to be the time of giving thereof) to the Holder at the address of the
Holder as shown on the books of the Corporation as of the date of which (i) the
books of the Corporation shall close or a record shall be taken for such stock
dividend, distribution, or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation, or winding up shall take place, as the case may be, provided that
in the case of any Major Transaction to which subsection (h) applies the
Corporation shall give at least 30 days prior written notice as aforesaid.
Such notice shall also specify the date as of which the holders of the Common
Stock of record shall participate in said dividend, distribution, or
subscription rights or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, or conveyance or participate in
such dissolution, liquidation, or winding up, as the case may be.  Failure to
give such notice shall not invalidate any action so taken.

                 (j) Anything herein to the contrary notwithstanding, the
issuance or sale of the following shares of Common Stock or options, warrants,
or other rights to purchase Common Stock shall be excluded from any calculation
of, and shall not be deemed issued or sold for purposes of calculating, any
reduction, adjustment, or readjustment of the Conversion Ratio hereunder: (i)
shares of Common Stock issued upon conversion of the indebtedness evidenced





                                     11


   12

by this Note or any portion thereof; (ii) shares of Common Stock or options,
warrants, or other rights to purchase Common Stock issuable, reserved for
issuance, or issued pursuant to a stock option plan, employee stock ownership
plan, or other compensatory benefit plan of the Corporation, duly adopted by
the Board; (iii) shares of Common Stock, issuable, reserved for issuance, or
issued pursuant to any currently outstanding warrants or options, or any
options, warrants, or other rights issuable, reserved for issuance, or issued
to officers of the Corporation in the future for compensatory purposes, if
fully authorized by the Board; and (iv) shares of Common Stock issued upon
conversion of the indebtedness evidenced by the Convertible Notes or the
currently issued and outstanding preferred stock.

                 SECTION 4.  REPORTS AS TO ADJUSTMENTS.  Upon any adjustment of
the Conversion Ratio then in effect and any increase or decrease in the number
of shares of Common Stock issuable upon the operation of the conversion set
forth in Section 3, then, and in each such case, the Corporation shall promptly
deliver to the Holder, a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment was
calculated and specifying the Conversion Ratio then in effect following such
adjustment and the increased or decreased number of shares issuable upon the
conversion granted by Section 3, and shall set forth in reasonable detail the
method of calculation of each and a brief statement of the facts requiring such
adjustment.  Where appropriate, such notice to the Holder may be given in
advance and included as part of the notice required under the provisions of
Section 3(i).

                 SECTION 5.       MANDATORY CONVERSION.  (a)  At any time after
June 22, 1997, and so long as at such time the Common Stock is listed or
admitted to trading on a national securities exchange, the Corporation may
require the Holder to convert all or a portion of the principal amount of the
indebtedness evidenced by this Note into shares of Common Stock if, at such
time, the Current Market Price of the Common Stock has equalled or exceeded one
hundred fifty percent (150%) of the Conversion Price (as it may from time to
time be adjusted) for forty-five (45) consecutive Trading Days following the
forty-fifth monthly anniversary of the Closing Date.  To exercise such right,
the Corporation must deliver a Mandatory Conversion Notice of the exercise of
such right to the Holder within thirty (30) days of the last day of such
forty-five (45) day period, such Mandatory Conversion Notice must be given at
least ten (10) Business Days, but not more than fifteen (15) Business Days
prior to the proposed Mandatory Conversion Date, and such Mandatory Conversion
Notice must specify the proposed Mandatory Conversion Date and the portion of
the principal amount of the indebtedness evidenced by this Note to be converted
into Common Stock.

                 (b)      All conversions effected pursuant to the preceding
paragraph will be made effective as of the close of business on the Mandatory
Conversion Date at the Conversion Ratio in effect on the Mandatory Conversion
Date; provided, however, that, in order to be able to convert, the Current
Market Price on the Mandatory Conversion Date must equal or exceed one hundred
fifty percent (150%) of the Conversion Price in effect on the Mandatory
Conversion Date.  If the Current Market Price on the Mandatory Conversion Date
does not equal or exceed




                                       12



   13

one hundred fifty percent (150%) of the Conversion Price in effect on the
Mandatory Conversion Date, the Corporation's election to require conversion
will be deemed void and no conversion will be effected pursuant to such notice.
Such event will not be deemed, however, to alter or restrict the Corporation's
right to again require conversion at such time as the Current Market Price
equals or exceeds one hundred fifty percent (150%) of the then current
Conversion Price for forty-five (45) consecutive Trading Days prior to such
time.  Upon conversion required by the Corporation pursuant to this paragraph
and the immediately preceding paragraph, all accrued but unpaid interest with
respect to the principal amount of the indebtedness evidenced by this Note
being converted shall be payable in accordance with the provisions of the
following paragraph.

                 (c)      Conversions of the indebtedness evidenced by this
Note effected by the exercise of the Corporation's right to require conversion
will be deemed effective as of the close of business on the Mandatory
Conversion Date without any action by the Holder and the Holder will, as of
such time, be a stockholder of the Corporation with respect to the number of
shares of Common Stock into which the principal balance evidenced by this Note
(or such portion of the principal balance evidenced by this Note as the
Corporation shall have specified) shall have been converted.  The Holder agrees
promptly to surrender this Note for cancellation following mandatory
conversion.  Certificates representing the shares of Common Stock issuable by
the Corporation as a result of the mandatory conversion of all or a portion of
the principal balance of the indebtedness evidenced by this Note and all
dividends and other distributions payable with respect to such shares and all
accrued but unpaid interest payable pursuant to the immediately preceding
paragraph will be retained by the Corporation pending surrender of this Note
for cancellation.  As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note, the Corporation shall deliver
or cause to be delivered, either by personal delivery or by certified or
registered mail or by a recognized overnight courier service, in any such case,
properly insured, to the Holder in accordance with the written instructions of
the Holder (i) certificates representing the number of Conversion Shares to
which the Holder shall be entitled, and (ii) if less than the entire principal
amount of indebtedness evidenced by this Note is being converted, a new
promissory note, in the form of this Note, for the balance of the indebtedness
that is not being so converted.

                 (d)      In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.

                 SECTION 6.       MANDATORY PREPAYMENT.  In the case of any
Change Event occurring at any time, at the option of the Holder, the Holder may
require the Corporation to prepay all or a portion of the then outstanding
principal amount of the indebtedness evidenced




                                     13

   14

by this Note.  To exercise such right of prepayment, the Holder must provide
the Corporation with a Mandatory Prepayment Notice at least thirty (30) days
prior to the proposed Mandatory Prepayment Date which Mandatory Prepayment
Notice shall specify the portion of the principal amount of the indebtedness
evidenced by this Note (which must be in integral multiples of One Thousand
Dollars ($1,000)) to be prepaid.  On the Mandatory Prepayment Date specified,
the Corporation shall prepay the portion of the principal amount of the
indebtedness evidenced by this Note that the Holder has specified must be
prepaid on such date, plus accrued interest on such principal amount to the
date of the prepayment.  Any prepayment shall be made by cashiers check or by
wire transfer of immediately available funds, in currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts, at such address or to such account, as applicable, as shall be
designated to the Corporation by the Holder.

                 SECTION 7.       OPTIONAL PREPAYMENT.  The Note shall be
subject to prepayment, at the option of the Corporation, at any time and from
time to time on and after July 1, 1997.  To exercise such right of prepayment,
the Corporation must provide the Holder with an Optional Prepayment Notice at
least sixty (60) days prior to the proposed Optional Prepayment Date which
Optional Prepayment Notice shall specify the portion of the principal amount of
the indebtedness evidenced by this Note (which must be in integral multiples of
One Thousand Dollars ($1,000)) to be prepaid.  The Holder's option to convert
the indebtedness evidenced by this Note as set forth in Section 3 hereof shall
continue notwithstanding the exercise of the option of the Corporation to
prepay under this Section 7, so long as the Holder requests conversion in
accordance with the terms hereof up to and including, but not after, the close
of business on the third Business Day prior to the Optional Prepayment Date.
On the Optional Prepayment Date specified, the Corporation shall prepay the
portion of the principal amount of the indebtedness evidenced by this Note that
the Corporation has specified is to be prepaid on such date, plus accrued
interest on such principal amount to the date of the prepayment.  Any
prepayment shall be made by cashiers check or by wire transfer of immediately
available funds, in currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts, at such
address or to such account, as applicable, as shall be designated to the
Corporation by the Holder.  This Note shall not be subject to prepayment,
whether in whole or in part, on or before June 30, 1997.

                 SECTION 8.   SUBORDINATION.  (a)  The Corporation covenants 
and agrees, and the Holder likewise covenants and agrees, that no payment 
shall be made by the Corporation on account of principal of or interest
on this Note, or otherwise, if there shall have occurred and be continuing, and
the Corporation and the Holder shall have received notice from the holder or
holders of, a default with respect to any Senior Indebtedness (i) permitting
the acceleration thereof and such default is the subject of a judicial
proceeding, or (ii) in an aggregate principal amount of not less than One
Million Dollars ($1,000,000) entitling such holder or holders of, a default
with respect to any Senior Indebtedness (i) permitting the acceleration thereof
and such default is the subject of a judicial proceeding, or (ii) in an
aggregate principal amount of not less than One Million Dollars ($1,000,000)
entitling such holder or holders to compel the acceleration thereof (provided,
however, that in the case of Senior Indebtedness issued pursuant to an
indenture, such notice may be validly given only by the trustee under such
indenture), unless and




                                       14


   15

until such default or Event of Default shall have been cured or waived or shall
have ceased to exist or such notice is withdrawn or found by a court of
competent jurisdiction to be invalid.

                 (b)      Upon any payment by the Corporation or distribution
of assets of the Corporation of any kind or character, whether in cash,
property, or securities, to creditors of the Corporation under any dissolution
or winding up or liquidation or reorganization of the Corporation, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership, or other
similar proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in money or money's worth, or payment
thereof provided for, before any payment is made on account of the principal of
or interest on this Note and upon such dissolution or winding up or liquidation
or reorganization, any payment by the Corporation, or distribution of assets of
the Corporation of any kind or character, whether in cash, property, or
securities, to which the Holder would be entitled except for the provisions
hereof, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent, or other person making such payment or
distribution directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the Holder.

                 (c)      The foregoing notwithstanding, in the event that any
payment of or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Holder before all Senior Indebtedness is
paid in full in money or money's worth, or provision is made for such payment,
then and in such event such payment or distribution shall be paid over or
delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness may have been issued, as their respective interests may appear,
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all Senior Indebtedness in full in money or money's
worth, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness (but subject to the power of a court of
competent jurisdiction to make other equitable provision, which shall have been
determined by such court to give effect to the rights conferred herein upon the
Senior Indebtedness and the holders thereof with respect to this Note or the
Holder hereof by a lawful plan or reorganization or readjustment under
applicable bankruptcy law).

                 (d)      The holders of Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to the Holder, without
incurring responsibility to the Holder and without impairing or releasing the
obligations of the Holder to the holders of Senior Indebtedness:  (i) change
the manner, place, or terms of payment or change or extend the time of payment
of,




                                     15

   16

or renew or alter Senior Indebtedness, or otherwise amend, in any manner,
Senior Indebtedness is outstanding; provided, however, that the average
weighted maturity of such Senior Indebtedness shall not be decreased without
the consent of the Holder; (ii) sell, exchange, release, or otherwise deal with
any property pledged, mortgaged, or otherwise securing Senior Indebtedness;
(iii) release any person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Corporation and any other person.

                 (e)      Subject to the payment in full of all amounts then
due (whether by acceleration of the maturity thereof or otherwise) on account
of the principal of, premium, if any, and interest on all Senior Indebtedness
at the time outstanding, the Holder shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property, or securities of the Corporation applicable to the Senior
Indebtedness until the principal of and interest on this Note shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
by the Corporation to the holders of Senior Indebtedness of any cash, property,
or securities to which the Holder would be entitled except for the provisions
hereof, and no payments over pursuant to the provisions hereof to the holders
of Senior Indebtedness by the Holder, shall, as between the Corporation, its
creditors other than holders of Senior Indebtedness, and the Holder, be deemed
to be a payment by the Corporation to or on account of the Senior Indebtedness.

                 (f)      It is understood that the foregoing provisions of
this Note are and are intended solely for the purpose of defining the relative
rights of the Holder on the one hand and the holders of Senior Indebtedness on
the other hand.  Nothing contained in this Note is intended to or shall impair,
as among the Corporation, its creditors other than the holders of Senior
Indebtedness, and the Holder, the obligation of the Corporation, which is
absolute and unconditional, to pay to the Holder the principal of and interest
on this Note as and when the same shall become due and payable in accordance
with its terms, or is intended to or shall affect the relative rights of the
Holder and creditors of the Corporation other than the holders of Senior
Indebtedness, nor shall anything herein prevent the Holder from exercising all
remedies otherwise permitted by applicable law upon default under this Note or
the Note Purchase Agreement.

                 (g)      Upon any payment or distribution of assets of the
Corporation referred to herein, the Holder shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation, or reorganization proceedings are
pending, or certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent, or other person making such payment or distribution, delivered
to the Holder, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior Indebtedness and other
indebtedness of the Corporation, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon, and all other facts pertinent
thereto.

                 (h)      The Corporation shall give prompt written notice to
the Holder of any fact known to the Corporation that would prohibit the making
of any payment of moneys to or by the Corporation in respect of this Note.




                                     16


   17

                 SECTION 9.   ACCELERATION.  This Note and the indebtedness
evidenced hereby is subject to acceleration under the terms and conditions set
forth in the Note Purchase Agreement.

                 SECTION 10.  MISCELLANEOUS.  (a) Any notice required by the
provisions of this Note to be given to the Holder or the Corporation shall be
given and deemed received or delivered in accordance with the provisions of
Section 10.4 of the Note Purchase Agreement.

                 (b)      In the event of prepayment or conversion of this Note
in part only, a new note or notes for the unpaid or unconverted portion hereof
will be issued in the name or names requested by the Holder upon the
cancellation hereof.

                 (c)      The transfer of this Note is registrable on the books
of the Corporation upon surrender of this Note for registration of transfer at
the offices of the Corporation in Nashville, Tennessee, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation duly executed by, the Holder or its attorney duly authorized in
writing, and thereupon one or more new notes of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.  New notes are issuable only in registered form
without coupons in denominations of One Thousand Dollars ($1,000) and any
integral multiple thereof.  This Note is exchangeable for a like aggregate
principal amount of notes of a different authorized denomination, as requested
by the Holder.  No service charge shall be made of any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

                 (d)      Prior to the due presentment of this Note for
registration of transfer, the Corporation and any agent of the Corporation may
treat the person in whose name this Note is registered as the owner hereof for
all purposes, irrespective of whether this Note be overdue, and neither the
Corporation nor any such agent shall be affected by notice to the contrary.

                 (e)      This Note shall be governed by and construed in
accordance with the laws of the State of California.

                 (f)      The Corporation agrees, to the extent permitted by
law, to pay to the Holder all costs and expenses (including attorneys' fees)
incurred by it in the collection hereof or the enforcement of any right or
remedy provided for herein (including such costs and expenses incurred in
connection with a workout or an insolvency or bankruptcy proceeding).

                 (g)      The provisions of the Note Purchase Agreement are
hereby incorporated into this Note by this reference.





                                     17


   18

         IN WITNESS WHEREOF, the undersigned has executed this Note effective
as of the date first above written.




                               CORRECTIONS CORPORATION OF AMERICA,
                               A Delaware corporation
                               
                               
                               
                               By:                      
                                  --------------------------------------------
                                   Doctor R. Crants, Chairman of the Board and
                                   Chief Executive Officer


ATTEST:


                                           
- --------------------------------
Darrell K. Massengale, Secretary





                                     18


   19

                    [FORM OF MANDATORY CONVERSION NOTICE]


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


         Notice is hereby given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, Corrections Corporation of America hereby elects to
require conversion of the 8.5% Convertible, Extendable, Subordinated Note,
originally due September 30, 1998, issued by it (the "Note").  The Note to be
converted and the principal amount thereof to be converted are as follows:





                                                      Principal                       Number of
                      Outstanding                    Amount to be                    Shares to
Note Number         Principal Amount                  Converted                      Be Delivered
- -------------------------------------------------------------------------------------------------
                                                                       



The Mandatory Conversion Date will be                       .
                                      ----------------------


                                     CORRECTIONS CORPORATION OF AMERICA
                                 
                                 
                                 
                                     By:                                        
                                         ------------------------------------
                                         Name:                               
                                              -------------------------------
                                         Title:                              
                                              -------------------------------


                                   Exhibit A


                                       19


   20

                     [FORM OF MANDATORY PREPAYMENT NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA
     
     -------------------------
     -------------------------


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and that certain Note
Purchase Agreement, dated June 22, 1992, between Corrections Corporation of
America, Pacific Mutual Life Insurance Company, and PM Group Life Insurance
Company, as amended from time to time, it hereby exercises its right to require
prepayment of such Note or portion thereof (which is $1,000 or an integral
multiple thereof), plus all accrued but unpaid interest with respect to such
principal amount.

         The Mandatory Prepayment Date shall be _____________.  The principal
amount to be prepaid shall be $__________________________.



                                [Name of Holder]



Dated:                                     By:
      --------------------                    ------------------------------
                                           
                                           Name:
                                                ----------------------------
                                           Title:
                                                ----------------------------





                                  Exhibit B





                                      20


   21

                          [FORM OF CONVERSION NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA

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


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and the Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, it hereby exercises its right to convert such Note,
or portion thereof (which is $1,000 or an integral multiple thereof), below
designated, into shares of Common Stock of Corrections Corporation of America
and directs that the shares issuable and deliverable upon the conversion, and
any notes representing any unconverted principal amount thereof, be issued and
delivered to the registered holder of such Note unless a different name has
been indicated below.  If shares or a new note representing unconverted
principal are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.




                                    [Name of Holder]
                            
                            

Dated:                                     By:                              
         -------------------                   ---------------------------
                                           Name:                          
                                                --------------------------
                                           Title:                         
                                                 -------------------------
                            
                                           Principal Amount to be converted 
                                           (in an integral multiple of $1,000, 
                                           if less than all):
                            
                            
                                            $                             
                                              ---------------------------





                                  Exhibit C




                                      21


   22



Fill in for registration of shares
of Common Stock and Note if to be
issued otherwise than to the
registered Holder.


                                  
- ----------------------------------
Name


                                  
- ----------------------------------
Address


                                  
- ----------------------------------
Please print name and address
(including zip code number)

SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFYING NUMBER


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





                                      22


   23

                      [FORM OF OPTIONAL PREPAYMENT NOTICE]


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


         Notice is hereby given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, Corrections Corporation of America hereby elects to
prepay the 8.5% Convertible, Extendable, Subordinated Note, originally due
September 30, 1998, issued by it (the "Note").  Prepayment of such Note or
portion thereof (which is $1,000 or an integral multiple thereof), plus all
accrued but unpaid interest with respect to such principal amount shall be
effective on the Optional Prepayment Date set forth below.

         The Optional Prepayment Date shall be ___________.  The principal
amount to be prepaid shall be $_______________________.



                               CORRECTIONS CORPORATION OF AMERICA
                               
                               
                               
                               By:                                         
                                       ------------------------------------
                                       Name:                               
                                            -------------------------------
                                       Title:                              
                                             ------------------------------




                                  Exhibit D




                                      23

EX-4.(S)

   1
                                                                    Exhibit 4(s)

                          CORRECTIONS CORPORATION OF AMERICA



                   8.5% CONVERTIBLE, EXTENDABLE, SUBORDINATED
                     NOTE ORIGINALLY DUE SEPTEMBER 30, 1998


                                                                     dated as of
No. 014                                                         December 2, 1992

                 SECTION 1.  PAYMENT OBLIGATION.  CORRECTIONS CORPORATION OF
AMERICA, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Corporation"), for value received, hereby
promises to pay to ATWELL & CO, or registered assigns (hereinafter referred to
as the "Holder"), the principal sum of One Hundred Ninety-Five Thousand Dollars
($195,000) on the Maturity Date, and to pay interest thereon from the date
hereof quarterly on September 30, December 31, March 31 and June 30 of each
year, commencing December 31, 1992, at (i) the Coupon Rate, or (ii) upon the
occurrence of a Triggering Event and until the date on which such Triggering
Event is cured or waived or until the date that is ninety (90) days from
initial occurrence of the Triggering Event, whichever is later, at the
Triggering Event Rate, until the principal hereof is paid to the person in
whose name this Note is registered at the close of business on the Business Day
immediately preceding the date such payment is due.  Payment of the principal
of and interest on this Note will be made by cashiers check or by wire transfer
of immediately available funds, in currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts,
at such address or to such account, as applicable, as shall be designated to
the Corporation by the Holder.

                 SECTION 2.  DEFINITIONS.  As used herein, the following terms
will be deemed to have the meanings set forth below:

         "BOARD" means the board of directors of the Corporation.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday, or
         Friday that is not a day on which banking institutions in Los Angeles,
         California are authorized or obligated by law or executive order to
         close.

         "CHANGE EVENT" shall mean:

                 (a) the acquisition by any individual, entity, or group
                 (within the meaning of Section 13(d)(3) or 14(d)(2) of the
                 Exchange Act) of beneficial ownership (within the meaning of
                 Rule 13d-3 promulgated under the Exchange Act) of 50% or more
                 of the combined voting power of the then outstanding voting
                 securities of the Corporation entitled to vote generally in
                 the election of directors, but excluding, for this purpose,
                 any such acquisition by (i) the Corporation or any of its
                 subsidiaries, (ii) any employee benefit plan (or related
                 trust) of the Corporation or
   2

                 its subsidiaries, or (iii) any corporation with respect to
                 which, following such acquisition, more than 50% of the
                 combined voting power of the then outstanding voting
                 securities of such corporation entitled to vote generally in
                 the election of directors is then beneficially owned, directly
                 or indirectly, by individuals and entities who were the
                 beneficial owners of voting securities of the Corporation
                 immediately prior to such acquisition in substantially the
                 same proportion as their ownership, immediately prior to such
                 acquisition, of the combined voting power of the then
                 outstanding voting securities of the Corporation entitled to
                 vote generally in the election of directors; or

                 (b) the Incumbent Board shall cease for any reason to
                 constitute as least fifty percent (50%) of the members of the
                 Board; or

                 (c) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then outstanding voting securities
                 entitled to vote generally in the election of  directors of
                 the corporation resulting from such reorganization, merger, or
                 consolidation; or

                 (d) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "CLOSING DATE" shall have the meaning ascribed thereto in Section 2.2
         of the Note Purchase Agreement.

         "COMMON STOCK" means the common stock of the Corporation, par value
         $1.00 per share.

         "CONVERSION PRICE" means $7.14 per share of Common Stock, subject to
         adjustment from time to time as herein set forth.

         "CONVERSION RATIO" means the number of Conversion Shares to be
         delivered upon conversion of One Hundred Dollars ($100) of principal
         amount of this Note.  Subject to the provisions for adjustment set
         forth herein, the Conversion Ration shall be determined as the
         quotient of (i) the principal amount of this Note to be converted,
         divided by (ii) the Conversion Price.  Subject to the provisions for
         adjustment set forth herein, the Conversion Ratio initially shall be
         14.0:1.0.

         "CONVERSION SHARES" means fully paid and nonassessable shares of
         Common Stock issuable upon conversion of the indebtedness evidenced by
         this Note.
   3

         "CONVERTIBLE NOTES" means the Corporation's (a) $7,000,000 aggregate
         principal amount 8.5% Convertible Subordinated Notes due November 7,
         1999, and (b) the Corporation's $2,700,000 aggregate principal amount
         8.5% Convertible Subordinated Notes due on various dates, the latest
         of which is January 16, 2000.

         "COUPON RATE" means eight and one-half percent (8.5%) per annum.

         "CURRENT MARKET PRICE" when used with reference to shares of Common
         Stock, shall mean the closing price per share of Common Stock on such
         date and, when used with reference to shares of Common Stock for any
         period shall mean the average of the daily closing prices per share of
         Common Stock for such period.  The closing price for each day shall be
         the last quoted sale price or, if not so quoted, the average of the
         high bid and low asked prices in the over-the-counter market, as
         reported by the National Association of Securities Dealers, Inc.
         Automated Quotation System or such other system then in use, or, if on
         any such date the Common Stock is not quoted nor so reported, the
         average of the closing bide and asked prices as furnished by a
         professional market maker making a market in the Common Stock selected
         by the Board.  If the Common Stock is listed or admitted to trading on
         a national securities exchange, the closing price shall be the last
         sale price, regular way, or, in case no such sale takes place on such
         day, the average of the closing bid and asked prices, regular way, in
         either case as reported in the principal consolidated transaction
         reporting system with respect to securities listed or admitted to
         trading on the New York Stock Exchange or, if the Common Stock is not
         listed or admitted to trading on the New York Stock Exchange, as
         securities listed on the principal national securities exchange on
         which the Common Stock is listed or admitted to trading.  If the
         Common Stock is not publicly held or so listed or publicly traded,
         "Current Market Price" shall mean the fair market value per share of
         Common Stock as determined in good faith by the Board based on an
         opinion of an independent investment banking firm with an established
         national reputation as a valuer of securities, which opinion may be
         based on such assumptions as such firm shall deem to be necessary and
         appropriate.

         "EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1 of
         the Note Purchase Agreement.

         "EXCHANGE ACT" shall have the meaning set forth in Section 3.1 of the
         Note Purchase Agreement.

         "INCUMBENT BOARD" means the individuals who, as of the Closing Date,
         constitute the Board; provided, however, that any individual becoming
         a director subsequent to the Closing Date, whose election, or
         nomination for election by the Corporation's stockholders, was
         approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be deemed to be a member of the
         Incumbent Board.





                                       3
   4

         "MAJOR TRANSACTION" shall mean:

                 (a) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then outstanding voting securities
                 entitled to vote generally in the election of directors of the
                 Corporation resulting from such reorganization, merger, or
                 consolidation; or

                 (b) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "MANDATORY CONVERSION DATE" means the Business Day specified by the
         Corporation, in compliance with the provisions hereof, as the date on
         which all or a portion of the indebtedness evidenced by this Note will
         be converted into shares of Common Stock pursuant to the Corporation's
         right to compel such conversion.

         "MANDATORY CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit A and incorporated
         herein by this reference..

         "MANDATORY PREPAYMENT DATE" means the Business Day specified by the
         Holder, in compliance with the provision hereof, as the date on which
         all or a portion of the indebtedness evidenced by this Note must be
         prepaid pursuant to the Holder's right to compel such prepayment.

         "MANDATORY PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit B and incorporated
         herein by this reference.

         "MATURITY DATE" means (i) September 30, 1998, or (ii) September 30,
         1999, if the Holder of this Note elects, by written notice given to
         the Corporation at least sixty (60) days but not more than one hundred
         twenty (120) days prior to September 30, 1998, to extend the then
         extant "Maturity Date" to September 30, 1999, or (iii) September 30,
         2000, if the Holder of this Note elects, by written notice given to
         the Corporation at least sixty (60) days but not more than one hundred
         twenty (120) days prior to September 30, 1999, to extend the then
         extant "Maturity Date" to September 30, 2000.

         "NOTE" means this 8.5% convertible, extendable, subordinated note 
         issued by the Corporation.





                                       4
   5

         "NOTE PURCHASE AGREEMENT" means that certain Note Purchase Agreement,
         dated as of June 22, 1992, between the Corporation, Pacific Mutual
         Life Insurance Company, and PM Group Life Insurance Company, as
         amended from time to time.

         "OPTIONAL CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit C and incorporated
         herein by this reference.

         "OPTIONAL PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit D and incorporated
         herein by this reference.

         "SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
         unpaid interest on  (a) indebtedness (other than indebtedness
         evidenced by the Convertible Notes, indebtedness that is subordinated
         in right of payment to one or more item or type of indebtedness of the
         Corporation, or indebtedness incurred in violation of the terms and
         conditions of the Note Purchase Agreement) of the Corporation,
         irrespective of whether secured and whether heretofore or hereafter
         (i) incurred for borrowed money, or (ii) evidenced by a note or
         similar instrument given in connection with the acquisition by the
         Corporation of any business, properties, or assets, including
         securities (but not including any account payable or other obligation
         created or assumed by the Corporation in the ordinary course of
         business in connection with the obtaining of materials or services),
         (b) any refundings, renewals, extensions, or deferrals of any of the
         indebtedness included as Senior Indebtedness by virtue of clause (a)
         hereof, and (c) obligations under capital leases; in each case for the
         payment of which the Corporation is liable directly or indirectly by
         guarantee, letter of credit, obligation to purchase or acquire, or
         otherwise, unless the terms of the instrument evidencing such
         indebtedness or capital lease or pursuant to which such indebtedness
         or capital lease is outstanding specifically provide that such
         indebtedness or capital lease is not superior in right of payment to
         the indebtedness evidenced by this Note.

         "TRADING DAY" means, if the Common Stock is listed or admitted to
         trading on any national securities exchange, a day on which such
         exchange is open for the transaction of business, otherwise, a
         Business Day.

         "TRANCHE B CLOSING DATE" shall have the meaning ascribed thereto in
         Section 3.1 of the Note Purchase Agreement.

         "TRANCHE C CLOSING DATE" shall have the meaning ascribed thereto in
         Section 3.1 of the Note Purchase Agreement.

         "TRIGGERING EVENT" means the occurrence of any Unmatured Event of
         Default or Event of Default described in clauses (i), (ii), and (iv)
         through (x), inclusive, of Section 7.1 of the Note Purchase Agreement.
         For purposes of determining the period during which the Triggering
         Event Rate shall be in effect, a Triggering Event shall not be deemed
         to have





                                       5
   6

         occurred until the date on which the Holder shall have given notice of
         the occurrence thereof to the Corporation.

         "TRIGGERING EVENT RATE" means ten and one-half percent (10.5%) per
         annum.

         "UNMATURED EVENT OF DEFAULT"shall mean any event or condition, the
         occurrence of which would, with the lapse of time or the giving of
         notice, or both, constitute an Event of Default.

                 SECTION 3.  OPTIONAL CONVERSION.  (a) Subject to and upon
compliance with the  provisions of this Note, the Holder is entitled, at its
option, at any time on or before the close of business on the Business Day
prior to the Maturity Date, or in case this Note or a portion hereof is called
for conversion by the Corporation in accordance with the terms hereof, or the
Corporation elects to prepay in accordance with the terms hereof, then until
and including, but not after, the close of business on the third Business Day
prior to the Mandatory Conversion Date or the Optional Prepayment Date, to
convert all or a portion of the principal amount of the indebtedness evidenced
by this Note into Conversion Shares.

                 (b) The principal amount of the indebtedness evidenced by this
Note or any portion of the principal amount of the indebtedness evidenced
hereby that is One Thousand Dollars ($1,000), an integral multiple of One
Thousand Dollars ($1,000), or the remaining balance of the principal amount of
the indebtedness evidenced by this Note may be converted into Conversion
Shares.  Subject to the provisions for adjustment set forth hereinafter, the
indebtedness evidenced by the Note shall be convertible into Conversion Shares
at a price per share equal to the Conversion Price and the number of Conversion
Shares to be deliverable to the Holder upon conversion of One Hundred Dollars
($100) of the principal amount of this Note shall be equal to the Conversion
Ratio.

                 (c) Conversion of all or a portion of the indebtedness
evidenced by this Note may be effected by the Holder upon the surrender to the
Corporation at the principal office of the Corporation in the State of
Tennessee or at the office of any agent or agents of the Corporation, as may be
designated by the Board, of this Note, duly endorsed or assigned to the
Corporation or in blank, accompanied by an Optional Conversion Notice to the
Corporation that the Holder elects to convert the principal amount of the
indebtedness evidenced by this Note or, if less than the entire principal
amount of the indebtedness evidenced by this Note is to be converted, the
portion thereof to be converted.  Such Optional Conversion Notice shall specify
the name or names in which the Holder wishes the certificate or certificates
for shares of Common Stock to be issued.  In case such notice shall specify a
name or names other than that of the Holder, such notice shall be accompanied
by payment of all transfer taxes payable upon the issuance of shares of Common
Stock in such name or names.  Other than such taxes, the Corporation will pay
any and all issue and other taxes (other than taxes based on income) that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the indebtedness evidenced by this Note.  No payment or
adjustment shall be made upon any conversion of this Note on account of any
dividends or other distributions payable on the Conversion Shares; provided,





                                       6
   7

however, that the Holder shall be entitled to receive the full amount of any
dividends or other distributions declared with respect to the Conversion Shares
with a record date on or after the effective date of such conversion.

                 As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note and the receipt of such notice
relating thereto and, if applicable, payment of all transfer taxes (or the
demonstration to the satisfaction of the Corporation that such taxes have been
paid), the Corporation shall deliver or cause to be delivered, either by
personal delivery or by certified or registered mail or by a recognized
overnight courier service, in any such case, properly insured, to the Holder in
accordance with the written instructions of the Holder (i) certificates
representing the number of Conversion Shares to which the Holder shall be
entitled, and (ii) if less than the entire principal amount of indebtedness
evidenced by this Note, for the balance of the indebtedness that is not being
so converted.  Such conversion shall be deemed to have been made at the close
of business on the date of giving such notice and of such surrender of this
Note so that the rights of the Holder (as a noteholder) with respect to the
principal amount being converted shall cease, and the person or persons
entitled to receive the Conversion Shares issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock
as of such day.  All accrued but unpaid interest through the Business Day
immediately preceding the date of such conversion with respect to the principal
amount of the indebtedness evidenced by this Note being converted shall be
payable upon conversion.

                 The Corporation shall not be required to convert, and no
surrender of this Note shall be effective for that purpose, while the transfer
books of the Corporation for the Common Stock are closed for any purpose (but
not for any period in excess of 15 days); but the surrender of this Note for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date this Note is surrendered, and at the
Conversion Ratio in effect at the date of such surrender.

                 (d) In case this Note is to be prepaid pursuant to the
mandatory prepayment provisions hereof, such right of conversion shall cease
and terminate as to the portion of this Note that is to be prepaid at the close
of business on the Business Day next preceding the date fixed for mandatory
prepayment unless the Corporation shall default in the payment of the Mandatory
Prepayment Amount.

                 (e) In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.





                                       7
   8

                 (f)      (i) The Corporation shall at all times reserve and
keep available for issuance upon the conversion of the indebtedness evidenced
by this Note, free from any preemptive rights, such number of its authorized
but unissued shares of Common Stock as will from time to time be sufficient to
permit the conversion of all of the indebtedness evidenced by this Note, and
shall take all action required to increase the authorized number of shares of
Common Stock if necessary to permit the conversion of all of the indebtedness
evidenced by this Note.

                          (ii)  If the Corporation shall issue shares of Common
Stock upon conversion of indebtedness evidenced by this Note as contemplated by
this Section 3, the Corporation shall issue together with each such share of
Common Stock any rights issued to holders of Common Stock of the Corporation,
irrespective of whether such rights shall be exercisable at such time, but only
if such rights are issued and outstanding and held by other holders of Common
Stock of the Corporation at such time and have not expired.

                 (g)      The Conversion Ratio will be subject to adjustment
from time to time as follows:

                          (i) In case the Corporation shall at any time or from
time to time after the Tranche B Closing Date (A) pay a dividend, or make a
distribution, on the outstanding shares of Common Stock in shares of Common
Stock, (B) subdivide the outstanding shares of Common Stock, (C) combine the
outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of the shares of Common Stock any shares of capital
stock of the Corporation, then, and in each such case, the Conversion Ratio in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted so that the Holder shall be entitled to receive
the number of shares of Common Stock (or other capital stock) of the
Corporation that the Holder would have owned or have been entitled to receive
after the happening of any of the events described above, had the indebtedness
evidenced by this Note been converted immediately prior to the happening of
such event or the record date therefor, whichever is earlier.  An adjustment
made pursuant to this clause (i) shall become effective (x) in the case of any
such dividend or distribution, immediately after the close of business on the
record date for the determination of holders of shares of Common Stock entitled
to receive such dividend or distribution, or (y) in the case of such
subdivision, reclassification, or combination, at the close of business on the
day upon which such corporate action becomes effective.  No adjustment shall be
made pursuant to this clause (i) in connection with any transaction to which
subsection (h) applies.

                          (ii) In case the Corporation shall issue shares of
Common Stock (or rights, warrants, or other securities convertible into or
exchangeable for shares of Common Stock) after the Tranche B Closing Date at a
price per share (or having a conversion price per share) less than the Current
Market Price per share of Common Stock, as of the date of issuance of such
shares or of such convertible securities, then, and in each such case, the
Conversion Ratio shall be adjusted so that the Holder shall be entitled to
receive, upon the conversion hereof, the number of shares of Common Stock
determined by multiplying (A) the applicable Conversion Ratio on the day
immediately prior to such date by (B) a fraction, the numerator of which shall
be the sum





                                       8
   9

of (1) the number of shares of Common Stock outstanding on such date plus (2)
the number of additional shares of Common Stock issued (or into which the
convertible securities may convert), and the denominator of which shall be the
sum of (x) the number of shares of Common Stock purchasable at the then Current
Market Price per share with the aggregate consideration received or receivable
by the Corporation for the total number of shares of Common Stock so issued (or
into which the rights, warrants, or other convertible securities may convert).

                          An adjustment made pursuant to this clause (ii) shall
be made on the next Business Day following the date on which any such issuance
is made and shall be effective retroactively to the close of business on the
date of such issuance.  For purposes of this clause (ii), the aggregate
consideration received or receivable by the Corporation in connection with the
issuance of shares of Common Stock shall be deemed to be equal to the sum of
the aggregate offering price (before deduction of underwriting discounts or
commissions and expenses payable to third parties) of all such Common Stock,
rights, warrants, and convertible securities plus the minimum aggregate amount,
if any, payable upon exercise of conversion of any such rights, warrants, and
convertible securities into shares of Common Stock.  The issuance of any shares
of Common Stock (whether treasury shares or newly issued shares) pursuant to
(a) a dividend or distribution on, or subdivision, combination or
reclassification of, the outstanding shares of Common Stock requiring an
adjustment in the conversion ratio pursuant to clause (i) of this subsection
(g), or (b) any restricted stock or stock option plan or program of the
Corporation, or (c) any option, warrant, right, or convertible security
outstanding as of the date hereof, or (d) the terms of a firmly committed
underwritten public offering, shall not be deemed to constitute an issuance of
Common Stock or convertible securities by the Corporation to which this clause
(ii) applies.

                          Upon the expiration of any unexercised options,
warrants, or rights to convert any convertible securities for which an
adjustment has been made pursuant to this clause (ii), the adjustment shall
forthwith be reversed to effect such rate of conversion as would have been in
effect at the time of such expiration or termination had such options, warrant,
rights or convertible securities, to the extent outstanding immediately prior
to such expiration or termination, never been issued.  If the purchase price
provided for in any option, warrant, or rights to convert any convertible
securities for which an adjustment has been made pursuant to this clause (ii),
the additional consideration, if any, payable upon the conversion or exchange
of any convertible securities for which an adjustment has been made, or the
rate at which any convertible securities referred to above are convertible into
or exchangeable for Common Stock shall, at any time, increase or decrease
(other than under or by reason of provisions designed to protect against
dilution), then, the Conversion Ratio in effect at the time of such event shall
forthwith be readjusted to the Conversion Ratio that would have been in effect
at such time and such options, warrants, or rights or convertible securities
still outstanding provided for such changed purchase price, additional
consideration, or conversion rate, as the case may be, at the time initially
granted, issued or sold.  No adjustment shall be made pursuant to this clause
(ii) in connection with any transaction to which subsection h applies.





                                       9
   10

                          (iii) In case the Corporation shall at any time or
from time to time after the Tranche B Closing Date declare, order, pay, or make
a dividend or other distribution (including, without limitation, any
distribution of stock or other securities or property or rights or warrants to
subscribe for securities of the Corporation or any of its subsidiaries by way
of dividend or spinoff), on its Common Stock, other than (A) dividends payable
in cash in an aggregate amount not to exceed 50% of net income from continuing
operations before extraordinary items of the Corporation, determined in
accordance with generally accepted accounting principles, during the period
(treated as one accounting period) commencing on March 31, 1992, and ending on
the date such dividend is paid; provided, that, to the extent required by the
terms thereof, such dividend shall have been previously consented to by the
holders of the notes issued pursuant to the Note Purchase Agreement, or (B)
dividends or distributions of shares of Common Stock which are referred to in
clause (i) of this subsection (g), then, and in each such case, the Conversion
Ratio shall be adjusted so that the Holder shall be entitled to receive, upon
the conversion hereof, the number of shares of Common Stock determined by
multiplying (1) the applicable Conversion Ratio on the day immediately prior to
the record date fixed for the determination of stockholders entitled to receive
such dividend or distribution by (2) a fraction, the numerator of which shall
be the Current Market Price per share of Common Stock for the period of 20
Trading Days preceding such record date, and the denominator of which shall be
such Current Market Price per share of Common Stock less the fair market value,
as determined in good faith by the Board, a certified resolution with respect
to which shall be mailed to the Holder, per share of Common Stock of such
dividend or distribution.  No adjustment shall be made pursuant to this clause
(iii) in connection with any transaction to which subsection (h) applies.

                          (iv) For purposes of this subsection (g), the number
of shares of Common Stock at any time outstanding shall not include any shares
of Common Stock then owned or held by or for the account of the Corporation.

                          (v) The term "dividend," as used in this subsection
(g), shall mean a dividend or other distribution upon stock of the Corporation.

                          (vi) Anything in this subsection (g) to the contrary
notwithstanding, the Corporation shall not be required to give effect to any
adjustment in the Conversion Ratio unless and until the net effect of one or
more adjustments (each of which shall be carried forward), determined as above
provided, shall have resulted in a change of the Conversion Ratio by at least
one one-hundredth (.01) of one share of Common Stock, and when the cumulative
net effect of more than one adjustment so determined shall be to change the
Conversion Ratio by at least one one-hundredth (.01) of one share of Common
Stock, such change in Conversion Ratio shall thereupon be given effect.

                          (vii) The certificate of any firm of independent
public accountants of recognized standing selected by the Board (which may be
the firm of independent public accountants regularly employed by the
Corporation) shall be presumptively correct for any computation made under this
subsection (g).





                                       10
   11

                          (viii) If the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment in the number of
shares of Common Stock issuable upon exercise of the right of conversion
granted by this subsection (g) or in the Conversion Ratio then in effect shall
be required by reason of the taking of such record.

                 (h) In the case of any Major Transaction occurring at any
time, at the option of the Holder, the indebtedness evidenced by the Note shall
thereafter be convertible into, in whole and in part and in lieu of the Common
Stock issuable upon such conversion prior to consummation of such Major
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Major
Transaction by a holder of that number of shares of Common Stock into which
such indebtedness, or portion thereof, was convertible immediately prior to
such Major Transaction (including, on a pro rata basis, the cash, securities,
or property received by holders of Common Stock in any tender or exchange offer
that is a step in such Major Transaction).  In case securities or property
other than Common Stock shall be issuable or deliverable upon conversion as
aforesaid, then all references in this Section 3 shall be deemed to apply, so
far as appropriate and nearly as may be, to such other securities or property.

                 (i) In case at any time or from time to time the Corporation
shall pay any stock dividend or make any other non-cash distribution of the
holders of its Common Stock, or shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other right, or there shall be any capital reorganization or reclassification
of the Common Stock of the Corporation or consolidation or merger of the
Corporation with or into another corporation or other entity, or any sale or
conveyance to another corporation or other entity of the assets or property of
the Corporation as an entirety or substantially as an entirety, or there shall
be a voluntary or involuntary dissolution, liquidation, or winding up of the
Corporation, then, in any one or more of said cases the Corporation shall give
at least 20 days prior written notice (the time of mailing of such notice shall
be deemed to be the time of giving thereof) to the Holder at the address of the
Holder as shown on the books of the Corporation as of the date of which (i) the
books of the Corporation shall close or a record shall be taken for such stock
dividend, distribution, or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation, or winding up shall take place, as the case may be, provided that
in the case of any Major Transaction to which subsection (h) applies the
Corporation shall give at least 30 days prior written notice as aforesaid.
Such notice shall also specify the date as of which the holders of the Common
Stock of record shall participate in said dividend, distribution, or
subscription rights or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, or conveyance or participate in
such dissolution, liquidation, or winding up, as the case may be.  Failure to
give such notice shall not invalidate any action so taken.





                                       11
   12

                 (j) Anything herein to the contrary notwithstanding, the
issuance or sale of the following shares of Common Stock or options, warrants,
or other rights to purchase Common Stock shall be excluded from any calculation
of, and shall not be deemed issued or sold for purposes of calculating, any
reduction, adjustment, or readjustment of the Conversion Ratio hereunder: (i)
shares of Common Stock issued upon conversion of the indebtedness evidenced by
this Note or any portion thereof; (ii) shares of Common Stock or options,
warrants, or other rights to purchase Common Stock issuable, reserved for
issuance, or issued pursuant to a stock option plan, employee stock ownership
plan, or other compensatory benefit plan of the Corporation, duly adopted by
the Board; (iii) shares of Common Stock,  issuable, reserved for issuance, or
issued pursuant to any currently outstanding warrants or options, or any
options, warrants, or other rights issuable, reserved for issuance, or issued
to officers of the Corporation in the future for compensatory purposes, if
fully authorized by the Board; and (iv) shares of Common Stock issued upon
conversion of the indebtedness evidenced by the Convertible Notes or the
currently issued and outstanding preferred stock.

                 SECTION 4.  REPORTS AS TO ADJUSTMENTS.  Upon any adjustment of
the Conversion Ratio then in effect and any increase or decrease in the number
of shares of Common Stock issuable upon the operation of the conversion set
forth in Section 3, then, and in each such case, the Corporation shall promptly
deliver to the Holder, a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment was
calculated and specifying the Conversion Ratio then in effect following such
adjustment and the increased or decreased number of shares issuable upon the
conversion granted by Section 3, and shall set forth in reasonable detail the
method of calculation of each and a brief statement of the facts requiring such
adjustment.  Where appropriate, such notice to the Holder may be given in
advance and included as part of the notice required under the provisions of
Section 3(i).

                 SECTION 5.       MANDATORY CONVERSION.  (a)  At any time after
June 22, 1997, and so long as at such time the Common Stock is listed or
admitted to trading on a national securities exchange, the Corporation may
require the Holder to convert all or a portion of the principal amount of the
indebtedness evidenced by this Note into shares of Common Stock if, at such
time, the Current Market Price of the Common Stock has equalled or exceeded one
hundred fifty percent (150%) of the Conversion Price (as it may from time to
time be adjusted) for forty-five (45) consecutive Trading Days following the
forty-fifth monthly anniversary of the Tranche B Closing Date.  To exercise
such right, the Corporation must deliver a Mandatory Conversion Notice of the
exercise of such right to the Holder within thirty (30) days of the last day of
such forty-five (45) day period, such Mandatory Conversion Notice must be given
at least ten (10) Business Days, but not more than fifteen (15) Business Days
prior to the proposed Mandatory Conversion Date, and such Mandatory Conversion
Notice must specify the proposed Mandatory Conversion Date and the portion of
the principal amount of the indebtedness evidenced by this Note to be converted
into Common Stock.





                                       12
   13

                 (b)      All conversions effected pursuant to the preceding
paragraph will be made effective as of the close of business on the Mandatory
Conversion Date at the Conversion Ratio in effect on the Mandatory Conversion
Date; provided, however, that, in order to be able to convert, the Current
Market Price on the Mandatory Conversion Date must equal or exceed one hundred
fifty percent (150%) of the Conversion Price in effect on the Mandatory
Conversion Date.  If the Current Market Price on the Mandatory Conversion Date
does not equal or exceed one hundred fifty percent (150%) of the Conversion
Price in effect on the Mandatory Conversion Date, the Corporation's election to
require conversion will be deemed void and no conversion will be effected
pursuant to such notice.  Such event will not be deemed, however, to alter or
restrict the Corporation's right to again require conversion at such time as
the Current Market Price equals or exceeds one hundred fifty percent (150%) of
the then current Conversion Price for forty-five (45) consecutive Trading Days
prior to such time.  Upon conversion required by the Corporation pursuant to
this paragraph and the immediately preceding paragraph, all accrued but unpaid
interest with respect to the principal amount of the indebtedness evidenced by
this Note being converted shall be payable in accordance with the provisions of
the following paragraph.

                 (c)      Conversions of the indebtedness evidenced by this
Note effected by the exercise of the Corporation's right to require conversion
will be deemed effective as of the close of business on the Mandatory
Conversion Date without any action by the Holder and the Holder will, as of
such time, be a stockholder of the Corporation with respect to the number of
shares of Common Stock into which the principal balance evidenced by this Note
(or such portion of the principal balance evidenced by this Note as the
Corporation shall have specified) shall have been converted.  The Holder agrees
promptly to surrender this Note for cancellation following mandatory
conversion.  Certificates representing the shares of Common Stock issuable by
the Corporation as a result of the mandatory conversion of all or a portion of
the principal balance of the indebtedness evidenced by this Note and all
dividends and other distributions payable with respect to such shares and all
accrued but unpaid interest payable pursuant to the immediately preceding
paragraph will be retained by the Corporation pending surrender of this Note
for cancellation.  As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note, the Corporation shall deliver
or cause to be delivered, either by personal delivery or by certified or
registered mail or by a recognized overnight courier service, in any such case,
properly insured, to the Holder in accordance with the written instructions of
the Holder (i) certificates representing the number of Conversion Shares to
which the Holder shall be entitled, and (ii) if less than the entire principal
amount of indebtedness evidenced by this Note is being converted, a new
promissory note, in the form of this Note, for the balance of the indebtedness
that is not being so converted.

                 (d)      In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same





                                       13
   14

time, the number of full shares of Common Stock issuable on conversion thereof
shall be computed on the basis of the total amount of indebtedness to be
converted.

                 SECTION 6.       MANDATORY PREPAYMENT.  In the case of any
Change Event occurring at any time, at the option of the Holder, the Holder may
require the Corporation to prepay all or a portion of the then outstanding
principal amount of the indebtedness evidenced by this Note.  To exercise such
right of prepayment, the Holder must provide the Corporation with a Mandatory
Prepayment Notice at least thirty (30) days prior to the proposed Mandatory
Prepayment Date which Mandatory Prepayment Notice shall specify the portion of
the principal amount of the indebtedness evidenced by this Note (which must be
in integral multiples of One Thousand Dollars ($1,000)) to be prepaid.  On the
Mandatory Prepayment Date specified, the Corporation shall prepay the portion
of the principal amount of the indebtedness evidenced by this Note that the
Holder has specified must be prepaid on such date, plus accrued interest on
such principal amount to the date of the prepayment.  Any prepayment shall be
made by cashiers check or by wire transfer of immediately available funds, in
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at such address or to such
account, as applicable, as shall be designated to the Corporation by the
Holder.

                 SECTION 7.       OPTIONAL PREPAYMENT.  The Note shall be
subject to prepayment, at the option of the Corporation, at any time and from
time to time on and after December 2, 1997.  To exercise such right of
prepayment, the Corporation must provide the Holder with an Optional Prepayment
Notice at least sixty (60) days prior to the proposed Optional Prepayment Date
which Optional Prepayment Notice shall specify the portion of the principal
amount of the indebtedness evidenced by this Note (which must be in integral
multiples of One Thousand Dollars ($1,000)) to be prepaid.  The Holder's option
to convert the indebtedness evidenced by this Note as set forth in Section 3
hereof shall continue notwithstanding the exercise of the option of the
Corporation to prepay under this Section 7, so long as the Holder requests
conversion in accordance with the terms hereof up to and including, but not
after, the close of business on the third Business Day prior to the Optional
Prepayment Date.  On the Optional Prepayment Date specified, the Corporation
shall prepay the portion of the principal amount of the indebtedness evidenced
by this Note that the Corporation has specified is to be prepaid on such date,
plus accrued interest on such principal amount to the date of the prepayment.
Any prepayment shall be made by cashiers check or by wire transfer of
immediately available funds, in currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts, at
such address or to such account, as applicable, as shall be designated to the
Corporation by the Holder.  This Note shall not be subject to prepayment,
whether in whole or in part, on or before December 2, 1997.

                 SECTION 8.       SUBORDINATION.  (a)  The Corporation
covenants and agrees, and the Holder likewise covenants and agrees, that no
payment shall be made by the Corporation on account of principal of or interest
on this Note, or otherwise, if there shall have occurred and be continuing, and
the Corporation and the Holder shall have received notice from the holder or
holders of, a default with respect to any Senior Indebtedness (i) permitting
the acceleration thereof and such default is the subject of a judicial
proceeding, or (ii) in an aggregate principal





                                       14
   15

amount of not less than One Million Dollars ($1,000,000) entitling such holder
or holders of, a default with respect to any Senior Indebtedness (i) permitting
the acceleration thereof and such default is the subject of a judicial
proceeding, or (ii) in an aggregate principal amount of not less than One
Million Dollars ($1,000,000) entitling such holder or holders to compel the
acceleration thereof (provided, however, that in the case of Senior
Indebtedness issued pursuant to an indenture, such notice may be validly given
only by the trustee under such indenture), unless and until such default or
Event of Default shall have been cured or waived or shall have ceased to exist
or such notice is withdrawn or found by a court of competent jurisdiction to be
invalid.

                 (b)      Upon any payment by the Corporation or distribution
of assets of the Corporation of any kind or character, whether in cash,
property, or securities, to creditors of the Corporation under any dissolution
or winding up or liquidation or reorganization of the Corporation, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership, or other
similar proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in money or money's worth, or payment
thereof provided for, before any payment is made on account of the principal of
or interest on this Note and upon such dissolution or winding up or liquidation
or reorganization, any payment by the Corporation, or distribution of assets of
the Corporation of any kind or character, whether in cash, property, or
securities, to which the Holder would be entitled except for the provisions
hereof, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent, or other person making such payment or
distribution directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the Holder.

                 (c)      The foregoing notwithstanding, in the event that any
payment of or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Holder before all Senior Indebtedness is
paid in full in money or money's worth, or provision is made for such payment,
then and in such event such payment or distribution shall be paid over or
delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness may have been issued, as their respective interests may appear,
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all Senior Indebtedness in full in money or money's
worth, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness (but subject to the power of a court of
competent jurisdiction to make other equitable provision, which shall have been
determined by such court to give effect to the rights conferred herein upon the





                                       15
   16

Senior Indebtedness and the holders thereof with respect to this Note or the
Holder hereof by a lawful plan or reorganization or readjustment under
applicable bankruptcy law).

                 (d)      The holders of Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to the Holder, without
incurring responsibility to the Holder and without impairing or releasing the
obligations of the Holder to the holders of Senior Indebtedness: (i) change the
manner, place, or terms of payment or change or extend the time of payment of,
or renew or alter Senior Indebtedness, or otherwise amend, in any manner,
Senior Indebtedness is outstanding; provided, however, that the average
weighted maturity of such Senior Indebtedness shall not be decreased without
the consent of the Holder; (ii) sell, exchange, release, or otherwise deal with
any property pledged, mortgaged, or otherwise securing Senior Indebtedness;
(iii) release any person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Corporation and any other person.

                 (e)      Subject to the payment in full of all amounts then
due (whether by acceleration of the maturity thereof or otherwise) on account
of the principal of, premium, if any, and interest on all Senior Indebtedness
at the time outstanding, the Holder shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property, or securities of the Corporation applicable to the Senior
Indebtedness until the principal of and interest on this Note shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
by the Corporation to the holders of Senior Indebtedness of any cash, property,
or securities to which the Holder would be entitled except for the provisions
hereof, and no payments over pursuant to the provisions hereof to the holders
of Senior Indebtedness by the Holder, shall, as between the Corporation, its
creditors other than holders of Senior Indebtedness, and the Holder, be deemed
to be a payment by the Corporation to or on account of the Senior Indebtedness.

                 (f)      It is understood that the foregoing provisions of
this Note are and are intended solely for the purpose of defining the relative
rights of the Holder on the one hand and the holders of Senior Indebtedness on
the other hand.  Nothing contained in this Note is intended to or shall impair,
as among the Corporation, its creditors other than the holders of Senior
Indebtedness, and the Holder, the obligation of the Corporation, which is
absolute and unconditional, to pay to the Holder the principal of and interest
on this Note as and when the same shall become due and payable in accordance
with its terms, or is intended to or shall affect the relative rights of the
Holder and creditors of the Corporation other than the holders of Senior
Indebtedness, nor shall anything herein prevent the Holder from exercising all
remedies otherwise permitted by applicable law upon default under this Note or
the Note Purchase Agreement.

                 (g)      Upon any payment or distribution of assets of the
Corporation referred to herein, the Holder shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation, or reorganization proceedings are
pending, or certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent, or other person making such payment or distribution, delivered
to the Holder, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of





                                       16
   17

Senior Indebtedness and other indebtedness of the Corporation, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon,
and all other facts pertinent thereto.

                 (h)      The Corporation shall give prompt written notice to
the Holder of any fact known to the Corporation that would prohibit the making
of any payment of moneys to or by the Corporation in respect of this Note.

                 SECTION 9.       ACCELERATION.  This Note and the indebtedness
evidenced hereby is subject to acceleration under the terms and conditions set
forth in the Note Purchase Agreement.

                 SECTION 10.  MISCELLANEOUS.  (a) Any notice required by the
provisions of this Note to be given to the Holder or the Corporation shall be
given and deemed received or delivered in accordance with the provisions of
Section 10.4 of the Note Purchase Agreement.

                 (b)      In the event of prepayment or conversion of this Note
in part only, a new note or notes for the unpaid or unconverted portion hereof
will be issued in the name or names requested by the Holder upon the
cancellation hereof.

                 (c)      The transfer of this Note is registrable on the books
of the Corporation upon surrender of this Note for registration of transfer at
the offices of the Corporation in Nashville, Tennessee, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation duly executed by, the Holder or its attorney duly authorized in
writing, and thereupon one or more new notes of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.  New notes are issuable only in registered form
without coupons in denominations of One Thousand Dollars ($1,000) and any
integral multiple thereof.  This Note is exchangeable for a like aggregate
principal amount of notes of a different authorized denomination, as requested
by the Holder.  No service charge shall be made of any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

                 (d)      Prior to the due presentment of this Note for
registration of transfer, the Corporation and any agent of the Corporation may
treat the person in whose name this Note is registered as the owner hereof for
all purposes, irrespective of whether this Note be overdue, and neither the
Corporation nor any such agent shall be affected by notice to the contrary.

                 (e)      This Note shall be governed by and construed in
accordance with the laws of the State of California.

                 (f)      The Corporation agrees, to the extent permitted by
law, to pay to the Holder all costs and expenses (including attorneys' fees)
incurred by it in the collection hereof or the enforcement of any right or
remedy provided for herein (including such costs and expenses incurred in
connection with a workout or an insolvency or bankruptcy proceeding).





                                       17
   18

                 (g)      The provisions of the Note Purchase Agreement are
hereby incorporated into this Note by this reference.

         IN WITNESS WHEREOF, the undersigned has executed this Note effective
as of the date first above written.

                                 CORRECTIONS CORPORATION OF AMERICA,
                                 A Delaware corporation
                                
                                
                                
                                 By:
                                    --------------------------------------------
                                     Doctor R. Crants, Chairman of the Board and
                                     Chief Executive Officer



ATTEST:



                                           
- --------------------------------
Darrell K. Massengale, Secretary





                                       18
   19

                     [FORM OF MANDATORY CONVERSION NOTICE]


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


         Notice is hereby given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, Corrections Corporation of America hereby elects to
require conversion of the 8.5% Convertible, Extendable, Subordinated Note,
originally due September 30, 1998, issued by it (the "Note").  The Note to be
converted and the principal amount thereof to be converted are as follows:


                                                                         
                                                       Principal                     Number of
                        Outstanding                   Amount to be                   Shares to
Note Number           Principal Amount                  Converted                   Be Delivered
- -------------------------------------------------------------------------------------------------




The Mandatory Conversion Date will be                       .
                                      ---------------------- 


                             CORRECTIONS CORPORATION OF AMERICA
                             
                             
                             
                             By:                                             
                                     ----------------------------------------
                                     Name:                                   
                                          -----------------------------------
                                     Title:                                  
                                           ----------------------------------






                                   Exhibit A





                                       19
   20

                     [FORM OF MANDATORY PREPAYMENT NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA
                                  
         -------------------------
                                  
         -------------------------


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and that certain Note
Purchase Agreement, dated June 22, 1992, between Corrections Corporation of
America, Pacific Mutual Life Insurance Company, and PM Group Life Insurance
Company, as amended from time to time, it hereby exercises its right to require
prepayment of such Note or portion thereof (which is $1,000 or an integral
multiple thereof), plus all accrued but unpaid interest with respect to such
principal amount.

         The Mandatory Prepayment Date shall be _____________.  The principal
amount to be prepaid shall be $__________________________.



                                                   [Name of Holder]



Dated:                                     By:                               
      --------------------                         --------------------------
                                           Name:                             
                                                   --------------------------
                                           Title:                            
                                                   --------------------------





                                   Exhibit B





                                       20
   21

                          [FORM OF CONVERSION NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA
                                  
         -------------------------
                                  
         -------------------------


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and the Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, it hereby exercises its right to convert such Note,
or portion thereof (which is $1,000 or an integral multiple thereof), below
designated, into shares of Common Stock of Corrections Corporation of America
and directs that the shares issuable and deliverable upon the conversion, and
any notes representing any unconverted principal amount thereof, be issued and
delivered to the registered holder of such Note unless a different name has
been indicated below.  If shares or a new note representing unconverted
principal are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.




                                            [Name of Holder]
                                    
                                    
                                    
Dated:                              By:                                      
         -----------------                  ---------------------------------
                                    Name:                                    
                                            ---------------------------------
                                    Title:                                   
                                            ---------------------------------
                                    
                                    Principal Amount to be converted (in an 
                                    integral multiple of $1,000, if less
                                    than all):
                                    
                                    
                                                     $                         
                                                      -------------------------





                                   Exhibit C





                                       21
   22

Fill in for registration of shares
of Common Stock and Note if to be
issued otherwise than to the
registered Holder.


                                  
- ----------------------------------
Name


                                  
- ----------------------------------
Address


                                  
- ----------------------------------
Please print name and address
(including zip code number)

SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFYING NUMBER


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




                                       22
   23

                      [FORM OF OPTIONAL PREPAYMENT NOTICE]


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


         Notice is hereby given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, Corrections Corporation of America hereby elects to
prepay the 8.5% Convertible, Extendable, Subordinated Note, originally due
September 30, 1998, issued by it (the "Note").  Prepayment of such Note or
portion thereof (which is $1,000 or an integral multiple thereof), plus all
accrued but unpaid interest with respect to such principal amount shall be
effective on the Optional Prepayment Date set forth below.

         The Optional Prepayment Date shall be ___________.  The principal
amount to be prepaid shall be $_______________________.



                              CORRECTIONS CORPORATION OF AMERICA
                              
                              
                              
                              By:                                            
                                      ---------------------------------------
                                      Name:                                  
                                           ----------------------------------
                                      Title:                                 
                                            ---------------------------------





                                   Exhibit D





                                       23

EX-4.(T)

   1
                                                                EXHIBIT 4(t)

                     CORRECTIONS CORPORATION OF AMERICA


                 8.5% CONVERTIBLE, EXTENDABLE, SUBORDINATED
                   NOTE ORIGINALLY DUE SEPTEMBER 30, 1998
                                                                  

                                                                     dated as of
No. 015
                                                                  April 29, 1993

                 SECTION 1.  PAYMENT OBLIGATION.  CORRECTIONS CORPORATION OF
AMERICA, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Corporation"), for value received, hereby
promises to pay to ATWELL & CO, or registered assigns (hereinafter referred to
as the "Holder"), the principal sum of Four Hundred Sixty-Six Thousand Five
Hundred Fifty Dollars ($466,550) on the Maturity Date, and to pay interest
thereon from the date hereof quarterly on September 30, December 31, March 31
and June 30 of each year, commencing June 30, 1993, at (i) the Coupon Rate, or
(ii) upon the occurrence of a Triggering Event and until the date on which such
Triggering Event is cured or waived or until the date that is ninety (90) days
from initial occurrence of the Triggering Event, whichever is later, at the
Triggering Event Rate, until the principal hereof is paid to the person in
whose name this Note is registered at the close of business on the Business Day
immediately preceding the date such payment is due.  Payment of the principal
of and interest on this Note will be made by cashiers check or by wire transfer
of immediately available funds, in currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts,
at such address or to such account, as applicable, as shall be designated to
the Corporation by the Holder.

                 SECTION 2.  DEFINITIONS.  As used herein, the following terms
will be deemed to have the meanings set forth below:

         "BOARD" means the board of directors of the Corporation.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday, or
         Friday that is not a day on which banking institutions in Los Angeles,
         California are authorized or obligated by law or executive order to
         close.

         "CHANGE EVENT" shall mean:

                 (a) the acquisition by any individual, entity, or group
                 (within the meaning of Section 13(d)(3) or 14(d)(2) of the
                 Exchange Act) of beneficial ownership (within the meaning of
                 Rule 13d-3 promulgated under the Exchange Act) of 50% or more
                 of the combined voting power of the then outstanding voting
                 securities of the Corporation entitled to vote generally in
                 the election of directors, but excluding, for this purpose,
                 any such acquisition by (i) the Corporation or any of its
                 subsidiaries, (ii) any employee benefit plan (or related
                 trust) of the Corporation or


   2



                 its subsidiaries, or (iii) any corporation with respect to
                 which, following such acquisition, more than 50% of the
                 combined voting power of the then outstanding voting
                 securities of such corporation entitled to vote generally in
                 the election of directors is then beneficially owned, directly
                 or indirectly, by individuals and entities who were the
                 beneficial owners of voting securities of the Corporation
                 immediately prior to such acquisition in substantially the
                 same proportion as their ownership, immediately prior to such
                 acquisition, of the combined voting power of the then
                 outstanding voting securities of the Corporation entitled to
                 vote generally in the election of directors; or

                 (b) the Incumbent Board shall cease for any reason to
                 constitute as least fifty percent (50%) of the members of the
                 Board; or

                 (c) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then outstanding voting securities
                 entitled to vote generally in the election of  directors of
                 the corporation resulting from such reorganization, merger, or
                 consolidation; or

                 (d) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "CLOSING DATE" shall have the meaning ascribed thereto in Section 2.2
         of the Note Purchase Agreement.

         "COMMON STOCK" means the common stock of the Corporation, par value
         $1.00 per share.

         "CONVERSION PRICE" means $7.14 per share of Common Stock, subject to
         adjustment from time to time as herein set forth.

         "CONVERSION RATIO" means the number of Conversion Shares to be
         delivered upon conversion of One Hundred Dollars ($100) of principal
         amount of this Note.  Subject to the provisions for adjustment set
         forth herein, the Conversion Ratio shall be determined as the quotient
         of (i) the principal amount of this Note to be converted, divided by
         (ii) the Conversion Price.  Subject to the provisions for adjustment
         set forth herein, the Conversion Ratio initially shall be 14.0:1.0.




                                      2


   3


         "CONVERSION SHARES" means fully paid and nonassessable shares of
         Common Stock issuable upon conversion of the indebtedness evidenced by
         this Note.

         "CONVERTIBLE NOTES" means the Corporation's (a) $7,000,000 aggregate
         principal amount 8.5% Convertible Subordinated Notes due November 7,
         1999, and (b) the Corporation's $2,700,000 aggregate principal amount
         8.5% Convertible Subordinated Notes due on various dates, the latest
         of which is January 16, 2000.

         "COUPON RATE" means eight and one-half percent (8.5%) per annum.

         "CURRENT MARKET PRICE" when used with reference to shares of Common
         Stock, shall mean the closing price per share of Common Stock on such
         date and, when used with reference to shares of Common Stock for any
         period shall mean the average of the daily closing prices per share of
         Common Stock for such period.  The closing price for each day shall be
         the last quoted sale price or, if not so quoted, the average of the
         high bid and low asked prices in the over-the-counter market, as
         reported by the National Association of Securities Dealers, Inc.
         Automated Quotation System or such other system then in use, or, if on
         any such date the Common Stock is not quoted nor so reported, the
         average of the closing bide and asked prices as furnished by a
         professional market maker making a market in the Common Stock selected
         by the Board.  If the Common Stock is listed or admitted to trading on
         a national securities exchange, the closing price shall be the last
         sale price, regular way, or, in case no such sale takes place on such
         day, the average of the closing bid and asked prices, regular way, in
         either case as reported in the principal consolidated transaction
         reporting system with respect to securities listed or admitted to
         trading on the New York Stock Exchange or, if the Common Stock is not
         listed or admitted to trading on the New York Stock Exchange, as
         securities listed on the principal national securities exchange on
         which the Common Stock is listed or admitted to trading.  If the
         Common Stock is not publicly held or so listed or publicly traded,
         "Current Market Price" shall mean the fair market value per share of
         Common Stock as determined in good faith by the Board based on an
         opinion of an independent investment banking firm with an established
         national reputation as a valuer of securities, which opinion may be
         based on such assumptions as such firm shall deem to be necessary and
         appropriate.

         "EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1 of
         the Note Purchase Agreement.

         "EXCHANGE ACT" shall have the meaning set forth in Section 3.1 of the
         Note Purchase Agreement.

         "INCUMBENT BOARD" means the individuals who, as of the Closing Date,
         constitute the Board; provided, however, that any individual becoming
         a director subsequent to the Closing Date, whose election, or
         nomination for election by the Corporation's stockholders, was
         approved by a vote of at least a majority of the directors then




                                      3



   4

         comprising the Incumbent Board shall be deemed to be a member of the
         Incumbent Board.

         "MAJOR TRANSACTION" shall mean:

                 (a) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then outstanding voting securities
                 entitled to vote generally in the election of directors of the
                 Corporation resulting from such reorganization, merger, or
                 consolidation; or

                 (b) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "MANDATORY CONVERSION DATE" means the Business Day specified by the
         Corporation, in compliance with the provisions hereof, as the date on
         which all or a portion of the indebtedness evidenced by this Note will
         be converted into shares of Common Stock pursuant to the Corporation's
         right to compel such conversion.

         "MANDATORY CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit A and incorporated
         herein by this reference.

         "MANDATORY PREPAYMENT DATE" means the Business Day specified by the
         Holder, in compliance with the provision hereof, as the date on which
         all or a portion of the indebtedness evidenced by this Note must be
         prepaid pursuant to the Holder's right to compel such prepayment.

         "MANDATORY PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit B and incorporated
         herein by this reference.

         "MATURITY DATE" means (i) September 30, 1998, or (ii) September 30,
         1999, if the Holder of this Note elects, by written notice given to
         the Corporation at least sixty (60) days but not more than one hundred
         twenty (120) days prior to September 30, 1998, to extend the then
         extant "Maturity Date" to September 30, 1999, or (iii) September 30,
         2000, if the Holder of this Note elects, by written notice given to
         the Corporation at least sixty (60) days but not more than one hundred
         twenty (120) days prior to September 30, 1999, to extend the then
         extant "Maturity Date" to September 30, 2000.

         "NOTE" means this 8.5% convertible, extendable, subordinated note
         issued by the Corporation.



                                      4



   5

         "NOTE PURCHASE AGREEMENT" means that certain Note Purchase Agreement,
         dated as of June 22, 1992, between the Corporation, Pacific Mutual
         Life Insurance Company, and PM Group Life Insurance Company, as
         amended from time to time.

         "OPTIONAL CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit C and incorporated
         herein by this reference.

         "OPTIONAL PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit D and incorporated
         herein by this reference.

         "SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
         unpaid interest on  (a) indebtedness (other than indebtedness
         evidenced by the Convertible Notes, indebtedness that is subordinated
         in right of payment to one or more item or type of indebtedness of the
         Corporation, or indebtedness incurred in violation of the terms and
         conditions of the Note Purchase Agreement) of the Corporation,
         irrespective of whether secured and whether heretofore or hereafter
         (i) incurred for borrowed money, or (ii) evidenced by a note or
         similar instrument given in connection with the acquisition by the
         Corporation of any business, properties, or assets, including
         securities (but not including any account payable or other obligation
         created or assumed by the Corporation in the ordinary course of
         business in connection with the obtaining of materials or services),
         (b) any refundings, renewals, extensions, or deferrals of any of the
         indebtedness included as Senior Indebtedness by virtue of clause (a)
         hereof, and (c) obligations under capital leases; in each case for the
         payment of which the Corporation is liable directly or indirectly by
         guarantee, letter of credit, obligation to purchase or acquire, or
         otherwise, unless the terms of the instrument evidencing such
         indebtedness or capital lease or pursuant to which such indebtedness
         or capital lease is outstanding specifically provide that such
         indebtedness or capital lease is not superior in right of payment to
         the indebtedness evidenced by this Note.

         "TRADING DAY" means, if the Common Stock is listed or admitted to
         trading on any national securities exchange, a day on which such
         exchange is open for the transaction of business, otherwise, a
         Business Day.

         "TRANCHE C CLOSING DATE" shall have the meaning ascribed thereto in
         Section 3.1 of the Note Purchase Agreement.

         "TRIGGERING EVENT" means the occurrence of any Unmatured Event of
         Default or Event of Default described in clauses (i), (ii), and (iv)
         through (x), inclusive, of Section 7.1 of the Note Purchase Agreement.
         For purposes of determining the period during which the Triggering
         Event Rate shall be in effect, a Triggering Event shall not be deemed
         to have occurred until the date on which the Holder shall have given
         notice of the occurrence thereof to the Corporation.

         "TRIGGERING EVENT RATE" means ten and one-half percent (10.5%) per
         annum.




                                      5


   6


         "UNMATURED EVENT OF DEFAULT" shall mean any event or condition, the
         occurrence of which would, with the lapse of time or the giving of
         notice, or both, constitute an Event of Default.

                 SECTION 3.  OPTIONAL CONVERSION.  (a) Subject to and upon
compliance with the  provisions of this Note, the Holder is entitled, at its
option, at any time on or before the close of business on the Business Day
prior to the Maturity Date, or in case this Note or a portion hereof is called
for conversion by the Corporation in accordance with the terms hereof, or the
Corporation elects to prepay in accordance with the terms hereof, then until
and including, but not after, the close of business on the third Business Day
prior to the Mandatory Conversion Date or the Optional Prepayment Date, to
convert all or a portion of the principal amount of the indebtedness evidenced
by this Note into Conversion Shares.

                 (b) The principal amount of the indebtedness evidenced by this
Note or any portion of the principal amount of the indebtedness evidenced
hereby that is One Thousand Dollars ($1,000), an integral multiple of One
Thousand Dollars ($1,000), or the remaining balance of the principal amount of
the indebtedness evidenced by this Note may be converted into Conversion
Shares.  Subject to the provisions for adjustment set forth hereinafter, the
indebtedness evidenced by the Note shall be convertible into Conversion Shares
at a price per share equal to the Conversion Price and the number of Conversion
Shares to be deliverable to the Holder upon conversion of One Hundred Dollars
($100) of the principal amount of this Note shall be equal to the Conversion
Ratio.

                 (c) Conversion of all or a portion of the indebtedness
evidenced by this Note may be effected by the Holder upon the surrender to the
Corporation at the principal office of the Corporation in the State of
Tennessee or at the office of any agent or agents of the Corporation, as may be
designated by the Board, of this Note, duly endorsed or assigned to the
Corporation or in blank, accompanied by an Optional Conversion Notice to the
Corporation that the Holder elects to convert the principal amount of the
indebtedness evidenced by this Note or, if less than the entire principal
amount of the indebtedness evidenced by this Note is to be converted, the
portion thereof to be converted.  Such Optional Conversion Notice shall specify
the name or names in which the Holder wishes the certificate or certificates
for shares of Common Stock to be issued.  In case such notice shall specify a
name or names other than that of the Holder, such notice shall be accompanied
by payment of all transfer taxes payable upon the issuance of shares of Common
Stock in such name or names.  Other than such taxes, the Corporation will pay
any and all issue and other taxes (other than taxes based on income) that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the indebtedness evidenced by this Note.  No payment or
adjustment shall be made upon any conversion of this Note on account of any
dividends or other distributions payable on the Conversion Shares; provided,
however, that the Holder shall be entitled to receive the full amount of any
dividends or other distributions declared with respect to the Conversion Shares
with a record date on or after the effective date of such conversion.





                                      6



   7

                 As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note and the receipt of such notice
relating thereto and, if applicable, payment of all transfer taxes (or the
demonstration to the satisfaction of the Corporation that such taxes have been
paid), the Corporation shall deliver or cause to be delivered, either by
personal delivery or by certified or registered mail or by a recognized
overnight courier service, in any such case, properly insured, to the Holder in
accordance with the written instructions of the Holder (i) certificates
representing the number of Conversion Shares to which the Holder shall be
entitled, and (ii) if less than the entire principal amount of indebtedness
evidenced by this Note, for the balance of the indebtedness that is not being
so converted.  Such conversion shall be deemed to have been made at the close
of business on the date of giving such notice and of such surrender of this
Note so that the rights of the Holder (as a noteholder) with respect to the
principal amount being converted shall cease, and the person or persons
entitled to receive the Conversion Shares issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock
as of such day.  All accrued but unpaid interest through the Business Day
immediately preceding the date of such conversion with respect to the principal
amount of the indebtedness evidenced by this Note being converted shall be
payable upon conversion.

                 The Corporation shall not be required to convert, and no
surrender of this Note shall be effective for that purpose, while the transfer
books of the Corporation for the Common Stock are closed for any purpose (but
not for any period in excess of 15 days); but the surrender of this Note for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date this Note is surrendered, and at the
Conversion Ratio in effect at the date of such surrender.

                 (d) In case this Note is to be prepaid pursuant to the
mandatory prepayment provisions hereof, such right of conversion shall cease
and terminate as to the portion of this Note that is to be prepaid at the close
of business on the Business Day next preceding the date fixed for mandatory
prepayment unless the Corporation shall default in the payment of the Mandatory
Prepayment Amount.

                 (e) In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.

                 (f)      (i) The Corporation shall at all times reserve and
keep available for issuance upon the conversion of the indebtedness evidenced
by this Note, free from any preemptive rights, such number of its authorized
but unissued shares of Common Stock as will from time to time





                                      7



   8

be sufficient to permit the conversion of all of the indebtedness evidenced by
this Note, and shall take all action required to increase the authorized number
of shares of Common Stock if necessary to permit the conversion of all of the
indebtedness evidenced by this Note.

                          (ii)  If the Corporation shall issue shares of Common
Stock upon conversion of indebtedness evidenced by this Note as contemplated by
this Section 3, the Corporation shall issue together with each such share of
Common Stock any rights issued to holders of Common Stock of the Corporation,
irrespective of whether such rights shall be exercisable at such time, but only
if such rights are issued and outstanding and held by other holders of Common
Stock of the Corporation at such time and have not expired.

                 (g)      The Conversion Ratio will be subject to adjustment
from time to time as follows:

                          (i) In case the Corporation shall at any time or from
time to time after the Tranche C Closing Date (A) pay a dividend, or make a
distribution, on the outstanding shares of Common Stock in shares of Common
Stock, (B) subdivide the outstanding shares of Common Stock, (C) combine the
outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of the shares of Common Stock any shares of capital
stock of the Corporation, then, and in each such case, the Conversion Ratio in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted so that the Holder shall be entitled to receive
the number of shares of Common Stock (or other capital stock) of the
Corporation that the Holder would have owned or have been entitled to receive
after the happening of any of the events described above, had the indebtedness
evidenced by this Note been converted immediately prior to the happening of
such event or the record date therefor, whichever is earlier.  An adjustment
made pursuant to this clause (i) shall become effective (x) in the case of any
such dividend or distribution, immediately after the close of business on the
record date for the determination of holders of shares of Common Stock entitled
to receive such dividend or distribution, or (y) in the case of such
subdivision, reclassification, or combination, at the close of business on the
day upon which such corporate action becomes effective.  No adjustment shall be
made pursuant to this clause (i) in connection with any transaction to which
subsection (h) applies.

                          (ii) In case the Corporation shall issue shares of
Common Stock (or rights, warrants, or other securities convertible into or
exchangeable for shares of Common Stock) after the Tranche C Closing Date at a
price per share (or having a conversion price per share) less than the Current
Market Price per share of Common Stock, as of the date of issuance of such
shares or of such convertible securities, then, and in each such case, the
Conversion Ratio shall be adjusted so that the Holder shall be entitled to
receive, upon the conversion hereof, the number of shares of Common Stock
determined by multiplying (A) the applicable Conversion Ratio on the day
immediately prior to such date by (B) a fraction, the numerator of which shall
be the sum of (1) the number of shares of Common Stock outstanding on such date
plus (2) the number of additional shares of Common Stock issued (or into which
the convertible securities may convert), and the denominator of which shall be
the sum of (x) the number of shares of Common Stock



                                       8


   9

purchasable at the then Current Market Price per share with the aggregate
consideration received or receivable by the Corporation for the total number of
shares of Common Stock so issued (or into which the rights, warrants, or other
convertible securities may convert).

                          An adjustment made pursuant to this clause (ii) shall
be made on the next Business Day following the date on which any such issuance
is made and shall be effective retroactively to the close of business on the
date of such issuance.  For purposes of this clause (ii), the aggregate
consideration received or receivable by the Corporation in connection with the
issuance of shares of Common Stock shall be deemed to be equal to the sum of
the aggregate offering price (before deduction of underwriting discounts or
commissions and expenses payable to third parties) of all such Common Stock,
rights, warrants, and convertible securities plus the minimum aggregate amount,
if any, payable upon exercise of conversion of any such rights, warrants, and
convertible securities into shares of Common Stock.  The issuance of any shares
of Common Stock (whether treasury shares or newly issued shares) pursuant to
(a) a dividend or distribution on, or subdivision, combination or
reclassification of, the outstanding shares of Common Stock requiring an
adjustment in the conversion ratio pursuant to clause (i) of this subsection
(g), or (b) any restricted stock or stock option plan or program of the
Corporation, or (c) any option, warrant, right, or convertible security
outstanding as of the date hereof, or (d) the terms of a firmly committed
underwritten public offering, shall not be deemed to constitute an issuance of
Common Stock or convertible securities by the Corporation to which this clause
(ii) applies.

                          Upon the expiration of any unexercised options,
warrants, or rights to convert any convertible securities for which an
adjustment has been made pursuant to this clause (ii), the adjustment shall
forthwith be reversed to effect such rate of conversion as would have been in
effect at the time of such expiration or termination had such options, warrant,
rights or convertible securities, to the extent outstanding immediately prior
to such expiration or termination, never been issued.  If the purchase price
provided for in any option, warrant, or rights to convert any convertible
securities for which an adjustment has been made pursuant to this clause (ii),
the additional consideration, if any, payable upon the conversion or exchange
of any convertible securities for which an adjustment has been made, or the
rate at which any convertible securities referred to above are convertible into
or exchangeable for Common Stock shall, at any time, increase or decrease
(other than under or by reason of provisions designed to protect against
dilution), then, the Conversion Ratio in effect at the time of such event shall
forthwith be readjusted to the Conversion Ratio that would have been in effect
at such time and such options, warrants, or rights or convertible securities
still outstanding provided for such changed purchase price, additional
consideration, or conversion rate, as the case may be, at the time initially
granted, issued or sold.  No adjustment shall be made pursuant to this clause
(ii) in connection with any transaction to which subsection h applies.

                          (iii) In case the Corporation shall at any time or
from time to time after the Tranche C Closing Date declare, order, pay, or make
a dividend or other distribution (including, without limitation, any
distribution of stock or other securities or property or rights or warrants to
subscribe for securities of the Corporation or any of its subsidiaries by way
of dividend or





                                      9


   10

spinoff), on its Common Stock, other than (A) dividends payable in cash in an
aggregate amount not to exceed 50% of net income from continuing operations
before extraordinary items of the Corporation, determined in accordance with
generally accepted accounting principles, during the period (treated as one
accounting period) commencing on March 31, 1992, and ending on the date such
dividend is paid; provided, that, to the extent required by the terms thereof,
such dividend shall have been previously consented to by the holders of the
notes issued pursuant to the Note Purchase Agreement, or (B) dividends or
distributions of shares of Common Stock which are referred to in clause (i) of
this subsection (g), then, and in each such case, the Conversion Ratio shall be
adjusted so that the Holder shall be entitled to receive, upon the conversion
hereof, the number of shares of Common Stock determined by multiplying (1) the
applicable Conversion Ratio on the day immediately prior to the record date
fixed for the determination of stockholders entitled to receive such dividend
or distribution by (2) a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock for the period of 20 Trading Days
preceding such record date, and the denominator of which shall be such Current
Market Price per share of Common Stock less the fair market value, as
determined in good faith by the Board, a certified resolution with respect to
which shall be mailed to the Holder, per share of Common Stock of such dividend
or distribution.  No adjustment shall be made pursuant to this clause (iii) in
connection with any transaction to which subsection (h) applies.

                          (iv) For purposes of this subsection (g), the number
of shares of Common Stock at any time outstanding shall not include any shares
of Common Stock then owned or held by or for the account of the Corporation.

                          (v) The term "dividend," as used in this subsection
(g), shall mean a dividend or other distribution upon stock of the Corporation.

                          (vi) Anything in this subsection (g) to the contrary
notwithstanding, the Corporation shall not be required to give effect to any
adjustment in the Conversion Ratio unless and until the net effect of one or
more adjustments (each of which shall be carried forward), determined as above
provided, shall have resulted in a change of the Conversion Ratio by at least
one one-hundredth (.01) of one share of Common Stock, and when the cumulative
net effect of more than one adjustment so determined shall be to change the
Conversion Ratio by at least one one-hundredth (.01) of one share of Common
Stock, such change in Conversion Ratio shall thereupon be given effect.

                          (vii) The certificate of any firm of independent
public accountants of recognized standing selected by the Board (which may be
the firm of independent public accountants regularly employed by the
Corporation) shall be presumptively correct for any computation made under this
subsection (g).

                          (viii) If the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver
such dividend or distribution, then thereafter no adjustment in the number of
shares of




                                       10


   11

Common Stock issuable upon exercise of the right of conversion granted by this
subsection (g) or in the Conversion Ratio then in effect shall be required by
reason of the taking of such record.

                 (h) In the case of any Major Transaction occurring at any
time, at the option of the Holder, the indebtedness evidenced by the Note shall
thereafter be convertible into, in whole and in part and in lieu of the Common
Stock issuable upon such conversion prior to consummation of such Major
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Major
Transaction by a holder of that number of shares of Common Stock into which
such indebtedness, or portion thereof, was convertible immediately prior to
such Major Transaction (including, on a pro rata basis, the cash, securities,
or property received by holders of Common Stock in any tender or exchange offer
that is a step in such Major Transaction).  In case securities or property
other than Common Stock shall be issuable or deliverable upon conversion as
aforesaid, then all references in this Section 3 shall be deemed to apply, so
far as appropriate and nearly as may be, to such other securities or property.

                 (i) In case at any time or from time to time the Corporation
shall pay any stock dividend or make any other non-cash distribution of the
holders of its Common Stock, or shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other right, or there shall be any capital reorganization or reclassification
of the Common Stock of the Corporation or consolidation or merger of the
Corporation with or into another corporation or other entity, or any sale or
conveyance to another corporation or other entity of the assets or property of
the Corporation as an entirety or substantially as an entirety, or there shall
be a voluntary or involuntary dissolution, liquidation, or winding up of the
Corporation, then, in any one or more of said cases the Corporation shall give
at least 20 days prior written notice (the time of mailing of such notice shall
be deemed to be the time of giving thereof) to the Holder at the address of the
Holder as shown on the books of the Corporation as of the date of which (i) the
books of the Corporation shall close or a record shall be taken for such stock
dividend, distribution, or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation, or winding up shall take place, as the case may be, provided that
in the case of any Major Transaction to which subsection (h) applies the
Corporation shall give at least 30 days prior written notice as aforesaid.
Such notice shall also specify the date as of which the holders of the Common
Stock of record shall participate in said dividend, distribution, or
subscription rights or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, or conveyance or participate in
such dissolution, liquidation, or winding up, as the case may be.  Failure to
give such notice shall not invalidate any action so taken.

                 (j) Anything herein to the contrary notwithstanding, the
issuance or sale of the following shares of Common Stock or options, warrants,
or other rights to purchase Common Stock shall be excluded from any calculation
of, and shall not be deemed issued or sold for purposes of calculating, any
reduction, adjustment, or readjustment of the Conversion Ratio hereunder: (i)
shares of Common Stock issued upon conversion of the indebtedness evidenced




                                     11



   12

by this Note or any portion thereof; (ii) shares of Common Stock or options,
warrants, or other rights to purchase Common Stock issuable, reserved for
issuance, or issued pursuant to a stock option plan, employee stock ownership
plan, or other compensatory benefit plan of the Corporation, duly adopted by
the Board; (iii) shares of Common Stock, issuable, reserved for issuance, or
issued pursuant to any currently outstanding warrants or options, or any
options, warrants, or other rights issuable, reserved for issuance, or issued
to officers of the Corporation in the future for compensatory purposes, if
fully authorized by the Board; and (iv) shares of Common Stock issued upon
conversion of the indebtedness evidenced by the Convertible Notes or the
currently issued and outstanding preferred stock.

                 SECTION 4.  REPORTS AS TO ADJUSTMENTS.  Upon any adjustment of
the Conversion Ratio then in effect and any increase or decrease in the number
of shares of Common Stock issuable upon the operation of the conversion set
forth in Section 3, then, and in each such case, the Corporation shall promptly
deliver to the Holder, a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment was
calculated and specifying the Conversion Ratio then in effect following such
adjustment and the increased or decreased number of shares issuable upon the
conversion granted by Section 3, and shall set forth in reasonable detail the
method of calculation of each and a brief statement of the facts requiring such
adjustment.  Where appropriate, such notice to the Holder may be given in
advance and included as part of the notice required under the provisions of
Section 3(i).

                 SECTION 5.       MANDATORY CONVERSION.  (a)  At any time after
April 29, 1998, and so long as at such time the Common Stock is listed or
admitted to trading on a national securities exchange, the Corporation may
require the Holder to convert all or a portion of the principal amount of the
indebtedness evidenced by this Note into shares of Common Stock if, at such
time, the Current Market Price of the Common Stock has equalled or exceeded one
hundred fifty percent (150%) of the Conversion Price (as it may from time to
time be adjusted) for forty-five (45) consecutive Trading Days following the
forty-fifth monthly anniversary of the Tranche C Closing Date.  To exercise
such right, the Corporation must deliver a Mandatory Conversion Notice of the
exercise of such right to the Holder within thirty (30) days of the last day of
such forty-five (45) day period, such Mandatory Conversion Notice must be given
at least ten (10) Business Days, but not more than fifteen (15) Business Days
prior to the proposed Mandatory Conversion Date, and such Mandatory Conversion
Notice must specify the proposed Mandatory Conversion Date and the portion of
the principal amount of the indebtedness evidenced by this Note to be converted
into Common Stock.

                 (b)      All conversions effected pursuant to the preceding
paragraph will be made effective as of the close of business on the Mandatory
Conversion Date at the Conversion Ratio in effect on the Mandatory Conversion
Date; provided, however, that, in order to be able to convert, the Current
Market Price on the Mandatory Conversion Date must equal or exceed one hundred
fifty percent (150%) of the Conversion Price in effect on the Mandatory
Conversion Date.  If the Current Market Price on the Mandatory Conversion Date
does not equal or exceed





                                     12


   13


one hundred fifty percent (150%) of the Conversion Price in effect on the
Mandatory Conversion Date, the Corporation's election to require conversion
will be deemed void and no conversion will be effected pursuant to such notice.
Such event will not be deemed, however, to alter or restrict the Corporation's
right to again require conversion at such time as the Current Market Price
equals or exceeds one hundred fifty percent (150%) of the then current
Conversion Price for forty-five (45) consecutive Trading Days prior to such
time.  Upon conversion required by the Corporation pursuant to this paragraph
and the immediately preceding paragraph, all accrued but unpaid interest with
respect to the principal amount of the indebtedness evidenced by this Note
being converted shall be payable in accordance with the provisions of the
following paragraph.

                 (c)      Conversions of the indebtedness evidenced by this
Note effected by the exercise of the Corporation's right to require conversion
will be deemed effective as of the close of business on the Mandatory
Conversion Date without any action by the Holder and the Holder will, as of
such time, be a stockholder of the Corporation with respect to the number of
shares of Common Stock into which the principal balance evidenced by this Note
(or such portion of the principal balance evidenced by this Note as the
Corporation shall have specified) shall have been converted.  The Holder agrees
promptly to surrender this Note for cancellation following mandatory
conversion.  Certificates representing the shares of Common Stock issuable by
the Corporation as a result of the mandatory conversion of all or a portion of
the principal balance of the indebtedness evidenced by this Note and all
dividends and other distributions payable with respect to such shares and all
accrued but unpaid interest payable pursuant to the immediately preceding
paragraph will be retained by the Corporation pending surrender of this Note
for cancellation.  As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note, the Corporation shall deliver
or cause to be delivered, either by personal delivery or by certified or
registered mail or by a recognized overnight courier service, in any such case,
properly insured, to the Holder in accordance with the written instructions of
the Holder (i) certificates representing the number of Conversion Shares to
which the Holder shall be entitled, and (ii) if less than the entire principal
amount of indebtedness evidenced by this Note is being converted, a new
promissory note, in the form of this Note, for the balance of the indebtedness
that is not being so converted.

                 (d)      In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.

                 SECTION 6.       MANDATORY PREPAYMENT.  In the case of any
Change Event occurring at any time, at the option of the Holder, the Holder may
require the Corporation to prepay all or a portion of the then outstanding
principal amount of the indebtedness evidenced





                                     13


   14



by this Note.  To exercise such right of prepayment, the Holder must provide
the Corporation with a Mandatory Prepayment Notice at least thirty (30) days
prior to the proposed Mandatory Prepayment Date which Mandatory Prepayment
Notice shall specify the portion of the principal amount of the indebtedness
evidenced by this Note (which must be in integral multiples of One Thousand
Dollars ($1,000)) to be prepaid.  On the Mandatory Prepayment Date specified,
the Corporation shall prepay the portion of the principal amount of the
indebtedness evidenced by this Note that the Holder has specified must be
prepaid on such date, plus accrued interest on such principal amount to the
date of the prepayment.  Any prepayment shall be made by cashiers check or by
wire transfer of immediately available funds, in currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts, at such address or to such account, as applicable, as shall be
designated to the Corporation by the Holder.

                 SECTION 7.       OPTIONAL PREPAYMENT.  The Note shall be
subject to prepayment, at the option of the Corporation, at any time and from
time to time on and after April 29, 1998.  To exercise such right of
prepayment, the Corporation must provide the Holder with an Optional Prepayment
Notice at least sixty (60) days prior to the proposed Optional Prepayment Date
which Optional Prepayment Notice shall specify the portion of the principal
amount of the indebtedness evidenced by this Note (which must be in integral
multiples of One Thousand Dollars ($1,000)) to be prepaid.  The Holder's option
to convert the indebtedness evidenced by this Note as set forth in Section 3
hereof shall continue notwithstanding the exercise of the option of the
Corporation to prepay under this Section 7, so long as the Holder requests
conversion in accordance with the terms hereof up to and including, but not
after, the close of business on the third Business Day prior to the Optional
Prepayment Date.  On the Optional Prepayment Date specified, the Corporation
shall prepay the portion of the principal amount of the indebtedness evidenced
by this Note that the Corporation has specified is to be prepaid on such date,
plus accrued interest on such principal amount to the date of the prepayment.
Any prepayment shall be made by cashiers check or by wire transfer of
immediately available funds, in currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts, at
such address or to such account, as applicable, as shall be designated to the
Corporation by the Holder.  This Note shall not be subject to prepayment,
whether in whole or in part, on or before April 29, 1998.

                 SECTION 8.       SUBORDINATION.  (a)  The Corporation
covenants and agrees, and the Holder likewise covenants and agrees, that no
payment shall be made by the Corporation on account of principal of or interest
on this Note, or otherwise, if there shall have occurred and be continuing, and
the Corporation and the Holder shall have received notice from the holder or
holders of, a default with respect to any Senior Indebtedness (i) permitting
the acceleration thereof and such default is the subject of a judicial
proceeding, or (ii) in an aggregate principal amount of not less than One
Million Dollars ($1,000,000) entitling such holder or holders of, a default
with respect to any Senior Indebtedness (i) permitting the acceleration thereof
and such default is the subject of a judicial proceeding, or (ii) in an
aggregate principal amount of not less than One Million Dollars ($1,000,000)
entitling such holder or holders to compel the acceleration thereof (provided,
however, that in the case of Senior Indebtedness issued pursuant to an
indenture, such notice may be validly given only by the trustee under such
indenture), unless and





                                     14


   15

until such default or Event of Default shall have been cured or waived or shall
have ceased to exist or such notice is withdrawn or found by a court of
competent jurisdiction to be invalid.

                 (b)      Upon any payment by the Corporation or distribution
of assets of the Corporation of any kind or character, whether in cash,
property, or securities, to creditors of the Corporation under any dissolution
or winding up or liquidation or reorganization of the Corporation, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership, or other
similar proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full in money or money's worth, or payment
thereof provided for, before any payment is made on account of the principal of
or interest on this Note and upon such dissolution or winding up or liquidation
or reorganization, any payment by the Corporation, or distribution of assets of
the Corporation of any kind or character, whether in cash, property, or
securities, to which the Holder would be entitled except for the provisions
hereof, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent, or other person making such payment or
distribution directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the Holder.

                 (c)      The foregoing notwithstanding, in the event that any
payment of or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Holder before all Senior Indebtedness is
paid in full in money or money's worth, or provision is made for such payment,
then and in such event such payment or distribution shall be paid over or
delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness may have been issued, as their respective interests may appear,
for application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all Senior Indebtedness in full in money or money's
worth, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness (but subject to the power of a court of
competent jurisdiction to make other equitable provision, which shall have been
determined by such court to give effect to the rights conferred herein upon the
Senior Indebtedness and the holders thereof with respect to this Note or the
Holder hereof by a lawful plan or reorganization or readjustment under
applicable bankruptcy law).

                 (d)      The holders of Senior Indebtedness may, at any time
and from time to time, without the consent of or notice to the Holder, without
incurring responsibility to the Holder and without impairing or releasing the
obligations of the Holder to the holders of Senior Indebtedness:  (i) change
the manner, place, or terms of payment or change or extend the time of payment
of,



                                     15


   16

or renew or alter Senior Indebtedness, or otherwise amend, in any manner,
Senior Indebtedness is outstanding; provided, however, that the average
weighted maturity of such Senior Indebtedness shall not be decreased without
the consent of the Holder; (ii) sell, exchange, release, or otherwise deal with
any property pledged, mortgaged, or otherwise securing Senior Indebtedness;
(iii) release any person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Corporation and any other person.

                 (e)      Subject to the payment in full of all amounts then
due (whether by acceleration of the maturity thereof or otherwise) on account
of the principal of, premium, if any, and interest on all Senior Indebtedness
at the time outstanding, the Holder shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property, or securities of the Corporation applicable to the Senior
Indebtedness until the principal of and interest on this Note shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
by the Corporation to the holders of Senior Indebtedness of any cash, property,
or securities to which the Holder would be entitled except for the provisions
hereof, and no payments over pursuant to the provisions hereof to the holders
of Senior Indebtedness by the Holder, shall, as between the Corporation, its
creditors other than holders of Senior Indebtedness, and the Holder, be deemed
to be a payment by the Corporation to or on account of the Senior Indebtedness.

                 (f)      It is understood that the foregoing provisions of
this Note are and are intended solely for the purpose of defining the relative
rights of the Holder on the one hand and the holders of Senior Indebtedness on
the other hand.  Nothing contained in this Note is intended to or shall impair,
as among the Corporation, its creditors other than the holders of Senior
Indebtedness, and the Holder, the obligation of the Corporation, which is
absolute and unconditional, to pay to the Holder the principal of and interest
on this Note as and when the same shall become due and payable in accordance
with its terms, or is intended to or shall affect the relative rights of the
Holder and creditors of the Corporation other than the holders of Senior
Indebtedness, nor shall anything herein prevent the Holder from exercising all
remedies otherwise permitted by applicable law upon default under this Note or
the Note Purchase Agreement.

                 (g)      Upon any payment or distribution of assets of the
Corporation referred to herein, the Holder shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation, or reorganization proceedings are
pending, or certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent, or other person making such payment or distribution, delivered
to the Holder, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior Indebtedness and other
indebtedness of the Corporation, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon, and all other facts pertinent
thereto.

                 (h)      The Corporation shall give prompt written notice to
the Holder of any fact known to the Corporation that would prohibit the making
of any payment of moneys to or by the Corporation in respect of this Note.





                                       16


   17

                 SECTION 9.       ACCELERATION.  This Note and the indebtedness
evidenced hereby is subject to acceleration under the terms and conditions set
forth in the Note Purchase Agreement.

                 SECTION 10.  MISCELLANEOUS.  (a) Any notice required by the
provisions of this Note to be given to the Holder or the Corporation shall be
given and deemed received or delivered in accordance with the provisions of
Section 10.4 of the Note Purchase Agreement.

                 (b)      In the event of prepayment or conversion of this Note
in part only, a new note or notes for the unpaid or unconverted portion hereof
will be issued in the name or names requested by the Holder upon the
cancellation hereof.

                 (c)      The transfer of this Note is registrable on the books
of the Corporation upon surrender of this Note for registration of transfer at
the offices of the Corporation in Nashville, Tennessee, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation duly executed by, the Holder or its attorney duly authorized in
writing, and thereupon one or more new notes of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.  New notes are issuable only in registered form
without coupons in denominations of One Thousand Dollars ($1,000) and any
integral multiple thereof.  This Note is exchangeable for a like aggregate
principal amount of notes of a different authorized denomination, as requested
by the Holder.  No service charge shall be made of any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

                 (d)      Prior to the due presentment of this Note for
registration of transfer, the Corporation and any agent of the Corporation may
treat the person in whose name this Note is registered as the owner hereof for
all purposes, irrespective of whether this Note be overdue, and neither the
Corporation nor any such agent shall be affected by notice to the contrary.

                 (e)      This Note shall be governed by and construed in
accordance with the laws of the State of California.

                 (f)      The Corporation agrees, to the extent permitted by
law, to pay to the Holder all costs and expenses (including attorneys' fees)
incurred by it in the collection hereof or the enforcement of any right or
remedy provided for herein (including such costs and expenses incurred in
connection with a workout or an insolvency or bankruptcy proceeding).

                 (g)      The provisions of the Note Purchase Agreement are
hereby incorporated into this Note by this reference.





                                     17


   18


         IN WITNESS WHEREOF, the undersigned has executed this Note effective
as of the date first above written.



                             CORRECTIONS CORPORATION OF AMERICA,
                             A Delaware corporation
                             
                             
                             
                             By:
                                 -------------------------------------------
                                 Doctor R. Crants, Chairman of the Board and
                                 Chief Executive Officer



ATTEST:



- --------------------------------
Darrell K. Massengale, Secretary





                                     18


   19

                    [FORM OF MANDATORY CONVERSION NOTICE]


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


         Notice is hereby given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, Corrections Corporation of America hereby elects to
require conversion of the 8.5% Convertible, Extendable, Subordinated Note,
originally due September 30, 1998, issued by it (the "Note").  The Note to be
converted and the principal amount thereof to be converted are as follows:





                                                      Principal                Number of
                        Outstanding                 Amount to be               Shares to
Note Number         Principal Amount                  Converted                Be Delivered
- --------------------------------------------------------------------------------------------
                                                                      





The Mandatory Conversion Date will be                       .
                                     -----------------------

                                        CORRECTIONS CORPORATION OF AMERICA
                                        
                                        
                                        
                                        By:
                                             -------------------------------
                                             Name:
                                                  --------------------------
                                             Title:
                                                   -------------------------




                                   Exhibit A




                                       19


   20

                    [FORM OF MANDATORY PREPAYMENT NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA
     
     --------------
     --------------


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and that certain Note
Purchase Agreement, dated June 22, 1992, between Corrections Corporation of
America, Pacific Mutual Life Insurance Company, and PM Group Life Insurance
Company, as amended from time to time, it hereby exercises its right to require
prepayment of such Note or portion thereof (which is $1,000 or an integral
multiple thereof), plus all accrued but unpaid interest with respect to such
principal amount.

         The Mandatory Prepayment Date shall be _____________.  The principal
amount to be prepaid shall be $__________________________.



                                [Name of Holder]



Dated:                                     By:
      -------------                              ------------------------------
                                           Name:
                                                 ------------------------------
                                           Title:
                                                 ------------------------------




                                   Exhibit B



                                       20



   21

                          [FORM OF CONVERSION NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA

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



         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and the Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, it hereby exercises its right to convert such Note,
or portion thereof (which is $1,000 or an integral multiple thereof), below
designated, into shares of Common Stock of Corrections Corporation of America
and directs that the shares issuable and deliverable upon the conversion, and
any notes representing any unconverted principal amount thereof, be issued and
delivered to the registered holder of such Note unless a different name has
been indicated below.  If shares or a new note representing unconverted
principal are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.




                                [Name of Holder]



Dated:                By:
      ------------          ---------------------------------------------------
                      Name:
                            ---------------------------------------------------
                      Title:
                            ---------------------------------------------------

                      Principal Amount to be converted (in an integral multiple
                      of $1,000, if less than all):
                      
                      
                                       $
                                        ---------------------------




                                   Exhibit C




                                       21


   22




Fill in for registration of shares
of Common Stock and Note if to be
issued otherwise than to the
registered Holder.


- ---------------------------------
Name


- ---------------------------------
Address


- ---------------------------------
Please print name and address
(including zip code number)

SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFYING NUMBER


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


                                     22



   23

                      [FORM OF OPTIONAL PREPAYMENT NOTICE]

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



         Notice is hereby given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated June 22, 1992, between Corrections Corporation of America,
Pacific Mutual Life Insurance Company, and PM Group Life Insurance Company, as
amended from time to time, Corrections Corporation of America hereby elects to
prepay the 8.5% Convertible, Extendable, Subordinated Note, originally due
September 30, 1998, issued by it (the "Note").  Prepayment of such Note or
portion thereof (which is $1,000 or an integral multiple thereof), plus all
accrued but unpaid interest with respect to such principal amount shall be
effective on the Optional Prepayment Date set forth below.

         The Optional Prepayment Date shall be ___________.  The principal
amount to be prepaid shall be $_______________________.



                             CORRECTIONS CORPORATION OF AMERICA
                             
                             
                             
                             By:  
                                  ----------------------------------
                                  Name:    
                                       -----------------------------    
                                  Title:   
                                       -----------------------------
                             
                             



                                   Exhibit D





                                     23

EX-4.(U)

   1


                                                                EXHIBIT 4(u)

         THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS
         OF A NOTE PURCHASE AGREEMENT DATED AS OF FEBRUARY 29, 1996 BETWEEN THE
         CORPORATION AND PMI MEZZANINE FUND, L.P. AND A REGISTRATION RIGHTS
         AGREEMENT DATED AS OF FEBRUARY 29, 1996 BETWEEN THE CORPORATION AND
         PMI MEZZANINE FUND, L.P., COPIES OF WHICH ARE ON FILE AT THE OFFICES
         OF THE CORPORATION.

         THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933 OR QUALIFIED UNDER ANY APPLICABLE STATE
         SECURITIES OR BLUE SKY LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR SALE,
         PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND
         QUALIFICATION UNDER APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, OR
         PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION
         REQUIREMENTS.

                     CORRECTIONS CORPORATION OF AMERICA

                     7.5% CONVERTIBLE, SUBORDINATED NOTE
                            DUE FEBRUARY 28, 2002



No. 013
                                                               February 29, 1996


                 SECTION 1.  PAYMENT OBLIGATION.  CORRECTIONS CORPORATION OF
AMERICA, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Corporation"), for value received, hereby
promises to pay to ATWELL & CO., as nominee for PMI Mezzanine Fund, L.P., a
limited partnership duly organized and existing under the laws of the State of
Delaware (herein called "PMI"), or registered assigns (hereinafter referred to
as the "Holder"), the principal sum of Five Million Dollars ($5,000,000) on the
Maturity Date, and to pay interest thereon from the date hereof quarterly on
March 31, June 30, September 30, and December 31 of each year, commencing March
31, 1996, at (i) the Coupon Rate, or (ii) upon the occurrence of a Triggering
Event and until the date on which such Triggering Event is cured or waived or
until the date that is ninety (90) days from initial occurrence of the
Triggering Event, whichever is later, at the Triggering Event Rate, until the
principal hereof is paid to the person in whose name this Note is registered at
the close of business on the Business Day immediately preceding the date such
payment is due.  Any payments due hereunder that fall due on a day that is not
a Business Day shall be payable on the first succeeding




   2

Business Day and such extension of time shall be included in the computation of
interest due hereunder.  Payment of the principal of and interest on this Note
will be made by cashiers check or by wire transfer of immediately available
funds, in currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts, at such address or to
such account, as applicable, as shall be designated to the Corporation by the
Holder.

                 SECTION 2.  DEFINITIONS.  As used herein, the following terms
will be deemed to have the meanings set forth below:

         "BOARD" means the board of directors of the Corporation.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday, or
         Friday that is not a day on which banking institutions in Los Angeles,
         California are authorized or obligated by law or executive order to
         close.

         "CHANGE EVENT" shall mean:

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

                 (b) the Incumbent Board shall cease for any reason to
                 constitute at fifty percent (50%) of the members of the Board;
                 or

                 (c) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such



                                     -2-




   3

                 reorganization, merger, or consolidation beneficially own,
                 directly or indirectly, more than 50% of the combined voting
                 power of the then outstanding voting securities entitled to
                 vote generally in the election of directors of the corporation
                 resulting from such reorganization, merger, or consolidation;
                 or

                 (d) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "CLOSING DATE" shall have the meaning ascribed thereto in Section 2.2
         of the Note Purchase Agreement.

         "COMMON STOCK" means the common stock of the Corporation, par value
         $l.00 per share.

         "CONVERSION PRICE" means $53.30 per share of Common Stock, subject to
         adjustment from time to time as herein set forth.

         "CONVERSION RATIO" means the number of Conversion Shares to be
         delivered upon conversion of One Hundred Dollars ($100) of principal
         amount of this Note.  Subject to the provisions for adjustment set
         forth herein, the Conversion Ratio shall be determined as the quotient
         of (i) the principal amount of this Note to be converted, divided by
         (ii) the Conversion Price.  Subject to the provisions for adjustment
         set forth herein, the Conversion Ratio initially shall be 1.8762.

         "CONVERSION SHARES" means fully paid and nonassessable shares of
         Common Stock issuable upon conversion of the indebtedness evidenced by
         this Note.

         "CONVERTIBLE NOTES" means the Corporation's (a) $7,000,000 aggregate
         principal amount 8.5% Convertible Subordinated Notes due November 7,
         1999, (b) $7,500,000 aggregate principal amount 8.5% Convertible,
         Extendable, Subordinated Notes due on September 30, 1998 or, if
         extended, on various dates, the latest of which is September 30, 2000,
         (c) option to purchase the Floating Rate Notes, and (d) the Floating
         Rate Notes when issued.

         "CONVERTIBLE SECURITIES" means rights, warrants, options or other
         securities convertible into or exchangeable for shares of Common
         Stock.

         "COUPON RATE" means seven and one-half percent (7.5%) per annum.



                                     -3-



   4

         "CURRENT MARKET PRICE" when used with reference to shares of Common
         Stock, shall mean the closing price per share of Common Stock on such
         date and, when used with reference to shares of Common Stock for any
         period shall mean the average of the daily closing prices per share of
         Common Stock for such period.  If the Common Stock is listed or
         admitted to trading on a national securities exchange, the closing
         price for each day shall be the last sale price, regular way, or, in
         case no such sale takes place on such day, the average of the closing
         bid and asked prices, regular way, in either case as reported in the
         principal consolidated transaction reporting system with respect to
         securities listed or admitted to trading on the New York Stock
         Exchange or, if the Common Stock is not listed or admitted to trading
         on the New York Stock Exchange, as reported in the principal
         consolidated transaction reporting system with respect to securities
         listed on the principal national securities exchange on which the
         Common Stock is listed or admitted to trading.  If the Common Stock is
         not publicly held or so listed or publicly traded, "Current Market
         Price" shall mean the fair market value per share of Common Stock as
         determined in good faith by the Board based on an opinion of an
         independent investment banking firm with an established national
         reputation as a valuer of securities, which opinion may be based on
         such assumptions as such firm shall deem to be necessary and
         appropriate.

         "EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1 of
         the Note Purchase Agreement.

         "EXCHANGE ACT" shall have the meaning set forth in Section 3.1 of the
         Note Purchase Agreement.

         "FLOATING RATE NOTES" shall have the meaning set forth in the Sodexho
         Agreement.

         "INCUMBENT BOARD" means the individuals who, as of the Closing Date,
         constitute the Board; provided, however, that any individual becoming
         a director subsequent to the Closing Date, whose election, or
         nomination for election by the Corporation's stockholders, was
         approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be deemed to be a member of the
         Incumbent Board.

         "MAJOR TRANSACTION" shall mean:

                 (a) approval by the stockholders of the Corporation of a
                 reorganization, merger, or consolidation, in each case, with
                 respect to which all or substantially all the individuals and
                 entities who were the respective beneficial owners of the
                 voting securities of the Corporation immediately prior to such
                 reorganization, merger, or consolidation do not, following
                 such reorganization, merger, or consolidation beneficially
                 own, directly or indirectly, more than 50% of the combined
                 voting power of the then





                                     -4-


   5

                 outstanding voting securities entitled to vote generally in
                 the election of directors of the corporation resulting from
                 such reorganization, merger, or consolidation; or

                 (b) the sale or other disposition of all or substantially all
                 the assets or property of the Corporation in one transaction
                 or a series of related transactions.

         "MANDATORY CONVERSION DATE" means the Business Day specified by the
         Corporation, in compliance with the provisions hereof, as the date on
         which all or a portion of the indebtedness evidenced by this Note will
         be converted into shares of Common Stock pursuant to the Corporation's
         right to compel such conversion.

         "MANDATORY CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit A and incorporated
         herein by this reference.

         "MANDATORY PREPAYMENT DATE" means the Business Day specified by the
         Holder, in compliance with the provisions hereof, as the date on which
         all or a portion of the indebtedness evidenced by this Note must be
         prepaid pursuant to the Holder's right to compel such prepayment.

         "MANDATORY PREPAYMENT NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit B and incorporated
         herein by this reference.

         "MATURITY DATE" means February 28, 2002.

         "NOTE" means this 7.5% convertible, subordinated note issued by the
         Corporation.

         "NOTE PURCHASE AGREEMENT" means that certain Note Purchase Agreement,
         dated as of February 29, 1996, between the Corporation and PMI.

         "OPTIONAL CONVERSION NOTICE" means a written notice substantially in
         the form of the notice attached hereto as Exhibit C and incorporated
         herein by this reference.

         "SENIOR INDEBTEDNESS" means the principal of and premium, if any, and
         unpaid interest on (a) indebtedness (other than indebtedness evidenced
         by the Convertible Notes, indebtedness that is subordinated in right
         of payment to one or more item or type of indebtedness of the
         Corporation, or indebtedness incurred in violation of the terms and
         conditions of the Note Purchase Agreement) of the Corporation,
         irrespective of whether secured and whether heretofore or hereafter
         (i) incurred for borrowed money, or (ii) evidenced by a note or
         similar instrument given in connection with the acquisition by the
         Corporation of any business, properties, or assets, including
         securities (but not including any account payable or other obligation
         created or assumed by the Corporation in the ordinary course of
         business in





                                     -5-



   6

         connection with the obtaining of materials or services), (b) any
         refundings, renewals, extensions, or deferrals of any of the
         indebtedness included as Senior Indebtedness by virtue of clause (a)
         hereof, and (c) obligations under capital leases; in each case for the
         payment of which the Corporation is liable directly or indirectly by
         guarantee, letter of credit, obligation to purchase or acquire, or
         otherwise, unless the terms of the instrument evidencing such
         indebtedness or capital lease or pursuant to which such indebtedness
         or capital lease is outstanding specifically provide that such
         indebtedness or capital lease is not superior in right of payment to
         the indebtedness evidenced by this Note.

         "SODEXHO AGREEMENT" means that certain Securities Purchase Agreement,
         dated as of June 23, 1994, between Sodexho S.A., a French corporation,
         or its designee and the Corporation, as amended by that certain
         Amendment No. 1 to Securities Purchase Agreement, dated as of July 11,
         1995.

         "TRADING DAY" means, if the Common Stock is listed or admitted to
         trading on any national securities exchange, a day on which such
         exchange is open for the transaction of business, otherwise, a
         Business Day.

         "TRIGGERING EVENT" means the occurrence of any Unmatured Event of
         Default of Event of Default described in clauses (i), (ii), and (iv)
         through (x), inclusive, of Section 7.1 of the Note Purchase Agreement.
         For purposes of determining the period during which the Triggering
         Event Rate shall be in effect, a Triggering Event shall not be deemed
         to have occurred until the date on which the Holder shall have given
         notice of the occurrence thereof to the Corporation.

         "TRIGGERING EVENT RATE" means nine and one-half percent (9.5%) per
         annum.

         "UNMATURED EVENT OF DEFAULT" shall mean any event or condition, the
         occurrence of which would, with the lapse of time or the giving of
         notice, or both, constitute an Event of Default.

                 SECTION 3.  OPTIONAL CONVERSION.  (a)  Subject to and upon
compliance with the provisions of this Note, the Holder is entitled, at its
option, at any time on or before the close of business on the Business Day
prior to the Maturity Date, or in case this Note or a portion hereof is called
for conversion by the Corporation in accordance with the terms hereof, then
until and including, but not after, the close of business on the third Business
Day prior to the Mandatory Conversion Date, to convert all or a portion of the
principal amount of the indebtedness evidenced by this Note into Conversion
Shares.




                                     -6-


   7

                 (b)  The principal amount of the indebtedness evidenced by
this Note or any portion of the principal amount of the indebtedness evidenced
hereby that is One Thousand Dollars ($1,000), an integral multiple of One
Thousand Dollars ($1,000), or the remaining balance of the principal amount of
the indebtedness evidenced by this Note may be converted into Conversion
Shares.  Subject to the provisions for adjustment set forth hereinafter, the
indebtedness evidenced by the Note shall be convertible into Conversion Shares
at a price per share equal to the Conversion Price and the number of Conversion
Shares to be deliverable to the Holder upon conversion of One Hundred Dollars
($100) of the principal amount of this Note shall be equal to the Conversion
Ratio.

                 (c)  Conversion of all or a portion of the indebtedness
evidenced by this Note may be effected by the Holder upon the surrender to the
Corporation at the principal office of the Corporation in the State of
Tennessee or at the office of any agent or agents of the Corporation, as may be
designated by the Board, of this Note, duly endorsed or assigned to the
Corporation or in blank, accompanied by a Optional Conversion Notice to the
Corporation that the Holder elects to convert the principal amount of the
indebtedness evidenced by this Note or, if less than the entire principal
amount of the indebtedness evidenced by this Note is to be converted, the
portion thereof to be converted.  Such Optional Conversion Notice shall specify
the name or names in which the Holder wishes the certificate or certificates
for shares of Common Stock to be issued.  In case such notice shall specify a
name or names other than that of the Holder, such notice shall be accompanied
by payment of all transfer taxes payable upon the issuance of shares of Common
Stock in such name or names.  Other than such taxes, the Corporation will pay
any and all issue and other taxes (other than taxes based on income) that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the indebtedness evidenced by this Note.  No payment or
adjustment shall be made upon any conversion of this Note on account of any
dividends or other distributions payable on the Conversion Shares; provided,
however, that the Holder shall be entitled to receive the full amount of any
dividends or other distributions declared with respect to the Conversion Shares
with a record date on or after the effective date of such conversion.

                 As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note and the receipt of such notice
relating thereto and, if applicable, payment of all transfer taxes (or the
demonstration to the satisfaction of the Corporation that such taxes have been
paid), the Corporation shall deliver or cause to be delivered, either by
personal delivery or by certified or registered mail or by a recognized
overnight courier service, in any such case, properly insured, to the Holder in
accordance with the written instructions of the Holder (i) certificates
representing the number of Conversion Shares to which the Holder shall be
entitled, and (ii) if less than the entire principal amount of indebtedness
evidenced by this Note is being converted, a new promissory note, in the form
of this Note, for the balance of the indebtedness that is not being so
converted.  Such conversion shall be deemed to have been made at the close of
business on the date of giving such notice and of such surrender of this Note
so that the rights of the Holder (as a noteholder) with respect to the
principal amount being converted





                                     -7-


   8

shall cease, and the person or persons entitled to receive the Conversion
Shares issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock as of such day.  All accrued but unpaid
interest through the Business Day immediately preceding the date of such
conversion with respect to the principal amount of the indebtedness evidenced
by this Note being converted shall be payable upon conversion.

                 The Corporation shall not be required to convert, and no
surrender of this Note shall be effective for that purpose, while the transfer
books of the Corporation for the Common Stock are closed for any purpose (but
not for any period in excess of 15 days); but the surrender of this Note for
conversion during any period while such books are so closed shall become
effective for conversion immediately upon the reopening of such books, as if
the conversion had been made on the date this Note is surrendered, and at the
Conversion Ratio in effect at the date of such surrender.

                 (d)  In case this Note is to be prepaid pursuant to the
mandatory prepayment provisions hereof, such right of conversion shall cease
and terminate as to the portion of this Note that is to be prepaid at the close
of business on the Business Day next preceding the date fixed for mandatory
prepayment unless the Corporation shall default in the payment of the mandatory
prepayment amount.

                 (e)  In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.

                 (f)      (i) The Corporation shall at all times reserve and
keep available for issuance upon the conversion of the indebtedness evidenced
by this Note, free from any preemptive rights, such number of its authorized
but unissued shares of Common Stock as will from time to time be sufficient to
permit the conversion of all of the indebtedness evidenced by this Note, and
shall take all action required to increase the authorized number of shares of
Common Stock if necessary to permit the conversion of all of the indebtedness
evidenced by this Note.

                          (ii)    If the Corporation shall issue shares of
Common Stock upon conversion of indebtedness evidenced by this Note as
contemplated by this Section 3, the Corporation shall issue together with each
such share of Common Stock any rights issued to holders of Common Stock of the
Corporation, irrespective of whether such rights shall be exercisable at such
time, but only if such rights are issued and outstanding and held by other
holders of Common Stock of the Corporation at such time and have not expired.





                                     -8-



   9

                 (g)      The Conversion Ratio will be subject to adjustment
from time to time as follows:

                          (i)     In case the Corporation shall at any time or
         from time to time after the Closing Date (A) pay a dividend, or make a
         distribution, on the outstanding shares of Common Stock in shares of
         Common Stock, (B) subdivide the outstanding shares of Common Stock,
         (C) combine the outstanding shares of Common Stock into a smaller
         number of shares, or (D) issue by reclassification of the shares of
         Common Stock any shares of capital stock of the Corporation, then, and
         in each such case, the Conversion Ratio in effect immediately prior to
         such event or the record date therefor, whichever is earlier, shall be
         adjusted so that the Holder shall be entitled to receive the number of
         shares of Common Stock (or other capital stock) of the Corporation
         that the Holder would have owned or have been entitled to receive
         after the happening of any of the events described above, had the
         indebtedness evidenced by this Note been converted immediately prior
         to the happening of such event or the record date therefor, whichever
         is earlier.  An adjustment made pursuant to this clause (i) shall
         become effective (x) in the case of any such dividend or distribution,
         immediately after the close of business on the record date for the
         determination of holders of shares of Common Stock entitled to receive
         such dividend or distribution, or (y) in the case of such subdivision,
         reclassification, or combination, at the close of business on the day
         upon which such corporate action becomes effective.  No adjustment
         shall be made pursuant to this clause (i) in connection with any
         transaction to which subsection (h) applies.

                          (ii)    In case the Corporation shall issue shares of
         Common Stock or Convertible Securities after the Closing Date at a
         price per share (or having a conversion price per share) less than the
         Current Market Price per share of Common Stock, as of the date of
         issuance of such shares or of such Convertible Securities, then, and
         in each such case, the Conversion Ratio shall be adjusted so that the
         Holder shall be entitled to receive, upon the conversion hereof, the
         number of shares of Common Stock determined by multiplying (A) the
         applicable Conversion Ratio on the day immediately prior to such date
         by (B) a fraction, the numerator of which shall be the sum of (1) the
         number of shares of Common Stock outstanding on such date, plus (2)
         the number of additional shares of Common Stock issued (or into which
         the Convertible Securities may convert), and the denominator of which
         shall be the sum of (a) the number of shares of Common Stock
         outstanding on such date, plus (b) the number of shares of Common
         Stock purchasable at the then Current Market Price per share with the
         aggregate consideration received or receivable by the Corporation for
         the total number of shares of Common Stock so issued (or into which
         the Convertible Securities may convert).  Notwithstanding the
         foregoing, in the event that after the date hereof the Corporation (x)
         issues the Floating Rate Notes, or (y) sells up to 1,000,000 shares
         (dilution adjustments for future public stock issuances in excess of
         1,000,000 shares after adjustment is made for the first 1,000,000
         shares pursuant to this sentence, shall be made in accordance with the





                                     -9-


   10

         previous sentence) of its Common Stock to the public in a registered
         offering or offerings (on Forms other than S-4, S-8, or any successor
         Forms or similar Forms) (each such issuance an "Adjustment Event"),
         then, and in each such case, the Conversion Ratio shall be adjusted so
         that the holder shall be entitled to receive, upon the conversion
         hereof, the number of shares of Common Stock determined by multiplying
         the applicable Conversion Ratio on the day immediately prior to such
         Adjustment Event by a fraction, (i) the numerator of which shall be
         the number of shares of Common Stock outstanding, plus, in the case of
         an Adjustment Event described in clause (x), the number of shares of
         Common Stock into which the Floating Rate Notes may convert,
         immediately after such Adjustment Event, and (ii) the denominator of
         which shall be the number of shares of Common Stock outstanding,
         immediately prior to such Adjustment Event.

                          An adjustment made pursuant to this clause (ii) shall
         be made on the next Business Day following the date on which any such
         issuance is made and shall be effective retroactively to the close of
         business on the date of such issuance.  For purposes of this clause
         (ii), the aggregate consideration received or receivable by the
         Corporation in connection with the issuance of shares of Common Stock
         or of rights, warrants, or other securities convertible into shares of
         Common Stock shall be deemed to be equal to the sum of the aggregate
         offering price (before deduction of underwriting discounts or
         commissions and expenses payable to third parties) of all such Common
         Stock, rights, warrants, and convertible securities plus the minimum
         aggregate amount, if any, payable upon exercise of conversion of any
         such rights, warrants, and convertible securities into shares of
         Common Stock.  The issuance of any shares of Common Stock (whether
         treasury shares or newly issued shares) pursuant to (a) a dividend or
         distribution on, or subdivision, combination or reclassification of,
         the outstanding shares of Common Stock requiring an adjustment in the
         conversion ratio pursuant to clause (i) of this subsection (g), or (b)
         other than as provided in clause (y) above, the terms of a firmly
         committed underwritten public offering, shall not be deemed to
         constitute an issuance of Common Stock or Convertible Securities by
         the Corporation to which this clause (ii) applies.

                          Upon the expiration of any unexercised options,
         warrants, or rights to convert any convertible securities for which an
         adjustment has been made pursuant to this clause (ii), the adjustments
         shall forthwith be reversed to effect such rate of conversion as would
         have been in effect at the time of such expiration or termination had
         such options, warrants, or rights or convertible securities, to the
         extent outstanding immediately prior to such expiration or
         termination, never been issued.  If the purchase price provided for in
         any option, warrant, or rights to convert any convertible securities
         for which an adjustment has been made pursuant to this clause (ii),
         the additional consideration, if any, payable upon the conversion or
         exchange of any convertible securities for which an adjustment has
         been made, or the rate at which any convertible securities referred to
         above are convertible into or exchangeable for Common Stock shall, at
         any time, increase or decrease (other than





                                    -10-


   11

         under or by reason of provisions designed to protect against
         dilution), then, the Conversion Ratio in effect at the time of such
         event shall forthwith be readjusted to the Conversion Ratio that would
         have been in effect at such time had such options, warrants, or rights
         or convertible securities still outstanding provided for such changed
         purchase price, additional consideration, or conversion rate, as the
         case may be, at the time initially granted, issued, or sold.  No
         adjustment shall be made pursuant to this clause (ii) in connection
         with any transaction to which subsection (h) applies.

                          (iii) In case the Corporation shall at any time or
         from time to time after the Closing Date declare, order, pay, or make
         a dividend or other distribution (including, without limitation, any
         distribution of stock or other securities or property or rights or
         warrants to subscribe for securities of the Corporation or any of its
         subsidiaries by way of dividend or spinoff), on its Common Stock,
         other than (A) dividends payable in cash in an aggregate amount not to
         exceed 50% of net income from continuing operations before
         extraordinary items of the Corporation, determined in accordance with
         generally accepted accounting principles, during the period (treated
         as one accounting period) commencing on December 31, 1995, and ending
         on the date such dividend is paid; provided, that, to the extent
         required by the terms thereof, such dividend shall have been
         previously consented to by the holders of the notes issued pursuant to
         the Note Purchase Agreement, or (B) dividends or distributions of
         shares of Common Stock which are referred to in clause (i) of this
         subsection (g), then, and in each such case, the Conversion Ratio
         shall be adjusted so that the Holder shall be entitled to receive,
         upon the conversion hereof, the number of shares of Common Stock
         determined by multiplying (1) the applicable Conversion Ratio on the
         day immediately prior to the record date fixed for the determination
         of stockholders entitled to receive such dividend or distribution by
         (2) a fraction, the numerator of which shall be the Current Market
         Price per share of Common Stock for the period of 30 Trading Days
         preceding such record date, and the denominator of which shall be such
         Current Market Price per share of Common Stock less the fair market
         value, as determined in good faith by the Board, a certified
         resolution with respect to which shall be mailed to the Holder, per
         share of Common Stock of such dividend or distribution.  No adjustment
         shall be made pursuant to this clause (iii) in connection with any
         transaction to which subsection (h) applies.

                          (iv) For purposes of this subsection (g), the number
         of shares of Common Stock at any time outstanding shall not include
         any shares of Common Stock then owned or held by or for the account of
         the Corporation.

                          (v)     The term "dividend," as used in this
         subsection (g), shall mean a dividend or other distribution upon stock
         of the Corporation.





                                    -11-


   12

                          (vi) Anything in this subsection (g) to the contrary
         notwithstanding, the Corporation shall not be required to give effect
         to any adjustment in the Conversion Ratio unless and until the net
         effect of one or more adjustments (each of which shall be carried
         forward), determined as above provided, shall have resulted in a
         change of the Conversion Ratio by at least one one-hundredth (.01) of
         one share of Common Stock, and when the cumulative net effect of more
         than one adjustment so determined shall be to change the Conversion
         Ratio by at least one one-hundredth (.01) of one share of Common
         Stock, such change in Conversion Ratio shall thereupon be given
         effect.

                          (vii) The certificate of any firm of independent
         public accountants of recognized standing selected by the Board (which
         may be the firm of independent public accountants regularly employed
         by the Corporation) shall be presumptively correct for any computation
         made under this subsection (g).

                          (viii) If the Corporation shall take a record of the
         holders of its Common Stock for the purpose of entitling them to
         receive a dividend or other distribution, and shall thereafter and
         before the distribution to stockholders thereof legally abandon its
         plan to pay or deliver such dividend or distribution, then thereafter
         no adjustment in the number of shares of Common Stock issuable upon
         exercise of the right of conversion granted by this subsection (g) or
         in the Conversion Ratio then in effect shall be required by reason of
         the taking of such record.

                 (h) In the case of any Major Transaction occurring at any
time, at the option of the Holder, the indebtedness evidenced by the Note shall
thereafter be convertible into, in whole and in part and in lieu of the Common
Stock issuable upon such conversion prior to consummation of such Major
Transaction, the kind and amount of shares of stock and other securities and
property receivable (including cash) upon the consummation of such Major
Transaction by a holder of that number of shares of Common Stock into which
such indebtedness, or portion thereof, was convertible immediately prior to
such Major Transaction (including, on a pro rata basis, the cash, securities,
or property received by holders of Common Stock in any tender or exchange offer
that is a step in such Major Transaction).  In case securities or property
other than Common Stock shall be issuable or deliverable upon conversion as
aforesaid, then all references in this Section 3 shall be deemed to apply, so
far as appropriate and nearly as may be, to such other securities or property.

                 (i) In case at any time or from time to time the Corporation
shall pay any stock dividend or make any other non-cash distribution to the
holders of its Common Stock, or shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or any
other right, or there shall be any capital reorganization or reclassification
of the Common Stock of the Corporation or consolidation or merger of the
Corporation with or into another corporation or other entity, or any sale or
conveyance





                                    -12-


   13

to another corporation or other entity of the assets or property of the
Corporation as an entirety or substantially as an entirety, or there shall be a
voluntary or involuntary dissolution, liquidation, or winding up of the
Corporation, then, in any one or more of said cases the Corporation shall give
at least 20 days prior written notice (the time of mailing of such notice shall
be deemed to be the time of giving thereof) to the Holder at the address of the
Holder as shown on the books of the Corporation as of the date of which (i) the
books of the Corporation shall close or a record shall be taken for such stock
dividend, distribution, or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation, or winding up shall take place, as the case may be, provided that
in the case of any Major Transaction to which subsection (h) applies the
Corporation shall give at least 30 days prior written notice as aforesaid.
Such notice also shall specify the date as of which the holders of the Common
Stock of record shall participate in said dividend, distribution, or
subscription rights or shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, or conveyance or participate in
such dissolution, liquidation, or winding up, as the case may be.  Failure to
give such notice shall not invalidate any action so taken.

                 (j)  Anything herein to the contrary notwithstanding, the
issuance or sale of the following shares of Common Stock or options, warrants,
or other rights to purchase Common Stock shall be excluded from any calculation
of, and shall not be deemed issued or sold for purposes of calculating, any
reduction, adjustment, or readjustment of the Conversion Ratio hereunder:  (i)
shares of Common Stock issued upon conversion of the indebtedness evidenced by
this Note or any portion thereof; (ii) shares of Common Stock or options,
warrants, or other rights to purchase Common Stock issuable, reserved for
issuance, or issued pursuant to a stock option plan, employee stock ownership
plan, or other compensatory benefit plan of the Corporation, duly adopted by
the Board; (iii) shares of Common Stock, issuable, reserved for issuance, or
issued pursuant to any currently outstanding warrants or options (other than as
provided in clause (x) of subparagraph (g)(ii) above), or any options,
warrants, or other rights issuable, reserved for issuance, or issued to
officers of the Corporation in the future for compensatory purposes, if duly
authorized by the Board; and (iv) shares of Common Stock issued upon conversion
of the indebtedness evidenced by the Convertible Notes (other than as provided
in clause (x) of subparagraph (g)(ii) above).

                 Section 4.  REPORTS AS TO ADJUSTMENTS.  Upon any adjustment of
the Conversion Ratio then in effect and any increase or decrease in the number
of shares of Common Stock issuable upon the operation of the conversion set
forth in Section 3, then, and in each such case, the Corporation shall promptly
deliver to the Holder, a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Corporation setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment was
calculated and specifying the Conversion Ratio then in effect following such
adjustment and the increased or decreased number of shares issuable upon the
conversion granted by





                                    -13-


   14

Section 3, and shall set forth in reasonable detail the method of calculation
of each and a brief statement of the facts requiring such adjustment.  Where
appropriate, such notice to the Holder may be given in advance and included as
part of the notice required under the provisions of Section 3(i).

                 SECTION 5.  MANDATORY CONVERSION.  (a)  At any time after the
fourth anniversary of the Closing Date, and so long as at such time the Common
Stock is listed or admitted to trading on a national securities exchange, the
Corporation may require the Holder to convert all or a portion of the principal
amount of the indebtedness evidenced by this Note into shares of Common Stock
if, at such time, the Current Market Price of the Common Stock has equalled or
exceeded one hundred fifty percent (150%) of the Conversion Price (as it may
from time to time be adjusted) for forty- five (45) consecutive Trading Days
following the forty-fifth monthly anniversary of the Closing Date.  To exercise
such right, the Corporation must deliver a Mandatory Conversion Notice of the
exercise of such right to the Holder within thirty (30) days of the last day of
such forty-five (45) day period, such Mandatory Conversion Notice must be given
at least ten (10) Business Days, but not more than fifteen (15) Business Days
prior to the proposed Mandatory Conversion Date, and such Mandatory Conversion
Notice must specify the proposed Mandatory Conversion Date and the portion of
the principal amount of the indebtedness evidenced by this Note to be converted
into Common Stock.

                 (b)  All conversions effected pursuant to the preceding
paragraph will be made effective as of the close of business on the Mandatory
Conversion Date at the Conversion Ratio in effect on the Mandatory Conversion
Date; provided, however, that, in order to be able to convert, the Current
Market Price on the Mandatory Conversion Date must equal or exceed one hundred
fifty percent (150%) of the Conversion Price in effect on the Mandatory
Conversion Date.  If the Current Market Price on the Mandatory Conversion Date
does not equal or exceed one hundred fifty percent (150%) of the Conversion
Price in effect on the Mandatory Conversion Date, the Corporation's election to
require conversion will be deemed void and no conversion will be effected
pursuant to such notice.  Such event will not be deemed, however, to alter or
restrict the Corporation's right to again require conversion at such time as
the Current Market Price equals or exceeds one hundred fifty percent (150%) of
the then current Conversion Price for forty-five (45) consecutive Trading Days
prior to such time.  Upon conversion required by the Corporation pursuant to
this paragraph and the immediately preceding paragraph, all accrued but unpaid
interest with respect to the principal amount of the indebtedness evidenced by
this Note being converted shall be payable in accordance with the provisions of
the following paragraph.

                 (c)  Conversions of the indebtedness evidenced by this Note
effected by the exercise of the Corporation's right to require conversion will
be deemed effective as of the close of business on the Mandatory Conversion
Date without any action by the Holder and the Holder will, as of such time, be
a stockholder of the Corporation with respect to the number of shares of Common
Stock into which the principal balance evidenced by this





                                    -14-


   15

Note (or such portion of the principal balance evidenced by this Note as the
Corporation shall have specified) shall have been converted.  The Holder agrees
promptly to surrender this Note for cancellation following mandatory
conversion.  Certificates representing the shares of Common Stock issuable by
the Corporation as a result of the mandatory conversion of all or a portion of
the principal balance of the indebtedness evidenced by this Note and all
dividends and other distributions payable with respect to such shares and all
accrued but unpaid interest payable pursuant to the immediately preceding
paragraph will be retained by the Corporation pending surrender of this Note
for cancellation.  As promptly as practicable, and in any event within five (5)
Business Days after the surrender of this Note, the Corporation shall deliver
or cause to be delivered, either by personal delivery or by certified or
registered mail or by a recognized overnight courier service, in any such case,
properly insured, to the Holder in accordance with the written instructions of
the Holder (i) certificates representing the number of Conversion Shares to
which the Holder shall be entitled, and (ii) if less than the entire principal
amount of indebtedness evidenced by this Note is being converted, a new
promissory note, in the form of this Note, for the balance of the indebtedness
that is not being so converted.

                 (d)  In connection with the conversion of the indebtedness
evidenced by this Note, no fractions of shares of Common Stock shall be issued,
but in lieu thereof the Corporation shall pay a cash adjustment in respect of
such fractional interest in an amount equal to such fractional interest
multiplied by the Current Market Price per share of Common Stock on the Trading
Day on which such indebtedness evidenced by this Note is deemed to have been
converted.  If more than one note shall be surrendered for conversion by the
Holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total amount of
indebtedness to be converted.

                 SECTION 6.  MANDATORY PREPAYMENT.  In the case of any Change
Event occurring at any time, at the option of the Holder, the Holder may
require the Corporation to prepay all or a portion of the then outstanding
principal amount of the indebtedness evidenced by this Note.  To exercise such
right of prepayment, the Holder must provide the Corporation with a Mandatory
Prepayment Notice at least thirty (30) days prior to the proposed Mandatory
Prepayment Date which Mandatory Prepayment Notice shall specify the portion of
the principal amount of the indebtedness evidenced by this Note (which must be
in integral multiples of One Thousand Dollars ($1,000)) to be prepaid.  On the
Mandatory Prepayment Date specified, the Corporation shall prepay the portion
of the principal amount of the indebtedness evidenced by this Note that the
Holder has specified must be prepaid on such date, plus accrued interest on
such principal amount to the date of the prepayment.  Any prepayment shall be
made by cashiers check or by wire transfer of immediately available funds, in
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, at such address or to such
account, as applicable, as shall be designated to the Corporation by the
Holder.





                                    -15-


   16

                 SECTION 7.  SUBORDINATION.  (a)  The Corporation covenants and
agrees, and the Holder likewise covenants and agrees, that no payment shall be
made by the Corporation on account of principal of or interest on this Note, or
otherwise, if there shall have occurred and be continuing, and the Corporation
and the Holder shall have received notice from the holder or holders of, a
default with respect to any Senior Indebtedness (i) permitting the acceleration
thereof and such default is the subject of a judicial proceeding, or (ii) in an
aggregate principal amount of not less than One Million Dollars ($1,000,000)
entitling such holder or holders to compel the acceleration thereof (provided,
however, that in the case of Senior Indebtedness issued pursuant to an
indenture, such notice may be validly given only by the trustee under such
indenture), unless and until such default or Event of Default shall have been
cured or waived or shall have ceased to exist or such notice is withdrawn or
found by a court of competent jurisdiction to be invalid.

                 (b)  Upon any payment by the Corporation or distribution of
assets of the Corporation of any kind or character, whether in cash, property,
or securities, to creditors of the Corporation upon any dissolution or winding
up or liquidation or reorganization of the Corporation, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership, or other similar
proceedings, all amounts due or to become due upon all Senior Indebtedness
shall first be paid in full in money or money's worth, or payment thereof
provided for, before any payment is made on account of the principal of or
interest on this Note and upon such dissolution or winding up or liquidation or
reorganization, any payment by the Corporation, or distribution of assets of
the Corporation of any kind or character, whether in cash, property, or
securities, to which the Holder would be entitled except for the provisions
hereof, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, agent, or other person making such payment or
distribution directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the Holder.

                 (c)  The foregoing notwithstanding, in the event that any
payment of or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Holder before all Senior Indebtedness is
paid in full in money or money's worth, or provision is made for such payment,
then and in such event such payment or distribution shall be paid over or
delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior





                                    -16-


   17

Indebtedness (but subject to the power of a court of competent jurisdiction to
make other equitable provision, which shall have been determined by such court
to give effect to the rights conferred herein upon the Senior Indebtedness and
the holders thereof with respect to this Note or the Holder hereof by a lawful
plan or reorganization or readjustment under applicable bankruptcy law).

                 (d)  The holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Holder, without
incurring responsibility to the Holder and without impairing or releasing the
obligations of the Holder to the holders of Senior Indebtedness:  (i) change
the manner, place, or terms of payment or change or extend the time of payment
of, or renew or alter Senior Indebtedness, or otherwise amend, in any manner,
Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; provided, however, that
the average weighted maturity of such Senior Indebtedness shall not be
decreased without the consent of the Holder; (ii) sell, exchange, release, or
otherwise deal with any property pledged, mortgaged, or otherwise securing
Senior Indebtedness; (iii) release any person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Corporation and any other person.

                 (e)  Subject to the payment in full of all amounts then due
(whether by acceleration of the maturity thereof or otherwise) on account of
the principal of, premium, if any, and interest on all Senior Indebtedness at
the time outstanding, the Holder shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property, or securities of the Corporation applicable to the Senior
Indebtedness until the principal of and interest on this Note shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
by the Corporation to the holders of Senior Indebtedness of any cash, property,
or securities to which the Holder would be entitled except for the provisions
hereof, and no payments over pursuant to the provisions hereof to the holders
of Senior Indebtedness by the Holder, shall, as between the Corporation, its
creditors other than holders of Senior Indebtedness, and the Holder, be deemed
to be a payment by the Corporation to or on account of the Senior Indebtedness.

                 (f)  It is understood that the foregoing provisions of this
Note are and are intended solely for the purpose of defining the relative
rights of the Holder on the one hand and the holders of Senior Indebtedness on
the other hand.  Nothing contained in this Note is intended to or shall impair,
as among the Corporation, its creditors other than the holders of Senior
Indebtedness, and the Holder, the obligation of the Corporation, which is
absolute and unconditional, to pay to the Holder the principal of and interest
on this Note as and when the same shall become due and payable in accordance
with its terms, or is intended to or shall affect the relative rights of the
Holder and creditors of the Corporation other than the holders of Senior
Indebtedness, nor shall anything herein prevent the Holder from exercising all
remedies otherwise permitted by applicable law upon default under this Note or
the Note Purchase Agreement.





                                    -17-


   18

                 (g)  Upon any payment or distribution of assets of the
Corporation referred to herein, the Holder shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation, or reorganization proceedings are
pending, or certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent, or other person making such payment or distribution, delivered
to the Holder, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior Indebtedness and other
indebtedness of the Corporation, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon, and all other facts pertinent
thereto.

                 (h)  The Corporation shall give prompt written notice to the
Holder of any fact known to the Corporation that would prohibit the making of
any payment of moneys to or by the Corporation in respect of this Note.

                 SECTION 8.  ACCELERATION.  This Note and the indebtedness
evidenced hereby is subject to acceleration under the terms and conditions set
forth in the Note Purchase Agreement.

                 SECTION 9.  NO OPTIONAL PREPAYMENT.  This Note and the
indebtedness evidenced hereby shall not be prepaid at the option of the
Corporation.

                 SECTION 10.  MISCELLANEOUS.  (a)  Any notice required by the
provisions of this Note to be given to the Holder or the Corporation shall be
given and deemed received or delivered in accordance with the provisions of
Section 10.4 of the Note Purchase Agreement.

                 (b)  In the event of prepayment or conversion of this Note in
part only, a new note or notes for the unpaid or unconverted portion hereof
will be issued in the name or names requested by the Holder upon the
cancellation hereof.

                 (c)  The transfer of this Note is registrable on the books of
the Corporation upon surrender of this Note for registration of transfer at the
offices of the Corporation in Nashville, Tennessee, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation duly executed by, the Holder or its attorney duly authorized in
writing, and thereupon one or more new notes of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.  New notes are issuable only in registered form
without coupons in denominations of One Thousand Dollars ($1,000) and any
integral multiple thereof.  This Note is exchangeable for a like aggregate
principal amount of notes of a different authorized denomination, as requested
by the Holder.  No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.




                                    -18-


   19



                 (d)  Prior to the due presentment of this Note for
registration of transfer, the Corporation and any agent of the Corporation may
treat the person in whose name this Note is registered as the owner hereof for
all purposes, irrespective of whether this Note be overdue, and neither the
Corporation nor any such agent shall be affected by notice to the contrary.

                 (e)  This Note shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be governed by,
construed under, and enforced in accordance with the laws of the State of New
York.

                 (f)  The Corporation agrees, to the extent permitted by law,
to pay to the Holder all costs and expenses (including attorneys' fees)
incurred by it in the collection hereof or the enforcement of any right or
remedy provided for herein (including such costs and expenses incurred in
connection with a workout or an insolvency or bankruptcy proceeding).

                 (g)  The provisions of the Note Purchase Agreement are hereby
incorporated into this Note by this reference.



                [Remainder of page intentionally left blank.]





                                    -19-


   20

                 IN WITNESS WHEREOF, the undersigned has executed this Note
effective as of the date first above written.


                                  CORRECTIONS CORPORATION OF AMERICA,
                                  a Delaware corporation
                                  
                                  
                                  
                                  By:                                      
                                           --------------------------------
                                  Title:                                   
                                           --------------------------------


ATTEST:


                              
- ------------------------------
Secretary


                                    -20-


   21

                                  Exhibit A

                    [FORM OF MANDATORY CONVERSION NOTICE]


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


         Notice hereby is given that, in accordance with the terms and
conditions of the Note hereinafter described and that certain Note Purchase
Agreement, dated February 29, 1996, between Corrections Corporation of America
and PMI Mezzanine Fund, L.P., Corrections Corporation of America hereby elects
to require conversion of the 7.5% Convertible, Subordinated Note, due February
28, 2002, issued by it (the "Note").  The Note to be converted and the
principal amount thereof to be converted are as follows:


                                                        Principal                    Number of
                                 Outstanding                    Amount to be                  Shares to
Note Number                    Principal Amount                  Converted                   Be Delivered
- ---------------------------------------------------------------------------------------------------------
                                                                                   



The Mandatory Conversion Date will be                      .
                                      --------------------- 



                                    CORRECTIONS CORPORATION OF AMERICA
                                    
                                    By:                                
                                             --------------------------
                                    Name:                              
                                          -----------------------------
                                    Title:                             
                                           ----------------------------





                                     -21-
   22



                                   Exhibit B

                     [FORM OF MANDATORY PREPAYMENT NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA


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


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and that certain Note
Purchase Agreement, dated February 29, 1996, between Corrections Corporation of
America and PMI Mezzanine Fund, L.P., it hereby exercises its right to require
prepayment of such Note or portion thereof (which is $1,000 or an integral
multiple thereof), plus all accrued but unpaid interest with respect to such
principal amount.

         The Mandatory Prepayment Date shall be ______________.  The principal
amount to be prepaid shall be $___________ _________________.


                                             [Name of Holder]
                                    
                                    
Dated:                              By:                                 
       ---------------------            --------------------------------
                                    Name:                               
                                          ------------------------------
                                    Title:                              
                                          ------------------------------


                                     -22-


   23

                                  Exhibit C

                     [FORM OF OPTIONAL CONVERSION NOTICE]


TO:  CORRECTIONS CORPORATION OF AMERICA


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


         The undersigned owner of the attached Note hereby gives notice that,
in accordance with the terms and conditions of such Note and the Note Purchase
Agreement, dated February 29, 1996, between Corrections Corporation of America,
PMI Mezzanine Fund, L.P., it hereby exercises its right to convert such Note,
or portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Corrections Corporation of America
and directs that the shares issuable and deliverable upon the conversion, and
any notes representing any unconverted principal amount thereof, be issued and
delivered to the registered holder of such Note unless a different name has
been indicated below.  If shares or a new note representing unconverted
principal are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.


                                   [Name of Holder]
                              
                              
Dated:                        By:                                              
       ----------------           ---------------------------------------------
                              Name:                                            
                                    -------------------------------------------
                              Title:                                           
                                     ------------------------------------------
                              
                              Principal Amount to be converted  (in an integral
                              if less than all):
                              
                                               $                      
                                                ----------------


                                     -23-


   24

Fill in for registration of shares
of Common Stock and note if to be
issued other than to the
registered Holder.


                      
- ---------------------------------
Name

                      
- ---------------------------------
Address

                      
- ---------------------------------
Please print name and address
(including zip code number)

SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFYING NUMBER

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





                                     -24-

EX-10.140

   1


                                                              EXHIBIT 10.140


                           STOCK PURCHASE AGREEMENT

                                BY AND BETWEEN

                  CHUBB SECURITY HOLDINGS AUSTRALIA LIMITED

                                     AND

                      CORRECTIONS CORPORATION OF AMERICA




                         DATED AS OF MARCH ___, 1995






   2

                          STOCK PURCHASE AGREEMENT


         This Agreement (the "Agreement") is made and entered into this ____
day of March, 1995, by and between Corrections Corporation of America, a
Delaware corporation having its principal place of business in Nashville,
Tennessee (the "Buyer"), and Chubb Security Holdings Australia Limited A.C.N.
003 590 921, a New South Wales Company, having its principal place of business
in New South Wales, Australia (the "Seller").

         WHEREAS, Seller will at the Closing (as hereinafter defined) own
15,000 "W" class shares and 7,500 "H" class shares in the capital of
Corrections Corporation of Australia Pty. Ltd. A.C.N. 010 921 641, a Queensland
Company (the "Company") which shares collectively represent fifty (50%) percent
of the issued shares of the Company; and

         WHEREAS, Buyer desires to acquire from Seller, and Seller desires to
sell to Buyer, all of the shares in the capital of the Company owned by Seller
upon and subject to the terms and conditions contained in this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, the parties agree as follows:


                                  ARTICLE I

                         PURCHASE AND SALE OF SHARES

         1.01.   TRANSFER OF SHARES.  Subject to all of the terms and
conditions of this Agreement, at the Closing, Seller hereby agrees to sell,
transfer and convey to Buyer, and Buyer agrees to purchase and acquire from
Seller, free and clear of all liens, claims, charges, restrictions, security
interests, equities, proxies, pledges and encumbrances of any kind, 15,000 "W"
class shares and 7,500 "H" class shares in the capital of the Company, which
shares collectively constitute fifty (50%) percent of the issued shares in the
capital of the Company (the foregoing shares of the Company are hereinafter
collectively referred to as the "Shares").


                                 ARTICLE II

                                CONSIDERATION

         2.01.   PURCHASE PRICE.  The Purchase Price for the Shares shall be
Five Million Dollars ($5,000,000) (Aust.) (the "Purchase Price").  The Purchase
Price shall be paid by Buyer to Seller at the Closing, by bank cheque, bank
wire transfer or such other method as may be mutually agreed upon by the
parties.

         2.02.  ASSUMPTION OF LIABILITIES.  From and after the Closing, Buyer
shall be responsible for any and all obligations of Seller with respect to
providing equity financing to the Company,






   3

including, without limitation, payments in connection with the Company's
overdraft facility or the provision of any equity necessary for construction
and development of that certain new women's prison to be located in Victoria,
Australia (the "New Women's Prison").  The Buyer undertakes to procure a full
and conditional release for the Seller from all agreements entered into by it
in relation to the construction, development and operation of the New Women's
Prison and hereby indemnifies and shall keep indemnified the Seller from and
against any and all loss, damage, costs, expenses, obligations and liability
suffered or incurred by the Seller under or pursuant to any or all such
agreements until the Seller shall have been fully and unconditionally released
therefrom.

         2.03.   PERSONNEL SERVICES.  Following the Closing and until March 31,
1996 or such earlier date as may be agreed to by the parties, Seller shall
provide various supervision and security operations personnel to the Borallon
Correctional Centre in accordance with the terms and conditions of that certain
Personnel Contract by and between Seller and Buyer to be attached hereto as
Exhibit A.


                                 ARTICLE III

                     CLOSING; OBLIGATIONS OF THE PARTIES

         3.01.   CLOSING DATE.  Subject to the fulfillment of Section 7.07, the
closing (the "Closing") shall take place and be effective for all purposes at
10:00 a.m., local time, on 14 April 1995 at the offices of Seller or at such
other time and place as the parties hereto mutually agree (the "Closing Date").
If the Buyer has not received the notification referred to in Section 7.07 from
the Commonwealth Government by 14 April 1995, the Closing Date shall be five
working days after the receipt of such notification or if no notification is
received within 40 days from the date that the Buyer has given notification to
the Commonwealth government of its intention to enter into this Agreement, then
five working days after the expiration of that 40 day period.

         3.02.   OBLIGATIONS OF THE PARTIES AT THE CLOSING.

                 (a)      At the Closing, the events set out in clauses (i)
                          through (v) shall occur:

                          (i)     the Buyer shall pay the consideration as
                                  specified in Section 2.01;

                          (ii)    the Seller shall deliver to the Buyer or to
such person as Buyer may direct, the share certificate issued by the Company
for the Shares together with an executed instrument of transfer in registrable
form (except for the payment of any applicable stamp duty) for the Shares in
favor of the Buyer or its nominee (as transferee) from the registered holder of
the Shares (as transferor).

                          (iii)   the Seller shall deliver to the Buyer any
waiver, consent or other document which the Buyer may require to obtain a good
title to the Shares registered in the name





                                      2


   4

of the Buyer or its nominee, including any Power of Attorney under which any
document required to be delivered under this Agreement has been executed.

                          (iv)    the Seller and the Buyer shall cause a
meeting of the Directors of the Company to be convened and shall procure that
at the meeting:

                                  (a)      the Directors shall approve the
         transfer of the Shares to the Buyer or its nominee and, subject to the
         payment of stamp duty, direct the entries in the Company's share
         register be made, the existing share certificate for the Shares be
         cancelled and a new certificate in the name of the Buyer be issued;

                                  (b)      the Directors shall revoke any
         authorities for the operation of the Company's bank account granted to
         any nominee or officer of Seller or granted to any Director or
         Secretary appointed by Seller or representing Seller;

                                  (c)      two (2) persons that Buyer shall
         have previously nominated shall be appointed as Directors and one (1)
         person previously nominated by the Purchaser shall be appointed as
         Secretary of the Company in place of the Director and Secretary
         nominated by Seller or representing Seller;

                                  (d)      the Directors shall revoke any
         power/s of attorney granted by the Company prior to the meeting in
         favor of Seller or any Director or Secretary appointed by Seller;

                                  (e)      Ian Richards Masters and Graeme
         Francis Pettigrew shall each resign as Director of the Company.  Their
         resignations shall be accepted; and

                                  (f)      The Directors shall appoint as an
         additional Secretary of the Company some person nominated for that
         purpose by Messrs. Thomas W. Beasley and T. Don Hutto.

                          (v)     Seller shall deliver to the Meeting of the 
Directors of the Company:

                                  (a)      the written resignation of Messrs.
         Masters and Pettigrew and an acknowledgement from them that they have
         no claim of any nature against the Company;

                                  (b)      any property of the Company in the
         possession of Seller or any employee of Seller or in the possession of
         Messrs. Masters or/and Pettigrew; and

                          (vi)    Buyer may by written notice to the Seller
waive compliance by the Seller with the requirements of this Section 3.02 on
the Seller's part to be performed.





                                       3


   5


                      (vii)       The Buyer and the Seller being the only
shareholders in the Company, and being the only shareholders or class of
shareholders entitled to appoint directors of the Company hereby agree that the
quorum necessary for a valid meeting of directors of the Company shall be
present if there shall be 3 directors present 2 of whom appointed by the "W"
class shareholders and 1 by the "C" class shareholders or vice versa.


                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         In order to induce Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, Seller hereby represents and warrants as
follows:

         4.01.  ORGANIZATION AND GOOD STANDING.  Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New South Wales and has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.

         4.02.   OWNERSHIP OF SHARES; VALIDITY AND ENFORCEABILITY.  Seller
represents and warrants that (i) Seller is the legal and beneficial owner of
the Shares, free and clear of all liens, claims, charges, restrictions,
security interests, equities, proxies, pledges or encumbrances of any kind;
(ii) Seller has the full right, power, authority and capacity to sell and
transfer the respective Shares owned by such Seller;  (iii)  by virtue of the
transfer of the Shares to Buyer at the Closing, Buyer will obtain full title to
such Shares, free and clear of all liens, claims, charges, restrictions,
security interests, equities, proxies, pledges, or encumbrances of any kind.
This Agreement constitutes a legal, valid and binding agreement of the Seller,
enforceable against Seller in accordance with its terms.  As of the Closing
Date and upon receipt of the Purchase Price, Seller represents that it has no
claims of any kind against the Company.

         4.03.   CORPORATE POWER AND AUTHORITY: DUE AUTHORIZATION.  Seller has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.  The Board of Directors of
Seller has duly approved and authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and no
other corporate proceedings on the part of Seller are necessary to approve and
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.  This Agreement and each of the documents
to which Seller is a party constitutes, or will constitute when executed and
delivered, a valid and binding agreement of Seller, in each case enforceable in
accordance with its terms.

         4.04.   NO VIOLATION.  The execution and delivery of this Agreement by
the Seller does not, and the consummation of the transactions contemplated
hereby will not, (a) violate or be in conflict with, or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) with, or result in the termination of, or accelerate the performance





                                      4


   6

required by, or excuse performance by any person of any of its obligations
under, or cause the performance required by, or exercise performance by any
person of any of its liabilities under, any provision of, or result in the
creation of any lien or security interest under, any agreement, indenture,
instrument, lease, security agreement, mortgage or lien to which the Seller is
a party or by which any of the Seller's assets or properties are bound; (b)
violate or be in conflict with any provision of the Articles of Association or
Bylaws of the Seller; (c) violate any order, arbitration award, judgment, writ,
injunction, decree, statute, rule, or regulation applicable to the Seller; or
(d) violate any other contractual or legal obligation or restriction to which
the Seller is subject.

         4.05.   ABSENCE OF QUESTIONABLE PAYMENTS.  Neither the Seller nor
Messrs. Pettigrew and Masters or any other person acting on their behalf has at
any time directly or indirectly used funds for any illegal purpose, including
without limitation, the making of any improper political contribution, bribe or
kickback.

         4.06.   PROFESSIONAL FEES.  The Seller has not done anything to cause
or incur any liability or obligation of the Company for investment banking,
brokerage, finders, agents or other fees, commissions, expenses or charges in
connection with the negotiation, preparation, execution or performance of this
Agreement or the consummation of the transactions contemplated hereby, and
Seller does not know of any claim by anyone for such a fee, commission, expense
or charge.

         4.07.   CONSENTS AND APPROVALS.  Seller has obtained or will have
obtained prior to Closing, all consents, approvals, authorizations or orders of
third parties, including governmental authorities, necessary for the
authorization, execution and performance of this Agreement by Seller.

         4.08.   FULL DISCLOSURE.  Neither this Agreement, nor any schedule,
exhibit, list, certificate or other instrument and document furnished or to be
furnished by Seller to Buyer pursuant to this Agreement, contains any untrue
statement of a material fact or omits to state any material fact required to be
stated herein or therein or necessary to make the statements and information
contained herein or therein not misleading.


                                  ARTICLE V

                   REPRESENTATIONS AND WARRANTIES OF BUYER

         In order to induce Seller to enter into this Agreement and consummate
the transactions contemplated hereby, Buyer hereby represents and warrants to
Seller as follows:

         5.01.   ORGANIZATION AND GOOD STANDING.  Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.





                                       5


   7

         5.02.   AUTHORIZATION.  The Board of Directors of Buyer has taken all
action required by law, its Certificate of Incorporation, its Bylaws and
otherwise to authorize the execution and delivery by Buyer of this Agreement
and the consummation by Buyer of the transactions contemplated hereby.

         5.03.   VALID AND BINDING AGREEMENT.  This Agreement constitutes a
valid and binding agreement of Buyer, enforceable against Buyer in accordance
with its terms.

         5.04.   NO VIOLATION.  The execution and delivery of this Agreement by
Buyer does not, and the consummation of the transactions contemplated hereby
will not, (a) violate any provision, or result in the creation of any lien or
security interest under, any agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which Buyer is a party or by which it is bound;
(b) violate any provision of Buyer's Certificate of Incorporation or Bylaws;
(c) violate any order, arbitration award, judgment, writ, injunction, decree,
statute, rule or regulation applicable to Buyer; or (d) violate any other
contractual or legal obligation or restriction to which Buyer is subject.

         5.05.   PROFESSIONAL FEES.  Buyer has not done anything to cause or
incur any liability for investment banking, brokerage, finders, agents or other
fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution and performance of this Agreement or the consummation of
the transactions contemplated hereby, and Buyer does not know of any claim by
anyone for such a commission or fee.

         5.06.   CONSENTS AND APPROVALS.  Buyer has obtained or will have
obtained prior to Closing, all consents, approvals, authorizations or orders of
third parties, including governmental authorities, necessary for the
authorization, execution and performance of this Agreement by Buyer.

         5.07.   FULL DISCLOSURE.  Neither this Agreement, nor any certificate
or other instrument or document furnished or to be furnished by Buyer to Seller
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state a material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein
not misleading.


                                 ARTICLE VI

                     COVENANTS AND AGREEMENTS OF SELLER

     Seller agrees that from the date hereof until the Closing, and thereafter
if so specified, it will fulfill the following covenants and agreements unless
otherwise consented to by Buyer in writing:

         6.01.   FURTHER ASSURANCES.  At any time and from time to time after
the Closing, at Buyer's request and without further consideration, Seller will
execute and deliver such other





                                      6


   8

instruments of sale, transfer, conveyance, assignment, and delivery and
confirmation and take such action as the Buyer may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to Buyer and
to place Buyer in possession and control of, and to confirm Buyer's title to,
the Shares, and to assist Buyer in exercising all rights and enjoying all
benefits with respect thereto.

         6.02.   CONSENTS AND APPROVALS.  Seller shall, in a timely, accurate
and complete manner, take all necessary corporate and other action and use all
reasonable efforts to obtain all consents, approvals, permits, licenses and
amendments of agreements required of the Seller to carry out the transactions
contemplated in this Agreement.

         6.03.   NON-DISCLOSURE.  (a)  Except as agreed to in writing by Buyer,
Seller will not disclose to any other person not an employee of Seller (or a
person otherwise involved in the carrying out of the transactions contemplated
by this Agreement), nor make any public announcement of, the transactions
contemplated by this Agreement prior to the Closing.  Any such disclosure to
employees will be made on a need-to-know basis and on the condition that such
employees agree to be bound by the same confidentiality terms.

                 (b)  Seller absolutely and unconditionally covenants and
agrees with Buyer that, from the period commencing on the Closing Date and
continuing for a period of five years following the Closing Date, neither
Seller nor any of its officers, directors, employees or affiliates and their
successors and assigns will disclose to any other person not an employee of
Seller, any information which it may have obtained regarding the business of
the Company.

         6.04.  NON-COMPETITION.

                 (a)  Seller and its affiliates absolutely and unconditionally
covenant and agree with the Buyer that, from the period commencing on the
Closing Date and continuing for a period of five years following the Closing
Date, neither Seller nor any of its directors, officers, employees or
affiliates will, either directly or indirectly, solely or jointly with any
other person or persons, as an employee, consultant or advisor (whether or not
engaged in business for profit), or as an individual proprietor, partner,
shareholder, director, officer, joint venturer, investor, lender or in any
other capacity, compete with the business of the Buyer in any and all parts of
the world outlined on the plan annexed to that certain Shareholders' Agreement
dated September 22, 1989 and subsequently amended, by and between Buyer and
Seller (the "Shareholders' Agreement") as Exhibit B.  For purposes of this
Agreement, "compete with the business of the Buyer" shall mean engaging in the
business of developing, designing, managing or operating private correctional
facilities or providing extradition services therefore, provided, however, that
the foregoing restriction shall not prevent Seller from providing security
personnel for supervision and security operations to such entities.

                 (b)  It is expressly understood, acknowledged and agreed by
Seller (i) that the restriction contained in Section 6.04(a) of this Agreement
represents a reasonable and necessary protection of the legitimate interests of
the Buyer and that its failure to observe and comply with




                                       7


   9

its covenants and agreements in that paragraph will cause irreparable harm to
the Buyer; (ii) it is and will continue to be difficult to ascertain the
nature, scope and extent of the harm; and (iii) a remedy at law for such
failure by the Seller will be inadequate.  Accordingly, it is the intention of
the parties that, in addition to any other rights or remedies which the Buyer
may have in the event of any breach of Section 6.04(a), the Buyer shall be
entitled, and is expressly and irrevocably authorized by Seller, to demand and
obtain specific performance, including, without limitation, temporary and
permanent injunctive relief and all other appropriate equitable relief against
Seller in order to enforce against Seller the covenants and agreements
contained in that Section of this Agreement.

                 (c)  If any court of competent jurisdiction shall at any time
deem the duration of the restriction contained in Section 6.04(a) of this
Agreement to be too lengthy or the scope thereof to be too broad, the
restrictive time period shall be deemed to be the longest period permissible by
law, and the scope shall be deemed to comprise the broadest scope permissible
by law.  The parties hereby agree that such court may modify the objectionable
provision so as to make it valid, reasonable and enforceable and agree to be
bound by the terms of such provision, as modified by the court.

         6.05.  EXCLUSIVITY.  Unless and until this Agreement terminates,
neither Seller nor any of its directors, officers, employees, investment
bankers, commercial banks, representatives or agents shall, directly or
indirectly, solicit, initiate, or knowingly encourage initiation of any
inquiries or proposals from or provide any confidential information to or
participate in any discussion or negotiations with, any person (other than
Buyer and its affiliates and their respective directors, officers, employees,
investment bankers, commercial banks, representatives and agents) concerning
the sale of the Shares, nor shall Seller accept any proposal with respect to,
or otherwise enter into any such sale or other similar transaction.


                                  ARTICLE VII

                       CONDITIONS TO BUYER'S OBLIGATIONS

         All obligations of Buyer hereunder are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:

         7.01.   REPRESENTATIONS AND WARRANTIES.  The representations and
warranties made by the Seller in this Agreement shall be true when made and at
and as of the time of the Closing as though such representations and warranties
were made at and as of such date.

         7.02.   PERFORMANCE.  Seller shall have performed and complied with
all agreements, obligations, and conditions required by this Agreement to be so
complied with or performed.




                                      8


   10

         7.03.   OFFICER'S CERTIFICATE.  Seller shall have delivered to Buyer a
Certificate of an officer of Seller dated the Closing Date, certifying as to
the fulfillment of the conditions specified in Sections 7.01 and 7.02 hereof.

         7.04.  CONSENTS AND APPROVALS.  Buyer shall have received all consents
required for the consummation of the transactions contemplated hereby, all of
which consents shall be in form and substance satisfactory to Buyer.

         7.05.  RENEWAL OF BORALLON CONTRACT.  That certain contract by and
between the Company and the Queensland Corrective Service Commission with
respect to the Borallon Correctional Centre shall have been renewed on terms
and conditions satisfactory to Buyer.

         7.06.  FAVORABLE TAX RULING.  The Company shall have received, in the
opinion of Buyer, a favorable 51 AD tax code ruling as to the expensing of the
infrastructure of the New Women's Prison.

         7.07.  COMMONWEALTH APPROVAL.  The Buyer shall have received
notification from the Commonwealth government that it does not object to the
Buyer acquiring the Seller's shares pursuant to this Agreement, as provided for
in S.26(2) of the Foreign Acquisitions & Takeovers Act (Commonwealth).  The
Buyer agrees to notify the Treasurer of the Commonwealth of this Agreement and
its intention to acquire the Seller's shares forthwith upon the execution of
this Agreement.


                                ARTICLE VIII

                     CONDITIONS TO SELLER'S OBLIGATIONS

         All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:

         8.01.   REPRESENTATIONS AND WARRANTIES.  The representations and
warranties made by the Buyer in this Agreement shall be true when made and at
and as of the time of the Closing as though such representations and warranties
were made at and as of such date.

         8.02.   PERFORMANCE.  Buyer shall have performed and complied with all
agreements, obligations, and conditions required by this Agreement to be so
complied with or performed.

         8.03.   OFFICER'S CERTIFICATE.  Buyer shall have delivered to Seller a
Certificate of an officer of Buyer, dated the Closing Date, certifying as to
the fulfillment of the conditions specified in Sections 8.01 and 8.02 hereof.





                                       9


   11

                                   ARTICLE IX

                                INDEMNIFICATION

         9.01.   INDEMNIFICATION BY SELLER.  The Seller hereby agrees to
defend, indemnify and hold harmless Buyer and shall reimburse Buyer for, from
and against each claim, loss, liability, cost and expense (including, without
limitation, interest, penalties, costs of preparation and investigation, and
the reasonable fees, disbursements and expenses of attorneys, accountants and
other professional advisors) (collectively, "Losses"), directly or indirectly
relating to, resulting from or arising out of:

                 (a)      Any untrue representation, misrepresentation, breach
of warranty or nonfulfillment of any covenant, undertaking, agreement or other
obligation by or of Seller contained herein, or in any certificate, schedule,
document or instrument delivered to Buyer pursuant hereto.

                 (b)      Without prejudice to the Buyer's undertaking and
indemnity in Section 2.02 any and all liabilities or obligations of the Seller
to the Company arising outside of this Agreement.

                 (c)      Any other Loss incidental to any of the foregoing.

         9.02.   INDEMNIFICATION BY BUYER.  Buyer hereby agrees to defend,
indemnify and hold harmless Seller, and shall reimburse Seller for, from and
against Losses directly or indirectly relating to, resulting from or arising
out of:

                 (a)      Any untrue representation, misrepresentation, breach
of warranty or nonfulfillment of any covenant, undertaking, agreement or other
obligation by Buyer contained herein or in any certificate, document or
instrument delivered to Seller pursuant hereto.

                 (b)      Any other Loss incidental to the foregoing.

         9.03.   PROCEDURE.  The indemnified party shall promptly notify the
indemnifying party of any claim, demand, action or proceeding for which
indemnification will be sought under Sections 9.01 or 9.02 of this Agreement,
and, if such claim, demand, action or proceeding is a third party claim,
demand, action or proceeding, the indemnifying party will have the right at its
expense to assume the defense thereof using counsel reasonably acceptable to
the indemnified party.  The indemnified party shall have the right to
participate, at its own expense, with respect to any such third party claim,
demand, action or proceeding.  In connection with any such third party claim,
demand, action or proceeding, Buyer and the Seller shall cooperate with each
other and provide each other with access to relevant books and records in their
possession.  No such third party claim, demand, action or proceeding shall be
settled without the prior written consent of the indemnified party.  If a firm
written offer is made to settle any such third party claim, demand, action or
proceeding and the indemnifying party proposes to accept such settlement and





                                       10


   12



the indemnified party refuses to consent to such settlement, then:  (i) the
indemnifying party shall be excused from, and the indemnified party shall be
solely responsible for, all further defense of such third party claim, demand,
action or proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
indemnified party on such third party claim, demand, action or proceeding is
greater than the amount of the proposed settlement.


                                   ARTICLE X

                          SURVIVAL OF REPRESENTATIONS

         10.01.  SURVIVAL OF REPRESENTATIONS.  All representations, warranties,
covenants, indemnities and agreements by the parties contained in this
Agreement shall survive the Closing and any investigation at any time made by
or on behalf of any party hereto, and other than the covenants of the Seller
contained in Section 6.04 hereof and the undertaking and indemnities of the
Buyer contained in Section 2.02, shall expire on the second anniversary of the
Closing Date.

         10.02.  STATEMENTS AS REPRESENTATIONS.  All statements contained in
any certificate, schedule, list, document or other writing delivered pursuant
hereto or in connection with the transactions contemplated hereby shall be
deemed representations and warranties for all purposes of this Agreement.

         10.03.  REMEDIES CUMULATIVE.  The remedies provided herein shall be
cumulative and shall not preclude the assertion by any party hereto of any
other rights or the seeking of any other remedies against the other party
hereto.

         10.04.  LIMITATION ON SELLER'S LIABILITY.  Notwithstanding any other
provisions of this Agreement, under no circumstances whatsoever shall the
liability of the Seller for:

         (a)     breach of any and all of the warranties and representations
contained in Article IV hereof; and

         (b)     under the indemnity given by the Seller under Article IX
hereof in relation to such warranties and representations; and

         (c)     breach of any and all of any warranties and conditions as to
title to the Shares that may be implied by law into the sale and purchase of
the Shares exceed in the aggregate for any and all claims a sum equal to the
Purchase price.



                                       11


   13

                                 ARTICLE XI

                          TERMINATION OF AGREEMENT

         11.01.  TERMINATION.  This Agreement may be terminated at any time
prior to the Closing:

                 (a)      By mutual agreement of Seller and Buyer.

                 (b)      By Buyer, if there has been a material violation or
breach by the Seller of any of the agreements, representations or warranties
contained in this Agreement which has not been waived in writing, or if any of
the conditions set forth in Article VII hereof have not been satisfied by the
Closing or have not been waived in writing by Buyer.

                 (c)      By Seller, if there has been a material violation or
breach by the Buyer of any of the agreements, representations or warranties
contained in this Agreement which has not been waived in writing, or if any of
the conditions set forth in Article VIII hereof have not been satisfied by the
Closing or have not been waived in writing by Seller.

                 (d)      By either Buyer or Seller if the transactions
contemplated by this Agreement shall not have been consummated on or before
[April 30, 1995].

                 (e)      By either Buyer or the Seller if the other makes an
assignment for the benefit of creditors, files a voluntary petition in
bankruptcy or seeks or consents to any reorganization or similar relief under
any present or future bankruptcy act or similar law, or is adjudicated a
bankrupt or insolvent, or if a third party commences any bankruptcy,
insolvency, reorganization or similar proceeding involving the other.

         11.02.  EFFECT OF TERMINATION.   In the absence of fraud or willful
breach on the part of Seller, or on the part of Buyer, then Seller will not
have any liability to Buyer, or Buyer will not have any liability to Seller, as
the case may be, under this Agreement if Seller or Buyer terminates this
Agreement pursuant to Section 11.01.


                                 ARTICLE XII

                                MISCELLANEOUS

         12.01.  EXPENSES.  All fees and expenses incurred by Seller, including
without limitation, legal fees and expenses, in connection with this Agreement
will be borne by Seller and all fees and expenses incurred by Buyer, including,
without limitation, legal fees and expenses, in connection with this Agreement
will be borne by Buyer, provided, however, that Buyer shall be responsible for
all stamp duty which may be due to any jurisdiction or governmental entity as a
result of the Closing of the purchase of the Shares.





                                     12

   14


         12.02.  ASSIGNABILITY; PARTIES IN INTEREST.

                 (a)      Buyer may assign any and all of its rights hereunder
to any affiliate of or any direct or indirect subsidiary of Buyer, and Buyer
shall advise Seller of any such assignment and shall designate such party as
the assignee and transferee of the securities purchased.  Any such assignee
shall assume all of Buyer's duties, obligations and undertakings hereunder, but
the assignor shall remain liable thereunder.

                 (b)      Seller may not assign, transfer or otherwise dispose
of any of its rights hereunder without the prior written consent of Buyer.

                 (c)      All the terms and provisions of this Agreement shall
be binding upon, shall inure to the benefit of and shall be enforceable by the
respective heirs, successors, assigns and legal or personal representatives of
the parties hereto.

         12.03.  ENTIRE AGREEMENT; AMENDMENTS.  This Agreement, including the
exhibits, schedules, lists and other documents and writings referred to herein
or delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter.  There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein.  This Agreement supersedes
all prior agreements and undertakings between the parties with respect to its
subject matter.  This Agreement may be amended only by a written instrument
duly executed by all parties or their respective heirs, successors, assigns or
legal personal representatives.  Any condition to a party's obligations
hereunder may be waived, but only by a written instrument signed by the party
entitled to the benefits thereof.  The failure or delay of any party at any
time or times to require performance of any provision or to exercise its rights
with respect to any provision hereof, shall in no manner operate as a waiver of
or affect such party's right at a later time to enforce the same.

         12.04.  HEADINGS.  The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.

         12.05.  SEVERABILITY.  The invalidity of any term or terms of this
Agreement shall not affect any other term of this Agreement, which shall remain
in full force and effect.

         12.06.  NOTICES.  All notices, request, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested) as follows:





                                       13


   15

         If to Seller:

         Chubb Security Holdings Australia Limited
         P. O. Box 1955
         149-155 Milton Street
         Ashfield NSW 2131
         Australia
         Attn:  Mr. Graeme Francis Pettigrew

         If to Buyer:

         Corrections Corporation of America
         102 Woodmont Boulevard, Suite 800
         Nashville, Tennessee  37205
         Attn:  Doctor R. Crants

         With a copy to:

         Elizabeth E. Moore, Esq.
         Stokes & Bartholomew, P.A.
         424 Church Street, Suite 2800
         Nashville, Tennessee  37219

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.

         12.07.  GOVERNING LAW.  This Agreement shall be governed by and be
interpreted under the laws of Queensland without regard to the conflicts of law
principles thereof.  Each party hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court located in Queensland over any
action or proceeding to enforce any right under this Agreement.  The parties
further acknowledge that irrevocable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  Accordingly, the parties shall be
entitled to an injunction to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court in Queensland.  This being in addition to any other remedy to which they
may be entitled at law or equity.

         12.08.  COUNTERPARTS.  This Agreement may be executed simultaneously
in one or more counterparts, with the same effect as if the signatories
executing the several counterparts had executed one counterpart, provided,
however, that the several executed counterparts shall together have been signed
by Buyer and the Seller.  All such executed counterparts shall together
constitute one and the same instrument.





                                     14


   16

         12.09.  DISPUTE RESOLUTION.

                 (a)      Any party to this agreement claiming that a dispute
has arisen under this agreement between any of the parties to this agreement
shall give notice to the other party in dispute designating as its
representative in negotiations relating to the dispute a person with authority
to settle the dispute and the other party given written notice shall promptly
give notice in writing to the first party designating as its representative in
negotiations relating to the dispute a person with similar authority.

                 (b)      The designated persons shall within 10 days of the
last designation required by subsection (a), following whatever investigations
each deems appropriate, seek to resolve the dispute.

                 (c)      If the dispute is not resolved within the following
10 days (or within such further period as the representatives may agree is
appropriate) the parties in dispute shall within a further 10 days seek to
agree on a process for resolving the whole or part of the dispute through means
other than litigation, such as further negotiations, mediation, conciliation,
independent expert determination and so on.

                 (d)      The parties acknowledge that the purpose of any
exchange of information or documents or the making of any offer of settlement
pursuant to this Section is to attempt to settle the dispute between the
parties.  No party may use any information or documents obtained through the
dispute resolution process established by this Section for any purpose other
than in an attempt to settle a dispute between that party and the other party
to this Agreement.

                 (e)      After the expiration of the time established by this
Section for agreement on a dispute resolution process, any party which has
complied with the provisions of this Section may in writing terminate the
dispute resolution process provided for in this Section and may then commence
Court proceedings relating to the dispute.

         IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Buyer and by the Seller on the
date first above written.



                             BUYER:
                             
                             CORRECTIONS  CORPORATION  OF  AMERICA
                             
                             
                             
                             By:                                     
                                -------------------------------------
                             
                             
                             Title:                                  
                                   ----------------------------------




                                     15


   17



                                SELLER:
                                
                                CHUBB  SECURITY  HOLDINGS  AUSTRALIA
                                LIMITED
                                
                                
                                
                                By:                                     
                                   -------------------------------------
                                
                                
                                Title:                                  
                                      ----------------------------------





                                     16

EX-10.142

   1
                                                                 EXHIBIT 10.142


                            NOTE PURCHASE AGREEMENT



                                    BETWEEN



                     PACIFIC MUTUAL LIFE INSURANCE COMPANY

                        PM GROUP LIFE INSURANCE COMPANY


                                      AND


                       CORRECTIONS CORPORATION OF AMERICA



                           DATED AS OF JUNE 22, 1992



             $7,500,000 CONVERTIBLE, EXTENDABLE, SUBORDINATED NOTES
                       ORIGINALLY DUE SEPTEMBER 30, 1998
   2
                 This NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of
June 22, 1992, between PACIFIC MUTUAL LIFE INSURANCE COMPANY, a California
corporation ("PM"), PM GROUP LIFE INSURANCE COMPANY ("PMGLIC") and CORRECTIONS
CORPORATION OF AMERICA, a Delaware corporation (the "Corporation").

                 WHEREAS, the Corporation has duly authorized the issuance of
convertible, extendable, subordinated notes in the aggregate principal amount
of $7,500,000 that are to be convertible into shares of the Corporation's
common stock;

                 WHEREAS, Purchaser wishes to purchase the convertible,
extendable, subordinated notes from the Corporation, and the Corporation wishes
to sell such convertible, extendable, subordinated notes to Purchaser; and

                 WHEREAS, Purchaser and the Corporation are entering into this
Agreement to provide for such purchase and sale and to establish various rights
and obligations in connection therewith.

                 NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein set forth, the parties hereto agree as follows:

         1.      AUTHORIZATION OF ISSUE OF THE NOTES.  The Corporation has duly
authorized the issuance of convertible, extendable, subordinated notes (the
"Notes") in the aggregate principal amount of $7,500,000, to be dated the date
of issuance thereof, to bear interest on the unpaid balance thereof from the
date thereof quarterly at the Coupon Rate and, upon the occurrence of a
Triggering Event and until the date on which such Triggering Event is cured or
waived or until the date that is ninety (90) days from the initial occurrence
of Triggering Event, whichever is later, at the Triggering Event Rate, until
the principal thereof shall become due and payable.  The indebtedness evidenced
by the Notes shall be convertible into shares of the Corporation's common
stock, $1.00 par value, upon such terms and at a conversion rate as set forth
in the Notes.  The Tranche A Notes shall be substantially in the form attached
hereto as Exhibit A, the Tranche B Notes shall be substantially in the form
attached hereto as Exhibit B, and the Tranche C Notes shall be substantially in
the form attached hereto as Exhibit C.  The Tranche A Notes shall be issued to
Purchaser on the Closing Date; the Tranche B Notes shall be issued to Purchaser
on the Tranche B Closing Date; and the Tranche C Notes shall be issued to
Purchaser on the Tranche C Closing Date.

         2.      SALE AND PURCHASE OF THE NOTES; CLOSING DATES; CONDITIONS
PRECEDENT; CONDITION SUBSEQUENT.

                 2.1      Sale and Purchase of the Notes.  Subject to the terms
and conditions of this Agreement, PM, either directly or through one or more
Affiliates, agrees to purchase, and the Corporation agrees to sell and issue to
PM, or such Affiliates: (i) on the Closing 




                                     -1-
   3
Date, a Tranche A Note for a purchase price of Two Million One Hundred
Seventy-Five Thousand Dollars ($2,175,000); (ii) on the Tranche B Closing Date,
a Tranche B Note for a purchase price of Two Million One Hundred Seventy-Five
Thousand Dollars (2,175,000); and (iii) at PM's sole option, on the Tranche C
Closing Date, a Tranche C Note for a purchase price of Two Million One Hundred
Fifty Thousand Dollars ($2,150,000), for a total purchase price of Six Million
Five Hundred Thousand Dollars ($6,500,000).  Subject to the terms and
conditions of this Agreement, PMGLIC, either directly or through one or more
Affiliates, agrees to purchase, and the Corporation agrees to sell and issue to
PMGLIC, or such Affiliates: (i) on the Closing Date, a Tranche A Note for a
purchase price of Three Hundred Twenty-Five Thousand Dollars ($325,000); (ii)
on the Tranche B Closing Date, a Tranche B Note for a purchase price of Three
Hundred Twenty-Five Thousand Dollars ($325,000); and (iii) at PMGLIC's sole
option, on the Tranche C Closing Date, a Tranche C Note for a purchase price of
Three Hundred Fifty Thousand Dollars ($350,000), for a total purchase price of
One Million Dollars ($1,000,000).

                 2.2      Closing Date; Tranche B Closing Date; Tranche C
Closing Date.  The closing of the sale and purchase of the Tranche A Notes
shall take place at the offices of Brobeck, Phleger & Harrison, 550 South Hope
Street, Los Angeles, California 90071, counsel to Purchaser at 10:00 a.m.,
local time, on June 22, 1992 or at such other time, date, or place as the
Corporation and Purchaser shall mutually agree (which time, date, and place are
referred to in this Agreement as the "Closing Date").  To exercise their
respective rights to cause the issuance and sale of the Tranche B Notes, the
Corporation or the Purchaser must provide the other with a Tranche B Notice at
least five (5) Business Days days prior to the proposed Tranche B Closing Date
which Tranche B Notice shall specify the proposed Tranche B Closing Date.  The
closing of the sale and purchase of the Tranche B Notes shall take place on the
Tranche B Closing Date so specified in the Tranche B Notice and at such time
and place on such date as the Corporation and Purchaser shall mutually agree.
To exercise its right to cause the issuance and sale of the Tranche C Notes, if
in its sole and absolute discretion it determines to do so, the Purchaser must
provide the Corporation with a Tranche C Notice at least five (5) Business Days
days prior to the proposed Tranche C Closing Date which Tranche C Notice shall
specify the proposed Tranche C Closing Date.  The closing of the sale and
purchase of the Tranche C Notes shall take place on the Tranche C Closing Date
so specified in the Tranche C Notice and at such time and place on such date as
the Corporation and Purchaser shall mutually agree.

                 2.3  Closing Date Conditions.  Purchaser's obligation to
purchase the Tranche A Notes on the Closing Date shall be subject to the
performance by the Corporation of its agreements hereunder that by the terms
hereof are to be performed at or prior to the time of delivery of the Tranche A
Notes and to the following further conditions precedent:

                          (i)        Closing Date.  The Closing Date shall
         occur on or before June 26, 1992;





                                      -2-
   4
                          (ii)       Closing Certificate.  Purchaser shall
         have  received a certificate dated the Closing Date, signed by the
         President or a Vice President of the Corporation, to the effect that:
         (i) the representations and warranties of the Corporation set forth in
         Sections 4.1 through 4.22 are true and correct in all material
         respects on and with respect to the Closing Date; (ii) the Corporation
         has performed all of its obligations hereunder that are to be
         performed on or prior to the Closing Date; and (iii) no Unmatured
         Event of Default or Event of Default has occurred and is continuing;

                          (iii)      Legality.  The Tranche A Notes shall
         qualify as a legal investment for Purchaser under the laws and
         regulations of each jurisdiction to which Purchaser is subject
         (without reference to any so- called "basket" provision which permits
         the making of an investment without restrictions to the character of
         the particular investment being made) and the purchase of and payment
         for the Tranche A Notes shall not be prohibited by any applicable law
         or governmental regulation.

                          (iv)       Satisfactory Proceedings.  All corporate
         proceedings taken in connection with the transactions contemplated by
         this Agreement, and all documents necessary to the consummation
         thereof, shall be satisfactory in form and substance to Purchaser and
         special counsel to Purchaser, and Purchaser shall have received a copy
         (executed or certified as may be appropriate) of all documents or
         corporate proceedings taken in connection with the consummation of
         said transactions, including the following:

                                     a.       Certified copies of the
                 Certificate of Incorporation and By-laws of the Corporation;

                                     b.       Certified copies of resolutions
                 of the Board of Directors of the Corporation authorizing the
                 execution, delivery, and performance of this Agreement, the
                 Notes, the Registration Rights Agreement, and any other
                 documents provided for in this Agreement; and

                                     c.       A certificate of the Secretary of
                 the Corporation certifying the names of the officer or
                 officers of the Corporation authorized to sign this Agreement,
                 the Notes, the Registration Rights Agreement, and any other
                 documents provided for in this Agreement, together with a
                 sample of the true signature of each such officer;

                          (v)        Legal Opinion.  Purchaser shall have
         received from Stokes & Bartholomew and Irell & Manella, counsel and
         local counsel to the Corporation, opinion letters dated the Closing
         Date, in form and substance satisfactory to Purchaser and their
         counsel, and covering the matters set forth in Exhibit D hereto;





                                      -3-
   5
                          (vi)       Issuance of the Tranche A Notes.  The
         Corporation shall have executed and delivered the Tranche A Notes to
         Purchaser or their nominees;

                          (vii)      Registration Rights Agreement.  The
         Corporation and Purchaser shall have entered into a registration
         rights agreement in the form of Exhibit E hereto (the "Registration
         Rights Agreement");

                          (viii)     Closing Fee.  The Corporation shall pay to
         Purchaser a closing fee of $75,000 (net of any commitment delivery fee
         ($25,000) or commitment acceptance fee ($50,000) previously paid to
         Purchaser) by wire transfer of immediately available funds;

                          (ix)       No Material Adverse Change.  No material
         adverse change in the business, condition, or operations (financial or
         otherwise) of the Corporation and its Subsidiaries taken as a whole
         from that set forth in the balance sheet as of March 31, 1992,
         included in the SEC Reports, other than changes disclosed to Purchaser
         in writing prior to the execution and delivery by Purchaser of this
         Agreement, shall have occurred;

                          (x)        Approvals and Consents.  The Corporation
         shall have duly received all authorizations, consents, approvals,
         licenses, franchises, permits, and certificates by or of all federal,
         state, and local governmental authorities necessary for the issuance
         of the Tranche A Notes;

                          (xi)       Payment of Legal Fees.  The Corporation
         shall have reimbursed the Purchaser in full for the fees and expenses
         of its counsel, Brobeck, Phleger & Harrison, incurred in connection
         with the preparation, negotiation, and execution of this Agreement,
         the Notes, the Registration Rights Agreement, and any other documents
         executed in connection herewith;

                          (xii)      Representations and Warranties.  The
         representations and warranties of the Corporation contained in this
         Agreement shall be true and correct in all respects on and as of the
         Closing Date, as though made on and as of such date (except to the
         extent that such representations and warranties relate solely to an
         earlier date); and

                          (xiii)     Events of Default.  No Unmatured Event of
         Default or Event of Default shall have occurred and be continuing on
         the Closing Date, nor shall either result from the purchase and sale
         of the Tranche A Notes.

                 2.4      Waiver of Conditions.  If, on the Closing Date, the
Corporation fails to deliver the Tranche A Notes to Purchaser or if any of the
other conditions specified in Section 2.3 have not been satisfied, Purchaser
shall be relieved of all further obligations under this Agreement.  Without
limiting the foregoing, if the conditions specified in





                                      -4-
   6
Section 2.3 have not been satisfied, Purchaser may waive compliance by the
Corporation with any such condition to such extent as it may in its sole
discretion determine.  Nothing in this Section 2.4 shall operate to relieve the
Corporation of any of its obligations hereunder or to waive any of Purchaser's
rights against the Corporation occassioned by any such breach.


                 2.5  Condition Subsequent.  The following shall be a condition
subsequent to the purchase and sale of the Tranche A Notes and the failure to
satisfy the following shall constitute an Event of Default hereunder:

                          (i)        Escrow Agreement.  Withing thirty (30)
days of the Closing Date, the Corporation, the Purchaser, and NationsBank (or
another third party acceptable to Purchaser in its sole and absolute
discretion) shall have entered into an escrow agreement (the "Escrow
Agreement"), together with appropriate financing statements signed by the
Corporation, in each case in form and substance satisfactory to Purchaser.

                 2.6  Tranche B Closing Date Conditions.  Purchaser's
obligation to purchase the Tranche B Notes on the Tranche B Closing Date shall
be subject to the performance by the Corporation of its agreements hereunder
that by the terms hereof are to be performed at or prior to the time of
delivery of the Tranche B Notes and to the following further conditions
precedent:

                          (i)        Closing Certificate.  Purchaser shall have
         received a certificate dated the Tranche B Closing Date, signed by the
         President or a Vice President of the Corporation, to the effect that:
         (i) the representations and warranties of the Corporation set forth in
         Sections 4.1 through 4.22 are true and correct in all material
         respects on and with respect to the Tranche B Closing Date (except to
         the extent that such representations and warranties relate solely to
         an earlier date); (ii) the Corporation has performed all of its
         obligations hereunder that are to be performed on or prior to the
         Tranche B Closing Date; and (iii) no Unmatured Event of Default or
         Event of Default has occurred and is continuing;

                          (ii)       Legality.  The Tranche B Notes shall
         qualify as a legal investment for Purchaser under the laws and
         regulations of each jurisdiction to which Purchaser is subject
         (without reference to any so-called "basket" provision which permits
         the making of an investment without restrictions to the character of
         the particular investment being made) and the purchase of and payment
         for the Tranche B Notes shall not be prohibited by any applicable law
         or governmental regulation.

                          (iii)      Satisfactory Proceedings.  All corporate
         proceedings taken in connection with the issuance of the Tranche B
         Notes, shall be satisfactory in form and substance to Purchaser and
         special counsel to Purchaser, and Purchaser shall have received a copy
         (executed or certified as may be appropriate) of all documents





                                      -5-
   7
or corporate proceedings taken in connection with the consummation of said
issuance, including the following:

                                     a.       Certified copies of the
                 Certificate of Incorporation and By-laws of the Corporation or
                 a certificate of the Secretary of the Corporation certifying
                 that such documents have not been changed from the copies that
                 were provided to Purchaser on the Closing Date;

                                     b.       Certified copies of resolutions
                 of the Board of Directors of the Corporation authorizing the
                 execution, delivery, and performance of this Agreement, the
                 Notes, the Registration Rights Agreement, and any other
                 documents provided for in this Agreement or a certificate of
                 the Secretary of the Corporation certifying that such
                 resolutions have not been changed from the copies that were
                 provided to Purchaser on the Closing Date and that such
                 resolutions remain in full force and effect; and

                                     c.       A certificate of the Secretary of
                 the Corporation certifying the names of the officer or
                 officers of the Corporation authorized to sign this Agreement,
                 the Notes, the Registration Rights Agreement, and any other
                 documents provided for in this Agreement, together with a
                 sample of the true signature of each such officer or a
                 certificate of the Secretary of the Corporation certifying
                 that such certifications have not been changed from the copies
                 that were provided to Purchaser on the Closing Date and that
                 such resolutions remain in full force and effect;

                          (iv)       Legal Opinion.  Purchaser shall have
         received from Stokes & Bartholomew and Irell & Manella, counsel and
         local counsel to the Corporation, updated opinion letters dated the
         Tranche B Closing Date, in the form and substance of the opinions
         rendered by such counsel on the Closing Date;

                          (v)        Issuance of the Tranche B Notes.  The
         Corporation shall have executed and delivered the Tranche B Notes to
         Purchaser or their nominees;

                          (vi)       Tranche B Closing Fee.  The Corporation
         shall pay to Purchaser a closing fee of $75,000 by wire transfer of
         immediately available funds;

                          (vii)      No Material Adverse Change.  No material
         adverse change in the business, condition, or operations (financial or
         otherwise) of the Corporation and its Subsidiaries taken as a whole
         from that set forth in the balance sheet as of March 31, 1992,
         included in the SEC Reports, other than changes disclosed to Purchaser
         in writing prior to the execution and delivery by Purchaser of this
         Agreement, shall have occurred;





                                      -6-
   8
                          (viii)     Approvals and Consents.  The Corporation
         shall have duly received all authorizations, consents, approvals,
         licenses, franchises, permits, and certificates by or of all federal,
         state, and local governmental authorities necessary for the issuance
         of the Tranche B Notes;

                          (ix)       Payment of Legal Fees.  The Corporation
         shall have reimbursed the Purchaser in full for the fees and expenses
         of its counsel, Brobeck, Phleger & Harrison, incurred in connection
         with the preparation, execution, and delivery of the Escrow Agreement
         and the Tranche B Notes;

                          (x)        Representations and Warranties.  The
         representations and warranties of the Corporation contained in this
         Agreement shall be true and correct in all respects on and as of the
         Tranche B Closing Date, as though made on and as of such date (except
         to the extent that such representations and warranties relate solely
         to an earlier date);

                          (xi)       Events of Default.  No Unmatured Event of
         Default or Event of Default shall have occurred and be continuing on
         the Tranche B Closing Date, nor shall either result from the purchase
         and sale of the Tranche B Notes;

                          (xii)      Escrow Agreement.  The Corporation shall
         have deposited into the escrow account created under and pursuant to
         the Escrow Agreement (either from the proceeds of sale from the sale
         of its Estancia Facility or otherwise) the sum of not less than Five
         Million Dollars ($5,000,000); provided, however, that the Corporation
         shall be able to satisfy this condition in the event that it has
         deposited into the escrow account created under and pursuant to the
         Escrow Agreement (either from the proceeds of sale from the sale of
         its Estancia Facility or otherwise) the sum of not less than Two
         Million Five Hundred Thousand Dollars ($2,500,000) and if it instructs
         the Purchaser to deposit up to Two Million Five Hundred Thousand
         Dollars ($2,500,000) of the proceeds from the sale of the Tranche B
         Notes into such escrow account so that after giving effect to such
         additional deposit the total amount of funds contained in such escrow
         account is not less than Five Million Dollars ($5,000,000); and

                          (xiii)     Tranche B Closing Date.  The Tranche B
         Closing Date shall occur on or before December 15, 1992.

                 2.7      Waiver of Conditions.  If, on the Tranche B Closing
Date, the Corporation fails to deliver the Tranche B Notes to Purchaser or if
any of the other conditions specified in Section 2.6 have not been satisfied,
Purchaser shall be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in Section 2.6 have
not been satisfied, Purchaser may waive compliance by the Corporation with any
such condition to such extent as it may in its sole discretion determine, it
being expressly understood and agreed that the Corporation is to use its best





                                      -7-
   9
efforts to satisfy the conditions specified in Section 2.6 and the Corporation
is obligated to accept the financing provided by the purchase and sale of the
Tranche B Notes if Purchaser is prepared to provide it.  Nothing in this
Section 2.7 shall operate to relieve the Corporation of any of its obligations
hereunder or to waive any of Purchaser's rights against the Corporation
occassioned by any such breach.

                 2.8  Tranche C Closing Date Conditions.  Purchaser shall have
no obligation to purchase the Tranche C Notes unless it, in its sole and
absolute discretion it determines to do so.  If it does so determine to
purchase the Tranche C Notes then its obligation to purchase the Tranche C
Notes on the Tranche C Closing Date shall be subject to the performance by the
Corporation of its agreements hereunder that by the terms hereof are to be
performed at or prior to the time of delivery of the Tranche C Notes and to the
following further conditions precedent:

                          (i)        Tranche C Closing Date.  The Tranche C
         Closing Date shall occur on or before December 15, 1992;

                          (ii)       Closing Certificate.  Purchaser shall have
         received a certificate dated the Tranche C Closing Date, signed by the
         President or a Vice President of the Corporation, to the effect that:
         (i) the representations and warranties of the Corporation set forth in
         Sections 4.1 through 4.22 are true and correct in all material
         respects on and with respect to the Tranche C Closing Date (except to
         the extent that such representations and warranties relate solely to
         an earlier date); (ii) the Corporation has performed all of its
         obligations hereunder that are to be performed on or prior to the
         Tranche C Closing Date; and (iii) no Unmatured Event of Default or
         Event of Default has occurred and is continuing;

                          (iii)      Legality.  The Tranche C Notes shall
         qualify as a legal investment for Purchaser under the laws and
         regulations of each jurisdiction to which Purchaser is subject
         (without reference to any so- called "basket" provision which permits
         the making of an investment without restrictions to the character of
         the particular investment being made) and the purchase of and payment
         for the Tranche C Notes shall not be prohibited by any applicable law
         or governmental regulation.

                          (iii)      Satisfactory Proceedings.  All corporate
         proceedings taken in connection with the issuance of the Tranche C
         Notes, shall be satisfactory in form and substance to Purchaser and
         special counsel to Purchaser, and Purchaser shall have received a copy
         (executed or certified as may be appropriate) of all documents or
         corporate proceedings taken in connection with the consummation of
         said issuance, including the following:

                                     d.       Certified copies of the
                 Certificate of Incorporation and By-laws of the Corporation or
                 a certificate of the Secretary of the Corporation certifying
                 that such documents have not been changed from the copies that





                                      -8-
   10
                 were provided to Purchaser on the Closing Date or the Tranche
                 B Closing Date, as applicable;

                                     e.       Certified copies of resolutions
                 of the Board of Directors of the Corporation authorizing the
                 execution, delivery, and performance of this Agreement, the
                 Notes, the Registration Rights Agreement, and any other
                 documents provided for in this Agreement or a certificate of
                 the Secretary of the Corporation certifying that such
                 resolutions have not been changed from the copies that were
                 provided to Purchaser on the Closing Date, or the Tranche B
                 Closing Date, as applicable, and that such resolutions remain
                 in full force and effect; and

                                     f.       A certificate of the Secretary of
                 the Corporation certifying the names of the officer or
                 officers of the Corporation authorized to sign this Agreement,
                 the Notes, the Registration Rights Agreement, and any other
                 documents provided for in this Agreement, together with a
                 sample of the true signature of each such officer or a
                 certificate of the Secretary of the Corporation certifying
                 that such certifications have not been changed from the copies
                 that were provided to Purchaser on the Closing Date, or the
                 Tranche B Closing Date, as applicable, and that such
                 resolutions remain in full force and effect;

                          (iv)       Legal Opinion.  Purchaser shall have
         received from Stokes & Bartholomew and Irell & Manella, counsel and
         local counsel to the Corporation, updated opinion letters dated the
         Tranche C Closing Date, in the form and substance of the opinions
         rendered by such counsel on the Closing Date;

                          (v)        Issuance of the Tranche C Notes.  The
         Corporation shall have executed and delivered the Tranche C Notes to
         Purchaser or their nominees;

                          (vi)       Tranche C Closing Fee.  The Corporation
         shall pay to Purchaser a closing fee of $75,000 by wire transfer of
         immediately available funds;

                          (vii)      No Material Adverse Change.   No material
         adverse change in the business, condition, or operations (financial or
         otherwise) of the Corporation and its Subsidiaries taken as a whole
         from that set forth in the balance sheet as of March 31, 1992,
         included in the SEC Reports, other than changes disclosed to Purchaser
         in writing prior to the execution and delivery by Purchaser of this
         Agreement, shall have occurred;

                          (viii)     Approvals and Consents.  The Corporation
         shall have duly received all authorizations, consents, approvals,
         licenses, franchises, permits, and certificates by or of all federal,
         state, and local governmental authorities necessary for the issuance
         of the Tranche C Notes;





                                      -9-
   11
                          (ix)       Payment of Legal Fees.  The Corporation
         shall have reimbursed the Purchaser in full for the fees and expenses
         of its counsel, Brobeck, Phleger & Harrison, incurred in connection
         with the preparation, execution, and delivery of the Tranche C Notes;

                          (x)        Representations and Warranties.  The
         representations and warranties of the Corporation contained in this
         Agreement shall be true and correct in all respects on and as of the
         Tranche C Closing Date, as though made on and as of such date (except
         to the extent that such representations and warranties relate solely
         to an earlier date); and

                          (xi)       Events of Default.  No Unmatured Event of
         Default or Event of Default shall have occurred and be continuing on
         the Tranche C Closing Date, nor shall either result from the purchase
         and sale of the Tranche C Notes.

                 2.9      Waiver of Conditions.  If, on the Tranche C Closing
Date, the Corporation fails to deliver the Tranche C Notes to Purchaser or if
any of the other conditions specified in Section 2.8 have not been satisfied,
Purchaser shall be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in Section 2.8 have
not been satisfied, Purchaser may waive compliance by the Corporation with any
such condition to such extent as it may in its sole discretion determine, it
being expressly understood and agreed that the Corporation is to use its best
efforts to satisfy the conditions specified in Section 2.8 and the Corporation
is obligated to accept the financing provided by the purchase and sale of the
Tranche C Notes if Purchaser is prepared to provide it.  Nothing in this
Section 2.9 shall operate to relieve the Corporation of any of its obligations
hereunder or to waive any of Purchaser's rights against the Corporation
occassioned by any such breach.

                 2.10     Effect of Exercise of Certain Mandatory Prepayment
Options.  Anything contained herein to contrary notwithstanding, if Purchaser,
or any one of them, exercises the right contained in Section 6(a) of the
Tranche A Notes or the Tranche B Notes, as applicable, to require the
Corporation to prepay such Notes, then, thereafter, the Corporation shall not
be obligated to accept the financing provided by the purchase and sale of the
Tranche B Notes or the Tranche C Notes, as applicable, irrespective of whether
Purchaser is prepared to provide it.

         3.      DEFINITIONS; CONSTRUCTION.

                 3.1      Definitions.          For purposes of this Agreement,
the following terms shall have the following meanings:

                 "Affiliate" has the meaning set forth in Rule 12b-2 under the
         Exchange Act (as in effect on the date of this Agreement), it being
         understood that any limited





                                      -10-
   12
         partner of a partnership shall not be an Affiliate of such partnership 
         solely by virtue of its status as such a limited partner.

                 "Agreement" shall have the meaning ascribed thereto in the
         preamble.

                 "Business Day" means each Monday, Tuesday, Wednesday,
         Thursday, or Friday that is not a day on which banking institutions in
         Los Angeles, California are authorized or obligated by law or
         executive order to close.

                 "Capital Lease" means as to any Person any lease or rental of
         real or personal property that, under generally accepted accounting
         principles, is or will be required to be capitalized on the balance
         sheet of such Person.

                 "Capital Lease Obligation" means any rental obligation in
         respect of a Capital Lease taken at the amount thereof accounted for
         as indebtedness (net of interest expense) in accordance with generally
         accepted accounting principles.

                 "Certificate of Designation" means the Certificate of
         Designation that sets forth the rights and preferences of the
         Preferred Stock.

                 "Closing Date" shall have the meaning ascribed thereto in
         Section 2.2 hereof.

                 "Commission" means the United States Securities and Exchange
         Commission.

                 "Common Stock" means the common stock of the Corporation, par
         value $l.00 per share.

                 "Confidential Information" shall have the meaning ascribed
         thereto in Section 9.1 hereof.

                 "Consolidated Fixed Charge Coverage" means at the end of any
         fiscal quarter the quotient of (a) twice the Consolidated Operating
         Cash Flow for such fiscal quarter and the immediately preceding fiscal
         quarter, divided by (b) Consolidated Fixed Charges for the next
         succeeding four fiscal quarters.

                 "Consolidated Fixed Charges" means, for any period, the sum of
         Consolidated Rentals and Consolidated Interest Expense for such
         period.  In the event that Consolidated Fixed Charges are to be
         determined for any future period or periods and any component of
         Consolidated Rentals or Consolidated Interest Expense may fluctuate or
         is determined on the basis of a rate or criterion that may fluctuate
         during such period, Consolidated Rentals or Consolidated Interest
         Expense, as the case may be, shall be calculated assuming that such
         amount, rate, or criterion in effect on the date such calculation is
         made shall be in effect throughout such period.





                                      -11-
   13
                 "Consolidated Interest Expense" means, for any period, total
         interest, whether paid or accrued (including that attributable to
         Capital Leases), of the Corporation and the Restricted Subsidiaries on
         a consolidated basis, including all amounts payable on the First
         Mortgage Notes and all commissions, discounts, and other fees and
         charges owed with respect to letters of credit and banker's acceptance
         financing and net costs under interest rate exchange or cap agreements
         providing interest rate protection, all as determined in conformity
         with generally accepted accounting principles.

                 "Consolidated Net Income" means, for any period, the net
         earnings (or losses) of the Corporation and the Restricted
         Subsidiaries, on a consolidated basis, for such period taken as a
         single accounting period determined in conformity with generally
         accepted accounting principles consistently applied, but excluding:

                 a.       any gain that under generally accepted accounting
                 principles consistently applied would be properly classified
                 as an extraordinary gain;

                 b.       any gain arising from a sale of capital assets that
                 is not made in the ordinary course of business of the
                 Corporation or its Restricted Subsidiaries;

                 c.       any gain arising from any write-up of assets;

                 d.       the proceeds of any life insurance policy;

                 e.       earnings of any Person substantially all of the
                 assets of that have been acquired in any manner (whether
                 through merger or otherwise) to the extent that such earnings
                 were realized prior to the date of such acquisition; and

                 f.       earnings of any Person to which substantially all the
                 assets of the Corporation shall have been sold or transferred,
                 into which the Corporation shall have been merged, or with
                 which the Corporation shall have been consolidated, to the
                 extent that such earnings were realized prior to the date of
                 such transfer, merger, or consolidation.

         All losses (including any loss that, under generally accepted
         accounting principles consistently applied, would be properly
         classified as an extraordinary loss) shall be included in determining
         such net earnings (or  losses).

                 "Consolidated Net Worth" means, as of the time of any
         determination thereof, the excess of (a) the sum of (i) the par value
         (or value stated on the books of the Corporation) of the capital stock
         of all classes of the Corporation, plus (or minus in the case of
         surplus deficit) (ii) the amount of consolidated surplus, whether
         capital or earned, of the Corporation and the Restricted Subsidiaries,
         plus (iii) the face amount of the Subordinated Funded Debt, over (b)
         the amount of all treasury stock; all determined on a consolidated
         basis for the Corporation and the Restricted





                                      -12-
   14
         Subsidiaries in accordance with generally accepted accounting
         principles consistent with those followed in the preparation of the
         financial statements referred to in Section 4.5, including the making
         of appropriate deductions for minority interests, if any, in the
         Restricted Subsidiaries.

                 "Consolidated Operating Cash Flow" means for any period,
         without duplication, (a) Consolidated Net Income plus (b) to the
         extent deducted in computing Consolidated Net Income, depreciation and
         amortization and other similar non-cash charges, accrued income tax
         expense and interest expense of the Corporation and the Restricted
         Subsidiaries for such period.

                 "Consolidated Rentals" means, for any period, all amounts
         payable by the Corporation and any Restricted Subsidiary as lessee or
         sublessee relating to Operating Leases.

                  "Consolidated Senior Funded Debt" means all Funded Debt other
         than Subordinated Funded Debt.

                 "Consolidated Total Capitalization" means, as of the time of
         any determination thereof, the sum of Consolidated Senior Funded Debt
         and Consolidated Net Worth.

                 "Conversion Shares" means the shares of Common Stock issuable
         upon conversion of the indebtedness evidenced by the Notes.

                 "Convertible Notes" means the Corporation's (a) $7,000,000
         aggregate principal amount 8.5% Convertible Subordinated Notes due
         November 7, 1999, and (b) the Corporation's $2,700,000 aggregate
         principal amount 8.5% Convertible Subordinated Notes due on various
         dates, the latest of which is January 16, 2000.

                 "Corporation" shall have the meaning ascribed thereto in the
         preamble to this Agreement and shall include the Corporation's
         permitted successors and assigns.

                 "Coupon Rate" means (i) with respect to the Tranche A Notes
         and the Tranche B Notes, eight and one-half percent (8.5%) per annum;
         and (ii) with respect to the Tranche C Notes, the greater of: (a)
         eight and one-half percent (8.5%) per annum, or (b) two and
         nine-tenths percentage points (2.90) above the Treasury Rate as of the
         Tranche C Closing Date for notes having a maturity of three years from
         the date of issuance thereof.

                 "ERISA" means the Employee Retirement Income Security Act of
         1974.

                 "Escrow Agreement" shall have the meaning ascribed thereto in
         Section 2.5(i) hereof.





                                      -13-
   15
                 "Estancia Facility" means the Corporation's Torrance County
         Detention Center located in Estancia, New Mexico.

                 "Event of Default" shall have the meaning set forth in Section
         7.1.

                 "Exchange Act" means the Securities Exchange Act of 1934, as
         amended, or any similar federal statute, and the rules and regulations
         of the Commission thereunder, all as the same shall be in effect at
         the time.  Reference to a particular section of the Exchange Act shall
         include reference to the comparable section, if any, of any successor
         federal statute.

                 "Federal Government Contract" means a contract between the
         Corporation and the federal government of the United States of America
         or any subdivision or agency thereof.

                 "Foreign Government Contract" means a contract between the
         Corporation and any foreign (other nation) government or any
         subdivision or agency thereof.

                 "First Mortgage Note Purchase Agreement" means the Note
         Purchase Agreement dated as of December 6, 1990, as amended, between
         the Corporation and the purchasers of the First Mortgage Notes listed
         therein.

                 "First Mortgage Notes" means the Corporation's $20,000,000
         aggregate principal amount of 11.08% first mortgage notes due November
         30, 2000 issued pursuant to the First Mortgage Note Purchase
         Agreement.

                 "Funded Debt" means and includes without duplication (a) any
         obligation payable more than one year from the date of the creation
         thereof (including the current portion of Funded Debt), that under
         generally accepted accounting principles is shown on the balance sheet
         as a liability (including obligations under Capital Leases and
         excluding reserves for deferred income taxes and other reserves to the
         extent that such reserves do not constitute an obligation), (b)
         guarantees, endorsements (other than endorsements of negotiable
         instruments for collection in the ordinary course of business), and
         other contingent liabilities (whether direct or indirect) in
         connection with the obligations, stock, or dividends of any Person,
         including obligations under contracts to supply funds to or in any
         other manner invest in any Person, (c) obligations under any contract
         to purchase, sell, or lease (as lessee or lessor) property or to
         purchase or sell services, primarily for the purpose of enabling a
         Person to make payment of obligations or to assure the holder of such
         obligations against loss including obligations under any contract for
         the purchase of materials, supplies, or other property or services if
         such contract (or any related document) requires that payment for such
         materials, supplies, or other property or services shall be made
         regardless of whether delivery of such materials, supplies, or other
         property or services is ever made or tendered, (d) obligations under
         any





                                      -14-
   16
         contract to pay or purchase obligations of a Person, or to advance or
         supply funds for the payment or purchase of such obligations, and (e)
         any agreement to assure a creditor of a Person against loss.

                 "Government Contract" means any Federal Government Contract,
         Foreign Government Contract, or any State Government Contract.

                 "indemnified party" shall have the meaning ascribed thereto in
         Section 10.1 hereof.

                 "indemnifying party" shall have the meaning ascribed thereto
         in Section 10.1 hereof.

                 "Margin Stock" shall have the meaning given such term in
         Regulation G (12 CFR part 207) of the Board of Governors of the
         Federal Reserve System.

                 "Notes" shall have the meaning ascribed thereto in Section 1
         hereof.

                 "Operating Lease" means any lease of real, personal, or mixed
         property that is not a Capital Lease.

                 "Permitted Businesses" means the design, construction,
         ownership, start up, management, or operation of detention and
         correctional facilities together with associated consulting and
         educational services.

                 "Person" means any individual, partnership, joint venture,
         corporation, trust, unincorporated organization, government, or
         department or agency of a government.

                 "PM" shall have the meaning ascribed thereto in the preamble
         to this Agreement.

                 "PMGLIC" shall have the meaning ascribed thereto in the
         preamble to this Agreement.

                 "Preferred Stock" means the Corporation's Series A Cumulative
         Convertible Preferred Stock, $1.00 par value per share.

                 "Purchaser" shall mean PM and PMGLIC, individually and
         collectively, and shall include PM's and PMGLIC's permitted successors
         and assigns.

                 "Registration Rights Agreement" shall have the meaning
         ascribed thereto in Section 2.3(vii) hereof.

                 "Representative" shall have the meaning ascribed thereto in
         Section 7.1 hereof.





                                      -15-
   17
                 "Restricted Subsidiary" means a Subsidiary of the Corporation
         that is (a) organized under the laws of any state of the United States
         of America and at least 80% of the total combined voting power of all
         classes of Voting Stock shall at the time as of which any
         determination is being made, be owned by the Corporation either
         directly or through any Restricted Subsidiary, (b) engaged in a
         Permitted Business and (c) whose assets and operations are located
         within the United States of America.

                 "Security" or "Securities" means the Notes or the Conversion
         Shares.

                 "SEC Reports" shall have the meaning ascribed thereto in
         Section 4.4 hereof.

                 "Securities Act" means the Securities Act of 1933.

                 "Senior Indebtedness" shall have the meaning ascribed to such
         term in the Notes.

                 "State Government Contract" means a contract between the
         Corporation or any of its Subsidiaries and the government of any
         state, county, or municipality or any political subdivision or agency
         thereof.

                 "Subordinated Funded Debt" means the indebtedness of the
         Corporation evidenced by the Convertible Notes.

                 "Subsidiary" means any corporation, partnership, or other
         entity of which a majority of the total combined voting power of all
         classes of Voting Stock at the time as of which any determination is
         being made, is owned by a Person either directly, through one or more
         Subsidiaries or both.

                 "Tranche B Closing Date" means the Business Day specified by
         the Corporation or PM, on behalf of the Purchaser, as applicable, in
         compliance with the provisions hereof, as the date on which all of the
         Tranche B Notes are to be issued by the Corporation and purchased by
         Purchaser in accordance with the provisions hereof.

                 "Tranche B Notice" means a written notice substantially in the
         form of the notice attached hereto as Exhibit F and incorporated
         herein by this reference.

                 "Tranche C Closing Date" means the Business Day specified by
         PM, on behalf of the Purchaser, in compliance with the provisions
         hereof, as the date on which all of the Tranche C Notes are to be
         issued by the Corporation and purchased by Purchaser in accordance
         with the provisions hereof.





                                      -16-
   18
                 "Tranche C Notice" means a written notice substantially in the
         form of the notice attached hereto as Exhibit G and incorporated
         herein by this reference.

                 "Tranche A Note" means any one or more of the Notes issued on
         the Closing Date or any substitute or replacement therefor; the
         aggregate amount of the Tranche A Notes shall be Two Million Five
         Hundred Thousand Dollars ($2,500,000).

                 "Tranche B Note" means any one or more of the Notes issued on
         the Tranche B Closing Date or any substitute or replacement therefor;
         the aggregate amount of the Tranche B Notes shall be Two Million Five
         Hundred Thousand Dollars ($2,500,000).

                 "Tranche C Note" means any one or more of the Notes issued on
         the Tranche C Closing Date or any substitute or replacement therefor;
         the aggregate amount of the Tranche C Notes shall be Two Million Five
         Hundred Thousand Dollars ($2,500,000).

                 "Transfer" shall have the meaning ascribed thereto in Section
         8.4 hereof.

                 "Treasury Rate" shall mean, as of the date of any
         determination thereof, the rate per annum, as determined by Purchaser,
         equal to the arithmetic average of the two most recent weekly average
         bid-side yields on issues of United States Treasury Securities, as
         published by the Federal Reserve Board for release on the first
         business day of the week in which such determination is made in its
         Statistical Release H.15 (519) under the heading "Treasury Constant
         Maturities" for the two calendar weeks ending on the two Wednesdays
         immediately preceding the date of such release or, if such average is
         not published for such periods, of such reasonably comparable index as
         may be designated for such period by Purchaser.

                 "Triggering Event" means the occurrence of any Unmatured Event
         of Default of Event of Default described in clauses (i), (ii), and
         (iv) through (x), inclusive, of Section 7.1.  For purposes of
         determining the period during which the Triggering Event Rate shall be
         in effect, a Triggering Event shall not be deemed to have occurred
         until the date on which Purchaser shall have given notice of the
         occurrence thereof to the Corporation.

                 "Triggering Event Rate" means (i) with respect to the Tranche
         A Notes and the Tranche B Notes, ten and one-half percent (10.5%) per
         annum; and (ii) with respect to the Tranche C Notes, the greater of:
         (a) ten and one-half percent (10.5%) per annum, or (b) two and
         nine-tenths percentage points (2.90) above the Treasury Rate as of the
         Tranche C Closing Date for notes having a maturity of three years from
         the date of issuance thereof.





                                      -17-
   19
                 "Unmatured Event of Default" shall mean any event or
         condition, the occurrence of which would, with the lapse of time or
         the giving of notice, or both, constitute an Event of Default.

                 "Voting Stock" means, when used with respect to any Person,
         any shares of stock or other ownership interests of such Person having
         general voting power under ordinary circumstances to elect a majority
         of the board of directors of such Person (irrespective of whether at
         the time stock or ownership interests of any other class or classes
         shall have or might have voting power by reason of the happening of
         any contingency).

                 "Warrants" means the warrants dated as of December 6, 1990
         evidencing the right to purchase 250,000 shares of Common Stock of the
         Corporation between the Corporation and the purchasers of the First
         Mortgage Notes.

                 3.2      Construction.   Unless the context of this
Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, the part includes the whole,
the terms "include" and "including" are not limiting, and the term "or" has,
except where otherwise indicated, the inclusive meaning represented by the
phrase "and/or".  The words "hereof," "herein," "hereby," "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement.  Section, subsection, clause,
exhibit, and schedule references are to this Agreement unless otherwise
specified.  Any reference herein to this Agreement, the Notes, or the
Registration Rights Agreement includes any and all alterations, amendments,
changes, extensions, modifications, renewals, or supplements thereto or
thereof, as applicable.

                 3.3      Changes in Acccounting Principles.  If any changes in
accounting principles from those in effect at the time of preparation of the
financial statements referred to in Section 4.5 are hereafter occasioned by the
promulgation of rules, regulations, pronouncements, and opinions by or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or organizations with
similar functions) result in a change in the method of calculation of financial
covenants, standards, or terms found in this Agreement or there is any change
in the Corporation's fiscal quarters or fiscal year, the parties hereto agree
to enter into negotiations to amend this Agreement so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of the Corporation shall be the same after such changes as
if such changes had not been made.





                                      -18-
   20
         4.      REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.  The
Corporation represents and warrants to Purchaser, as of the date hereof, and as
of the Closing Date, the Tranche B Closing Date, and the Tranche C Closing
Date, that:

                          4.1        Organization and Qualification.  Each of
         the Corporation and its Subsidiaries is a corporation duly organized
         and existing in good standing under the laws of the jurisdiction in
         which it is incorporated and has the power to own its respective
         property and to carry on its respective business as now being
         conducted.  Each of the Corporation and its Subsidiaries is duly
         qualified as a foreign corporation to do business and in good standing
         in every jurisdiction in which the nature of the respective business
         conducted or property owned by it makes such qualification necessary
         and where the failure so to qualify would have a material adverse
         effect on the business or financial position of the Corporation and
         its Subsidiaries taken as a whole.

                          4.2        Due Authorization.  The execution and
         delivery of this Agreement and the Registration Rights Agreement and
         the issuance and sale of the Notes and the Conversion Shares by the
         Corporation and compliance by the Corporation with all the provisions
         of this Agreement, the Registration Rights Agreement, the Notes, and
         the Conversion Shares (i) are within the corporate power and authority
         of the Corporation; (ii) do not require the approval or consent of any
         stockholders of the Corporation; and (iii) have been authorized by all
         requisite corporate proceedings on the part of the Corporation.  This
         Agreement, the Notes, and the Registration Rights Agreement have been
         duly executed and delivered by the Corporation and constitute valid
         and binding agreements of the Corporation enforceable in accordance
         with their respective terms, except that (i) such enforcement may be
         subject to bankruptcy, insolvency, reorganization, moratorium, or
         other similar laws now or hereafter in effect relating to creditors
         rights, and (ii) the remedy of specific performance and injunctive and
         other form of equitable relief may be subject to equitable defenses
         and to the discretion of the court before which any proceeding
         therefor may be brought.  The Corporation has furnished to Purchaser
         true and correct copies of the Corporation's current Certificate of
         Incorporation and By-laws.

                          4.3        Subsidiaries.  The Subsidiaries of the
         Corporation, together with their jurisdiction of incorporation, are
         set forth on Schedule 4.3 hereto.

                          4.4        SEC Reports.  The Corporation has filed
         all proxy statements, reports, and other documents required to be
         filed by it under the Exchange Act and the Corporation has furnished
         Purchaser copies of its Annual Report on Form 10-K for the fiscal year
         ended December 31, 1991, and all proxy statements and reports under
         the Exchange Act filed by the Corporation after such date, each as
         filed with the Commission (collectively, the "SEC Reports").  Each SEC
         Report was in





                                      -19-
   21
         substantial compliance with the requirements of its respective report
         form and did not, on the date of filing, contain any untrue statement
         of a material fact or omit to state a material fact required to be
         stated therein or necessary to make the statements therein, in the
         light of the circumstances under which they were made, not misleading.

                          4.5        Financial Statements.  The financial
         statements (including any related schedules or notes) included in the
         SEC Reports have been prepared in accordance with generally accepted
         accounting principles consistently followed (except as indicated in
         the notes thereto) throughout the periods involved and fairly present
         the consolidated financial condition, results of operations, and
         changes in stockholders' equity of the Corporation and its
         Subsidiaries as of the dates thereof and for the periods ended on such
         dates (in each case subject, as to interim statements, to changes
         resulting from year-end adjustments (none of which will be material in
         amount or effect)), and the Corporation has no material liabilities,
         contingent or otherwise, not reflected in the balance sheet as of
         March 31, 1992 included in the SEC Reports or otherwise referred to in
         the SEC Reports or otherwise disclosed to Purchaser in writing prior
         to the execution by Purchaser of this Agreement, other than any such
         liabilities incurred in the ordinary course of business since March
         31, 1992.  There has been no material adverse change in the business,
         condition, or operations (financial or otherwise) of the Corporation
         and its Subsidiaries taken as a whole from that set forth in the
         balance sheet as of March 31, 1992 included in the SEC Reports, other
         than changes disclosed or referred to in the SEC Reports or otherwise
         disclosed to Purchaser in writing prior to the execution by Purchaser
         of this Agreement.

                          4.6        Actions Pending; Compliance with Law.
         Except as disclosed on Schedule 4.6 hereto, there is no action, suit,
         criminal investigation, or proceeding pending or, to the knowledge of
         the Corporation, threatened by any public official or governmental
         authority, against the Corporation or any of its Subsidiaries or any
         of their respective properties or assets by or before any court,
         arbitrator, or governmental body, department, commission, board,
         bureau, agency, or instrumentality, which questions the validity of
         this Agreement, the Notes, the Registration Rights Agreement, or the
         Conversion Shares or any action taken or to be taken pursuant hereto
         or thereto, or, except as set forth in the SEC Reports, that are
         reasonably likely to result in any material adverse change in the
         business or financial condition of Corporation, and neither the
         Corporation nor any of its Subsidiaries is in default in any material
         respect with respect to any judgment, order, writ, injunction, decree,
         or award, and, except as disclosed in the SEC Reports, the businesses
         of the Corporation and its Subsidiaries are in compliance in all
         material respects with applicable federal, state, local, and foreign
         governmental laws and regulations and all Government Contracts, all to
         the extent necessary to avoid any material adverse effect on the
         business, properties, or condition (financial or other) of the
         Corporation and its Subsidiaries taken as a whole.





                                      -20-
   22
                          4.7        Title to Properties; Insurance.  The
         Corporation and its Subsidiaries have good and valid title to their
         respective properties and assets, free of all liens and encumbrances
         other than those referred to in the financial statements of the
         Corporation (or the notes thereto) for the quarter ended March 31,
         1992, included in the SEC Reports, except in each case for such
         defects in title and such other liens and encumbrances that are
         otherwise disclosed or referred to in the SEC Reports or that do not
         in the aggregate materially detract from the value to the Corporation
         of the properties and assets of the Corporation and its Subsidiaries
         taken as a whole. The Corporation and its Subsidiaries maintain
         insurance in such amounts (to the extent available in the public
         market), including self-insurance, retainage, and deductible
         arrangements, and of such a character as the Corporation believes is
         reasonable for companies engaged in the same or similar business.

                          4.8        Governmental Consents, Etc.  The
         Corporation is not required to obtain any consent, approval, or
         authorization of, or to make any declaration or filing with, any
         governmental authority as a condition to or in connection with the
         valid execution, delivery, and performance of this Agreement, the
         Notes, or the Registration Rights Agreement and the valid offer,
         issue, sale, or delivery of the Notes or the Conversion Shares, or the
         performance by the Corporation of its obligations in respect thereof,
         except for any filings required to effect any registration pursuant to
         the Registration Rights Agreement, and filings required pursuant to
         state and federal securities laws that will be timely made after the
         Closing Date, the Tranche B Closing Date, or the Tranche C Closing
         Date, as applicable.

                          4.9        Holding Corporation Act and Investment
         Corporation Act Status.  The Corporation is not a "holding company" or
         a "public utility company" as such terms are defined in the Public
         Utility Holding Corporation Act of 1935.  The Corporation is not an
         "investment company," or a company "controlled" by an "investment
         company," within the meaning of the Investment Corporation Act of 1940.

                          4.10       Taxes.  The Corporation and its
         Subsidiaries have filed or caused to be filed all income tax returns
         that are required to be filed and have paid or caused to be paid all
         taxes as shown on said returns and on all assessments received by it
         to the extent that such taxes have become due, except taxes the
         validity or amount of which is being contested in good faith by
         appropriate proceedings and with respect to which adequate reserves
         have been set aside.  The federal income tax returns of the
         Corporation and its Subsidiaries have been examined and reported on by
         the Internal Revenue Service (or closed by applicable statutes) and
         all tax liabilities including additional assessments have been
         satisfied for all fiscal years prior to and including the fiscal year
         ended December 31, 1987.  The Corporation and its Subsidiaries have
         paid or caused to be paid, or have established reserves that the
         Corporation reasonably believes to be adequate in all material
         respects, for all federal income tax liabilities and state income tax
         liabilities





                                      -21-
   23
         applicable to the Corporation and its Subsidiaries for all fiscal
         years that have not been examined and reported on by the taxing
         authorities (or closed by applicable statutes).

                4.11       Conflicting Agreements and Charter Provisions. 
         Neither the Corporation nor its Subsidiaries is a party to any
         contract or agreement or subject to any charter or other corporate
         restriction that materially and adversely affects its business,
         property, or assets or financial condition.  Except as set forth on 
         Schedule 4.11 attached hereto, neither the execution and delivery of
         this Agreement, the Notes, or the Registration Rights Agreement nor
         the issuance of the Conversion Shares nor fulfillment of or compliance
         with the terms and provisions hereof or thereof or the prepayment of
         the Notes as contemplated hereby and by the Notes, and the conversion
         of the indebtedness evidenced by the Notes into the Conversion Shares
         as contemplated hereby and by the Notes will conflict with or result
         in a breach of the terms, conditions, or provisions of, or give rise
         to a right of termination under, or constitute a default under, or
         result in any violation of, the Certificate of Incorporation or
         By-laws of the Corporation or any mortgage, agreement, instrument,
         order, judgment, decree, statute, law, rule, or regulations to which
         the Corporation or any of its Subsidiaries or any of their respective
         properties is subject. Neither the Corporation nor any of its
         Subsidiaries is in default under any outstanding indenture or other
         debt instrument or with respect to the payment of the principal of or
         interest on any outstanding obligations for borrowed money, is in
         default under any of their respective contracts or agreements, or
         under any instrument by which the Corporation or any of its
         Subsidiaries is bound, in each case that materially and adversely
         affects the business, operations, or financial condition of the
         Corporation and its Subsidiaries taken as a whole.

                          4.12       Capitalization.  The authorized capital
         stock of the Corporation consists of (i) 30,000,000 shares of Common
         Stock, of which, as of the date hereof, 9,288,881 shares are
         outstanding and no shares are held in its treasury; and (ii) 1,000,000
         shares of preferred stock, $1.00 par value, of which, as of the date
         hereof, 50,000 shares are outstanding; all of such outstanding shares
         have been validly issued and are fully paid and nonassessable.  No
         shares of Common Stock of the Corporation are entitled to preemptive
         rights.  The Preferred Stock is entitled to only those preemptive
         rights that are set forth in the Certificate of Designation.  Except
         for the options and warrants listed on Schedule 4.12 hereto and except 
         for the Warrants, the Preferred Stock, and the Convertible Notes, 
         there are no outstanding options, warrants, scrip, rights to subscribe 
         to, calls, or commitments of any character whatsoever relating to, or 
         securities or rights convertible into, shares of any capital stock of 
         the Corporation, or contracts, commitments, understandings, or
         arrangements by which the Corporation is or may become bound to issue
         additional shares of its capital stock or options, warrants, or rights
         to purchase or acquire any shares of its capital stock.  Since March
         31, 1992, the Corporation has not changed the amount of its authorized
         capital stock or subdivided or otherwise changed any shares of any





                                      -22-
   24
         class of its capital stock, whether by way of reclassification,
         recapitalization, stock split, or otherwise, or issued or reissued, or
         agreed to issue or reissue, any of its capital stock, except as
         disclosed in this Section 4.12 and has not since such date declared or
         paid any dividend in cash or stock or made any other distribution of
         assets to its stockholders.

                          4.13       Disclosure.  Neither this Agreement nor
         the SEC Reports nor the financial statements included in the SEC
         Reports nor any certificate or written disclosure statement referred
         to herein and furnished to Purchaser by or on behalf of the
         Corporation in connection with the transactions contemplated hereby
         contains any untrue statement of a material fact or omits to state a
         material fact necessary in order to make the statements contained
         herein and therein not misleading.  There is no fact peculiar to the
         Corporation or any of its Subsidiaries that the Corporation has not
         disclosed to Purchaser in writing that materially affects adversely
         or, so far as the Corporation can now reasonably foresee, will
         materially affect adversely the properties, business, or condition
         (financial or otherwise) of the Corporation and its Subsidiaries taken
         as a whole or the ability of the Corporation to perform this
         Agreement, the Notes, the Registration Rights Agreement or its
         obligations in respect of the Conversion Shares.

                          4.14       Status of Conversion Shares.  The
         Conversion Shares have been duly authorized by all necessary corporate
         action on the part of the Corporation (no consent or approval of
         stockholders being required by law, the Certificate of Incorporation
         or the By-laws of the Corporation, or otherwise), and such shares of
         Common Stock have been validly reserved for issuance, and upon
         issuance, will be validly issued and outstanding, fully paid, and
         nonassessable.

                          4.15       Registration Under Exchange Act.  The
         Conversion Shares will not be registered as a class pursuant to
         Section 12 of the Exchange Act and such registration is not required
         except as otherwise required by the provisions of the Registration
         Rights Agreement.

                          4.16       ERISA.  No accumulated funding deficiency
         (as defined in Section 302 of ERISA and Section 412 of the Code),
         irrespective of whether waived, exists with respect to any Plan (as
         defined below) (other than a Multiemployer Plan (as defined below)).
         No liability to the Pension Benefit Guaranty Corporation has been
         incurred with respect to any Plan (other than a Multiemployer Plan) by
         the Corporation or any of its Subsidiaries that is or would be
         materially adverse to the Corporation and its Subsidiaries taken as a
         whole.  Neither the Corporation nor any of its Subsidiaries has
         incurred any withdrawal liability under Title IV of ERISA with respect
         to any Multiemployer Plan that is or would be materially adverse to
         the Corporation and its Subsidiaries taken as a whole.  The execution
         and delivery of this Agreement and the Registration Rights Agreement
         and the issuance and sale of the Notes and the conversion of the
         indebtedness evidenced by the Notes into the





                                      -23-
   25
         Conversion Shares will not involve any transaction that is subject to
         the prohibitions of Section 406 of ERISA or in connection with which a
         tax could be imposed pursuant to Section 4975 of the Code.  The
         representation by the Corporation in the immediately preceding
         sentence is made in reliance upon and subject to the accuracy of
         Purchaser's representation in Section 5.3 as to the source of the
         funds to be used to pay the purchase price of the Conversion Shares.
         As used in this Section 4.16, the term "Plan" shall mean an "employee
         pension benefit plan" (as defined in Section 3(2) of ERISA) that is or
         has been established or maintained, or to which contributions are or
         have been made, by the Corporation or by any trade or business,
         irrespective of whether incorporated, that, together with the
         Corporation, is under common control, as described in Section 414(b)
         or (c) of the Code, and the term "Multiemployer Plan" shall mean any
         Plan that is a "multiemployer plan" (as such term is defined in
         Section 4001 (a) (3) of ERISA).

                          4.17       Possession of Franchises, Licenses, Etc.
         The Corporation and its Subsidiaries possess all franchises,
         certificates, licenses, permits, and other authorizations from
         governmental or political subdivisions or regulatory authorities and
         all patents, trademarks, service marks, trade names, copyrights,
         licenses, and other rights, free from burdensome restrictions, that
         are necessary in any material respect to the Corporation and its
         Subsidiaries, taken as a whole for the ownership, maintenance, and
         operation of their respective properties and assets, and neither the
         Corporation nor any of its Subsidiaries is in violation of any thereof
         in any material respect.

                          4.18       Environmental and Other Regulations.   The
         Corporation and its Subsidiaries are in compliance in all material
         respects with all laws and regulations, including those relating to
         environmental control, equal employment opportunity, and employee
         safety, in all jurisdictions in which the Corporation and its
         Subsidiaries are presently doing business and where the failure to
         effect such compliance would have a material adverse effect on the
         business, operations, or financial condition of the Corporation and
         its Subsidiaries taken as a whole.

                          4.19       Offering of Securities.  Neither the
         Corporation nor any Person acting on its behalf has offered the
         Securities or any similar securities of the Corporation for sale to,
         solicited any offers to buy the Securities or any similar securities
         of the Corporation from, or otherwise approached or negotiated with
         respect to the Corporation with any Person other than Purchaser and a
         limited number of other "accredited investors" (as defined in Rule
         501(a) under the Securities Act).  Neither the Corporation nor any
         Person acting on its behalf has taken or will take any action
         (including any offering of any securities of the Corporation under
         circumstances that would require the integration of such offering with
         the offering of the Securities under the Securities Act and the rules
         and regulations of the Commission thereunder) that might subject the
         offering, issuance,





                                      -24-
   26
         or sale of the Securities to the registration requirements of Section
         5 of the Securities Act.

                          4.20       Brokers or Finders.  Except for the fee of
         Page Capital Inc. that will be paid by the Corporation, no agent,
         broker, investment banker, or other firm or Person is or will be
         entitled to any broker's fee or any other commission or similar fee as
         a result of the activities of the Corporation or its Subsidiaries,
         agents, or employees undertaken in connection with any of the
         transactions contemplated by this Agreement or the Registration Rights
         Agreement.

                          4.21       Offering of Notes.  Neither the
         Corporation nor, to the best knowledge of the Corporation, any person
         authorized to act on behalf of the Corporation has taken or will take
         any action that would subject the issuance or sale of the Notes to the
         provisions of Section 5 of the Securities Act or violate the
         provisions of any securities, "blue sky", or similar law of any
         applicable jurisdiction.

                          4.22       Regulations G, T, U, and X.  Neither the
         Corporation nor any of its Subsidiaries owns or has any present
         intention of acquiring any Margin Stock.  Neither the Corporation, any
         of its Subsidiaries, nor any agent acting on its behalf has taken take
         any action that might cause this Agreement to violate Regulations G,
         T, U, or X or any other regulation of the Board of Governors of the
         Federal Reserve System or to violate the Exchange Act.





                                      -25-
   27
                 5.       REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to the Corporation, as of the date hereof and
as of the Closing Date, the Tranche B Closing Date, and the Tranche C Closing
Date, as follows:

                          5.1        Due Authorization.  Purchaser has all
         right, power, and authority to enter into this Agreement and the
         Registration Rights Agreement and to consummate the transactions
         contemplated hereby and thereby.  The execution and delivery of this
         Agreement and the Registration Rights Agreement by Purchaser and the
         consummation by Purchaser of the transactions contemplated hereby and
         thereby have been duly authorized by all necessary corporate action on
         behalf of Purchaser.  This Agreement and the Registration Rights
         Agreement have been duly executed and delivered by Purchaser and
         constitute valid and binding agreements of Purchaser enforceable in
         accordance with their terms, except that (i) such enforcement may be
         subject to bankruptcy, insolvency, reorganization, moratorium, or
         other similar laws now or hereafter in effect relating to creditors'
         rights, and (ii) the remedy of specific performance and injunctive and
         other forms of equitable relief may be subject to equitable defenses
         and to the discretion of the court before which any proceeding
         therefor may be brought.

                          5.2        Conflicting Agreements and Other Matters.
         Neither the execution and delivery of this Agreement or the
         Registration Rights Agreement nor the performance by Purchaser of its
         obligations hereunder or thereunder will conflict with, result in a
         breach of the terms, conditions, or provisions of, constitute a
         default under, result in the creation of any mortgage, security
         interest, encumbrance, lien, or charge of any kind upon any of the
         properties or assets of Purchaser pursuant to, or require any consent,
         approval, or other action by or any notice to or filing with any court
         or administrative or governmental body pursuant to the organizational
         documents or agreements of Purchaser or any agreement, instrument,
         order, judgment, decree, statute, law, rule, or regulation by which
         Purchaser is bound, except, possibly, for filings after the Closing
         Date, the Tranche B Closing Date, and the Tranche C Closing Date, as
         applicable, under Section 13(d) of the Exchange Act.

                          5.3        Acquisition for Investment; Source of
         Funds.  Purchaser is acquiring the Notes (and its rights with respect
         to the Conversion Shares) for its own account for the purpose of
         investment and not with a view to or for sale in connection with any
         distribution thereof, and Purchaser has no present intention or plan
         to effect any distribution of the Conversion Shares.  No part of the
         funds used by Purchaser to purchase the Notes hereunder constitutes
         assets allocated to any separate account (as defined in Section 3 of
         ERISA) maintained by Purchaser or assets of any employee benefit plan
         (as defined in Section 3(3) of ERISA) other than a governmental plan
         (as defined in Section 3(32) of ERISA).





                                      -26-
   28
                          5.4        Brokers or Finders.  No agent, broker, 
         investment banker, or other firm or Person is or will be entitled to 
         any broker's fee or any other commission or similar fee as a result of 
         the activities of Purchaser or its Subsidiaries, agents, or employees 
         undertaken in connection with any of the transactions contemplated by 
         this Agreement or the Registration Rights Agreement.

                          5.5        Accredited Investor.  Purchaser is an
         "accredited investor" within the meaning of Rule 501 promulgated under
         the Securities Act.





                                      -27-
   29
                 6.       COVENANTS.

                 The Corporation covenants that so long as any amount due or to
become due under the Notes or this Agreement remains unpaid:

                          6.1        Financial Statements and Other Reports.

                                     (i)      it will, as soon as practicable
         and in any event within 45 days after the end of each quarterly period
         (other than the last quarterly period) in each fiscal year, furnish to
         Purchaser statements of consolidated net income and cash flows and a
         statement of changes in consolidated stockholders equity of the
         Corporation and its Subsidiaries for the period from the beginning of
         the then current fiscal year to the end of such quarterly period, and
         a consolidated balance sheet of the Corporation and its Subsidiaries
         as of the end of such quarterly period, setting forth in each case in
         comparative form figures for the corresponding period or date in the
         preceding fiscal year, all in reasonable detail and certified by an
         authorized financial officer of the Corporation, subject to changes
         resulting from year-end adjustments; provided, however, that delivery
         pursuant to clause (iii) below of a copy of the Quarterly Report on
         Form 10-Q of the Corporation for such quarterly period filed with the
         Commission shall be deemed to satisfy the requirements of this clause
         (i);

                                     (ii)     it will, as soon as practicable
         and in any event within 90 days after the end of each fiscal year,
         furnish to Purchaser statements of consolidated net income and cash
         flows and a statement of changes in consolidated stockholders' equity
         of the Corporation and its Subsidiaries for such year, and a
         consolidated balance sheet of the Corporation and its Subsidiaries as
         of the end of such year, setting forth in each case in comparative
         form the corresponding figures from the preceding fiscal year, all in
         reasonable detail and examined and reported on by independent public
         accountants of recognized standing selected by the Corporation;
         provided, however, that delivery pursuant to clause (iii) below of a
         copy of the Annual Report on Form 10-K of the Corporation for such
         fiscal year filed with the Commission shall be deemed to satisfy the
         requirements of this clause (ii);

                                     (iii)  it will, promptly upon transmission
         thereof, furnish to Purchaser copies of all financial statements,
         proxy statements, notices, and reports as it shall send to its
         stockholders and copies of all registration statements (without
         exhibits), other than registration statements relating to employee
         benefit or dividend reinvestment plans, and all regular and periodic
         reports as it shall file with the Commission; and

                                     (iv)  it will, with reasonable promptness,
         furnish to Purchaser such other financial and other data of the
         Corporation and its Subsidiaries as such





                                      -28-
   30
         Purchaser may request, including operating financial information for
         each facility owned or operated by the Corporation or any of its
         Subsidiaries.

                          Together with each delivery of financial statements 
         required by clauses (i) and (ii) above, the Corporation will deliver 
         to Purchaser a certificate of an authorized financial officer of the 
         Corporation regarding compliance by the Corporation with the covenants 
         set forth in Sections 6.6., 6.7, and 6.8.  At such other time or times 
         that the Corporation delivers a compliance certificate to any other 
         holder of Funded Debt, the Corporation will deliver such certificate, 
         and any supporting detail, to the Purchaser.

                          6.2        Inspection of Property.  The Corporation
         will permit representatives of Purchaser to visit and inspect, at
         Purchaser's expense, any of the properties of the Corporation and its
         Subsidiaries, to examine the corporate books and make copies or
         extracts therefrom and to discuss the affairs, finances, and accounts
         of the Corporation and its Subsidiaries with the principal officers of
         the Corporation, all at such reasonable times, upon reasonable notice,
         and as often as Purchaser may reasonably request; provided, however,
         that the foregoing shall be subject to compliance with reasonable
         safety requirements and shall not require the Corporation or any of
         its Subsidiaries to permit any inspection that, in the reasonable
         judgment of the Corporation, would result in the violation of any
         statute or regulation with respect to confidentiality or security.
         Purchaser agrees that the information received pursuant to this
         Section 6.2 or Section 6.1(iv) is subject to Section 9 hereof.

                          6.3        Dividends, Distributions, and Redemptions.
         The Corporation will not declare or pay any dividend on, or make any
         other distribution in respect of, or redeem any shares of Common Stock
         or any other shares of capital stock of the Corporation other than, so
         long as no Event of Default or Unmatured Event of Default has occurred
         and is continuing hereunder or under the Notes, cash dividends on its
         Preferred Stock in accordance with the terms of the Certificate of
         Designation; provided, however, that, so long as no Event of Default
         or Unmatured Event of Default has occurred and is continuing hereunder
         or under the Notes, nothing in this Section 6.3 shall prevent the
         Corporation from purchasing or redeeming any shares of Preferred Stock
         in accordance with the terms of the Certificate of Designation.

                          6.4        Certain Acquisitions.  Without the prior
         written consent of Purchaser, the Corporation will not purchase or
         otherwise acquire the business, assets, or securities of any other
         Person other than in the ordinary course of the Corporation's
         business.

                          6.5        Use of Proceeds; Regulations G, T, U, and
         X.  All of the proceeds of the sale of the Notes will be used by the
         Corporation for general corporate purposes.  None of such proceeds
         will be used, directly or indirectly, for





                                      -29-
   31
         the purpose of purchasing or carrying any Margin Stock or for the
         purpose of reducing or retiring any indebtedness that was originally
         incurred to purchase or carry Margin Stock or for any other purpose
         that might constitute this transaction a "purpose credit" within the
         meaning of Regulations G, T, U, or X.

                          6.6        Consolidated Net Worth.  The Corporation
         will not permit Consolidated Net Worth at any time to be less than the
         sum of (a) $35,569,167 at March 31, 1992, plus (b) an amount during
         each fiscal quarter thereafter equal to the sum of (i) the amount of
         Consolidated Net Worth required hereunder for the immediately
         preceding fiscal quarter, plus (ii) if positive, fifty percent (50%)
         of Consolidated Net Income for such immediately preceding fiscal
         quarter.

                          6.7        Consolidated Fixed Charges.

                                     a.       The Corporation shall not permit
         Consolidated Fixed Charge Coverage to be less than (i) 1.75 as at the
         end of any fiscal quarter occurring in 1992, and (ii) 2.00 as at the
         end of any fiscal quarter occurring thereafter.

                                     b.       The Corporation will not, and
         will not permit any Restricted Subsidiary to, incur, assume, or suffer
         to exist any obligation under Operating Leases or under any
         transaction giving rise to Consolidated Interest Expense after the
         Closing Date unless, after giving effect on a pro forma basis to such
         obligation or transaction, the Corporation will be in compliance with
         Section 6.7(a) (calculated as at the end of the most recently
         completed fiscal quarter).

                          6.8        Consolidated Senior Funded Debt.  The
         Corporation will not permit Consolidated Senior Funded Debt to exceed
         eighty percent (80%) of Consolidated Total Capitalization.

                          6.9        Attendance at Board Meeting.  The designee
         of the Purchaser (such individual to be identified to the Corporation
         in a writing signed by the Purchaser) shall have the right to attend
         all meetings of the Board of Directors of the Corporation in a
         nonvoting observer capacity, to receive notice of such meetings, and
         to receive the information provided by the Corporation to the Board of
         Directors.  The Corporation agrees to provide the Purchaser with at
         least fifteen (15) days prior written notice of any proposed meeting
         of the Board of Directors of the Corporation.  The reasonable
         out-of-pocket costs and expenses of any such individual attending a
         Board of Directors meeting of the Corporation shall be reimbursed by
         the Corporation.

                          6.10       Compliance with laws.  The Corporation at
         all times will, and will cause each of its Subsidiaries to, observe
         and comply in all material respects with all laws (including
         environmental laws applicable to the Corporation and its
         Subsidiaries), ordinances, orders, judgments, rules, regulations,
         certifications,





                                      -30-
   32
         franchises, permits, licenses, directions, and requirements of all
         governmental authorities that are now and may at any time be
         applicable to the Corporation or its Subsidiaries, a violation of
         which could reasonably be expected to have a material adverse effect
         on the business, assets, operations, prospects, or condition
         (financial or otherwise) of the Corporation and its Subsidiaries taken
         as a whole, except such thereof as shall be contested in good faith
         and by appropriate proceedings promptly instituted and diligently
         conducted by the Corporation or its Subsidiaries, as the case may be,
         so long as adequate reserves or other appropriate provisions as shall
         be required in accordance with generally accepted accounting
         principles shall have been made therefor.

                          6.11       Maintenance of Properties; Insurance.  The
         Corporation will maintain and will cause its Subsidiaries to maintain
         in good repair, working order, and condition (normal wear and tear
         excepted) all properties used or useful in the business of the
         Corporation and its Subsidiaries and from time to time will make or
         cause to be made all appropriate repairs, renewals, and replacements
         thereof.  The Corporation will maintain and will cause its
         Subsidiaries to maintain in full force and effect, with financially
         sound and reputable insurers acceptable to Purchaser, insurance
         (subject to customary deductibles and retentions) with respect to its
         properties and business and the properties and business of its
         Subsidiaries against hazards, contingencies, loss, or damage of the
         kinds customarily insured against by corporations of established
         reputation or similar size engaged in the same or similar business and
         similarly situated, of such types and in such amounts as are
         customarily carried under similar circumstances by such other
         corporations; provided, however, in no event shall the coverage and
         amount of such insurance be less than the coverage and amount of
         insurance in force on the Closing Date.  Without limiting the
         generality of the foregoing, the Corporation will maintain (i) public
         liability insurance against claims for personal injury, death, or
         property damage occurring upon, in, about or in connection with the
         use of any property owned, occupied, or controlled by the Corporation
         or any of its Subsidiaries in an amount per occurrence of at least
         $10,000,000, (ii) workers' compensation and business interruption
         insurance covering loss of rents and builders' all risk insurance, and
         (iii) such other insurance for the Corporation and its Subsidiaries as
         may be required by law.

                          6.12       Performance of Government Contracts.  The
         Corporation will, and will cause each of its Subsidiaries to perform
         each and every term and condition of the Government Contracts relating
         to the facilities owned or operated by the Corporation or such
         Subsidiary and will not, and will not permit any Subsidiary to consent
         to any termination, cancellation, or material amendment, modification,
         or supplement to any Government Contract relating to the facilities
         owned or operated by the Corporation or any of its Subsidiaries which
         termination, cancellation, amendment, modification, or supplement
         could reasonably be expected to have a material adverse effect on the
         business, assets, operations, prospects, or condition (financial or
         otherwise) of the Corporation and its Subsidiaries taken as a whole.





                                      -31-
   33
                          6.13       Notice to Purchaser.   When any Unmatured
         Event of Default or Event of Default has occurred, the Corporation
         agrees to give written notice thereof to Purchaser within three (3)
         days of the Corporation's discovery of such event.

                          6.14       Waiver of Stay, Extension, or Usury Laws.
         The Corporation covenants (to the extent that it may lawfully do so)
         that it will not at any time insist upon, plead, or in any manner
         whatsoever claim or take the benefit or advantage of any stay or
         extension law or any usury law or other law which would prohibit or
         forgive the Corporation from paying all or any portion of the
         principal of, or interest, or premium, if any on the Notes as
         contemplated herein, wherever enacted, now or at any time hereafter in
         force, or which may affect the covenants or the performance of this
         Agreement; and (to the extent that it may lawfully do so) the
         Corporation hereby expressly waives all benefit or advantage of any
         such law, and covenants that it will not hinder, delay, or impede the
         execution of any power herein granted to the holders of the Notes, but
         will suffer and permit the execution of every such power as though no
         such law had been enacted.

                          6.15       Conduct of Business.  The Corporation will
         not, and will not permit any of its Subsidiaries to, engage in any
         business other than the construction and management of prisons and
         other correctional facilities for governmental agencies, the ownership
         and operation of a proprietary school, and other businesses or
         activities substantially similar or related thereto.

                          6.16       Amendments or Waivers of Certain
         Documents.  The Corporation will not agree to any material amendment,
         modification, supplement to, or waiver of any agreement related to the
         Convertible Notes.  The Corporation agrees to give the Purchaser prior
         written notice of any proposed material amendment, modification,
         supplement to, or waiver of any agreement relating to Senior
         Indebtedness.

                          6.17       Limitation on Issuance of Other
         Subordinated Indebtedness Senior to the Notes.  The Corporation will
         not create, incur, assume, guarantee, or in any other manner become
         liable with respect to any indebtedness that is subordinate in right
         of payment to any Senior Indebtedness unless such indebtedness is also
         pari passu with, or subordinate pursuant to provisions substantially
         similar to those contained in the Notes, in right of payment to the
         Notes.

                          6.18       Limitation on Subsidiary Funded Debt.  The
         Corporation shall not permit any of its Subsidiaries to incur, create,
         assume, or guarantee any Funded Debt (which shall be deemed to include
         preferred stock issued by a Subsidiary of the Corporation that is not
         held by the Corporation), unless, after giving effect thereto, (a) the
         total amount of Funded Debt of the Corporation's Subsidiaries does not
         exceed 10% of Consolidated Total Capitalization, and (b) the
         Corporation would be





                                      -32-
   34
         entitled to incur at least $1.00 of additional Consolidated Senior
         Funded Debt under Section 6.8.

                          6.19       Sale of Estancia Facility; Funding of the
         Escrow Account.  The Corporation agrees that, within one (1) Business
         Day of the date on which such sale is consummated, it will deposit the
         net proceeds (after the payment of prior encumbrances and related tax
         obligations and the payment of related transactional costs and
         expenses) of sale of its Estancia Facility up to Five Million Dollars
         ($5,000,000) into the escrow account created under and pursuant to the
         Escrow Agreement.  In the event that the Estancia Facility is not sold
         on or before August 31, 1992, then, on each of August 31, 1992,
         September 30, 1992, and November 31, 1992, the Corporation shall
         deposit into the escrow account created under and pursuant to the
         Escrow Agreement an amount equal to one-third (1/3) of the outstanding
         principal balance of the Notes as of August 31, 1992.  In the event
         that the Estancia Facility is sold but the net proceeds of sale
         deposited into the escrow account created under and pursuant to the
         Escrow Agreement are less than the outstanding principal balance of
         the Notes, then, on each of August 31, 1992, September 30, 1992, and
         November 31, 1992, the Corporation shall deposit equal additional
         amounts into such escrow account (i.e., each equal to one-third (1/3)
         of the required sum) so that, after giving effect to all of such
         addditional deposits, the amount that has been deposited to the escrow
         is equal to the outstanding principal balance of the Notes as of
         August 31, 1992.





                                      -33-
   35
                 7.  EVENTS OF DEFAULT; REMEDIES THEREFOR.

                          7.1        Events of Default.  Any one or more of the
following shall constitute an "Event of Default":

                          (i)        default in the payment of any interest due
         under the Notes when it becomes due and payable, and continuance of
         such default for a period of five (5) days; or

                          (ii)       default in the payment of the principal of
         the Notes when due (whether at scheduled maturity, as a result of a
         mandatory prepayment requirement, by acceleration, or otherwise); or

                          (iii)      default under any bond, debenture, note,
         or other evidence of indebtedness for money borrowed in excess of
         $100,000 by the Corporation or any of its Subsidiaries, whether such
         indebtedness now exists or shall hereafter be created, which default
         (i) shall consist of a failure to pay such indebtedness at final
         maturity and after the expiration of any applicable grace period, or
         (ii) shall have resulted in such indebtedness (A) becoming or being
         declared due and payable prior to the date on which it would otherwise
         have become due and payable, without such acceleration having been
         rescinded or annulled, or (B) having been discharged within a period
         of ten (10) days after there shall have been given, by registered or
         certified mail, to the Corporation or such Subsidiary, as applicable,
         by any holder of such indebtedness a written notice specifying such
         default and requiring the Corporation or such Subsidiary, as
         applicable, to cause such indebtedness to be discharged; or

                          (iv)         default shall occur in the observance or
         performance of any covenant or agreement or any other provision of
         this Agreement or the Notes that is not remedied within twenty (20)
         days after receipt by the Corporation of written notice of such
         default from Purchaser;

                          (v)        any representation or warranty made by the
         Corporation herein, or made by the Corporation in any statement or
         certificate furnished by the Corporation in connection with the
         consummation of the issuance and delivery of the Notes or thereafter
         pursuant to the terms of this Agreement, is untrue in any material
         respect as of the date of the issuance or making thereof; or

                          (vi)       a final judgment or judgments entered by a
         court of competent jurisdiction for the payment of money aggregating
         in excess of $1,000,000 is or are outstanding against the Corporation
         or any of its Subsidiaries and any one such judgment in excess of
         $1,000,000 has, or such judgments aggregating in excess of $1,000,000
         have remained unpaid, unvacated, unbonded, or unstayed by appeal or
         otherwise for a period of thirty (30) days from the date of entry; or





                                      -34-
   36
                          (vii)      a court or other governmental authority or
         agency having jurisdiction in the premises shall enter a decree or
         order (a) for the appointment of a receiver, liquidator, assignee,
         trustee, sequestrator, or other similar official of the Corporation or
         any Subsidiary of the Corporation or of a material portion of the
         assets of either, or for the winding-up or liquidation of its affairs,
         and such decree or order shall remain in force, undischarged and
         unstayed for a period of more than thirty (30) days, or (b) for the
         sequestration or attachment of any material portion of the assets of
         the Corporation or any Subsidiary of the Corporation, without its
         unconditional return to the possession of the Corporation or such
         Subsidiary, or its unconditional release from such sequestration or
         attachment, within thirty (30) days thereafter; or

                          (viii)     the Corporation or any Subsidiary of the
         Corporation makes an assignment for the benefit of creditors, or the
         Corporation or any Subsidiary of the Corporation applies for or
         consents to the appointment of a custodian, liquidator, trustee, or
         receiver for the Corporation or such Subsidiary or for a material
         portion of the assets of either; or

                          (ix)       the entry of a decree or order by a court
         having jurisdiction in the premises adjudging the Corporation or any
         of its Subsidiaries a bankrupt or insolvent, or approving as properly
         filed a petition seeking reorganization, arrangement, adjustment, or
         composition of or in respect of the Corporation under federal
         bankruptcy law or any other applicable federal or state law, or
         appointing a receiver, liquidator, assignee, trustee, sequestrator, or
         other similar official for the Corporation or any of its Subsidiaries
         or of any substantial part of its property, or ordering the winding up
         or liquidation of its affairs, and the continuance of any such decree
         or order unstayed and in effect for a period of sixty (60) consecutive
         days or until an order for relief has been entered; or

                          (x)        the institution by the Corporation or any
         of its Subsidiaries of proceedings to be adjudicated a debtor or
         insolvent, or the consent by it to the institution of bankruptcy or
         insolvency proceedings against it, or the filing by it of a petition
         or answer or consent seeking reorganization or relief under federal
         bankruptcy law or any other applicable federal or state law or the
         consent by it to the filing such petition or to the appointment of a
         receiver, liquidator, assignee, trustee, sequestrator, or similar
         official for the Corporation or any of its Subsidiaries or of any
         substantial part of its property, or the making by it of an assignment
         for the benefit of creditors, or the admission by it in writing of its
         inability to pay its debts generally as they become due, or the taking
         of corporate action by the Corporation or any of its Subsidiaries in
         furtherance of any such action.

                 7.2      Acceleration of Maturities. When any Event of Default
         described in clauses (i) through (vi), inclusive, of Section 7.1 has
         occurred and is continuing, Purchaser may, by notice in writing sent
         to the Corporation, declare the entire





                                      -35-
   37
         principal and all interest accrued on the Notes to be, and the Notes
         shall thereupon become, forthwith due and payable, without any
         presentment, demand, protest, or other notice of any kind, all of
         which are hereby expressly waived.  When any Event of Default
         described in clauses (vii) through (x), inclusive, of Section 7.1 has 
         occurred, then the Notes shall immediately become due and payable 
         without presentment, demand, protest, or notice of any kind.  When any 
         Event of Default described in clause (iv) of Section 7.1 has occurred
         and is continuing as a result of the Corporation's breach of its
         obligation to use its best efforts to satisfy one or more of the
         conditions to the issuance and sale of the Tranche B Notes or the
         Tranche C Notes or as a result of the Corporation's breach of its
         obligation to convert the indebtedness evidenced by the Notes into
         Conversion Shares in accordance with the terms and conditions of the
         Notes, Purchaser shall be entitled to specific performance of such
         obligation of the Corporation; it being expressly acknowledged and
         agreed by the Corporation that no adequate remedy at law exists for
         any such breach and that Purchaser will be irreparably harmed by any
         such breach by the Corporation.  Upon the Notes becoming due and
         payable as a result of any Event of Default as aforesaid, the
         Corporation shall forthwith pay to Purchaser the entire principal and
         interest accrued on the Notes.  No course of dealing on the part of
         Purchaser nor any delay or failure on the part of Purchaser to
         exercise any right shall operate as a waiver of such right or
         otherwise prejudice Purchaser's rights, powers, and remedies.  The
         Corporation further agrees, to the extent permitted by law, to pay to
         Purchaser all costs and expenses (including attorneys' fees) incurred
         by it in the collection of the Notes upon any default hereunder or
         thereon (including such costs and expenses incurred in connection with
         a workout or an insolvency or bankruptcy proceeding).





                                      -36-
   38
         8.      AGREEMENTS OF PURCHASER.  Purchaser agrees with the
Corporation as follows:

                 8.1      Transfer of the Notes.  Purchaser will not attempt to
         sell, transfer, convey, exchange, or otherwise dispose of all or any
         part of the Notes, except in accordance with applicable law.

                 8.2      No General Solicitation.  Purchaser acknowledges and
         agrees that it has not received nor is it aware of any general
         solicitation or general advertising of the Notes, including any
         advertisement, article, notice, or other communication published in
         any newspaper, magazine, or similar media or broadcast over television
         or radio, and that it was not invited to attend any seminar or meeting
         by means of any such general solicitation or general advertising.

                 8.3      No Registration.  Purchaser understands and agrees
         that, neither the Notes nor, except as provided in the Registration
         Rights Agreement, any Conversion Shares will be registered under the
         Securities Act or any state securities law, that the Notes and
         Conversion Shares may be required to be held until they are
         subsequently registered under the Securities Act and any applicable
         state securities law, or any corresponding provisions of succeeding
         laws, unless an exemption from the registration requirements of such
         laws is available, and that the Corporation is under no obligation to
         register the Notes or, except as provided in the Registration Rights
         Agreement, any Conversion Shares, for resale.

                 8.4      Transfer Restrictions; Legends.  Purchaser
         understands and agrees that the Notes and, when issued, the Conversion
         Shares have not been registered under the Securities Act or the
         securities laws of any state and that they may be sold or otherwise
         disposed of only in one or more transactions registered under the
         Securities Act and, where applicable, such laws unless an exemption
         from the registration requirements of the Securities Act and, where
         applicable, such laws is available.  Purchaser acknowledges that,
         except as provided in the Registration Rights Agreement, the Purchaser
         has no right to require the Corporation to register the Conversion
         Shares.  The Purchaser understands and agrees that each certificate
         representing Conversion Shares shall bear the following legends:

                               "THE TRANSFER OF THE SECURITIES REPRESENTED BY
                          THIS CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON
                          FILE AT THE OFFICES OF THE CORPORATION."

                               "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
                          HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                          1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
                          BE SOLD OR OTHERWISE DISPOSED OF





                                      -37-
   39
                          EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
                          STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
                          SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
                          REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS."

         Purchaser will not, directly or indirectly, sell, transfer, pledge,
         encumber, or otherwise dispose of (collectively, "Transfers") any
         Conversion Shares except for (i) Transfers to any Affiliate of
         Purchaser, (ii) Transfers to other institutional investors that are
         not competitors of the Corporation in blocks of not less than 10,000
         shares (or such lesser number as may then be outstanding), (iii)
         Transfers pursuant to any bona fide tender or exchange offer to
         acquire Voting Stock of the Corporation or pursuant to any merger,
         consolidation, or other business combination of the Corporation with
         any other Person; or (iv) the redemption of the Conversion Shares.

                 8.5      Restrictions on Conversion.  Purchaser further
         understands and agrees that any conversion of the indebtedness
         evidenced by the Notes into Conversion Shares must comply with all
         applicable securities laws, including the Securities Act and any
         applicable state securities laws, as such laws exist on the date
         hereof and on such future dates that the indebtedness evidenced by the
         Notes, or any portion thereof, may be converted into Conversion
         Shares.

                 8.6      Further Cooperation.  Purchaser will do all acts and
         things reasonably requested of it by the Corporation in connection
         with any attempt by the Corporation to achieve compliance with federal
         and state securities laws in connection with the offering and sale of
         the Notes or the conversion of all or any portion of the indebtedness
         evidenced by the Notes into Conversion Shares.





                                      -38-
   40
         9.      NONDISCLOSURE OF CONFIDENTIAL INFORMATION.

                          9.1        Without the prior written consent of the
         Corporation, any information relating to the Corporation provided to
         Purchaser in connection with its acquisition of the Notes or the
         Conversion Shares that is either confidential, proprietary, or
         otherwise not generally available to the public (but excluding
         information Purchaser has obtained independently from third-party
         sources without Purchaser's knowledge that the source has violated any
         fiduciary or other duty not to disclose such information (the
         "Confidential Information") will be kept confidential by Purchaser and
         their directors, officers, employees, agents, auditors, participants,
         transferees, assignees, and representatives (collectively,
         "Representatives"), using the same standard of care in safeguarding
         the Confidential Information as Purchaser employs in protecting its
         own proprietary information that Purchaser desires not to disseminate
         or publish.  It is understood (a) that such Representatives shall be
         informed by Purchaser of the confidential nature of the Confidential
         Information, (b) that such Representatives shall be bound by the
         provisions of this Section 9.1 as a condition of receiving the
         Confidential Information, and (c) that, in any event, Purchaser shall
         be responsible for any breach of Sections 9.1, 9.2, 9.3, or 9.4 of
         this Agreement by any of its Representatives (other than Purchaser's
         participants, transferees, or assignees).

                          9.2        Without the prior consent of the
         Corporation, other than as required by applicable law, Purchaser will
         not, and will direct its Representatives not to disclose to any Person
         (other than its Representatives) either the fact that the Confidential
         Information has been made available to Purchaser or that Purchaser has
         inspected any portion of the Confidential Information.

                          9.3        If Purchaser or its Representatives are
         requested or required (by oral question, interrogatories, requests for
         information or documents, subpoena, civil investigative demand, or
         similar process) to disclose any Confidential Information, Purchaser
         will, as soon as practicable, notify the Corporation of such request
         or requirement so that the Corporation may seek an appropriate
         protective order.  If, in the absence of a protective order or the
         receipt of a waiver hereunder, Purchaser or its Representatives is, in
         the opinion of Purchaser's counsel, compelled to disclose the
         Confidential Information or else stand liable for contempt or suffer
         other censure or significant penalty, Purchaser, or its
         Representative, as the case may be, may disclose only such of the
         Confidential Information to the party compelling disclosure as is
         required by law.  Purchaser shall not be liable for the disclosure of
         Confidential Information pursuant to the preceding sentence.
         Purchaser will exercise all reasonable efforts to assist the
         Corporation in obtaining a protective order or other reliable
         assurance that confidential treatment will be accorded the
         Confidential Information.





                                      -39-
   41
         10.     MISCELLANEOUS.

                 10.1     Indemnification.  Each party (an "indemnifying
         party") hereto agrees to indemnify and hold harmless the other parties
         (an "indemnified party") against and in respect of any and all claims,
         demands, losses, costs, expenses, obligations, liabilities, damages,
         recoveries, and deficiencies, including reasonable attorneys' fees,
         that such indemnified party and each of its officers and directors
         shall incur or suffer, that arise, result from, or relate to any
         breach of, or failure by such indemnifying party to perform, any of
         its representations, warranties, covenants, or agreements set forth in
         this Agreement, the Notes, or the Registration Rights Agreement.

                 10.2     Survival of Covenants, Representations, and
         Warranties.  All covenants, representations, and warranties made by
         the Corporation herein and in any certificates delivered pursuant
         hereto, irrespective of whether in connection with the transactions
         occurring on the Closing Date, the Tranche B Closing Date, or the
         Tranche C Closing Date, and shall survive the closing and the delivery
         of this Agreement, the Notes, the Escrow Agreement, and the
         Registration Rights Agreement, regardless of any investigation made by
         Purchaser or on its behalf.

                 10.3     Successors and Assigns.  This Agreement shall be
         binding upon the Corporation and its successors and assigns and shall
         inure to the Purchaser's benefit and to the benefit of its successors
         and assigns, including each successive holder or holders of the Notes
         or any interest therein.

                 10.4     Notices.  Unless otherwise provided in this
         Agreement, all notices or demands by any party relating to this
         Agreement or any other agreement entered into in connection herewith
         shall be in writing and (except for financial statements and other
         informational documents which may be sent by first-class mail, postage
         prepaid) shall be personally delivered or sent by registered or
         certified mail, postage prepaid, return receipt requested, or by
         prepaid telex, telefacsimile, or telegram (with messenger delivery
         specified) to the Corporation or to Purchaser, as the case may be, at
         the addresses set forth below:

         If to PM, to:                   PACIFIC MUTUAL LIFE INSURANCE COMPANY
                                         700 Newport Center Drive
                                         Newport Beach, CA 92660
                                         Attention:  Mezzanine Investments





                                      -40-
   42
         With a copy to:                 BROBECK, PHLEGER & HARRISON
                                         550 South Hope Street
                                         Los Angeles, CA 90071
                                         Attention:  John Francis Hilson, Esq.
                                         
         If to PMGLIC, to:               PM GROUP LIFE INSURANCE COMPANY
                                         700 Newport Center Drive
                                         Newport Beach, CA 92660
                                         Attention:  Mezzanine Investments
                                         
         With a copy to:                 BROBECK, PHLEGER & HARRISON
                                         550 South Hope Street
                                         Los Angeles, CA 90071
                                         Attention:  John Francis Hilson, Esq.
                                          
         If to the Corporation, to:      CORRECTIONS CORPORATION OF AMERICA
                                         The CCA Building
                                         102 Woodmont Boulevard
                                         Nashville, Tennessee 37205
                                         Attention:  Doctor R. Crants, Jr.
                                         
         With a copy to:                 STOKES & BARTHOLOMEW, P.A.
                                         424 Church Street, Suite 2800
                                         Nashville, Tennessee 37219
                                         Attention:  Elizabeth Enoch Moore, Esq.

                 The parties hereto may change the address at which they are to
         receive notices hereunder, by notice in writing in the foregoing
         manner given to the other.  The failure of the Corporation or
         Purchaser to send a copy of notice to the individuals who are shown
         above as being required to receive copies shall not invalidate or
         otherwise affect the validity of a notice that is otherwise
         effectively given.  All notices or demands sent in accordance with
         this Section 10.4 shall be deemed received on the earlier of the date
         of actual receipt or three (3) days after the deposit thereof in the
         mail or the transmission thereof by telefacsimile or other similar
         method as set forth above.

                 10.5     Expenses.  In addition to the payments provided for
         in Section 2.3(xi), Section 2.6(ix), and Section 2.8(ix), the
         Corporation agrees to pay Purchaser for all fees and all out-of-pocket
         expenses incurred by Purchaser arising in connection with this
         Agreement, the Notes, the Registration Rights Agreement, the Escrow
         Agreement, and the transactions hereby and thereby contemplated,
         including the conversion of the indebtedness evidenced by the Notes
         into Conversion Shares, all stamp and other taxes payable with respect
         to the issuance of the Conversion Shares,





                                      -41-
   43
         filing fees, reasonable fees and expenses of counsel, and all such
         expenses incurred with respect to the preparation, execution,
         delivery, or enforcement of any provision of such agreement or
         instrument, or any amendment or waivers requested by the Corporation
         (irrespective of whether the same become effective) under or in
         respect of any such agreement, including costs and expenses in any
         bankruptcy proceeding.

                 10.6     Descriptive Headings.  The descriptive headings of
         the various Sections or parts of this Agreement are for convenience
         only and shall not affect the meaning or construction of any of the
         provisions hereof.

                 10.7     Satisfaction Requirement.  If any agreement,
         certificate, or other writing, or any action taken or to be taken, is
         by the terms of this Agreement required to be satisfactory to
         Purchaser, the determination of such satisfaction shall be made by
         Purchaser in its sole and exclusive judgment exercised in good faith.

                 10.8     Remedies.  In case any one or more of the covenants
         or agreements set forth in this Agreement, the Notes, the Escrow
         Agreement, or the Registration Rights Agreement shall have been
         breached by the Corporation or Purchaser, the Corporation or
         Purchaser, as applicable, may proceed to protect and enforce its
         rights either by suit in equity or by action at law, including an
         action for damages as a result of any such breach or an action for
         specific performance of any such covenant or agreement contained in
         this Agreement, the Notes, the Escrow Agreement, or the Registration
         Rights Agreement.

                 10.9     Entire Agreement.  This Agreement, the Notes, the
         Escrow Agreement, the Registration Rights Agreement, and the other
         writings referred to herein or delivered pursuant hereto contain the
         entire agreement among the parties with respect to the subject matter
         hereof and supersede all prior and contemporaneous arrangements or
         understandings with respect thereto.

                 10.10    Amendments.  This Agreement may be amended, and the
         observance of any term of this Agreement may be waived, with (and only
         with) the written consent of the Corporation and Purchaser.

                 10.11    Severability.  Should any part of this Agreement, for
         any reason, be determined to be invalid or unenforceable, such
         determination shall not affect the validity or enforceability of any
         remaining portion, which remaining portion shall remain in full force
         and effect as if this Agreement had been executed with the invalid or
         unenforceable part hereof eliminated, and it is hereby declared the
         intention of the parties hereto that they would have executed the
         remaining portion of this Agreement without including therein any such
         part which may, for any reason, be hereafter declared invalid or
         unenforceable.





                                      -42-
   44
                 10.12    Execution in Counterparts; Telecopy Execution.  This
         Agreement may be executed in any number of counterparts and by
         different parties on separate counterparts, each of which
         counterparts, when so executed and delivered, shall be deemed to be an
         original and all of which counterparts, taken together, shall
         constitute but one and the same Agreement.  This Agreement shall
         become effective upon the execution of a counterpart hereof by each of
         the parties hereto.  Delivery of an executed counterpart of the
         signature page(s) of this Agreement by telecopier shall be equally
         effective as delivery of a manually executed counterpart.  Any party
         delivering an executed counterpart of the signature page(s) of this
         Agreement by telecopier shall thereafter also promptly deliver a
         manually executed counterpart, but the failure to deliver such
         manually executed counterpart shall not affect the validity,
         enforceability, and binding effect of this Agreement.

                 10.13    Governing Law.  This Agreement, the Notes issued and
         sold hereunder, and the Escrow Agreement and the Registration Rights
         Agreement shall be governed by, and construed and enforced in
         accordance with, the laws of the State of California.

                 10.14    Consent to Jurisdiction.  The Corporation irrevocably
         submits to the non-exclusive jurisdiction of any California state or
         federal court sitting in the City of Los Angeles, California over any
         suit, action, or proceeding arising out of or relating to this
         Agreement, the Notes, the Escrow Agreement, or the Registration Rights
         Agreement.  To the fullest extent it may effectively do so under
         applicable law, the Corporation irrevocably waives and agrees not to
         assert, by way of motion, as a defense, or otherwise, any claim that
         it is not subject to the jurisdiction of any such court, any objection
         that it may now or hereafter have to the laying of the venue of any
         such suit, action, or proceeding brought in any such court, and any
         claim that any such suit, action, or proceeding brought in any such
         court has been brought in an inconvenient forum.

                 10.15    Enforcement of Judgments; Service of Process; Jury
         Trial Waiver.  The Corporation agrees, to the fullest extent it may
         effectively do so under applicable law, that a judgment in any suit,
         action, or proceeding of the nature referred to in Section 10.14 
         brought in any such court shall be conclusive and binding upon the 
         Corporation and may be enforced in the courts of the United States of 
         America or the State of California (or any other court to the 
         jurisdiction of which the Corporation is or may be subject) by a suit 
         upon such judgment.

                 THE CORPORATION AGREES THAT SERVICE OF PROCESS SUFFICIENT FOR
         PERSONAL JURISDICTION IN ANY ACTION, SUIT, OR PROCEEDING OF THE NATURE
         REFERRED TO IN SECTION 10.14 MAY BE MADE BY REGISTERED OR CERTIFIED
         MAIL TO THE CORPORATION'S ADDRESS SET FORTH IN SECTION 10.4.





                                      -43-
   45
                 EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ITS RESPECTIVE
         RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
         ARISING OUT OF THIS AGREEMENT, THE NOTES, THE ESCROW AGREEMENT, THE
         REGISTRATION RIGHTS AGREEMENT, OR ANY OTHER RELATED DOCUMENT TO BE
         DELIVERED PURSUANT HERETO, OR ANY DEALINGS BETWEEN THEM RELATING TO
         THE SUBJECT MATTER OF THIS TRANSACTION AND THE CONTRACTUAL
         RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS
         INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
         FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
         TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
         CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY
         HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
         INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
         WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
         RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH PARTY
         HERETO FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS
         WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
         WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
         COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
         MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO
         ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO
         THIS AGREEMENT, THE NOTES, THE ESCROW AGREEMENT, THE REGISTRATION
         RIGHTS AGREEMENT, OR THE RELATED DOCUMENTS TO BE DELIVERED PURSUANT
         HERETO.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
         WRITTEN CONSENT TO A TRIAL BY THE COURT.

                 10.15    No Limitation on Service or Suit.  Nothing herein
         shall affect the right of Purchaser to serve process in any manner
         permitted by law, or limit any right that Purchaser may have to bring
         proceedings against the Corporation in the courts of any jurisdiction
         or to enforce in any lawful manner a judgment obtained in one
         jurisdiction in any other jurisdiction.

                 10.16 Direct Payment.  Notwithstanding anything to the
         contrary contained in this Agreement or the Notes, the Corporation
         will punctually pay when due the principal of: (a) the Tranche A
         Notes, and any interest thereon, without any presentment thereof,
         directly to the Purchaser or to the nominee of the Purchaser at the
         address set forth in Schedule 1 or such other address as the Purchaser
         or the Purchaser's nominee may from time to time designate in writing
         to the Corporation,





                                      -44-
   46
         or, if a bank account with a United States bank is designated for the
         Purchaser or the Purchaser's nominee on Schedule 1 hereto or in any
         written notice to the Corporation from the Purchaser or the
         Purchaser's nominee, the Corporation will make such payments in
         immediately available funds to such bank account, marked for attention
         as indicated; (b) the Tranche B Notes, and any interest thereon,
         without any presentment thereof, directly to the Purchaser or to the
         nominee of the Purchaser at the address set forth in Schedule 2 or
         such other address as the Purchaser or the Purchaser's nominee may
         from time to time designate in writing to the Corporation, or, if a
         bank account with a United States bank is designated for the Purchaser
         or the Purchaser's nominee on Schedule 2 hereto or in any written
         notice to the Corporation from the Purchaser or the Purchaser's
         nominee, the Corporation will make such payments in immediately
         available funds to such bank account, marked for attention as
         indicated; and (c) the Tranche C Notes, and any interest thereon,
         without any presentment thereof, directly to the Purchaser or to the
         nominee of the Purchaser at the address set forth in Schedule 3 or
         such other address as the Purchaser or the Purchaser's nominee may
         from time to time designate in writing to the Corporation, or, if a
         bank account with a United States bank is designated for the Purchaser
         or the Purchaser's nominee on Schedule 3 hereto or in any written
         notice to the Corporation from the Purchaser or the Purchaser's
         nominee, the Corporation will make such payments in immediately
         available funds to such bank account, marked for attention as
         indicated.  The Purchaser agrees that in the event that it shall sell
         or transfer any Notes, it will, prior to the delivery of such Notes,
         make a notation thereon of all principal, if any, prepaid on such
         Notes and will also note thereon the date to which interest has been
         paid on such Notes.  The Corporation agrees that transferees of Notes
         shall be entitled to the benefits of this Section 10.16 so long as any
         such transferee has made the same agreements relating to the
         transferred Notes as the Purchaser have made in this Section 10.16.  
         The Corporation shall be entitled to presume conclusively that the 
         Purchaser or any subsequent noteholders remain the holders of the 
         Notes until such Notes shall have been presented to the Corporation 
         as evidence of the transfer of such Notes.





                                      -45-
   47
                 The execution hereof by the Corporation, PM, and PMGLIC shall
constitute a contract among them for the uses and purposes hereinabove set 
forth.




                                       CORRECTIONS CORPORATION OF
                                       AMERICA


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

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


                                       PACIFIC MUTUAL LIFE INSURANCE
                                       COMPANY


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

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


                                       PM GROUP LIFE INSURANCE
                                       COMPANY


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

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




                                      -46-
   48

                               AMENDMENT NO. 1
                                     TO
                           NOTE PURCHASE AGREEMENT

                 THIS AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT (this
"Amendment"), dated as of August 25, 1992, is entered into by and among Pacific
Mutual Life Insurance Company ("PM"), PM Group Life Insurance Company
("PMGLIC") (PM and PMGLIC shall be referred to herein as the "Purchaser"), and
Corrections Corporation of America (the "Corporation").

                                R E C I T A L S

                 WHEREAS, the Corporation and the Purchaser are parties to that
certain Note Purchase Agreement dated as of June 22, 1992 (the "Agreement");

                 WHEREAS, the Corporation has requested that the Purchaser
agree to make certain amendments to the Agreement; and

                 WHEREAS, the Corporation is willing to amend the Agreement as
set forth herein.

                               A G R E E M E N T

                 NOW, THEREFORE, in consideration of the foregoing and subject
to the terms and conditions herein contained, the parties hereto agree as
follows:

                 SECTION 1.  Definitions.  Initially capitalized terms used in
this Amendment shall have the meanings ascribed thereto in the Agreement, as
amended hereby, unless otherwise defined herein.

                 SECTION 2.  Amendments to the Agreement.

                 2.1      Amendment of Section 2.5 of the Agreement.  Section
2.5 of the Agreement is hereby amended by deleting clause (i) thereof in its
entirety and inserting in its place the following new clause (i):

                          (i)     Escrow Agreement.  Within sixty-five (65)
                 days after the Closing Date, the Corporation, the Purchaser,
                 and NationsBank (or another third party acceptable to
                 Purchaser in its sole and absolute discretion) shall have
                 entered into an escrow agreement (the "Escrow Agreement"),
                 together with appropriate financing statements signed by the
                 Corporation, in each case in form and substance satisfactory
                 to Purchaser.
   49


                 2.2      Amendment of Section 2.6 of the Agreement.  Section
2.6 of the Agreement is hereby amended by deleting clause (xiii) thereof in its
entirety and inserting in its place the following new clause (xiii):

                          (xiii)  Tranche B Closing Date.  The Tranche B
                 Closing Date shall occur on or after November 1, 1992, and on
                 or before December 15, 1992.

                 2.3      Amendment of Section 2.8 of the Agreement.  Section
2.8 of the Agreement is hereby amended by deleting clause (i) thereof in its
entirety and inserting in its place the following new clause (i):

                          (i)  Tranche C Closing Date.  The Tranche C Closing
                 Date shall occur on or after November 1, 1992, and on or
                 before December 15, 1992.

                 2.4      Amendment of Section 3.1 of the Agreement.  Section
3.1 of the Agreement is hereby amended by deleting the definition of "Coupon
Rate" in its entirety and inserting in its place the following new definition:

                          "Coupon Rate" means (i) with respect to the Tranche A
                 Notes, eight and one-half percent (8.5%) per annum; and (ii)
                 with respect to the Tranche B Notes and the Tranche C Notes,
                 the greater of: (a) eight and one-half percent (8.5%) per
                 annum, or (b) two and nine-tenths (2.90) percentage points
                 above the Treasury Rate as of the Tranche B Closing Date or
                 the Tranche C Closing Date, as applicable, for notes having a
                 maturity of three (3) years from the date of issuance thereof.

                 2.5      Amendment of Section 6.19 of the Agreement.  Section
6.19 of the Agreement is hereby amended and restated to read in its entirety as
follows:

                          6.19    Sale of Estancia Facility; Funding of the
                 Escrow Account.

                                  (a)      Within one (1) Business Day after
                 the date on which the sale of the Estancia Facility is
                 consummated, the Corporation shall deposit the net proceeds of
                 such sale (after the payment of prior encumbrances, related
                 tax obligations, related transactional costs and expenses, and
                 the Corporation's existing obligations to The Canada Life
                 Assurance Company in an amount not to exceed Seven Million
                 Dollars ($7,000,000), plus accrued interest) in an amount of
                 up to the outstanding principal balance of the Notes at the
                 time the sale is consummated into the escrow account created
                 under and pursuant to the Escrow Agreement.





                                      -2-
   50


                                  (b)      In the event that the sale of the
                 Estancia Facility is not consummated on or before August 31,
                 1992, then, on each of August 31, 1992, September 30, 1992,
                 and October 31, 1992, the Corporation shall deposit into the
                 escrow account created under and pursuant to the Escrow
                 Agreement an amount equal to one-third (1/3) of the
                 outstanding principal balance of the Notes as of August 31,
                 1992.

                                  (c)      In the event that the sale of the
                 Estancia Facility is consummated on or before August 31, 1992,
                 but the net proceeds of the sale deposited into the escrow
                 account created under and pursuant to the Escrow Agreement are
                 less than the outstanding principal balance of the Notes,
                 then, on each of August 31, 1992, September 30, 1992, and
                 October 31, 1992, the Corporation shall deposit equal
                 additional amounts into such escrow account (i.e., each equal
                 to one-third (1/3) of the required sum) so that, after giving
                 effect to all of such additional deposits, the amount that has
                 been deposited into such escrow account is equal to the
                 outstanding principal balance of the Notes as of August 31,
                 1992.

                                  (d)      The Corporation shall grant to
                 Purchaser a security interest in all of the Corporation's
                 right, title and interest in and to the Escrow Agreement and
                 in the funds on deposit under the Escrow Agreement and the
                 proceeds thereof in order to secure prompt repayment of all of
                 the obligations owed by the Corporation to Purchaser under the
                 Notes and this Agreement.  The Corporation and Purchaser shall
                 file any all UCC-1 financing statements and take such other
                 actions as may be necessary to perfect Purchaser's security
                 interest described above under Tennessee law.  In connection
                 therewith, the Corporation shall pay any and all recording
                 taxes that may be payable under Tennessee law in order to file
                 such UCC-1 financing statements.  In recognition of the fact
                 that at the time the Escrow Agreement is executed only the
                 Tranche A Notes will have been purchased, the Corporation,
                 contemporaneously with the execution of the Escrow Agreement
                 and the filing of the UCC-1 financing statements, shall pay
                 recording tax based on an obligation secured of Two Million
                 Five Hundred Thousand Dollars ($2,500,000).  Upon the purchase
                 of the Tranche B Notes or the Tranche C Notes, the Corporation
                 and Purchaser shall file amendments to the UCC-1 financing
                 statements and take such other actions reflecting the
                 increased amount of the obligation secured and the Corporation
                 shall thereupon pay an additional recording tax in accordance
                 with the requirements of Tennessee law.  The Corporation
                 hereby grants to Purchaser its power of attorney to execute
                 any and all such





                                      -3-
   51

                 amendments to UCC-1 financing statements, on the Corporation's
                 behalf and in the Corporation's name.  The Corporation agrees
                 that Purchaser may pay any and all such additional recording
                 taxes and may add the amount of any such payments to the
                 obligations owed by the Corporation to Purchaser under the
                 Notes and this Agreement.

                 2.6      Amendment of Section 6 of the Agreement.  Section 6
of the Agreement is hereby amended by adding and inserting the following new
Section 6.20:

                          6.20    Issuance of Warrants with respect to Tranche
                 B Notes and Tranche C Notes.  Upon the purchase of the Tranche
                 B Notes and the Tranche C Notes, the Corporation shall issue
                 warrants (in form and substance satisfactory to Purchaser) to
                 Purchaser, to compensate Purchaser for any dilution in the
                 value of its investment in the Corporation that Purchaser may
                 suffer due to the Corporation's proposed issuance of warrants
                 to its shareholders on or about September 15, 1992.  The value
                 of the warrants to be issued to Purchaser in connection with
                 the purchase of the Tranche B Notes and the Tranche C Notes
                 shall be based on an assumption that the purchase of the
                 Tranche B Notes and the Tranche C Notes occurred one day prior
                 to the proposed issuance of warrants to the Corporation's
                 shareholders.

                 SECTION 3.  Amendment of Exhibit B to the Agreement.  Exhibit
B to the Agreement (form of Tranche B Notes) is hereby amended by deleting the
definition of Coupon Rate from Section 2 thereof in its entirety and inserting
in its place the following new definition:

                          "Coupon Rate" means _______________ percent (__%) per
                 annum.

                 SECTION 4.  Effectiveness of this Amendment.

                 This Amendment shall become effective only upon the
satisfaction of the following conditions:

                          (a)     The Corporation shall have delivered to the
Purchaser an executed copy of this Amendment;

                          (b)     The Escrow Agreement shall have been duly
executed by the parties thereto and shall be in full force and effect, and two
fully executed original copies thereof shall have been delivered to the
Purchaser;





                                      -4-
   52


                          (c)     The Corporation shall have executed and
caused the recording of UCC-1 financing statement(s), in form and substance
satisfactory to the Purchaser, for the purpose of perfecting the Purchaser's
security interest in the Corporation's right, title, and interest in the Escrow
Agreement and the funds held in escrow pursuant thereto, and the Corporation
shall have paid recording taxes payable in connection with the recording
thereof based on an obligation secured of Two Million Five Hundred Thousand
Dollars ($2,500,000); and

                          (d)     The Purchaser shall have received full
payment of all of its out-of-pocket expenses arising in connection with the
negotiation, preparation, execution, and delivery of this Amendment and the
Escrow Agreement, including the fees and expenses of the Purchaser's legal
counsel.

                 SECTION 5.  Representations and Warranties of the Corporation.

                 In order to induce the Purchaser to enter into this Amendment,
the Corporation hereby makes the following representations and warranties to
the Purchaser:

                 5.1      Corporate Power and Authorization.  The Corporation
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Amendment and the Escrow Agreement.

                 5.2      No Conflict.  Neither the execution and delivery by
the Corporation of this Amendment and the Escrow Agreement nor the consummation
of the transactions contemplated or required hereby or thereby nor compliance
by the Corporation with the terms, conditions and provisions hereof or thereof
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Certificate of Incorporation or Bylaws of the Corporation or
any law, regulation, order, writ, injunction or decree of any court or
governmental instrumentality or any agreement or instrument to which the
Corporation is a party or by which any of its properties is bound, or
constitute a default thereunder or result in the creation or imposition of any
lien.

                 5.3      Authorization; Governmental Approvals.  The execution
and delivery by the Corporation of this Amendment and the Escrow Agreement and
the consummation of the transactions contemplated hereby and thereby (i) have
been duly authorized by all necessary corporate action on the part of the
Corporation and (ii) do not and will not require any authorization, consent,
approval or license from or any registration, qualification, designation,
declaration or filing with, any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.





                                      -5-
   53


                 5.4      Valid and Binding Effect.  This Amendment and the
Escrow Agreement have been duly and validly executed and delivered by the
Corporation and constitute the legal, valid and binding obligation of the
Corporation, enforceable in accordance with their respective terms.

                 5.5      Absence of Default.  No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment or the Escrow Agreement that would constitute an
Event of Default under the Agreement.

                 SECTION 6.  Miscellaneous.

                 6.1      Ratification of the Agreement.  Except as
specifically amended by this Amendment, the terms, conditions and provisions of
the Agreement shall not be affected by this Amendment and shall remain in full
force and effect and are hereby ratified and confirmed.

                 6.2      No Implied Waiver.  The execution, delivery and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver or modification of any provision of, or operate as a waiver
of any right, power or remedy of the Purchaser under, the Agreement or
prejudice any right or remedy that the Purchaser may have or may have in the
future under or in connection with the Agreement or any instrument or agreement
referred to therein.  The Corporation acknowledges and agrees that the
representations and warranties of the Corporation contained in the Agreement
and in this Amendment shall survive the execution and delivery of this
Amendment and the effectiveness hereof.

                 6.3      Governing Law.  This Amendment shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California.

                 6.4      Counterparts.  This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.





                                      -6-
   54

                 IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be executed by their duly authorized officers as of the date first written
above.



CORRECTIONS CORPORATION OF AMERICA                PACIFIC MUTUAL LIFE 
                                                  INSURANCE COMPANY
                                                   
                                                   
By:                                               By:
   ---------------------------                        -------------------------
                                              
Its:                                              Its: 
    --------------------------                         ------------------------


PM GROUP LIFE INSURANCE COMPANY

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

Its: 
     -------------------------




                                      -7-
   55

                               AMENDMENT NO. 2
                                     TO
                           NOTE PURCHASE AGREEMENT

                 THIS AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT (this
"Amendment"), dated as of October 29, 1992, is entered into by and among
Pacific Mutual Life Insurance Company ("PM"), PM Group Life Insurance Company
("PMGLIC") (PM and PMGLIC shall be referred to herein collectively as the
"Purchaser"), and Corrections Corporation of America (the "Corporation").

                                R E C I T A L S

                 WHEREAS, the Corporation and the Purchaser are parties to that
certain Note Purchase Agreement, dated as of June 22, 1992, that was amended by
that certain Amendment No. 1 to Note Purchase Agreement, dated as of August 25,
1992 (as so amended, the "Agreement");

                 WHEREAS, the Corporation has requested that the Purchaser
agree to make certain amendments to the Agreement; and

                 WHEREAS, the Purchaser is willing to amend the Agreement as
set forth herein.

                               A G R E E M E N T

                 NOW, THEREFORE, in consideration of the foregoing and subject
to the terms and conditions herein contained, the parties hereto agree as
follows:

                 SECTION 1.  Definitions.  Initially capitalized terms used in
this Amendment shall have the meanings ascribed thereto in the Agreement, as
amended hereby, unless otherwise defined herein.

                 SECTION 2.  Amendments to the Agreement.

                 2.1      Amendment of Section 2.1 of the Agreement.  Section
2.1 of the Agreement is hereby amended by deleting such  Section in its
entirety and inserting in its place the following new Section 2.1:

                          2.1     Sale and Purchase of the Notes.  Subject to
                 the terms and conditions of this Agreement, PM, either
                 directly or through one or more Affiliates, agrees to
                 purchase, and the Corporation agrees to sell and issue to PM,
                 or such Affiliates: (i) on the Closing Date, a Tranche A Note
                 for a purchase price of Two Million One Hundred Seventy-





   56

                 Five Thousand Dollars ($2,175,000); (ii) on the Tranche B
                 Closing Date, a Tranche B Note for a purchase price of One
                 Million Three Hundred Five Thousand Dollars (1,305,000); and
                 (iii) at PM's sole option, on the Tranche C Closing Date, a
                 Tranche C Note for a purchase price of Three Million Twenty
                 Thousand Dollars ($3,020,000), for a total purchase price of
                 Six Million Five Hundred Thousand Dollars ($6,500,000).
                 Subject to the terms and conditions of this Agreement, PMGLIC,
                 either directly or through one or more Affiliates, agrees to
                 purchase, and the Corporation agrees to sell and issue to
                 PMGLIC, or such Affiliates: (i) on the Closing Date, a Tranche
                 A Note for a purchase price of Three Hundred Twenty-Five
                 Thousand Dollars ($325,000); (ii) on the Tranche B Closing
                 Date, a Tranche B Note for a purchase price of One Hundred
                 Ninety Five Thousand Dollars ($195,000); and (iii) at PMGLIC's
                 sole option, on the Tranche C Closing Date, a Tranche C Note
                 for a purchase price of Four Hundred Eighty Thousand Dollars
                 ($480,000), for a total purchase price of One Million Dollars
                 ($1,000,000).

                 2.2      Amendment of Section 2.6 of the Agreement.  Section
2.6 of the Agreement is hereby amended by deleting clauses (vi), (xii), and
(xiii) thereof in their entirety and inserting in their place the following new
clauses (vi), (xii), and (xiii), and also adding the following new clause
(xiv):

                          (vi)  Tranche B Closing Fee.  The Corporation shall
                 pay to Purchaser a closing fee of $45,000 by wire transfer of
                 immediately available funds;

                          (xii)  Casa Grande Approvals.  The Corporation shall
                 have furnished Purchaser with evidence, satisfactory to
                 Purchaser, that all necessary regulatory approvals have been
                 obtained to permit the Corporation to build a 302 bed U.S.
                 Marshal Services staging area in Casa Grande, Arizona;

                          (xiii)  Tranche B Closing Date.  The Tranche B
                 Closing Date shall occur on or before December 15, 1992; and

                          (xiv)  Bank Financing Commitment.  The Corporation
                 shall have furnished Purchaser with evidence, satisfactory to
                 Purchaser, of a commitment by First Union Bank to provide at
                 least $5,000,000 of financial accommodations to the
                 Corporation.

                 2.3      Amendment of Section 2.8 of the Agreement.  Section
2.8 of the Agreement is hereby amended by deleting clause (i) thereof in its
entirety and inserting in its place the following new clause (i):





                                      -2-
   57

                          (i)  Tranche C Closing Date.  The Tranche C
                 Closing Date shall occur on or before June 30, 1993.

                 2.4      Amendment of Section 3.1 of the Agreement.  Section
3.1 of the Agreement is hereby amended by deleting the definitions of "Tranche
B Note" and "Tranche C Note" in their entirety and inserting in their place the
following new definitions:

                          "Tranche B Note" means any one or more of the Notes
                 issued on the Tranche B Closing Date or any substitute or
                 replacement therefor; the aggregate amount of the Tranche B
                 Notes shall be One Million Five Hundred Thousand Dollars
                 ($1,500,000).

                          "Tranche C Note" means any one or more of the Notes
                 issued on the Tranche C Closing Date or any substitute or
                 replacement therefor; the aggregate amount of the Tranche C
                 Notes shall be Three Million Five Hundred Thousand Dollars
                 ($3,500,000).

                 2.5      Amendment of Section 6.19 of the Agreement.  Section
6.19 of the Agreement is hereby amended by deleting such  Section in its
entirety and inserting in its place the following new Section 6.19:

                          6.19    Sale of Estancia Facility; Funding of the
                 Escrow Account.

                            [Intentionally Omitted]

                 SECTION 3.  Termination of the Escrow Agreement.  Concurrently
with the effectiveness of this Amendment, the parties to the Escrow Agreement
shall terminate the Escrow Agreement and all funds then held in escrow pursuant
to the Escrow Agreement shall be delivered to the Corporation

                 SECTION 4.  Effectiveness of this Amendment.

                 This Amendment shall become effective only upon the
satisfaction of the following conditions:

                          (a)     The Corporation shall have delivered to the
Purchaser an executed copy of this Amendment; and

                          (b)     The Purchaser shall have received full
payment of all of its out-of-pocket expenses arising in connection with the
negotiation, preparation, execution, and delivery of the Agreement, the Tranche
A Notes, Amendment No. 1 to the Agreement, and the Escrow Agreement, and all
related transactions,





                                      -3-
   58

including the fees and expenses of the Purchaser's legal counsel that have not
previously been paid.

                 SECTION 5.  Representations and Warranties of the Corporation.

                 In order to induce the Purchaser to enter into this Amendment,
the Corporation hereby makes the following representations and warranties to
the Purchaser:

                 5.1      Corporate Power and Authorization.  The Corporation
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Amendment.

                 5.2      No Conflict.  Neither the execution and delivery by
the Corporation of this Amendment nor the consummation of the transactions
contemplated or required hereby nor compliance by the Corporation with the
terms, conditions and provisions hereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the Certificate of
Incorporation or Bylaws of the Corporation or any law, regulation, order, writ,
injunction or decree of any court or governmental instrumentality or any
agreement or instrument to which the Corporation is a party or by which any of
its properties is bound, or constitute a default thereunder or result in the
creation or imposition of any lien.

                 5.3      Authorization; Governmental Approvals.  The execution
and delivery by the Corporation of this Amendment and the consummation of the
transactions contemplated hereby (i) have been duly authorized by all necessary
corporate action on the part of the Corporation and (ii) do not and will not
require any authorization, consent, approval or license from or any
registration, qualification, designation, declaration or filing with, any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.

                 5.4      Valid and Binding Effect.  This Amendment has been
duly and validly executed and delivered by the Corporation and constitutes the
legal, valid and binding obligation of the Corporation, enforceable in
accordance with its terms.

                 5.5      Absence of Default.  No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment that would constitute an Event of Default under
the Agreement.

                 SECTION 6.  Miscellaneous.

                 6.1      Ratification of the Agreement.  Except as
specifically amended by this Amendment, the terms, conditions and provisions of
the Agreement shall not





                                      -4-
   59

be affected by this Amendment and shall remain in full force and effect and are
hereby ratified and confirmed.

                 6.2      No Implied Waiver.  The execution, delivery and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver or modification of any provision of, or operate as a waiver
of any right, power or remedy of the Purchaser under, the Agreement or
prejudice any right or remedy that the Purchaser may have or may have in the
future under or in connection with the Agreement or any instrument or agreement
referred to therein.  The Corporation acknowledges and agrees that the
representations and warranties of the Corporation contained in the Agreement
and in this Amendment shall survive the execution and delivery of this
Amendment and the effectiveness hereof.

                 6.3      Governing Law.  This Amendment shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California.

                 6.4      Counterparts; Telecopy Execution.  This Agreement may
be executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart.  Any party delivering an executed counterpart of this Amendment by
telefacsimile shall also deliver a manually executed counterpart, but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.





                                      -5-
   60

                 IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be executed by their duly authorized officers as of the date first written
above.




CORRECTIONS CORPORATION                       PACIFIC MUTUAL LIFE 
OF AMERICA                                    INSURANCE COMPANY


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

Its:                                          Its: 
     -------------------------                     --------------------------


PM GROUP LIFE INSURANCE COMPANY

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

Its: 
     -------------------------



                                      -6-
   61

                               AMENDMENT NO. 3
                                     TO
                           NOTE PURCHASE AGREEMENT

                 THIS AMENDMENT NO. 3 TO NOTE PURCHASE AGREEMENT (this
"Amendment"), dated as of April 29, 1993, is entered into by and among Pacific
Mutual Life Insurance Company ("PM"), PM Group Life Insurance Company
("PMGLIC") (PM and PMGLIC shall be referred to herein collectively as the
"Purchaser"), and Corrections Corporation of America (the "Corporation").

                                R E C I T A L S

                 WHEREAS, the Corporation and the Purchaser are parties to that
certain Note Purchase Agreement, dated as of June 22, 1992, that was amended by
that certain Amendment No. 1 to Note Purchase Agreement, dated as of August 25,
1992 and by that certain Amendment No. 2 to Note Purchase Agreement, dated as
of October 29, 1992 (as so amended, the "Agreement");

                 WHEREAS, the Corporation has requested that the Purchaser
agree to make certain amendments to the Agreement; and

                 WHEREAS, the Purchaser is willing to amend the Agreement as
set forth herein.

                               A G R E E M E N T

                 NOW, THEREFORE, in consideration of the foregoing and subject
to the terms and conditions herein contained, the parties hereto agree as
follows:

                 SECTION 1.  Definitions.  Initially capitalized terms used in
this Amendment shall have the meanings ascribed thereto in the Agreement, as
amended hereby, unless otherwise defined herein.

                 SECTION 2.  Amendments to the Agreement.

                 2.1      Amendment of Section 2.1 of the Agreement.  Section
2.1 of the Agreement is hereby amended by deleting such Section in its entirety
and inserting in its place the following new Section 2.1:

                          2.1     Sale and Purchase of the Notes.  Subject to
                 the terms and conditions of this Agreement, PM, either
                 directly or through one or more Affiliates, agrees to
                 purchase, and the Corporation agrees to sell and issue to
                 PM, or such Affiliates: (i) on the Closing Date, a Tranche



   62

                 
                 A Note for a purchase price of Two Million One Hundred
                 Seventy-Five Thousand Dollars ($2,175,000); (ii) on the
                 Tranche B Closing Date, a Tranche B Note for a purchase price
                 of One Million Three Hundred Five Thousand Dollars
                 (1,305,000); and (iii) at PM's sole option, on the Tranche C
                 Closing Date, a Tranche C Note for a purchase price of Three
                 Million Thirty-Three Thousand Four Hundred Fifty Dollars
                 ($3,033,450), for a total purchase price of Six Million Five
                 Hundred Thirteen Thousand Four Hundred Fifty Dollars
                 ($6,513,450).  Subject to the terms and conditions of this
                 Agreement, PMGLIC, either directly or through one or more
                 Affiliates, agrees to purchase, and the Corporation agrees to
                 sell and issue to PMGLIC, or such Affiliates: (i) on the
                 Closing Date, a Tranche A Note for a purchase price of Three
                 Hundred Twenty-Five Thousand Dollars ($325,000); (ii) on the
                 Tranche B Closing Date, a Tranche B Note for a purchase price
                 of One Hundred Ninety Five Thousand Dollars ($195,000); and
                 (iii) at PMGLIC's sole option, on the Tranche C Closing Date,
                 a Tranche C Note for a purchase price of Four Hundred
                 Sixty-Six Thousand Five Hundred Fifty Dollars ($466,550), for
                 a total purchase price of Nine Hundred Eighty-Six Thousand
                 Five Hundred Fifty Dollars ($986,550).

                 2.2      Amendment of Section 2.8 of the Agreement.  Section
2.8 of the Agreement is hereby amended by deleting clause (vi) thereof in its
entirety and inserting in its place the following new clause (vi), and also
adding the following new clauses (xii), (xiii), and (xiv):

                          (vi)  Tranche C Closing Fee.  The Corporation shall
                 pay to Purchaser a closing fee of $105,000 by wire transfer of
                 immediately available funds;

                          (xii)  Financing for Repayment of New Mexico IRB
                 Indebtedness.  The Corporation shall have obtained a
                 commitment for long term real estate secured financing, on
                 terms acceptable to Purchaser, to repay approximately
                 $5,000,000 of the New Mexico IRB Indebtedness;

                          (xiii)  Use of Proceeds of Tranche C Notes.  As a
                 condition subsequent to the purchase of the Tranche C Notes,
                 the Corporation shall use the entire proceeds of the Tranche C
                 Notes to repay the New Mexico IRB Indebtedness on or prior to
                 May 3, 1993;

                          (xiv)     Repayment of New Mexico IRB Indebtedness.
                 As a condition subsequent to the purchase of the Tranche C
                 Notes, the Corporation shall repay in full the New Mexico IRB
                 Indebtedness on or prior to May 3, 1993.





                                      -2-
   63

                 2.3     Amendment of Section 3.1 of the Agreement.  Section
3.1 of the Agreement is hereby amended by inserting the following new
definition:

                          "New Mexico IRB Indebtedness" means the principal,
                 interest, and fees owing by the Corporation with respect to
                 those certain 9.2% taxable revenue bonds issued in 1989 and
                 scheduled to mature in 2004 in connection with financing for
                 the New Mexico Women's Prison.

                 SECTION 3.  Effectiveness of this Amendment.

                 This Amendment shall become effective upon the execution and
delivery of this Amendment by the Purchaser and the Corporation.

                 SECTION 4.  Representations and Warranties of the Corporation.

                 In order to induce the Purchaser to enter into this Amendment,
the Corporation hereby makes the following representations and warranties to
the Purchaser:

                 4.1      Corporate Power and Authorization.  The Corporation
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Amendment.

                 4.2      No Conflict.  Neither the execution and delivery by
the Corporation of this Amendment nor the consummation of the transactions
contemplated or required hereby nor compliance by the Corporation with the
terms, conditions and provisions hereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the Certificate of
Incorporation or Bylaws of the Corporation or any law, regulation, order, writ,
injunction or decree of any court or governmental instrumentality or any
agreement or instrument to which the Corporation is a party or by which any of
its properties is bound, or constitute a default thereunder or result in the
creation or imposition of any lien.

                 4.3      Authorization; Governmental Approvals.  The execution
and delivery by the Corporation of this Amendment and the consummation of the
transactions contemplated hereby (i) have been duly authorized by all necessary
corporate action on the part of the Corporation and (ii) do not and will not
require any authorization, consent, approval or license from or any
registration, qualification, designation, declaration or filing with, any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.





                                      -3-
   64


                 4.4      Valid and Binding Effect.  This Amendment has been
duly and validly executed and delivered by the Corporation and constitutes the
legal, valid and binding obligation of the Corporation, enforceable in
accordance with its terms.

                 4.5      Absence of Default.  No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment that would constitute an Event of Default under
the Agreement.

                 SECTION 5.  Miscellaneous.

                 5.1      Ratification of the Agreement.  Except as
specifically amended by this Amendment, the terms, conditions and provisions of
the Agreement shall not be affected by this Amendment and shall remain in full
force and effect and are hereby ratified and confirmed.

                 5.2      No Implied Waiver.  The execution, delivery and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver or modification of any provision of, or operate as a waiver
of any right, power or remedy of the Purchaser under, the Agreement or
prejudice any right or remedy that the Purchaser may have or may have in the
future under or in connection with the Agreement or any instrument or agreement
referred to therein.  The Corporation acknowledges and agrees that the
representations and warranties of the Corporation contained in the Agreement
and in this Amendment shall survive the execution and delivery of this
Amendment and the effectiveness hereof.

                 5.3      Governing Law.  This Amendment shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California.

                 5.4      Counterparts; Telecopy Execution.  This Agreement may
be executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart.  Any party delivering an executed counterpart of this Amendment by
telefacsimile shall also deliver a manually executed counterpart, but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.





                                      -4-
   65

                 IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be executed by their duly authorized officers as of the date first written
above.




CORRECTIONS CORPORATION                           PACIFIC MUTUAL LIFE
OF AMERICA                                        INSURANCE COMPANY


By:                                              By:                          
     --------------------------                        -------------------------
Its:                                             Its:
     --------------------------                        -------------------------

PM GROUP LIFE INSURANCE COMPANY

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

Its: 
     --------------------------




                                      -5-
   66

                            AMENDMENT NUMBER FOUR
                                     TO
                           NOTE PURCHASE AGREEMENT

                 THIS AMENDMENT NUMBER FOUR TO NOTE PURCHASE AGREEMENT (this
"Amendment"), dated as of April 25, 1995, is entered into by and among PACIFIC
MUTUAL LIFE INSURANCE COMPANY ("PM"), PM GROUP LIFE INSURANCE COMPANY
("PMGLIC") (PM and PMGLIC shall be referred to herein collectively as the
"Purchaser"), and CORRECTIONS CORPORATION OF AMERICA (the "Corporation").

                               R E C I T A L S

                 WHEREAS, the Corporation and the Purchaser are parties to that
certain Note Purchase Agreement, dated as of June 22, 1992, that was amended by
that certain Amendment No. 1 to Note Purchase Agreement, dated as of August 25,
1992, by that certain Amendment No. 2 to Note Purchase Agreement, dated as of
October 29, 1992, and by that certain Amendment No. 3 to Note Purchase
Agreement, dated as of April 29, 1993 (as so amended, the "Agreement");

                 WHEREAS, the Corporation has requested that the Purchaser
agree to make certain amendments to the Agreement; and

                 WHEREAS, the Purchaser is willing to amend the Agreement as
set forth herein.

                              A G R E E M E N T

                 NOW, THEREFORE, in consideration of the foregoing and subject
to the terms and conditions herein contained, the parties hereto agree as
follows:

                 SECTION 1.  DEFINITIONS.  Initially capitalized terms used in
this Amendment shall have the meanings ascribed thereto in the Agreement, as
amended hereby, unless otherwise defined herein.

                 SECTION 2.  AMENDMENTS TO THE AGREEMENT.

                          2.1     Amendment of Section 3.1 of the Agreement.
Section 3.1 of the Agreement is hereby amended by (a) adding the defined terms
"Amendment Effective Date," "Concept," "Concept Acquisition," "Concept Acquired
Indebtedness," "Concept Share Exchange Agreement," "Eloy Facility," "UCI,"
"United Concept Partnership," and "United Concept Partnership Debt," as set
forth
   67

below, and (b) deleting the defined term "Funded Debt" in its entirety and
substituting therefor the following defined term:

                          "Amendment Effective Date" means the date when each
of the conditions set forth in Section 4 of this Amendment have been satisfied
or waived.

                          "Concept" means Concept Incorporated, a Delaware
corporation.

                          "Concept Acquisition" means the acquisition by the
Corporation of Concept pursuant to the terms and conditions of the Concept
Share Exchange Agreement.

                          "Concept Acquired Indebtedness" means Funded Debt of
Concept existing immediately prior to the consummation of the Concept
Acquisition; provided, however, that the foregoing shall not include the United
Concept Partnership Debt.

                          "Concept Share Exchange Agreement" means a share
exchange agreement, containing such terms and conditions as reasonably may be
acceptable to Purchaser, involving the exchange of shares between the
Corporation and the stockholders of Concept.

                          "Eloy Facility" means the Bureau of Prisons facility
that is located in Eloy, Arizona and owned by United Concept Partnership.

                          "Funded Debt" means and includes without duplication
(a) any obligation payable more than one year from the date of the creation
thereof (including the current portion of Funded Debt), that under generally
accepted accounting principles is shown on the balance sheet as a liability
(including obligations under Capital Leases and excluding reserves for deferred
income taxes and other reserves to the extent that such reserves do not
constitute an obligation), (b) guarantees, endorsements (other than
endorsements of negotiable instruments for collection in the ordinary course of
business), and other contingent liabilities (whether direct or indirect) in
connection with the obligations, stock, or dividends of any Person, including
obligations under contracts to supply funds to or in any other manner invest in
any Person, (c) obligations under any contract to purchase, sell, or lease (as
lessee or lessor) property or to purchase or sell services, primarily for the
purpose of enabling a Person to make payment of obligations or to assure the
holder of such obligations against loss including obligations under any
contract for the purchase of materials, supplies, or other property or services
if such contract (or any related document) requires that payment for such
materials, supplies, or other property or services shall be made regardless of
whether delivery of such materials, supplies, or other property or services is
ever made or tendered, (d) obligations





                                      -2-
   68

under any contract to pay or purchase obligations of a Person, or to advance or
supply funds for the payment or purchase of such obligations, and (e) any
agreement to assure a creditor of a Person against loss.  For all purposes of
this Agreement (other than for purposes of calculating United Concept
Partnership Funded Debt), all United Concept Partnership Funded Debt shall be
deemed to constitute "Funded Debt."

                          "UCI" means United Concept, Inc., a Delaware
corporation, fifty percent of the issued and outstanding common stock of which
is owned by Concept.

                          "United Concept Partnership" means United Concept
Limited Partnership, a Delaware limited partnership of which UCI is the
managing general partner.

                          "United Concept Partnership Funded Debt" means (a)
the approximately $30,000,000 of indebtedness of United Concept Partnership
that is secured by a first mortgage lien upon the Eloy Facility, and (b) any
and all other indebtedness of United Concept Partnership that constitutes
Funded Debt (without giving effect to the last sentence of such definition).

                 2.2      Amendment of Section 6.18 of the Agreement.  Section
6.18 of the Agreement is hereby amended by deleting such Section in its
entirety and adding and inserting in its place the following new Section 6.18:

                 "6.18    Limitation on Subsidiary Funded Debt.  The
                 Corporation shall not permit any of its Subsidiaries to incur,
                 create, assume, or guarantee any Funded Debt (which shall be
                 deemed to include preferred stock issued by a Subsidiary of
                 the Corporation that is not held by the Corporation), unless,
                 after giving effect thereto, (a) the total amount of Funded
                 Debt of the Corporation's Subsidiaries does not exceed 10% of
                 Consolidated Total Capitalization, and (b) the Corporation
                 would be entitled to incur at least $1.00 of additional
                 Consolidated Senior Funded Debt under Section 6.8.  The
                 foregoing to the contrary notwithstanding, Concept shall be
                 entitled to be obligated with respect to (and there shall be
                 excluded from the above calculation both on the Amendment
                 Effective Date and thereafter) the United Concept Partnership
                 Debt and the Concept Acquired Debt, so long as the aggregate
                 amount of Funded Debt of the Corporation incurred, assumed, or
                 acquired in connection with the Concept Acquisition (inclusive
                 of the United Concept Partnership Debt and the Concept
                 Acquired Debt does not exceed Forty Million Dollars
                 ($40,000,000)."

                 SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.





                                      -3-
   69

                 In order to induce the Purchaser to enter into this Amendment,
the Corporation hereby makes the following representations and warranties to
the Purchaser:

                 3.1      Corporate Power and Authorization.  The Corporation
has the requisite corporate power and authority to execute, deliver, and
perform its obligations under this Amendment.

                 3.2      No Conflict.  Neither the execution and delivery by
the Corporation of this Amendment nor the consummation of the transactions
contemplated or required hereby nor compliance by the Corporation with the
terms, conditions, and provisions hereof will conflict with or result in a
breach of any of the terms, conditions, or provisions of the Certificate of
Incorporation or Bylaws of the Corporation or any law, regulation, order, writ,
injunction, or decree of any court or governmental instrumentality or any
agreement or instrument to which the Corporation is a party or by which any of
its properties is bound, or constitute a default thereunder or result in the
creation or imposition of any lien.

                 3.3      Authorization; Governmental Approvals.  The execution
and delivery by the Corporation of this Amendment and the consummation of the
transactions contemplated hereby (i) have been duly authorized by all necessary
corporate action on the part of the Corporation and (ii) do not and will not
require any authorization, consent, approval, or license from or any
registration, qualification, designation, declaration, or filing with, any
court or governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign.

                 3.4      Valid and Binding Effect.  This Amendment has been
duly and validly executed and delivered by the Corporation and constitutes the
legal, valid, and binding obligation of the Corporation, enforceable in
accordance with its terms.

                 3.5      Absence of Default.  No event has occurred and is
continuing or will result from the consummation of the transactions
contemplated by this Amendment that would constitute an Event of Default under
the Agreement.

                 SECTION 4.  CONDITIONS.

                          4.1     Conditions to the Effectiveness of this
Amendment.  The effectiveness of this Amendment is subject to the fulfillment,
to the satisfaction of Purchaser, of each of the following conditions:





                                      -4-
   70


                                  (a)  Purchaser shall have received an
executed counterpart of this Amendment duly executed and delivered by the
Corporation and each Purchaser; and

                                  (b)  Each Purchaser shall have received an
executed replacement Tranche A Note (in the form of Exhibit A attached hereto),
Tranche B Note (in the form of Exhibit B attached hereto), and Tranche C Note
(in the form of Exhibit C attached hereto), each duly executed and delivered by
the Corporation.

                 SECTION 5.  MISCELLANEOUS.

                 5.1      Ratification of the Agreement.  Except as
specifically amended by this Amendment, the terms, conditions and provisions of
the Agreement shall not be affected by this Amendment and shall remain in full
force and effect and are hereby ratified and confirmed.

                 5.2      No Implied Waiver.  The execution, delivery, and
performance of this Amendment shall not, except as expressly provided herein,
constitute a waiver or modification of any provision of, or operate as a waiver
of any right, power, or remedy of the Purchaser under, the Agreement or
prejudice any right or remedy that the Purchaser may have or may have in the
future under or in connection with the Agreement or any instrument or agreement
referred to therein.  The Corporation acknowledges and agrees that the
representations and warranties of the Corporation contained in the Agreement
and in this Amendment shall survive the execution and delivery of this
Amendment and the effectiveness hereof.

                 5.3      Governing Law.  This Amendment shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California.

                 5.4      Counterparts; Telecopy Execution.  This Agreement may
be executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart.  Any party delivering an executed counterpart of this Amendment by
telefacsimile shall also deliver a manually executed counterpart, but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.





                                      -5-
   71

                 IN WITNESS WHEREOF, the undersigned have caused this Amendment
to be executed by their duly authorized officers as of the date first written
above.




CORRECTIONS CORPORATION OF                        PACIFIC MUTUAL LIFE
AMERICA                                           INSURANCE COMPANY
                                                  

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

Its:                                             Its: 
     -------------------------                        -------------------------


PM GROUP LIFE INSURANCE
COMPANY

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

Its: 
     -------------------------



                                      -6-

EX-10.143

   1

                                                             EXHIBIT 10.143




                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                       CORRECTIONS CORPORATION OF AMERICA

                                      AND

                                  SODEXHO S.A.




                            DATED AS OF JUNE 9, 1995











   2

                            STOCK PURCHASE AGREEMENT

                                      
         This Agreement (the "Agreement") is made and entered into this 9th day
of June, 1995, by and between Corrections Corporation of America, a Delaware
corporation having its principal place of business in Nashville, Tennessee (the
"Seller"), and Sodexho S.A., a French corporation, having its principal place
of business in France (the "Buyer").

         WHEREAS, Seller will at the Closing (as hereinafter defined) own
45,000 "C" class shares in the capital of Corrections Corporation of Australia
Pty. Ltd. A.C.N. 010 921 641, a Queensland company (the "Company") which shares
collectively represent one hundred (100%) percent of the issued shares of the
Company; and

         WHEREAS, Buyer desires to acquire from Seller, and Seller desires to
sell to Buyer, shares in the capital of the Company owned by Seller which
shares collectively represent fifty percent (50%) of the issued shares of the
Company (the "Shares") upon and subject to the terms and conditions contained
in this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, the parties agree as follows:


                                   ARTICLE I

                          PURCHASE AND SALE OF SHARES

         1.01.   TRANSFER OF SHARES.  Subject to all of the terms and
conditions of this Agreement, at the Closing, Seller hereby agrees to sell,
transfer and convey to Buyer, and Buyer agrees to purchase and acquire from
Seller, free and clear of all liens, claims, charges, restrictions, security
interests, equities, proxies, pledges and encumbrances of any kind, 22,500 "C"
class shares in the capital of the Company, which shares collectively
constitute fifty percent (50%) of the issued shares in the capital of the
Company (the foregoing shares of the Company are hereinafter collectively
referred to as the "Shares").


                                   ARTICLE II

                                 CONSIDERATION

         2.01.   PURCHASE PRICE.  The Purchase Price for the Shares shall be
Three Million Seven Hundred Seventeen Thousand Dollars ($3,717,000.00) (U.S.)
(the "Purchase Price").  The Purchase Price shall be paid by Buyer to Seller at
the Closing, by bank cheque, bank wire transfer or such other method as may be
mutually agreed upon by the parties.



   3

         2.02.  COMPANY OBLIGATIONS.  By entering into this Agreement, Buyer
understands and agrees that from and after the Closing, Buyer shall have the
obligations set forth in Schedule 2.02 hereto.


                                  ARTICLE III

                      CLOSING; OBLIGATIONS OF THE PARTIES

         3.01.   CLOSING DATE.  Subject to the provisions of Section 7.05 and
Section 8.05, the closing (the "Closing") shall take place and be effective for
all purposes at 10:00 a.m., local time, on ___ July 1995 at the offices of
Seller or at such other time and place as the parties hereto mutually agree
(the "Closing Date").

         3.02.   OBLIGATIONS OF THE PARTIES AT THE CLOSING.

         (a)     At the Closing, the events set out in clauses (i) through (v)
                 shall occur:

                 (i)      the Buyer shall pay the consideration as specified 
in Section 2.01.

                 (ii)     the Seller shall deliver to the Buyer or to such
person as Buyer may direct, the share certificate issued by the Company for the
Shares together with an executed instrument of transfer in registrable form
(except for the payment of any applicable stamp duty) for the Shares in favor
of the Buyer or its nominee (as transferee) from the registered holder of the
Shares (as transferor).

                 (iii)    the Seller shall deliver to the Buyer any waiver,
consent or other document which the Buyer may require to obtain a good title to
the Shares registered in the name of the Buyer or its nominee, including any
Power of Attorney under which any document required to be delivered under this
Agreement has been executed.

                 (iv)     the Seller shall cause a meeting of the Directors of
the Company to be convened and shall procure that at the meeting:

                          (a)     the Directors shall approve the transfer of
the Shares to the Buyer or its nominee and, subject to the payment of stamp
duty, direct the entries in the Company's share register be made, the existing
share certificate for the Shares be cancelled and a new certificate in the name
of the Buyer be issued;

                          (b)     Two (2) persons nominated by Buyer shall be
appointed as directors; 

                  (v)      Buyer may by written notice to the Seller waive 
compliance by the Seller with the requirements of this Section 3.02 on the 
Seller's part to be performed.





                                       2


   4

                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         In order to induce Buyer to enter into this Agreement and consummate
the transactions contemplated hereby, Seller hereby represents and warrants as
follows:

         4.01.  ORGANIZATION AND GOOD STANDING.  Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.

         4.02.   OWNERSHIP OF SHARES; VALIDITY AND ENFORCEABILITY.  Seller
represents and warrants that (i) Seller is the legal and beneficial owner of
the Shares, free and clear of all liens, claims, charges, restrictions,
security interests, equities, proxies, pledges or encumbrances of any kind;
(ii) Seller has the full right, power, authority and capacity to sell and
transfer the respective Shares owned by such Seller;  (iii)  by virtue of the
transfer of the Shares to Buyer at the Closing, Buyer will obtain full title to
such Shares, free and clear of all liens, claims, charges, restrictions,
security interests, equities, proxies, pledges, or encumbrances of any kind.
This Agreement constitutes a legal, valid and binding agreement of the Seller,
enforceable against Seller in accordance with its terms.


         4.03.   CORPORATE POWER AND AUTHORITY: DUE AUTHORIZATION.  Seller has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.  The Board of Directors of
Seller has duly approved and authorized the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and no
other corporate proceedings on the part of Seller are necessary to approve and
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.  This Agreement and each of the documents
to which Seller is a party constitutes, or will constitute when executed and
delivered, a valid and binding agreement of Seller, in each case enforceable in
accordance with its terms.

         4.04.   NO VIOLATION.  The execution and delivery of this Agreement by
the Seller does not, and the consummation of the transactions contemplated
hereby will not, (a) violate or be in conflict with, or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute a
default) with, or result in the termination of, or accelerate the performance
required by, or excuse performance by any person of any of its obligations
under, or cause the performance required by, or exercise performance by any
person of any of its liabilities under, any provision of, or result in the
creation of any lien or security interest under, any agreement, indenture,
instrument, lease, security agreement, mortgage or lien to which the Seller is
a party or by which any of the Seller's assets or properties are bound; (b)
violate or be in conflict with any provision of the Certificate of
Incorporation or Bylaws of the Seller; (c) violate any order, arbitration
award, judgment, writ, injunction, decree, statute, rule, or regulation
applicable to the





                                       3


   5

Seller; or (d) violate any other contractual or legal obligation or restriction
to which the Seller is subject.

         4.05.   ABSENCE OF QUESTIONABLE PAYMENTS.  Neither the Seller nor any
other person acting on its behalf has at any time directly or indirectly used
funds for any illegal purpose, including without limitation, the making of any
improper political contribution, bribe or kickback.

         4.06.   ORGANIZATION AUTHORITY AND GOOD STANDING.  The Company is a
company duly organized, validly existing, and in good standing under the laws
of Queensland, Australia.  The Company has full corporate power and authority
to carry on its business as now conducted and possesses all governmental and
other permits, licenses, and other authorization to own, lease, or operate its
assets and properties as now owned, leased, and operated and to carry on its
business as presently conducted.

         4.07.   NO CONFLICTS.  The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will
not, (a)violate any provision, or result in the creation of any lien or
security interest under, any agreement, indenture, instrument, lease, security
agreement, mortgage, or lien to which Company is a party or by which it is
bound; (b) violate any order, arbitration award, judgment, writ, injunction,
decree, statute, rule, or regulation applicable to Company; or (c) violate any
other contractual or legal obligation or restriction to which Company is
subject.  That certain Shareholders Agreement dated September 27, 1989 and
subsequently amended by and among Seller and certain other shareholders of the
Company has been terminated.

         4.08.   SUBSIDIARIES.  The entities listed on Schedule 4.08 hereto
(the "Subsidiaries") are the only subsidiaries in which the Company owns,
directly or indirectly, any capital stock or other equity interest, or with
respect to which the Company, alone or in combination with others, is in a
control position.  Each of the Subsidiaries is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation.  Each of the Subsidiaries has the power and authority and
possesses all governmental and other permits, licenses, and other
authorizations to own or lease its properties and to carry on its business as
now conducted.  The outstanding capital stock of each of the Subsidiaries is
validly issued, fully paid, and non-assessable.  The Company has good and valid
title to the equity interests in the Subsidiaries, free and clear of all liens,
claims, charges, restrictions, security interests, equities, proxies, pledges,
or encumbrances of any kind, except as set forth on Schedule 4.08.  Except
where otherwise indicated herein, or unless the context otherwise requires, any
reference to the Company herein shall include the Company and the Subsidiaries.

         4.09.   LITIGATION.  Except as set forth in Schedule 4.09, there are
no claims, actions, suits, proceedings, inquiries, or investigations pending or
threatened by or against, or otherwise affecting the Company at law or in
equity, or by any federal, state, municipal, or other governmental department,
commission, board, agency, instrumentality, or authority which, if adversely
decided, have a material adverse effect on the condition (financial or
otherwise), assets, liabilities, earnings, prospects, or business of the
Company.  There are no claims, action, or suits





                                       4


   6

pending or threatened by or against or otherwise affecting the Company at law
or in equity, questioning the validity of this Agreement or the transactions
contemplated hereby.

         4.10.   TITLE TO ASSETS.  Except as set forth in Schedule 4.10, the
Company is the record, legal, and beneficial owner of, and has good marketable
title to, all the Assets (as defined herein), free and clear of all mortgages,
security interests, liens, leases, covenants, assessments, easements, options,
rights of refusal and set-off, restrictions, reservations, defects in the
title, encroachments, and other encumbrances, direct, contingent, or otherwise.
The Assets are all assets set forth in the financial statements of the Company
and owned or leased by the Company or otherwise utilized in the operation of
the Company's business, excluding those items disposed of and replaced since
December 31, 1994, in the ordinary course of business, but including the
replacements thereof.

         4.11    TAX MATTERS.  Seller and the Company have duly and timely
filed all tax reports and returns required to be filed by the Company and have
duly paid all taxes and other charges due or claimed to be due from the Company
by foreign, federal, state, or local taxing authorities (including, without
limitation, those due in respect of its properties, income, franchises,
licenses, sales, and payrolls); and true and correct copies of all tax reports
and returns relating to such taxes and other charges for the period since
December 31, 1990, have been heretofore delivered to Buyer.  Since January 1,
1990, the Company has not incurred tax liabilities other than in the ordinary
course of business; there are no tax liens (other than liens for current taxes
not yet due) upon any properties or assets of the Company (whether real,
personal or mixed, tangible or intangible), and, except as reflected in the
financial statements of the Company, there are no pending or threatened
questions or examinations relating to, or claims asserted for, taxes or
assessments against the Company, and there is no basis for such question or
claim.

         4.12.   CAPITALIZATION.  The authorized capital stock of the Company
consists of 15,000,000 "C" class shares of $1.00 each and of 1,000,000 "E"
class shares of $1.00 each.  The issued capital stock is 45,000 "C" class
shares and no "E" class shares.  Except for the issued "C" class and "E" class
shares, there are no shares of capital stock or other securities of the Company
issued and outstanding.  There are no outstanding options, warrants, or rights
to purchase or acquire from the Company or the Seller, any securities of the
Company, and there are no contracts, commitments, agreements, understandings,
arrangements, or restrictions as to which the Company or the Seller is a party
or by which either of them is bound relating to any shares of capital stock or
other securities of the Company (including the Shares), whether or not
outstanding on the stock of the Company.

         4.13.   SHARES.  All of the shares of issued capital stock of the
Company are duly authorized, validly issued, and outstanding and fully paid and
nonassessable, and free of preemptive rights.

         4.14.   CONTRACTS.  Schedule 4.14 hereto sets forth a complete and
accurate list of all contracts, agreements, consulting arrangements, purchase
orders, leases, subleases, options, and commitments, oral or written, and all
assignments, amendments, schedules, exhibits, and





                                       5


   7

appendices thereof, affecting or relating to the Company's business, the
Company's assets, or any interest therein to which the Company is a party or by
which the Company or its business assets or the Company's stock is bound or
affected, including, without limitation, service contracts, equipment leases,
and leases of space and ground leases (collectively, the "Contracts"); provided
there shall be no breach of this Section 4.14 if Immaterial Contracts as
defined below, are omitted.  "Immaterial Contracts" shall mean contracts having
a remaining term of less than one (1) year and involving an expenditure of less
than US$25,000 in the aggregate for all obligations under any one contract or
$1,000,000 for all such contracts.

         4.15.   LICENSES AND PERMITS.  The Company has all local, state, and
federal licenses, permits, registrations, certificates, consents,
accreditation, and approvals (collectively, the "Licenses and Permits")
necessary to conduct its business in a manner currently conducted.  There is no
default under any of the Company's Licenses and Permits, no notices have been
received by the Company or its employees, agents, or representatives with
respect to threatened, pending, or possible revocation, termination,
suspension, or limitation of any such License or Permit, and there exists no
grounds for revocation, suspension, or limitation of any such License or
Permit.

         4.16.   RELATED PARTY TRANSACTIONS.  All transactions between Seller
and its affiliates on the one hand and the Company and its affiliates on the
other hand prior to the date hereof were conducted at arm's length and at fair
value.

         4.17.   FINANCIAL STATEMENTS.  Seller has delivered to Buyer:  (a)
audited consolidated balance sheets of the Company as of December 31, 1994, and
the related audited consolidated statements of income, changes in stockholders'
equity, and changes in financial position for the fiscal year then ended,
including the notes thereto, together with the report thereon of Arthur
Andersen LLP, independent certified public accountants (the "Audited Financial
Statements"), and (b) an unaudited consolidated balance sheet of the Company as
of April 30, 1995 (the "Unaudited Balance Sheet") and the related unaudited
consolidated statements of income, changes in shareholders' equity, and changes
in financial position for the period then ended, including the notes thereto
(the "Unaudited Financial Statements") (the Audited Financial Statements and
the Unaudited Financial Statements are collectively referred to herein as the
"Financial Statements").  The Financial Statements are true, complete, and
correct, and fairly present the consolidated assets, liabilities, financial
condition, and results of operations of the Company as of the respective dates
thereof, and for the periods therein referred to, subject, in the case of the
Unaudited Financial Statements, to normal recurring year-end adjustments.

         4.18.   NO UNDISCLOSED LIABILITY.  The Company does not have any
liabilities or obligations of any nature, whether absolute, accrued,
contingent, or otherwise, and whether due or to become due (including, without
limitation, liabilities for taxes and interest, penalties, and other charges
payable with respect thereto which are not reflected or reserved against in
Financial Statements or disclosed in the notes thereto.)  The reserves
reflected in the Financial Statements are adequate, appropriate, and reasonable
in accordance with generally accepted accounting principles applied on a
consistent basis.  Furthermore, Seller does not have actual knowledge of





                                       6



   8

or actual knowledge of any basis for the assertion against the Company of any
such liability or obligation of any nature not fully reflected or reserved
against in the Financial Statements.

         4.19.   PROFESSIONAL FEES.  The Seller has not done anything to cause
or incur any liability or obligation of the Company for investment banking,
brokerage, finders, agents or other fees, commissions, expenses or charges in
connection with the negotiation, preparation, execution or performance of this
Agreement or the consummation of the transactions contemplated hereby, and
Seller does not know of any claim by anyone for such a fee, commission, expense
or charge.

         4.20.   OFFERING OF SHARES.  The offer, issuance and sale of the
Shares by the Seller to Buyer will not require registration under United States
securities laws.

         4.21.   CONSENTS AND APPROVALS.  Subject to the provisions of Section
7.05, Seller has obtained or will have obtained prior to Closing, all consents,
approvals, authorizations or orders of third parties, including governmental
authorities, necessary for the authorization, execution and performance of this
Agreement by Seller.

         4.22.   FULL DISCLOSURE.  Neither the representations appearing in
Article IV of this Agreement, nor any schedule, exhibit, list, certificate or
other instrument and document furnished or to be furnished by Seller to Buyer
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein
not misleading.


                                   ARTICLE V

                    REPRESENTATIONS AND WARRANTIES OF BUYER

         In order to induce Seller to enter into this Agreement and consummate
the transactions contemplated hereby, Buyer hereby represents and warrants to
Seller as follows:

         5.01.   ORGANIZATION AND GOOD STANDING.  Buyer is a societe anonyme
duly organized, validly existing and in good standing under the laws of France
and has full corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby.

         5.02.   AUTHORIZATION.  The Board of Directors of Buyer has taken all
action required to authorize the execution and delivery by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated
hereby.

         5.03.   VALID AND BINDING AGREEMENT.  This Agreement constitutes a
valid and binding agreement of Buyer, enforceable against Buyer in accordance
with its terms.

         5.04.   NO VIOLATION.  The execution and delivery of this Agreement by
Buyer does not, and the consummation of the transactions contemplated hereby
will not, (a) violate any provision,





                                       7



   9



or result in the creation of any lien or security interest under, any
agreement, indenture, instrument, lease, security agreement, mortgage or lien
to which Buyer is a party or by which it is bound; (b) violate any order,
arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to Buyer; or (c) violate any other contractual or legal
obligation or restriction to which Buyer is subject.

         5.05.   PURCHASE FOR INVESTMENT.  Buyer is acquiring the Shares for
its own account and not with a view to, or present intention of, distribution
thereof in violation of the federal securities laws of the United States or
Australia or any state securities or blue sky laws, and the Shares will not be
disposed of in contravention of such laws.

         5.06.   PROFESSIONAL FEES.  Buyer has not done anything to cause or
incur any liability for investment banking, brokerage, finders, agents or other
fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution and performance of this Agreement or the consummation of
the transactions contemplated hereby, and Buyer does not know of any claim by
anyone for such a commission or fee.

         5.07.   CONSENTS AND APPROVALS.  Buyer has obtained or will have
obtained prior to Closing, all consents, approvals, authorizations or orders of
third parties, including governmental authorities, necessary for the
authorization, execution and performance of this Agreement by Buyer.

         5.08.   FULL DISCLOSURE.  Neither the representations appearing in
Article V of this Agreement, nor any certificate or other instrument or
document furnished or to be furnished by Buyer to Seller pursuant to this
Agreement, contains any untrue statement of a material fact or omits to state a
material fact required to be stated herein or therein or necessary to make the
statements and information contained herein or therein not misleading.


                                   ARTICLE VI

                      COVENANTS AND AGREEMENTS OF PARTIES

     The parties hereto agree that from the date hereof until the Closing, and
thereafter if so specified, it will fulfill the following covenants and
agreements unless otherwise consented to by Buyer in writing:

         6.01.   FURTHER ASSURANCES.  At any time and from time to time after
the Closing, at the request of the other party hereto and without further
consideration, each of Seller and Buyer will execute and deliver such other
instruments of sale, transfer, conveyance, assignment, and delivery and
confirmation and take such action as may reasonably be requested by the other
party hereto in order more effectively to transfer, convey and assign to Buyer
and to place Buyer in possession and control of, and to confirm Buyer's title
to, the Shares, and to assist Buyer in exercising all rights and enjoying all
benefits with respect thereto.





                                       8

   10

         6.02.   CONSENTS AND APPROVALS.  Each of Seller and Buyer shall, in a
timely, accurate and complete manner, take all necessary corporate and other
action and use all reasonable efforts to obtain all consents, approvals,
permits, licenses and amendments of agreements required to carry out the
transactions contemplated in this Agreement.

         6.03.   NON-DISCLOSURE.  Except as agreed to in writing by the other
party hereto, neither Seller nor Buyer will disclose to any other person not an
employee of such entity (or a person otherwise involved in the carrying out of
the transactions contemplated by this Agreement), nor make any public
announcement of, the transactions contemplated by this Agreement prior to the
Closing.  Any such disclosure to employees will be made on a need-to-know basis
and on the condition that such employees agree to be bound by the same
confidentiality terms.

         6.04.  SCHEDULES.  Seller hereby agrees to deliver the Schedules
referred to herein and required to be delivered pursuant to the terms hereof,
to the Buyer within fourteen (14) days of the execution of this Agreement.


                                  ARTICLE VII

                       CONDITIONS TO BUYER'S OBLIGATIONS

         All obligations of Buyer hereunder are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:

         7.01.   REPRESENTATIONS AND WARRANTIES.  The representations and
warranties made by the Seller in this Agreement shall be true when made and at
and as of the time of the Closing as though such representations and warranties
were made at and as of such date.

         7.02.   PERFORMANCE.  Seller shall have performed and complied with
all agreements, obligations, and conditions required by this Agreement to be so
complied with or performed.

         7.03.   DUE DILIGENCE.  Buyer shall have completed to its satisfaction,
a due diligence review of the Company.

         7.04.   OFFICER'S CERTIFICATE.  Seller shall have delivered to Buyer a
Certificate of an officer of Seller dated the Closing Date, certifying as to
the fulfillment of the conditions specified in Sections 7.01 and 7.02 hereof.

         7.05.   SHAREHOLDERS AGREEMENT.  The parties hereto shall have entered
into a Shareholders Agreement or, if necessary, an amendment to the Articles of
Association with regard to the issues outlined in Schedule 7.05 hereto which
Agreement shall be in form and substance mutually agreeable to both parties.





                                       9
   11

         7.06.  GOVERNMENTAL APPROVAL.  (a)  The Buyer shall have received
notification from The Treasurer of the Commonwealth Government of Australia
(the "Treasurer") that the Treasurer does not object to the Buyer acquiring the
Shares on the terms set out in this Agreement.  If the Buyer has not done so
prior to the execution of this Agreement it shall forthwith notify the
Treasurer of its intention to acquire the Shares as required by the Foreign
Acquisitions & Takeovers Act 1975 (the "Act");

         (b)     If the Treasurer shall have made an order pursuant to Section
18(2) of the Act prohibiting the acquisition of the Shares by the Buyer, then
this Agreement shall terminate;

         (c)     If the Treasurer indicates, within 30 days of notification,
that, pursuant to Section 25(1A) of the Act, he is prepared to grant his
consent to the acquisition of the Shares by the Buyer, subject to the
fulfillment by the Buyer of certain specified conditions, then the Buyer shall
advise the Treasurer and the Seller in writing within seven days thereafter
whether it accepts these conditions.  If the Buyer accepts the conditions,
Buyer shall use its best reasonable efforts to comply with such conditions
within five days of the Treasurer's notification of the conditions and the
Closing shall be within five days of such compliance.  If the Buyer does not
accept the Treasurer's conditions, then this Agreement will be at an end;

         (d)     If the Buyer has given notice to the Treasurer of his
intention to acquire the Shares, 30 days has expired from the date of such
notification and the Treasurer has not made any order under the Act or has not
made any decision under Section 25(1A) of the Act, then Closing shall be 5
working days from the date of expiration of that period of 30 days;

         (e)     If:

                 (i)      before the end of thirty days after the date on which
the Treasurer has received notice from the Buyer of its intention to acquire
the Shares, the Treasurer has made an order under Section 22 of the Act in
relation to the proposed acquisition of the Shares;

                 (ii)     an order is published in the Gazette as required by 
                          the Act; and

                 (iii)    90 days pass after the day on which the order is
                          published:

                          (a)  the Treasurer has not made a decision under 
                          Section 25(1A); or

                          (b)  made any other order under the Act,

                          then the Closing shall be five working days after the
expiration of that ninety day period.

         (f)     The purchase of the Shares by Buyer shall have been approved
by the States of Victoria and Queensland governments as required by existing
contracts by and between the Company and such governments.





                                       10


   12

         (g)     The Victorian government shall have completed to its
satisfaction a probity investigation of Buyer in connection with the Company's
New Women's Prison Project in Victoria.

         (h)     The governments of the States of Victoria and Queensland shall
have completed to their satisfaction a probity investigation of the directors
of the Company designated by Buyer and appointed pursuant to Clause
3.02(a)(iv)(b) hereof.


                                  ARTICLE VIII

                       CONDITIONS TO SELLER'S OBLIGATIONS

         All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:

         8.01.   REPRESENTATIONS AND WARRANTIES.  The representations and
warranties made by the Buyer in this Agreement shall be true when made and at
and as of the time of the Closing as though such representations and warranties
were made at and as of such date.

         8.02.   PERFORMANCE.  Buyer shall have performed and complied with all
agreements, obligations, and conditions required by this Agreement to be so
complied with or performed.

         8.03.   OFFICER'S CERTIFICATE.  Buyer shall have delivered to Seller a
Certificate of an officer of Buyer, dated the Closing Date, certifying as to
the fulfillment of the conditions specified in Sections 8.01 and 8.02 hereof.

         8.04.   CONSENTS.  Seller shall have received all consents required for
the consummation of the transactions contemplated hereby, all of which consents
shall be in form and substance satisfactory to Seller.

         8.05.   GOVERNMENT APPROVALS.  (a)  The Buyer shall have received the
approval of the Treasurer as described in Section 7.05 hereof.

         (b)  The purchase of the Shares by Buyer shall have been approved by
the States of Victoria and Queensland governments as required by existing
contracts by and between the Company and such governments.

         (c)  The Victorian government shall have completed to its
satisfaction a probity investigation of Buyer in connection with the Company's
New Women's Prison Project in Victoria.





                                       11

   13

         (d)     The governments of the States of Victoria and Queensland shall
have completed to their satisfaction a probity investigation of the directors
of the Company designated by Buyer and appointed pursuant to Clause
3.02(a)(iv)(b) hereof.


                                   ARTICLE IX

                                INDEMNIFICATION

         9.01.   INDEMNIFICATION BY SELLER.  The Seller hereby agrees to
defend, indemnify and hold harmless Buyer, its directors, officers, employees,
affiliates and agents, and shall reimburse Buyer for, from and against each
claim, loss, diminution in value, damages, liability, cost and expense
(including, without limitation, interest, penalties, costs of preparation and
investigation, and the reasonable fees, disbursements and expenses of
attorneys, accountants and other professional advisors) (collectively,
"Losses"), directly or indirectly relating to, resulting from or arising out
of:

         (a)     Any untrue representation, misrepresentation, breach of
warranty or nonfulfillment of any covenant, undertaking, agreement or other
obligation by or of Seller contained herein, or in any certificate, schedule,
document or instrument delivered to Buyer pursuant hereto.

         (b)     Any other Loss incidental to any of the foregoing.

         9.02.   INDEMNIFICATION BY BUYER.  Buyer hereby agrees to defend,
indemnify and hold harmless Seller, its directors, officers, employees,
affiliates and agents, and shall reimburse Seller for, from and against Losses
directly or indirectly relating to, resulting from or arising out of:

         (a)     Any untrue representation, misrepresentation, breach of
warranty or nonfulfillment of any covenant, undertaking, agreement or other
obligation by Buyer contained herein or in any certificate, document or
instrument delivered to Seller pursuant hereto.

         (b)     Any other Loss incidental to the foregoing.

         9.03.   PROCEDURE.  (a) The indemnified party shall promptly notify
the indemnifying party of any claim, demand, action or proceeding for which
indemnification will be sought under Sections 9.01 or 9.02 of this Agreement
(but the failure to so notify shall not relieve the indemnifying party from its
obligations hereunder unless such failure irrevocably prejudices the
indemnifying party), and, if such claim, demand, action or proceeding is a
third party claim, demand, action or proceeding, the indemnifying party will
have the right at its expense to assume the defense thereof using counsel
reasonably acceptable to the indemnified party.  The indemnified party shall
have the right to participate, at its own expense, with respect to any such
third party claim, demand, action or proceeding.  In connection with any such
third party claim, demand, action or proceeding, Buyer and the Seller shall
cooperate with each other and provide each other with access to relevant books
and records in their possession.  No such third party





                                       12

   14

claim, demand, action or proceeding shall be settled without the prior written
consent of the indemnified party.  If a firm written offer is made to settle
any such third party claim, demand, action or proceeding and the indemnifying
party proposes to accept such settlement and the indemnified party refuses to
consent to such settlement, then:  (i) the indemnifying party shall be excused
from, and the indemnified party shall be solely responsible for, all further
defense of such third party claim, demand, action or proceeding; and (ii) the
maximum liability of the indemnifying party relating to such third party claim,
demand, action or proceeding shall be the amount of the proposed settlement if
the amount thereafter recovered from the indemnified party on such third party
claim, demand, action or proceeding is greater than the amount of the proposed
settlement.

         (b)     If the indemnified party reasonably determines (i) that there
may be a conflict between the positions of the indemnifying party and the
indemnified party in defending such claim or action, or (ii) that there may be
legal defenses available to such indemnified party different from or in
addition to those available to the indemnifying party, then separate counsel
for the indemnified party shall be entitled to participate in and conduct the
defense, or such different defenses, and the indemnifying party shall be liable
for any reasonable legal or other expenses incurred by the indemnified party in
connection with the defense.

         (c)     Judgments against and settlements entered into by the
indemnified party pursuant to Section 9.03(a) shall unconditionally release the
indemnifying party from liability for the particular claim, demand, action, or
proceeding for which indemnification was sought.


                                   ARTICLE X

                          SURVIVAL OF REPRESENTATIONS

         10.01.  SURVIVAL OF REPRESENTATIONS.  All representations, warranties,
covenants, indemnities and agreements by the parties contained in this
Agreement shall survive the Closing and any investigation at any time made by
or on behalf of any party hereto, and shall expire on the third anniversary of
the Closing Date.

         10.02.  STATEMENTS AS REPRESENTATIONS.  All statements contained in
any certificate, schedule, list, document or other writing delivered pursuant
hereto or in connection with the transactions contemplated hereby shall be
deemed representations and warranties for all purposes of this Agreement.

         10.03.  REMEDIES CUMULATIVE.  The remedies provided herein shall be
cumulative and shall not preclude the assertion by any party hereto of any
other rights or the seeking of any other remedies against the other party
hereto.




                                       13

   15

                                   ARTICLE XI

                            TERMINATION OF AGREEMENT

         11.01.  TERMINATION.  This Agreement may be terminated at any time
prior to the Closing:

         (a)     By Buyer, if there has been a material violation or breach by
the Seller of any of the agreements, representations or warranties contained in
this Agreement which has not been waived in writing, or if any of the
conditions set forth in Article VII hereof have not been satisfied by the
Closing or have not been waived in writing by Buyer.

         (b)     By Seller, if there has been a material violation or breach by
the Buyer of any of the agreements, representations or warranties contained in
this Agreement which has not been waived in writing, or if any of the
conditions set forth in Article VIII hereof have not been satisfied by the
Closing or have not been waived in writing by Seller.

         (c)     By either Buyer or Seller if the transactions contemplated by
this Agreement shall not have been consummated on or before August 15, 1995.

         (d)     By either Buyer or the Seller if the other makes an assignment
for the benefit of creditors, files a voluntary petition in bankruptcy or seeks
or consents to any reorganization or similar relief under any present or future
bankruptcy act or similar law, or is adjudicated a bankrupt or insolvent, or if
a third party commences any bankruptcy, insolvency, reorganization or similar
proceeding involving the other.

         11.02.  EFFECT OF TERMINATION.   In the absence of fraud or willful
breach on the part of Seller, or on the part of Buyer, then Seller will not
have any liability to Buyer, or Buyer will not have any liability to Seller, as
the case may be, under this Agreement if Seller or Buyer terminates this
Agreement pursuant to Section 11.01.


                                  ARTICLE XII

                                 MISCELLANEOUS

         12.01.  EXPENSES.  All fees and expenses incurred by Seller, including
without limitation, legal fees and expenses, in connection with this Agreement
will be borne by Seller and all fees and expenses incurred by Buyer, including,
without limitation, legal fees and expenses, in connection with this Agreement
will be borne by Buyer, provided, however, that Buyer shall be responsible for
all stamp duty which may be due to any jurisdiction or governmental entity as a
result of the Closing of the purchase of the Shares.




                                       14


   16

         12.02.  ASSIGNABILITY; PARTIES IN INTEREST.

         (a)     Buyer may assign any and all of its rights hereunder to any
affiliate of or any direct or indirect subsidiary of Buyer, and Buyer shall
advise Seller of any such assignment and shall designate such party as the
assignee and transferee of the securities purchased.  Any such assignee shall
assume all of Buyer's duties, obligations and undertakings hereunder, but the
assignor shall remain liable thereunder.

         (b)     Seller may not assign, transfer or otherwise dispose of any of
its rights hereunder without the prior written consent of Buyer.

         (c)     All the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be enforceable by the
respective heirs, successors, assigns and legal or personal representatives of
the parties hereto.

         12.03.  ENTIRE AGREEMENT; AMENDMENTS.  This Agreement, including the
exhibits, schedules, lists and other documents and writings referred to herein
or delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter.  There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein.  This Agreement supersedes
all prior agreements and undertakings between the parties with respect to its
subject matter.  This Agreement may be amended only by a written instrument
duly executed by all parties or their respective heirs, successors, assigns or
legal personal representatives.  Any condition to a party's obligations
hereunder may be waived, but only by a written instrument signed by the party
entitled to the benefits thereof.  The failure or delay of any party at any
time or times to require performance of any provision or to exercise its rights
with respect to any provision hereof, shall in no manner operate as a waiver of
or affect such party's right at a later time to enforce the same.

         12.04.  HEADINGS.  The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretations of this Agreement.

         12.05.  SEVERABILITY.  The invalidity of any term or terms of this
Agreement shall not affect any other term of this Agreement, which shall remain
in full force and effect.

         12.06.  NOTICES.  All notices, request, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered or mailed (registered or certified mail, postage
prepaid, return receipt requested) as follows:





                                       15


   17

         If to Seller:

         Corrections Corporation of America
         102 Woodmont Boulevard, Suite 800
         Nashville, Tennessee  37205
         Attn:  Doctor R. Crants
         With a copy to:

         Elizabeth E. Moore, Esq.
         Stokes & Bartholomew, P.A.
         424 Church Street, Suite 2800
         Nashville, Tennessee  37219

         If to Buyer:

         Sodexho S.A.
         3, avenue Newton
         78180 Montigny-le-Bretonneux
         FRANCE
         Attn:  Jean-Pierre Cuny

         With a copy to:

         Ropes & Gray
         One International Place
         Boston, MA  02110
         Attn:  Howard K. Fuguet, Esq.

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.

         12.07.  GOVERNING LAW.  This Agreement shall be governed by and be
interpreted under the laws of Queensland without regard to the conflicts of law
principles thereof.  Each party hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court located in Queensland over any
action or proceeding to enforce any right under this Agreement.  The parties
further acknowledge that irrevocable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  Accordingly, the parties shall be
entitled to an injunction to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court in Queensland.  This being in addition to any other remedy to which they
may be entitled at law or equity.

         12.08.  COUNTERPARTS.  This Agreement may be executed simultaneously
in one or more counterparts, with the same effect as if the signatories
executing the several counterparts had





                                       16


   18

executed one counterpart, provided, however, that the several executed
counterparts shall together have been signed by Buyer and the Seller.  All such
executed counterparts shall together constitute one and the same instrument.

         12.09.  DISPUTE RESOLUTION.

         (a)     Any party to this Agreement claiming that a dispute has arisen
in connection with the negotiation, execution, interpretation, performance or
nonperformance of this Agreement between any of the parties to this Agreement
shall give notice to the other party in dispute designating as its
representative in negotiations relating to the dispute a person with authority
to settle the dispute and the other party given written notice shall promptly
give notice in writing to the first party designating as its representative in
negotiations relating to the dispute a person with similar authority.

         (b)     The designated persons shall within 10 days of the last
designation required by subsection (a), following whatever investigations each
deems appropriate, seek to resolve the dispute.

         (c)     If the dispute is not resolved within the following 10 days
(or within such further period as the representatives may agree is appropriate)
the parties hereto agree that such dispute shall be solely and finally settled
by arbitration in accordance with the international rules of the International
Chamber of Commerce.  All such proceedings shall be conducted in Geneva,
Switzerland.

         (d)     The parties acknowledge that the purpose of any exchange of
information or documents or the making of any offer of settlement pursuant to
this Section is to attempt to settle the dispute between the parties.  No party
may use any information or documents obtained through the dispute resolution
process established by this Section for any purpose other than in an attempt to
settle a dispute between that party and the other party to this Agreement.

         (e)     After the expiration of the time established by this Section
for agreement on a dispute resolution process, any party which has complied
with the provisions of this Section may in writing terminate the dispute
resolution process provided for in this Section and may then commence Court
proceedings relating to the dispute.





                                       17

   19

         IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of Buyer and by the Seller on the
date first above written.

                                           BUYER:

                                           SODEXHO S.A.


                                           By:                                 
                                              ---------------------------------
                                           Title:                              
                                                 ------------------------------

                                           SELLER:

                                           CORRECTIONS CORPORATION OF AMERICA


                                           By:                                 
                                              ---------------------------------
                                           Title:                              
                                                 ------------------------------




                                       18


   20

                                  SCHEDULES TO

                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                       CORRECTIONS CORPORATION OF AMERICA

                                      AND

                                  SODEXHO S.A.




                            DATED AS OF JUNE 9, 1995







   21

                                 SCHEDULE 4.08

                                  SUBSIDIARIES


1.       Corrections Corporation of New Zealand Limited.

2.       Excor Investments Pty. Ltd. A.C.N. 011 043 002.

3.       Viccor Investments Pty. Ltd. A.C.N. 068 569 120.





   22

                                SCHEDULE 4.09

                                 LITIGATION


                                     None.





   23

                                 SCHEDULE 4.10

             ASSETS TO WHICH THE COMPANY DOES NOT HAVE CLEAR TITLE


                                     None.










   24

                                SCHEDULE 4.14

                             MATERIAL CONTRACTS


1.       Contract (CCA) with the Government of the State of Queensland for the
         management of the Borallon Prison.  The Contract runs for the period
         1st April 1995 to the 31st March 2000.

2.       Contract (CCA) with the Government of the State of Victoria for the
         provision of transport and escort services of inmates to and from and
         in the Geelong Courts, Victorian County Courts; the security of prison
         inmates in St. Augustine's Ward of St. Vincent's Hospital, Melbourne.
         This Contract runs for the period 1st July 1994 to the 30th June 1997
         and has 2 option provisions (in favour of CCA) for 3 years each.

3.       Contract (Viccor) with the Government of the State of Victoria for the
         design, construction, ownership, finance and management of a 125 bed
         women's correctional centre at Melton, Victoria.  Under this Contract
         construction commenced on the 5th June 1995 and is to be completed by
         the 30th June 1996.  The correctional centre is to commence operations
         on the 1st July 1996.  The Contract for the management of the centre
         runs for a period of 5 years commencing on the 1st July 1996 and has 5
         options (in favour of CCA's subsidiary Excor Investments Pty.  Ltd.)
         of 3 years each.  The Contract with the Government of the State of
         Victoria for the women's correctional centre provides for CCA's
         subsidiary Excor Investments Pty. Ltd. to lease the land at Melton for
         a period of 40 years; to construct a prison on that land; and for
         CCA's subsidiary to provide a prison for the Government of the State
         of Victoria for a period of up to 20 years.

4.       And as follows:

         (a)     Prison Services Agreement (5/6/95)
         (b)     Ground Lease (5/6/95)
         (c)     Tripartite Agreement (5/6/95)
         (d)     Accommodation Services Support Agreement (5/6/95)
         (e)     Project Facility Agreement (5/6/95)
         (f)     Equity Support Agreement (5/6/95)

EX-10.144

   1

                                                 EXHIBIT 10.144



                            STOCK PURCHASE AGREEMENT

                                    BETWEEN

                                  SODEXHO S.A.

                                      AND

                       CORRECTIONS CORPORATION OF AMERICA

                           DATED AS OF JUNE 29, 1995




   2

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT, dated as of June 29, 1995, between
Sodexho S.A., a French corporation or its designee (the "Purchaser"), and
Corrections Corporation of America, a Delaware corporation (the "Company").

                              W I T N E S S E T H:

         WHEREAS, the Company and the Purchaser are parties to a Stockholders
Agreement dated June 23, 1994, (the "Stockholders Agreement") pursuant to which
the Purchaser is entitled to participate in future offerings by the Company of
its securities; and

         WHEREAS, on April 25, 1995, the Company issued 1,362,496 shares of
common stock of the Company in exchange for all of the outstanding shares of
Concept Incorporated in a share exchange; and

         WHEREAS, as a result of such issuance by the Company of its securities
and in accordance with Section 9 of the Stockholders Agreement, on May 12,
1995, the Purchaser exercised its right to purchase from the Company 272,500
shares of the Company's Common Stock, $1.00 par value per share (the Common
Stock"); and

         WHEREAS, the Purchaser and the Company are entering into this
Agreement to provide for such purchase and sale and to establish various rights
and obligations in connection therewith.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto agree as follows:

         1.      Purchase and Sales of Shares.  Upon the terms set forth
herein, the Company agrees to sell to the Purchaser and the Purchaser agrees to
purchase from the Company an aggregate of 272,500 shares of Common Stock (the
"Shares") at a purchase price of $30.50 per share for an aggregate purchase
price of $8,311,250 (the "Purchase Price").

         2.      Closing.

                 2.1      Closing Date.  The closing (the "Closing") of the
purchase and sale of the Shares shall take place on June 29, 1995 at the
offices of the Company or at such other time and place as the parties hereto
mutually agree.

                 2.2      Obligations at Closing.  At the closing of the
purchase and sale of the Shares (the "Closing"):

                 (i)      the Company shall deliver to the Purchaser a stock
         certificate in definitive form registered in the name of the Purchaser
         representing the Shares being purchased by it pursuant hereto; and


   3



                 (ii)     the Purchaser shall concurrently pay to the Company
         the Purchase Price by wire transfer of immediately available funds.

         3.      Representations and Warranties of the Company.  The Company
represents and warrants as of the date hereof as follows:

                 3.1      Organization and Qualification.  Each of the Company
and its subsidiaries is a corporation duly organized and existing in good
standing under the laws of the jurisdiction in which it is incorporated and has
the power to own its respective property and to carry on its respective
business as now being conducted.  Each of the Company and its subsidiaries is
duly qualified as a foreign corporation to do business and in good standing in
every jurisdiction in which the nature of the respective business conducted or
property owned by it makes such qualification necessary and where the failure
so to qualify would have a material adverse effect on the business or financial
position of the Company and its subsidiaries taken as a whole.

                 3.2      Due Authorization.  The execution and delivery of
this Agreement (i) are within the corporate power and authority of the Company;
(ii) do not require the approval or consent of any stockholders of the Company;
and (iii) have been authorized by all requisite corporate proceedings on the
part of the Company.  This Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding agreement of the Company
enforceable in accordance with its respective terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.

                 3.3      SEC Reports.  (a)  The Company has filed in a timely
manner with the Securities and Exchange Commission (the "SEC") all proxy
statements, reports, and other documents required to be filed by it under the
Exchange Act, including its Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 (collectively, the "SEC Reports").  Each SEC Report was
in substantial compliance with the requirements of its respective report form
and did not on the date of filing contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which there were made, not misleading.

                          (b)  The financial statements (including any related
schedules and/or notes) included in the SEC Reports have been prepared in
accordance with generally accepted accounting principles consistently followed
(except as indicated in the notes thereto) throughout the periods involved and
fairly present the consolidated financial condition, results of operations and
changes in stockholders' equity of the Company and its subsidiaries as of the
dates thereof and for the periods ended on such dates (in each case subject, as
to interim statements, to changes resulting from normal year-end audit
adjustments (none of which will be material in amount or effect)), and the
Company has no material liabilities, contingent or otherwise, not reflected in
the balance sheet as of December 31, 1994 included in the SEC Reports or
otherwise referred to in



                                       2




   4

the SEC Reports or otherwise disclosed to the Purchaser in writing prior to the
execution by the Purchaser of this Agreement, other than any such liabilities
incurred in the ordinary course of business since December 31, 1994.  There has
been no material adverse change in the business, prospects, condition or
operations (financial or otherwise) of the Company and its subsidiaries taken
as a whole from that set forth in the SEC Reports, other than changes disclosed
or referred to in the SEC Reports or otherwise disclosed to the Purchaser in
writing prior to the execution by the Purchaser of this Agreement.

                 3.4      Actions Pending; Compliance with Law.  There is no
action, suit, investigation, proceeding claim or penalty pending or, to the
knowledge of the Company, threatened by any public official or governmental
authority or agency, against the Company or any of its properties or assets by
or before any court, arbitrator or governmental body, department, commission,
board, bureau, agency or instrumentality, which questions the validity of this
Agreement, or the Shares or any action taken or to be taken pursuant hereto or
thereto, or, except as set forth in the SEC Reports, which are reasonably
likely to result in any material adverse change in the business, prospects or
financial condition of the Company.

                 3.5      Conflicts.  Except as set forth on Schedule 3.5
hereto, neither the execution and delivery of this Agreement, and the issuance
of the Shares nor fulfillment of or compliance with the terms and provisions
hereof, will conflict with or result in a breach of the terms, conditions or
provisions of, or give rise to a right of termination under, or constitute a
default under, or result in any violation of, the Certificate of Incorporation
or Bylaws of the Company or any mortgage, agreement, security, instrument,
order, judgment, decree, statute, law, rule or regulations to which the Company
or any of its subsidiaries or any of their respective property is subject.
Neither the Company nor any of its subsidiaries is in default under any
outstanding indenture or other debt instrument or with respect to the payment
of the principal of or interest on any outstanding obligations for borrowed
money, is in default under any of their respective contracts or agreements, or
under any instrument by which the Company or any of its subsidiaries is bound,
in each case which materially and adversely affects the business, operations or
condition (financial or otherwise) of the Company and its subsidiaries taken as
a whole.

                 3.6      Capitalization.  The authorized capital stock of the
Company consists of (a) 50,000,000 shares of Common Stock, of which, as of the
date hereof, 14,924,475 shares are outstanding and 63,356 shares are held in
its treasury; and (b) 1,000,000 shares of preferred stock, $1.00 par value, and
as the date hereof, no shares of which are issued and outstanding; all of such
outstanding shares have been validly issued and are fully paid and
nonassessable.  No class of capital stock of the Company is entitled to
preemptive rights.  The Company has no contractual obligations with respect to
preemptive rights other than those previously granted to the Purchaser.  Except
for the convertible notes, options and warrants listed on Schedule 3.6 hereto,
there are no outstanding options, warrants, convertible notes, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, shares of any capital stock of the
Company, or contracts, commitments, understandings, or arrangements by which
the Company is or may become bound to issue additional shares of its capital
stock or options, warrants or rights to purchase or acquire any shares of its
capital stock.





                                       3


   5

Since May 26, 1995, the Company has not changed the amount of its authorized
capital stock or subdivided or otherwise changed any shares of any class of its
capital stock, whether by way of reclassification, recapitalization, stock
split or otherwise, or issued or reissued, or agreed to issue or reissue, any
of its capital stock, except as disclosed in this Section 3.6 and has not since
such date declared or paid any dividend in cash or stock or made any other
distribution of assets to its stockholders.  Except as disclosed in Schedule
3.6(b) hereto and Schedule 4.12 of that certain Securities Purchase Agreement
dated June 23, 1994 by and between the Company and the Purchaser, there are no
existing rights with respect to registration under the Securities Act of 1933,
as amended, of any of the Company's capital stock.

                 3.7      Disclosure.  Neither this Agreement nor the SEC
Reports nor the financial statements included in the SEC Reports nor any
certificate or written disclosure statement referred to herein and furnished to
the Purchaser by or on behalf of the Company in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading.  There is no fact
peculiar to the Company or any of its subsidiaries which the Company has not
disclosed to Purchaser in writing which materially affects adversely or, so far
as the Company can now reasonably foresee, will materially affect adversely the
properties, business, or condition (financial or otherwise) or contracts of the
Company and its subsidiaries taken as a whole or the ability of the Company to
perform this Agreement, or its obligations in respect of the Shares.

                 3.8      Governmental Consents, Etc.  The Company is not
required to obtain any consent, approval, or authorization of, or to make any
declaration or filing with, any governmental authority as a condition to or in
connection with the valid execution, delivery, and performance of this
Agreement and the valid offer, issue, sale or delivery of the Shares, or the
performance by the Company of its obligations in respect thereof, except for
the filing of (i) a Supplemental Listing Application with the New York Stock
Exchange and (ii) a notification under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") (and any extension
thereof), and any filings required pursuant to state and federal securities
laws which will be timely made after the Closing hereunder.

                 3.9      Status of Shares.  The Shares being issued on the
date hereof have been duly authorized by all necessary corporate action on the
part of the Company (no consent or approval of stockholders being required by
law, the Certificate of Incorporation or the By-laws of the Company or
otherwise), and such Shares, upon Closing, will be validly issued, fully paid
and nonassessable.

                 3.10     Offering of Shares.  The offer, issuance, and sale by
the Company to the Purchaser of the Shares are exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act") and have been, or will be as of Closing, registered or
qualified (or are, or will be as of the Closing, exempt from registration and
qualification) under the registration, permit, or qualification requirements of
all applicable state blue sky and securities laws.





                                       4


   6

                 3.11     Brokers or Finders.  No agent, broker, investment
banker, or other firm or person, including any of the foregoing that is an
affiliate of the Company is or will be entitled to any broker's fees or any
other commission or similar fee from the Company in connection with any of the
transactions contemplated by this Agreement.

         4.      Representations and Warranties of the Purchaser.  The
Purchaser represents and warrants as of the date hereof as follows:

                 4.1      Organization and Qualification.  Purchaser is a
societe anonyme duly organized, validly existing and in good standing under the
laws of France.

                 4.2      Due Authorization.  The Purchaser has all right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.  The execution and delivery of this Agreement
by the Purchaser and the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary action on behalf
of the Purchaser.  This Agreement has been duly executed and delivered by the
Purchaser and constitutes a valid and binding agreement of the Purchaser
enforceable in accordance with its terms, except that (i) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.

                 4.3      Conflicting Agreements and Other Matters.  Neither
the execution and delivery of this Agreement nor the performance by the
Purchaser of its obligations hereunder will conflict with, result in a breach
of the terms, conditions, or provisions of, constitute a default under, result
in the creation of any mortgage, security interest, encumbrance, lien, or
charge of any kind upon any of the properties or assets of the Purchaser
pursuant to, or require any consent, approval, or other action by or any notice
to or filing with any court or administrative or governmental body pursuant to,
the organizational documents or agreements of the Purchaser or any agreement,
instrument, order, judgment, decree, statute, law, rule, or regulation by which
the Purchaser is bound, except for (i) notification filing under the HSR Act,
and (ii) filings after the Closing under Sections 13(d) and 16(a) of the
Securities Exchange Act of 1934, as amended.

                 4.4      Acquisition for Investment; Source of Funds.  (a) The
Purchaser is acquiring the Shares being purchased by it for its own account for
the purpose of investment and not with a view to or for sale in connection with
any distribution thereof, and the Purchaser has no present intention or plan to
effect any distribution of the Shares.

                 (b)      The Purchaser will acquire the Shares for its own
account for the purpose of investment and not in conjunction with any person,
directly or indirectly, and not with a view to exercising control over the
Company, or merging or otherwise combining the Company with any other person or
effecting any change in the corporate structure of the Company or the manner in
which the Company conducts its business.





                                       5


   7


                 4.5      Brokers or Finders.  No agent, broker, investment
banker, or other firm or person, including any of the foregoing that is an
affiliate of the Purchaser, is or will be entitled to any broker's fees or any
other commission or similar fee from the Purchaser in connection with any of
the transactions contemplated by this Agreement.

                 4.6      Accredited Investor.  The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the Securities Act.

         5.      Miscellaneous.

                 5.1      Applicability of Provisions of Securities Purchase
Agreement.  Except as expressly set forth in this Agreement, all agreements,
covenants, undertakings, provisions, stipulations, and promises contained in
that certain Securities Purchase Agreement (the "Securities Purchase
Agreement") by and between the parties hereto, dated June 23, 1994 (including
the documents set forth in the exhibits thereto) and the Stockholders Agreement
shall be applicable to the purchase of the Shares by the Purchaser.  Except as
provided by this Agreement, or unless the context or use indicates another or
different meaning or intent, defined words and terms used in this Agreement
shall have the same meaning as in the Securities Purchase Agreement and the
Stockholders Agreement.

                 5.2      Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.  It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.

                 5.3      Counterparts.  This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the counterparts have
been signed by each party and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.

                 5.4      Notices.  All notices, consents, requests,
instructions, approvals and other communications provided for herein shall be
validly given, if in writing and delivered personally, by telecopy or sent by
registered mail, postage prepaid, if to:

                 The Company:

                 Corrections Corporation of America
                 102 Woodmont Boulevard, Suite 800
                 Nashville, Tennessee  37205
                 Attention:  Doctor R. Crants



                                       6


   8


                 With a copy to:

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

                 Purchaser:

                 Sodexho S.A.
                 3 avenue Newton
                 78180 Montigny-le-Bretonneux
                 FRANCE
                 Attention:  Bernard Carton

                 With a copy to:

                 Ropes & Gray
                 One International Place
                 Boston, Massachusetts  02110
                 Attention:  Howard K. Fuguet, Esq.

or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.

                 5.5      Amendments.  This Agreement may not be waived,
changed, modified, or discharged orally, but only by an agreement in writing
signed by the party or parties against whom enforcement of any waiver, change,
modification or discharge is sought or by parties with the right to consent to
such waiver, change, modification or discharge on behalf of such party.

                 5.6      Cooperation.  The Purchaser and the Company agree to
take, or cause to be taken, all such further or other actions as shall
reasonably be necessary to make effective and consummate the transactions
contemplated by this Agreement.

                 5.9      Successors and Assigns.  All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.

                 5.10     Survival of Representations and Warranties.  All
representations and warranties contained herein or made in writing by any party
in connection herewith other than those contained in Section 3.9 hereof shall
survive the execution and delivery of this Agreement and shall terminate upon
the issuance and delivery of the Shares.  The representations contained in
Section 3.9 hereof shall expire upon the expiration of the applicable statute
of limitations.

                 5.11     Delivery of Legal Opinion.  At the Closing, the
Company shall deliver the legal opinion of its counsel, Stokes & Bartholomew,
P.A. in form acceptable to the Purchaser.





                                       7


   9


                 5.12     Transfer of Shares.  (a) The Purchaser understands
and agrees that Shares have not been registered under the Securities Act of
1933, as amended (the "Securities Act") or the securities laws of any state and
that they may be sold or otherwise disposed of only in one or more transactions
registered under the Securities Act and, where applicable, such laws or as to
which an exemption from the registration requirements of the Securities Act
and, where applicable, such laws are available.  The Purchaser and the Company
agree that (i) the Shares shall be subject to and entitled to the benefits of
the terms and conditions of that certain Registration Rights Agreement dated
June 23, 1994 by and between the Purchaser and the Company (the "Registration
Rights Agreement"), (ii) the Shares are Registrable Securities as defined in
the Registration Rights Agreement, and (iii) the Shares shall be entitled to
the registration rights granted to the former shareholders of TransCor America,
Inc. and/or Concept Incorporated.  The Purchaser acknowledges that, except as
provided in the Registration Rights Agreement, the Purchaser has no right to
require the Company to register the Shares.  The Purchase understands and
agrees that each certificate representing the Shares shall bear the following
legends:

                          "THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
                 CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
                 OFFICES OF THE CORPORATION."

                          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
                 NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
                 SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
                 DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
                 STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
                 OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
                 SUCH ACT OR SUCH LAWS."


                 5.13     Governing Law.  This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
Delaware.  The Company and the Purchaser each hereby irrevocably submit to the
jurisdiction of said Court and agree that neither will sue in connection with
any matter covered under this Agreement in any other court.  The English
language version of all documents related to the transactions contemplated
hereby will govern.

                 5.14     Publicity.  Each of the parties hereto agrees that it
will make no statement regarding the transactions contemplated hereby without
mutual consent.  Notwithstanding the foregoing, each of the parties hereto may,
in documents required to be filed by it with the SEC or other regulatory
bodies, make such statements with respect to the transactions contemplated
hereby as each may be advised is legally necessary upon advice of its counsel.

                 5.15     Expenses.  Except as otherwise provided herein, each
of the parties shall be responsible for their own expenses relating to the
transactions contemplated hereby.




                                       8


   10

                 IN WITNESS WHEREOF, the Purchaser and the Company have caused
         this Agreement to be duly executed and delivered, all as of the day
         and year first above written.

                                        SODEXHO S.A.



                                        By:                             
                                            --------------------------  
                                        Its:                            
                                            --------------------------  


                                        CORRECTIONS CORPORATION OF AMERICA


                                        By:                             
                                            --------------------------  
                                        Its:                            
                                            --------------------------  




                                       9

EX-10.145

   1

                                                             EXHIBIT 10.145

                                AMENDMENT NO. 1
                                       TO
                         SECURITIES PURCHASE AGREEMENT


         THIS AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT (this
"Amendment"), dated as of July 11, 1995, is entered into by and among Sodexho
S.A., a French corporation ("Purchaser") and Corrections Corporation of
America, a Delaware corporation (the "Corporation").

                                R E C I T A L S:

         WHEREAS, the Corporation and the Purchaser are parties to that certain
Securities Purchase Agreement, dated as of June 23, 1994 (the "Agreement"); and

         WHEREAS, the parties desire to amend the Agreement with regard to the
interest rate on the 8.75% Notes (as referred to therein) and the timing of the
purchase of such 8.75% Notes by the Purchaser on the terms and conditions set
forth herein.

                               A G R E E M E N T:

         NOW, THEREFORE, in consideration of the foregoing and subject to the
terms and conditions herein contained, the parties hereto agree as follows:

         SECTION 1.  Definitions.

         1.1.  General.  Initially capitalized terms used in this Amendment
shall have the meanings ascribed thereto in the Agreement, as amended hereby,
unless otherwise defined herein.

         1.2.  Floating Rate.  Section 6 of the Agreement is hereby amended to
include the following definition of Floating Rate:

                 "Floating Rate" means the six (6) month London Interbank
         Offered Rate (LIBOR) as reported each day in The Wall Street Journal
         plus 135 basis points or 1.35%, calculated on a daily basis.  The
         Floating Rate Note shall bear interest at the Floating Rate from the
         date such Floating Rate Note is issued to the date the principal
         hereof is paid or made available for payment or upon conversion of
         such principal portion of the Floating Rate Note in accordance
         therewith.  Interest on the Floating Rate Note shall be computed on
         the daily principal balance at the Floating Rate.  The Floating Rate
         shall be calculated upon the issuance of such note and shall be
         recalculated upon each Interest Payment Date (as defined in the
         Floating Rate Note) for the following six-month period.  In computing
         interest on the Floating Rate Note, the date of issuance of such note
         shall be included and the date of payment shall be excluded: provided
         that if the note is repaid on the same day on which it is issued, one
         day's interest shall be paid on the note."


   2

         SECTION 2.         Amendments to the Agreement.

         2.1.  Amendment to Terms.  All references in the Agreement to the
8.75% Notes shall be deleted and such Notes shall hereinafter be referred to as
the "Floating Rate Notes".

         2.2.  Amendment of Section 1.8 of the Agreement.  Section 1.8 of the
Agreement is hereby amended by deleting such Section in its entirety and
inserting in its place the following new Section 1.8.

                 "1.8.  Right to Purchase Floating Rate Note.  The Company has
         authorized the grant to Purchaser of the right to purchase up to $20
         million aggregate principal amount Floating Rate Convertible
         Subordinated Notes, in the form of Exhibit E hereto (the "Floating
         Rate Note", and together with the Shares, the 8.5% Note and the
         Warrants, the "Securities"), on the terms and conditions set forth in
         Section 2 hereto."

         2.3.  Amendment of Section 2 of the Agreement.  Section 2 of the
Agreement is hereby amended by deleting such Section in its entirety and
inserting in its place the following new Section 2.

                 "2.  Right to Purchase Securities.

                 2.1.  Right to Purchase Floating Rate Notes.  Subject to the
         terms and conditions set forth below, at any time during the period
         beginning September 30, 1995 and ending December 31, 1997, the
         Purchaser will have the right to purchase up to $10 million aggregate
         principal amount Floating Rate Notes convertible at the conversion
         price of $27.30.  Subject to the terms and conditions set forth below,
         at any time during the period beginning February 15, 1996 and ending
         December 31, 1997, the Purchaser will have the right to purchase up to
         $10 million aggregate principal amount Floating Rate Notes convertible
         at the conversion price of $27.30 (collectively, the "Rights").

                 The Floating Rate Notes shall be converted in no more than
         three increments.  All conversions of the Floating Rate Notes shall be
         on such other terms and conditions as set forth in Exhibit D hereto.

                 (a)  To exercise the Rights, the Purchaser shall deliver to
         the Company (i) a notice of exercise duly executed by the Purchaser
         specifying the aggregate principal amount of Floating Rate Notes to be
         purchased (the "Notice of Exercise") and (ii) an amount equal to the
         principal amount for all of the Floating Rate Notes as to which the
         Rights are then being exercised (the "Exercise Price").  At the option
         of the Purchaser, payment of the Exercise Price shall be made by (i)
         wire transfer of funds to an account in a bank designated by the
         Company for such purpose, or (ii) certified or official bank check
         payable to the order of the Company, or (iii) by any combination of
         such methods.

                 (b)  Upon receipt of the required deliveries by the Purchaser
         and satisfaction of the conditions set forth in Section 11 hereof, the
         Company shall at





                                       2


   3



         a Subsequent Closing within five days after receipt of the Notice of
         Exercise, cause to be issued and delivered to the Purchaser Floating
         Rate Notes in an aggregate principal amount equal to that specified in
         the Notice of Exercise.  Such Floating Rate Notes shall be registered
         in the name of the Purchaser.

                 (c)  Purchaser may, prior to any Subsequent Closing, if the
         conditions specified in Section 11 have not been fulfilled, in a
         written notice to the Company, withdraw the Notice of Exercise and the
         Company shall repay to the Purchaser the Exercise Price plus interest
         at a rate of the Floating Rate for the period beginning on the date of
         the Notice of Exercise and ending on the date of such repayment within
         three days of the withdrawal of the Notice of Exercise.

                 2.2.  Effectiveness of Exercise.  Unless otherwise requested
         by the Purchaser, the Rights shall be deemed to have been exercised
         and the Floating Rate Notes shall be deemed to have been issued, and
         the Purchaser shall be deemed to have become the holder of record of
         the Floating Rate Notes for all purposes, as of the close of business
         on the date the Notice of Exercise, together with payment of the
         Exercise Price, is received by the Company."

         SECTION 3.  Effectiveness of this Amendment.

         This Amendment shall become effective upon the execution and delivery
of this Amendment by the Purchaser and the Corporation.

         SECTION 4.  Representations and Warranties of the Corporation.

         In order to induce the Purchaser to enter into this Amendment, the
Corporation hereby makes the following representations and warranties to the
Purchaser:

         4.1.  Corporate Power and Authorization.  The Corporation has the
requisite corporate power and authority to execute, deliver and perform its
obligations under this Amendment.

         4.2.  No Conflict.  Neither the execution and delivery by the
Corporation of this Amendment nor the consummation of the transactions
contemplated or required hereby nor compliance by the Corporation with the
terms, conditions and provisions hereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the Certificate of
Incorporation or Bylaws of the Corporation or any law, regulation, order, writ,
injunction or decree of any court or governmental instrumentality or any
agreement or instrument to which the Corporation is a party or by which any of
its properties is bound, or constitute a default thereunder or result in the
creation or imposition of any lien.

         4.3.  Authorization; Governmental Approvals.  The execution and
delivery by the Corporation of this Amendment and the consummation of the
transactions contemplated hereby (i) have been duly authorized by all necessary
corporate action on the part of the Corporation and (ii) do not and will not
require any authorization, consent, approval or license from or any




                                       3


   4

registration, qualification, designation, declaration or filing with, any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.

         4.4.  Valid and Binding Effect.  This Amendment has been duly and
validly executed and delivered by the Corporation and constitutes the legal,
valid and binding obligation of the Corporation, enforceable in accordance with
its terms.

         4.5.  Absence of Default.  No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default under the Agreement.

         SECTION 5.  Miscellaneous.

         5.1.  Amendment to Agreement.  The Agreement is hereby, and shall
henceforth be deemed to be, amended, modified and supplemented in accordance
with the provisions hereof, and the respective rights, duties and obligations
under the Agreement shall hereafter be determined, exercised and enforced under
the Agreement, as amended, subject in all respects to such amendments,
modifications, and supplements and all terms and conditions of this Amendment.

         5.2.  Ratification of the Agreement.  Except as expressly set forth in
this Amendment, all agreements, covenants, undertakings, provisions,
stipulations, and promises contained in the Agreement and the Securities are
hereby ratified, readopted, approved, and confirmed and remain in full force
and effect.

         5.3.  No Implied Waiver.  The execution, delivery and performance of
this Amendment shall not, except as expressly provided herein, constitute a
waiver or modification of any provision of, or operate as a waiver of any
right, power or remedy of the Purchaser under, the Agreement or prejudice any
right or remedy that the Purchaser may have or may have in the future under or
in connection with the Agreement or any instrument or agreement referred to
therein.  The Corporation acknowledges and agrees that the representations and
warranties of the Corporation contained in the Agreement and in this Amendment
shall survive the execution and delivery of this Amendment and the
effectiveness hereof.

         5.4.  Governing Law.  This Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware.
The English language version of all documents relating to the transactions
contemplated hereby will govern.

         5.5.  Counterparts; Telecopy Execution.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Amendment by facsimile
shall be equally as effective as delivery of a manually executed counterpart.
Any party delivering an executed counterpart of this Amendment by facsimile
shall also deliver a manually executed counterpart, but the failure to deliver
a manually executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.




                                       4


   5

         IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized officers as of the date first written above.



                                        SODEXHO S.A.



                                        By:                          
                                            ------------------------------
                                        Its:                         
                                            ------------------------------

                                        CORRECTIONS CORPORATION OF AMERICA

                                        By:                          
                                            ------------------------------
                                        Its:                         
                                            ------------------------------








                                       5

EX-10.146

   1
                                                                 EXHIBIT 10.146




                    AMENDED  AND  RESTATED  LOAN  AGREEMENT
                    

                         DATED  AS  OF  JULY  13,  1995


                                    BETWEEN


                     CORRECTIONS  CORPORATION  OF  AMERICA


                                      AND


                  FIRST  UNION  NATIONAL  BANK  OF  TENNESSEE







   2

                    AMENDED  AND  RESTATED  LOAN  AGREEMENT

                         Dated  as  of  July  13,  1995


                 THIS  AMENDED  AND  RESTATED  LOAN  AGREEMENT  (the
"Agreement") is  entered into by  and between CORRECTIONS CORPORATION OF
AMERICA,  a Delaware corporation  with its principal offices at 102
Woodmont Boulevard, Suite 800, Nashville, Tennessee 37205 (the
"Borrower"), TRANSCOR AMERICA, INC., a Tennessee corporation,  TECHNICAL
& BUSINESS INSTITUTE OF AMERICA, INC., a Michigan corporation, and
CONCEPT, INCORPORATED,  a  Delaware  corporation  (individually  a  "Guarantor"
and  collectively,  the  "Guarantors"),  and FIRST  UNION  NATIONAL  BANK  OF
TENNESSEE,  a  national  banking  association  with  offices  located  at  150
Fourth Avenue  North,  Nashville,  Tennessee    37219  (the  "Lender").

                                   BACKGROUND

                 Borrower  and  Lender  are  currently  parties  to  a  certain
Amended  and  Restated  Loan  Agreement dated  as  of  December  22,  1992,
between  the  Borrower  and  the  Lender,  as  amended  from  time  to  time
(the "Loan  Agreement").    The  Loan  Agreement  provides  for  a  line  of
credit  in  favor  of  Borrower  in  an  amount not  to  exceed  $15,000,000
to  be  used  for  working  capital  and  to  provide  for  the  issuance  of
standby letters  of  credit.    In  addition,  Lender  has,  from  time  to
time,  entered  into  other  agreements  with  the Borrower  with  respect  to
specific  loans  from  Lender  to  Borrower,  including  without  limitation,
the Construction  Loan  and  Security  Agreement  dated  as  of  February  23,
1994,  between  Borrower  and  Lender related  to  the  correctional  facility
located  in  Florence,  Pinal  County,  Arizona  (the  "Construction  Loan
Agreement").

                 It  is  the  intention  of  Lender  and  Borrower  hereunder
to  amend  and  restate  the  Loan Agreement  to  provide  for  an  increase
in  the  working  capital  line  of  credit  facility  to  $25,000,000  to
provide  working  capital  for  the  Borrower  and  the  Guarantors,  to
adopt,  eliminate,  expand  or  otherwise modify  various  other  provisions
contained  in  the  Loan  Agreement,  and  to  provide  such  other  terms  and
conditions  as  are  set  forth  herein.    It  is  the  intent  of  Borrower
and  Lender  that  this  Agreement  shall supersede  and  replace,  in  all
respects,  the  Loan  Agreement  and  the  Construction  Loan  Agreement,  and,
upon execution  of  this  Agreement,  the  Loan  Agreement  and  the
Construction  Loan  Agreement  shall  be  of  no further  force  and  effect.

                 The  funds  available  under  the  line  of  credit  will
directly  benefit  the  Guarantors,  and, consequently,  the  Guarantors  have
agreed  to  guarantee  the  repayment  of  the  obligations  of  the  Borrower
under  this  Agreement.

                           A  G  R  E  E  M  E  N  T

                 In  consideration  of  the  premises,  and  for  other  good
and  valuable  consideration,  the receipt  and  sufficiency  of  which  is
hereby  acknowledged,  Borrower  and  Lender  hereby  amend  and  restate  the
Loan  Agreement  as  follows:






                                     -1-


   3


                                   ARTICLE  1

                                  DEFINITIONS

                 Section  1.1.    Definitions.    For  the  purposes  of  this
                                  Agreement:


                 "Affiliate"  means,  with  respect  to  a  person,  any  other
person  (a)    that  directly  or indirectly  through  one  or  more
intermediaries,  controls,  or  is  controlled  by,  or  is  under  common
control with,  such  given  person,  (b)    that  directly  or  indirectly
beneficially  owns  or  holds  ten  percent  (10%) or  more  of  any  class  of
voting  stock  of  such  person,  or  (c)    ten  percent  (10%)  or  more  of
the voting  stock  of  which  is  directly  or  indirectly  beneficially  owned
or  held  by  such  person.    The  term "control"  means  the  possession,
directly  or  indirectly,  of  the  power  to  direct  or  cause  the
direction  of the  management  and  policies  of  a  person,  whether  through
ownership  of  voting  securities,  by  contract  or otherwise.

                 "Agreement"  means  this  Amended  and  Restated  Loan
Agreement  and  all  amendments,  modifications and  supplements  thereto.

                 "Applicable  Law"  means  all  applicable  provisions  of
constitutions,  statutes,  rules, regulations  and  orders  of  all
governmental  bodies  and  all  orders  and  decrees  of  all  courts,
agencies  and arbitrators.

                 "Business  Day"  means  any  day  other  than  a  Saturday,
Sunday,  or  day  on  which  banks  in Nashville,  Tennessee,  are  authorized
to  close.

                 "Cash  Flow"  means  the  sum  of  net  income  after  taxes,
plus  depreciation,  plus  amortization, plus  interest  expense,  measured  on
a  rolling  four  (4)  quarter  basis.

                 "Collateral"  means  and  includes  all  of  the  Borrower's
and  each  Guarantor's  right,  title and  interest  in  and  to  the
following,  wherever  located  in  the  United  States  of  America,  and
whether  now or  hereafter  existing  or  now  owned  or  hereafter  acquired
or  arising:

                 (a)    all  accounts  receivable,  contract  rights,  general
                        intangibles,  equity  participations, or  other  rights
                        or  interests  of  Borrower  and/or  the  Subsidiaries
                        arising  from  the operations  of  all  of  the
                        Facilities,  excluding  only:

                               (1)       Laredo  Processing  Center,  Laredo,
                                         TX;

                               (2)       Houston  Processing  Center,  Houston,
                                         TX;

                               (3)       Shelby  Training  Center,  Memphis,
                                         TN;

                               (4)       Leavenworth  Detention  Facility,
                                         Leavenworth,  KS;  and

                               (5)       Bay  County  Jail  Annex  Facility,
                                         Panama  City,  FL.

                 (b)    all  equipment,  including,  without  limitation,  all
                        of  Borrower's  and  the  Guarantors' furniture,
                        fixtures,  machinery,  parts,  accessories,
                        improvements,  replacements  and substitutions  with
                        respect  thereto,  which  are  owned  by






                                     -2-
   4


                        Borrower  and/or  the  Guarantors,  both  presently
                        existing  and  acquired  in  the  future, excluding
                        facilities  which  are  managed  by  the  Borrower  or
                        an  Affiliate,  but  which are  not  owned  by  the
                        Borrower  or  a  Guarantor.

                 (c)    all  real  and  personal  property  and  improvements
                        comprising  the  Bay  County,  Florida Annex  Facility
                        (the  "Bay  County  Facility"),  together  with  title
                        insurance,  in  form and  substance  acceptable  to
                        the  Lender  and  such  other  documents  or
                        instruments  as are  customary  for  commercial  real
                        estate  loans  of  the  magnitude  and  question.
                        Notwithstanding  the  foregoing,  the  deed  of  trust
                        and  other  security  interests required  hereunder
                        with  respect  to  the  Bay  County  Facility  shall
                        not  be  required  to be  delivered  so  long  as
                        prohibited  by  (1)  that  certain  Loan  Agreement
                        dated  as  of November  1,  1986  between  Bay  County,
                        Florida  and  the  Borrower  or  (2)  that  certain Bay
                        County,  Florida  Detention  Facilities  contract
                        dated  September  3,  1985,  between Bay  County  and
                        the  Borrower,  as  supplemented;

                 (d)    Deeds  of  Trust  of  record  in  Book  3,  page  6797,
                        Clerk's  Office  for  Cibola  County, New  Mexico,
                        encumbering  the  real  property  and  improvements
                        comprising  the  New  Mexico Women's  Correctional
                        Facility  located  in  Grants,  New  Mexico  (the
                        "Grants  Deed  of Trust");

                 (e)    Deed  of  Trust  of  record  in  Book  265,  page
                        3922,  Clerk's  Office  for  Torrence County,  New
                        Mexico,  encumbering  the  real  property  and
                        improvements  comprising  the Torrence  County
                        Detention  Center  located  in  Estancia,  New  Mexico
                        (the  "Estancia  Deed of  Trust");

                 (f)    Deeds  of  Trust  of  record  in  Book  1987,  page
                        67,  Clerk's  Office  for  Pinal  County, Arizona,
                        encumbering  the  real  property  and  improvements
                        comprising  the  correctional facility  located  in
                        Florence,  Arizona  (the  "Florence  Arizona  Deed  of
                        Trust");

                 (g)    all  of  the  Borrower's  equipment,  furniture,
                        fixtures,  machinery,  parts,  accessories,
                        improvements,  and  replacements  and  substitutions
                        with  respect  thereto,  which  are located  at  the
                        Borrower's  corporate  headquarters  in  Nashville,
                        Tennessee;

                 (h)    an  assignment  of  the  Borrower's  right  to  receive
                        payment  from  Hamilton  County, Tennessee  (the
                        "County")  of  the  agreed-upon  value  of  the
                        capital  improvements  with respect  to  the  Work
                        House  Facility  in  Chattanooga,  Hamilton  County,
                        Tennessee, pursuant  to  that  certain  Corrections
                        Facilities  Agreement  by  and  among  the  Borrower,
                        the  County  and  Dalton  Roberts,  County  Executive
                        of  the  County,  dated  September  20, 1984;  and

                 (i)    all  collateral  securing  the  obligations  of
                        Borrower  to  Lender,  as  described  or referred  to
                        in  the  Loan  Agreement  dated  as  of  June  21,
                        1990,  by  and  between Lender  and  Borrower,
                        covering  the  West  Tennessee  Detention  Center
                        located  in  Mason, Tennessee.






                                     -3-


   5

                 "Current  Maturing  Long  Term  Debt"  means  all
indebtedness  of  the  Borrower,  including capitalized  lease  obligations,
which  shall  become  due  within  365  days  from  the  date  on  which  it
is measured.

                 "Debt  Service  Coverage  Ratio"  means  Cash  Flow  divided
by  the  sum  of  Current  Maturing  Long Term  Debt  plus  interest  expense,
measured  quarterly  on  a  rolling  four  (4)  quarter  basis.

                 "Default"  means  any  of  the  events  or  occurrences
specified  in  Section  11.1  hereof  provided that  any  requirement  for
notice  or  lapse  of  time  or  any  other  condition  has  been  satisfied.


                 "Effective  Date"  means  the  later  of:

                 (a)    the  date  of  this  Agreement;  or

                 (b)    the  date  on  which  all  of  the  conditions  set
forth  in  Article  4  shall  have  been first  fulfilled.

                 "ERISA"  means  the  Employee  Retirement  Income  Security
Act  of  1974,  as  from  time  to  time amended  and  in  effect.

                 "Eurodollar  Interest  Period"  means,  with  respect  to  a
Eurodollar  Loan,  a  period  of  1,  2 or  3  months  commencing  on  a
Business  Day  selected  by  Borrower,  pursuant  to  this  Agreement.    Such
Eurodollar  Interest  Period  shall  end  on  the  day  in  the  last  calendar
month  of  such  period  chosen  by Borrower  which  corresponds  numerically
to  the  beginning  day  of  such  Eurodollar  Interest  Period,  provided,
however,  that  if  there  is  no  such  numerically  corresponding  day  in
such  month,  such  Eurodollar  Interest Period  shall  end  on  the  last
Business  Day  of  such  month.  If  the  Eurodollar  Interest  Period  would
otherwise  end  on  a  day  which  is  not  a  Business  Day,  such  Eurodollar
Interest  Period  shall  end  on  the next  succeeding  Business  Day,
provided,  however,  that  if  said  next  succeeding  Business  Day  falls  in
a new  month,  such  Eurodollar  Interest  Period  shall  end  on  the
immediately  preceding  Business  Day.    Borrower may  not  elect  any
Eurodollar  Interest  Period  that  ends  later  than  the  Loan  Termination
Date.    Interest shall  accrue  from  and  including  the  first  day  of  a
Eurodollar  Interest  Period  to,  but  excluding  the last  day  of  such
Eurodollar  Interest  Period.

                 "Eurodollar  Loan"  means  any  Loan  which  bears  interest
based  on  the  LIBOR  Rate.

                 "Facilities"  means  the  correctional  facilities  operated
by  the  Borrower  and/or  the Subsidiaries  in  the  United  States  and
listed  on  Schedule  1  attached  hereto,  together  with  any  additional
facilities  acquired  by  Borrower  or  any  Subsidiary  during  the  term  of
this  Agreement.

                 "Financing  Statements"  mean  the  Uniform  Commercial  Code
financing  statements  executed  and delivered  by  the  Borrower  to  the
Lender,  naming  the  Lender  as  secured  party  and  the  Borrower,  or  the
Guarantors,  as  debtor,  in  connection  with  this  Agreement.

                 "Floating  Rate  Loan"  means  any  Loan  which  bears
interest  based  on  the  Prime  Rate.




                                     -4-


   6

                 "Governmental  Approvals"  mean  all  authorizations,
consents,  approvals,  licenses  and  exemptions of,  registrations  and
filings  with,  and  reports  to,  all  governmental  bodies,  whether
federal,  state  or local,  and  all  agencies  thereof.

                 "Guaranty",  "Guaranteed"  or  to  "Guarantee"  shall  mean
                  and  include

                 (a)    a  Guaranty  (other  than  by  endorsement  of
                        negotiable  instruments  for  collection  in the
                        ordinary  course  of  business),  directly  or
                        indirectly,  in  any  manner,  of  any part  or  all
                        of  an  obligation;  and

                 (b)    an  agreement,  direct  or  indirect,  contingent  or
                        otherwise,  and  whether  or  not constituting  a
                        guaranty,  the  practical  effect  of  which  is  to
                        assure  the  payment  or performance  (or  payment  of
                        damages  in  the  event  of  nonperformance)  of  any
                        part  or all  of  an  obligation  of  another  person
                        whether  by

                        (1)    the  purchase  of  securities  or  obligations;

                        (2)    the  purchase,  sale  or  lease  (as  lessee  or
                               lessor)  of  property  or  the  purchase or
                               sale  of  services  primarily  for  the  purpose
                               of  enabling  the  obligor  with respect  to
                               such  obligation  to  make  any  payment  or
                               performance  (or  payment  of damages  in  the
                               event  of  nonperformance)  of  or  on  account
                               of  any  part  or  all of  such  obligation,  or
                               to  assure  the  owner  of  such  obligation
                               against  loss;

                        (3)    the  supplying  of  funds  to  or  in  any
                               other  manner  investing  in  the  obligor with
                               respect  to  such  obligation,  or  indemnifying
                               or  holding  harmless,  in  any way,  the
                               obligor  against  any  part  or  all  of  such
                               obligation;  or

                        (4)    repayment  of  amounts  drawn  down  by
                               beneficiaries  of  standby  letters  of  credit.

                 "Guaranty  Agreements"  means  the  Guaranty  and  Suretyship
Agreements  of  even  date  herewith executed  by  the  Guarantors  in  favor
of  the  Lender.

                 "Guaranty  and  Reimbursement  Agreement"  means  the
Guaranty  and  Reimbursement  Agreement  of even  date  herewith  executed  by
the  Borrower  in  favor  of  First  Union  National  Bank  of  North
Carolina,  an Affiliate  of  the  Lender  ("FUNBNC").

                 "Indebtedness"  means

                 (a)    all  items  (except  items  of  capital  stock,
                        Preferred  Stock,  additional  paid-in  capital or
                        retained  earnings)  which  in  accordance  with
                        generally  accepted  accounting principles  would  be
                        included  in  determining  total  liabilities  as
                        shown  on  the liability  side  of  a  balance  sheet
                        at  the  date  as  of  which  Indebtedness  is  to  be
                        determined;

                 (b)    capitalized  lease  obligations;




                                     -5-


   7



                 (c)    all  obligations  which  have  been  Guaranteed,
                        including,  but  not  limited  to,  all obligations
                        consisting  of  recourse  liability  with  respect  to
                        accounts  receivable  sold or  otherwise  disposed  of;
                        and

                 (d)    the  Loan.

                 "Internal  Revenue  Code"  means  the  Internal  Revenue  Code
of  1986,  as  amended.


                 "LIBOR  Rate"  means,  with  respect  to  any  Eurodollar
Loan,  the  interest  rate  per  annum (rounded  upward,  if  necessary,  to
the  next  higher  1/100  of  1%),  for  deposits  in  United  States  dollars
approximately  equal  in  the  principal  amount  to  such  Eurodollar  Loan
and  with  a  maturity  comparable  to the  Eurodollar  Interest  Period
chosen  by  Borrower  (30,  60  or  90  day),  which  appears  on  the
Telerate Page  3750  at  approximately  11:00  a.m.,  London  time,  two  (2)
London  business  days  prior  to  the  date  of commencement  of  such
Eurodollar  Interest  Period,  as  determined  by  Lender,  as  such  rate  is
adjusted  in accordance  with  Lender's  standard  practice  for  reserves  and
other  requirements.

                 "Lien"  means:

                 (a)    any  mortgage,  deed  to  secure  debt,  deed  of
                        trust,  lien,  pledge,  charge,  lease constituting  a
                        capitalized  lease  obligation,  conditional  sale  or
                        other  title  retention agreement,  or  other  security
                        interest,  security  title  or  encumbrance  of  any
                        kind  in respect  of  any  property  of  the  Borrower,
                        or  upon  the  income  or  profits  therefrom;

                 (b)    any  arrangement,  express  or  implied,  under  which
                        any  property  of  the  Borrower  is transferred,
                        sequestered  or  otherwise  identified  for  the
                        purpose  of  subjecting  the same  to  the  payment  of
                        Indebtedness  or  performance  of  any  other
                        obligation  in priority  to  the  payment  of  the
                        general,  unsecured  creditors  of  the  Borrower;

                 (c)    any  Indebtedness  which  is  unpaid  more  than  30
                        days  after  the  same  shall  have become  due  and
                        payable  and  which,  if  unpaid,  might  by  law
                        (including  but  not limited  to  bankruptcy  and
                        insolvency  laws),  or  otherwise,  be  given  any
                        priority whatsoever  over  general  unsecured
                        creditors  of  the  Borrower;  and

                 (d)    the  filing  of,  or  any  agreement  to  give,  any
                        financing  statement  under  the  Uniform Commercial
                        Code  or  its  equivalent  in  any  jurisdiction.

                 "Loan"  or  "Loans"  means  all  amounts  due  the  Lender
under  the  Working  Capital  Facility.

                 "Materially  Adverse  Effect"  means  a  materially  adverse
effect  upon  a  person's  business, assets,  liabilities,  financial
condition,  results  of  operations  or  business  prospects.

                 "Note"  means  the  amended  and  restated  promissory  note
of  the  Borrower,  substantially  in the  form  of  Exhibit  A  hereto,
payable  to  the  order  of  the  Lender  and  evidencing  the  Loan,  as
amended and  supplemented  from  time  to  time,  and  any  replacement
thereof  or  substitution  therefor.




                                     -6-




   8

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

                 "Permitted  Liens"  means:

                 (a)    Liens  securing  taxes,  assessments  and  other
                        governmental  charges  or  levies  (excluding any  Lien
                        imposed  pursuant  to  any  of  the  provisions  of
                        ERISA)  or  the  claims  of materialmen,  mechanics,
                        carriers,  warehousemen  or  landlords  for  labor,
                        materials, supplies  or  rentals  incurred  in  the
                        ordinary  course  of  business,  but  in  the  case of
                        warehousemen  or  landlords,  only  if  such  Liens
                        are  junior  to  the  Security Interest  in  any  of
                        the  Collateral;

                 (b)    Liens  consisting  of  deposits  or  pledges  made  in
                        the  ordinary  course  of  business  in connection
                        with,  or  to  secure  payment  of,  obligations  under
                        workmen's  compensation, unemployment  insurance  or
                        similar  legislation;

                 (c)    Liens  constituting  encumbrances  in  the  nature  of
                        zoning  restrictions,  easements,  and rights  or
                        restrictions  of  record  on  the  use  of  real
                        property  of  the  Borrower, which  in  the  sole
                        judgment  of  the  Lender  does  not  materially
                        detract  from  the value  of  such  real  property  or
                        impair  the  use  of  the  Borrower's  real  property
                        in the  business  of  the  Borrower;

                 (d)    Purchase  Money  Liens  on  property  other  than
                        Inventory  and  liens  created  in connection  with
                        the  leasing  of  personal  property  by  the
                        Borrower;

                 (e)    Liens  in  favor  of  the  Lender;  and

                 (f)    Liens  listed  on  Schedule  5.1(g)  attached  hereto.

                 "Plan"  means  employee  benefit  plan  maintained  for
employees  of  the  Borrower  that  is covered  by  Title  IV  of  ERISA,
including  such  plans  as  may  be  established  after  the  Agreement  Date.

                 "Preceding  Event"    means  an  event  which  with  the
giving  of  notice  or  lapse  of  time  or both  would  constitute  a  Default
under  the  provisions  of  Section  11.1  hereof.

                 "Prime  Rate"  means  at  any  time  the  rate  of  interest
publicly  announced  from  time  to  time by  the  Lender  as  Lender's
"prime"  rate  as  in  effect  at  such  time,  and  is  not  necessarily  the
lowest or  best  rate  charged  by  Lender.

                 "Prior  Loan  Documents"  means  the  Loan  Agreement  and
all  documents  and  instruments  executed and  delivered  in  connection  with
the  Loan  Agreement,  and  all  amendments  to  the  foregoing  prior  to  the
date  of  this  Agreement.

                 "Purchase  Money  Lien"  means  a  Lien  securing

                 (a)    Indebtedness  created  to  secure  the  payment  of
                        all  or  any  part  of  the  purchase price  of  any
                        property  other  than  inventory;




                                     -7-


   9

                 (b)    any  Indebtedness  incurred  at  the  time  of  or
                        within  10  days  prior  to  or  after  the acquisition
                        of  any  property  other  than  inventory  for  the
                        purpose  of  financing  all or  any  part  of  the
                        purchase  price  thereof;  and

                 (c)    any  renewals,  extensions  or  refinancings  thereof,
                        but  not  any  increases  in  the principal  amounts
                        thereof  outstanding  at  the  time;  but  only  if
                        such  Lien  shall  be incurred  after  the  date  of
                        this  Agreement  and  shall  at  all  times  be
                        confined solely  to  the  property  the  purchase
                        price  of  which  was  financed  through  the
                        incurrence  of  such  Indebtedness.

                 "Reimbursement  Agreements"  means  agreements  entered  into
between  the  Borrower  and  the  Lender governing  the  Borrower's
obligations  to  repay  the  Lender  for  draws  on  standby  letters  of
credit,  if  any.

                 "Reportable  Event"  has  the  meaning  set  forth  in
Section  4043(b)  of  ERISA.

                 "Secured  Obligations"  mean,  in  each  case  whether  now
in  existence  or  hereafter  arising,

                 (a)    the  principal  of,  and  interest  on,  the  Loan;

                 (b)    all  of  the  Borrower's  obligations  to  the  Lender
under  Reimbursement  Agreements;

                 (c)    all  indebtedness,  liabilities,  obligations,
                        covenants  and  duties  of  the  Borrower  to the
                        Lender  (or  to  an  Affiliate  of  Lender  which
                        issues  letters  of  credit  or otherwise  extends
                        credit  to  Borrower),  of  every  kind,  nature  and
                        description,  direct or  indirect,  absolute  or
                        contingent,  now  or  hereafter  existing,  due  or
                        not  due, contractual  or  tortious,  liquidated  or
                        unliquidated,  and  whether  or  not  evidenced  by any
                        note,  and  whether  or  not  for  the  payment  of
                        money  under  or  in  respect  of this  Agreement,  the
                        Note,  a  letter  of  credit  or  any  of  the
                        Security  Documents,  and shall  specifically  include,
                        without  limitation,  the  obligations  described  in
                        Schedule 2  attached  hereto;  and

                 (d)    all  of  the  Guarantor's  obligations  to  the  Lender
under  the  Guaranty  Agreements.

                 "Security  Documents"  means  each  of  the  following:

                 (a)    the  Financing  Statements;

                 (b)    The  Guaranty  Agreements;

                 (c)    each  other  writing  executed  and  delivered  by  the
                        Borrower  securing  the  Secured Obligations;  and

                 (d)    any  Reimbursement  Agreement.

                 "Security  Interest"  means  the  Liens  of  the  Lender  on
and  in  the  Collateral.
 


                 


                                     -8-


   10

                 "Senior  Debt"  means  senior  funded  obligations,
including,  without  limitation,  obligations evidenced  by  outstanding
letters  of  credit  issued  by  Lender  under  the  terms  of  this
Agreement.

                 "Subordinated  Debt"  means  (i)  the  existing  Indebtedness
described  in  Schedule  3  attached hereto,  which,  pursuant  to  its  terms,
is  subordinated  to  the  Secured  Obligations,  and  (ii)  additional
Indebtedness  incurred  by  Borrower  after  the  date  hereof  with  the
consent  of  the  Lender,  which  pursuant to  its  terms,  is  subordinated
to  the  Secured  Obligations.

                 "Subsidiary"  or  "Subsidiaries"  means  the  subsidiaries  of
Borrower  listed  in  Schedule  4 attached  hereto,  and  all  other
subsidiaries  formed  or  acquired  hereafter  with  the  consent  of  the
Lender, if  any.

                 "Termination  Date"  means

                 (a)    May  31,  1997,  and  is  the  date  upon  which  the
                        Loan  shall  be  payable  in  full without  demand,  or

                 (b)    the  date  of  the  occurrence  of  any  Default;

provided,  however,  that  this  Agreement  and  the  obligations  hereunder
may  be  renewed  for  additional  one- year  periods  only  if  such  renewal
shall  be  granted  by  the  Lender,  in  its  sole  and  absolute  discretion,
on  or  before  May  31  of  the  year  immediately  preceding  the
Termination  Date  or  any  extension  of  the Termination  Date  as  provided
herein,  unless  this  Agreement  is  otherwise  terminated  by  the
occurrence  of  a Default.

                 "Termination  Event"  means

                 (a)    a  Reportable  Event;  or

                 (b)    the  filing  of  a  notice  of  intent  to  terminate
                        a  Plan  or  the  treatment  of  a  Plan amendment  as
                        a  termination  under  Section  4041  of  ERISA;  or

                 (c)    the  institution  of  proceedings  to  terminate  a
                        Plan  by  the  PBGC  under  Section  4042 of  ERISA,
                        or  the  appointment  of  a  trustee  to  administer
                        any  Plan.

                 "Unfunded  Vested  Accrued  Benefits"  means,  with  respect
to  any  Plan  at  any  time,  the amount  (if  any)  by  which

                 (a)    the  present  value  of  all  vested  nonforfeitable
benefits  under  such  Plan  exceeds

                 (b)    the  fair  market  value  of  all  Plan  assets
allocable  to  such  benefits;

all  determined  as  of  the  then  most  recent  valuation  date  for  such
Plan.

                 "Working  Capital  Facility"  means  the  loan  facility
described  in  Section  2.1  hereof.

                 Section  1.2.    General.    All  terms  of  an  accounting
nature  not  specifically  defined  herein shall  have  the  meaning  ascribed
thereto  by  generally  accepted  accounting  principles.



 

                                     -9-


   11

Except  as  otherwise  defined  herein,  the  terms  accounts,  chattel  paper,
contract  rights,  documents, equipment,  instruments,  general  intangibles
and  inventory,  shall  have  the  meanings  given  those  terms  in the
Uniform  Commercial  Code.    Unless  otherwise  specified,  a  reference  in
this  Agreement  to  a  particular section  or  subsection  is  a  reference
to  that  section  or  subsection  of  this  Agreement.    Wherever  from the
context  it  appears  appropriate,  each  term  stated  in  either  the
singular  and  plural  shall  include  the singular  and  plural,  and
pronouns  stated  in  the  masculine,  feminine  or  neuter  gender  shall
include  the masculine,  the  feminine  and  the  neuter.


                                 ARTICLE  2

                                THE  FACILITY

                 Section  2.1.    Working  Capital  Facility.    Upon  the
terms  and  subject  to  the  conditions  of this  Agreement,  and  in
reliance  upon  the  representations  and  warranties  made  herein,  the
Lender  agrees  to make  advances  to  the  Borrower  from  time  to  time,  as
requested  by  the  Borrower  in  accordance  with  the terms  and  conditions
hereof,  up  to  the  aggregate  principal  amount  of  $25,000,000.    The
purpose  of  the Working  Capital  Facility  and  all  advances  made
hereunder  shall  be  to  (a)  provide  for  the  on-going working  capital
requirements  of  the  Borrower  and  the  Subsidiaries  and  for  other
general  corporate purposes,  and  (b)  permit  the  issuance  of  letters  of
credit  on  behalf  of  the  Borrower  and  the Subsidiaries.    It  is
expressly  understood  and  agreed  that  the  Lender  shall  make  advances
hereunder  only if  no  Default  exists  or  is  continuing  under  this
Agreement.    During  such  time  that  a  Preceding  Event exists  and  is
continuing,  the  Lender  shall  continue  to  make  advances  pursuant  to
such  conditions  or limitations  as  the  Lender,  in  its  sole  discretion,
shall  determine.    The  principal  amount  of  any  advance which  is  repaid
may  be  reborrowed  by  the  Borrower  in  accordance  with  the  terms
hereof.

                 Section  2.2.    Manner  of  Borrowing.    Advances  under
the  Working  Capital  Facility  shall  be made  in  increments  of  $100,000
upon  written  notice  to  the  Lender  not  less  than  three  (3)  Business
Days prior  to  the  intended  disbursement  date.

                 (a)    The  Borrower  shall  give  the  Lender  irrevocable
                        notice  (a  "Borrowing  Notice")  not later  than  1:00
                        p.m.  Nashville  time  three  (3)  Business  Days
                        prior  to  any  requested disbursement.    Each
                        Borrowing  Notice  shall  be  written  and  may  be
                        made  by telecopier,  telex  or  cable  in  addition
                        to  the  means  set  forth  for  giving  notice  in
                        Section  12.1(b).    Each  Borrowing  Notice  shall
                        specify  the  requested  date  of  such requested
                        disbursement,  the  aggregate  amount  of  such
                        disbursement,  the  type  of  Loan (Floating  Rate
                        Loan  or  Eurodollar  Loan),  and  if  a  Eurodollar
                        Loan,  the  designated Eurodollar  Interest  Period.
                        Disbursement  of  the  proceeds  of  each  advance
                        hereunder shall  be  made  by  credit  to  an  account
                        of  the  Borrower  maintained  with  the  Lender or  by
                        wire  transfer,  bank  check,  or  other  instrument
                        to  such  other  account  or person  as  may  be
                        agreed  upon  by  the  Borrower  and  the  Lender  from
                        time  to  time.


                 (b)    The  Borrower  shall  have  the  right  at  any  time,
                        on  prior  irrevocable  written  or telefaxed  notice
                        to  the  Lender,  not  later  than  10:00  a.m.,
                        Nashville  time,  to convert  any  Floating  Rate  Loan
                        into  a  Eurodollar  Loan,  to  convert  a  Eurodollar
                        Loan into  a  Floating  Rate  Loan,  or  to  continue
                        any  Eurodollar  Loan  for  a  subsequent Eurodollar
                        Interest  Period  (specifying  in  each  case  the




                                    -10-


   12

                        Eurodollar  Interest  Period  to  be  applicable
                        thereto),  subject  in  each  case  to  the following:

                        (1)    No  Eurodollar  Loan  shall  be  converted  or
                               prepaid  at  any  time  other  than  at the  end
                               of  the  Eurodollar  Interest  Period
                               applicable  thereto;

                        (2)    Each  conversion  shall  be  effected  by
                               applying  the  proceeds  of  the  new Eurodollar
                               or  Floating  Rate  Loan,  as  the  case  may
                               be,  to  the  Loan  (or portion  thereof)  being
                               converted;

                        (3)    The  number  of  Eurodollar  Loans  outstanding
                               at  any  one  time  shall  not  exceed five
                               (5).

                 Each  notice  pursuant  to  this  subparagraph  shall  be
irrevocable  and  shall  refer  to  this Agreement  and  specify  (i)  the
identity  and  principal  amount  of  the  particular  Loan  that  the
Borrower requests  to  be  converted  or  continued,  (ii)  if  such  notice
requests  conversion,  the  date  of  conversion (which  shall  be  a  Business
Day),  and  (iii)  if  a  Loan  is  to  be  converted  to  a  Eurodollar  Loan,
or  a Eurodollar  Loan  is  to  be  continued,  the  Eurodollar  Interest
Period  with  respect  thereto.    In  the  event that  the  Borrower  shall
not  give  notice  to  continue  any  Eurodollar  Loan  for  a  subsequent
period,  such Loan  (unless  repaid)  shall  automatically  be  converted  into
a  Floating  Rate  Loan.    If  the  Borrower  shall fail  to  specify  in  the
Borrowing  Notice  the  type  of  borrowing,  or,  in  the  case  of  a
Eurodollar  Loan, the  applicable  Eurodollar  Interest  Period,  the  Borrower
will  be  deemed  to  have  requested  a  Floating  Rate Loan.    If  Lender
reasonably  believes  that  any  failure  by  Borrower  to  specify  the  type
of  borrowing  or the  applicable  Eurodollar  Interest  Period  shall  have
resulted  from  failure  of  communications  equipment  or clerical  error,
then  prior  to  funding  any  such  borrowing,  the  Lender  shall  use
reasonable  efforts  to obtain  confirmation  from  Borrower  of  the  contents
of  such  Borrowing  Notice;  however,  in  the  absence  of confirmation  by
Borrower,  which  specifies  the  type  of  borrowing  and  the  applicable
Eurodollar  Interest Period,  the  Borrower  will  be  deemed  to  have
requested  a  Floating  Rate  Loan.    Notwithstanding  anything  to the
contrary  contained  above,  if  an  Event  of  Default  shall  have  occurred
and  be  continuing,  no Eurodollar  Loan  may  be  continued,  and  no
Floating  Rate  Loan  may  be  converted  into  a  Eurodollar  Loan.

                 Section  2.3.    Repayment  of  Working  Capital  Facility.
The  Working  Capital  Facility  shall be  immediately  due  and  payable  and
shall  be  repaid  in  lawful  money  of  the  United  States  of  America  in
immediately  available  funds  as  follows:

                 (a)    Upon  the  Termination  Date;  or

                 (b)    In  accordance  with  the  provisions  of  Section
                        11.2  hereof.
 
                 Section  2.4.    Note.    The  obligation  of  the  Borrower
to  repay  the  Loan  under  the  Working Capital  Facility  shall  be
evidenced  by,  and  be  repayable  in  accordance  with  the  terms  of  the
Note payable  to  the  order  of  the  Lender.    The  Note  shall  be  dated
the  Effective  Date  and  be  duly  and validly  executed  and  delivered  by
the  Borrower.

                 Section  2.5.    Standby  Letters  of  Credit.    As  part  of
the  Working  Capital  Facility  and upon  the  terms  and  subject  to  the
conditions  of  this  Agreement,  and  in  reliance  upon  the  representations
and  warranties  made  herein,  the  Lender  agrees  to  issue  from  time  to
time,  prior  to  the  Termination Date,  standby  letters  of  credit
pursuant  to  the  Bank's  standard  letter  of  credit






                                    -11-


   13



application  agreement  and  Reimbursement  Agreement,  a  copy  of  which  is
attached  hereto  as  Exhibit  B; provided,  however,  that  (1)  the
aggregate  face  amount  of  all  such  letters  of  credit  shall  not  exceed
$12,500,000;  (2)  the  duration  of  any  such  letter  of  credit  shall  not
exceed  one  (1)  year  and  in  no event  shall  extend  beyond  the
Termination  Date;  (3)  there  shall  exist  no  Event  of  Default
hereunder; (4)  the  Lender  may  assign  to  an  Affiliate  of  Bank  its
obligation  to  issue  letters  of  credit  hereunder without  the  Borrower's
consent;  (5)  standby  letters  of  credit  shall  be  secured  by  the
Collateral  and shall  otherwise  be  subject  to  this  Agreement  and  the
Security  Documents;  and  (6)  the  aggregate  face amount  of  all  such
letters  of  credit,  together  with  the  aggregate  amount  outstanding
under  the  Loan, shall  not  exceed  25,000,000.    Upon  the  issuance  of  a
standby  letter  of  credit  hereunder,  the  face amount  thereof  shall
immediately  reduce  availability  for  advances  under  the  Working  Capital
Facility  by the  amount  thereof.    In  the  event  any  standby  letter  of
credit  issued  pursuant  hereto  is  drawn  upon, the  amount  of  all  sums
advanced  by  the  Lender,  together  with  all  fees,  costs  and  expenses
in  connection therewith,  shall  become  an  obligation  under  the  Working
Capital  Facility  and  shall  be  evidenced  by  the Note.

                 Section  2.6.    Reimbursement  Obligation.    The  Borrower
hereby  unconditionally  agrees  to reimburse  the  Lender  for  the  total
amount  of  the  sums  paid  by  the  Lender  in  connection  with  the
issuance  of  any  standby  letters  of  credit  or  any  additional  or
further  liability  that  may  accrue  against the  Lender  in  connection
with  the  same,  whether  as  a  result  of  a  draft  or  demand  for
payment  submitted thereunder,  or  otherwise.    Any  such  amounts  which
are  not  reimbursed  to  the  Lender  on  demand  may,  at the  Lender's
option  and  in  the  Lender's  sole  discretion,  be  debited  at  any  time
against  the  Loan  under this  Agreement  and  shall  be  treated  for  all
purposes  and  shall  have  the  same  force  and  effect  as  if the  same
has  been  cash  advanced  by  the  Lender  to  the  Borrower  pursuant  to
Section  2.1  of  this Agreement,  subject  to  all  the  terms  and
conditions  of  this  Agreement.    Notwithstanding  the  foregoing,  the
Lender  may,  in  its  sole  discretion,  require  the  Borrower  to  enter
into  a  Reimbursement  Agreement  with respect  to  one  or  more  standby
letters  of  credit.

                 Section  2.7.    Letter  of  Credit  Fee.    As  consideration
for  issuing  each  letter  of  credit hereunder,  the  Borrower  shall  pay
to  the  Lender  a  fee  in  the  amount  of  one  percent  (1%)  per  annum
of the  face  amount  of  each  letter  of  credit.    Payment  of  the  letter
of  credit  fee  shall  be  a  condition precedent  to  the  Lender's
obligation  to  issue  the  letter  of  credit.

                 Section  2.8.    Unused  Balance  Fee.    As  consideration
for  the  cost  of  reserving  and  making available  the  Working  Capital
Facility,  the  Borrower  shall  pay  to  the  Lender  a  fee  in  the  amount
of one-quarter  of  one  percent  (.25%)  per  annum  on  the  average  unused
balance  of  the  Working  Capital Facility.    Such  fee  shall  be  due  and
payable  quarterly,  in  arrears,  on  the  first  day  of  each  calendar
quarter,  commencing  originally  on  October  1,  1995.





                                    -12-


   14

                                   ARTICLE  3

                           GENERAL  LOAN  PROVISIONS

                 Section  3.1.    Interest.

                 (a)    The  Borrower  shall  pay  interest  quarterly  in
                        arrears  on  the  first  day  of  each quarter
                        commencing  originally  on  October  1,  1995,
                        provided,  however,  that  interest due  on  a
                        Eurodollar  Loan  shall  be  due  and  payable  at  the
                        end  of  each  Eurodollar Interest  Period.    Interest
                        shall  be  calculated  on  the  unpaid  principal
                        amount  of the  Loan  for  each  day  from  the  day
                        the  Loan  was  made  until  the  Loan  is  due
                        (whether  at  the  stated  maturity  date,  by  reason
                        of  acceleration  or  otherwise)  at  a floating  rate
                        per  annum  equal  to:

                        (1)    For  a  Floating  Rate  Loan,  at  an  annual
                               rate  equal  to  the  Prime  Rate,  said rate
                               to  change  contemporaneously  with  any  change
                               in  the  Prime  Rate.

                        (2)    For  a  Eurodollar  Loan,  at  a  rate  equal
                               to  the  applicable  LIBOR  Rate  plus  200
                               basis  points  (2%)  per  annum.

                 The  interest  for  Floating  Rate  Loans  and  Eurodollar
                 Loans  shall  be  computed  on  the  basis of  a  360-day
                 year,  counting  the  actual  number  of  days  elapsed.

                 (b)    If  the  Borrower  shall  fail  to  pay  when  due
                        (whether  at  the  stated  maturity  date, by  reason
                        of  acceleration  or  otherwise)  all  or  any  portion
                        of  the  unpaid  principal amount  of  the  Loan,  the
                        interest  rate  on  each  such  unpaid  amount  for
                        each  day from  the  date  it  was  so  due  until
                        paid  in  full  shall  be  equal  to  the  Prime  Rate
                        plus  five  percent  (5%)  per  annum,  until  the
                        Loan  or  portion  thereof,  as appropriate,  is  paid
                        in  full.

                 (c)    Nothing  contained  in  this  Agreement  or  the  Note
                        shall  be  deemed  to  establish  or require  the
                        payment  of  a  rate  of  interest  in  excess  of  the
                        maximum  rate  permitted by  any  Applicable  Law.
                        In  the  event  that  any  rate  of  interest  required
                        under this  Agreement  or  the  Note  exceeds  the
                        maximum  rate  permitted  by  any  such Applicable
                        Law,  such  rate  shall  automatically  be  reduced  to
                        the  maximum  rate permitted  by  such  law  and  any
                        excess  amount  collected  shall  be  refunded  or
                        credited to  principal.


                 Section  3.2.    Manner  of  Payment.

                 Each  payment  (including  prepayments)  by  the  Borrower  of
the  principal  of  or  interest  on the  Loan  or  of  any  other  amounts
payable  to  the  Lender  under  this  Agreement  or  the  Note,  shall  be
paid  in  immediately  available  funds  and  the  Lender  shall  credit  such
payment  on  the  date  of  receipt  by the  Lender  in  Nashville,  Tennessee.
Any  payments  by  the  Borrower  shall  be  made  without  application  of any
setoff,  counterclaim  or  deduction  whatsoever.

                 Section  3.3.    Prepayment.    The  Borrower  may,  at  its
option,  prepay  the  principal  amount of  the  Loan  outstanding  hereunder
at  any  time,  in  whole  or  in  part  (but  all  partial





                                    -13-


   15

prepayments  shall  be  in  a  principal  amount  not  less  than  $100,000  or
an  integral  multiple  thereof),  upon giving  the  Lender  at  least  three
(3)  Business  Days'  prior  notice  of  the  aggregate  principal  amount  to
be  prepaid.    In  the  event  of  a  partial  prepayment  of  principal,
accrued  interest  to  the  date  of prepayment  of  the  amount  so  prepaid
shall  continue  to  be  payable  as  provided  in  the  Note, notwithstanding
such  prepayment  of  principal.    All  accrued  interest  shall  be  paid
immediately  in  the event  that  the  prepayment  discharges  the  principal
obligation  under  the  Note.    Notwithstanding  the foregoing,  a  Eurodollar
Loan  may  be  prepaid  only  at  the  end  of  a  Eurodollar  Interest
Period.

                 Section  3.4.    General.    If  any  payment  under  this
Agreement  or  the  Note  shall  be specified  to  be  made  upon  a  day
which  is  not  a  Business  Day,  it  shall  be  made  on  the  next
succeeding day  which  is  a  Business  Day  and  such  extension  of  time
shall  in  such  case  be  included  in  computing interest,  if  any,  in
accordance  with  such  payment.

                 Section  3.5.    Alternate  Rate  of  Interest.    In  the
event,  and  on  such  occasion,  that  on the  date  of  commencement  of  any
Eurodollar  Interest  Period  for  a  Eurodollar  Loan,  Lender  shall  have
reasonably  determined:

                 (a)    That  dollar  deposits  in  the  amount  of  the
                        requested  principal  amount  of  such Eurodollar  Loan
                        are  not  generally  available  to  Lender  in  the
                        London  Interbank Market;

                 (b)    That  the  rate  at  which  such  dollar  deposits  are
                        being  offered  will  not  adequately and  fairly
                        reflect  the  cost  to  Lender  of  making  or
                        maintaining  such  Eurodollar  Loan during  such
                        Eurodollar  Interest  Period;  or

                 (c)    That  reasonable  means  do  not  exist  for
                        ascertaining  the  LIBOR  Rate  generally,  Lender
                        shall,  as  soon  as  practicable  thereafter,  given
                        written  or  telephonic  notice  of  such determination
                        to  the  Borrower.    In  the  event  of  any  such
                        determination,  any  request by  the  Borrower  for  a
                        Eurodollar  Loan  shall,  until  the  circumstances
                        giving  rise  to such  notice  no  longer  exist,  be
                        deemed  to  be  a  request  for  a  Floating  Rate
                        Loan.  Each  determination  by  the  Lender  hereunder
                        shall  be  conclusive  absent  manifest  error.


                                   ARTICLE  4

                             CONDITIONS  PRECEDENT

                 Section  4.1.    Conditions  Precedent.    Notwithstanding
any  other  provision  of  this  Agreement, advances  under  the  Working
Capital  Facility  shall  not  be  made  until  the  fulfillment  of  each  of
the following  conditions:

                 (a)    The  Lender  shall  have  received  each  of  the
                        following  documents,  all  of  which  shall be
                        satisfactory  in  form  and  substance  to  the  Lender
                        and  its  counsel:

                        (1)    certified  copies  of  the  certificate  of
                               incorporation,  and  by-laws  of  the Borrower
                               and  the  Subsidiaries  as  in  effect  on  the
                               Effective  Date;





                                    -14-



   16

                        (2)    certified  copies  of  all  corporate  action,
                               including  stockholder  approval,  if necessary,
                               taken  by  the  Borrower  and  the  Guarantors
                               to  authorize  the  execution, delivery  and
                               performance  of  this  Agreement,  the  Note
                               and  the  Security Documents,  and  a
                               certificate  of  incumbency  with  respect  to
                               the  officers  of  the Borrower  and  the
                               Guarantors;

                        (3)    a  certificate  evidencing  the  good  standing
                               of  the  Borrower  and  the  Subsidiaries in
                               each  jurisdiction  in  which  the  same  is
                               required,  such  certificates  to  be dated  no
                               earlier  than  thirty  (30)  days  prior  to
                               the  Effective  Date;

                        (4)    a  signed  opinion  of  Stokes  &  Bartholomew,
                               counsel  for  the  Borrower,  opining  as to
                               such  matters  in  connection  with  this
                               Agreement  as  the  Lender  may  reasonably
                               request,  and  such  other  opinions  of  other
                               counsel  as  Lender  or  its  counsel may
                               reasonably  request;

                        (5)    Financing  Statements,  or  amendments  thereto,
                               naming  the  Borrower  and/or  the Guarantors
                               as  debtor  and  the  Lender  as  secured  party
                               duly  executed  and delivered  by  the  Borrower
                               and  evidence  satisfactory  to  the  Lender  as
                               to  the filing  of  such  statements  in  each
                               jurisdiction  and  each  filing  office  where
                               such  filing  may  be  necessary  or
                               appropriate  to  perfect  the  Security
                               Interest;

                        (6)    to  the  extent  deemed  necessary  by  Lender,
                               amendments  to  the  Estancia  Deed  of Trust,
                               the  Grants  Deed  of  Trust,  and  the  Central
                               Arizona  Deed  of  Trust, reflecting  the  terms
                               of  this  Agreement,  together  with  an
                               opinion  of  counsel acceptable  to  the  Lender
                               with  respect  to  the  validity,  binding
                               effect  and enforceability  of  said  Amended
                               Real  Property  Deed  of  Trust;

                        (7)    a  certified  copy  of  the  Borrower's
                               casualty  insurance  policy  or  policies
                               certifying  that  such  insurance  is  in  full
                               force  and  effect  and  will  not  be
                               terminated  without  ten  (10)  days  advance
                               written  notice  to  the  Lender,  together with
                               a  loss  payee  endorsement  on  each  such
                               policy  naming  Lender  as  loss  payee on  such
                               form  as  the  Lender  shall  approve  in
                               advance;

                        (8)    a  certificate  of  compliance  by  the  Chief
                               Executive  Officer  of  the  Borrower stating
                               that,  to  the  best  of  his  knowledge  and
                               based  on  an  examination sufficient  to
                               enable  him  to  make  an  informed  statement:

                               (i)   all  of  the  representations  and
                                     warranties  made  or  deemed  to  be  made
                                     under  this  Agreement  are  true  and
                                     correct  as  of  the  Effective  Date;

                               (ii)  no  Default  or  Preceding  Event  exists;


                        (9)    all  Schedules  required  pursuant  to  Section
                               5.1  hereof;  and





                                    -15-


   17

                        (10)   such  other  certificates,  documents  and
                               instruments  as  the  Lender  may  reasonably
                               request,  including,  without  limitation,
                               evidence  reasonably  satisfactory  to  the
                               Lender  that  all  of  the  conditions  of  this
                               Article  4  have  been  satisfied.

                 (b)    No  Event  of  Default  shall  have  occurred  and  be
                        continuing  under  the  Prior  Loan Documents.

                 (c)    This  Agreement,  the  Note  and  the  Security
                        Documents  shall  have  been  duly  executed and
                        delivered.

                 (d)    No  action,  proceeding,  investigation,  regulation
                        or  legislation  shall  have  been instituted,
                        threatened  or  proposed  before  any  court,
                        governmental  agency  or legislative  body  to  enjoin,
                        restrain,  or  prohibit,  or  to  obtain  substantial
                        damages in  respect  of,  or  which  is  related  to
                        or  arises  out  of  this  Agreement  or  the
                        consummation  of  the  transactions  contemplated
                        hereby,  or  which,  in  the  Lender's  sole
                        discretion,  would  make  it  inadvisable  to
                        consummate  the  transactions  contemplated  by this
                        Agreement.

                 (e)    There  shall  have  been  no  material  adverse  change
                        in  the  financial  condition, business  operations  or
                        business  affairs  of  the  Borrower.

                 Section  4.2.    Subsequent  Advances.    At  the  time  of
the  making  of  each  advance  or issuing  each  standby  letter  of  credit
under  the  Working  Capital  Facility:

                 (a)    the  Borrower  shall  be  deemed  to  represent  and
                        warrant  to  the  Lender  that  the Borrower  is  at
                        such  time  in  full  compliance  with  the  covenants
                        and  agreements herein,  and  no  Default  or
                        Preceding  Event  exists  at  such  time;

                 (b)    the  corporate  actions  of  the  Borrower  referred
                        to  in  Section  4.1(a)(2)  shall  remain in  full
                        force  and  effect;  and

                 (c)    the  Lender  may,  without  waiving  either  condition,
                        consider  the  conditions  specified in  Section
                        4.2(a)  and  (b)  fulfilled  and  a  representation  by
                        the  Borrower  to  such effect  made,  if  no  written
                        notice  to  the  contrary  is  received  by  the
                        Lender  prior to  the  making  of  the  advance  or
                        issuing  of  the  standby  letter  of  credit.


                                 ARTICLE  5

               REPRESENTATIONS  AND  WARRANTIES  OF  BORROWER

                 Section  5.1.    Representations  and  Warranties.    The
Borrower  and  the  Guarantors  represent and  warrant  to  the  Lender  that
as  of  the  Effective  Date  and  giving  effect  to  the  transactions
contemplated  herein:





                                    -16-


   18

                 (a)    Organization;  Power;  Qualification.

                        (1)    The  Borrower  is  a  corporation,  duly
                               organized,  validly  existing  and  in  good
                               standing  under  the  laws  of  its
                               jurisdiction  of  incorporation,  has  the
                               power and  authority  to  own  its  properties
                               and  to  carry  on  its  business  as  now being
                               and  thereafter  proposed  to  be  conducted
                               and  is  duly  qualified  and authorized  to  do
                               business  as  a  foreign  corporation  in
                               Tennessee  and  in  each other  jurisdiction  in
                               which  the  character  of  its  properties  or
                               the  nature  of its  business  requires  such
                               qualification  or  authorization  except  (i)
                               Transcor America,  Inc.  is  in  the  process
                               of  qualifying  to  transact  business  in
                               certain states  as  necessary,  which  process
                               will  be  completed  within  120  days  from
                               the date  hereof,  and  (ii)  where  the
                               failure  of  the  Borrower  to  qualify  would
                               not have  a  Materially  Adverse  Effect  on
                               the  Borrower.

                        (2)    Each  of  the  Subsidiaries  is  a  corporation,
                               duly  organized,  validly  existing  and in
                               good  standing  under  the  laws  of  the
                               jurisdiction  of  its  incorporation,  has the
                               power  and  authority  to  own  its  properties
                               and  to  carry  on  its  business as  now  being
                               and  thereafter  proposed  to  be  conducted
                               and  is  duly  qualified and  authorized  to  do
                               business  as  a  foreign  corporation  in
                               Tennessee  and  in each  other  jurisdiction  in
                               which  the  character  of  its  properties  or
                               the  nature of  its  business  requires  such
                               qualification  or  authorization  except  where
                               the failure  of  the  Borrower  to  qualify
                               would  not  have  a  Materially  Adverse  Effect
                               on  the  Borrower.

                 (b)    Subsidiaries  and  Capital  Structure.    Other  than
                        the  Subsidiaries,  the  Borrower  has no
                        subsidiaries.    The  outstanding  capital  stock  of
                        the  Borrower  has  been  duly  and validly  issued,
                        is  fully  paid  and  nonassessable.

                 (c)    Authorization  of  Agreement,  Note,  Security
                        Documents.  The  Borrower,  and  each  of  the
                        Subsidiaries,  has  the  right  and  power,  and  has
                        taken  all  necessary  action  to authorize,  to
                        execute,  deliver  and  perform  this  Agreement,  the
                        Note,  and  the Security  Documents  in  accordance
                        with  their  respective  terms.    This  Agreement,
                        the Note  and  each  of  the  Security  Documents,
                        when  executed  and  delivered  in  accordance with
                        this  Agreement,  will  be  legal,  valid  and  binding
                        obligations  of  the  Borrower, all  enforceable  in
                        accordance  with  their  terms.

                 (d)    Compliance  of  Agreement,  Notes,  Security  Documents
                        with  Laws,  etc.    The  execution, delivery  and
                        performance  of  this  Agreement,  the  Note,  and  the
                        Security  Documents  in accordance  with  their
                        respective  terms  and  the  advances  hereunder  do
                        not  and  will not,  by  the  passage  of  time,  the
                        giving  of  notice  or  otherwise,

                        (1)    require  any  Government  Approval  or  violate
                               any  Applicable  Law  relating  to  the
                               Borrower;

                        (2)    conflict  with,  result  in  a  breach  of  or
                               constitute  a  default  under  the certificate
                               of  incorporation  or  bylaws  of  the
                               Borrower,  any  indenture,  agreement or  other
                               instrument  to  which  the  Borrower  is  a
                               party  or  by





                                    -17-


   19

                               which  it  or  any  of  its  property  may  be
                               bound  or  any  Governmental  Approval relating
                               to  the  Borrower,  or

                        (3)    result  in  or  require  the  creation  or
                               imposition  of  any  Lien  upon  or  with
                               respect  to  any  property  now  owned  or
                               hereafter  acquired  by  the  Borrower  other
                               than  the  Security  Interest.

                 (e)    Business.    Neither  the  Borrower  nor  any
                        Subsidiary  owns  or  presently  intends  to acquire,
                        or  is  engaged  in  the  business  of  extending
                        credit  for  the  purpose  of purchasing  or  carrying,
                        any  "margin  security"  or  "margin  stock"  as
                        defined  in  the rules  and  regulations  of  the
                        Board  of  Governors  of  the  Federal  Reserve  System
                        (herein  called  "Margin  Stock").    None  of  the
                        proceeds  of  the  Loan  hereunder  will be  used,
                        directly  or  indirectly,  for  the  purpose  of
                        purchasing  or  carrying  any Margin  Stock  or  for
                        the  purpose  of  reducing  or  retiring  any
                        indebtedness  that  was originally  incurred  to
                        purchase  or  carry  Margin  Stock  or  for  any  other
                        purpose  that might  constitute  this  transaction  a
                        "purpose  credit"  within  the  meaning  of  the  rules
                        and  regulations.    Neither  the  Borrower  nor  any
                        subsidiary  has  taken  or  will  take any  action
                        that  might  cause  this  Agreement  or  the  Note  to
                        violate  any  rule  or regulation  of  the  Board  of
                        Governors  of  the  Federal  Reserve  System  or  to
                        violate the  Securities  and  Exchange  Act  of  1934,
                        nor  will  any  proceeds  of  the  Loan  be used  to
                        acquire  any  security  in  any  transaction  with  is
                        subject  to  Section  13  or 14  of  the  Securities
                        Exchange  Act  of  1934.

                 (f)    Compliance  with  Law;  Governmental  Approvals.    The
                        Borrower  and  each  of  the Subsidiaries  have  all
                        Governmental  Approvals  required  by  any  Applicable
                        Law  that  are material  to  the  conduct  of  its
                        business,  each  of  which  is  in  full  force  and
                        effect,  is  final  and  not  subject  to  review  on
                        appeal  and  is  not  the  subject  of any  pending
                        or,  to  the  best  of  Borrower's  knowledge,
                        threatened  attack  by  direct  or collateral
                        proceeding.    The  Borrower  and  each  of  the
                        Subsidiaries  are  in  compliance with  each
                        Governmental  Approval,  if  any,  and  in  compliance
                        with  all  other  Applicable Laws  relating  to  it,
                        including,  without  limitation,  all  federal  and
                        state  securities laws,  except  for  noncompliances
                        which  would  not,  singly  or  in  the  aggregate,
                        cause a  Default  or  Preceding  Event  or  have  a
                        Materially  Adverse  Effect  on  the  Borrower and  in
                        respect  of  which  adequate  reserves  have  been
                        established  on  the  books  of the  Borrower;

                 (g)    Titles  to  Properties.    Except  as  set  forth  in
                        Schedule  5.1(g)  the  Borrower  and/or the
                        Subsidiaries  have  good,  marketable  and  legal
                        title  to,  or  a  valid  leasehold interest  in,  its
                        real  properties  and  valid  and  legal  title  to
                        all  personal  property and  assets;  all  its  such
                        personal  property  and  assets  are  in  good
                        condition,  fit for  their  intended  purposes.

                 (h)    Liens.    Except  for  tangible  personal  property
                        used  in  connection  with  the  Winn Correctional
                        Center  and  the  Metropolitan  Nashville  and
                        Davidson  County  Facility,none of  the  Collateral
                        is,  as  of  the  Effective  Date,  subject  to  any
                        Lien,  except Permitted  Liens,  that  is  superior  to
                        the  Security  Interest  created  herein.    Except
                        with  respect  to  Permitted  Liens,  no  financing
                        statement  under  the  Uniform  Commercial Code  which
                        names  the  Borrower



                                    -18-




   20

                        or  a  Subsidiary  as  debtor  and  which  lists  the
                        Collateral  as  collateral  (other  than the  Financing
                        Statements)  and  which  has  not  been  terminated
                        has  been  filed  in  any State  or  other
                        jurisdiction,  and  neither  the  Borrower  nor  any
                        Subsidiary  has  signed any  such  financing  statement
                        or  any  security  agreement  authorizing  any  secured
                        party thereunder  to  file  any  such  financing
                        statement.

                 (i)    Indebtedness  .    The  Borrower,  and  each  of  the
                        Subsidiaries,  have  performed  and  is in  compliance
                        with  all  of  the  terms  of  all  Indebtedness  and
                        all  instruments  and agreements  (including
                        Guaranties)  relating  thereto,  and  no  default  or
                        event  which with  the  giving  of  notice  or  lapse
                        of  time  or  both  would  constitute  a  default,
                        exists  as  of  the  Agreement  Date  with  respect  to
                        any  such  Indebtedness.

                 (j)    Litigation.    There  are  no  actions,  suits  or
                        proceedings  pending  (nor,  to  the knowledge  of  the
                        Borrower  or  the  Subsidiaries,  are  there  any
                        actions,  suits  or proceedings  threatened,  nor  is
                        there  any  basis  therefor)  against  or  in  any
                        other way  relating  adversely  to  or  affecting  the
                        Borrower  or  the  Subsidiaries,  or  any  of its
                        property  or  by  any  governmental  body  except
                        actions,  suits  or  proceedings  of the  character
                        normally  incident  to  the  kind  of  business
                        conducted  by  the  Borrower or  the  Subsidiaries,
                        which  if  adversely  determined  would  not  singly
                        or  in  the aggregate  have  a  Materially  Adverse
                        Effect  on  the  Borrower  or  the  Subsidiaries,  and
                        there  are  no  strikes  or  walkouts  in  progress
                        relating  to  any  labor  contracts  to which  the
                        Borrower  or  the  Subsidiaries  is  a  party.

                 (k)    Patents;  Trademarks.    The  Borrower,  and/or  the
                        Subsidiaries,  own  or  possess  all patents,  patent
                        rights  or  licenses,  patent  applications,
                        trademarks,  trademark  rights, trade  styles,  trade
                        names,  trade  name  rights,  service  marks,  service
                        mark  rights, copyrights  and  rights  with  respect
                        to  the  foregoing  which  are  required  to  conduct
                        its  business  as  now  and  presently  planned  to  be
                        conducted  without  conflict  with  the rights  of
                        others.      Except  as  set  forth  on  Schedule
                        5.1(k),  the  Borrower  possesses good  and
                        indefeasible  title  to  and  ownership  of  all
                        trademarks,  trade  systems,  trade names,  service
                        marks,  licenses,  patents,  patent  applications,  and
                        copyrights  as  set forth  on  Schedule  5.1(k)  which
                        are  currently  used  and  intended  to  be  used  in
                        normal  business  operations,  and  none  of  the
                        foregoing  assets  is  the  subject  of  any pending
                        or  threatened  claim  or  challenge.

                 (l)    Tax  Returns  and  Payments.    All  federal,  state
                        and  other  tax  returns  of  the Borrower  required
                        by  law  to  be  filed  have  been  duly  filed,  and
                        all  federal,  state and  other  taxes,  assessments
                        and  other  governmental  charges  or  levies  upon
                        the Borrower  and  its  property,  income,  profits
                        and  assets  which  are  due  and  payable have  been
                        paid,  except  any  such  nonpayment  which  is  at
                        the  time  permitted  under Section  8.5.    The
                        charges,  accruals  and  reserves  on  the  books  of
                        the  Borrower  in respect  of  federal  and  state
                        taxes  for  all  fiscal  years  and  portions  thereof
                        since its  organization  are,  in  the  judgment  of
                        the  Borrower,  adequate,  and  the  Borrower knows  of
                        no  reason  to  anticipate  any  additional
                        assessments  for  any  of  such  years which,  singly
                        or  in  the  aggregate,  might  have  a  Materially
                        Adverse  Effect  on  the Borrower.



                                    -19-

   21


                 (m)    Financial  Statements.    The  Borrower  has  furnished
                        to  the  Lender  copies  of  the  (i) audited
                        consolidated  statements  of  income  and  cash  flows
                        of  the  Borrower  for  the 12-month  period  ended
                        December  31,  1994,  and  unaudited  consolidated
                        statements  of income  and  cash  flow  for  the  month
                        ending  March  31,  1995.    Each  such  financial
                        statement  is  complete  and  correct,  and  presents
                        fairly  in  accordance  with  generally accepted
                        accounting  principles  the  Borrower's  financial
                        condition  as  of  the  date  of the  statement  or
                        for  the  period  covered  (except  that  the
                        unaudited  financial statement  shall  be  subject  to
                        the  normal  year-end  audit  adjustments).    Except
                        as disclosed  or  reflected  in  such  financial
                        statements  as  at  the  Effective  Date,  and except
                        as  disclosed  in  writing  to  the  Lender  prior  to
                        the  Effective  Date,  neither the  Borrower  nor  any
                        of  its  Subsidiaries  had  any  material  liabilities,
                        contingent  or otherwise,  and  neither  the  Borrower
                        nor  any  of  its  Subsidiaries  had  any  material
                        unrealized  or  anticipated  losses.

                 (n)    Liabilities.    Except  for  liabilities  incurred  in
                        the  ordinary  course  of  business  or otherwise
                        described  in  the  financial  statements  disclosed
                        to  the  Lender,  neither  the Borrower  nor  any
                        Subsidiary,  individually  or  in  the  aggregate,  has
                        any  material liabilities,  claims  or  assessments,
                        direct  or  indirect,  absolute  or  contingent.

                 (o)    Leases.    Schedule  5.1(o)  contains  a  complete  and
                        correct  listing  of  all (i)  capitalized  lease
                        obligations  and    (ii)    operating  leases  in
                        effect  as  of  the Agreement  Date  which  call  for
                        total  annual  lease  payments  in  excess  of
                        $100,000.  The  Borrower  and/or  the  Subsidiaries
                        have  performed  and  is  in  compliance  with  all the
                        terms  of  such  capitalized  lease  obligations  and
                        operating  leases  and  no  default or  event  which
                        with  the  giving  of  notice  or  lapse  of  time  or
                        both  would constitute  a  default  exists  as  of  the
                        Agreement  Date  with  respect  to  any  such
                        capitalized  lease  obligation  or  operating  lease.

                 (p)    ERISA.    Except  as  set  forth  on  Schedule  5.1(p),
                        neither  the  Borrower  nor  any Subsidiaries  has  any
                        Plans.    Each  Plan  is  in  compliance  with  ERISA
                        in  all  material respects.    No  material  liability
                        to  the  PBGC  or  to  a  Multiemployer  Plan  has
                        been, or  is  expected  by  the  Borrower  to  be,
                        incurred  by  the  Borrower  or  any  of  its
                        Subsidiaries.

                 (q)    Absence  of  Defaults.    Neither  the  Borrower  nor
                        any  Subsidiary  is  in  default  under its
                        certificate  of  incorporation  or  by-laws  and  no
                        event  has  occurred  which  has  not been  remedied,
                        cured  or  waived,

                        (1)    which  constitutes  a  Default  or  Preceding
                               Event;  or

                        (2)    which  constitutes,  or  which  with  the
                               passage  of  time  or  giving  of  notice  or
                               both  would  constitute,  a  default  by  the
                               Borrower  or  any  Subsidiary

                        under  any  agreement  (other  than  this  Agreement)
                        or  judgment,  decree  or  order  to which  the
                        Borrower  or  any  Subsidiary  is  a  party  or  by
                        which  the  Borrower  or  any Subsidiary  or  any  of
                        the  respective  properties  of  the



                                    -20-



   22

                        Borrower  or  a  Subsidiary  may  be  bound,  and
                        which  event  would  have  a  Materially Adverse
                        Effect  upon  the  Borrower  or  any  Subsidiary.

                 (r)    Accuracy  and  Completeness  of  Information.    All
                        written  information,  reports  and  other papers  and
                        data  produced  by  or  on  behalf  of  the  Borrower
                        and  the  Subsidiaries  and furnished  to  the  Lender
                        were,  at  the  time  the  same  were  so  furnished,
                        complete  and correct  in  all  material  respects,  to
                        the  extent  necessary  to  give  the  recipient  a
                        true  and  accurate  knowledge  of  the  subject
                        matter.    No  fact  is  known  to  the Borrower  nor
                        to  a  Subsidiary  which  has  had,  or  may  in  the
                        future  have  (so  far  as the  Borrower  can
                        foresee),  a  Materially  Adverse  Effect  upon  the
                        Borrower  or  the Subsidiaries  which  has  not  been
                        set  forth  in  such  information,  reports  or  other
                        papers  or  data,  or  otherwise  disclosed  in
                        writing  to  the  Lender  prior  to  the  date of  this
                        Agreement.    No  document  furnished  or  written
                        statement  made  to  the  Lender in  connection  with
                        the  negotiation,  preparation  or  execution  of  this
                        Agreement,  the Note  or  any  of  the  Security
                        Documents  contains  or  will  contain  any  untrue
                        statement of  a  fact  material  to  the
                        creditworthiness  of  the  Borrower  or  omits  or
                        will  omit to  state  a  material  fact  necessary  in
                        order  to  make  the  statement  contained  therein not
                        misleading.

                 (s)    Solvency.    In  each  case  after  giving  effect  to
                        the  Indebtedness  represented  by  the Loan  and  the
                        standby  letters  of  credit,  and  the  transactions
                        contemplated  by  this Agreement,  the  Borrower  and
                        each  of  the  Subsidiaries  is  solvent,  having
                        assets  of  a fair  salable  value  which  exceeds  the
                        amount  required  to  pay  its  debts.    The Borrower
                        and  each  of  the  Subsidiaries  is  able  to  and
                        anticipates  that  it  will  be able  to  meet  its
                        debts  as  they  mature  and  has  adequate  capital
                        to  conduct  the business  in  which  it  is  or
                        proposes  to  be  engaged.

                 (t)    Casualties;  Loss,  etc..    Neither  the  business
                        nor  the  assets  of  Borrower  or  any Subsidiary  has
                        been  materially  and  adversely  affected  as  a
                        result  of  any  fire, explosion,  earthquake,  flood,
                        drought,  windstorm,  accident,  strike,  or  other
                        labor disturbance,  embargo,  requisition  or  taking
                        of  property  or  cancellation  of  contracts, permits
                        or  concessions  by  any  domestic  or  foreign
                        government  or  any  agency  thereof, riot,  activities
                        of  armed  forces,  or  acts  of  God,  or  of  any
                        public  enemy.

                 (u)    Environmental  Laws,  Etc.    Neither  Borrower  nor
                        any  Subsidiary  is  in  violation  of any  federal,
                        state  or  local  environmental  laws,  rules  or
                        regulations,  nor  has  the Borrower  become  aware  of
                        any  facts  or  circumstances  that  would  cause  it
                        to  believe that  any  of  the  facilities  managed  by
                        it  have  violated  or  are  violating  any federal,
                        state  or  local  environmental  laws,  rules  or
                        regulations.

                 (v)    Investment  Company.    Neither  the  Borrower  nor
                        any  Subsidiary  in  an  "investment company"  or  a
                        company  controlled  by  an  "investment  company"
                        within  the  meaning  of the  Investment  Company  Act
                        of  1940,  as  amended.

                 Section  5.2.    Survival  of  Representations  and
Warranties,  etc.    All  representations  and warranties  set  forth  in  this
Article  5,  and  all  representations,  warranties  and  statements



                                    -21-



   23

contained  elsewhere  in  this  Agreement  or  in  any  certificate,  financial
statement,  or  other  instrument, delivered  by  or  on  behalf  of  the
Borrower  or  the  Subsidiaries  pursuant  to  or  in  connection  with  this
Agreement,  the  Note  or  any  of  the  Security  Documents  (including  but
not  limited  to  any  such  made  in  or in  connection  with  any  amendment
thereto)  shall  constitute  representations  and  warranties  made  under
this Agreement  and  shall  survive  the  execution  hereof  and  the  making
of  any  Loan  or  issuance  of  any  standby letter  of  credit  hereunder.


                                   ARTICLE  6

                               SECURITY  INTEREST

                 Section  6.1.    Security  Interest.

                 (a)    To  secure  the  payment,  observance  and  performance
                        of  the  Secured  Obligations,  the Borrower,  and
                        each  of  the  Guarantors,  hereby  mortgages,  pledges
                        and  assigns  all  of the  Collateral  to  the  Lender
                        and  grants  to  the  Lender  a  continuing  Security
                        Interest  in,  and  a  continuing  Lien  upon,  all  of
                        the  Collateral.    The  Borrower  and the  Guarantors
                        acknowledge  that  the  security  interest  and  liens
                        in  the  Collateral are  held  by  the  Lender  for
                        the  benefit  of  the  Lender  and  any  Affiliate  of
                        Lender which  issues  letters  of  credit  or
                        otherwise  extends  credit  to  the  Borrower  under
                        the  terms  of  this  Agreement,  including,  without
                        limitation,  First  Union  National  Bank of  North
                        Carolina,  and  upon  the  occurrence  of  an  Event
                        of  Default,  to  the  extent proceeds  are  realized
                        from  the  disposition  of  the  Collateral  in
                        accordance  with  the terms  of  this  Agreement,  the
                        proceeds  shall  be  applied  by  Lender  to  the
                        Secured Obligations,  including,  without  limitation,
                        the  obligations  of  the  Borrower  to  FUNBNC under
                        the  Guaranty  and  Reimbursement  Agreement,  in
                        accordance  with  the  terms  of  this Agreement.

                 (b)    As  additional  security  for  all  of  the  Secured
                        Obligations,  the  Borrower  and  each  of the
                        Guarantors,  grants  to  the  Lender  a  Security
                        Interest  in,  and  assigns  to  the Lender  all  of
                        the  Borrower's  and  each  of  the  Guarantors'
                        right,  title  and  interest in  and  to,  any
                        deposits  or  other  sums  at  any  time  credited  by
                        or  due  from  the Lender  or  the  Lender's
                        Affiliates  to  the    Borrower  or  the  Guarantors
                        with  the  same rights  therein  as  if  the  deposits
                        or  other  sums  were  credited  by  or  due  from  the
                        Lender.    The  Borrower,  and  each  of  the
                        Guarantors,  hereby  authorizes  the  Lender's
                        Affiliates  to  pay  or  deliver  to  Lender,  without
                        necessity  on  the  Lender's  part  to resort  to
                        other  security  or  sources  of  reimbursement  for
                        the  Secured  Obligations,  at any  time  upon  the
                        occurrence  of  any  Default  and  without  further
                        notice  to  the Borrower  or  the  Guarantors  (such
                        notice  being  expressly  waived),  any  of  the
                        aforesaid  deposits  (general  or  special,  time  or
                        demand,  provisional  or  final)  or other  sums  for
                        application  of  any  Secured  Obligation,
                        irrespective  of  whether  any demand  has  been  made
                        or  whether  such  Secured  Obligation  is  mature,
                        and  the  rights given  the  Lender  hereunder  are
                        cumulative  with  the  Lender's  other  rights  and
                        remedies,  including  other  rights  of  set-off.
                        The  Lender  will  promptly  notify  the Borrower  of
                        its  receipt  of  any  such  funds  for  application
                        to  the  Secured Obligations,  but  failure  to  do  so
                        will  not  affect  the  validity  or  enforceability
                        thereof.    The  Lender  may  give  notice  of



                                    -22-


   24

                        the  above  grant  of  a  Security  Interest  in  and
                        assignment  of  the  aforesaid  deposits and  other
                        sums,  and  authorization,  to,  and  make  any
                        suitable  arrangements  with,  any such  Affiliate  of
                        the  Lender  for  effectuation  thereof,  and  the
                        Borrower  hereby irrevocably  appoints  the  Lender  as
                        its  attorney-in-fact  to  collect  any  and  all  such
                        deposits  or  other  sums  to  the  extent  any  such
                        payment  is  not  made  to  the  Lender by  such
                        Affiliate  or  participant.

         Section  6.2.    Continued  Priority  of  Security  Interest.

                 (a)    The  Security  Interest  granted  in  Section  6.1
                        hereof  shall  at  all  times  be  valid, perfected
                        and  enforceable  against  the  Borrower,  and  each
                        of  the  Guarantors,  and  all third  parties  in
                        accordance  with  the  terms  of  this  Agreement,  as
                        security  for  the Secured  Obligations,  and  the
                        Collateral  shall  not  at  any  time  be  subject  to
                        any Liens  that  are  prior  to,  on  a  parity  with,
                        or  junior  to  the  Security  Interest, other  than
                        Permitted  Liens.

                 (b)    The  Borrower  shall,  at  its  sole  cost  and
                        expense,  take  all  action  that  may  be necessary
                        or  desirable,  or  that  the  Lender  may  request,
                        so  as  at  all  times  to maintain  the  validity,
                        perfection,  enforceability  and  rank  of  the
                        Security  Interest in  the  Collateral  in  conformity
                        with  the  requirements  of  Section  6.2(a),  or  to
                        enable  the  Lender  to  exercise  or  enforce  its
                        rights  hereunder,  including  but  not limited  to:

                        (1)    paying  all  taxes,  assessments  and  other
                               claims  lawfully  levied  or  assessed  on any
                               of  the  Collateral,  except  to  the  extent
                               that  such  taxes,  assessments  and other
                               claims  constitute  Permitted  Liens;

                        (2)    obtaining,  after  the  date  of  this
                               Agreement,  landlords',  mortgagees'  or
                               mechanics'  releases,  subordinations  or
                               waivers;  provided,  that  the  failure  to
                               obtain  any  of  the  foregoing  shall  not  be
                               deemed  a  breach  of  this  covenant  so long
                               as  the  Lender  is  satisfied  that  the
                               Borrower  utilized  its  best  efforts in
                               connection  therewith;

                        (3)    executing  and  delivering  financing
                               statements,  pledges,  designations,  mortgages,
                               deeds  to  secure  debt,  deeds  of  trust,
                               security  agreements,  hypothecations, notices
                               and  assignments  in  each  case  in  form  and
                               substance  satisfactory  to  the Lender
                               relating  to  the  creation,  validity,
                               perfection,  maintenance  or continuation  of
                               the  Security  Interest  under  the  Uniform
                               Commercial  Code  or other  Applicable  Law.

                 (c)    The  Lender  is  hereby  authorized  to  file  one  or
                        more  financing  or  continuation statements  or
                        amendments  thereto  without  the  signature  of  or
                        in  the  name  of  the Borrower  and  each  of  the
                        Guarantors  for  such  purpose.    The  Lender  will
                        give  the Borrower  notice  of  the  filing  of  any
                        such  statements  or  amendments,  which  notice shall
                        specify  the  locations  where  such  statements  or
                        amendments  were  filed.    A carbon,  photographic,
                        xerographic  or  other  reproduction  of  this
                        Agreement  or  of  any of  the  Security  Documents  or
                        of  any  financing  statement  filed  in  connection
                        with this  Agreement  is  sufficient  as  a  financing
                        statement.




                                    -23-


   25


                                   ARTICLE  7

                             COLLATERAL  COVENANTS

                 Until  all  the  Secured  Obligations  have  been  paid  in
full,  unless  the  Lender  shall otherwise  consent  in  writing  thereto:

                 Section  7.1.    Ownership  and  Defense  of  Title.

                 (a)    Except  for  Permitted  Liens,  the  Borrower  and  the
                        Guarantors  shall  at  all  times  be the  sole  owner
                        of  each  and  every  item  of  Collateral  and  shall
                        not  create  any  lien on,  or  sell,  lease,
                        exchange,  assign,  transfer,  pledge,  hypothecate,
                        grant  a  security interest  or  security  title  in
                        or  otherwise  dispose  of,  any  of  the  Collateral
                        or any  interest  therein.    The  inclusion  of
                        "proceeds"  of  the  Collateral  under  the Security
                        Interest  shall  not  be  deemed  a  consent  by  the
                        Lender  to  any  other  sale or  other  disposition  of
                        any  part  or  all  of  the  Collateral.

                 (b)    The  Borrower  and  each  of  the  Guarantors  shall
                        defend  its  title  in  and  to,  and  the Security
                        Interest  in,  the  Collateral  against  the  claims
                        and  demands  of  all  persons.

                 Section  7.2.    Insurance.

                 (a)    The  Borrower  shall  at  all  times  cause  insurance
                        to  be  maintained  on  the  Collateral and  on  all
                        other  buildings,  property,  and  equipment  against
                        loss  or  damage  by  fire, theft,  burglary,
                        pilferage,  loss  in  transit  and  such  other
                        hazards  as  the  Lender shall  reasonably  specify,
                        in  amounts  and  under  policies  issued  by  the
                        Borrower's present  insurers  or  other  insurers
                        acceptable  to  the  Lender.    All  premiums  on  such
                        insurance  shall  be  paid  (or  caused  to  be  paid)
                        by  the  Borrower  and,  unless heretofore  delivered,
                        copies  of  the  policies  shall  be  delivered  to
                        the  Lender.    The Borrower  will  not  use  or
                        permit  the  Collateral,  or  other  buildings,
                        property,  or equipment  to  be  used  unlawfully  or
                        in  such  a  way  that  the  use  causes  the
                        Collateral,  or  other  buildings,  property,  or
                        equipment  to  be  excluded  from  coverage.

                 (b)    All  insurance  policies  required  under  Section  7.2
                        shall  contain  clauses  in  the  form submitted  to
                        the  Borrower  by  the  Lender  or  in  other  form
                        and  substance  satisfactory to  the  Lender,  naming
                        the  Lender,  as  loss  payee  and  providing

                        (1)    that  all  proceeds  thereunder  shall  be
                               payable  to  the  Lender;

                        (2)    that  no  such  insurance  shall  be  affected
                               by  any  act  or  neglect  of  the insured  or
                               owner  of  the  property  described  in  such
                               policy;  and

                        (3)    that  such  policy  and  any  loss  payee
                               clause  may  not  be  cancelled,  amended  or
                               terminated  unless  at  least  ten  days'  prior
                               written  notice  is  given  to  the Lender.



                                    -24-



   26

                 Section  7.3.    Location  of  Offices;  Records.    The
Borrower  will  not  change  the  location of  its  chief  executive  office
or  its  books  and  records  relating  to  the  Collateral  or  change  its
name, its  identity  or  corporate  structure  without  giving  the  Lender  30
days'  prior  written  notice  thereof.  The  Borrower  will  at  all  times
keep  complete  and  accurate  records  of  all  Collateral.


                                   ARTICLE  8

                             AFFIRMATIVE  COVENANTS

                 Until  all  the  Secured  Obligations  have  been  paid  in
full,  unless  the  Lender  shall otherwise  consent  in  writing  thereto,
the  Borrower  will:

                 Section  8.1.    Preservation  of  Corporate  Existence  and
Similar  Matters.    Preserve  and maintain  its  corporate  existence,
rights,  franchises,  licenses  and  privileges  in  the  jurisdiction  of  its
incorporation  and  qualify  and  remain  qualified  as  a  foreign
corporation  and  authorized  to  do  business  in each  jurisdiction  in
which  the  character  of  its  properties  or  the  nature  of  its  business
requires  such qualification  or  authorization.

                 Section  8.2.    Compliance  with  Applicable  Law,  Etc.

                 (a)    Comply  with  all  Applicable  Laws  relating  to  the
                        Borrower.

                 (b)    Maintain  all  Government  Approvals  material  to  the
                        conduct  of  the  Borrower's  and/or the  Subsidiaries'
                        business.

                 (c)    Upon  request  by  Bank,  Borrower  shall  provide  to
                        Bank  copies  of  any  Governmental Approval  required
                        to  be  obtained  by  Borrower  by  Applicable  Law.

                 Section  8.3.    Maintenance  of  Property.    In  addition
to,  and  not  in  derogation  of,  the requirements  of  Section  7.1  and  of
any  of  the  Security  Documents:

                 (a)    protect  and  preserve  all  properties  material  to
                        the  normal  operation  of  its business,  including
                        copyrights,  patents,  trade  names  and  trademarks,
                        and  maintain  in good  repair,  working  order  and
                        condition  all  tangible  properties  material  to  the
                        normal  operation  of  its  business;

                 (b)    maintain  all  physical  property  material  to  normal
                        operation  in  good  and  workable condition  in  all
                        material  respects,  with  reasonable  allowance  for
                        wear  and  tear,  and exercise  proper  custody  over
                        all  such  property;  and

                 (c)    from  time  to  time  make  or  cause  to  be  made
                        all  needed  and  appropriate  repairs, renewals,
                        replacements  and  additions  to  such  properties
                        material  to  the  normal operation  of  its  business,
                        so  that  the  business  carried  on  in  connection
                        therewith may  be  properly  and  advantageously
                        conducted  at  all  times.



                                    -25-



   27

                 Section  8.4.    Insurance.    Maintain,  in  addition  to
that  required  by  Section  7.2  or  any of  the  Security  Documents,
insurance  with  responsible  insurance  companies  against  such  risks  and
in  such amounts  as  is  customarily  maintained  by  similar  businesses  or
as  may  be  required  by  Applicable  Law, including,  without  limitation,
workers'  compensation,  business  interruption  and  fire  and  casualty
insurance and,  in  addition  to  the  foregoing,  general  liability
(including,  if  appropriate,  errors  and  omissions) insurance  in  an
amount  not  less  than  $15,000,000,  and  from  time  to  time  deliver  to
the  Lender  upon  its request  a  detailed  list  of  all  insurance  then  in
effect,  stating  the  names  of  the  insurance  companies, the  amounts  and
rates  of  the  insurance,  the  dates  of  the  expiration  thereof  and  the
properties  and risks  covered  thereby.

  Section  8.5.    Filing  of  Returns  and  Payment  of  Taxes  and  Claims.

                 (a)    File  all  tax  returns  when  due  and  pay  or
                        discharge  when  due  all  taxes,  assessments and
                        governmental  charges  or  levies  imposed  upon  it
                        or  upon  its  income  or  profits or  upon  any
                        properties  belonging  to  it;  and

                 (b)    Pay  or  discharge  when  due  all  lawful  claims  of
                        materialmen,  mechanics,  carriers, warehousemen  and
                        landlords  for  labor,  materials,  supplies  and
                        rentals  which,  if unpaid,  might  become  a  Lien  on
                        any  properties  of  the  Borrower;  except  that  this
                        Section  8.5  shall  not  require  the  payment  or
                        discharge  of  any  such  tax,  assessment, charge,
                        levy  or  claim  which  is  being  contested  in  good
                        faith  by  appropriate proceedings  and  for  which
                        adequate  reserves  have  been  established  on  the
                        appropriate books.

                 Section  8.6.    Accounting  Methods  and  Financial  Records.
Maintain  a  system  of  accounting, and  keep  such  books,  records  and
accounts  (which  shall  be  true  and  complete),  as  may  be  required  or
as may  be  necessary  to  permit  the  preparation  of  financial  statements
in  accordance  with  generally  accepted accounting  principles  consistently
applied.

                 Section  8.7.    Visits  and  Inspections.    During  normal
business  hours  of  the  Borrower, permit  representatives,  agents,  officers
or  employees  of  the  Lender  at  any  time  to

                 (a)    visit  and  inspect  the  Collateral  and  properties
                        of  the  Borrower  and  the Subsidiaries;

                 (b)    inspect,  review,  audit  and  make  extracts  from
                        its  relevant  books,  files, correspondence,  computer
                        information  and  records  including  but  not  limited
                        to management  letters  prepared  by  independent
                        accountants;  and

                 (c)    discuss  with  its  principal  officers,  and,  upon
                        one  (1)  day  prior  notice  to  the Borrower,  its
                        independent  accountants,  its  business,  assets,
                        liabilities,  financial condition,  results  of
                        operations  and  business  prospects.    The  Borrower
                        will  deliver to  the  Lender  any  instrument
                        necessary  for  it  to  obtain  records  from  any
                        service bureau  maintaining  records  on  behalf  of
                        the  Borrower  or  the  Subsidiaries.



                                    -26-


   28

                 Section  8.8.    Use  of  Proceeds.

                 (a)    Use  the  proceeds  of  all  advances  made  hereunder
                        only  for  working  capital  and general  business
                        purposes,  and  for  issuance  of  letters  of  credit
                        in  accordance  with the  terms  of  this  Agreement;
                        and

                 (b)    Not  use  any  part  of  the  proceeds  to  purchase
                        or  carry,  or  to  reduce  or  retire  or refinance
                        any  credit  incurred  to  purchase  or  carry,  any
                        margin  stock  (within  the meaning  of  Regulation  G
                        of  the  Board  of  Governors  of  the  Federal
                        Reserve  System) or  for  any  other  purpose  which
                        would  involve  a  violation  of  such  Regulation  G
                        or Regulation  U  or  X  of  such  Board  of
                        Governors,  or  for  any  other  purpose  prohibited by
                        law  or  by  the  terms  and  conditions  of  this
                        Agreement.

                 Section  8.9.    Further  Assurances.    Promptly  cure  any
defects  in  this  Agreement,  the  Note or  the  Security  Documents  at  its
expense  if  resulting  from  any  act  or  failure  to  act  by  the
Borrower, the  Subsidiaries  or  any  employee  or  officer  thereof
including,  without  limitation,  the  perfection  of  any Liens  in  favor  of
the  Lender.    The  Borrower,  at  its  expense,  will  promptly  execute  and
deliver  to  the Lender  all  such  other  and  further  documents,  agreements
and  instrument  in  compliance  with  or accomplishment  of  the  covenants
and  agreements  of  the  Borrower  set  forth  herein,  in  the  Note  or  in
the Security  Documents,  and  will  take  such  other  actions  necessary  to
further  evidence  or  more  fully  describe any  Collateral,  or  to  correct
any  omissions  or  to  state  more  fully  the  obligations  set  forth  in
any  of the  foregoing,  or  to  perfect,  protect  or  preserve  any  Liens
created  pursuant  to  the  foregoing,  or  to make  such  other  recordings
or  filings  or  to  obtain  such  consents  as  may  be  necessary  or
appropriate  in connection  with  this  Agreement,  the  Note  or  the
Security  Documents.

                 Section  8.10.    Management  Employment  Contracts.    Enter
into  and/or  maintain  an  employment agreement  with  Doctor  R.  Crants  as
shall  be  reasonably  satisfactory  to  the  Lender.

                                 ARTICLE  9

                                 INFORMATION

                 Until  all  the  Secured  Obligations  have  been  paid  in
full,  unless  the  Lender  shall otherwise  consent  in  writing  thereto,
the  Borrower  shall  furnish  to  the  Lender:

                 Section  9.1.    Quarterly  Financial  Statements.    As  soon
as  available  and  in  any  event, within  45  days  following  the  end  of
each  fiscal  quarter,  the  consolidated  and  consolidating  balance  sheet
of  the  Borrower  as  at  the  end  of  such  quarter,  the  related
statement  of  income  of  the  Borrower  for such  quarter,  and  a  statement
of  cash  flow  for  such  quarter,  all  setting  forth  in  comparative  form
the figures  for  the  corresponding  periods  of  the  previous  fiscal  year,
all  of  which  shall  be  certified  by the  president  or  chief  financial
officer  of  the  Borrower  to  be,  in  his  opinion,  complete  and  correct
and  to  present  fairly,  in  accordance  with  generally  accepted
accounting  principles  for  the  presentation  of interim  financial
statements  consistently  applied  throughout  the  period  involved,  subject
to  audit  and year-end  adjustments,  the  financial  position  of  the
Borrower  as  at  its  date  and  the  operations  of  the Borrower  for  the
period  then  ended.



                                    -27-


   29


                 Section  9.2.    Audited  Year-End  Statements.    As  soon
as  available,  and  in  any  event within  90  days  after  the  end  of  each
fiscal  year  of  the  Borrower,  the  consolidated  (together  with internally
prepared  consolidating  statements)  and  consolidating  balance  sheet  of
the  Borrower  as  at  the end  of  such  fiscal  year  and  the  related
statements  of  income,  retained  earnings  and  changes  in  financial
position  of  the  Borrower  for  such  fiscal  year,  and  in  each  case
setting  forth  in  comparative  form  the figures  as  at  the  end  of  and
for  the  previous  fiscal  year,  certified  by  independent  certified
public accountants  acceptable  to  the  Lender  and  whose  certificates
shall  be  in  scope  and  substance  satisfactory to  the  Lender  and  who
shall  have  authorized  the  Borrower  to  deliver  such  financial
statements  and certifications  thereof  to  the  Lender  pursuant  to  this
Agreement.

                 Section  9.3.    Quarterly  Reports.    As  soon  as
available,  and  in  any  event  within  forty- five  (45)  days  following
the  end  of  each  fiscal  quarter,

                 (a)    an  accounts  receivable  aging  report,  in  form  and
substance  acceptable  to  Lender;

                 (b)    a  quarterly  occupancy  report  setting  forth  the
                        occupancy  levels  for  the  Facilities, in  form  and
                        substance  acceptable  to  Lender.


                 Section  9.4.    Officer  Certificate.    At  the  time  the
financial  statements  are  furnished pursuant  to  Sections  9.1  and  9.2,  a
certificate  of  the  Borrower's  president  or  chief  financial  officer

                 (a)    stating  that  a  review  of  the  activities  of  the
                        Borrower  has  been  made  under  his supervision  with
                        a  view  toward  determining  whether  the  Borrower,
                        and  each  of  the Guarantors,  have  fulfilled  all
                        of  its  obligations  under  this  Agreement,  the
                        Note, and  the  Security  Documents;

                 (b)    stating  that  the  Borrower,  and  each  of  the
                        Guarantors,  have  fulfilled  their obligations  under
                        this  Agreement,  the  Note  and  the  Security
                        Documents,  and  that  all representations  made  in
                        this  Agreement  continue  to  be  true  and  correct,
                        and  that  no Default  or  Preceding  Event  exists,
                        or,  if  the  foregoing  is  not  the  case,
                        specifying the  nature  of  any  change  or  specifying
                        such  Default  or  Preceding  Event  and  its nature,
                        when  it  occurred,  whether  it  is  continuing,  and
                        the  steps  being  taken  by the  Borrower  with
                        respect  to  such  event  or  failure;

                 (c)    having  attached  the  calculations,  prepared  by  the
                        Borrower,  required  to  establish whether  or  not
                        the  Borrower  is  in  compliance  with  the  covenants
                        contained  in Sections  10.1  and  10.2,    as  at  the
                        date  of  such  certificate;

                 (d)    to  the  extent  requested  from  time  to  time  by
                        the  Lender,  specifically  affirming compliance  by
                        the  Borrower,  and  each  of  the  Guarantors,  with
                        any  of  its representations  or  obligations  under
                        this  Agreement,  the  Note,  and  the  Security
                        Documents;  and

                 (e)    containing  or  accompanied  by  such  financial  or
                        other  details,  information  and material  as  the
                        Lender  may  reasonably  request  to  evidence  such
                        compliance.



                                     -28-



   30


                 Section  9.5.    Audit  Reports.    Upon  the  receipt  of
any  report  submitted  to  the  Borrower or  any  Subsidiary  by  independent
certified  public  accountants  in  connection  with  any  annual,  interim  or
special  audit  made  by  them  of  the  books  of  the  Borrower  or  any
Subsidiary,  the  Borrower  shall  furnish a  copy  of  any  such  report  to
the  Lender.

                 Section  9.6.    Copies  of  Other  Reports.

                 (a)    Upon  request  of  Bank,  copies  of  all  independent
                        public  accountant  management  letters and  reports
                        to  the  Audit  Committee  of  the  Borrower.

                 (b)    As  soon  as  practicable,  copies  of  all  financial
                        statements  and  reports  as  the Borrower  shall  send
                        to  its  stockholders  and  of  all  registration
                        statements  and  all regular  or  periodic  reports
                        which  the  Borrower  shall  file,  with  the
                        Securities  and Exchange  Commission  or  any
                        successor  commission.

                 (c)    Copies  of  any  amendments  reflecting  any  changes
                        in  Governmental  Approvals  which  may have  a
                        Materially  Adverse  Effect  on  the  Borrower  or  the
                        Subsidiaries.

                 (d)    From  time  to  time  and  promptly  upon  each
                        request,  such  data,  certificates,  reports,
                        statements,  documents  or  further  information
                        regarding  the  business,  assets, liabilities,
                        financial  condition,  results  of  operations  or
                        business  prospects  of  the Borrower  as  the  Lender
                        may  request  and  that  the  Borrower  has  or
                        without unreasonable  expense  can  obtain.    The
                        rights  of  the  Lender  under  this  Section 9.6(d)
                        are  in  addition  to  and  not  in  derogation  of
                        its  rights  under  any  other provision  of  this
                        Agreement  or  any  of  the  Security  Documents.

                 (e)    Upon  request  by  the  Lender,  following  Lender's
                        receipt  of  evidence  of  a  violation or  potential
                        violation  of  applicable  environment  laws,  evidence
                        of  continuing compliance  with  all  federal,  state
                        and  local  environmental  laws  applying  to  the
                        properties  or  operations  of  the  Borrower  and  the
                        Subsidiaries.

                 Section  9.7.    Notice  of  Litigation,  Default  and  Other
Matters.    Prompt  notice  of:

                 (a)    to  the  extent  the  Borrower  is  aware  of  the
                        same,  the  commencement  of  all proceedings  and
                        investigations  by  or  before  any  governmental  or
                        nongovernmental  body and  all  actions  and
                        proceedings  in  any  court  or  before  any
                        arbitrator  against  or in  any  other  way  relating
                        adversely  to,  or  adversely  affecting,  the
                        Borrower,  a Subsidiary  or  any  of  the  property,
                        assets  or  businesses  of  the  Borrower  or  the
                        Subsidiaries,  which  might  singly  or  in  the
                        aggregate,  have  a  Materially  Adverse Effect  on
                        the  Borrower  or  the  Subsidiaries;

                 (b)    any  amendment  of  the  certificate  of  incorporation
                        or  by-laws  of  the  Borrower  or  any Subsidiary;

                 (c)    any  change  in  the  business,  assets,  liabilities,
                        financial  condition,  results  of operations  or
                        business  prospects  of  the  Borrower  or  any
                        Subsidiary  which  has  had  or may  have  any
                        Materially  Adverse  Effect  on  the  Borrower  or  any



                                     -29-



   31

                        Subsidiary  and  any  change  in  the  officers  or
                        board  of  directors  of  the  Borrower; and

                 (d)    any  Default  or  Preceding  Event.

                 Section  9.8.    Notice  of  Issuance  of  Stock.    Upon  the
issuance  of  additional  shares  of stock  in  the  Borrower,  the  Borrower
shall  promptly  disclose  to  the  Lender  in  writing  the  number  of shares
issued,  the  price  therefor,  and  such  other  information  as  the  Lender
may  from  time  to  time request.

                 Section  9.9.    Sources  and  Uses  of  Funds.    Upon
request  of  Lender,  Borrower  shall  provide Lender,  on  a  semi-annual
basis,  with  a  sources  and  uses  of  funds  statement,  in  form  and
substance acceptable  to  Lender.

                 Section  9.10.    Accuracy  of  Information.    All  written
information,  reports,  statements  and other  papers  and  data  furnished  to
the  Lender,  whether  pursuant  to  this  Article  9  or  any  other provision
of  this  Agreement,  or  any  of  the  Security  Documents,  shall  be,  at
the  time  the  same  is  so furnished,  complete  and  correct  in  all
material  respects  to  the  extent  necessary  to  give  the  Lender  true and
accurate  knowledge  of  the  subject  matter.


                                 ARTICLE  10

                             NEGATIVE  COVENANTS

                 Until  all  the  Secured  Obligations  have  been  paid  in
full,  unless  the  Lender  shall otherwise  consent  in  writing  thereto,
neither  the  Borrower  nor  any  Subsidiary  shall  directly  or indirectly:

                 Section  10.1.    Financial  Ratios.    Permit:

                 (a)    the  Borrower's  Debt  Service  Coverage  Ratio  to  be
                        less  than  1.75  to  1,  measured quarterly  on  a
                        rolling  four  (4)  quarters  basis;

                 (b)    the  ratio  of  Senior  Debt  to  Cash  Flow  to  be
                        greater  than  2.75  to  1,  measured quarterly.

                 Section  10.2.    Debts,  Guaranties  and  Other  Obligations.
Incur,  create,  assume  or  in  any manner  be  or  become  liable  in
respect  of  any  Indebtedness  (including  obligations  for  the  payment  of
rent);  Guarantee  or  otherwise  in  any  way  become  or  be  responsible
for  obligations  of  any  other  person, direct  or  contingent,  whether  by
agreement  to  purchase  the  indebtedness  of  any  other  person,  agreement
for  the  furnishing  of  funds  to  any  other  person  through  the  purchase
or  lease  of  goods,  supplies  or services,  or  by  way  of  stock
purchase,  capital  contribution,  advance  or  loan,  for  the  purpose  of
paying or  discharging  the  indebtedness  of  any  other  person,  or
otherwise,  except  that  the  foregoing  restrictions shall  not  apply  to:

                 (a)    the  Secured  Obligations  to  the  Lender  pursuant
to  this  Agreement;



                                     -30-


   32

                 (b)    liabilities,  direct  or  contingent,  of  the
                        Borrower  existing  on  the  date  of  this Agreement
                        and  set  forth  in  Schedule  10.2(b)  attached
                        hereto,  and  including  and  all renewals  and
                        extensions  thereof  (but  not  increases  thereof);

                 (c)    liabilities  in  relation  to  leases  and  lease
                        agreements  to  the  extent  permitted  by Section
                        10.8  hereof;

                 (d)    endorsements  of  negotiable  or  similar  instruments
                        for  collection  or  deposit  in  the ordinary  court
                        of  business;

                 (e)    trade  payables  or  similar  obligations  from  time
                        to  time  incurred  in  the  ordinary course  of
                        business,  other  than  for  borrowed  money;  and

                 (f)    taxes,  assessments  or  other  governmental  charges
                        that  are  not  yet  due  or  are  being contested  in
                        good  faith  by  appropriate  action  initiated  in  a
                        timely  fashion  and diligently  conducted  and,  with
                        respect  to  such  charges  exceeding  $100,000,  if
                        adequate  reserves  shall  have  been  made  therefor.

                 Section  10.3.    Liens.    Create,  incur,  assume  or
permit  to  exist  any  Lien  on  any  of  its properties  or  assets  (now
owned  or  hereafter  acquired),  except:

                 (a)    Liens  securing  the  payment  of  any  Indebtedness
                        to  the  Lender;

                 (b)    Liens  for  taxes,  assessments,  or  other
                        governmental  charges  not  yet  due  or  which are
                        being  contested  in  good  faith  by  appropriate
                        action  promptly  initiated, diligently  conducted  and
                        adequately  bonded;

                 (c)    Liens  of  landlords,  vendors,  carriers,
                        warehousemen,  mechanics,  laborers  and materialmen
                        arising  by  law  in  the  ordinary  course  of
                        business  for  sums  not  yet  due or  being  contested
                        in  good  faith  by  appropriate  action  promptly
                        initiated  and diligently  pursued;

                 (d)    Liens  existing  on  property  owned  by  Borrower  or
                        a  Subsidiary  and  described  in Schedule  5.1(g)
                        attached  hereto,  and  including  all  renewals  and
                        extensions  thereof (but  not  increases  thereof);

                 (e)    pledges  or  deposits  made  in  the  ordinary  court
                        of  business  in  connection  with workers'
                        compensation,  unemployment  insurance,  social
                        security  and  other  like  laws; and

                 (f)    inchoate  Liens  arising  under  ERISA  to  secure  the
                        contingent  liability  of  Borrower.

                 Section  10.4.    Investments,  Loans  and  Advances.    Make
or  permit  to  remain  outstanding  any loans  or  advances  to  or
investments  in  any  person,  except  that:

                 (a)    the  Borrower  may  acquire  and  own  stock,
                        obligations  or  securities  received  in settlement
                        of  debts  owing  to  the  Borrower,  if  the  debts
                        in  question  were  created in  the  ordinary  course
                        of  business;




                                     -31-


   33

                 (b)    the  Borrower  may  endorse  negotiable  instruments
                        for  collection  in  the  ordinary  course of
                        business;

                 (c)    except  for  the  existing  investments  described  in
                        Schedule  10.4(c)  attached  hereto, the  Borrower  may
                        invest,  loan  or  otherwise  contribute  singly  or
                        in  the  aggregate and  for  the  term  of  this
                        Agreement  not  more  than  One  Million  Dollars
                        ($1,000,000) in,  to,  or  on  behalf  of  its
                        Subsidiaries  on  or  after  the  date  hereof;  and

                 (d)    the  Borrower  may  continue  to  make  available  to
                        Doctor  R.  Crants  a  line  of  credit in  a
                        principal  amount  not  to  exceed  $300,000.

                 Section  10.5.    Dividends,  Distributions  and  Redemptions.
Declare  or  pay  any  dividend, purchase,  redeem  or  otherwise  acquire  for
value  any  of  its  stock  now  or  hereafter  outstanding,  or  the stock  of
a  Subsidiary,  as  the  case  may  be,  return  any  capital  to  its
stockholders,  or  make  any distribution  of  its  assets  to  its
stockholders  as  such.    Notwithstanding  the  foregoing,  the  Borrower  may
purchase  or  acquire  its  capital  stock  in  connection  with  Borrower's
(i)  "Flexible  Stock  Option  Plan," adopted  May  26,  1988,"  (ii)  "Stock
Option  Plan,"  dated  January  23,  1985,  (iii)  "Non  Qualified  Stock
Option  Plan,"  dated  January  16,  1986,  (iv)  "1991  Flexible  Stock
Option  Plan,"  dated  April  12,  1991,  or (v)  "1995  Stock  Incentive
Plan"  dated  May  26,  1995.

                 Section  10.6.    Sales  and  Leasebacks.    Enter  into  any
arrangement,  directly  or  indirectly, with  any  person  whereby  the
Borrower  or  any  Subsidiary  shall  sell  or  transfer  any  property,
whether  now owned  or  hereafter  acquired,  and  whereby  the  Borrower  or
any  Subsidiary  shall  then  or  thereafter  rent  or lease  as  lessees  such
property  or  any  part  thereof  or  other  property  which  the  Borrower  or
any Subsidiary  intends  to  use  for  substantially  the  same  purpose  or
purposes  as  the  property  sold  or transferred.

                 Section  10.7.    Nature  of  Business.    Permit  any
material  change  to  be  made  in  the  scope or  character  of  its  business
as  carried  on  at  the  date  hereof  or  alter  or  change  the  corporate
name of  the  Borrower  or  any  Guarantor.

                 Section  10.8.    Limitation  of  Leases.    Create,  incur,
assume  or  suffer  to  exist  any obligation  for  the  payment  of  rent  or
hire  of  property  of  any  kind  whatsoever,  whether  real  or personal,
under  leases  or  lease  agreements  that  would  cause  the  aggregate
amount  of  all  additional payments  made  by  Borrower  pursuant  to  such
new  leases  or  lease  agreements  to  exceed  $250,000  per  year.

                 Section  10.9.    Mergers,  Etc..    Divest  itself  of  a
controlling  interest  in  any  person  or merge  or  consolidate  with  or
sell,  assign,  lease  or  otherwise,  dispose  of  all  or  substantially  all
of its  properties  whether  now  owned  or  hereafter  acquired  (whether  in
one  transaction  or  in  a  series  of transactions)  to,  any  person,  or
permit  any  person  to  do  so;  transfer,  sell,  assign,  pledge  or
hypothecate,  directly  or  indirectly,  any  of  the  capital  stock  of  any
Subsidiary  or  more  than  twenty-five percent  (25%)  of  the  currently
issued  and  outstanding  capital  stock  of  Borrower,  or  issue  or  sell
any capital  stock  for  less  than  fair  market  value  or  issue  from
authorized  but  unissued  stock  or  treasury stock  an  amount  which  would
cause  the  total  number  of  shares  then  outstanding  to  be  more  than
one hundred  twenty-five  percent  (125%)  of  such  amount  as  of  the  date
hereof.



                                     -32-



   34

                 Section  10.10.    Use  of  Working  Capital  Facility.
Permit  the  proceeds  of  the  Working Capital  Facility  to  be  used  for
any  purpose  other  than  those  specified  herein.

                 Section  10.11.    Sale  or  Discount  of  Receivables.
Except  to  minimize  losses  on  bona  fide debts  previously  contracted,
discount,  or  sell  with  recourse,  or  sell  for  less  than  the  greater
of  the face  or  market  value  thereof,  any  of  its  notes  receivable  or
accounts  receivable.

                 Section  10.12.    Prepayments  of  Other  Indebtedness.
Prepay  any  Indebtedness  (excluding trade  payables)  to  any  person,
except  that  the  foregoing  restriction  shall  not  apply  to  the  Note  or
other  Indebtedness  to  the  Lender.

                 Section  10.13.    Certain  Transactions.    Except  as  set
forth  in  Schedule  10.13  attached hereto,  enter  into,  directly  or
indirectly,  any  lease,  contract,  agreement  or  other  transaction  with
any Affiliate  on  terms  that  are  less  favorable  than  those  that  might
be  obtained  at  the  time  in  question from  persons  who  are  not
Affiliates,  or  enter  into,  directly  or  indirectly,  any  contract,
agreement,  or other  transaction  with  any  director  or  officer  of  the
Borrower  or  any  Subsidiary,  or  any  relative  or Affiliates  thereof,
other  than  on  fair  and  reasonable  terms.

                 Section  10.14.    Subsidiaries.    Allow  the  creation  or
existence  of  any  subsidiaries  other than  the  Subsidiaries,  or  allow
all  or  any  part  of  the  capital  stock  of  any  Subsidiary  to  be
transferred,  sold,  pledged  or  hypothecated  in  part  or  in  whole,  or
to  become  subject  to  any  Lien.

                 Section  10.15.    Foreign  Involvement.    Become  materially
involved  in  any  non-United  States of  America  situated  activity  except
for  the  current  activities  described  in  Schedule  10.15  attached hereto.

                 Section  10.16.    Operate  Without  Qualification.
Undertake  to  own,  operate  or  conclude  any agreement  to  own  or  operate
a  correctional  facility  in  any  state  until  it  shall  have  qualified
as  a foreign  corporation  to  do  business  in  such  state.

                 Section  10.17.    Management  Agreement.    Enter  into
agreements  with  third  parties  to  perform the  functions  of  senior
management.

                 Section  10.18.     Change  in  Fiscal  Year.    Change  the
fiscal  year  of  the  Borrower.

                 Section  10.19.     Capital  Expenditures.    Make  capital
expenditures  for  acquisition  or construction  of  a  new  prison  facility.

                                 ARTICLE  11

                                   DEFAULT

                 Section  11.1.    Default.    Each  of  the  following  shall
constitute  a  Default,  whatever  the reason  for  such  event  and  whether
it  shall  be  voluntary  or  involuntary  or  be  effected  by  operation  of
law  or  pursuant  to  any  judgment  or  order  of  any  court  or  any
order,  rule  or  regulation  of  any governmental  or  nongovernmental  body:

                 (a)    Default  in  Payment.    The  Borrower  shall  fail  to
make  any  payment  of



                                     -33-



   35

                        principal  of,  or  interest  on,  the  Note  when  and
                        as  due  (whether  at  the  stated maturity  date,  by
                        reason  of  acceleration  or  otherwise).

                 (b)    Misrepresentation.    Any  representation  or  warranty
                        made  or  deemed  to  be  made  by  the Borrower  or
                        any  Guarantor  under  this  Agreement  or  any
                        Security  Document,  or  any amendment  hereto  or
                        thereto,  shall  at  any  time  prove  to  have  been
                        incorrect  or misleading  in  any  material  respect
                        when  made.

                 (c)    Default  in  Performance.    The  Borrower  or  any
                        Guarantor  shall  fail  to  perform  or observe  any
                        term,  covenant,  condition  or  agreement  contained
                        in  this  Agreement  (other than  one  a  failure  in
                        the  performance  or  observance  of  which  is  dealt
                        with specifically  elsewhere  in  this  Section  11.1)
                        and  such  failure  shall  continue  for  a period  of
                        ten  (10)  business  days  after  (i)  written  notice
                        thereof  has  been  given to  the  Borrower  by  the
                        Lender,  or  (ii)  the  date  such  failure  otherwise
                        becomes known  to  the  Borrower.

                 (d)    Security  Documents.    Any  default  under  the
                        Security  Documents  or  any  Reimbursement Agreement
                        shall  occur  or  the  Borrower  or  any  Guarantor
                        shall  default  in  the performance  or  observance  of
                        any  term,  covenant,  condition  or  agreement
                        contained  in, or  the  payment  of  any  other  sum
                        covenanted  to  be  paid  by  the  Borrower  or  any
                        Guarantor  under,  any  Security  Document  or
                        Reimbursement  Agreement.

                 (e)    Cross-Defaults.    The  Borrower  shall  have
                        defaulted  in  the  payment  when  due,  or  in the
                        performance  or  observance,  of  any  obligation  or
                        condition  of  any  note,  contract, lease  or  other
                        agreement  or  undertaking  (other  than  one  of  the
                        Security  Documents) with  any  person.


                 (f)    Voluntary  Bankruptcy  Proceeding.    The  Borrower  or
                        any  Guarantor  shall

                        (1)    commence  a  voluntary  case  under  the
                               federal  bankruptcy  laws  (as  now  or
                               hereafter  in  effect);

                        (2)    file  a  petition  seeking  to  take  advantage
                               of  any  other  laws,  domestic  or foreign,
                               relating  to  bankruptcy,  insolvency,
                               reorganization,  winding  up  or composition
                               for  adjustment  of  debts;

                        (3)    consent  to  or  fail  to  contest  in  a
                               timely  and  appropriate  manner  any  petition
                               filed  against  it  in  an  involuntary  case
                               under  such  bankruptcy  laws  or  other laws;

                        (4)    apply  for  or  consent  to,  or  fail  to
                               contest  in  a  timely  and  appropriate manner,
                               the  appointment  of,  or  the  taking  of
                               possession  by,  a  receiver, custodian,
                               trustee,  or  liquidator  of  itself  or  of  a
                               substantial  part  of  its property,  domestic
                               or  foreign;

                        (5)    admit  in  writing  its  inability  to  pay  its
                               debts  as  they become  due;

                        (6)    make  a  general  assignment  for  the  benefit 
                               of  creditors;  or



                                     -34-



   36

                        (7)    take  any  formal  corporate  action  for  the
                               purpose  of  effecting  any  of  the foregoing.

                 (g)    Involuntary  Bankruptcy  Proceeding.    A  case  or
                        other  proceeding  shall  be  commenced against  the
                        Borrower  or  any  Guarantor  in  any  court  of
                        competent  jurisdiction  seeking

                        (1)    relief  under  the  federal  bankruptcy  laws
                               (as  now  or  hereafter  in  effect)  or under
                               any  other  laws,  domestic  or  foreign,
                               relating  to  bankruptcy,  insolvency,
                               reorganization,  winding  up  or  adjustment  of
                               debts;

                        (2)    the  appointment  of  a  trustee,  receiver,
                               custodian,  liquidator  or  the  like  of the
                               Borrower  or  any  Guarantor  or  of  all  or
                               any  substantial  part  of  the assets,
                               domestic  or  foreign,  of  the  Borrower  or
                               any  Guarantor;  and  such  case or  proceeding
                               shall  continue  undismissed  or  unstayed  for
                               a  period  of  60 consecutive  calendar  days,
                               or  an  order  granting  the  relief  requested
                               in  such case  or  proceeding  against  the
                               Borrower  or  any  Guarantor  (including,  but
                               not limited  to,  an  order  for  relief  under
                               such  federal  bankruptcy  laws)  shall  be
                               entered.

                 (h)    Litigation.    Except  for  good  faith  disputes
                        regarding  the  interpretation  of  this Agreement  or
                        any  other  document,  instrument  or  certificate
                        delivered  in  connection with  this  Agreement,  the
                        Borrower,  a  Guarantor,  or  any  Affiliate  shall
                        challenge  or contest  in  any  action,  suit  or
                        proceeding  in  any  court  or  before  any  arbitrator
                        or governmental  body  the  validity  or
                        enforceability  of  this  Agreement,  the  Note  or
                        any Security  Document  or  the  perfection  or
                        priority  of  the  Security  Interest  or  any Lien
                        granted  to  the  Lender  under  any  Security
                        Document.

                 (i)    Judgment.    A  judgment  or  order  for  the  payment
                        of  money  shall  be  entered  against the  Borrower
                        by  any  court  which  exceeds  $100,000  in  amount
                        and  such  judgment  order shall  continue
                        undischarged  or  unstayed  for  thirty  (30)  days.

                 (j)    Breach  of  Other  Agreements.    The  Borrower  shall
                        breach  any  material  term  or condition  of  any
                        other  agreement  to  which  the  Borrower  is  a
                        party  and  the  party other  than  the  Borrower
                        thereto  shall  resort  to  any  remedy  under  such
                        agreement  or otherwise  available  at  law  or  equity
                        which  could  have  a  Material  Adverse  Affect upon
                        the  business  or  financial  condition  of  the
                        Borrower.

                 (k)    ERISA.

                        (1)    Any  Termination  Event  with  respect  to  a
                               Plan  shall  occur  that  results  in  an
                               Unfunded  Vested  Accrued  Benefit;  or




                                     -35-


   37

                        (2)    any  Plan  shall  incur  an  "accumulated
                               funding  deficiency"  (as  defined  in  Section
                               412  of  the  Code  or  Section  302  of  ERISA)
                               for  which  a  waiver  has  not  been obtained
                               in  accordance  with  the  applicable
                               provisions  of  the  Code  and  ERISA; or


                        (3)    the  Borrower  is  in  "default"  (as  defined
                               in  Section  4219(c)(5)  of  ERISA)  with
                               respect  to  payments  to  a  multi-employer
                               Plan  resulting  from  the  Borrower's complete
                               or  partial  withdrawal  (as  described  in
                               Section  4203  or  4205  of  ERISA) from  such
                               plan.

                 (l)    Standby  Letter  of  Credit.    Any  demand  or  claim
                        shall  be  made  for  payment  or  honor by  the
                        holder  thereof  with  respect  to  any  standby
                        letter  of  credit  issued  pursuant to  this
                        Agreement  and  such  demand  or  claim  is  not
                        withdrawn  and  all  advances  made pursuant  thereto,
                        together  with  interest  thereon,  are  not  repaid
                        to  the  Lender within  thirty  (30)  days  of  such
                        demand  or  claim.

                 (m)    Discontinuance  of  Business.    The  Borrower  shall
                        discontinue  or  otherwise  materially reduce  its
                        usual  and  customary  business  activities.

                 Section  11.2.    Remedies.

                 (a)    Automatic  Acceleration  and  Termination  of
                        Facility.    Upon  the  occurrence  of  a Default
                        specified  in  Section  11.1(f),  (g)  or  (h),  (1)
                        the  principal  of  and  the interest  on  the  Working
                        Capital  Facility  and  the  Note  at  the  time
                        outstanding,  and all  other  amounts  owed  to  the
                        Lender  under  this  Agreement,  the  Note,  any
                        Reimbursement  Agreements,  or  any  of  the  Security
                        Documents,  shall  thereupon  become due  and  payable
                        without  presentment,  demand,  protest,  or  other
                        notice  of  any  kind, all  of  which  are  expressly
                        waived,  anything  in  this  Agreement,  the  Note,
                        any Reimbursement  Agreements,  or  any  of  the
                        Security  Documents  to  the  contrary notwithstanding;
                        and  (2)  the  Working  Capital  Facility  and  the
                        right  of  the  Borrower to  request  borrowings  or
                        standby  letters  of  credit  hereunder  shall
                        immediately terminate.

                 (b)    Other  Remedies.    If  a  Default  shall  have
                        occurred,  and  during  the  continuance  of any
                        Default,  the  Lender,  in  its  sole  and  absolute
                        discretion,  and  without  implied limitation,  may  do
                        any  or  all  of  the  following:

                        (1)    declare  the  principal  of  and  interest  on
                               the  Note  at  the  time  outstanding, and  all
                               other  amounts  owed  to  the  Lender  under
                               this  Agreement,  or  any  of  the Security
                               Documents,  to  be  forthwith  due  and
                               payable,  whereupon  the  same  shall
                               immediately  become  due  and  payable  without
                               presentment,  demand,  protest  or  other notice
                               of  any  kind,  all  of  which  are  expressly
                               waived,  anything  in  this Agreement,  the
                               Note  or  the  Security  Documents  to  the
                               contrary  notwithstanding;

                        (2)    declare  all  amounts  that  may  be  owed  to
                               the  Lender  under  any  Reimbursement Agreement
                               to  be  due  and  payable  and  require  such



                                     -36-



   38

                               amount  to  be  paid  to  Lender  as  security
                               against  any  draw  or  draws  pursuant to  any
                               standby  letter  of  credit;

                        (3)    terminate  the  Working  Capital  Facility  and
                               any  other  right  of  the  Borrower  to request
                               borrowings  hereunder;

                        (4)    notify,  or  request  the  Borrower  to  notify,
                               in  writing  or  otherwise,  any account  debtor
                               or  obligor  with  respect  to  any  one  or
                               more  accounts  receivable to  make  payment  to
                               the  Lender  or  its  agent  or  designee,  at
                               such  address  as may  be  specified  by  the
                               Lender  (if,  notwithstanding  the  giving  of
                               any  notice, any  account  debtor  or  other
                               such  obligor  shall  make  payments  to  the
                               Borrower, the  Borrower  shall  hold  all  such
                               payments  it  receives  in  trust  for  the
                               Lender,  without  commingling  the  same  with
                               other  funds  or  property  of,  or  held by,
                               the  Borrower,  and  shall  deliver  the  same
                               to  the  Lender  or  its  agent  or designee
                               immediately  upon  receipt  by  the  Borrower
                               in  the  identical  form received,  together
                               with  any  necessary  endorsements);

                        (5)    settle  or  adjust  disputes  and  claims
                               directly  with  account  debtors  and  other
                               obligors  on  accounts  receivable  for  amounts
                               and  on  terms  which  the  Lender considers
                               advisable  and  in  all  such  cases  only  the
                               net  amounts  received  by the  Lender  in
                               payment  of  such  amounts,  after  deductions
                               of  costs  and attorneys'  fees  shall
                               constitute  Collateral  (the  Borrower  shall
                               have  no  further right  to  make  any  such
                               settlements  or  adjustments  or  to  accept
                               any  returns  of goods);

                        (6)    exercise  any  and  all  of  its  rights  under
                               any  and  all  of  the  Security Documents;

                        (7)    apply  any  cash  Collateral  to  the  payment
                               of  the  Secured  Obligations  in  any order  in
                               which  the  Lender  may  elect  or  use  such
                               cash  in  connection  with  the exercise  of
                               any  of  its  other  rights  hereunder  or
                               under  any  of  the  Security Documents;

                        (8)    exercise  all  of  the  rights  and  remedies
                               of  a  secured  party  under  the  Uniform
                               Commercial  Code  and  under  any  other
                               Applicable  Law,  including,  without
                               limitation,  the  right  without  notice  except
                               as  specified  below  and  with  or without
                               taking  the  possession  thereof,  to  sell  the
                               Collateral  or  any  part thereof  in  one  or
                               more  parcels  at  public  or  private  sale,
                               at  any  location chosen  by  the  Lender,  for
                               cash,  on  credit  or  for  future  delivery,
                               and  at such  price  or  prices  and  upon  such
                               other  terms  as  the  Lender  may  deem
                               commercially  reasonable.    (The  Borrower
                               agrees  that,  to  the  extent  notice  of sale
                               shall  be  required  by  law,  at  least  ten
                               days'  notice  to  the  Borrower  of the  time
                               and  place  of  any  public  sale  or  the  time
                               after  which  any  private sale  is  to  be
                               made  shall  constitute  reasonable
                               notification.    The  Lender  shall not  be
                               obligated  to  make  any  sale  of  Collateral
                               regardless  of  notice  of  sale having  been
                               given.    The  Lender  may  adjourn  any  public
                               or  private  sale  from time  to  time  by
                               announcement  at  the  time  and  place  fixed




                                     -37-

   39



                               therefor,  and  such  sale  may,  without
                               further  notice,  be  made  at  the  time  and
                               place  to  which  it  was  adjourned).

                 Section  11.3.    Application  of  Proceeds.    All  proceeds
from  each  sale  of,  or  other realization  upon,  all  or  any  part  of
the  Collateral  following  a  Default  shall  be  applied  or  paid  over as
follows:

                 (a)    First:    to  the  payment  of  all  costs  and
                        expenses  incurred  in  connection  with  such sale  or
                        other  realization,  including  attorneys'  fees;


                 (b)    Second:    to  the  payment  of  the  Secured
                        Obligations  (with  the  Borrower  remaining liable
                        for  any  deficiency)  in  any  order  which  the
                        Lender  may  elect;  and

                 (c)    Third:    the  balance  (if  any)  of  such  proceeds
                        shall  be  paid  to  the  Borrower, subject  to  any
                        duty  imposed  by  law  or  otherwise  to  whomsoever
                        will  be  entitled thereto.

The  Borrower  shall  remain  liable  and  will  pay,  on  demand,  any
deficiency  remaining  in  respect  of  the Secured  Obligations,  together
with  interest  thereon  at  a  rate  per  annum  equal  to  the  highest  rate
then payable  hereunder  on  such  Secured  Obligations,  which  interest
shall  constitute  part  of  the  Secured Obligations.

                 Section  11.4.    Power  of  Attorney.    In  addition  to
the  authorizations  granted  to  the Lender  under  any  other  provision  of
this  Agreement  or  any  of  the  Security  Documents,  upon  and  after  a
Default,  the  Borrower  hereby  irrevocably  designates  and  appoints  the
Lender  (and  all  persons  designated  by the  Lender  from  time  to  time)
as  the  Borrower's  true  and  lawful  attorney  and  agent  in  fact,  and
the Lender,  or  any  agent  of  the  Lender,  may,  without  notice  to  the
Borrower,  and  at  such  time  or  times  as the  Lender  or  any  such  agent
in  its  sole  discretion  may  determine,  in  the  name  of  the  Borrower
or  the Lender,  exercise  all  of  the  Borrower's  rights  and  remedies
with  respect  to  the  collection  of  accounts receivable,  prepare,  file
and  sign  the  name  of  the  Borrower  on  any  notice  of  Lien,  assignment
or satisfaction  of  Lien,  or  similar  document  in  connection  with  any
of  the  Collateral,  and  endorse  the  name of  the  Borrower  upon  any
chattel  paper,  document,  instrument,  notice,  freight  bill,  bill  of
lading  or similar  document  or  agreement  relating  to  any  other
Collateral.

                 Section  11.5.    Miscellaneous  Provisions  Concerning
                                   Remedies.

                 (a)    Rights  Cumulative.    The  rights  and  remedies  of
                        the  Lender  under  this  Agreement,  the Note,  any
                        Reimbursement  Agreement  and  each  of  the  Security
                        Documents  shall  be cumulative  and  not  exclusive
                        of  any  rights  or  remedies  which  it  would
                        otherwise have.    In  exercising  its  rights  and
                        remedies  the  Lender  may  be  selective,  and  no
                        failure  or  delay  by  the  Lender  in  exercising
                        any  right  shall  operate  as  a  waiver of  it,  nor
                        shall  any  single  or  partial  exercise  of  any
                        power  or  right  preclude its  other  or  further
                        exercise  or  the  exercise  of  any  other  power  or
                        right.

                 (b)    Waiver  of  Marshalling.    The  Borrower  hereby
                        waives  any  right  to  require  any marshalling  of
                        assets  and  any  similar  right.




                                     -38-


   40


                                 ARTICLE  12

                                MISCELLANEOUS

                 Section  12.1.    Notices.

                 (a)    Method  of  Communication.    Except  as  specifically
                        provided  in  this  Agreement  or  in any  of  the
                        Security  Documents,  all  notices  and  the
                        communications  hereunder  and thereunder  shall  be
                        in  writing  or  by  telephone,  subsequently
                        confirmed  in  writing.  Notices  in  writing  shall
                        be  delivered  personally  or  sent  by  certified  or
                        registered mail  postage  prepaid  or  by  telegraph
                        or  telex  and  shall  be  deemed  received,  in  the
                        case  of  personal  delivery,  when  delivered,  in
                        the  case  of  mailing,  on  the  third day  after
                        mailing,  in  the  case  of  telegraph,  on  the  day
                        after  delivery  to  the telegraph  office  and  in
                        the  case  of  telex,  upon  transmittal.

                 (b)    Addresses  for  Notices.    Notices  to  any  party
                        shall  be  sent  to  it  at  the  following addresses,
                        or  any  other  address  of  which  all  the  other
                        parties  are  notified  in writing:

                        If  to  the  Borrower:    Corrections
                                                  Corporation  of  America 102
                                                  Woodmont  Boulevard Suite
                                                  800 Nashville,  Tennessee
                                                  37205 Attention:
                                    Attention:    Darrell  K.  Massengale,
                                                  Chief  Financial  Officer

                        With  a  copy  to:        Robert  R.  Campbell,
                                                  Jr.,  Esq.  Stokes  &
                                                  Bartholomew 424  Church
                                                  Street,  Suite  2800
                                                  Nashville,  Tennessee  37219

                        If  to  the  Lender:      First  Union  National  Bank 
                                                  of Tennessee 333  Union  
                                                  Street Nashville,  Tennessee 
                                                  37219
                                  Attention:      Brent  Turner,  Vice  
                                                  President

                        With  a  copy  to:        Kim  A.  Brown,  Esq.
                                                  Sherrard  &  Roe,  P.L.C.
                                                  424  Church  Street,  Suite
                                                  2000 Nashville,  Tennessee
                                                  37219

                 Section  12.2.    Expenses.    The  Borrower  will  pay  all
reasonable  out-of-pocket  expenses  of the  Lender  in  connection  with  the
preparation,  execution  and  delivery  of  this  Agreement,  the  Note,  each
of  the  Security  Documents,  and  any  other  documents  or  instruments
whenever  the  same  shall  be  executed and  delivered,  including
appraisers'  fees,  search  fees,  recording  fees,  taxes,  title  insurance
premiums  and the  fees  and  disbursements  of  the  law  firm  of  Sherrard
&  Roe,  counsel  for  the  Lender  and  of  each local  counsel  retained  by
the  Lender.




                                     -39-


   41

                 Section  12.3.    Setoff.    In  addition  to  any  rights
now  or  hereafter  granted  under Applicable  Law  upon  and  after  the
occurrence  of  any  Default,  the  Lender  is  hereby  authorized  by  the
Borrower  at  any  time  and  from  time  to  time,  without  notice,  to  set
off  and  to  apply  any  and  all amounts  in  any  and  all  payroll
accounts  of  the  Borrower  maintained  with  the  Lender  or  any  Affiliate
of the  Lender,  against  and  on  account  of  the  Secured  Obligations
irrespective  or  whether  or  not

                 (a)    the  Lender  shall  have  made  any  demand  under
                        this  Agreement,  the  Note,  any Reimbursement
                        Agreement  or  any  of  the  Security  Documents;  or


                 (b)    the  Lender  shall  have  declared  any  or  all  of
                        the  Secured  Obligations  to  be  due and  payable  as
                        permitted  by  Section  11.2  and  although  such
                        Secured  Obligations  shall be  contingent  or
                        unmatured.

                 Section  12.4.    Accounting  Matters.    All  financial  and
accounting  calculations,  measurements and  computations  made  for  any
purpose  relating  to  this  Agreement,  including  without  limitation  all
computations  utilized  by  the  Borrower  in  complying  with  any  covenant
contained  herein,  shall,  unless  there is  an  express  written  direction
by  the  Lender  to  the  contrary,  be  performed  in  accordance  with
generally accepted  accounting  principles  consistently  applied.

                 Section  12.5.    Assignment.    All  the  provisions  of
this  Agreement  shall  be  binding  upon and  inure  to  the  benefit  of  the
parties  hereto  and  their  respective  successors  and  assigns,  except
that the  Borrower  may  not  assign,  delegate,  or  otherwise  transfer  any
of  its  rights  or  duties  under  this Agreement.

                 Section  12.6.    Amendments.    Any  term,  covenant,
agreement  or  condition  of  this  Agreement, the  Note  or  any  of  the
Security  Documents  may  be  amended  or  waived,  and  any  departure
therefrom  may  be consented  to,  if,  but  only  if,  such  amendment,
waiver  or  consent  is  in  writing  and  is  signed  by  the Lender  and,  in
the  case  of  any  amendment,  also  by  the  Borrower,  and  in  such  event,
the  failure  to observe,  perform  or  discharge  any  such  term,  covenant,
agreement  or  condition  (whether  such  amendment  is executed  or  such
waiver  or  consent  is  given  before  or  after  such  failure)  shall  not
be  construed  as  a breach  of  such  term,  covenant,  agreement  or
condition  or  as  a  Default  or  Preceding  Event.  Unless otherwise
specified  in  such  waiver  or  consent,  a  waiver  or  consent  given
hereunder  shall  be  effective only  in  the  instance  and  for  the
specific  purpose  for  which  given.

                 Section  12.7.    Performance  of  Borrower's  Duties.

                 (a)    The  Borrower's  obligations  under  this  Agreement,
                        the  Term  Note,  the  Revolving  Credit Note  and
                        each  of  the  Security  Documents  shall  be
                        performed  by  the  Borrower  at  its sole  cost  and
                        expense.

                 (b)    If  the  Borrower  shall  fail  to  do  any  act  or
                        thing  which  it  has  covenanted  to  do under  this
                        Agreement  or  any  of  the  Security  Documents,  the
                        Lender  may  (but  shall not  be  obligated  to)  do
                        the  same  or  cause  it  to  be  done  either  in  the
                        name  of the  Lender  or  in  the  name  and  on
                        behalf  of  the  Borrower  and  the  Borrower  hereby
                        irrevocably  authorizes  the  Lender  so  to  act.



                                     -40-



   42

                 Section  12.8.    Indemnification.    The  Borrower  agrees
to  indemnify  and  hold  the  Lender harmless  from  and  against  all  losses
(including  reasonable  attorneys'  fees)  suffered  by  the  Lender  in
connection  with:

                 (a)    the  exercise  by  the  Lender  of  any  right  or
                        remedy  granted  to  it  under  this Agreement,  the
                        Note,  any  Reimbursement  Agreement  or  any  of  the
                        Security  Documents;

                 (b)    any  claim,  and  the  prosecution  or  defense
                        thereof,  arising  out  of  or  in  any  way connected
                        with  this  Agreement,  the  Note,  any  Reimbursement
                        Agreement  or  any  of  the Security  Documents;

                 (c)    the  collection  or  enforcement  of  the  Secured
                        Obligations;  and

                 (d)    any  claim,  demand,  action,  proceeding,  liability,
                        penalty  or  assessment  relating  to or  arising  from
                        a  violation  or  alleged  violation  of  any  federal,
                        state  or  local environmental  law,  rule,  regulation
                        or  order;

provided  that  the  Borrower  shall  not  be  obligated  to  so  indemnify
and  hold  harmless  the  Lender  for  any such  loss  resulting  from  the
willful  misconduct  or  gross  negligence  of  the  Borrower.

                 Section  12.9.    All  Powers  Coupled  with  Interest.    All
powers  of  attorney  and  other authorizations  granted  to  the  Lender  and
any  persons  designated  by  the  Lender  pursuant  to  any  provisions of
this  Agreement,  any  Reimbursement  Agreement  or  any  of  the  Security
Documents  shall  be  deemed  coupled with  an  interest  and  shall  be
irrevocable  so  long  as  any  of  the  Secured  Obligations  remain  unpaid
or unsatisfied.

                 Section  12.10.    Survival.    Notwithstanding  any
termination  of  this  Agreement,

                 (a)    until  all  Secured  Obligations  have  been  paid  in
                        full  or  otherwise  satisfied,  the Lender  shall
                        retain  its  Security  Interest  and  shall  retain
                        all  rights  under  this Agreement,  any  Reimbursement
                        Agreement  and  each  of  the  Security  Documents
                        with respect  to  such  Collateral  as  fully  as
                        though  this  Agreement  had  not  been terminated;
                        and

                 (b)    the  indemnities  to  which  the  Lender  is  entitled
                        under  the  provisions  of  this Article  12  and  any
                        other  provision  of  this  Agreement,  any
                        Reimbursement  Agreement and  the  Security  Documents
                        shall  continue  in  full  force  and  effect  and
                        shall protect  the  Lender  against  events  arising
                        after  such  termination  as  well  as  before.

                 Section  12.11.    Titles  and  Captions.    The  Table  of
Contents  and  the  titles  and  captions of  Articles,  Sections  and
subsections  in  this  Agreement  are  for  convenience  only,  and  neither
limit  nor amplify  the  provisions  of  this  Agreement.

                 Section  12.12.    Severability  of  Provisions.    Any
provision  of  this  Agreement  which  is prohibited  or  unenforceable  in
any  jurisdiction  shall,  as  to  such  jurisdiction,  be  ineffective  only
to the  extent  of  such  prohibition  or  unenforceability  without
invalidating  the  remainder  of  such  provision  or the  remaining
provisions  hereof  or  affecting  the  validity  or  enforceability  of  such
provision  in  any other  jurisdiction.




                                     -41-


   43

                 Section  12.13.    Governing  Law;  Jurisdiction.    This
Agreement,  the  Note  and  Security Documents  shall  be  construed  in
accordance  with  and  governed  by  the  law  of  the  State  of  Tennessee;
except  that  the  enforceability  of  any  mortgage  or  deed  of  trust  with
respect  to  real  property  Collateral located  outside  the  State  of
Tennessee  shall  be  governed  by  the  laws  of  the  jurisdiction  where
such real  property  is  located.    The  Borrower  agrees  that  this
Agreement,  the  Note  and  the  Security  Documents were  the  subject  of
negotiations  that  occurred  in  Tennessee  between  the  Borrower  and  the
Lender  and  may be  enforced  by  an  action  filed  in  the  United  States
District  Court  for  the  Middle  District  of Tennessee,  or  in  any  court
of  record  in  the  City  of  Nashville,  Tennessee,  and  the  Borrower
hereby submits  to  the  jurisdiction  of  the  State  of  Tennessee  for  all
purposes  in  connection  with  this Agreement.

                 Section  12.14.    Counterparts.    This  Agreement  may  be
executed  in  any  number  of counterparts  and  by  different  parties  hereto
in  separate  counterparts,  each  of  which  when  so  executed shall  be
deemed  to  be  an  original  and  shall  be  binding  upon  all  parties,
their  successors  and  assigns upon  execution  by  all  parties,  and  all
of  which  taken  together  shall  constitute  one  and  the  same agreement.

                 Section  12.15.    Capital  Adequacy  Regulation.    If  the
Lender  shall  determine  that  any Regulation  adopted  or  effective  after
the  date  hereof  regarding  capital  adequacy,  or  any  change  therein, or
any  change  in  the  interpretation  or  administration  thereof  by  any
governmental  authority,  central  bank or  comparable  agency  charged  with
the  interpretation  or  administration  thereof,  or  any  request  or
directive  regarding  capital  adequacy  (whether  or  not  having  the  force
of  law)  of  any  such  authority, central  bank  or  comparable  agency,  has
or  would  have  the  effect  of  reducing  the  rate  of  return  on capital
of  the  Lender  as  a  consequence  of  the  Lender's  obligations  under
this  Agreement,  to  a  level below  that  which  the  Lender  could  have
achieved  but  for  such  adoption  or  change  (taking  into consideration
its  policies  with  respect  to  capital  adequacy)  by  an  amount  deemed
by  the  Lender  to  be material,  then  from  time  to  time,  within  fifteen
(15)  days  after  demand  by  the  Lender,  the  Borrower shall  compensate
the  Lender  for  such  reduction,  including  any  amount  or  amounts  equal
to  any  taxes  on the  overall  net  income  of  the  Lender  payable  with
respect  to  the  amount  of  payments  required  to  be made  pursuant  to
this  subsection.    The  Lender  will  promptly  notify  the  Borrower  of
any  event  of  which it  has  knowledge,  occurring  after  the  date  hereof,
which  will  entitle  the  Lender  to  compensation  pursuant to  this
subsection,  and  the  Lender  will  designate  a  different  applicable
lending  office  if  such designation  will  avoid  the  need  for,  or  reduce
the  amount  of,  such  compensation  and  will  not,  in  the judgment  of
the  Lender,  be  otherwise  disadvantageous  to  it.    If  the  Lender  shall
claim  compensation under  this  provision,  it  shall  furnish  a  certificate
to  the  Borrower  setting  forth  the  additional  amount or  amounts  to  be
paid  to  it  hereunder,  which  shall  be  conclusive  in  the  absence  of
manifest  error.  In  determining  such  amount,  the  Lender  may  use  any
reasonable  averaging  and  attribution  methods.

                 Section  12.16.    Amended  and  Restated  Loan  Agreement.
This  Agreement,  the  Note  and Security  Documents  executed  pursuant
hereto  are  intended  to  amend  and  restate  the  Loan  Agreement  and  the
Construction  Loan  Agreement.    The  Borrower  and  the  Lender  hereby
agree  that  the  Loan  Agreement  is herewith  fully  incorporated  into  this
Agreement,  the  Note  and  the  Security  Documents,  respectively,  and that
the  Loan  Agreement  and  the  Construction  Loan  Agreement  shall,  from
the  date  hereof,  be  of  no further  independent  force  and  effect.



                                     -42-



   44

                 IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused
this  Agreement  to  be  executed  by  their duly  authorized  officers  in
several  counterparts  all  as  of  the  day  and  year  first  written  above.

                                                                                    
GUARANTORS:                                     BORROWER:                                 
                                                                                          
TRANSCOR  AMERICA,  INC.                        CORRECTIONS  CORPORATION                  
                                                OF  AMERICA                               
                                                                                          
                                                                                          
                                                                                          
BY:                                             BY:                                       
   -----------------------------------                -------------------------------       
      Darrell  K.  Massengale                          Darrell  K.  Massengale            
      Secretary                                        Chief  Financial  Officer          
                                                                                          
                                                                                          
TECHNICAL  &  BUSINESS  INSTITUTE                                                         
OF  AMERICA,  INC.                              LENDER:                                   
                                                                                          
                                                FIRST  UNION  NATIONAL  BANK              
BY:                                             OF  TENNESSEE                             
   -----------------------------------                                                    
      Darrell  K.  Massengale                                                             
      Secretary                                                                           
                                                                                          
                                                                                          
CONCEPT,  INCORPORATED                          BY:                                       
                                                   ----------------------------------     
BY:                                             Brent  Turner,  Vice  President           
   ----------------------------------  
      Darrell  K.  Massengale                            
      Secretary                        





                                     -43-




   45

                                  SCHEDULE  2

                              Secured  Obligations


              (a)   Indebtedness  evidenced  by  a  $13,260,000.01  Amended
and  Restated  Construction  Loan  Note dated  as  of  July  13,  1995,
executed  by  Corrections  Corporation  of  America  ("CCA")  and  payable  to
First Union  National  Bank  of  Tennessee,  together  with  all  renewals,
extensions  and  modifications  thereof.

              (b)   The  obligations  of  CCA  under  the  terms  of  a
Guaranty  and  Reimbursement  Agreement  dated as  of  July  13,  1995,
executed  by  CCA  in  favor  of  First  Union  National  Bank  of  North
Carolina ("FUNBNC"),  delivered  in  connection  with  the  $34,346,301
Irrevocable  Letter  of  Credit  No.  S054438  issued by  FUNBNC,  at  the
request  of  CCA,  in  favor  of  Liberty  Bank  and  Trust  Company  of
Oklahoma  City, National  Association,  in  connection  with  the  Holdenville
bond  issue.








   46

                                  SCHEDULE  3

                          Subordinated  Indebtedness


              (a)   the  Borrower's  $7,000,000  aggregate  principal  amount
                    8.5%  Convertible  Subordinated  Notes originally  due
                    November  7,  1999,

              (b)   the  Borrower's  $7,500,000  aggregate  principal  amount
                    Convertible,  Extended  Subordinated Notes  originally  due
                    September  30,  1998.





   47


                                SCHEDULE  5.1(k)

                              PATENTS;  TRADEMARKS

                                      None







   48


                                SCHEDULE  5.1(o)

                                     LEASES


Office  Rental  Agreement:

              Approximately  21,000  square  feet  for  two  floors  of  office
space  at  102  Woodmont  Boulevard, Nashville,  Tennessee  37205.

              Rental  commitment  is  approximately  $420,000  per  year.





   49



                                SCHEDULE  5.1(p)

                                     ERISA

              The  Amended  and  Restated  Corrections  Corporation  of
America  Employee  Savings  and  Stock Ownership  Plan.

              Transcor  401(k)  Plan  (to  be  terminated).

              Concept  401(k)  Plan  (to  be  terminated).





   50



                               SCHEDULE  10.4(c)

                             Existing  Investments


              (a)   Borrower's  investment  in  Corrections  Corporation  of
Australia  Pty,  Ltd.

              (b)   Borrower's  investment  in  CCA  (UK)  Limited.

              (c)   Borrower's  investment  in  UK  Detention  Services
                    Limited.

              (d)   Borrower's  investment  in  United-Concept,  Inc.
                    (anticipated  to  be  completed  post-closing).





   51

                                SCHEDULE  10.13

                            Affiliate  Transactions



                                      None





   52



                                SCHEDULE  10.15

                              Foreign  Activities



              (a)   Activities  of  existing  Subsidiaries  and  Affiliates
(as  shown  on  Schedule  4  hereof);

              (b)   Activities  in  connection  with  Borrower's  agreements
with  Sodhexo,  S.A.





   53

                         FIRST  AMENDMENT  TO  AMENDED

                         AND  RESTATED  LOAN  AGREEMENT



           This  First  Amendment  dated  as  of  September  28,  1995,  by
and  between  Corrections  Corporation  of America,  a  Delaware  corporation
(the  "Borrower"),  Transcor  America,  Inc.,  a  Tennessee  corporation,
Technical &  Business  Institute  of  America,  Inc.,  a  Michigan
corporation,  and  Concept,  Incorporated,  a  Delaware corporation
(individually,  a  "Guarantor",  and  collectively,  the  "Guarantors"),  and
First  Union  National  Bank of  Tennessee,  a  national  banking  association
(the  "Lender"),

                         W  I  T  N  E  S  S  E  T  H:

           WHEREAS,  pursuant  to  the  terms  of  an  Amended  and  Restated
Loan  Agreement  dated  as  of  July  13, 1995,  by  and  between  the
Borrower,  the  Guarantors  and  the  Lender  (as  amended  from  time  to
time,  the "Loan  Agreement"),  the  Lender  committed  to  loan  to  the
Borrower  amounts  not  to  exceed  $25,000,000;  and,

           WHEREAS,  Borrower  has  contracted  to  acquire  the  Eden
Correctional  Facility  located  in  Concho, County,  Texas  (the  "Eden
Facility");  and,

           WHEREAS,  Borrower  has  requested  that  Lender  advance  certain
funds  to  the  Borrower  to  provide bridge  financing  for  the  acquisition
of  the  Eden  Facility,  on  a  short-term  basis,  pending  closing  of
permanent  bond  financing  for  the  Eden  Facility;  and,

           WHEREAS,  the  current  availability  of  the  Borrower  under  the
Working  Capital  Facility  does  not provide  enough  funds  to  permit  the
Borrower  to  fund  the  acquisition  of  the  Eden  Facility;  and,

           WHEREAS,  Borrower  has  requested  that  Lender  loan  to  the
Borrower  additional  funds  in  the  amount of  $3,000,000,  which,  when
combined  with  certain  funds  to  be  advanced  under  the  Working  Capital
Facility, will  provide  the  Borrower  with  funds  necessary  to  acquire
the  Eden  Facility;  and,

           WHEREAS,  the  Lender  has  agreed  to  advance  the  additional
$3,000,000  requested  by  the  Borrower, subject  to  the  terms  and
conditions  set  forth  herein,

           NOW,  THEREFORE,  in  consideration  of  the  foregoing  premises,
and  other  good  and  valuable consideration,  the  receipt  and  legal
sufficiency  of  which  are  hereby  acknowledged,  the  Borrower,  the
Guarantors  and  the  Lender  hereby  agree  to  amend  and  modify  the  Loan
Agreement,  as  follows:

           1.   Definitions.    Capitalized  terms  not  otherwise  defined
herein  shall  have  the  meaning  ascribed to  such  terms  in  the  Loan
Agreement.

           2.   $3,000,000  Loan.    The  Lender  hereby  agrees  to  loan  to
the  Borrower  an  additional $3,000,000  (the  "$3,000,000  Overadvance"),
the  proceeds  of  which  are  to  be  used  by  the  Borrower  to finance  the
acquisition  of  the  Eden  Facility.    The  $3,000,000  Overadvance  shall
be  evidenced  by  a Promissory  Note  dated  as  of  September  28,  1995,  in
the  original  principal  amount  of  $3,000,000,  executed



                                     -1-


   54

by  the  Borrower  and  payable  to  the  Lender,  such  Note  to  be  in
substantially  the  form  attached  hereto as  Exhibit  A  (such  Note,
together  with  any  renewals,  modifications  and  extensions  thereof,  being
referred to  as  the  "$3,000,000  Note).

           3.   Financial  Ratios.    Section  10.1(b)  of  the  Loan
Agreement  is  hereby  deleted  and  replaced with  the  following:

                (b)  the  ratio  of  Senior  Debt  to  Cash  Flow  to  be
           greater  than  (i)  3  to  1  from  the  date hereof  through
           November  30,  1995,  and  (ii)  2.75  to  1  thereafter,  such
           ratio  to  be  measured quarterly.

           4.   Secured  Obligations.    The  definition  of  "Secured
Obligations"  shall  include  all  obligations described  in  the  Loan
Agreement,  together  with  the  indebtedness  evidenced  by  the  $3,000,000
Note,  it being  the  intention  of  the  parties  that  the  Collateral  shall
secure  the  Secured  Obligations,  including, without  limitation,  the
indebtedness  evidenced  by  the  $3,000,000  Note.

           5.   Default.    Failure  to  pay  the  $3,000,000  Note  in
accordance  with  its  terms  shall  be  deemed to  be  a  Default  under  the
terms  of  the  Loan  Agreement.

           6.     Guarantors.    The  Guarantors  have  entered  into  this
First  Amendment  for  purposes  of acknowledging  the  $3,000,000  Loan  and
to  confirm  that  the  obligations  of  the  Borrower  guaranteed  by  the
Guarantors  under  the  terms  of  the  Guaranty  Agreements  shall  include,
without  limitation,  all  obligations of  the  Borrower  with  respect  to
the  $3,000,000  Loan.    Accordingly,  this  First  Amendment  shall  be
deemed to  amend  the  Guaranty  Agreements,  as  the  context  requires,  to
confirm  that  the  Secured  Obligations  (as defined  in  the  Guaranty
Agreements)  shall  include,  without  limitation,  the  obligations  of  the
Borrower with  respect  to  the  $3,000,000  Loan.

           7.   Commitment  Fee.    As  compensation  to  the  Lender  for
funding  the  $3,000,000  Loan,  Borrower shall  pay  to  Lender,
simultaneously  with  the  execution  of  this  First  Amendment,  a
commitment  fee  of $7,500.    Such  fee  shall  be  deemed  earned  by  Lender
upon  execution  of  this  First  Amendment.

           8.   Restatement  of  Loan  Agreement.    The  Borrower  and  the
Guarantors  hereby  restate  and  ratify all  of  the  representations,
warranties,  terms  and  covenants  contained  in  the  Loan  Agreement,  as
of  the date  hereof,  and  hereby  confirm  that  the  representations,
warranties,  terms  and  conditions  contained  in the  Loan  Agreement,  as
amended  hereby,  remain  in  full  force  and  effect.




              (Remainder  of  Page  Intentionally  Left  Blank)



                                     -2-



   55

                IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed
           this  First  Amendment  as  of  the  day and  date  first  above
           written.




                                        
GUARANTORS:                                 BORROWER:
                                    
TRANSCOR  AMERICA,  INC.                    CORRECTIONS  CORPORATION
                                            OF  AMERICA
                                    
                                    
BY:                                         BY:                               
   -----------------------                     ---------------------
   Darrell  K.  Massengale                     Darrell  K.  Massengale
   Secretary                                   Chief  Financial  Officer
                                    
                                    
TECHNICAL  &  BUSINESS  INSTITUTE   
OF  AMERICA,  INC.                          LENDER:
                                    
                                            FIRST  UNION  NATIONAL  BANK
BY:                                         OF  TENNESSEE
   -----------------------          
   Darrell  K.  Massengale          
   Secretary                        
                                    
CONCEPT,  INCORPORATED                      BY:                               
                                                   -------------------
                                    
                                            TITLE:                           
                                                  --------------------
BY:                                 
   -----------------------          
   Darrell  K.  Massengale          
   Secretary                        
                                    



                                     -3-

EX-10.147

   1
                                                          EXHIBIT 10.147


                            [FIRST UNION LETTERHEAD]


                                July ____, 1995


                                                    LETTER OF CREDIT NO. S054438


Liberty Bank and Trust Company of Oklahoma City,
  National Association
100 N. Broadway
Oklahoma City, Oklahoma  73102
Attention:  Corporate Trust  Department

Ladies and Gentlemen:

         At the request and on the instructions of the Holdenville Industrial
Authority, an Oklahoma public trust (the "Issuer"), we hereby establish in your
favor, as Trustee under the Bond Indenture dated as of June 1, 1995 (the
"Indenture"), between the Issuer and you pursuant to which $33,700,000 in
aggregate principal amount of the Issuer's Correctional Facility Revenue Bonds,
Series 1995 (the "Bonds") are being issued, this Irrevocable Letter of Credit
No.  S054438 in the initial amount of $34,346,301 (hereinafter, as reduced and
reinstated from time to time in accordance with the provisions hereof, the
"Stated Amount") of which (i) an amount not exceeding $33,700,000 (as reduced
and reinstated from time to time in accordance with the terms hereof, the
"Principal Amount Available"), may be drawn upon with respect to payment of the
unpaid principal amount or the portion of Purchase Price corresponding to
principal of the Bonds, and (ii) an amount not exceeding $646,301 (as reduced
and reinstated from time to time in accordance with the terms hereof, the
"Interest Amount Available") may be drawn upon with respect to payment of up to
fifty (50) days' interest accrued on the portion of Purchase Price
corresponding to interest accrued on the Bonds on or prior to their stated
maturity date, at an assumed rate of 14% per annum.  This Letter of Credit is
effective immediately and expires as of the close of business at our
Presentation Office (as defined herein) on July 13, 1996 (as such date may be
extended from time to time as hereinafter described, the "Stated Termination
Date") or earlier as hereinafter provided, or unless otherwise renewed or
extended.  All drawings under this Letter of Credit will be paid with our own
funds.

         We hereby irrevocably authorize you to draw on us, in an aggregate
amount not to exceed the Stated Amount and in accordance with the terms and
conditions and subject to the reductions in amount as hereinafter set forth,
(1) in a single drawing (subject to the provisions contained herein with
respect to reinstatement of the Interest Amount Available) by your draft drawn
on us at sight, presented for


   2



July _____, 1995
Page 2


payment on a day on which banks in the State of North Carolina are open for the
transaction of business of the nature required pursuant to the Indenture (a
"Business Day") and referring therein to the number of this Letter of Credit,
and accompanied by your written and completed certificate signed by an
Authorized Officer in the form of Annex A attached hereto (such draft
accompanied by such certificate being your "Interest Draft"), an amount not
exceeding the Interest Amount Available on the date of such drawing; (2) in one
or more drawings by one or more of your drafts drawn on us at sight, presented
for payment on a Business Day and referring therein to the number of this
Letter of Credit, and accompanied by your written completed certificate signed
by an Authorized Officer in the form of Annex B attached hereto (any such draft
accompanied by such certificate being your "Tender Draft"), an aggregate amount
not exceeding the Stated Amount on the date of such drawing; (3) in one or more
drawings by one or more of your drafts drawn on us at sight, presented for
payment on a Business Day and referring therein to the number of this Letter of
Credit, and accompanied by your written and completed certificate signed by an
Authorized Officer in the form of Annex C attached hereto (any such draft
accompanied by such certificate being your "Partial Redemption Draft"), an
aggregate amount not exceeding the Stated Amount on the date of such drawing;
(4) in a single drawing by your draft drawn on us at sight presented for
payment on a Business Day and referring therein to the number of this Letter of
Credit, and accompanied by your written and completed certificate signed by an
Authorized Officer in the form of Annex D hereto (any such draft accompanied by
such certificate being your "Conversion Draft"), an amount not exceeding the
Stated Amount on the date of such drawing; and (5) in a single drawing by your
draft drawing on us at sight, presented for payment on a Business Day and
referring therein to the number of this Letter of Credit, and accompanied by
your written and completed certificate signed by an Authorized Officer in the
form of Annex E attached hereto (such draft accompanied by such certificate
being your "Final Draft"), an amount not exceeding the Stated Amount on the
date of such drawing.

         In addition (i) if you shall not have received, within ten (10)
calendar days after any payment in respect of an Interest Draft, written notice
from us that an Event of Default under the Reimbursement and Credit Agreement
dated as of June 1, 1995 (as amended) between the Issuer and us has occurred
and is continuing, the Interest Amount Available shall be reinstated
automatically, as of the close of business on such tenth (10th) calendar day
(unless the Interest Amount Available previously has been reinstated with
respect to such Interest Draft), by the amount of such Interest Draft, and (ii)
upon the release by us of any Escrow Bonds, the Interest Amount Available shall
be reinstated automatically by the amount of the Interest Draft made by paying
the portion of the Purchase Price corresponding to interest on such Escrow
Bonds (unless the Interest Amount Available previously has been reinstated with
respect to such Interest Draft); provided, however, that in no event shall the
Interest Amount Available be reinstated to an amount in excess of 50 days'
interest on the sum of the then applicable Principal Amount Available plus the
aggregate principal amount of any Escrow Bonds.  The provisions of this
paragraph providing for the reinstatement of your right to draw on us by your
Interest Draft in a succeeding single drawing shall be applicable to each
successive drawing by your Interest Draft under clause (1) of the immediately
preceding paragraph so long as this Letter of Credit shall not have terminated
as set forth below.





   3

July _____, 1995
Page 3


         Upon our honoring any Tender Draft presented by you hereunder, the
Stated Amount under this Letter of Credit shall be automatically reduced by the
amount drawn under such Tender Draft, the Principal Amount Available to be
drawn hereunder by you shall be automatically reduced by an amount equal to the
principal component of such Tender Draft and the Interest Amount Available to
be drawn hereunder by you shall be automatically reduced by an amount equal to
the amount of the interest component of such Tender Draft.

         Upon our honoring any Partial Redemption Draft presented by you
hereunder, the Stated Amount under this Letter of Credit shall be automatically
and permanently reduced by the amount drawn under any such Partial Redemption
Draft, the Principal Amount Available to be drawn hereunder by you shall be
automatically and permanently reduced by an amount equal to the principal
component of such Partial Redemption Draft honored by us hereunder and the
Interest Stated Amount to be drawn hereunder by you shall be automatically and
permanently reduced by an amount equal to the amount of the interest which
would accrue on an amount of principal equal to the principal component of such
Partial Redemption Draft for fifty (50) days at an assumed rate of fourteen
(14%) per annum.

         Upon our honoring any Conversion Draft presented by you hereunder, the
Stated Amount under this Letter of Credit shall be automatically and
permanently reduced by the amount drawn under any such Conversion Draft, the
Principal Amount Available to be drawn hereunder by you shall be automatically
and permanently reduced by an amount equal to the principal component of such
Conversion Draft honored by us hereunder, and the Interest Amount Available to
be drawn hereunder by you shall be automatically and permanently reduced by an
amount equal to the amount of the interest component of any such Conversion
Draft honored by us hereunder.

         The Stated Amount, the Principal Amount Available and the Interest
Amount Available drawn under this Letter of Credit with respect to any Tender
Draft shall be reinstated as provided in this paragraph to the extent, but only
to the extent, that we are reimbursed by or on behalf of the Issuer in
immediately available funds delivered to us at the Presentation Office on or
before 3:00 p.m. (Charlotte, North Carolina time) on a Business Day for any
amount drawn in respect of principal and interest under any Tender Draft.  If
we receive such reimbursement by or on behalf of the Issuer, all in strict
conformity with the terms and conditions of this Letter of Credit, after 3:00
p.m. (Charlotte, North Carolina time) on a Business Day prior to the
termination hereof, such reimbursement will be honored as stated above as if
received on the next succeeding Business Day.  Any amount received by us from
or on behalf of the Issuer in reimbursement of amounts drawn hereunder by a
Tender Draft shall, if accompanied by your completed certificate signed by you
in the form of Annex F attached hereto, be applied to the extent of the amount
received by us and indicated therein to reimburse us for amounts drawn
hereunder by your Tender Drafts, and we will confirm to you the amount of the
Principal Amount Available and the Interest Amount Available reinstated by such
reimbursement by delivering to you the executed and completed acknowledgment
accompanying the form of Annex F delivered by you in connection with such
reimbursement.  The Stated Amount, the Principal Amount Available and the
Interest Amount Available shall be reinstated only in compliance with the
provisions of this paragraph.





   4



July _____, 1995
Page 4


         Each draft and certificate presented hereunder shall be dated the date
of presentation and each such draft and certificate shall be presented at our
office located at Two First Union Center, T-7, Charlotte, North Carolina
28288-0742, Attention:  International Operations, or at any other office which
may be designated by us by written notice delivered to you at least three (3)
Business Days prior to the date on which interest is payable on the Bonds (the
"Presentation Office"), and shall be presented on a Business Day.  If we
receive any of your drafts and certificates at such office, all in strict
conformity with the terms and conditions of this Letter of Credit, not later
than 11:30 a.m.  (Charlotte, North Carolina time) on a Business Day on or prior
to the termination of this Letter of Credit, we will honor the same by
initiating the wire funds by 2:30 p.m. (Charlotte, North Carolina time) on the
same day in accordance with your payment instructions, or on such other
Business Day as you may direct.  If we receive any of your drafts and
certificates at such office, all in strict conformity with the terms and
conditions of this Letter of Credit, after 11:30 a.m. (Charlotte, North
Carolina time) on a business day prior to termination of this Letter of Credit,
we will honor the same on the next succeeding Business Day by initiating the
wiring of funds by 2:30 p.m. (Charlotte, North Carolina time) in accordance
with your payment instructions, or on such other Business Day as you may
direct.  If requested by you, payment under this Letter of Credit may be made
by wire transfer of Federal Reserve Bank of Richmond funds in your account in a
bank on the Federal Reserve wire system or by deposit of same-day funds into a
designated account that you maintain with us.

         Upon the earliest of (i) our honoring of your Final Draft presented
hereunder, (ii) the fifth (5th) day following the date on which we receive a
certificate signed by an Authorized Officer stating that the interest rate on
the Bonds has been converted to a fixed interest rate, (iii) receipt of a
certificate signed by an Authorized Officer stating that you have accepted a
Substitute Letter of Credit (as defined in the Indenture), (iv) receipt of a
certificate signed by an Authorized Officer stating that no Bonds remain
Outstanding (as defined in the Indenture), or (v) the Stated Termination Date
hereof, this Letter of Credit shall automatically terminate and be delivered to
us for cancellation.

         This Letter of Credit applies only to the payment of principal or the
portion of Purchase Price of the Bonds corresponding to principal, and up to 50
days' interest accruing on the Bonds computed at a rate of 14% per annum, from
the date of issuance of this Letter of Credit through the date of termination
of this Letter of Credit computed on the basis of actual days elapsed in a 365
or 366 day year, as the case may be, and does not apply to any interest that
may accrue thereon or any principal, premium or other amounts that may be
payable with respect to the Bonds subsequent to the expiration of this Letter
of Credit.

         This Letter of Credit is transferable only in its entirety to any
transferee whom you certify to us has succeeded you as Trustee under the
Indenture, and may be successively transferred.  Transfer of the Stated Amount
under this Letter of Credit to such transferee shall be effected by the
presentation to us of this Letter of Credit accompanied by a certificate in the
form of Annex G attached hereto and payment of the transfer commission referred
to therein.  Upon such presentation, we shall forthwith transfer the same to
your transferee or, if so requested by your transferee, issue a letter of
credit to your transferee with provisions therein consistent with this Letter
of Credit.


   5



July _____, 1995
Page 5


         As used herein (i) "Authorized Officer" shall mean any person signing
as one of your Vice Presidents, Assistant Vice Presidents, Trust Officers or
Assistant Trust Officers and (ii) all other capitalized terms used herein and
not otherwise defined shall have the respective meanings assigned to such terms
in the above-mentioned Indenture.

         This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificate(s)
referred to herein; and any such reference shall not be deemed to incorporate
herein by reference any documents, instrument or agreement except for such
certificate(s).

         Except as otherwise provided herein, this Letter of Credit shall be
governed by and construed in accordance with the Uniform Customs and Practice
for Documentary Credits (1993 revisions), International Chamber of Commerce
Publication No. 500 (the "UCP") and, to the extent not inconsistent therewith,
the laws of the State of Tennessee.  Communications with respect to this Letter
of Credit, other than presentations of drafts and certificates hereunder, shall
be in writing and should be addressed to us at Two First Union Center, T-7,
Charlotte, NC, 28288-0742, Attention: International Operations, and shall
specifically refer to the number of this Letter of Credit.

                                                            Sincerely,

                                                       FIRST UNION NATIONAL BANK
                                                            NORTH CAROLINA



                                             By:
                                                 -------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:                             
                                                   -----------------------------




   6

                                    ANNEX A

                    [Form of Certificate for Interest Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                           OF UP TO 50 DAYS' INTEREST

                    IRREVOCABLE LETTER OF CREDIT NO. S054438

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S054438 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment of interest on the Bonds, which
         payment is due and payable on a regular interest payment date under
         the terms of the Bonds.  On the record date for such Interest Payment
         Date, none of such Bonds for which interest is drawn pursuant to the
         draft were held of record by the Issuer, or by the Bank, or its
         designee, as pledgee of the Issuer.

                 (3)      [The Interest Draft accompanying this Certificate is
         the first Interest Draft presented by the Trustee under the Letter of
         Credit.] [The Interest Draft last presented by the Trustee under the 
         Letter of Credit was honored and paid by the Bank on _______________, 
         _______, and the Trustee has not received a notice within ten days of 
         presentation of such Interest Draft from the Bank that an Event of 
         Default has occurred under the Indenture.

                 (4)      The amount of the Interest Draft accompanying this
         Certificate is $___________.  It was computed in compliance with the
         terms and conditions of the Bonds and the Indenture and does not
         exceed the Interest Amount Available to be drawn by the Trustee under
         the Letter of Credit.

                 (5)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the interest amount owing on account of the
         Bonds pursuant to the Indenture, (b) no portion of said amount shall
         be applied by the undersigned for any other purpose, and (c) no
         portion of said amount shall be commingled with other funds held by
         the undersigned.





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

     *   To be used in the Certificate relating to the first Interest Draft 
only.


                               - 1 -
   7

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ___________________________, 19___.



                                     LIBERTY BANK AND TRUST COMPANY
                                        OF OKLAHOMA CITY, NATIONAL
                                        ASSOCIATION, as Trustee


                                     By:
                                        --------------------------------       
                                     Name:
                                          ------------------------------       
                                     Title:
                                           -----------------------------       


                                     -2-

   8

                                    ANNEX C

               [Form of Certificate for Partial Redemption Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                 OF PRINCIPAL AND UP TO 50 DAYS' INTEREST UPON
                               PARTIAL REDEMPTION

                    IRREVOCABLE LETTER OF CREDIT NO. S054438

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S054438 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, upon redemption of less than all of
         the Bonds which are Outstanding (as defined in the Indenture), of the
         unpaid principal amount of, and up to 50 days' accrued and unpaid
         interest on, the Bonds to be redeemed pursuant to the Indenture (other
         than Bonds presently held of record by the Issuer, or by the Bank, or
         its designee, as pledgee of the Issuer).

                 (3)      The amount of the Partial Redemption Draft
         accompanying this Certificate is $______________ and is equal to the
         sum of (i) $____________ being drawn in respect of the payment of
         unpaid principal of Bonds (other than Bonds presently held of record
         by the Issuer, or by the Bank, or its designee, as pledgee of the
         Issuer) to be redeemed, which amount does not exceed the Principal
         Amount Available under the Letter of Credit and (ii) $____________
         being drawn in respect of the payment of _____ days' [not to exceed 50
         days'] accrued and unpaid interest on such Bonds, which amount does
         not exceed the Interest Amount Available under the Letter of Credit.

                 (4)      The amount of the Partial Redemption Draft
         accompanying this Certificate was computed in accordance with the
         terms and conditions of the Bonds and the Indenture and does not
         exceed the Amount Available under the Letter of Credit.

                 (5)      This Certificate and the Partial Redemption Draft it
         accompanies are dated, and are being presented to the Bank on, the
         date on which the unpaid principal amount of, and accrued and unpaid
         interest on, Bonds to be redeemed are due and payable under the
         Indenture upon redemption of less than all of the Bonds which are
         Outstanding (as defined in the Indenture).

                 (6)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the principal amount of and accrued and unpaid
         interest on the Bonds pursuant to the Indenture, (b) no portion of
         said



                                     -1-



   9

         amount shall be applied by the undersigned for any other purpose, and
         (c) no portion of said amount shall be commingled with other funds
         held by the undersigned.

         The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, upon the Bank's honoring of the Partial Redemption Draft accompanying
this Certificate, (i) the Amount Available under the Letter of Credit shall be
permanently reduced by the aggregate amount of such Partial Redemption Draft,
(ii) the Principal Amount Available under the Letter of Credit shall be
permanently reduced by an amount equal to the amount of the principal component
of such draft set forth in paragraph 3 above, and (iii) the Interest Amount
Available under the Letter of Credit shall be permanently reduced by
$_____________, which is equal to an amount of interest which would accrue on
an amount of principal equal to the principal component set forth in paragraph
3 above for a period of fifty (50) days at a maximum rate of fourteen percent
(14%) per annum.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ___________________________, 19___.




                                     LIBERTY BANK AND TRUST COMPANY
                                        OF OKLAHOMA CITY, NATIONAL
                                        ASSOCIATION, as Trustee


                                     By:                                   
                                        --------------------------------       
                                     Name:                                     
                                          ------------------------------       
                                     Title:                                    
                                           -----------------------------       


                                     -2-



   10

                                   ANNEX D

                   [Form of Certificate for Conversion Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                       OF PRINCIPAL PLUS ACCRUED INTEREST
                           UPON A MANDATORY PURCHASE
                     (CONVERSION TO A FIXED INTEREST RATE)

                    IRREVOCABLE LETTER OF CREDIT NO. S054438

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S054438 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
         the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, upon a mandatory tender for purchase
         pursuant to Section _____ of the Indenture (conversion to a Fixed
         Interest Rate within the meaning of the Indenture) of all or less than
         all of the Bonds which are Outstanding (as defined in the Indenture),
         of the unpaid principal amount of, and up to 50 days' accrued and
         unpaid interest on, the Bonds to be so purchased (other than Bonds
         presently held of record by the Issuer, or the Bank, or its designee,
         as pledgee of the Issuer), which payment is due on the date on which
         this Certificate and the Conversion Draft it accompanies are being
         presented to the Bank.

                 (3)      The amount of the Conversion Draft accompanying this
         Certificate is $______________ and is equal to the sum of (i)
         $____________ being drawn in respect of the payment of unpaid
         principal of Bonds (other than Bonds presently held of record by the
         Issuer or by the Bank, or its designee, as pledgee of the Issuer) to
         be purchased, which amount does not exceed the Principal Amount
         Available under the Letter of Credit and (ii) $____________ being
         drawn in respect of the payment of _____ days' [not to exceed 50
         days'] accrued and unpaid interest on such Bonds, which amount does
         not exceed the Interest Amount Available under the Letter of Credit.

                 (4)      The amount of the Conversion Draft accompanying this
         Certificate was computed in compliance with the terms and conditions
         of the Bonds and the Indenture and does not exceed the Amount
         Available under the Letter of Credit.

                 (5)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the principal amount of, and interest accrued
         and unpaid on, the Bonds pursuant to the Indenture, (b) no portion of
         said amount shall be applied by the undersigned for any other purpose,
         and (c) no portion of said amount shall be commingled with other funds
         held by the undersigned.



                                     -1-



   11

                 (6)      The Trustee acknowledges that the Trustee shall,
         pursuant to the Indenture, credit to the account of the Bank or its
         designee maintained by the Trustee, a principal amount of Bonds equal
         to the principal amount of the Conversion Draft accompanying this
         Certificate as promptly as practicable, and in any event within five
         (5) Business Days after presentation of the Conversion Draft
         accompanying this Certificate.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of ___________________________, 19___.



                                     LIBERTY BANK AND TRUST COMPANY    
                                        OF OKLAHOMA CITY, NATIONAL     
                                        ASSOCIATION, as Trustee        
                                                                       
                                                                       
                                     By:                               
                                        ----------------------------           
                                     Name:                             
                                          --------------------------           
                                     Title:                            
                                           -------------------------           


                                     -2-



   12

                                   ANNEX E


                     [Form of Certificate for Final Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                OF PRINCIPAL PLUS ACCRUED INTEREST, UPON STATED
                OR ACCELERATED MATURITY OR OPTIONAL OR MANDATORY
                             REDEMPTION AS A WHOLE


                    IRREVOCABLE LETTER OF CREDIT NO. S054438


         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S054438 (the "Letter of
Credit"; the terms defined therein and not otherwise defined herein being used
as therein defined) issued by the Bank in favor of the Trustee, as follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, either at stated maturity, upon
         acceleration, or as a result of a redemption as a whole pursuant to
         the Indenture, of the unpaid principal amount of and up to 50 days'
         accrued and unpaid interest on, all of the Bonds which are
         "Outstanding" within the meaning of the Indenture (other than Bonds
         presently held of record by the Issuer, or by the Bank, or its
         designee, as pledgee of the Issuer).

                 (3)      The amount of the Final Draft accompanying this
         Certificate is $_______ and is equal to the sum of (i) $________ being
         drawn in respect of the payment of unpaid principal of Bonds (other
         than Bonds presently held of record by the Issuer or by the Bank, or
         its designee, as pledgee of the Issuer), which amount does not exceed
         the Principal Amount Available under the Letter of Credit, and (ii)
         $________ being drawn in respect of the payment of _______ days' [not
         to exceed 50 days'] accrued and unpaid interest on such Bonds, which
         amount does not exceed the Interest Amount Available under the Letter
         of Credit.

                 (4)      The amount of the Final Draft accompanying this
         Certificate was computed in compliance with the terms and conditions
         of the Bonds and the Indenture and does not exceed the Amount
         Available under the Letter of Credit.

                 (5)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the principal amount and accrued and unpaid
         interest thereon owing on account of the Bonds pursuant to the
         Indenture, (b) no portion of said amount shall be applied by the
         undersigned for any other purpose and (c) no portion of said amount
         shall be commingled with other funds held by the undersigned.




                                     -1-


   13



                 IN WITNESS WHEREOF, the Trustee has executed and delivered
         this Certificate as of the ____ day of ______________, 19___.



                                     LIBERTY BANK AND TRUST COMPANY            
                                        OF OKLAHOMA CITY, NATIONAL             
                                        ASSOCIATION, as Trustee                
                                                                               
                                                                               
                                     By:                                       
                                        ----------------------------           
                                     Name:                                     
                                          --------------------------           
                                     Title:                                    
                                           -------------------------           


                                  - 2 -
   14



                                   ANNEX F

              [Form of Reinstatement Certificate For Tender Draft]

             CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE
                 UNDER IRREVOCABLE LETTER OF CREDIT NO. S054438


         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S054438 (the "Letter of
Credit"; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The amount of $________ paid to you today by or on
         behalf of the Issuer is a payment made to reimburse you, pursuant to
         Section _____ of the Letter of Credit and Reimbursement Agreement
         dated as of __________ (as amended or supplemented, the "Reimbursement
         Agreement") between the Issuer and the Bank, for amounts drawn under
         the Letter of Credit by Tender Drafts.  The Trustee hereby requests
         that you reinstate the Letter of Credit upon receipt of such payment
         in an amount equal to the amount of payment so received.

                 (3)      Of the amount referred to in paragraph (2), $________
         represents the aggregate principal amount of Bonds resold or to be
         sold on behalf of the Issuer.

                 (4)      Of the amount referred to in paragraph (2), $________
         represents accrued and unpaid interest on the Bonds.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of __________, 19____.



                                     LIBERTY BANK AND TRUST COMPANY       
                                        OF OKLAHOMA CITY, NATIONAL        
                                        ASSOCIATION, as Trustee           
                                                                               
                                                                               
                                     By:                                  
                                        ----------------------------           
                                     Name:                                
                                          --------------------------           
                                     Title:                               
                                           -------------------------           


                                     -1-



   15


                                        [attached to Annex F]


                                ACKNOWLEDGMENT


             The Bank hereby confirms to the Trustee that the Principal Amount
Available under the Letter of Credit has been reinstated by the amount $_______
and the Interest Amount Available under the Letter of Credit has been
reinstated by the amount of $_________.

             This ____ day of ___________, 19___.


                                    FIRST UNION NATIONAL BANK OF
                                         NORTH CAROLINA


                                    By:   
                                       -------------------------------
                                       Name:                                
                                       Title:                               



                                     -2-



   16

                                    ANNEX G

                         [Form of Transfer Certificate]

                            INSTRUCTION TO TRANSFER


First Union National Bank of
  North Carolina
Two First Union Center
Charlotte, North Carolina  28288-0742

Attention:  International Operations

             Re:   Your Irrevocable Letter of Credit No. S054438

Ladies and Gentlemen:

             For value received, the undersigned beneficiary (the "Transferor")
hereby irrevocably transfers to:


                                 -------------------------
                                    [Name of Transferee]
                                 
                                 
                                 -------------------------
                                         [Address]


(the "Transferee") all rights of the Transferor with respect to the
above-referenced Letter of Credit, including the right to draw under said
Letter of Credit in the Amount Available.  Said Transferee has succeeded the
Transferor as Trustee under that certain Bond Indenture dated as of
____________ by and between _______________, ______________________ as initial
Trustee thereunder and ___________________ (as amended or supplemented, the
"Indenture"), and has complied with the provisions of the Indenture.

             By virtue of this transfer, the Transferee shall have the sole
rights as beneficiary of said Letter of Credit, including sole rights relating
to any past or future amendments thereof, whether increases or extensions or
otherwise.  All amendments are to be advised directly to the Transferee without
necessity of any consent of or notice to the Transferor.

             By its signature below, the Transferee acknowledges that it has
duly succeeded the Transferor as Trustee pursuant to the Trust Indenture.





                                    - 1 -


   17

                   The advice of such Letter of Credit is returned herewith,
             along with a transfer fee of $_________________, and we ask you to
             endorse the transfer on the reverse side thereof and to forward it
             directly to the Transferee with your customary notice of transfer.

                                   Very truly yours,


                                   LIBERTY BANK AND TRUST COMPANY
                                   OF OKLAHOMA CITY, NATIONAL
                                   ASSOCIATION, as Trustee



                                    By:   
                                       ----------------------------------------
                                   [insert name and title of authorized officer]

                                             (CORPORATE SEAL)



Acknowledged by:


- --------------------------------------
[Insert name of Transferee]

By:          -------------------------
             [insert name and title of
             authorized officer]

(CORPORATE SEAL)





                                     - 2 -

EX-10.148

   1
                                                             EXHIBIT 10.148
                               PURCHASE AGREEMENT


         THIS PURCHASE AGREEMENT (the "Agreement") is entered into this 17th
day of July, 1995, by and between CONCEPT INCORPORATED, a Delaware corporation
("Concept"), and  LANDMARK ORGANIZATION SOUTHWEST, INC., a Delaware corporation
("Southwest").

                                   RECITALS:

         A.      Southwest owns a .2% general partnership interest and a 49.5%
limited partnership interest in United Concept Limited Partnership, an Arizona
limited partnership (the "Partnership") (the "Southwest Interests").  The
Partnership owns and operates a correctional facility near Eloy, Arizona
pursuant to Contract No. J200c-151 between the Partnership and the United
States Department of Justice, Federal Bureau of Prisons, Office of Procurement
& Property, on behalf of the BOP and the United States Immigration and
Naturalization Service.

         B.      Southwest and certain others granted to Concept an option (the
"Option") to purchase approximately 49.995% of the interests in the
Partnership, including the Southwest Interests (collectively, the "Partnership
Interests").  The terms and conditions of the Option are set forth in that
certain Option Agreement, dated October 10, 1994, by and among Concept, Mark
Schultz, a resident of Texas, and certain other partners (the "Option
Agreement").  Concept has notified Southwest that it intends to exercise the
Option as contemplated by the Option Agreement.

         C.      Pursuant to Concept's exercise of the Option and pursuant to
Sections 10.2, 10.3 and 11.3 of the Agreement of Limited Partnership of the
Partnership, Concept desires to purchase, and Southwest desires to sell, the
Southwest Interests on the terms and conditions set forth herein.

         NOW, THEREFORE, the parties agree as follows:

         1.      Purchase of Southwest Interests.  Southwest hereby agrees to
sell and assign all of the Southwest Interests to Concept at the Closing and
agrees to execute such assignments and other instruments of conveyance as may
be reasonably requested by Concept in order to effectuate the transfer of the
Southwest Interests.

         2.      Payment of Purchase Price.  Concept agrees to pay to Southwest
the sum of five million two hundred eighteen thousand five hundred dollars
($5,218,500.00) in full and complete payment for the Southwest Interests (the
"Purchase Price"), such Purchase Price to be paid by wire transfer at the
Closing or at such date as agreed to by the parties hereto.

         3.      Assumption of Liabilities.  From and after the Closing,
Concept shall be responsible for any and all debts of the Partnership,
including, without limitation payments in connection with the Indenture
Collateralized Notes payable to First Chicago, secured by an Indenture
Agreement by and between the Partnership and First Chicago dated November 15,
1993, and all collateral agreements thereto.  Concept hereby indemnifies
Landmark Organization,
   2

Inc. from and against any and all loss, damage, costs, expenses, and
obligations incurred by Landmark Organization, Inc.  in connection therewith.

         4.      Closing.  The closing of the transactions contemplated hereby
shall take place and be effective for all purposes at 10:00 a.m. local time, on
July 7, 1995 at the offices of Concept or at such other time and place as the
parties hereto mutually agree (the "Closing").

         5.      Southwest's Representations.  Southwest hereby represents and
warrants to Concept as follows:

                 (a)      Authority.  Southwest has full power and authority to
execute, deliver, enter into, and perform this Agreement and all agreements,
instruments, and documents contemplated hereby and to carry out the
transactions contemplated hereby and thereby.  This Agreement is a valid and
binding obligation of Southwest, enforceable against it in accordance with its
terms, subject to the limitations imposed by bankruptcy, insolvency,
moratorium, or similar laws or provisions of general application, and to the
availability of equitable remedies.

                 (b)      Ownership.  Southwest represents that (i) Southwest
is the sole owner of, and has good and marketable title to, the Southwest
Interests, free and clear of any liens, claims, charges, restrictions, security
interests, equities, proxies, pledges or encumbrances of any kind, (ii)
Southwest has full right, power, authority and capacity to sell and transfer
the Southwest Interests, and (iii) as of the Closing Date and upon receipt of
the Purchase Price, Southwest has no claims of any kind against Concept or the
Partnership.

                 (c)      No Contravention.  Neither the execution and delivery
of this Agreement nor the carrying out of the transactions contemplated hereby
or thereby, will in any respect result in any violation of or be in conflict
with any term of any agreement or instrument to which Southwest is a party or
by which it is bound, or of any law or governmental order, rule, or regulation
which is applicable to Southwest or will result in the creation or imposition
of any security interest, mortgage, lien, encumbrance, or charge upon any of
the properties or assets of Southwest.  No consents or approvals of any persons
or entities, governmental or otherwise, are required which have not been
obtained with respect to the execution and delivery of this Agreement or the
transfer of the Southwest Interests and the carrying out of the transactions
contemplated hereby on the part of Southwest.

                 (d)      Litigation.  There are no claims, actions, suits,
proceedings, investigations or penalty pending or threatened by or against, or
otherwise affecting the Southwest Interests at law or in equity or before or by
any federal, state, municipal or other governmental department, commission,
board, agency, instrumentality or authority.  Southwest does not know or has no
reason to know of any basis for any such claim, action, suit, proceeding or
investigation.

                 (e)      Related Party Transactions.  All transactions between
Southwest and its affiliates on the one hand and the Partnership and its
affiliates on the other hand prior to the date hereof were conducted at arm's
length and at fair value.





                                       2
   3

                 (f)      Professional Fees.  Southwest has not done anything
to cause or incur any liability or obligation of Southwest for investment
banking, brokerage, finders, agents or other fees, commissions, expenses or
charges in connection with the negotiation, preparation, execution or
performance of this Agreement or the consummation of the transactions
contemplated hereby, and Southwest does not know of any claim by anyone for
such a fee, commission, expense or charge.

                 (g)      Recitals.  The Recitals are true and correct in all
material respects.

         6.      Conditions to Closing.  (a)  The obligations of Southwest to
consummate the transactions contemplated by this Agreement are subject to the
conditions that Concept shall have complied with all covenants and agreements
and satisfied all conditions on its part to be performed or satisfied prior to
Closing and, if the Closing shall be other than on the date hereof, Southwest
may request a certificate to that effect executed on behalf of Concept.

                 (b)      The obligations of Concept to consummate the
transactions contemplated by this Agreement are subject to the conditions (i)
that the representations and warranties set forth in Section 5 are true and
correct on and as of the date hereof and shall be true and correct on and as of
the date of Closing, if later than the date hereof; (ii) that Southwest shall
have complied with all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied prior to Closing; (iii) that Concept
shall have completed to its satisfaction a due diligence review of the
Partnership, (iv) that Concept shall have acquired, or shall acquire
simultaneously with the Southwest Interests, the remaining Partnership
Interests and (v) that Concept shall have received all required consents for
the purchase of the Southwest Interests.  If the Closing shall be other than on
the date hereof, Concept may request a certificate signed by Southwest to the
effect that one or more of the foregoing conditions have been satisfied.

         7.      General Indemnification.  Southwest hereby agrees to indemnify
and hold harmless Concept from, against, and in respect of any and all loss or
damage to Concept resulting, in whole or in part, from any breach of the
representations and warranties by Southwest contained in this Agreement, or any
misstatement or omission of fact, or failure to state the facts necessary to
make those statements made not misleading, in or pursuant to this Agreement,
and any liability or obligation arising out of any  actions, suits,
proceedings, claims, demands, and judgments, (including court costs and legal
and accounting fees) incident to any of the foregoing.

         8.      Tax Indemnification.  Concept hereby agrees to indemnify and
hold harmless Mark Schultz from, against and in respect of any federal income
tax liability attributable to taxable income of the Partnership allocated to
Mark Schultz in excess of the aggregate amount of $718,000 for taxable years
1994 and 1995.  Any reimbursement made pursuant to the preceding sentence shall
be payable at the maximum individual tax rate.

         9.      Notices.  All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given if delivered
personally or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other





                                       3
   4

address for a party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt thereof):

                 (a)      If to Concept to:

                          Concept Incorporated
                          102 Woodmont Boulevard
                          Suite 800
                          Nashville, TN  37205
                          ATTN:  Doctor R. Crants

                          With a copy to:

                          Stokes & Bartholomew, P.A.
                          424 Church Street
                          Suite 2800
                          Nashville, TN  37219
                          ATTN: Elizabeth E. Moore, Esq.


                 (b)      If to Southwest to:

                          Landmark Organization Southwest, Inc.
                          1301 Capital of Texas Highway South, #B320
                          Austin, Texas  78746
                          ATTN:  Mark Schultz
                          With a copy to:

                          W. Lee Choate
                          Post Office Box 23
                          Austin, Texas 78767

         10.     Waivers and Consents.  The parties hereto acknowledge and
agree that any notices or consents required by the Partnership Agreement to be
given to the parties hereto or their respective affiliates are hereby waived.

         11.     Survival.  All representations, warranties, covenants and
agreements of Southwest contained in this Agreement and in any documents
delivered pursuant hereto or otherwise in connection herewith shall survive the
execution hereof and the closing of the transactions contemplated hereby.

         12.     Expenses.  All fees and expenses incurred by Southwest,
including without limitation, legal fees and expenses, in connection with this
Agreement will be borne by Southwest





                                       4
   5

and all fees and expenses incurred by Concept, including, without limitation,
legal fees and expenses, in connection with this Agreement will be borne by
Concept.

         13.     Cooperation.  Each party hereto agrees after the date hereof
to execute any and all further documents and writings and perform such other
reasonable actions which may be or become necessary or expedient to effectuate
and carry out the intent of this Agreement and the transactions contemplated
hereby.

         14.     Governing Law.  This Agreement shall be governed by the laws
of the State of Tennessee (regardless of the laws that might otherwise govern
under applicable Tennessee principles of conflicts of law).

         15.     Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed this Purchase Agreement
as of the date first set forth above.


                              CONCEPT INCORPORATED


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

                 Its:
                     -----------------------------------------------------------


                              LANDMARK ORGANIZATION SOUTHWEST, INC.


                  By:
                     -----------------------------------------------------------
                 Its:
                     -----------------------------------------------------------




                                       5

EX-10.149

   1
                                                               EXHIBIT 10.149


                               PURCHASE AGREEMENT


         THIS PURCHASE AGREEMENT (the "Agreement") is entered into this 17th
day of July, 1995, by and between CONCEPT INCORPORATED, a Delaware corporation
("Concept"), and  U.C. ELOY, INC., a Delaware corporation ("U.C. Eloy").

                                   RECITALS:

         A.      U.C. Eloy owns a .2% general partnership interest and a 49.5%
limited partnership interest in United Concept Limited Partnership, an Arizona
limited partnership (the "Partnership") (the "U.C. Eloy Interests").  The
Partnership owns and operates a correctional facility near Eloy, Arizona
pursuant to Contract No. J200c-151 between the Partnership and the United
States Department of Justice, Federal Bureau of Prisons, Office of Procurement
& Property, on behalf of the BOP and the United States Immigration and
Naturalization Service.

         B.      U.C. Eloy and certain others granted to Concept an option (the
"Option") to purchase approximately 49.995% of the interests in the
Partnership, including the U.C. Eloy Interests (collectively, the "Partnership
Interests").  The terms and conditions of the Option are set forth in that
certain Option Agreement, dated October 10, 1994, by and among Concept, Mark
Schultz, a resident of Texas, and certain other partners (the "Option
Agreement").  Concept has notified U.C. Eloy that it intends to exercise the
Option as contemplated by the Option Agreement.

         C.      Pursuant to Concept's exercise of the Option and pursuant to
Sections 10.2, 10.3 and 11.3 of the Agreement of Limited Partnership of the
Partnership, Concept desires to purchase, and U.C. Eloy desires to sell, the
U.C. Eloy Interests on the terms and conditions set forth herein.

         NOW, THEREFORE, the parties agree as follows:

         1.      Purchase of U.C. Eloy Interests.  U.C. Eloy hereby agrees to
sell and assign all of the U.C. Eloy Interests to Concept at the Closing and
agrees to execute such assignments and other instruments of conveyance as may
be reasonably requested by Concept in order to effectuate the transfer of the
U.C. Eloy Interests.

         2.      Payment of Purchase Price.  Concept agrees to pay to U.C. Eloy
the sum of five million two hundred eighteen thousand five hundred dollars
($5,218,500.00) in full and complete payment for the U.C. Eloy Interests (the
"Purchase Price"), such Purchase Price to be paid by wire transfer at the
Closing or at such date as agreed to by the parties hereto.

         3.      Assumption of Liabilities.  From and after the Closing,
Concept shall be responsible for any and all debts of the Partnership,
including, without limitation payments in connection with the Indenture
Collateralized Notes payable to First Chicago, secured by an Indenture
Agreement by and between the Partnership and First Chicago dated November 15,
1993, and all collateral agreements thereto.  Concept hereby indemnifies U.C.
Eloy from and
   2

against any and all loss, damage, costs, expenses, and obligations incurred by
U.C. Eloy in connection therewith.

         4.      Closing.  The closing of the transactions contemplated hereby
shall take place and be effective for all purposes at 10:00 a.m. local time, on
July 7, 1995 at the offices of Concept or at such other time and place as the
parties hereto mutually agree (the "Closing").

         5.      U.C. Eloy's Representations.  U.C. Eloy hereby represents and
warrants to Concept as follows:

                 (a)      Authority.  U.C. Eloy has full power and authority to
execute, deliver, enter into, and perform this Agreement and all agreements,
instruments, and documents contemplated hereby and to carry out the
transactions contemplated hereby and thereby.  This Agreement is a valid and
binding obligation of U.C. Eloy, enforceable against it in accordance with its
terms, subject to the limitations imposed by bankruptcy, insolvency,
moratorium, or similar laws or provisions of general application, and to the
availability of equitable remedies.

                 (b)      Ownership.  U.C. Eloy represents that (i) U.C. Eloy
is the sole owner of, and has good and marketable title to, the U.C. Eloy
Interests, free and clear of any liens, claims, charges, restrictions, security
interests, equities, proxies, pledges or encumbrances of any kind, (ii) U.C.
Eloy has full right, power, authority and capacity to sell and transfer the
U.C. Eloy Interests, and (iii) as of the Closing Date and upon receipt of the
Purchase Price, U.C. Eloy has no claims of any kind against Concept or the
Partnership.

                 (c)      No Contravention.  Neither the execution and delivery
of this Agreement nor the carrying out of the transactions contemplated hereby
or thereby, will in any respect result in any violation of or be in conflict
with any term of any agreement or instrument to which U.C. U.C. Eloy is a party
or by which it is bound, or of any law or governmental order, rule, or
regulation which is applicable to U.C. Eloy or will result in the creation or
imposition of any security interest, mortgage, lien, encumbrance, or charge
upon any of the properties or assets of U.C. Eloy.  No consents or approvals of
any persons or entities, governmental or otherwise, are required which have not
been obtained with respect to the execution and delivery of this Agreement or
the transfer of the U.C. Eloy Interests and the carrying out of the
transactions contemplated hereby on the part of U.C. Eloy.

                 (d)      Litigation.  There are no claims, actions, suits,
proceedings, investigations or penalty pending or threatened by or against, or
otherwise affecting the U.C. Eloy Interests at law or in equity or before or by
any federal, state, municipal or other governmental department, commission,
board, agency, instrumentality or authority.  U.C. Eloy does not know or has no
reason to know of any basis for any such claim, action, suit, proceeding or
investigation.

                 (e)      Related Party Transactions.  All transactions between
U.C. Eloy and its affiliates on the one hand and the Partnership and its
affiliates on the other hand prior to the date hereof were conducted at arm's
length and at fair value.





                                       2
   3

                 (f)      Professional Fees.  U.C. Eloy has not done anything
to cause or incur any liability or obligation of U.C. Eloy for investment
banking, brokerage, finders, agents or other fees, commissions, expenses or
charges in connection with the negotiation, preparation, execution or
performance of this Agreement or the consummation of the transactions
contemplated hereby, and U.C. Eloy does not know of any claim by anyone for
such a fee, commission, expense or charge.

                 (g)      Recitals.  The Recitals are true and correct in all
material respects.

         6.      Conditions to Closing.  (a)  The obligations of U.C. Eloy to
consummate the transactions contemplated by this Agreement are subject to the
conditions that Concept shall have complied with all covenants and agreements
and satisfied all conditions on its part to be performed or satisfied prior to
Closing and, if the Closing shall be other than on the date hereof, U.C. Eloy
may request a certificate to that effect executed on behalf of Concept.

                 (b)      The obligations of Concept to consummate the
transactions contemplated by this Agreement are subject to the conditions (i)
that the representations and warranties set forth in Section 5 are true and
correct on and as of the date hereof and shall be true and correct on and as of
the date of Closing, if later than the date hereof; (ii) that U.C. Eloy shall
have complied with all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied prior to Closing; (iii) that Concept
shall have completed to its satisfaction a due diligence review of the
Partnership, (iv) that Concept shall have acquired, or shall acquire
simultaneously with the U.C. Eloy Interests, the remaining Partnership
Interests and (v) that Concept shall have received all required consents for
the purchase of the U.C. Eloy Interests.  If the Closing shall be other than on
the date hereof, Concept may request a certificate signed by U.C. Eloy to the
effect that one or more of the foregoing conditions have been satisfied.

         7.      General Indemnification.  U.C. Eloy hereby agrees to indemnify
and hold harmless Concept from, against, and in respect of any and all loss or
damage to Concept resulting, in whole or in part, from any breach of the
representations and warranties by U.C. Eloy contained in this Agreement, or any
misstatement or omission of fact, or failure to state the facts necessary to
make those statements made not misleading, in or pursuant to this Agreement,
and any liability or obligation arising out of any  actions, suits,
proceedings, claims, demands, and judgments, (including court costs and legal
and accounting fees) incident to any of the foregoing.

         8.      Tax Indemnification.  Concept hereby agrees to indemnify and
hold harmless Mark Schultz from, against and in respect of any federal income
tax liability attributable to taxable income of the Partnership allocated to
Mark Schultz in excess of the aggregate amount of $718,000 for taxable years
1994 and 1995.  Any reimbursement made pursuant to the preceding sentence shall
be payable at the maximum individual tax rate.

         9.      Notices.  All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given if delivered
personally or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other





                                       3
   4

address for a party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt thereof):

                 (a)      If to Concept to:

                          Concept Incorporated
                          102 Woodmont Boulevard
                          Suite 800
                          Nashville, TN  37205
                          ATTN:  Doctor R. Crants

                          With a copy to:

                          Stokes & Bartholomew, P.A.
                          424 Church Street
                          Suite 2800
                          Nashville, TN  37219
                          ATTN: Elizabeth E. Moore, Esq.


                 (b)      If to U.C. Eloy to:

                          U.C. Eloy, Inc.
                          1301 Capital of Texas Highway South, #B320
                          Austin, Texas  78746
                          ATTN:  Mark Schultz
                          With a copy to:

                          W. Lee Choate
                          Post Office Box 23
                          Austin, Texas 78767

         10.     Waivers and Consents.  The parties hereto acknowledge and
agree that any notices or consents required by the Partnership Agreement to be
given to the parties hereto or their respective affiliates are hereby waived.

         11.     Survival.  All representations, warranties, covenants and
agreements of U.C. Eloy contained in this Agreement and in any documents
delivered pursuant hereto or otherwise in connection herewith shall survive the
execution hereof and the closing of the transactions contemplated hereby.

         12.     Expenses.  All fees and expenses incurred by U.C. Eloy,
including without limitation, legal fees and expenses, in connection with this
Agreement will be borne by U.C. Eloy





                                       4
   5

and all fees and expenses incurred by Concept, including, without limitation,
legal fees and expenses, in connection with this Agreement will be borne by
Concept.

         13.     Cooperation.  Each party hereto agrees after the date hereof
to execute any and all further documents and writings and perform such other
reasonable actions which may be or become necessary or expedient to effectuate
and carry out the intent of this Agreement and the transactions contemplated
hereby.

         14.     Governing Law.  This Agreement shall be governed by the laws
of the State of Tennessee (regardless of the laws that might otherwise govern
under applicable Tennessee principles of conflicts of law).

         15.     Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties have executed this Purchase Agreement
as of the date first set forth above.





                                      
                                      CONCEPT INCORPORATED
                                                          
                                                          
                                      By:                 
                                         --------------------------------------
                                                                               
                                      Its:                                     
                                          -------------------------------------
                                                                               

                                      U.C. ELOY, INC.                          
                                                                               
                                                                               
                                      By:                                      
                                         --------------------------------------
                                                                               
                                      Its:                                     
                                          -------------------------------------





                                       5

EX-10.151

   1
                                                              EXHIBIT 10.151



                             SHAREHOLDERS' AGREEMENT

         This Shareholders' Agreement (the "Agreement"), dated as of October
17, 1995, is by and among Corrections Corporation of Australia Pty. Ltd., a
Queensland, Australia corporation (the "Corporation"), Corrections Corporation
of America, a Delaware corporation ("CCA") and Sodexho S.A., a French societe
anonyme ("Sodexho") (CCA and Sodexho are sometimes referred to herein
collectively as the "Shareholders").

                              W I T N E S S E T H:

         WHEREAS, CCA owns 22,500 class "C" shares in the capital of the
Corporation, representing in the aggregate one hundred percent (100%) of the
issued and outstanding class "C" shares of the Corporation;

         WHEREAS, Sodexho owns 22,500 Class "C" Shares in the Capital of the
Corporation which Shares are held in accordance with Section 3.02(a)(ii) of the
Stock Purchase Agreement as amended on October 17, 1995 (the "Stock Purchase
Agreement"); and

         WHEREAS, the parties believe it is in the best interest of the
Corporation and its Shareholders to restrict Transfers of shares of capital of
the Corporation, and desire to set forth the terms and conditions regarding any
Transfers of class "C" shares and to set forth their agreements with respect to
certain other matters.

         NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants, representations, warranties, and conditions contained in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the
Shareholders hereby agree as follows:

         1.      Definitions.

         The following words and terms when used in this Agreement shall have
the meanings set forth below.

                 (a)  "Affiliate" means any person or entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the person or entity specified.

                 (b)  "Holder" or "Holders" means one or more Holders of Class
"C" Shares in the Capital of the Corporation, whether legal or beneficial
Holders, or parties to this Agreement or who are otherwise bound by its terms.

                 (c)  "Shares" means all Class "C" Shares in the capital of the
Corporation held by the Holders and all other securities of the Corporation or
any successor of the Corporation which (i) may be issued in exchange for or in
respect of such Shares (whether by way of stock split,
   2



stock dividend, combination, reclassification, share exchange, reorganization,
exchange, conversion, or any other means), or (ii) may be hereafter acquired by
any Holder or during the term of this Agreement.


                 (d)  "Transfer", "Transferred", or "Transferring" means any
sale, assignment, transfer, conveyance, pledge, hypothecation, mortgage,
encumbrance, gift, or other disposition of any Shares or any interest therein,
whether direct or indirect, or any attempted sale, assignment, transfer,
conveyance, pledge, hypothecation, mortgage, encumbrance, or other disposition
of such Shares or interest, including, without limitation, any commitment or
executory contract relating to the foregoing which is not expressly subject to
this Agreement.

         2.      Conditions to Transfer.

         No Holder shall Transfer all or any part of its Shares, except
expressly in accordance with the terms and conditions of this Agreement.

         3.      Right of First Refusal on Dispositions by Shareholders.  No
Shareholder shall directly or indirectly Transfer any or all Shares owned by it
to a third party unless (a) such Shareholder shall have received a bona-fide
arm's length offer to purchase such Shares from such third party, and (b) the
Shareholder first submits a written offer (the "Offer") to the other
Shareholder (the "Remaining Shareholder") identifying the third party to whom
such Shares are proposed to be sold and the terms of the proposed sale and
offering the opportunity to purchase such Shares on terms and conditions,
including price, not less favorable to the Remaining Shareholder or its
designee than those on which the Shareholder proposes to sell such Shares to
any other purchaser.

         The Remaining Shareholder shall act upon the Offer as soon as
practicable after receipt thereof, and in any event within 20 days after
receipt thereof.  In the event that the Remaining Shareholder or its designee
shall elect to purchase all or a part of the Shares covered by the Offer, the
Remaining Shareholder shall communicate in writing such election to purchase to
the Shareholder who submitted the Offer, which communication shall be delivered
to such Shareholder as set forth in Section 16 hereof and shall, when taken in
conjunction with the Offer, be deemed to constitute a valid, legally binding
and enforceable agreement for the sale and purchase of the Shares covered
thereby.

         In the event that the Remaining Shareholder or its designee does not
purchase all of the Shares offered by such Shareholder pursuant to the Offer,
the unpurchased portion of such Shares may be sold by such Shareholder at any
time within ninety (90) days after receipt of the Offer by the Remaining
Shareholder.  Any such sale shall be to the person originally named in the
Offer as the proposed purchaser or transferee and shall be at not less than the
price and upon other terms and conditions, if any, not more favorable to such
purchaser than those specified in the Offer.  Any Shares proposed to be sold
after such ninety (90) day period, to a different


                                        2
   3

purchaser or at a lower price or otherwise on more favorable terms shall be
subject to the requirements of a prior offer to the Remaining Shareholder
pursuant to this Section 3.

         If the purchase price specified in the Offer includes any property
other than cash, such purchase price shall be deemed to be the amount of any
cash included in the purchase price plus the value (as determined in good faith
by the Corporation's regular investment banking firm) of such other property
included in such price.  If the Remaining Shareholder exercises its right of
first refusal hereunder, the closing of the purchase of the Shares with respect
to which such right has been exercised shall take place within thirty (30)
calendar days (or if approval of such purchase by the Corporation's
shareholders is required by law or pursuant to any stock exchange rule or
policy, within ninety (90) calendar days) after the Remaining Shareholder gives
notice of such exercise.  Upon exercise of its right of first refusal, the
Remaining Shareholder shall be legally obligated to consummate the purchase
contemplated thereby and shall use its best efforts to secure all approvals
required in connection therewith.

         4.      Right to Participate in Transfers.

                 (a)  If at any time any Remaining Shareholder receives an
Offer pursuant to Section 3 hereof and does not elect to exercise the right of
first refusal granted in Section 3 with respect to such Offer, such Remaining
Shareholder may elect to Transfer a Pro Rata Share, as hereinafter defined, of
the securities described in such Offer.  As used in this Section 4, "Pro Rata
Share" means the product of the number of Shares in the Offer and a fraction
(i) the numerator of which is the number of Shares held by such Remaining
Shareholder, and (ii) the denominator of which is the sum of the number of
Shares held by all Remaining Shareholders who choose to exercise the rights
granted in this Section 4, plus the number of Shares held by the Holder making
the Offer.

                 (b)  Each Remaining Shareholder wishing so to participate in
any Transfer under this Section 4 shall notify the Holder making the Offer in
writing of such intention as soon as practicable after such Remaining
Shareholder's receipt of the Offer pursuant to Section 3, and in any event
within thirty (30) days after the date of the Offer.  Such notification shall
be delivered or mailed to such Holder in accordance with Section 15 below.

                 (c)  The Holder and each Remaining Shareholder participating
in the proposed Transfer pursuant to this Section 4 shall Transfer to the
proposed transferee (the "Proposed Transferee") (and any Remaining Shareholders
exercising rights of first refusal pursuant to Section 3 hereof) all, or, at
the option of the Proposed Transferee (or any such Remaining Shareholder) any
part of Shares in the Offer (the "Offered Shares") proposed to be Transferred
at not less than the price and upon other terms and conditions, if any, not
more favorable to the Proposed Transferee (or any such Remaining Shareholder)
than those in the Offer provided by the Holder under Section 3 hereof;
provided, however, that any purchase or other acquisition of less than all of
such Offered Shares by the Proposed Transferee (and any Remaining Shareholders
exercising rights of first refusal pursuant to Section 3 hereof) shall be made
from the Holder and each participating Remaining Shareholder pro rata based
upon the relative amount of the Offered





                                       3
   4

Shares that the Holder and such participating Remaining Shareholder is
otherwise entitled to Transfer pursuant to Section 4(a).

                 (d)  The Remaining Shareholders' right to participate in a
Transfer pursuant to this Section 4 shall not apply with respect to Transfers
of Shares to the Corporation.

         5.      Right of First Refusal to Purchase New Securities.

                 (a)  The Corporation shall, prior to any issuance by the
Corporation of any of its securities (other than debt securities with no equity
feature), offer to each Holder owning at least ten percent (10%) of the issued
and outstanding class "C" shares of the Corporation by written notice the
right, for a period of thirty (30) days, to purchase its Pro Rata Amount, as
hereinafter defined, of such securities for cash at a per share amount equal to
the per share price or other consideration for which such securities (the "New
Securities") are to be issued.  For purposes of this Section 5, "Pro Rata
Amount" means the product of the New Securities to be issued and a fraction (i)
the numerator of which is the number of Shares held by such Holder as of the
date of the New Securities Notice, as hereinafter defined, and (ii) the
denominator of which is the aggregate number of Shares held on such date by all
Holders of Shares.  The first refusal rights of the Holders pursuant to this
Section 5 shall not apply to securities issued (i) as a stock dividend or upon
any subdivision of Shares, provided that the securities issued are limited to
additional Shares, or (ii) pursuant to the exercise of options to purchase
shares of capital stock granted to employees of the Corporation, not to exceed
in the aggregate ten percent (10%) of capital shares outstanding (appropriately
adjusted in each case to reflect stock splits, stock dividends, share
exchanges, combinations of shares, and the like with respect to the Shares).
The Corporation's written notice to the Shareholders (the "New Securities
Notice") shall describe in reasonable detail the securities proposed to be
issued by the Corporation and specify the number, price, and the terms of
payment, and shall be deemed to be dated the date it is given to the
Shareholders in accordance with Section 16 hereof.

                 (b)  Each Shareholder may accept the Corporation's offer as to
the full number of New Securities offered to it in the New Securities Notice or
as to any lesser number, by written notice thereof ("Notice of Acceptance")
given by it to the Corporation prior to the expiration of the aforesaid thirty
(30) day period.  A Shareholder who accepts such offer as to any portion of its
Pro Rata Amount of the New Securities shall be referred to herein as a
Participating Shareholder.  If any Participating Shareholder shall subscribe
for less than his Pro Rata Amount of the New Securities, the other
Participating Shareholders shall be entitled to purchase the balance of that
Participating Shareholder's Pro Rata Amount of the New Securities in the same
proportion in which they were entitled to purchase the New Securities pursuant
to Section 5(a).  Within five (5) days following the expiration of the
aforesaid thirty (30) day period, the Corporation shall notify each
Participating Shareholder of the amount of New Securities which each
Participating Shareholder may purchase pursuant to the foregoing provision and
each Participating Shareholder shall then have fifteen (15) days from the
receipt of such notice to indicate such additional amount of New Securities, if
any, that such Participating Shareholder wishes to purchase.  Promptly
thereafter, the Corporation shall sell and each Participating





                                       4
   5

Shareholder shall buy, upon the terms specified, the number of New Securities
agreed to be purchased by each Participating Shareholder.

                 (c)  The Corporation shall be free at any time prior to one
hundred twenty (120) days after the date of its New Securities Notice to the
Shareholder, to offer and sell to any third party or parties the number of such
New Securities not agreed by the Shareholder to be purchased by them (the
"Refused Securities"), at a price and on payment terms no less favorable to the
Corporation than those specified in such New Securities Notice to the
Shareholders.  However, if such third party sale or sales are not consummated
within such one hundred twenty (120) day period, the Corporation shall not sell
such New Securities as shall not have been purchased within such period without
again complying with this Section 5.

                 (d)  In the event the Corporation shall propose to sell less
than all the Refused Securities (any such sale to be in the manner and on the
terms specified in this Section 5), the Shareholders may, at their sole option
and in their sole discretion, reduce the number of, or other units of
calculation of the amount of, the New Securities specified in their respective
Notices of Acceptance to an amount which shall be not less than the product of:
(i) the ratio of the amount of New Securities in respect of which Notices of
Acceptance were delivered to the Corporation to the total amount of New
Securities specified in the New Securities Notice multiplied by (ii) the total
amount of New Securities proposed to be actually sold by the Corporation
(calculated without regard to this provision).  In the event that the
Shareholders so elect to reduce the number or amount of New Securities
specified in their respective Notices of Acceptance, the number or amount of
New Securities by which such New Securities specified in the Notices of
Acceptance are reduced shall not be sold or otherwise disposed of until they
have again been offered to the Purchasers in accordance with this Section 5.

         6.      Permitted Transfers.  Anything herein to the contrary
notwithstanding, the provisions of Sections 2,3,4 and 5 shall not apply to any
Transfer by a Shareholder to any Affiliate of such Shareholder.  In the event
of any such Transfer, the transferee of the Shares shall be bound by the terms
and conditions of this Agreement, and shall, as a condition of such transfer,
the transferee shall execute and deliver to the other Shareholder and the
Corporation a written agreement to that effect.

         7.      Call Option.

                 (a)  In the case of an Event of Default (as described below)
by a Shareholder, the other Shareholder (the "Nondefaulting Shareholder") shall
be granted the option to purchase the Shares held by the other Shareholder at a
fair value price (the "Fair Price"), but in no case shall the Fair Price be
less than the book value of such interest, to be determined by the
Corporation's independent accountants (the "Accountant").  The costs of such
Accountant shall be paid by the Corporation.  Such option shall be exercisable
for a period of 15 days following the delivery of the valuation report by the
Accountant.





                                       5
   6

                 (b)  If the Non-Defaulting Shareholder has not exercised its
option pursuant to Section 7(a), then the other Shareholder shall be granted
the same option which will thereafter be exercisable from the 16th day until
the 30th day after the delivery of the valuation report by the Accountant.

                 (c)  If after the 30th day following the delivery of the
valuation report by the Accountant neither of the Shareholders has exercised
its option pursuant to Sections 7(a) and (b) hereof, then the Non-Defaulting
Shareholder shall have a new option to purchase the other Shareholder's
interest in the Corporation at a price equal to 90% of the Fair Price.  Such
option shall be exercisable for a period of seven days.

                 (d)  If the Non-Defaulting Shareholder has not exercised its
option pursuant to Section 7(c), then the other Shareholder shall have the same
option which will thereafter be exercisable from the 38th day until the 45th
day after the delivery of the valuation report by the Accountant.

                 (e)  The foregoing procedure shall be applied with successive
seven-day options granted to the Non- Defaulting Shareholder and the other
Shareholder at a price that shall be reduced by 10% of the Fair Price
determined by the Accountant at the expiration of each party's option to
purchase at the Fair Price, as so reduced, until any Shareholder decides to
exercise its option.

                 (f)  For purposes of this Section 7, an Event of Default shall
include:

                          (i)     a material default by either Shareholder in
                                  the observance or performance of any of the
                                  terms of this Agreement which default remains
                                  uncured for a period of sixty (60) days after
                                  receipt of reasonable notice thereof by the
                                  Defaulting Shareholder;

                          (ii)    a "change in control" of either Shareholder
                                  resulting in control by any person or
                                  corporation who is a competitor of the
                                  Shareholders.  For purposes of this paragraph
                                  "change in control" shall mean (a) the
                                  acquisition of fifty-one percent (51%) or
                                  more of the voting capital stock of such
                                  Shareholder or (b) the ability to control the
                                  Board of Directors of such Shareholder; or

                          (iii)   a Shareholder shall file a petition seeking
                                  reorganization or relief under any applicable
                                  bankruptcy law or consents to the filing of
                                  any such petition or to the appointment of a
                                  receiver, liquidator, assignee, trustee,
                                  sequestrator (or other similar official) for
                                  it or a substantial part of its property.





                                       6
   7

         8.      Requirement of Prior Consent of the Treasurer.  Where the
intended transfer of any Shares of the Corporation by a party (whether a party
to this Agreement or a third party) under the provisions of this Agreement
requires the consent of the Treasurer of the Commonwealth of Australia ("The
Treasurer") then such transfer shall be subject to such consent and
notwithstanding anything else contained in this Agreement:

                 (a)  any offer made to or by any such party to purchase or
acquire shares in the Corporation shall be deemed to be subject to that party
obtaining the consent of The Treasurer;

                 (b)  any notice of election, acceptance or agreement by any
such party to purchase or acquire the Shares shall be subject to a condition
precedent to that party obtaining the consent of The Treasurer;

                 (c)  any period of time set out in this Agreement, by which
any such party must purchase or pay for such Shares shall be deemed to be
extended until 5 days after the consent of The Treasurer has been obtained or
refused (or the acquisition prohibited);

                 (d)  the provisions of this Agreement shall be read and
construed subject to the provisions of this Section.

         9.      Deadlock.

                 (a)  In the event all of the Sodexho designees to the board of
directors of the Corporation (the "Board of Directors"), as a group, or all of
the CCA designees to the Board of Directors, as a group, fail to consent to any
material matter considered by the Board of Directors, the vote of any other
member of the Board of Directors who is not considered a CCA designee or a
Sodexho designee pursuant to Section 13 hereof shall not be counted in such
vote.  In the event (i) such disagreement between the Sodexho designees and the
CCA designees referred to in the preceding sentence remains unresolved for a
period of thirty (30) days after the date of such meeting; or (ii) two
successive meetings of the Board of Directors (each of which is called pursuant
to at least 14 days' prior notice to occur at a reasonable time and place)
either fail to occur or are not attended by a majority of the members of the
Board of Directors (each of the matters referred to in clauses (i) or (ii)
above being hereinafter referred to as a "Deadlock"), either Shareholder may
send to the other Shareholder a written notice identifying the Deadlock and
invoking the following procedures (the "Deadlock Notice").

                 (b)  In any case of a Deadlock under Section 9(a), each of the
Shareholders shall within 10 days of a Deadlock Notice covering such Deadlock
cause its members of the Board of Directors to prepare and circulate to the
other Shareholders and the Board of Directors a memorandum setting out its
position on the matter in dispute and its reason for adopting such position and
each such memorandum shall be considered by each Shareholder who shall
respectively use their reasonable endeavors in good faith to resolve such
dispute.  Any resolution of the matter by the Shareholders pursuant to this
Section 9(b) shall be a final and binding determination of the matter.





                                       7
   8

                 (c)  In the event (x) a Deadlock arises under Section
9(a)(ii), or if no resolution has occurred in accordance with the provisions of
Section 9(b) within 30 days after delivery of the memorandum mentioned therein;
and (y) if any such Deadlock shall prevent the Board of Directors from
continuing to achieve its business purposes or its ability to honor its
contractual commitments in any material respect, either of the Shareholders may
by notice in writing to the Corporation cause the interests of the Shareholders
in the Corporation to be transferred according to the procedure described in
Section 7 above.

                 (d)  In no circumstances shall a Shareholder create an
"artificial Deadlock" in order to invoke the provisions of this Section 9.  For
the purposes of this provision an "artificial Deadlock" shall be a Deadlock
caused (other than in circumstances where the interests of the Shareholder
conflicts with the interests of the Corporation) by a Shareholder or its
appointees on the Board of Directors voting against a series of related issues
or proposals in any case where the passage or approval of the same is required
to enable the Corporation to carry on its business properly and efficiently.

                 (e)  The provisions of this Article 9 shall also apply in the
event the Shareholders fail to agree to any material matter considered by the
Shareholders and (i) such disagreement remains unresolved for a period of
thirty (30) days after the date of such meeting; or (ii) two successive
meetings of the Shareholders (each of which is called pursuant to at least 14
days prior notice to occur at a reasonable time and place) either fail to occur
or are not attended by a majority of the Shareholders.

         10.     Non-Competition.

                 (a)  The Shareholders agree that, except as otherwise provided
herein, they will conduct all of their business with respect to the Prison
Management Business in the countries of Australia, New Zealand and Papua, New
Guinea (the "Australian Zone") exclusively with each other.  For purposes of
this Section 10, Prison Management Business means the (i) design, construction,
financing and "full management" of detention or correctional facilities with or
without custodial services and/or (ii) the transportation of prisoners; it
being understood that Sodexho may continue to provide food service, laundry,
housekeeping, maintenance, etc. outside of the Corporation and that the
provisions of such services by Sodexho at a rate of less than $10.00 (U.S.) per
inmate per day (as such amount may be increased by the Board from time to time)
shall not constitute "full management" and shall not constitute the Prison
Management Business.  In order to give effect to this decision, the
Shareholders agree that unless unanimously approved by the Board of Directors
in writing or except as otherwise permitted pursuant to this Agreement:

                          (i)     neither Shareholders nor any of their
                                  respective Affiliates will compete with the
                                  Corporation in the Prison Management Business
                                  in the Australian Zone.





                                       8
   9

                          (ii)    any third-party approach towards either
                                  Shareholder in relation to a Project (as
                                  defined herein) in the Australian Zone,
                                  whether in its individual capacity or as a
                                  Shareholder shall be immediately introduced
                                  to the Corporation.  For purposes of this
                                  Section 10, a Project means any opportunity
                                  related to the Prison Management Business in
                                  the Australian Zone such as requests (with
                                  respect to a particular facility) for
                                  proposals and bids to governmental agencies
                                  and consulting agencies with respect to the
                                  Prison Management Business.

                          (iii)   neither Shareholders nor any of their
                                  respective Affiliates, shall alone or jointly
                                  with others acquire any material interest
                                  (more than 10%) in any company which is a
                                  competitor of the Corporation in the Prison
                                  Management Business in the Australian Zone
                                  (other than competitors for which the
                                  revenues related to the prison management
                                  business constitute less than 10% of the
                                  total revenues for such competitors).

                 (b)  The Shareholders agree that in the event of a breach of
the provisions contained in Section 10(a) hereof, in addition to any other
remedies available to any Shareholder in breach of any such provision shall pay
to the other Shareholder an amount equal to one year's annual revenues
generated by the Prison Management Business which is the subject of such
breach.

                 (c)  If any of the restrictions set forth in Section 10(a)
should for any reason be declared invalid by a court of competent jurisdiction,
the validity or enforcement of the remainder of such restrictions and covenants
shall not thereby be adversely affected.  If any provision of Section 10 shall
be adjudicated to be invalid or unenforceable, such provision shall be deemed
deleted, but only to the operation of such provision in the particular
jurisdiction in which such adjudication was made; provided, that to the extent
any such provision may be made valid and enforceable, in such jurisdiction by
limitations on the scope of the activities, geographical area or time period
covered, such provision shall be deemed limited to the extent, and only to that
extent, necessary to make such provision enforceable to the fullest extent
permissible under the laws and public policies applied in such jurisdiction.

         11.     Confidentiality.

                 (a)  The Shareholders agree at all times during the term of
this Agreement to hold in confidence and keep secret and inviolate all of the
Corporation's confidential and proprietary information, including, without
limitation, the Corporation's budgets, financial statements, development plans,
and the information related thereto, and all unpublished matters relating to
the business, property, trade secrets, proprietary rights, intellectual
property, accounts, books, records, customers, and contracts of the Corporation
which it may know or hereafter come to know; provided, however, that no such
information, whether deemed confidential by the





                                       9
   10

Corporation or not, shall be subject to the terms of this Section 11 if it is
part of the public domain, through no fault of the Shareholder.

                 (b)      Each of the Shareholders covenant that the
information described in 11(a) will be kept confidential by such Shareholder,
the entities controlled by such Shareholder and the directors, employees, and
representatives of any of them, using the same standard of care in safeguarding
such information as such Shareholder employs in protecting its own proprietary
information which it desires not to disseminate or publish and that such
information shall only be used by the Shareholder in connection with the
business of the Corporation.

                 (c)  No Shareholder shall at any time take, or cause to be
taken any action, and shall not make, or cause to be made, any omission, which
would be inconsistent with or impair in any way the rights of the Corporation
in the information described in Section 11(a) above.  The Shareholders
acknowledge and agree that any unauthorized disclosure or use of the
information described in Section 11(a) above would cause the Corporation
irreparable injury or loss.  Accordingly, each Shareholder acknowledges and
agrees that in the event of a breach, or threatened breach, by any of them of
any provisions of this Section 11, the Corporation shall be entitled to an
injunction restraining such Shareholder from the disclosure or unauthorized use
of any such information.

         12.     Specific Performance.

                 The Shareholders and the Corporation expressly agree that the
Shareholders and the Corporation will be irreparably harmed and/or injured if
this Agreement is not specifically enforced.  Upon a breach or threatened
breach of the terms, covenants, and/or conditions of this Agreement by any of
the Shareholders or the Corporation, the other Shareholders and the Corporation
shall, in addition to all other remedies, each be entitled to a temporary or
permanent injunction, without showing any actual harm, injury, or damage to
such other Shareholders or the Corporation,  and/or a decree for specific
performance, in accordance with the provisions of this Agreement.

         13.     Board of Directors.  The Shareholders acknowledge and agree
that each Shareholder shall be entitled to an equal number of nominees to the
Board of Directors, and the Corporation's General Manager, who is currently
Terry Lawson shall be a member of the Corporation's Board of Directors but
shall not be considered a nominee of either Shareholder.   Each Shareholder
agrees (i) that in all elections of directors during the term of this
Agreement, such Shareholder shall vote all Shares owned by it for the nominees
of the other Shareholders, and (ii) that any change in the number of directors
shall require the unanimous written consent of all Shareholders.

         14.  Amendment to Articles of Association, etc.  The Shareholders
acknowledge and agree that the affirmative vote of seventy-five percent (75%)
of the Holders of the Shares shall be required for (i) an amendment to the
Corporation's Articles of Association, (ii) the issuance by the Corporation of
any additional class "C" shares or other securities convertible into capital





                                       10
   11

shares of the Corporation, or (iii) any merger or combination of the
Corporation with or into any other entity.

         15.     Term.  Unless otherwise specified, this Agreement, and the
respective rights and obligations of the parties hereto, shall continue and be
effective for so long as the parties hereto are shareholders in the
Corporation; provided, however, that Section 13 hereof shall terminate on the
tenth anniversary of the date hereof, unless extended by the mutual agreement
of the parties hereto.

         16.     Notices.

                 (a)  Any notices required or permitted to be sent hereunder
shall be mailed, certified mail, return receipt requested, postage prepaid, or
delivered by overnight courier service, or by facsimile transmission in the
case of non-U.S. residents, to the following addresses, or such other addresses
as shall be given by notice delivered hereunder, and shall be deemed to have
been given three days after mailing, if mailed, or one business day.

                 If to the Corporation, to:

                          Corrections Corporation of Australia Pty Ltd.
                          Level 4
                          39 Sherwood Road
                          Toowong, Queensland 4066
                          Australia
                          Attn:  Terry Lawson

                 With a copy to:

                          Lees Marshall & Warnick, Solicitors
                          Level 3 Banking Annexe
                          Central Plaza One
                          345 Queen Street
                          Brisbane QLD 4000
                          Australia
                          Attn:  Malcolm Marshall, Esq.





                                       11
   12

                 If to CCA, to:

                          Corrections Corporation of America
                          102 Woodmont Boulevard, Suite 800
                          Nashville, Tennessee  37205
                          Attn:  Doctor R. Crants

                 With a copy to:

                          Elizabeth E. Moore, Esq.
                          Stokes & Bartholomew, P.A.
                          424 Church Street, Suite 2800
                          Nashville, Tennessee  37219

                 If to Sodexho:

                          Sodexho S.A.
                          3, avenue Newton
                          78180 Montigny-le-Bretonneux
                          FRANCE
                          Attn:  Jean-Pierre Cuny

                 With a copy to:

                          Ropes & Gray
                          One International Place
                          Boston, MA  02110
                          Attn:  Jane Goldstein, Esq.

                 (b)  Copies of any notices given, or required to be given to
or by, any Shareholder under this Agreement shall also be furnished to the
Corporation in accordance with the provisions of this Section 16.

         17.     Legend.

                 Each certificate evidencing any of the Shares shall bear a
legend substantially as follows:

                 THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                 CERTAIN RESTRICTIONS ON TRANSFER AND MAY NOT BE SOLD,
                 EXCHANGED, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, OR
                 OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE WITH AND SUBJECT
                 TO ALL THE TERMS AND CONDITIONS OF THAT CERTAIN SHAREHOLDERS'
                 AGREEMENT, DATED OCTOBER 17, 1995, AMONG





                                       12
   13

                 THE CORPORATION AND ITS SHAREHOLDERS, A COPY OF WHICH THE
                 CORPORATION WILL FURNISH TO THE HOLDER OF THIS CERTIFICATE
                 WITHOUT CHARGE UPON REQUEST IN WRITING.

         18.     Entire Agreement and Amendments.

                 This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and neither this Agreement nor any
provision hereof may be waived, modified, amended, or terminated except by a
written agreement signed by the parties hereto and in accordance with the terms
of the Articles of Association, as amended.

         19.     Acknowledgement of Holder.  The parties hereto acknowledge and
agree that the 22,500 Class "C" Shares held by CCA in accordance with the Stock
Purchase Agreement shall be regarded by both parties as being held by Sodexho.

         20.     Governing Law.

                 This Agreement shall be governed by and be interpreted under
the laws of Queensland without regard to the conflicts of law principles
thereof.  Each party hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court located in Queensland over any
action or proceeding to enforce any right under this Agreement.  The parties
further acknowledge that irrevocable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  Accordingly, the parties shall be
entitled to an injunction to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court in Queensland.  This being in addition to any other remedy to which they
may be entitled at law or equity.

         21.     Successors and Assigns.

         This Agreement shall be binding upon the heirs, personal
representatives, executors, administrators, successors, and assigns of the
parties.

         22.     Waivers.

                 No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.

         23.     Severability.

                 If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision





                                       13
   14

of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid, or unenforceable provision were not contained herein.

         24.     Descriptive Headings.

                 Descriptive headings are for convenience only and are not
deemed to be part of this Agreement.

         25.     Counterparts.

                 This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

       This Agreement was executed as of the date first set forth above.


                                              CORRECTIONS CORPORATION OF       
                                              AUSTRALIA PTY. LTD.              
                                                                               
                                                                               
                                              By:                              
                                                 ------------------------------
                                                                               
                                              Title:                           
                                                    ---------------------------
                                                                               
                                                                               
                                              CORRECTIONS CORPORATION OF       
                                              AMERICA                          
                                                                               
                                                                               
                                              By:                              
                                                 ------------------------------
                                                                               
                                              Title:                           
                                                    ---------------------------
                                                                               
                                                                               
                                              SODEXHO S.A.                     
                                                                               
                                                                               
                                              By:                              
                                                 ------------------------------
                                                                               
                                              Title:                           
                                                    ---------------------------






                                       14

EX-10.152

   1


                                                                EXHIBIT 10.152


                  FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                       CORRECTIONS CORPORATION OF AMERICA

                                      AND

                                  SODEXHO S.A.




                        DATED AS OF OCTOBER ______, 1995
   2

                  FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT


         THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the "AMENDMENT") is
made and entered into this ____ day of October, 1995, by and between
CORRECTIONS CORPORATION OF AMERICA, a Delaware corporation having its principal
place of business in Nashville, Tennessee (the "SELLER"), and SODEXHO S.A., a
French corporation, having its principal place of business in France (the
"BUYER").

         WHEREAS, Buyer and Seller are parties to that certain Stock Purchase
Agreement dated as of June 9, 1995 (the "AGREEMENT"), pursuant to which Seller
agreed to sell to Buyer and Buyer agreed to purchase from Seller, shares
representing fifty percent (50%) of the issued shares of Corrections
Corporation of Australia Pty. Ltd. A.C.N. 010 921 641, a Queensland company
(the "COMPANY"), upon the terms and conditions set forth therein; and

         WHEREAS, Seller and Buyer desire to amend the Agreement on the terms
and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the mutual promises covenants and
agreements herein contained, the parties agree as follows:

         SECTION 1.       Definitions.  Initially capitalized terms used in
this Amendment shall have the meanings ascribed thereto in the Agreement, as
amended hereby, unless otherwise defined herein.

         SECTION 2.       Amendments to the Agreement.

         2.1.    Amendment to Article I.  Article I of the Agreement is hereby
amended to read in its entirety as follows:


                                   ARTICLE I

                          PURCHASE AND SALE OF SHARES

                 1.01.    Transfer of Shares.  Subject to all of the terms and
         conditions of this Agreement, at the Closing, Seller hereby agrees to
         sell, transfer and convey to Buyer, and Buyer agrees to purchase and
         acquire from Seller, 22,500 "C" class shares in the capital of the
         Company, which shares collectively constitute fifty percent (50%) of
         the issued shares in the capital of the Company (the foregoing shares
         of the Company are hereinafter collectively referred to as the
         "Shares").  Seller shall transfer the Shares free and clear of all
         liens, claims, charges, restrictions, security interests, equities,
         proxies, pledges and encumbrances of any kind, except that Seller
         shall retain title to the Shares and shall hold the Shares as provided
         in Section 3.02(a)(ii) hereof.
   3

                 2.2.     Amendment to Article III.  Article III of the
         Agreement is hereby amended to read in its entirety as follows:


                                  ARTICLE III

                      CLOSING; OBLIGATIONS OF THE PARTIES

                 3.01.    Closing Date. Subject to the provisions of Section
         7.06 and Section 8.05, the closing (the "Closing") shall take place
         and be effective for all purposes at 10:00 a.m., local time, on
         October ___, 1995 at the offices of Seller or at such other time and
         place as the parties hereto mutually agree (the "Closing Date").

                 3.02.    Obligations of the Parties at the Closing.

                 (a)      At the Closing, the events set out in clauses (i)
through (iv) shall occur:

                 (i)      Buyer shall pay the consideration as specified in
         Section 2.01.

                 (ii)     Upon and after receipt of the consideration pursuant
         to (i) above, and without any additional action by Seller or Buyer,
         Seller shall for the time being remain the record holder of and retain
         legal title to the Shares, and Buyer, as purchaser,  shall become
         beneficial owner of the Shares with all of the rights, including the
         right to receive dividends, and obligations of any holder of class "C"
         shares in the Company as set forth in the Articles of Association, as
         amended, and as a shareholder under the Shareholders Agreement by and
         between the Buyer and Seller of even date herewith (the "Shareholders
         Agreement").  Seller shall execute in favor of Buyer or Buyer's
         designee an irrevocable proxy in form and substance mutually agreeable
         to both parties (the "Irrevocable Proxy").  Seller shall not
         thereafter sell, transfer or convey the Shares, and Buyer shall not
         thereafter sell, transfer or convey its beneficial interest in the
         Shares, except in accordance with the terms of this Agreement and the
         terms of the Shareholders Agreement described in Section 7.05 of this
         Agreement and the Articles of Association, as amended.

                 (iii)    Seller shall cause a meeting of the Directors of the
         Company to be convened and shall procure that at the meeting:

                          (A)     approval of the transactions contemplated by
         this Agreement;

                          (B)     at the request of Buyer, the appointment as
         directors of the Corporation two (2) persons nominated by Buyer.

                 (b)      In the event all required approvals described in this
         Agreement are obtained on or before October ___, 1998, then the events
         set out in clauses (i) through (iii) shall occur within thirty (30)
         days of receipt of such approvals:





                                       2
   4

                 (i)      Seller shall deliver to Buyer, or to such person as
         Buyer may direct, without additional consideration the share
         certificate issued by the Company for the Shares together with an
         executed instrument of transfer in registrable form (except for the
         payment of any applicable stamp duty) for the Shares in favor of the
         Buyer or its nominee (as transferee) from the registered holder of the
         Shares (as transferor).

                 (ii)     Seller shall deliver to the Buyer any waiver, consent
         or other document which the Buyer may require to obtain a good title
         to the Shares registered in the name of the Buyer or its nominee,
         including any Power of Attorney under which any document required to
         be delivered under this Agreement has been executed.

                 (iii)    Seller shall cause a meeting of the Directors of the
         Company to be convened and shall procure that at the meeting approval
         of the transfer of the Shares to the Buyer or its nominee and, subject
         to the payment of stamp duty, direct the entries in the Company's
         share register be made, the existing share certificate for the Shares
         be canceled and a new certificate in the name of the Buyer be issued.
         Seller shall also cause the Articles of Association to be amended to
         incorporate the provisions of the Shareholders Agreement.

                 (c)      If (A) all required approvals described in this
         Agreement are not obtained on or before October    , 1998, or (B)
                                                        ----
         otherwise at Buyer's option on or before October    , 1997, the events
                                                         ----
         set out in clauses (i) through (iii) shall occur on or before October
            , 1998 in the case of (A) above or October    , 1997, in the case
         ---                                           ---
         of (B) above:

                 (i)      Seller or its designee, which designee may be Doctor
         R. Crants, subject to Seller's rights under the Shareholders Agreement
         and the receipt of government approvals described in Section 7.06 of
         the Agreement, shall pay to Buyer by bank cheque, bank wire transfer
         or such other method as may be mutually agreed upon by the parties a
         sum equal to the Purchase Price plus interest thereon at a rate equal
         to the six month LIBOR rate less any cash distributions received by
         Buyer as a result of Buyer's beneficial ownership of the Shares.

                 (ii)     Upon and after payment of such consideration, and
         without any additional action by Seller or Buyer, Seller shall cease
         to hold the Shares for the benefit of Buyer, and Seller or its
         designee, as the case may be, shall thereafter hold the Shares for its
         own account and the Irrevocable Proxy executed herewith shall
         terminate.

                 (iii)    The Shareholders Agreement described in Section 7.05
         of  this Agreement shall automatically terminate.

                 (iv)     The persons nominated by Buyer to serve as directors
         pursuant to subparagraph (a)(iii) of this section shall resign as
         directors.





                                       3
   5

                 (d)      Each party by written notice to the other may waive
         compliance by such other party with the requirements of this Section
         3.02.

          2.3.   Amendment to Article 4.02.  Article 4.02 of the Agreement is
hereby amended to read in its entirety as follows:

         4.02.   Ownership of Shares:  Validity and Enforceability.  Seller
         represents and warrants that (i) Seller is the legal and beneficial
         owner of the Shares, free and clear of all liens, claims, charges,
         restrictions, security interests, equities, proxies, pledges or
         encumbrances of any kind; (ii) Seller has the full right, power,
         authority and capacity to sell and transfer the respective Shares
         owned by such Seller; (iii) by virtue of the transfer of the Shares to
         Buyer, pursuant to Section 3.02, Buyer will obtain full title to such
         Shares, free and clear of all liens, claims, charges, restrictions,
         security interests, equities, proxies, pledges, or encumbrances of any
         kind.  This Agreement constitutes a legal, valid and binding agreement
         of the Seller, enforceable against Seller in accordance with its
         terms.

         SECTION 3.       Effectiveness of this Amendment.  This Amendment
shall become effective upon the execution and delivery of this Amendment by the
Buyer and the Seller.

         SECTION 4.       Indemnification.  Seller agrees to defend, indemnify
and hold harmless Buyer, its directors, officers, employees, affiliates and
agents, and shall reimburse Buyer for, from and against any Loss resulting from
this Amendment or any actions contemplated thereby.

         SECTION 5.  Miscellaneous.

         5.1.  Amendment to Agreement.  The Agreement is hereby, and shall
henceforth be deemed to be, amended, modified and supplemented in accordance
with the provisions hereof, and the respective rights, duties and obligations
under the Agreement shall hereafter be determined, exercised and enforced under
the Agreement, as amended, subject in all respects to such amendments,
modifications, and supplements and all terms and conditions of this Amendment
and the Articles of Association, as amended.

         5.2.  Ratification of the Agreement.  Except as expressly set forth in
this Amendment, all agreements, covenants, undertakings, provisions,
stipulations, and promises contained in the Agreement are hereby ratified,
readopted, approved, and confirmed and remain in full force and effect.

         5.3.  No Implied Waiver.  The execution, delivery and performance of
this Amendment shall not, except as expressly provided herein, constitute a
waiver or modification of any provision of, or operate as a waiver of any
right, power or remedy of the parties under, the Agreement or prejudice any
right or remedy that either party may have or may have in the future under or
in connection with the Agreement or any





                                       4
   6

instrument or agreement referred to therein.  The parties hereto acknowledge
and agree that the representations and warranties of the parties contained in
the Agreement shall survive the execution and delivery of this Amendment and
the effectiveness hereof.

         5.4.  Governing Law.  This Amendment shall be governed by and be
interpreted under the laws of Queensland without regard to the conflicts of law
principles thereof.  Each party hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court located in Queensland over any
action or proceeding to enforce any right under this Amendment.  The parties
further acknowledge that irrevocable damage would occur in the event that any
of the provisions of this Amendment were not performed in accordance with their
specific terms or were otherwise breached.  Accordingly, the parties shall be
entitled to an injunction to prevent breaches of the provisions of this
Amendment and to enforce specifically the terms and provisions hereof in any
court in Queensland.  This being in addition to any other remedy to which they
may be entitled at law or equity.

         5.5.  Counterparts; Telecopy Execution.  This Amendment may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Amendment by facsimile
shall be equally as effective as delivery of a manually executed counterpart.
Any party delivering an executed counterpart of this Amendment by facsimile
shall also deliver a manually executed counterpart, but the failure to deliver
a manually executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.

         IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized officers as of the date first written above.

                                        SODEXHO S.A.



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

                                        Its:
                                            -----------------------------------




                                       5
   7


                                           CORRECTIONS CORPORATION OF          
                                           AMERICA                             
                                                                               
                                                                               
                                           By:                                 
                                              ---------------------------------
                                                                               
                                           Its:                                
                                               --------------------------------






                                       6

EX-10.153

   1

                                                             EXHIBIT 10.153

                               FIRST AMENDMENT TO

                              AMENDED AND RESTATED

                       CORRECTIONS CORPORATION OF AMERICA

                             1989 STOCK BONUS PLAN


         This INDENTURE is made this 3rd day of November, 1995 by Corrections
Corporation of America, a corporation duly organized and existing under the
laws of the state of Delaware (the "Company").

                              W I T N E S S E T H:

         WHEREAS, the Company has adopted the Amended and Restated Corrections
Corporation of America 1989 Stock Bonus Plan (the "1989 Plan") pursuant to
which certain stock options were authorized to be granted;

         WHEREAS, the Company now wishes to amend the terms of the 1989 Plan to
decrease the number of shares of common stock that may be issued thereunder;
and

         WHEREAS, the Board of Directors of the Company have duly approved and
authorized the amendment of the 1989 Plan as embodied herein.

         NOW, THEREFORE, effective on the day and year first set forth above,
the Company does hereby amend the 1989 Plan as follows:

                                       1.

         Section 3 of the 1989 Plan shall be deleted in its entirety and the
following substituted in lieu thereof:

         "Section 3.  Common Stock Subject to the Plan.  The capital stock to
         be issued under the Plan will be shares of Common Stock.  The Common
         Stock to be issued under the Plan may be unissued shares of Common
         Stock or shares of Common Stock held in treasury.  The total number of
         shares of Common Stock that may be issued under the Plan shall not
         exceed in the aggregate 200,000 shares.  The Company is not obligated
         to issue Bonus Shares if such issuance would, in the opinion of
         counsel for the Company, violate the Securities Act of 1933, as
         amended, or any other applicable statute or regulation then in
         effect."

                                       2.

         Except as specifically amended hereby, the 1989 Plan shall remain in
full force and effect as prior to this amendment.
   2


         IN WITNESS WHEREOF, the Company caused this amendment to be executed
on the day and year first above written.





                                        CORRECTIONS CORPORATION OF             
                                        AMERICA                                
                                        a Delaware corporation                 
                                                                               
                                        By:                                    
                                           ------------------------------------
                                                                               
                                        Title:                                 
                                              ---------------------------------



      ATTEST:
      

      ------------------------
      Secretary






                                       2

EX-10.154

   1
                                                             EXHIBIT 10.154


                            [FIRST UNION LETTERHEAD]


                               December 15, 1995


                                                    LETTER OF CREDIT NO. S062573


Bank One, Texas, N.A.
910 Travis, 6th Floor
Houston, TX  77002
Attn:  Corporate Trust Department

Ladies and Gentlemen:

         At the request and on the instructions of the Taylor Detention Center
Corporation, a Texas non-profit corporation (the "Issuer"), we hereby establish
in your favor, as Trustee under the Trust Indenture dated as of December 15,
1995 (the "Indenture"), between the Issuer and you pursuant to which
$24,545,000 in aggregate principal amount of the Issuer's Taxable Detention
Center Revenue Bonds, Series 1995 (the "Bonds") are being issued, this
Irrevocable Letter of Credit No. S062573 in the amount of $24,998,915.00 (the
"Initial Stated Amount"), and, as from time to time, reduced and reinstated as
hereinafter provided, the "Amount Available"; of which (i) subject to the
provisions below reducing amounts available hereunder, $24,545,000 (as from
time to time reduced and reinstated as hereinafter provided, the "Principal
Amount Available"), shall be available for the payment of principal or the
portion of Purchase Price corresponding to principal of the Bonds, and (ii)
subject to the provisions below reducing amounts available hereunder, $453,915
(as from time to time reduced and reinstated as hereinafter provided, the
"Interest Amount Available") shall be available for the payment of up to
forty-five (45) days' interest or the portion of Purchase Price corresponding
to interest on the Bonds, at an assumed rate of fifteen percent (15%) per
annum.  Subject to such aggregate limits and to the conditions set forth
herein, funds may be drawn upon hereunder (i) with respect to payment of the
unpaid principal amount or the portion of Purchase Price corresponding to the
principal of the Bonds, and (ii) with respect to payment of up to forty-five
(45) days' interest accrued and payable or the portion of Purchase Price
corresponding to interest accrued on the Bonds on or prior to their stated
maturity date.  This Letter of Credit is effective immediately and expires as
of the close of business at our Presentation Office (as defined herein) on June
15, 1997 (as such date may be extended from time to time as hereinafter
described, the "Stated Termination Date") or earlier as hereinafter provided,
or unless otherwise renewed or extended.  All drawings under this Letter of
Credit will be paid with our own funds.


   2


March 28, 1996
Page 2




         We hereby irrevocably authorize you to draw on us, in an aggregate
amount not to exceed the Amount Available and in accordance with the terms and
conditions and subject to the reductions in amount as hereinafter set forth,
(1) in a single drawing (subject to the provisions contained in the next
following paragraph) by your draft drawn on us at sight, presented for payment
on a day on which banks in the State of North Carolina are open for the
transaction of business of the nature required pursuant to the Indenture (a
"Business Day") and referring therein to the number of this Letter of Credit,
and accompanied by your written and completed certificate signed by an
Authorized Officer in the form of Annex A attached hereto (such draft
accompanied by such certificate being your "Interest Draft"), an amount not
exceeding the Interest Amount Available on the date of such drawing; (2) in one
or more drawings by one or more of your drafts drawn on us at sight, presented
for payment on a Business Day and referring therein to the number of this
Letter of Credit, and accompanied by your written completed certificate signed
by an Authorized Officer in the form of Annex B attached hereto (any such draft
accompanied by such certificate being your "Tender Draft"), an aggregate amount
not exceeding the Amount Available on the date of such drawing; (3) in one or
more drawings by one or more of your drafts drawn on us at sight, presented for
payment on a Business Day and referring therein to the number of this Letter of
Credit, and accompanied by your written and completed certificate signed by an
Authorized Officer in the form of Annex C attached hereto (any such draft
accompanied by such certificate being your "Partial Redemption Draft"), an
aggregate amount not exceeding the Amount Available on the date of such
drawing; (4) in a single drawing by your draft drawn on us at sight presented
for payment on a Business Day and referring therein to the number of this
Letter of Credit, and accompanied by your written and completed certificate
signed by an Authorized Officer in the form of Annex D hereto (any such draft
accompanied by such certificate being your "Conversion Draft"), an amount not
exceeding the Amount Available on the date of such drawing; and (5) in a single
drawing by your draft drawing on us at sight, presented for payment on a
Business Day and referring therein to the number of this Letter of Credit, and
accompanied by your written and completed certificate signed by an Authorized
Officer in the form of Annex E attached hereto (such draft accompanied by such
certificate being your "Final Draft"), an amount not exceeding the Amount
Available on the date of such drawing.

         If you shall draw on us by an Interest Draft, and you shall not have
received from us, within ten (10) calendar days from the date of our payment in
respect of such drawing, written notice to the effect that we have not been
reimbursed for such drawing and that the interest portion of the Letter of
Credit will not be reinstated, then (x) your right to draw on us in a single
drawing by your Interest Draft under clause (1) of the immediately preceding
paragraph shall be automatically reinstated, and (y) effective as of the
eleventh (11th) calendar day from the date of our payment in respect of such
drawing, you shall again be authorized to draw on us by your Interest Draft, in
accordance with said clause (1).  The provisions of this paragraph providing
for the reinstatement of your right to draw on us by your Interest Draft in a
succeeding single drawing shall be applicable to each successive drawing by
your Interest Draft under clause (1) of the immediately preceding paragraph so
long as this Letter of Credit shall not have terminated as set forth below.







   3


March 28, 1996
Page 3




         Upon our honoring any Tender Draft presented by you hereunder, the
Amount Available under this Letter of Credit shall be automatically reduced by
the amount drawn under such Tender Draft, the Principal Amount Available to be
drawn hereunder by you shall be automatically reduced by an amount equal to the
principal component of such Tender Draft and the Interest Amount Available to
be drawn hereunder by you shall be automatically reduced by an amount equal to
the amount of the interest component of such Tender Draft.

         Upon our honoring any Partial Redemption Draft presented by you
hereunder, the Amount Available under this Letter of Credit shall be
automatically and permanently reduced by the amount drawn under any such
Partial Redemption Draft, the Principal Amount Available to be drawn hereunder
by you shall be automatically and permanently reduced by an amount equal to the
principal component of such Partial Redemption Draft honored by us hereunder
and the Interest Amount Available to be drawn hereunder by you shall be
automatically and permanently reduced by an amount equal to the amount of the
interest which would accrue on an amount of principal equal to the principal
component of such Partial Redemption Draft for forty-five (45) days at an
assumed rate of fifteen percent (15%) per annum.

         Upon our honoring any Conversion Draft presented by you hereunder, the
Amount Available under this Letter of Credit shall be automatically and
permanently reduced by the amount drawn under any such Conversion Draft, the
Principal Amount Available to be drawn hereunder by you shall be automatically
and permanently reduced by an amount equal to the principal component of such
Conversion Draft honored by us hereunder, and the Interest Amount Available to
be drawn hereunder by you shall be automatically and permanently reduced by an
amount equal to the amount of the interest component of any such Conversion
Draft honored by us hereunder.

         The Amount Available, the Principal Amount Available and the Interest
Amount Available drawn under this Letter of Credit with respect to any Tender
Draft shall be reinstated as provided in this paragraph to the extent, but only
to the extent, that we are reimbursed by or on behalf of the Issuer in
immediately available funds delivered to us at the Presentation Office on or
before 3:00 p.m. (Charlotte, North Carolina time) on a Business Day for any
amount drawn in respect of principal and interest under any Tender Draft.  If
we receive such reimbursement by or on behalf of the Issuer, all in substantial
conformity with the terms and conditions of this Letter of Credit, after 3:00
p.m.  (Charlotte, North Carolina time) on a Business Day prior to the
termination hereof, such reimbursement will be honored as stated above as if
received on the next succeeding Business Day.  Any amount received by us from
or on behalf of the Issuer in reimbursement of amounts drawn hereunder by a
Tender Draft shall, if accompanied by your completed certificate signed by you
in the form of Annex F attached hereto, be applied to the extent of the amount
received by us and indicated therein to reimburse us for amounts drawn
hereunder by your Tender Drafts, and we will confirm to you the amount of the
Principal Amount Available and the Interest Amount Available reinstated by such
reimbursement by delivering to you the executed and completed acknowledgment
accompanying the form of Annex F delivered by you in connection with such
reimbursement.  The Amount Available, the Principal Amount Available and the
Interest Amount Available shall be reinstated only in compliance with the
provisions of this paragraph.







   4


March 28, 1996
Page 4




         Each draft and certificate presented hereunder shall be dated the date
of presentation and each such draft and certificate shall be presented at our
office located at Two First Union Center, T-7, Charlotte, North Carolina
28288- 0742, Attention:  International Operations, or at any other office which
may be designated by us by written notice delivered to you at least three (3)
Business Days prior to the date on which interest is payable on the Bonds (the
"Presentation Office"), and shall be presented on a Business Day.  If we
receive any of your drafts and certificates at such office, all in strict
conformity with the terms and conditions of this Letter of Credit, not later
than 11:00 a.m.  (Charlotte, North Carolina time) on a Business Day on or prior
to the termination of this Letter of Credit, we will honor the same by
initiating the wire funds by 2:30 p.m. (Charlotte, North Carolina time) on the
same day in accordance with your payment instructions, or on such other
Business Day as you may direct.  If we receive any of your drafts and
certificates at such office, all in strict conformity with the terms and
conditions of this Letter of Credit, after 11:00 a.m. (Charlotte, North
Carolina time) on a business day prior to termination of this Letter of Credit,
we will honor the same on the next succeeding Business Day by initiating the
wiring of funds by 2:30 p.m. (Charlotte, North Carolina time) in accordance
with your payment instructions, or on such other Business Day as you may
direct.  If requested by you, payment under this Letter of Credit may be made
by wire transfer of Federal Reserve Bank of Richmond funds in your account in a
bank on the Federal Reserve wire system or by deposit of same-day funds into a
designated account that you maintain with us.

         In connection with the presentation of any Tender Draft or Conversion
Draft, Bonds in aggregate principal amount equal to the principal amount of
such Tender Draft or Conversion Draft shall be delivered to the Bank or its
designee as promptly as practicable, and in any event, within five (5) business
days after such presentation, registered in the name of the Issuer, pledged to
the Bank, pursuant to the Pledge Agreement.  With respect to any Tender Draft,
the Bank agrees that it shall not release any Bonds pledged to it until the
Trustee shall have received the Bank's executed acknowledgment accompanying the
form of Annex F attached hereto, notifying the Trustee that the Letter of
Credit has been reinstated so that the Amount Available as so reinstated shall
equal or exceed the aggregate principal and forty- five (45) days' interest
calculated at an assumed rate of fifteen percent (15%) per annum on all Bonds
for which drawings are available hereunder, after giving effect to such
release.

         Upon the earliest of (i) our honoring of your Final Draft presented
hereunder, (ii) the second (2nd) day following the date on which we receive a
certificate signed by an Authorized Officer stating that the interest rate on
the Bonds has been converted to a fixed interest rate, (iii) the date on which
we receive a certificate signed by an Authorized Officer stating that you have
accepted an Alternate Letter of Credit (as defined in the Indenture) which is
effective the date of such certificate, or (iv) the Stated Termination Date,
this Letter of Credit shall automatically terminate and be delivered to us for
cancellation.

         This Letter of Credit applies only to the payment of principal or the
portion of Purchase Price of the Bonds corresponding to principal, and up to
forty-five (45) days' interest accruing on the Bonds computed at a rate of
fifteen percent (15%) per annum, from the date of issuance of this Letter of
Credit







   5


March 28, 1996
Page 5




through the date of termination of this Letter of Credit computed on the basis
of actual days elapsed in a 365 or 366 day year, as the case may be, and does
not apply to any interest that may accrue thereon or any principal, premium or
other amounts that may be payable with respect to the Bonds subsequent to the
expiration of this Letter of Credit.

         This Letter of Credit is transferable only in its entirety to any
transferee whom you certify to us has succeeded you as Trustee under the
Indenture, and may be successively transferred.  Transfer of the Amount
Available under this Letter of Credit to such transferee shall be effected by
the presentation to us of this Letter of Credit accompanied by a certificate in
the form of Annex G attached hereto and payment of the transfer commission
referred to therein.  Upon such presentation, we shall forthwith transfer the
same to your transferee or, if so requested by your transferee, issue a letter
of credit to your transferee with provisions therein consistent with this
Letter of Credit.

         As used herein (i) "Authorized Officer" shall mean any person signing
as one of your Vice Presidents, Assistant Vice Presidents, Trust Officers or
Assistant Trust Officers and (ii) all other capitalized terms used herein and
not otherwise defined shall have the respective meanings assigned to such terms
in the Indenture.

         This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificate(s)
referred to herein; and any such reference shall not be deemed to incorporate
herein by reference any documents, instrument or agreement except for such
certificate(s).

         Except as otherwise provided herein, this Letter of Credit shall be
governed by and construed in accordance with the Uniform Customs and Practice
for Documentary Credits (1993 revisions), International Chamber of Commerce
Publication No. 500 (the "UCP") and, to the extent not inconsistent therewith,
the laws of the State of Tennessee.  Communications with respect to this Letter
of Credit, other than presentations of drafts and certificates hereunder, shall
be in writing and should be addressed







   6


March 28, 1996
Page 6




to us at Two First Union Center, T-7, Charlotte, NC, 28288-0742, Attention:
International Operations, and shall specifically refer to the number of this
Letter of Credit.


                                        Sincerely,                
                                                                  
                                        FIRST UNION NATIONAL BANK 
                                        NORTH CAROLINA            
                                                                  
                                                                  
                                                                  
                                        By:
                                           -------------------------------
                                        Name:
                                             -----------------------------
                                        Title:
                                              ----------------------------








   7

                                    ANNEX A

                    [Form of Certificate for Interest Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                           OF UP TO 45 DAYS' INTEREST

                    IRREVOCABLE LETTER OF CREDIT NO. S062573

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S062573 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to payment of interest on the Bonds, which payment
         is due and payable on a regular interest payment date under the terms
         of the Bonds.  On the record date for such Interest Payment Date, none
         of such Bonds for which interest is drawn pursuant to the draft were
         held of record by the Issuer, or by the Bank, or its designee, as
         pledgee of the Issuer.

                 (3)      [The Interest Draft accompanying this Certificate is
         the first Interest Draft presented by the Trustee under the Letter of
         Credit.]
                                        *  OR  [The Interest Draft last
         presented by the Trustee under the Letter of Credit was honored and
         paid by the Bank on                   ,        , and the Trustee has
                             ------------------  -------
         not received a notice within ten days of presentation of such Interest
         Draft from the Bank that an Event of Default has occurred under the
         Indenture.]

                 (4)      The amount of the Interest Draft accompanying this
         Certificate is $           .  It was computed in compliance with the
                         -----------
         terms and conditions the Bonds and the Indenture and does not exceed 
         the Interest Amount Available to be drawn by the Trustee under the 
         Letter of Credit.

                 (5)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the interest amount owing on account of the
         Bonds pursuant to the Indenture, (b) no portion of said amount shall
         be applied by the undersigned for any other purpose, and (c) no
         portion of said amount shall be commingled with other funds held by
         the undersigned.





__________________________________

     *   To be used in the Certificate relating to the first Interest Draft
only.


                                      1
   8

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the       day of                            , 19   .
                      -----        ---------------------------    ---


                                      BANK ONE, TEXAS, N.A., TRUSTEE         
                                                                             
                                                                             
                                      By:     
                                         --------------------------------------

                                      Name:                       
                                           ------------------------------------
                                                                               
                                      Title:                                   
                                            -----------------------------------







                                      2
   9

                                    ANNEX B

                     [Form of Certificate for Tender Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
           OF PRINCIPAL PURCHASE PRICE AND PORTION OF PURCHASE PRICE
                  CORRESPONDING TO INTEREST OF BONDS TENDERED

                    IRREVOCABLE LETTER OF CREDIT NO. S062573

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S062573 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, upon a tender of all or less than
         all of the Bonds, which are Outstanding (as defined in the Indenture),
         of the unpaid principal amount of the Bonds and accrued interest
         thereon to be purchased as a result of such tender pursuant to the
         terms of the Indenture (other than Bonds, presently held of record by
         the Issuer, or by the Bank, or its designee, as pledgee of the Issuer)
         which payment is due on the date on which this Certificate and the
         Tender Draft it accompanies are being presented to the Bank.

                 (3)      The amount of the Tender Draft accompanying this
         Certificate is equal to the sum of (i) $               being drawn in
                                                 --------------
         respect of the payment of unpaid principal of Bonds (other than Bonds
         presently held of record by the Issuer or by the Bank, or its
         designee, as pledgee of the Issuer) to be purchased as a result of a
         tender, which amount does not exceed the Principal Amount Available
         under the Letter of Credit, and (ii) $            being drawn in
                                               -----------
         respect of the payment of              days' [not to exceed 45 days']
                                   ------------
         accrued and unpaid interest on such Bonds constituting a portion of
         the purchase price of such Bonds being purchased as a result of a
         tender, which amount does not exceed the Interest Amount Available
         under the Letter of Credit.

                 (4)      The Trustee acknowledges that the Trustee shall,
         pursuant to the Indenture, credit the account of the Bank or its
         designee, a principal amount of Bonds equal to the principal amount of
         the Tender Draft accompanying this Certificate as promptly as
         practicable, and in any event within five (5) Business Days after
         presentation of the Tender Draft accompanying this Certificate.






                                      1
   10

                          (5)     The Trustee hereby authorizes and instructs
                 the Bank to pay the Tender Draft in the amount of $
                                                                    ----------
                 to the Tender Agent on behalf of the Trustee via the following
                 wiring instructions:

                          

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

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

                 (6)      Upon receipt by the Tender Agent of the amount
         demanded hereby, (a) the Tender Agent will apply the same directly to
         the payment when due of the purchase price of Bonds tendered pursuant
         to the Indenture and the Tender Agent Agreement, (b) no portion of
         said amount shall be applied by the Tender Agent for any other
         purpose, and (c) no portion of said amount shall be commingled with
         other funds held by the Tender Agent.

                 (7)      The amount of the Tender Draft accompanying this
         Certificate was computed by the Trustee in compliance with the terms
         and conditions of the Bonds and the Indenture and does not exceed the
         Amount Available under the Letter of Credit.

         The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, upon the Bank's honoring of the Tender Draft accompanying this
Certificate, (i) the Amount Available under the Letter of Credit shall be
automatically reduced by the aggregate amount of such Tender Draft, (ii) the
Principal Amount Available under the Letter of Credit shall be automatically
reduced by an amount equal to the amount of the principal component of such
draft set forth in paragraph 3 above, and (iii) the Interest Amount Available
under the Letter of Credit shall be automatically reduced by an amount equal to
the amount of the interest component of such draft set forth in paragraph 3
above, each subject to reinstatement as set forth in the Letter of Credit.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the       day of                            , 19   .
                      -----        ---------------------------    ---

                                     BANK ONE, TEXAS, N.A., TRUSTEE          
                                                                             
                                                                             
                                                                             
                                     By:                                     
                                        ---------------------------------------
                                                                               
                                     Name:                                     
                                          ------------------------------------ 
                                                                               
                                     Title:                                    
                                           ------------------------------------







                                      2
   11

                                    ANNEX C

               [Form of Certificate for Partial Redemption Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                 OF PRINCIPAL AND UP TO 45 DAYS' INTEREST UPON
                               PARTIAL REDEMPTION

                    IRREVOCABLE LETTER OF CREDIT NO. S062573

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S062573 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, upon redemption of less than all of
         the Bonds which are Outstanding (as defined in the Indenture), of the
         unpaid principal amount of, and up to 45 days' accrued and unpaid
         interest on, the Bonds to be redeemed pursuant to the Indenture (other
         than Bonds presently held of record by the Issuer, or by the Bank, or
         its designee, as pledgee of the Issuer).

                 (3)      The amount of the Partial Redemption Draft
         accompanying this Certificate is $               and is equal to the
                                           --------------
         sum of (i) $             being drawn in respect of the payment of
                     ------------
         unpaid principal of Bonds (other than Bonds presently held of record
         by the Issuer, or by the Bank, or its designee, as pledgee of the
         Issuer) to be redeemed, which amount does not exceed the Principal
         Amount Available under the Letter of Credit and (ii) $
                                                               ------------
         being drawn in respect of the payment of       days' [not to exceed 45
                                                  -----
         days'] accrued and unpaid interest on such Bonds, which amount does
         not exceed the Interest Amount Available under the Letter of Credit.

                 (4)      The amount of the Partial Redemption Draft
         accompanying this Certificate was computed in accordance with the
         terms and conditions of the Bonds and the Indenture and does not
         exceed the Amount Available under the Letter of Credit.

                 (5)      This Certificate and the Partial Redemption Draft it
         accompanies are dated, and are being presented to the Bank on, the
         date on which the unpaid principal amount of, and accrued and unpaid
         interest on, Bonds to be redeemed are due and payable under the
         Indenture upon redemption of less than all of the Bonds which are
         Outstanding (as defined in the Indenture).

                 (6)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the principal amount of and accrued and unpaid
         interest on the Bonds pursuant to the Indenture, (b) no portion of
         said amount shall be applied by the undersigned for any other purpose,
         and (c) no portion of said amount shall






                                      1
   12

         be commingled with other funds held by the undersigned.

         The Trustee acknowledges that, pursuant to the terms of the Letter of
Credit, upon the Bank's honoring of the Partial Redemption Draft accompanying
this Certificate, (i) the Amount Available under the Letter of Credit shall be
permanently reduced by the aggregate amount of such Partial Redemption Draft,
(ii) the Principal Amount Available under the Letter of Credit shall be
permanently reduced by an amount equal to the amount of the principal component
of such draft set forth in paragraph 3 above, and (iii) the Interest Amount
Available under the Letter of Credit shall be permanently reduced by
$             , which is equal to an amount of interest which would accrue on
 -------------
an amount of principal equal to the principal component set forth in paragraph
3 above for a period of forty-five (45) days at a maximum rate of fifteen
percent (15%) per annum.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the       day of                            , 19   .
                      -----        ---------------------------    ---


                                      BANK ONE, TEXAS, N.A., TRUSTEE        
                                                                            
                                                                            
                                                                            
                                      By:                                   
                                         --------------------------------------
                                                                            
                                      Name:                                 
                                           ------------------------------------
                                                                            
                                      Title:                                
                                            -----------------------------------







                                      2
   13

                                    ANNEX D

                   [Form of Certificate for Conversion Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                       OF PRINCIPAL PLUS ACCRUED INTEREST
                           UPON A MANDATORY PURCHASE
                     (CONVERSION TO A FIXED INTEREST RATE)

                    IRREVOCABLE LETTER OF CREDIT NO. S062573

         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S062573 (the "Letter of
Credit; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, upon a mandatory tender for purchase
         pursuant to Section       of the Indenture (conversion to a Fixed
                             -----
         Interest Rate within the meaning of the Indenture) of all or less than
         all of the Bonds which are Outstanding (as defined in the Indenture),
         of the unpaid principal amount of, and up to 45 days' accrued and
         unpaid interest on, the Bonds to be so purchased (other than Bonds
         presently held of record by the Issuer, or the Bank, or its designee,
         as pledgee of the Issuer), which payment is due on the date on which
         this Certificate and the Conversion Draft it accompanies are being
         presented to the Bank.

                 (3)      The amount of the Conversion Draft accompanying this
         Certificate is $               and is equal to the sum of (i)
                         --------------
         $             being drawn in respect of the payment of unpaid
          ------------
         principal of Bonds (other than Bonds presently held of record by the
         Issuer or by the Bank, or its designee, as pledgee of the Issuer) to
         be purchased, which amount does not exceed the Principal Amount
         Available under the Letter of Credit and (ii) $             being
                                                        ------------
         drawn in respect of the payment of       days' [not to exceed 45
                                            -----
         days'] accrued and unpaid interest on such Bonds, which amount does
         not exceed the Interest Amount Available under the Letter of Credit.

                 (4)      The amount of the Conversion Draft accompanying this
         Certificate was computed in compliance with the terms and conditions
         of the Bonds and the Indenture and does not exceed the Amount
         Available under the Letter of Credit.

                 (5)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the principal amount of, and interest accrued
         and unpaid on, the Bonds pursuant to the Indenture, (b) no portion of
         said amount shall be applied by the undersigned for any other purpose,
         and (c) no portion of said amount shall be commingled with other funds
         held by the undersigned.






                                      1
   14

                 (6)      The Trustee acknowledges that the Trustee shall,
         pursuant to the Indenture, credit to the account of the Bank or its
         designee, a principal amount of Bonds equal to the principal amount of
         the Conversion Draft accompanying this Certificate as promptly as
         practicable, and in any event within five (5) Business Days after
         presentation of the Conversion Draft accompanying this Certificate.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the       day of                            , 19   .
                      -----        ---------------------------    ---

                                            BANK ONE, TEXAS, N.A., TRUSTEE



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

                                            Name:                              
                                                 ------------------------------

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







                                      2
   15

                                    ANNEX E


                     [Form of Certificate for Final Draft]

             CERTIFICATE FOR DRAWING IN CONNECTION WITH THE PAYMENT
                OF PRINCIPAL PLUS ACCRUED INTEREST, UPON STATED
                OR ACCELERATED MATURITY OR OPTIONAL OR MANDATORY
                             REDEMPTION AS A WHOLE


                    IRREVOCABLE LETTER OF CREDIT NO. S062573


         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S062573 (the "Letter of
Credit"; the terms defined therein and not otherwise defined herein being used
as therein defined) issued by the Bank in favor of the Trustee, as follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The Trustee is making a drawing under the Letter of
         Credit with respect to a payment, either at stated maturity, upon
         acceleration, or as a result of a redemption as a whole pursuant to
         the Indenture, of the unpaid principal amount of and up to 45 days'
         accrued and unpaid interest on, all of the Bonds which are
         "Outstanding" within the meaning of the Indenture (other than Bonds
         presently held of record by the Issuer, or by the Bank, or its
         designee, as pledgee of the Issuer).

                 (3)      The amount of the Final Draft accompanying this
         Certificate is $        and is equal to the sum of (i) $         being
                         -------                                 --------
         drawn in respect of the payment of unpaid principal of Bonds (other
         than Bonds presently held of record by the Issuer or by the Bank, or
         its designee, as pledgee of the Issuer), which amount does not exceed
         the Principal Amount Available under the Letter of Credit, and (ii)
         $         being drawn in respect of the payment of         days' not
          --------                                          -------
         to exceed 45 days' accrued and unpaid interest on such Bonds, which
         amount does not exceed the Interest Amount Available under the Letter
         of Credit.

                 (4)      The amount of the Final Draft accompanying this
         Certificate was computed in compliance with the terms and conditions
         of the Bonds and the Indenture and does not exceed the Amount
         Available under the Letter of Credit.

                 (5)      Upon receipt by the undersigned of the amount
         demanded hereby, (a) the undersigned will apply the same directly to
         the payment when due of the principal amount and accrued and unpaid
         interest thereon owing on account of the Bonds pursuant to the
         Indenture, (b) no portion of said amount shall be applied by the
         undersigned for any other purpose and (c) no portion of said amount
         shall be commingled with other funds held by the undersigned.






                                      1
   16

                 IN WITNESS WHEREOF, the Trustee has executed and delivered
         this Certificate as of the      day of               , 19   .
                                    ----        --------------    ---


                                        BANK ONE, TEXAS, N.A., TRUSTEE



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

                                        Name:
                                             ----------------------------------

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





                                      2
   17

                                    ANNEX F

              [Form of Reinstatement Certificate For Tender Draft]

             CERTIFICATE FOR THE REINSTATEMENT OF AMOUNTS AVAILABLE
                 UNDER IRREVOCABLE LETTER OF CREDIT NO. S062573


         The undersigned, a duly authorized officer of the undersigned Trustee
hereby certifies to First Union National Bank of North Carolina (the "Bank"),
with reference to Irrevocable Letter of Credit No. S062573 (the "Letter of
Credit"; the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Trustee, as
follows:

                 (1)      The Trustee is the Trustee under the Indenture for
                          the holders of the Bonds.

                 (2)      The amount of $         paid to you today by or on
                                         --------
         behalf of the Issuer is a payment made to reimburse you, pursuant to
         Section       of the Letter of Credit and Reimbursement Agreement
                 -----
         dated as of            (as amended or supplemented, the "Reimbursement
                     ----------
         Agreement") between the Issuer and the Bank, for amounts drawn under
         the Letter of Credit by Tender Drafts.  The Trustee hereby requests
         that you reinstate the Letter of Credit upon receipt of such payment
         in an amount equal to the amount of payment so received.

                 (3)      Of the amount referred to in paragraph (2), $       
                                                                       ---------
         represents the aggregate principal amount of Bonds resold or to be
         sold on behalf of the Issuer.

                 (4)      Of the amount referred to in paragraph (2), $        
                                                                       --------
         represents accrued and unpaid interest on the Bonds.

         IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the      day of           , 19    .
                      ----        ----------    ----


                                        BANK ONE, TEXAS, N.A., TRUSTEE


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

                                        Name:                                  
                                             ----------------------------------

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







                                      1
   18


                                        [attached to Annex F]


                                 ACKNOWLEDGMENT


             The Bank hereby confirms to the Trustee that the Principal Amount
Available under the Letter of Credit has been reinstated by the amount $       
                                                                        -------
and the Interest Amount Available under the Letter of Credit has been
reinstated by the amount of $         .
                             ---------

             This      day of            , 19   .
                  ----        -----------    ---


                                             
                                             FIRST UNION NATIONAL BANK OF      
                                                    NORTH CAROLINA             
                                                                               
                                                                               
                                             By:                               
                                                -------------------------------
                                                                               
                                             Name:                             
                                                  -----------------------------
                                                                               
                                             Title:                            
                                                   ----------------------------







                                      2
   19

                                    ANNEX G

                         [Form of Transfer Certificate]

                            INSTRUCTION TO TRANSFER


First Union National Bank of
  North Carolina
Two First Union Center
Charlotte, North Carolina  28288-0742

Attention:  International Operations

             Re:   Your Irrevocable Letter of Credit No. S062573 

Ladies and Gentlemen:

             For value received, the undersigned beneficiary (the "Transferor")
hereby irrevocably transfers to:



                           -------------------------
                            [Name of Transferee]


                           -------------------------
                                   [Address]


(the "Transferee") all rights of the Transferor with respect to the
above-referenced Letter of Credit, including the right to draw under said
Letter of Credit in the Amount Available.  Said Transferee has succeeded the
Transferor as Trustee under that certain Trust Indenture dated as of December
15, 1995 by and between Bank One, Texas, N.A., as initial Trustee thereunder
and Taylor Detention Center Corporation, as Issuer (as amended or supplemented,
the "Indenture"), and has complied with the provisions of the Indenture.

             By virtue of this transfer, the Transferee shall have the sole
rights as beneficiary of said Letter of Credit, including sole rights relating
to any past or future amendments thereof, whether increases or extensions or
otherwise.  All amendments are to be advised directly to the Transferee without
necessity of any consent of or notice to the Transferor.

             By its signature below, the Transferee acknowledges that it has
duly succeeded the Transferor as Trustee pursuant to the Trust Indenture.


                   The advice of such Letter of Credit is returned herewith,
along with a transfer fee of $1,000,





                                       1
   20

and we ask you to endorse the transfer on the reverse side thereof and to
forward it directly to the Transferee with your customary notice of transfer.


                                         Very truly yours,
                                                                               
                                                                               
                                                         
                                         -------------------------------------
                                                                               
                                         By:             
                                            -----------------------------------
                                            [insert name and title of 
                                            authorized officer]
                                                                               
                                         (CORPORATE SEAL)                      



Acknowledged by:


                                            
- --------------------------------------------
[Insert name of Transferee]

By:                                  
   ----------------------------------
   [insert name and title of
   authorized officer]

(CORPORATE SEAL)






                                       2

EX-10.155

   1
                                                                 EXHIBIT 10.155




================================================================================






                       CORRECTIONS CORPORATION OF AMERICA

                     ======================================
                     
                            NOTE PURCHASE AGREEMENT
                     ======================================                     



                      7.5% Convertible, Subordinated Notes
                             due February 28, 2002
                                 ($30,000,000)





                         Dated as of February 29, 1996



================================================================================
   2

                               TABLE OF CONTENTS



                                                                                                                     PAGE
                                                                                                                     ----
                                                                                                                 
1.       Authorization of Issue of the Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

2.       Sale and Purchase of the Notes; Closing Date; Conditions for Closing . . . . . . . . . . . . . . . . . . . .   1
         2.1     Sale and Purchase of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         2.2     Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         2.3     Conditions for Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         2.4     Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

3.       Definitions; Construction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         3.1     Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         3.2     Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         3.3     Changes in Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

4.       Representations and Warranties of the Corporation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         4.1     Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         4.2     Due Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         4.3     Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         4.4     SEC Reports  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         4.5     Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         4.6     Actions Pending; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         4.7     Title to Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         4.8     Governmental Consents, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         4.9     Holding Corporation Act and Investment Corporation Act Status  . . . . . . . . . . . . . . . . . . .  14
         4.10    Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         4.11    Conflicting Agreements and Charter Provisions  . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
         4.12    Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
         4.13    Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         4.14    Status of Conversion Shares  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         4.15    Registration Under Exchange Act  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         4.16    ERISA  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         4.17    Possession of Franchises, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         4.18    Environmental and Other Regulations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         4.19    Offering of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         4.20    Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         4.21    Offering of Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         4.22    Regulations G, T, U, and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

5.       Representations and Warranties of Purchaser  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         5.1     Due Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18






                                          -i-
   3




                                                                                                                 
         5.2     Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         5.3     Acquisition for Investment; Source of Funds  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         5.4     Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         5.5     Accredited Investor  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

6.       Covenants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         6.1     Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         6.2     Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         6.3     Use of Proceeds; Regulations G, T, U, and X. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.4     Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.5     Consolidated Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.6     Consolidated Senior Funded Debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         6.7     Attendance at Board Meeting  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         6.8     Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         6.9     Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         6.10    Performance of Government Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         6.11    Notice to Purchaser  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         6.12    Waiver of Stay, Extension, or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         6.13    Conduct of Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         6.14    Amendments or Waivers of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         6.15    Limitation on Issuance of Other Subordinated Indebtedness Senior to the Notes  . . . . . . . . . . .  24
         6.16    Limitation on Subsidiary Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

7.       Events Of Default; Remedies Therefor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         7.1     Events of Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
                 7.2      Acceleration of Maturities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

8.       Agreements of Purchaser  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         8.1     Transfer of the Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         8.2     No General Solicitation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         8.3     No Registration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         8.4     Transfer Restrictions; Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         8.5     Restrictions on Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         8.6     Further Cooperation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28

9.       Nondisclosure of Confidential Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29

10.      Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         10.1    Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         10.2    Survival of Covenants, Representations, and Warranties . . . . . . . . . . . . . . . . . . . . . . .  30
         10.3    Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         10.4    Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
         10.5    Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31






                                          -ii-
   4



                                                                                                                    
         10.6    Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
         10.7    Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
         10.8    Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.9    Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.10   Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.11   Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.12   Execution in Counterparts; Telecopy Execution  . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.13   Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.14   Consent to Jurisdiction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         10.15   Enforcement of Judgments; Service of Process; Jury Trial Waiver  . . . . . . . . . . . . . . . . . .  33
         10.16   No Limitation on Service or Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         10.17   Direct Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34




LIST OF EXHIBITS

Exhibit L - 1 Legal Opinion

Exhibit N - 1 Form of Subordinated Note

Exhibit R - 1 Registration Rights Agreement


LIST OF SCHEDULES

Schedule 4.3 Subsidiaries

Schedule 4.6 Pending Actions

Schedule 4.11 Conflicts

Schedule 4.12 Options/Warrants

Schedule 10.17 Purchaser's Schedule






                                         -iii-

   5


                 This NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of
February 29, 1996, between PMI MEZZANINE FUND, L.P., a Delaware limited
partnership ("PMI"), and CORRECTIONS CORPORATION OF AMERICA, a Delaware
corporation (the "Corporation").

                 WHEREAS, the Corporation has duly authorized the issuance of
convertible, subordinated notes in the aggregate principal amount of
$30,000,000 that are to be convertible into shares of the Corporation's common
stock;

                 WHEREAS, Purchaser wishes to purchase the convertible,
subordinated notes from the Corporation, and the Corporation wishes to sell
such convertible, subordinated notes to Purchaser; and

                 WHEREAS, Purchaser and the Corporation are entering into this
Agreement to provide for such purchase and sale and to establish various rights
and obligations in connection therewith.

                 NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein set forth, the parties hereto agree as follows:

         1.      AUTHORIZATION OF ISSUE OF THE NOTES.  The Corporation has duly
authorized the issuance of convertible, subordinated notes (the "Notes") in the
aggregate principal amount of $30,000,000, to be dated the date of issuance
thereof, to bear interest on the unpaid balance thereof from the date thereof
quarterly at the Coupon Rate and, upon the occurrence of a Triggering Event and
until the date on which such Triggering Event is cured or waived or until the
date that is ninety (90) days from the initial occurrence of Triggering Event,
whichever is later, at the Triggering Event Rate, until the principal thereof
shall become due and payable.  The indebtedness evidenced by the Notes shall be
convertible into shares of the Corporation's common stock, $1.00 par value,
upon such terms and at a conversion rate as set forth in the Notes.  The Notes
shall be substantially in the form attached hereto as Exhibit N-1 and shall be
issued to Purchaser on the Closing Date.

 2.      SALE AND PURCHASE OF THE NOTES; CLOSING DATE; CONDITIONS FOR CLOSING.

                 2.1      Sale and Purchase of the Notes.  Subject to the terms
and conditions of this Agreement, Purchaser agrees to purchase, and the
Corporation agrees to sell and issue to Purchaser, on the Closing Date, the
Notes for an aggregate purchase price of Thirty Million Dollars ($30,000,000).

                 2.2      Closing Date.  The closing of the sale and purchase
of the Notes shall take place at the offices of Brobeck, Phleger & Harrison
LLP, 550 South Hope Street, Los Angeles, California 90071, counsel to
Purchaser, at 10:00 a.m., local time, on February 29, 1996 or at such other
time, date, or place as the Corporation and Purchaser shall
   6

mutually agree (which time, date, and place are referred to in this Agreement
as the "Closing Date").

                 2.3      Conditions for Closing.  Purchaser's obligation to
purchase the Notes on the Closing Date shall be subject to the performance by
the Corporation of its agreements hereunder that by the terms hereof are to be
performed at or prior to the time of delivery of the Notes and to the following
further conditions precedent:

                          (i)        Closing Date.  The Closing Date shall 
occur on or before February 29, 1996;

                          (ii)       Closing Certificate.  Purchaser shall have
         received a certificate dated the Closing Date, signed by the President
         or a Vice President of the Corporation, to the effect that: (i) the
         representations and warranties of the Corporation set forth in
         Sections 4.1 through 4.22 are true and correct in all material
         respects on and with respect to the Closing Date; (ii) the Corporation
         has performed all of its obligations hereunder that are to be
         performed on or prior to the Closing Date; and (iii) no Unmatured
         Event of Default or Event of Default has occurred and is continuing;

                          (iii)      Legality.  The Notes shall qualify as a
         legal investment for Purchaser under the laws and regulations of each
         jurisdiction to which Purchaser is subject (without reference to any
         so-called "basket" provision which permits the making of an investment
         without restrictions to the character of the particular investment
         being made) and the purchase of and payment for the Notes shall not be
         prohibited by any applicable law or governmental regulation.

                          (iv)       Satisfactory Proceedings.  All corporate
         proceedings taken in connection with the transactions contemplated by
         this Agreement, and all documents necessary to the consummation
         thereof, shall be satisfactory in form and substance to Purchaser and
         special counsel to Purchaser, and Purchaser shall have received a copy
         (executed or certified as may be appropriate) of all documents or
         corporate proceedings taken in connection with the consummation of
         said transactions, including the following:

                                     a.       Certified copies of the
                 Certificate of Incorporation and By-laws of the Corporation;

                                     b.       Certified copies of resolutions
                 of the Board of Directors of the Corporation authorizing the
                 execution, delivery, and performance of the Transaction
                 Documents, and any other documents provided for in this
                 Agreement; and





                                          -2-
   7

                                     c.       A certificate of the Secretary of
                 the Corporation certifying the names of the officer or
                 officers of the Corporation authorized to sign the Transaction
                 Documents and any other documents provided for in this
                 Agreement, together with a sample of the true signature of
                 each such officer;

                          (v)        Legal Opinion.  Purchaser shall have
         received from Stokes & Bartholomew, counsel to the Corporation, an
         opinion letter dated the Closing Date, in form and substance
         satisfactory to Purchaser and its counsel, and covering the matters
         set forth in Exhibit L-1 hereto;

                          (vi)       Issuance of the Notes.  The Corporation
         shall have executed and delivered the Notes to Purchaser or its
         nominee;

                          (vii)      Registration Rights Agreement.  The
         Corporation and Purchaser shall have entered into a registration
         rights agreement in the form of Exhibit R-1 hereto (the "Registration
         Rights Agreement");

                          (viii)     Arrangement Fee.  The Corporation shall
         pay to Purchaser an arrangement fee of $450,000 (net of $225,000
         previously paid to Purchaser) by wire transfer of immediately
         available funds;

                          (ix)       No Material Adverse Change.   No material
         adverse change in the business, condition, or operations (financial or
         otherwise) of the Corporation and its Subsidiaries taken as a whole
         from that set forth in the balance sheet as of September 30, 1995,
         included in the SEC Reports, other than changes disclosed to Purchaser
         in writing prior to the execution and delivery by Purchaser of this
         Agreement, shall have occurred;

                          (x)        Approvals and Consents.  The Corporation
         shall have duly received all authorizations, consents, approvals,
         licenses, franchises, permits, and certificates by or of all federal,
         state, and local governmental authorities necessary for the issuance
         of the Notes;

                          (xi)       Payment of Legal Fees.  The Corporation
         shall have reimbursed Purchaser in full for the fees and expenses of
         its counsel, Brobeck, Phleger & Harrison LLP, incurred in connection
         with the preparation, negotiation, and execution of the Transaction
         Documents, and any other documents executed in connection herewith;

                          (xii)      Representations and Warranties.  The
         representations and warranties of the Corporation contained in this
         Agreement shall be true and correct in all respects on and as of the
         Closing Date, as though made on and as of such date





                                          -3-
   8

         (except to the extent that such representations and warranties relate
solely to an earlier date);

                          (xiii)     Events of Default.  No Unmatured Event of
         Default or Event of Default shall have occurred and be continuing on
         the Closing Date, nor shall either result from the purchase and sale
         of the Notes; and

                          (xiv)      VCOC Letter.  The Corporation shall have
         executed and delivered to Purchaser a counterpart of the VCOC Letter.

                 2.4      Waiver of Conditions.  If, on the Closing Date, the
Corporation fails to deliver the Notes to Purchaser or if any of the other
conditions specified in Section 2.3 have not been satisfied, Purchaser shall be
relieved of all further obligations under this Agreement.  Without limiting the
foregoing, if the conditions specified in Section 2.3 have not been satisfied,
Purchaser may waive compliance by the Corporation with any such condition to
such extent as it may in its sole discretion determine.  Nothing in this
Section 2.4 shall operate to relieve the Corporation of any of its obligations
hereunder or to waive any of Purchaser's rights against the Corporation
occasioned by any such breach.

         3.      DEFINITIONS; CONSTRUCTION.

                 3.1      Definitions.          For purposes of this Agreement,
the following terms shall have the following meanings:

                 "Affiliate" has the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement), it being understood
that any limited partner of a partnership shall not be an Affiliate of such
partnership solely by virtue of its status as such a limited partner.

                 "Agreement" shall have the meaning ascribed thereto in the
preamble.

                 "Business Day" means each Monday, Tuesday, Wednesday,
Thursday, or Friday that is not a day on which banking institutions in Los
Angeles, California are authorized or obligated by law or executive order to
close.

                 "Capital Lease" means as to any Person any lease or rental of
real or personal property that, under generally accepted accounting principles,
is or will be required to be capitalized on the balance sheet of such Person.

                 "Capital Lease Obligation" means any rental obligation in
respect of a Capital Lease taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with generally accepted
accounting principles.

 "Closing Date" shall have the meaning ascribed thereto in Section 2.2 hereof.





                                          -4-
   9

                 "Code" means the Internal Revenue Code of 1986, or any
successor statute thereto, as the same may be amended from time to time.

    "Commission" means the United States Securities and Exchange Commission.

                 "Common Stock" means the common stock of the Corporation, par
value $l.00 per share.

         "Concept" means Concept Incorporated, a Delaware corporation.

                 "Concept Acquisition" means the acquisition by the Corporation
of Concept pursuant to the terms and conditions of the Concept Share Exchange
Agreement.

                 "Concept Acquired Indebtedness" means Funded Debt of Concept
existing immediately prior to the consummation of the Concept Acquisition;
provided, however, that the foregoing shall not include the United Concept
Partnership Funded Debt.

                 "Concept Share Exchange Agreement" means a share exchange
agreement, containing such terms and conditions reasonably acceptable to
Purchaser, involving the exchange of shares between the Corporation and the
stockholders of Concept.

                 "Confidential Information" shall have the meaning ascribed
thereto in Section 9.1 hereof.

                 "Consolidated Fixed Charge Coverage" means at the end of any
fiscal quarter the quotient of (a) twice the Consolidated Operating Cash Flow
for such fiscal quarter and the immediately preceding fiscal quarter, divided
by (b) Consolidated Fixed Charges for the next succeeding four fiscal quarters.

                 "Consolidated Fixed Charges" means, for any period, the sum of
Consolidated Rentals and Consolidated Interest Expense for such period.  In the
event that Consolidated Fixed Charges are to be determined for any future
period or periods and any component of Consolidated Rentals or Consolidated
Interest Expense may fluctuate or is determined on the basis of a rate or
criterion that may fluctuate during such period, Consolidated Rentals or
Consolidated Interest Expense, as the case may be, shall be calculated assuming
that such amount, rate, or criterion in effect on the date such calculation is
made shall be in effect throughout such period.

                 "Consolidated Interest Expense" means, for any period, total
interest, whether paid or accrued (including that attributable to Capital
Leases), of the Corporation and the Restricted Subsidiaries on a consolidated
basis, including all amounts payable on the First Mortgage Notes and all
commissions, discounts, and other fees and charges owed with respect to letters
of credit and banker's acceptance financing and net costs under interest





                                          -5-
   10

rate exchange or cap agreements providing interest rate protection, all as
determined in conformity with generally accepted accounting principles.

                 "Consolidated Net Income" means, for any period, the net
earnings (or losses) of the Corporation and the Restricted Subsidiaries, on a
consolidated basis, for such period taken as a single accounting period
determined in conformity with generally accepted accounting principles
consistently applied, but excluding:

                 a.       any gain that under generally accepted accounting
                 principles consistently applied would be properly classified
                 as an extraordinary gain;

                 b.       any gain arising from a sale of capital assets that
                 is not made in the ordinary course of business of the
                 Corporation or its Restricted Subsidiaries;

                 c.       any gain arising from any write-up of assets;

                 d.       the proceeds of any life insurance policy;

                 e.       earnings of any Person substantially all of the
                 assets of that have been acquired in any manner (whether
                 through merger or otherwise) to the extent that such earnings
                 were realized prior to the date of such acquisition; and

                 f.       earnings of any Person to which substantially all the
                 assets of the Corporation shall have been sold or transferred,
                 into which the Corporation shall have been merged, or with
                 which the Corporation shall have been consolidated, to the
                 extent that such earnings were realized prior to the date of
                 such transfer, merger, or consolidation.

All losses (including any loss that, under generally accepted accounting
principles consistently applied, would be properly classified as an
extraordinary loss) shall be included in determining such net earnings (or
losses).

                 "Consolidated Net Worth" means, as of the time of any
determination thereof, the excess of (a) the sum of (i) the par value (or value
stated on the books of the Corporation) of the capital stock of all classes of
the Corporation, plus (or minus in the case of surplus deficit) (ii) the amount
of consolidated surplus, whether capital or earned, of the Corporation and the
Restricted Subsidiaries, plus (iii) the face amount of the Subordinated Funded
Debt, over (b) the amount of all treasury stock; all determined on a
consolidated basis for the Corporation and the Restricted Subsidiaries in
accordance with generally accepted accounting principles consistent with those
followed in the preparation of the financial statements referred to in Section
4.5, including the making of appropriate deductions for minority interests, if
any, in the Restricted Subsidiaries.





                                          -6-
   11

                 "Consolidated Operating Cash Flow" means for any period,
without duplication, (a) Consolidated Net Income plus (b) to the extent
deducted in computing Consolidated Net Income, depreciation and amortization
and other similar non-cash charges, accrued income tax expense, and interest
expense of the Corporation and the Restricted Subsidiaries for such period.

                 "Consolidated Rentals" means, for any period, all amounts
payable by the Corporation and any Restricted Subsidiary as lessee or sublessee
relating to Operating Leases.

                 "Consolidated Senior Funded Debt" means all Funded Debt other
than Subordinated Funded Debt.

                 "Consolidated Total Capitalization" means, as of the time of
any determination thereof, the sum of Consolidated Senior Funded Debt and
Consolidated Net Worth.

                 "Conversion Shares" means the shares of Common Stock issuable
upon conversion of the indebtedness evidenced by the Notes.

                 "Convertible Notes" means the Corporation's (a) $7,000,000
aggregate principal amount 8.5% Convertible Subordinated Notes due November 7,
1999, (b) $7,500,000 aggregate principal amount 8.5% Convertible, Extended,
Subordinated Notes due on September 30, 1998 or, if extended, on various dates,
the latest of which is September 30, 2000, (c) option to purchase the Floating
Rate Notes, and (d) the Floating Rate Notes when issued.

                 "Corporation" shall have the meaning ascribed thereto in the
preamble to this Agreement and shall include the Corporation's permitted
successors and assigns.

        "Coupon Rate" means seven and one-half percent (7.5%) per annum.

                 "Eloy Facility" means the Bureau of Prisons facility that is
located in Eloy, Arizona and owned by United Concept Partnership.

       "ERISA" means the Employee Retirement Income Security Act of 1974.

      "Event of Default" shall have the meaning set forth in Section 7.1.

                 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall include reference
to the comparable section, if any, of any successor federal statute.





                                          -7-
   12

                 "Federal Government Contract" means a contract between the
Corporation and the federal government of the United States of America or any
subdivision or agency thereof.

                 "Floating Rate Notes" shall have the meaning set forth in the
Sodexho Agreement.

                 "Foreign Government Contract" means a contract between the
Corporation and any foreign (other nation) government or any subdivision or
agency thereof.

                 "First Mortgage Note Purchase Agreement" means the Note
Purchase Agreement dated as of December 6, 1990, as amended, between the
Corporation and the purchasers of the First Mortgage Notes listed therein.

                 "First Mortgage Notes" means the Corporation's $20,000,000
aggregate principal amount of 11.08% first mortgage notes due November 30, 2000
issued pursuant to the First Mortgage Note Purchase Agreement.

                 "Funded Debt" means and includes without duplication (a) any
obligation payable more than one year from the date of the creation thereof
(including the current portion of Funded Debt), that under generally accepted
accounting principles is shown on the balance sheet as a liability (including
obligations under Capital Leases and excluding reserves for deferred income
taxes and other reserves to the extent that such reserves do not constitute an
obligation), (b) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of business), and
other contingent liabilities (whether direct or indirect) in connection with
the obligations, stock, or dividends of any Person, including obligations under
contracts to supply funds to or in any other manner invest in any Person, (c)
obligations under any contract to purchase, sell, or lease (as lessee or
lessor) property or to purchase or sell services, primarily for the purpose of
enabling a Person to make payment of obligations or to assure the holder of
such obligations against loss including obligations under any contract for the
purchase of materials, supplies, or other property or services if such contract
(or any related document) requires that payment for such materials, supplies,
or other property or services shall be made regardless of whether delivery of
such materials, supplies, or other property or services is ever made or
tendered, (d) obligations under any contract to pay or purchase obligations of
a Person, or to advance or supply funds for the payment or purchase of such
obligations, and (e) any agreement to assure a creditor of a Person against
loss.  For all purposes of this Agreement (other than for purposes of
calculating United Concept Partnership Funded Debt), all United Concept
Partnership Funded Debt shall be deemed to constitute "Funded Debt."

                 "Government Contract" means any Federal Government Contract,
Foreign Government Contract, or any State Government Contract.





                                          -8-
   13

                 "indemnified party" shall have the meaning ascribed thereto in
Section 10.1 hereof.

                 "indemnifying party" shall have the meaning ascribed thereto
in Section 10.1 hereof.

                 "Margin Stock" shall have the meaning given such term in
Regulation G (12 CFR part 207) of the Board of Governors of the Federal Reserve
System.

                 "Notes" shall have the meaning ascribed thereto in Section 1
hereof.

                 "Operating Lease" means any lease of real, personal, or mixed
property that is not a Capital Lease.

                 "Permitted Businesses" means the design, construction,
ownership, start up, management, or operation of detention and correctional
facilities, and the operation of services involving the transportation and
extradition of prisoners, together with associated consulting and educational
services.

                 "Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government, or department or
agency of a government.

                 "PMI" shall have the meaning ascribed thereto in the preamble
to this Agreement.

                 "Purchaser" shall mean PMI and shall include PMI's permitted
successors and assigns.

                 "Registration Rights Agreement" shall have the meaning
ascribed thereto in Section 2.3(vii) hereof.

                 "Representative" shall have the meaning ascribed thereto in
Section 7.1 hereof.

                 "Restricted Subsidiary" means a Subsidiary of the Corporation
that is (a) organized under the laws of any state of the United States of
America and at least 80% of the total combined voting power of all classes of
Voting Stock shall at the time as of which any determination is being made, be
owned by the Corporation either directly or through any Restricted Subsidiary,
(b) engaged in a Permitted Business, and (c) whose assets and operations are
located within the United States of America.

                 "Security" or "Securities" means the Notes or the Conversion
Shares.

  "SEC Reports" shall have the meaning ascribed thereto in Section 4.4 hereof.





                                          -9-
   14

                 "Securities Act" means the Securities Act of 1933.

                 "Senior Indebtedness" shall have the meaning ascribed to such
term in the Notes.

                 "Sodexho Agreement" means that certain Securities Purchase
Agreement, dated as of June 23, 1994, between Sodexho S.A., a French
corporation, or its designee and the Corporation, as amended by that certain
Amendment No. 1 to Securities Purchase Agreement, dated as of July 11, 1995.

                 "State Government Contract" means a contract between the
Corporation or any of its Subsidiaries and the government of any state, county,
or municipality or any political subdivision or agency thereof.

                 "Subordinated Funded Debt" means the indebtedness of the
Corporation evidenced by the Convertible Notes and the Notes.

                 "Subsidiary" means any corporation, partnership, or other
entity of which a majority of the total combined voting power of all classes of
Voting Stock at the time as of which any determination is being made, is owned
by a Person either directly, through one or more Subsidiaries, or both.

                 "Transaction Documents" means this Agreement, the Notes, the
Registration Rights Agreement, and the VCOC Letter.

   "Transfer" shall have the meaning ascribed thereto in Section 8.4 hereof.

                 "Triggering Event" means the occurrence of any Unmatured Event
of Default of Event of Default described in clauses (i), (ii), and (iv) through
(x), inclusive, of Section 7.1.  For purposes of determining the period during
which the Triggering Event Rate shall be in effect, a Triggering Event shall
not be deemed to have occurred until the date on which Purchaser shall have
given notice of the occurrence thereof to the Corporation.

   "Triggering Event Rate" means nine and one-half percent (9.5%) per annum.

                 "UCI" means United Concept, Inc., a Delaware corporation, one
hundred percent (100%) of the issued and outstanding common stock of which is
owned by Concept.

                 "United Concept Partnership" means United Concept Limited
Partnership, a Delaware limited partnership of which UCI is the managing
general partner.





                                          -10-
   15

                 "United Concept Partnership Funded Debt" means (a) the
approximately $30,000,000 of indebtedness of United Concept Partnership that is
secured by a first mortgage lien upon the Eloy Facility, and (b) any and all
other indebtedness of United Concept Partnership that constitutes Funded Debt
(without giving effect to the last sentence of such definition).

                 "Unmatured Event of Default" shall mean any event or
condition, the occurrence of which would, with the lapse of time or the giving
of notice, or both, constitute an Event of Default.

                 "VCOC Letter" means a letter agreement between the Corporation
and Purchaser that meets the Venture Capital Operating Company requirements and
that is in form and substance satisfactory to Purchaser.

                 "Voting Stock" means, when used with respect to any Person,
any shares of stock or other ownership interests of such Person having general
voting power under ordinary circumstances to elect a majority of the board of
directors of such Person (irrespective of whether at the time stock or
ownership interests of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

                 3.2      Construction.         Unless the context of this
Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, the part includes the whole,
the terms "include" and "including" are not limiting, and the term "or" has,
except where otherwise indicated, the inclusive meaning represented by the
phrase "and/or".  The words "hereof," "herein," "hereby," "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement.  Section, subsection, clause,
exhibit, and schedule references are to this Agreement unless otherwise
specified.  Any reference herein to the Transaction Documents includes any and
all alterations, amendments, changes, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable.

                 3.3      Changes in Accounting Principles.  If any changes in
accounting principles from those in effect at the time of preparation of the
financial statements referred to in Section 4.5 are hereafter occasioned by the
promulgation of rules, regulations, pronouncements, and opinions by or required
by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or organizations with
similar functions) result in a change in the method of calculation of financial
covenants, standards, or terms found in this Agreement or there is any change
in the Corporation's fiscal quarters or fiscal year, the parties hereto agree
to enter into negotiations to amend this Agreement so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of the Corporation shall be the same after such changes as
if such changes had not been made.





                                          -11-
   16

         4.      REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.  The
Corporation represents and warrants to Purchaser, as of the date hereof and as
of the Closing Date, that:

                          4.1        Organization and Qualification.  Each of
         the Corporation and its Subsidiaries is a corporation duly organized
         and existing in good standing under the laws of the jurisdiction in
         which it is incorporated and has the power to own its respective
         property and to carry on its respective business as now being
         conducted.  Each of the Corporation and its Subsidiaries is duly
         qualified as a foreign corporation to do business and in good standing
         in every jurisdiction in which the nature of the respective business
         conducted or property owned by it makes such qualification necessary
         and where the failure so to qualify would have a material adverse
         effect on the business or financial position of the Corporation and
         its Subsidiaries taken as a whole.

                          4.2        Due Authorization.  The execution and
         delivery of this Agreement, the Registration Rights Agreement, and the
         other Transaction Documents, and the issuance and sale of the Notes
         and the Conversion Shares by the Corporation and compliance by the
         Corporation with all the provisions of the Transaction Documents and
         the Conversion Shares (i) are within the corporate power and authority
         of the Corporation; (ii) do not require the approval or consent of any
         stockholders of the Corporation; and (iii) have been authorized by all
         requisite corporate proceedings on the part of the Corporation.  The
         Transaction Documents have been duly executed and delivered by the
         Corporation and constitute valid and binding agreements of the
         Corporation enforceable in accordance with their respective terms,
         except that (i) such enforcement may be subject to bankruptcy,
         insolvency, reorganization, moratorium, or other similar laws now or
         hereafter in effect relating to creditors rights, and (ii) the remedy
         of specific performance and injunctive and other form of equitable
         relief may be subject to equitable defenses and to the discretion of
         the court before which any proceeding therefor may be brought.  The
         Corporation has furnished to Purchaser true and correct copies of the
         Corporation's current Certificate of Incorporation and By-laws.

                          4.3        Subsidiaries.  The Subsidiaries of the
         Corporation, together with their jurisdiction of incorporation, are
         set forth on Schedule 4.3 hereto.

                          4.4        SEC Reports.  The Corporation has filed
         all proxy statements, reports, and other documents required to be
         filed by it under the Exchange Act and the Corporation has furnished
         Purchaser copies of its Annual Report on Form 10-K for the fiscal year
         ended December 31, 1994, and all proxy statements and reports under
         the Exchange Act filed by the Corporation after such date, each as
         filed with the Commission (collectively, the "SEC Reports").  Each SEC
         Report was in substantial compliance with the requirements of its
         respective report form and did not, on the date of filing, contain any
         untrue statement of a





                                          -12-
   17

         material fact or omit to state a material fact required to be stated
         therein or necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading.

                          4.5        Financial Statements.  The financial
         statements (including any related schedules or notes) included in the
         SEC Reports have been prepared in accordance with generally accepted
         accounting principles consistently followed (except as indicated in
         the notes thereto) throughout the periods involved and fairly present
         the consolidated financial condition, results of operations, and
         changes in stockholders' equity of the Corporation and its
         Subsidiaries as of the dates thereof and for the periods ended on such
         dates (in each case subject, as to interim statements, to changes
         resulting from year-end adjustments (none of which will be material in
         amount or effect)), and the Corporation has no material liabilities,
         contingent or otherwise, not reflected in the balance sheet as of
         September 30, 1995 included in the SEC Reports or otherwise referred
         to in the SEC Reports or otherwise disclosed to Purchaser in writing
         prior to the execution by Purchaser of this Agreement, other than any
         such liabilities incurred in the ordinary course of business since
         September 30, 1995.  There has been no material adverse change in the
         business, condition, or operations (financial or otherwise) of the
         Corporation and its Subsidiaries taken as a whole from that set forth
         in the balance sheet as of September 30, 1995 included in the SEC
         Reports, other than changes disclosed or referred to in the SEC
         Reports, or otherwise disclosed to Purchaser in writing prior to the
         execution by Purchaser of this Agreement.

                          4.6        Actions Pending; Compliance with Law.
         Except as disclosed on Schedule 4.6 hereto, there is no action, suit,
         criminal investigation, or proceeding pending or, to the knowledge of
         the Corporation, threatened by any public official or governmental
         authority, against the Corporation or any of its Subsidiaries or any
         of their respective properties or assets by or before any court,
         arbitrator, or governmental body, department, commission, board,
         bureau, agency, or instrumentality, which questions the validity of
         the Transaction Documents or the Conversion Shares or any action taken
         or to be taken pursuant hereto or thereto, or, except as set forth in
         the SEC Reports, that are reasonably likely to result in any material
         adverse change in the business or financial condition of the
         Corporation, and neither the Corporation nor any of its Subsidiaries
         is in default in any material respect with respect to any judgment,
         order, writ, injunction, decree, or award, and, except as disclosed in
         the SEC Reports, the businesses of the Corporation and its
         Subsidiaries are in compliance in all material respects with
         applicable federal, state, local, and foreign governmental laws and
         regulations and all Government Contracts, all to the extent necessary
         to avoid any material adverse effect on the business, properties, or
         condition (financial or otherwise) of the Corporation and its
         Subsidiaries, taken as a whole.





                                          -13-
   18

                          4.7        Title to Properties; Insurance.  The
         Corporation and its Subsidiaries have good and valid title to their
         respective properties and assets, free of all liens and encumbrances
         other than those referred to in the financial statements of the
         Corporation (or the notes thereto) for the quarter ended September 30,
         1995, included in the SEC Reports, except in each case for such
         defects in title and such other liens and encumbrances that are
         otherwise disclosed or referred to in the SEC Reports or that do not
         in the aggregate materially detract from the value to the Corporation
         of the properties and assets of the Corporation and its Subsidiaries
         taken as a whole. The Corporation and its Subsidiaries maintain
         insurance in such amounts (to the extent available in the public
         market), including self-insurance, retainage, and deductible
         arrangements, and of such a character as the Corporation believes is
         reasonable for companies engaged in the same or similar business.

                          4.8        Governmental Consents, Etc.  The
         Corporation is not required to obtain any consent, approval, or
         authorization of, or to make any declaration or filing with, any
         governmental authority as a condition to or in connection with the
         valid execution, delivery, and performance of the Transaction
         Documents and the valid offer, issue, sale, or delivery of the Notes
         or the Conversion Shares, or the performance by the Corporation of its
         obligations in respect thereof, except for any filings required to
         effect any registration pursuant to the Registration Rights Agreement,
         and filings required pursuant to state and federal securities laws
         that will be timely made after the Closing Date.

                          4.9        Holding Corporation Act and Investment
         Corporation Act Status.  The Corporation is not a "holding company" or
         a "public utility company" as such terms are defined in the Public
         Utility Holding Corporation Act of 1935.  The Corporation is not an
         "investment company," or a company "controlled" by an "investment
         company," within the meaning of the Investment Corporation Act of
         1940.

                          4.10       Taxes.  The Corporation and its
         Subsidiaries have filed or caused to be filed all income tax returns
         that are required to be filed and have paid or caused to be paid all
         taxes as shown on said returns and on all assessments received by it
         to the extent that such taxes have become due, except taxes the
         validity or amount of which is being contested in good faith by
         appropriate proceedings and with respect to which adequate reserves
         have been set aside.  The federal income tax returns of the
         Corporation and its Subsidiaries have been examined and reported on by
         the Internal Revenue Service (or closed by applicable statutes) and
         all tax liabilities including additional assessments have been
         satisfied for all fiscal years prior to and including the fiscal year
         ended December 31, 1991.  The Corporation and its Subsidiaries have
         paid or caused to be paid, or have established reserves that the
         Corporation reasonably believes to be adequate in all material
         respects, for all federal income tax liabilities and state income tax
         liabilities applicable to the Corporation and its Subsidiaries for all
         fiscal years that have not





                                          -14-
   19

         been examined and reported on by the taxing authorities (or closed by
applicable statutes).

                          4.11       Conflicting Agreements and Charter
         Provisions.  Neither the Corporation nor its Subsidiaries is a party
         to any contract or agreement or subject to any charter or other
         corporate restriction that materially and adversely affects its
         business, property, or assets or financial condition.  Except as set
         forth on Schedule 4.11 attached hereto, neither the execution and
         delivery of the Transaction Documents nor the issuance of the
         Conversion Shares nor fulfillment of or compliance with the terms and
         provisions hereof or thereof or the prepayment of the Notes as
         contemplated hereby and by the Notes, and the conversion of the
         indebtedness evidenced by the Notes into the Conversion Shares as
         contemplated hereby and by the Notes will conflict with or result in a
         breach of the terms, conditions, or provisions of, or give rise to a
         right of termination under, or constitute a default under, or result
         in any violation of, the Certificate of Incorporation or By-laws of
         the Corporation or any mortgage, agreement, instrument, order,
         judgment, decree, statute, law, rule, or regulations to which the
         Corporation or any of its Subsidiaries or any of their respective
         properties is subject.  Neither the Corporation nor any of its
         Subsidiaries is in default under any outstanding indenture or other
         debt instrument or with respect to the payment of the principal of or
         interest on any outstanding obligations for borrowed money, or is in
         default under any of their respective contracts or agreements, or
         under any instrument by which the Corporation or any of its
         Subsidiaries is bound, in each case that materially and adversely
         affects the business, operations, or financial condition of the
         Corporation and its Subsidiaries, taken as a whole.

                          4.12       Capitalization.  The authorized capital
         stock of the Corporation consists of (i) 50,000,000 shares of Common
         Stock, of which, as of the date hereof, 33,069,252 shares are
         outstanding and 50,475 shares are held in its treasury; and (ii)
         1,000,000 shares of preferred stock, $1.00 par value, of which, as of
         the date hereof, no shares are outstanding; all of such outstanding
         shares have been validly issued and are fully paid and nonassessable.
         Except as set forth on Schedule 4.12 hereto, no shares of Common Stock
         of the Corporation are entitled to preemptive rights.  Except for the
         options and warrants listed on Schedule 4.12 hereto and except for the
         Convertible Notes, there are no outstanding options, warrants, scrip,
         rights to subscribe to, calls, or commitments of any character
         whatsoever relating to, or securities or rights convertible into,
         shares of any capital stock of the Corporation, or contracts,
         commitments, understandings, or arrangements by which the Corporation
         is or may become bound to issue additional shares of its capital
         stock.  Since September 30, 1995, the Corporation has not changed the
         amount of its authorized capital stock or subdivided or otherwise
         changed any shares of any class of its capital stock, whether by way
         of reclassification, recapitalization, stock split, or otherwise, or
         issued or reissued, or agreed to issue or reissue, any of its capital
         stock, except as disclosed in this Section





                                          -15-
   20

         4.12 and has not since such date declared or paid any dividend in cash
         or stock or made any other distribution of assets to its stockholders.

                          4.13       Disclosure.  Neither this Agreement nor
         the SEC Reports nor the financial statements included in the SEC
         Reports nor any certificate or written disclosure statement referred
         to herein and furnished to Purchaser by or on behalf of the
         Corporation in connection with the transactions contemplated hereby
         contains any untrue statement of a material fact or omits to state a
         material fact necessary in order to make the statements contained
         herein and therein not misleading.  There is no fact peculiar to the
         Corporation or any of its Subsidiaries that the Corporation has not
         disclosed to Purchaser in writing that materially affects adversely
         or, so far as the Corporation can now reasonably foresee, will
         materially affect adversely the properties, business, or condition
         (financial or otherwise) of the Corporation and its Subsidiaries,
         taken as a whole, or the ability of the Corporation to perform this
         Agreement, the Notes, the Registration Rights Agreement, or its
         obligations in respect of the Conversion Shares.

                          4.14       Status of Conversion Shares.  The
         Conversion Shares have been duly authorized by all necessary corporate
         action on the part of the Corporation (no consent or approval of
         stockholders being required by law, the Certificate of Incorporation
         or the By-laws of the Corporation, or otherwise), and such shares of
         Common Stock have been validly reserved for issuance, and upon
         issuance, will be validly issued and outstanding, fully paid, and
         nonassessable.

                          4.15       Registration Under Exchange Act.  The
         Conversion Shares will not be registered as a class pursuant to
         Section 12 of the Exchange Act and such registration is not required
         except as otherwise required by the provisions of the Registration
         Rights Agreement.

                          4.16       ERISA.  No accumulated funding deficiency
         (as defined in Section 302 of ERISA and Section 412 of the Code),
         irrespective of whether waived, exists with respect to any Plan (as
         defined below) (other than a Multiemployer Plan (as defined below)).
         No liability to the Pension Benefit Guaranty Corporation has been
         incurred with respect to any Plan (other than a Multiemployer Plan) by
         the Corporation or any of its Subsidiaries that is or would be
         materially adverse to the Corporation and its Subsidiaries, taken as a
         whole.  Neither the Corporation nor any of its Subsidiaries has
         incurred any withdrawal liability under Title IV of ERISA with respect
         to any Multiemployer Plan that is or would be materially adverse to
         the Corporation and its Subsidiaries, taken as a whole.  The execution
         and delivery of this Agreement and the Registration Rights Agreement
         and the issuance and sale of the Notes and the conversion of the
         indebtedness evidenced by the Notes into the Conversion Shares will
         not involve any transaction that is subject to the prohibitions of
         Section 406 of ERISA or in connection with which a tax could be
         imposed pursuant to Section 4975 of the Code.





                                          -16-
   21

         The representation by the Corporation in the immediately preceding
         sentence is made in reliance upon and subject to the accuracy of
         Purchaser's representation in Section 5.3 as to the source of the
         funds to be used to pay the purchase price of the Conversion Shares.
         As used in this Section 4.16, the term "Plan" shall mean an "employee
         pension benefit plan" (as defined in Section 3(2) of ERISA) that is or
         has been established or maintained, or to which contributions are or
         have been made, by the Corporation or by any trade or business,
         irrespective of whether incorporated, that, together with the
         Corporation, is under common control, as described in Section 414(b)
         or (c) of the Code, and the term "Multiemployer Plan" shall mean any
         Plan that is a "multiemployer plan" (as such term is defined in
         Section 4001 (a) (3) of ERISA).

                          4.17       Possession of Franchises, Licenses, Etc.
         The Corporation and its Subsidiaries possess all franchises,
         certificates, licenses, permits, and other authorizations from
         governmental or political subdivisions or regulatory authorities and
         all patents, trademarks, service marks, trade names, copyrights,
         licenses, and other rights, free from burdensome restrictions, that
         are necessary in any material respect to the Corporation and its
         Subsidiaries, taken as a whole for the ownership, maintenance, and
         operation of their respective properties and assets, and neither the
         Corporation nor any of its Subsidiaries is in violation of any thereof
         in any material respect.

                          4.18       Environmental and Other Regulations.   The
         Corporation and its Subsidiaries are in compliance in all material
         respects with all laws and regulations, including those relating to
         environmental control, equal employment opportunity, and employee
         safety, in all jurisdictions in which the Corporation and its
         Subsidiaries are presently doing business and where the failure to
         effect such compliance would have a material adverse effect on the
         business, operations, or financial condition of the Corporation and
         its Subsidiaries, taken as a whole.

                          4.19       Offering of Securities.  Neither the
         Corporation nor any Person acting on its behalf has offered the
         Securities or any similar securities of the Corporation for sale to,
         solicited any offers to buy the Securities or any similar securities
         of the Corporation from, or otherwise approached or negotiated with
         respect to the Corporation with any Person other than Purchaser and a
         limited number of other "accredited investors" (as defined in Rule
         501(a) under the Securities Act).  Neither the Corporation nor any
         Person acting on its behalf has taken or will take any action
         (including any offering of any securities of the Corporation under
         circumstances that would require the integration of such offering with
         the offering of the Securities under the Securities Act and the rules
         and regulations of the Commission thereunder) that might subject the
         offering, issuance, or sale of the Securities to the registration
         requirements of Section 5 of the Securities Act.





                                          -17-
   22

                          4.20       Brokers or Finders.  No agent, broker,
         investment banker, or other firm or Person is or will be entitled to
         any broker's fee or any other commission or similar fee as a result of
         the activities of the Corporation or its Subsidiaries, agents, or
         employees undertaken in connection with any of the transactions
         contemplated by this Agreement or the Registration Rights Agreement.

                          4.21       Offering of Notes.  Neither the
         Corporation nor, to the best knowledge of the Corporation, any person
         authorized to act on behalf of the Corporation has taken or will take
         any action that would subject the issuance or sale of the Notes to the
         provisions of Section 5 of the Securities Act or violate the
         provisions of any securities, "blue sky", or similar law of any
         applicable jurisdiction.

                          4.22       Regulations G, T, U, and X.  Neither the
         Corporation nor any of its Subsidiaries owns or has any present
         intention of acquiring any Margin Stock.  Neither the Corporation, any
         of its Subsidiaries, nor any agent acting on its behalf has taken take
         any action that might cause this Agreement to violate Regulations G,
         T, U, or X or any other regulation of the Board of Governors of the
         Federal Reserve System or to violate the Exchange Act.

                 5.       REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to the Corporation, as of the date hereof and
as of the Closing Date, as follows:

                          5.1        Due Authorization.  Purchaser has all
         right, power, and authority to enter into the Transaction Documents to
         which it is a party and to consummate the transactions contemplated
         hereby and thereby.  The execution and delivery by Purchaser of the
         Transaction Documents to which it is a party and the consummation by
         Purchaser of the transactions contemplated hereby and thereby have
         been duly authorized by all necessary corporate action on behalf of
         Purchaser.  The Transaction Documents to which Purchaser is a party
         have been duly executed and delivered by Purchaser and constitute
         valid and binding agreements of Purchaser enforceable in accordance
         with their terms, except that (i) such enforcement may be subject to
         bankruptcy, insolvency, reorganization, moratorium, or other similar
         laws now or hereafter in effect relating to creditors' rights, and
         (ii) the remedy of specific performance and injunctive and other forms
         of equitable relief may be subject to equitable defenses and to the
         discretion of the court before which any proceeding therefor may be
         brought.

                          5.2        Conflicting Agreements and Other Matters.
         Neither the execution and delivery of the Transaction Documents to
         which Purchaser is a party nor the performance by Purchaser of its
         obligations hereunder or thereunder will conflict with, result in a
         breach of the terms, conditions, or provisions of, constitute a
         default under, result in the creation of any mortgage, security
         interest,





                                          -18-
   23

         encumbrance, lien, or charge of any kind upon any of the properties or
         assets of Purchaser pursuant to, or require any consent, approval, or
         other action by or any notice to or filing with any court or
         administrative or governmental body pursuant to the organizational
         documents or agreements of Purchaser or any agreement, instrument,
         order, judgment, decree, statute, law, rule, or regulation by which
         Purchaser is bound, except, possibly, for filings after the Closing
         Date, as applicable, under Section 13(d) of the Exchange Act.

                          5.3        Acquisition for Investment; Source of
         Funds.  PMI is acquiring the Notes (and its rights with respect to the
         Conversion Shares) for its own account for the purpose of investment
         and not with a view to or for sale in connection with any distribution
         thereof, and PMI has no present intention or plan to effect any
         distribution of the Conversion Shares.  No portion of the funds to be
         used by PMI to purchase the Notes, as of the Closing Date, are "plan
         assets," within the meaning of 29 CFR Section 2510.3-101, of an
         "employee benefit plan," as defined in Section 3(3) of ERISA, subject
         to Part 4 of Title I of ERISA, or a "plan," as defined in Section
         4975(e)(1) of the Code, subject to Section 4975 of the Code.

                          5.4        Brokers or Finders.  No agent, broker,
         investment banker, or other firm or Person is or will be entitled to
         any broker's fee or any other commission or similar fee as a result of
         the activities of Purchaser or its Subsidiaries, agents, or employees
         undertaken in connection with any of the transactions contemplated by
         this Agreement or the Registration Rights Agreement.

                          5.5        Accredited Investor.  Purchaser is an
         "accredited investor" within the meaning of Regulation D under the
         Securities Act.

                 6.       COVENANTS.

                 The Corporation covenants that so long as any amount due or to
become due under the Notes or this Agreement remains unpaid:

                          6.1        Financial Statements and Other Reports.

                                     (i)      it will, as soon as practicable
         and in any event within 45 days after the end of each quarterly period
         (other than the last quarterly period) in each fiscal year, furnish to
         Purchaser statements of consolidated net income and cash flows and a
         statement of changes in consolidated stockholders equity of the
         Corporation and its Subsidiaries for the period from the beginning of
         the then current fiscal year to the end of such quarterly period, and
         a consolidated balance sheet of the Corporation and its Subsidiaries
         as of the end of such quarterly period, setting forth in each case in
         comparative form figures for the corresponding period or date in the
         preceding fiscal year, all in reasonable detail and certified by an





                                          -19-
   24

         authorized financial officer of the Corporation, subject to changes
         resulting from year-end adjustments; provided, however, that delivery
         pursuant to clause (iii) below of a copy of the Quarterly Report on
         Form 10-Q of the Corporation for such quarterly period filed with the
         Commission shall be deemed to satisfy the requirements of this clause
         (i);

                                     (ii)     it will, as soon as practicable
         and in any event within 90 days after the end of each fiscal year,
         furnish to Purchaser statements of consolidated net income and cash
         flows and a statement of changes in consolidated stockholders' equity
         of the Corporation and its Subsidiaries for such year, and a
         consolidated balance sheet of the Corporation and its Subsidiaries as
         of the end of such year, setting forth in each case in comparative
         form the corresponding figures from the preceding fiscal year, all in
         reasonable detail and examined and reported on by independent public
         accountants of recognized standing selected by the Corporation;
         provided, however, that delivery pursuant to clause (iii) below of a
         copy of the Annual Report on Form 10-K of the Corporation for such
         fiscal year filed with the Commission shall be deemed to satisfy the
         requirements of this clause (ii);

                                     (iii)  it will, promptly upon transmission
         thereof, furnish to Purchaser copies of all financial statements,
         proxy statements, notices, and reports as it shall send to its
         stockholders and copies of all registration statements (without
         exhibits), other than registration statements relating to employee
         benefit or dividend reinvestment plans, and all regular and periodic
         reports as it shall file with the Commission; and

                                     (iv)  it will, with reasonable promptness,
         furnish to Purchaser such other financial and other data of the
         Corporation and its Subsidiaries as Purchaser may request, including
         operating financial information for each facility owned or operated by
         the Corporation or any of its Subsidiaries.

                          Together with each delivery of financial statements
         required by clauses (i) and (ii) above, the Corporation will deliver
         to Purchaser a certificate of an authorized financial officer of the
         Corporation regarding compliance by the Corporation with the covenants
         set forth in Sections 6.4., 6.5, and 6.6.  At such other time or times
         that the Corporation delivers a compliance certificate to any other
         holder of Funded Debt, the Corporation will deliver such certificate,
         and any supporting detail, to Purchaser.

                          6.2        Inspection of Property.  The Corporation
         will permit representatives of Purchaser to visit and inspect, at
         Purchaser's expense, any of the properties of the Corporation and its
         Subsidiaries, to examine the corporate books and make copies or
         extracts therefrom and to discuss the affairs, finances, and accounts
         of the Corporation and its Subsidiaries with the principal officers of
         the





                                          -20-
   25

         Corporation, all at such reasonable times, upon reasonable notice, and
         as often as Purchaser may reasonably request; provided, however, that
         the foregoing shall be subject to compliance with reasonable safety
         requirements and shall not require the Corporation or any of its
         Subsidiaries to permit any inspection that, in the reasonable judgment
         of the Corporation, would result in the violation of any statute or
         regulation with respect to confidentiality or security.  Purchaser
         agrees that the information received pursuant to this Section 6.2 or
         Section 6.1(iv) is subject to Section 9 hereof.


                          6.3        Use of Proceeds; Regulations G, T, U, and
         X.  All of the proceeds of the sale of the Notes will be used by the
         Corporation for general corporate purposes.  None of such proceeds
         will be used, directly or indirectly, for the purpose of purchasing or
         carrying any Margin Stock or for the purpose of reducing or retiring
         any indebtedness that was originally incurred to purchase or carry
         Margin Stock or for any other purpose that might constitute this
         transaction a "purpose credit" within the meaning of Regulations G, T,
         U, or X.

                          6.4        Consolidated Net Worth.  The Corporation
         will not permit Consolidated Net Worth at any time to be less than the
         sum of (a) Ninety-Five Million Dollars ($95,000,000) at December 31,
         1995, plus (b) an amount during each fiscal quarter thereafter equal
         to the sum of (i) the amount of Consolidated Net Worth required
         hereunder for the immediately preceding fiscal quarter, plus (ii) if
         positive, fifty percent (50%) of Consolidated Net Income for such
         immediately preceding fiscal quarter.

                          6.5        Consolidated Fixed Charges.

                                     a.       The Corporation shall not permit
         Consolidated Fixed Charge Coverage to be less than (i) 2.00 as at the
         end of any fiscal quarter occurring in 1996, (ii) 2.25 as at the end
         of any fiscal quarter occurring in 1997, and (iii) 2.50 as at the end
         of any fiscal quarter occurring thereafter.

                                     b.       The Corporation will not, and
         will not permit any Restricted Subsidiary to, incur, assume, or suffer
         to exist any obligation under Operating Leases or under any
         transaction giving rise to Consolidated Interest Expense after the
         Closing Date unless, after giving effect on a pro forma basis to such
         obligation or transaction, the Corporation will be in compliance with
         Section 6.5(a) (calculated as at the end of the most recently
         completed fiscal quarter).

                          6.6        Consolidated Senior Funded Debt.  The
         Corporation will not permit Consolidated Senior Funded Debt to exceed
         eighty percent (80%) of Consolidated Total Capitalization.





                                          -21-
   26

                          6.7        Attendance at Board Meeting.  The designee
         of Purchaser (such individual to be identified to the Corporation in a
         writing signed by Purchaser) shall have the right to attend all
         meetings of the Board of Directors of the Corporation in a nonvoting
         observer capacity, to receive notice of such meetings, and to receive
         the information provided by the Corporation to the Board of Directors.
         The Corporation agrees to provide Purchaser with at least fifteen (15)
         days prior written notice of any proposed meeting of the Board of
         Directors of the Corporation.  The reasonable out-of-pocket costs and
         expenses of any such individual attending a Board of Directors meeting
         of the Corporation shall be reimbursed by the Corporation.

                          6.8        Compliance with Laws.  The Corporation at
         all times will, and will cause each of its Subsidiaries to, observe
         and comply in all material respects with all laws (including
         environmental laws applicable to the Corporation and its
         Subsidiaries), ordinances, orders, judgments, rules, regulations,
         certifications,franchises, permits, licenses, directions, and
         requirements of all governmental authorities that are now and may at
         any time be applicable to the Corporation or its Subsidiaries, a
         violation of which could reasonably be expected to have a material
         adverse effect on the business, assets, operations, prospects, or
         condition (financial or otherwise) of the Corporation and its
         Subsidiaries, taken as a whole, except such thereof as shall be
         contested in good faith and by appropriate proceedings promptly
         instituted and diligently conducted by the Corporation or its
         Subsidiaries, as the case may be, so long as adequate reserves or
         other appropriate provisions as shall be required in accordance with
         generally accepted accounting principles shall have been made
         therefor.

                          6.9        Maintenance of Properties; Insurance.  The
         Corporation will maintain and will cause its Subsidiaries to maintain
         in good repair, working order, and condition (normal wear and tear
         excepted) all properties used or useful in the business of the
         Corporation and its Subsidiaries and from time to time will make or
         cause to be made all appropriate repairs, renewals, and replacements
         thereof.  The Corporation will maintain and will cause its
         Subsidiaries to maintain in full force and effect, with financially
         sound and reputable insurers acceptable to Purchaser, insurance
         (subject to customary deductibles and retentions) with respect to its
         properties and business and the properties and business of its
         Subsidiaries against hazards, contingencies, loss, or damage of the
         kinds customarily insured against by corporations of established
         reputation or similar size engaged in the same or similar business and
         similarly situated, of such types and in such amounts as are
         customarily carried under similar circumstances by such other
         corporations; provided, however, in no event shall the coverage and
         amount of such insurance be less than the coverage and amount of
         insurance in force on the Closing Date.  Without limiting the
         generality of the foregoing, the Corporation will maintain (i) public
         liability insurance against claims for personal injury, death, or
         property damage occurring upon, in, about, or in connection with the
         use of any property owned, occupied, or





                                          -22-
   27

         controlled by the Corporation or any of its Subsidiaries in an amount
         per occurrence of at least $10,000,000, (ii) workers' compensation and
         business interruption insurance covering loss of rents and builders'
         all risk insurance, and (iii) such other insurance for the Corporation
         and its Subsidiaries as may be required by law.

                          6.10       Performance of Government Contracts.  The
         Corporation will and will cause each of its Subsidiaries to perform
         each and every term and condition of the Government Contracts relating
         to the facilities owned or operated by the Corporation or such
         Subsidiary and will not, and will not permit any Subsidiary to consent
         to any termination, cancellation, or material amendment, modification,
         or supplement to any Government Contract relating to the facilities
         owned or operated by the Corporation or any of its Subsidiaries which
         termination, cancellation, amendment, modification, or supplement
         could reasonably be expected to have a material adverse effect on the
         business, assets, operations, prospects, or condition (financial or
         otherwise) of the Corporation and its Subsidiaries, taken as a whole.

                          6.11       Notice to Purchaser.  When any Unmatured
         Event of Default or Event of Default has occurred, the Corporation
         agrees to give written notice thereof to Purchaser within three (3)
         days of the Corporation's discovery of such event.

                          6.12       Waiver of Stay, Extension, or Usury Laws.
         The Corporation covenants (to the extent that it may lawfully do so)
         that it will not at any time insist upon, plead, or in any manner
         whatsoever claim or take the benefit or advantage of any stay or
         extension law or any usury law or other law which would prohibit or
         forgive the Corporation from paying all or any portion of the
         principal of, or interest, or premium, if any, on the Notes as
         contemplated herein, wherever enacted, now or at any time hereafter in
         force, or which may affect the covenants or the performance of this
         Agreement; and (to the extent that it may lawfully do so) the
         Corporation hereby expressly waives all benefit or advantage of any
         such law, and covenants that it will not hinder, delay, or impede the
         execution of any power herein granted to the holders of the Notes, but
         will suffer and permit the execution of every such power as though no
         such law had been enacted.

                          6.13       Conduct of Business.  The Corporation will
         not, and will not permit any of its Subsidiaries to, engage in any
         business other than the construction and management of prisons and
         other correctional facilities for governmental agencies, the ownership
         and operation of a proprietary school, the operation of services
         involving the transportation and extradition of prisoners, and other
         businesses or activities substantially similar or related thereto.





                                          -23-
   28

                          6.14       Amendments or Waivers of Certain
         Documents.  The Corporation will not agree to any material amendment,
         modification, supplement to, or waiver of any agreement related to the
         Convertible Notes that would increase the interest rates thereof,
         shorten the average maturities thereof, or alter financial covenants
         contained therein in a manner that could be expected to be materially
         adverse to the interests of Purchaser.

                          6.15       Limitation on Issuance of Other
         Subordinated Indebtedness Senior to the Notes.  The Corporation will
         not create, incur, assume, guarantee, or in any other manner become
         liable with respect to any indebtedness that is subordinate in right
         of payment to any Senior Indebtedness unless such indebtedness is also
         pari passu with, or subordinate pursuant to provisions substantially
         similar to those contained in the Notes, in right of payment to the
         Notes.

                          6.16       Limitation on Subsidiary Funded Debt.  The
         Corporation shall not permit any of its Subsidiaries to incur, create,
         assume, or guarantee any Funded Debt (which shall be deemed to include
         preferred stock issued by a Subsidiary of the Corporation that is not
         held by the Corporation), unless, after giving effect thereto, (a) the
         total amount of Funded Debt of the Corporation's Subsidiaries does not
         exceed 10% of Consolidated Total Capitalization, and (b) the
         Corporation would be entitled to incur at least $1.00 of additional
         Consolidated Senior Funded Debt under Section 6.6.  The foregoing to
         the contrary notwithstanding, Concept shall be entitled to be
         obligated with respect to (and there shall be excluded from the above
         calculation) the United Concept Partnership Funded Debt and the
         Concept Acquired Indebtedness, so long as the aggregate amount of
         Funded Debt of the Corporation incurred, assumed, or acquired in
         connection with the Concept Acquisition (inclusive of the United
         Concept Partnership Funded Debt and the Concept Acquired Indebtedness
         does not exceed Forty Million Dollars ($40,000,000).

                 7.       EVENTS OF DEFAULT; REMEDIES THEREFOR.

                          7.1        Events of Default.  Any one or more of the
following shall constitute an "Event of Default":

                          (i)        default in the payment of any interest due
         under the Notes when it becomes due and payable, and continuance of
         such default for a period of ten (10) days; or

                          (ii)       default in the payment of the principal of
         the Notes when due (whether at scheduled maturity, as a result of a
         mandatory prepayment requirement, by acceleration, or otherwise); or





                                          -24-
   29

                          (iii)      default under any bond, debenture, note,
         or other evidence of indebtedness for money borrowed in excess of
         $100,000 by the Corporation or any of its Subsidiaries, whether such
         indebtedness now exists or shall hereafter be created, which default
         (i) shall consist of a failure to pay such indebtedness at final
         maturity and after the expiration of any applicable grace period, or
         (ii) shall have resulted in such indebtedness (A) becoming or being
         declared due and payable prior to the date on which it would otherwise
         have become due and payable, without such acceleration having been
         rescinded or annulled, or (B) having been discharged within a period
         of ten (10) days after there shall have been given, by registered or
         certified mail, to the Corporation or such Subsidiary, as applicable,
         by any holder of such indebtedness a written notice specifying such
         default and requiring the Corporation or such Subsidiary, as
         applicable, to cause such indebtedness to be discharged; or

                          (iv)       default shall occur in the observance or
         performance of any covenant or agreement or any other provision of
         this Agreement or the Notes that is not remedied within twenty (20)
         days after receipt by the Corporation of written notice of such
         default from Purchaser;

                          (v)        any representation or warranty made by the
         Corporation herein, or made by the Corporation in any statement or
         certificate furnished by the Corporation in connection with the
         consummation of the issuance and delivery of the Notes or thereafter
         pursuant to the terms of this Agreement, is untrue in any material
         respect as of the date of the issuance or making thereof; or

                          (vi)       a final judgment or judgments entered by a
         court of competent jurisdiction for the payment of money aggregating
         in excess of $1,000,000 is or are outstanding against the Corporation
         or any of its Subsidiaries and any one such judgment in excess of
         $1,000,000 has, or such judgments aggregating in excess of $1,000,000
         have remained unpaid, unvacated, unbonded, or unstayed by appeal or
         otherwise for a period of thirty (30) days from the date of entry; or

                          (vii)      a court or other governmental authority or
         agency having jurisdiction in the premises shall enter a decree or
         order (a) for the appointment of a receiver, liquidator, assignee,
         trustee, sequestrator, or other similar official of the Corporation or
         any Subsidiary of the Corporation or of a material portion of the
         assets of either, or for the winding-up or liquidation of its affairs,
         and such decree or order shall remain in force, undischarged and
         unstayed for a period of more than thirty (30) days, or (b) for the
         sequestration or attachment of any material portion of the assets of
         the Corporation or any Subsidiary of the Corporation, without its
         unconditional return to the possession of the Corporation or such
         Subsidiary, or its unconditional release from such sequestration or
         attachment, within thirty (30) days thereafter; or





                                          -25-
   30

                          (viii)     the Corporation or any Subsidiary of the
         Corporation makes an assignment for the benefit of creditors, or the
         Corporation or any Subsidiary of the Corporation applies for or
         consents to the appointment of a custodian, liquidator, trustee, or
         receiver for the Corporation or such Subsidiary or for a material
         portion of the assets of either; or

                          (ix)       the entry of a decree or order by a court
         having jurisdiction in the premises adjudging the Corporation or any
         of its Subsidiaries a bankrupt or insolvent, or approving as properly
         filed a petition seeking reorganization, arrangement, adjustment, or
         composition of or in respect of the Corporation under federal
         bankruptcy law or any other applicable federal or state law, or
         appointing a receiver, liquidator, assignee, trustee, sequestrator, or
         other similar official for the Corporation or any of its Subsidiaries
         or of any substantial part of its property, or ordering the winding up
         or liquidation of its affairs, and the continuance of any such decree
         or order unstayed and in effect for a period of sixty (60) consecutive
         days or until an order for relief has been entered; or

                          (x)        the institution by the Corporation or any
         of its Subsidiaries of proceedings to be adjudicated a debtor or
         insolvent, or the consent by it to the institution of bankruptcy or
         insolvency proceedings against it, or the filing by it of a petition
         or answer or consent seeking reorganization or relief under federal
         bankruptcy law or any other applicable federal or state law or the
         consent by it to the filing such petition or to the appointment of a
         receiver, liquidator, assignee, trustee, sequestrator, or similar
         official for the Corporation or any of its Subsidiaries or of any
         substantial part of its property, or the making by it of an assignment
         for the benefit of creditors, or the admission by it in writing of its
         inability to pay its debts generally as they become due, or the taking
         of corporate action by the Corporation or any of its Subsidiaries in
         furtherance of any such action.

                 7.2      Acceleration of Maturities.  When any Event of
         Default described in clauses (i) through (vi), inclusive, of Section
         7.1 has occurred and is continuing, Purchaser may, by notice in
         writing sent to the Corporation, declare the entire principal and all
         interest accrued on the Notes to be, and the Notes shall thereupon
         become, forthwith due and payable, without any presentment, demand,
         protest, or other notice of any kind, all of which are hereby
         expressly waived.  When any Event of Default described in clauses
         (vii) through (x), inclusive, of Section 7.1 has occurred, then the
         Notes shall immediately become due and payable without presentment,
         demand, protest, or notice of any kind.  When any Event of Default
         described in clause (iv) of Section 7.1 has occurred and is continuing
         as a result of the Corporation's breach of its obligation to convert
         the indebtedness evidenced by the Notes into Conversion Shares in
         accordance with the terms and conditions of the Notes, Purchaser shall
         be entitled to specific performance of such obligation of the
         Corporation; it being expressly acknowledged and agreed by the
         Corporation that no adequate remedy at law exists for any such breach
         and that Purchaser will be





                                          -26-
   31

         irreparably harmed by any such breach by the Corporation.  Upon the
         Notes becoming due and payable as a result of any Event of Default as
         aforesaid, the Corporation shall forthwith pay to Purchaser the entire
         principal and interest accrued on the Notes.  No course of dealing on
         the part of Purchaser nor any delay or failure on the part of
         Purchaser to exercise any right shall operate as a waiver of such
         right or otherwise prejudice Purchaser's rights, powers, and remedies.
         The Corporation further agrees, to the extent permitted by law, to pay
         to Purchaser all costs and expenses (including attorneys' fees)
         incurred by it in the collection of the Notes upon any default
         hereunder or thereon (including such costs and expenses incurred in
         connection with a workout or an insolvency or bankruptcy proceeding).

         8.      AGREEMENTS OF PURCHASER.  Purchaser agrees with the
                 Corporation as follows:

                 8.1      Transfer of the Notes.  Purchaser will not attempt to
         sell, transfer, convey, exchange, or otherwise dispose of all or any
         part of the Notes, except in accordance with applicable law.

                 8.2      No General Solicitation.  Purchaser acknowledges and
         agrees that it has not received nor is it aware of any general
         solicitation or general advertising of the Notes, including any
         advertisement, article, notice, or other communication published in
         any newspaper, magazine, or similar media or broadcast over television
         or radio, and that it was not invited to attend any seminar or meeting
         by means of any such general solicitation or general advertising.

                 8.3      No Registration.  Purchaser understands and agrees
         that, neither the Notes nor, except as provided in the Registration
         Rights Agreement, any Conversion Shares will be registered under the
         Securities Act or any state securities law, that the Notes and
         Conversion Shares may be required to be held until they are
         subsequently registered under the Securities Act and any applicable
         state securities law, or any corresponding provisions of succeeding
         laws, unless an exemption from the registration requirements of such
         laws is available, and that the Corporation is under no obligation to
         register the Notes or, except as provided in the Registration Rights
         Agreement, any Conversion Shares, for resale.

                 8.4      Transfer Restrictions; Legends.  Purchaser
         understands and agrees that the Notes and, when issued, the Conversion
         Shares have not been registered under the Securities Act or the
         securities laws of any state and that they may be sold or otherwise
         disposed of only in one or more transactions registered under the
         Securities Act and, where applicable, such laws unless an exemption
         from the registration requirements of the Securities Act and, where
         applicable, such laws is available.  Purchaser acknowledges that,
         except as provided in the Registration Rights Agreement, Purchaser has
         no right to require the





                                          -27-
   32

         Corporation to register the Conversion Shares.  Purchaser understands
         and agrees that each certificate representing Conversion Shares shall
         bear the following legends:

                               "THE TRANSFER OF THE SECURITIES REPRESENTED BY
                          THIS CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON
                          FILE AT THE OFFICES OF THE CORPORATION."

                               "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
                          HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                          1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
                          BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
                          AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
                          AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
                          EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH
                          ACT OR SUCH LAWS."

         Purchaser will not, directly or indirectly, sell, transfer, pledge,
         encumber, or otherwise dispose of (collectively, "Transfers") any
         Conversion Shares except for (i) Transfers to any Affiliate of
         Purchaser, (ii) Transfers to other institutional investors that are
         not competitors of the Corporation in blocks of not less than 10,000
         shares (or such lesser number as may then be outstanding), (iii)
         Transfers pursuant to any bona fide tender or exchange offer to
         acquire Voting Stock of the Corporation or pursuant to any merger,
         consolidation, or other business combination of the Corporation with
         any other Person; or (iv) the redemption of the Conversion Shares.

                 8.5      Restrictions on Conversion.  Purchaser further
         understands and agrees that any conversion of the indebtedness
         evidenced by the Notes into Conversion Shares must comply with all
         applicable securities laws, including the Securities Act and any
         applicable state securities laws, as such laws exist on the date
         hereof and on such future dates that the indebtedness evidenced by the
         Notes, or any portion thereof, may be converted into Conversion
         Shares.

                 8.6      Further Cooperation.  Purchaser will do all acts and
         things reasonably requested of it by the Corporation in connection
         with any attempt by the Corporation to achieve compliance with federal
         and state securities laws in connection with the offering and sale of
         the Notes or the conversion of all or any portion of the indebtedness
         evidenced by the Notes into Conversion Shares.





                                          -28-
   33

         9.      NONDISCLOSURE OF CONFIDENTIAL INFORMATION.

                 9.1      Without the prior written consent of the Corporation,
         any information relating to the Corporation provided to Purchaser in
         connection with its acquisition of the Notes or the Conversion Shares
         that is either confidential, proprietary, or otherwise not generally
         available to the public (but excluding information Purchaser has
         obtained independently from third-party sources without Purchaser's
         knowledge that the source has violated any fiduciary or other duty not
         to disclose such information (the "Confidential Information") will be
         kept confidential by Purchaser and their directors, officers,
         employees, agents, auditors, participants, transferees, assignees, and
         representatives (collectively, "Representatives"), using the same
         standard of care in safeguarding the Confidential Information as
         Purchaser employs in protecting its own proprietary information that
         Purchaser desires not to disseminate or publish.  It is understood (a)
         that such Representatives shall be informed by Purchaser of the
         confidential nature of the Confidential Information, (b) that such
         Representatives shall be bound by the provisions of this Section 9.1
         as a condition of receiving the Confidential Information, and (c)
         that, in any event, Purchaser shall be responsible for any breach of
         Sections 9.1, 9.2, or 9.3 of this Agreement by any of its
         Representatives (other than Purchaser's participants, transferees, or
         assignees).

                 9.2      Without the prior consent of the Corporation, other
         than as required by applicable law, Purchaser will not, and will
         direct its Representatives not to disclose to any Person (other than
         its Representatives) either the fact that the Confidential Information
         has been made available to Purchaser or that Purchaser has inspected
         any portion of the Confidential Information.

                 9.3      If Purchaser or its Representatives are requested or
         required (by oral question, interrogatories, requests for information
         or documents, subpoena, civil investigative demand, or similar
         process) to disclose any Confidential Information, Purchaser will, as
         soon as practicable, notify the Corporation of such request or
         requirement so that the Corporation may seek an appropriate protective
         order.  If, in the absence of a protective order or the receipt of a
         waiver hereunder, Purchaser or its Representatives are, in the opinion
         of Purchaser's counsel, compelled to disclose the Confidential
         Information or else stand liable for contempt or suffer other censure
         or significant penalty, Purchaser, or its Representative, as the case
         may be, may disclose only such of the Confidential Information to the
         party compelling disclosure as is required by law.  Purchaser shall
         not be liable for the disclosure of Confidential Information pursuant
         to the preceding sentence.  Purchaser will exercise all reasonable
         efforts to assist the Corporation in obtaining a protective order or
         other reliable assurance that confidential treatment will be accorded
         the Confidential Information.





                                          -29-
   34

         10.     MISCELLANEOUS.

                 10.1     Indemnification.  Each party (an "indemnifying
         party") hereto agrees to indemnify and hold harmless the other parties
         (an "indemnified party") against and in respect of any and all claims,
         demands, losses, costs, expenses, obligations, liabilities, damages,
         recoveries, and deficiencies, including reasonable attorneys' fees,
         that such indemnified party and each of its officers and directors
         shall incur or suffer, that arise, result from, or relate to any
         breach of, or failure by such indemnifying party to perform, any of
         its representations, warranties, covenants, or agreements set forth in
         the Transaction Documents.

                 10.2     Survival of Covenants, Representations, and
         Warranties.  All covenants, representations, and warranties contained
         herein and in any certificates delivered pursuant hereto in connection
         with the transactions occurring on the Closing Date shall survive the
         closing and the delivery of the Transaction Documents, regardless of
         any investigation made by or on behalf of any party.

                 10.3     Successors and Assigns.  This Agreement shall be
         binding upon the Corporation and its successors and assigns and shall
         inure to Purchaser's benefit and to the benefit of its successors and
         assigns, including each successive holder or holders of the Notes or
         any interest therein.

                 10.4     Notices.  Unless otherwise provided in this
         Agreement, all notices or demands by any party relating to this
         Agreement or any other agreement entered into in connection herewith
         shall be in writing and (except for financial statements and other
         informational documents which may be sent by first-class mail, postage
         prepaid) shall be personally delivered or sent by registered or
         certified mail, postage prepaid, return receipt requested, or by
         prepaid telex, telefacsimile, or telegram (with messenger delivery
         specified) to the Corporation or to Purchaser, as the case may be, at
         the addresses set forth below:

                       If to PMI, to:      PMI MEZZANINE FUND, L.P.
                                           610 Newport Center Drive, Suite 1100
                                           Newport Beach, CA 92660
                                           Attention:  Mr. Robert Bartholomew

                       With a copy to:     BROBECK, PHLEGER & HARRISON LLP
                                           550 South Hope Street
                                           Los Angeles, CA 90071
                                           Attention: John Francis Hilson, Esq.





                                          -30-
   35

If to the Corporation, to: CORRECTIONS CORPORATION OF AMERICA
                           The CCA Building
                           102 Woodmont Boulevard
                           Nashville, Tennessee  37205
                           Attention:  Doctor R. Crants, Jr.
                          
With a copy to:            STOKES & BARTHOLOMEW, P.A.
                           424 Church Street, Suite 2800
                           Nashville, Tennessee 37219
                           Attention: Elizabeth Enoch Moore, Esq.

                 The parties hereto may change the address at which they are to
         receive notices hereunder, by notice in writing in the foregoing
         manner given to the other.  The failure of the Corporation or
         Purchaser to send a copy of any notice to the individuals who are
         shown above as being required to receive such copies shall not
         invalidate or otherwise affect the validity of a notice that is
         otherwise effectively given.  All notices or demands sent in
         accordance with this Section 10.4 shall be deemed received on the
         earlier of the date of actual receipt or three (3) days after the
         deposit thereof in the mail or the transmission thereof by
         telefacsimile or other similar method as set forth above.

                 10.5     Expenses.  In addition to the payments provided for
         in Section 2.3(xi), the Corporation agrees to pay Purchaser for all
         fees and all out-of-pocket expenses incurred by Purchaser arising in
         connection with the Transaction Documents and the transactions hereby
         and thereby contemplated, including the conversion of the indebtedness
         evidenced by the Notes into Conversion Shares, all stamp and other
         taxes payable (other than taxes based on income) with respect to the
         issuance of the Conversion Shares, filing fees, reasonable fees and
         expenses of counsel, and all such expenses incurred with respect to
         the preparation, execution, delivery, or enforcement of any provision
         of such agreement or instrument, or any amendment or waivers requested
         by the Corporation (irrespective of whether the same become effective)
         under or in respect of any such agreement, including costs and
         expenses in any bankruptcy proceeding.

                 10.6     Descriptive Headings.  The descriptive headings of
         the various Sections or parts of this Agreement are for convenience
         only and shall not affect the meaning or construction of any of the
         provisions hereof.

                 10.7     Satisfaction Requirement.  If any agreement,
         certificate, or other writing, or any action taken or to be taken, is
         by the terms of this Agreement required to be satisfactory to
         Purchaser, the determination of such satisfaction shall be made by
         Purchaser in its sole and exclusive judgment exercised reasonably and
         in good faith.





                                          -31-
   36

                 10.8     Remedies.  In case any one or more of the covenants
         or agreements set forth in the Transaction Documents shall have been
         breached by the Corporation or Purchaser, the Corporation or
         Purchaser, as applicable, may proceed to protect and enforce its
         rights either by suit in equity or by action at law, including an
         action for damages as a result of any such breach or an action for
         specific performance of any such covenant or agreement contained in
         the Transaction Documents.

                 10.9     Entire Agreement.  The Transaction Documents and the
         other writings referred to herein or delivered pursuant hereto contain
         the entire agreement among the parties with respect to the subject
         matter hereof and supersede all prior and contemporaneous arrangements
         or understandings with respect thereto.

                 10.10    Amendments.  This Agreement may be amended, and the
         observance of any term of this Agreement may be waived, with (and only
         with) the written consent of the Corporation and Purchaser.

                 10.11    Severability.  Should any part of this Agreement, for
         any reason, be determined to be invalid or unenforceable, such
         determination shall not affect the validity or enforceability of any
         remaining portion, which remaining portion shall remain in full force
         and effect as if this Agreement had been executed with the invalid or
         unenforceable part hereof eliminated, and it is hereby declared the
         intention of the parties hereto that they would have executed the
         remaining portion of this Agreement without including therein any such
         part which may, for any reason, be hereafter declared invalid or
         unenforceable.

                 10.12    Execution in Counterparts; Telecopy Execution.  This
         Agreement may be executed in any number of counterparts and by
         different parties on separate counterparts, each of which
         counterparts, when so executed and delivered, shall be deemed to be an
         original and all of which counterparts, taken together, shall
         constitute but one and the same Agreement.  This Agreement shall
         become effective upon the execution of a counterpart hereof by each of
         the parties hereto.  Delivery of an executed counterpart of the
         signature page(s) of this Agreement by telecopier shall be equally
         effective as delivery of a manually executed counterpart.  Any party
         delivering an executed counterpart of the signature page(s) of this
         Agreement by telecopier shall thereafter also promptly deliver a
         manually executed counterpart, but the failure to deliver such
         manually executed counterpart shall not affect the validity,
         enforceability, and binding effect of this Agreement.

                 10.13    Governing Law.  The Transaction Documents shall be
         governed by, and construed and enforced in accordance with, the laws
         of the State of New York.

                 10.14    Consent to Jurisdiction.  The Corporation irrevocably
         submits to the non-exclusive jurisdiction of any New York state or
         federal court sitting in the City of New York, New York over any suit,
         action, or proceeding arising out of or





                                          -32-
   37

         relating to the Transaction Documents.  To the fullest extent it may
         effectively do so under applicable law, the Corporation irrevocably
         waives and agrees not to assert, by way of motion, as a defense, or
         otherwise, any claim that it is not subject to the jurisdiction of any
         such court, any objection that it may now or hereafter have to the
         laying of the venue of any such suit, action, or proceeding brought in
         any such court, and any claim that any such suit, action, or
         proceeding brought in any such court has been brought in an
         inconvenient forum.

                 10.15    Enforcement of Judgments; Service of Process; Jury
         Trial Waiver.  The Corporation agrees, to the fullest extent it may
         effectively do so under applicable law, that a judgment in any suit,
         action, or proceeding of the nature referred to in Section 10.14
         brought in any such court shall be conclusive and binding upon the
         Corporation and may be enforced in the courts of the United States of
         America or the State of New York (or any other court to the
         jurisdiction of which the Corporation is or may be subject) by a suit
         upon such judgment.

                 THE CORPORATION AGREES THAT SERVICE OF PROCESS SUFFICIENT FOR
         PERSONAL JURISDICTION IN ANY ACTION, SUIT, OR PROCEEDING OF THE NATURE
         REFERRED TO IN SECTION 10.14 MAY BE MADE BY REGISTERED OR CERTIFIED
         MAIL TO THE CORPORATION'S ADDRESS SET FORTH IN SECTION 10.4.

                 EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ITS RESPECTIVE
         RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
         ARISING OUT OF THE TRANSACTION DOCUMENTS, OR ANY OTHER RELATED
         DOCUMENT TO BE DELIVERED PURSUANT HERETO, OR ANY DEALINGS BETWEEN THEM
         RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE CONTRACTUAL
         RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS
         INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
         FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
         TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
         CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY
         HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
         INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
         WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
         RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH PARTY
         HERETO FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS
         WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
         WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
         COUNSEL.  THIS WAIVER IS





                                          -33-
   38

         IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
         WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
         RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THE TRANSACTION DOCUMENTS,
         OR THE RELATED DOCUMENTS TO BE DELIVERED PURSUANT HERETO.  IN THE
         EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
         TO A TRIAL BY THE COURT.

                 10.16    No Limitation on Service or Suit.  Nothing herein
         shall affect the right of Purchaser to serve process in any manner
         permitted by law, or limit any right that Purchaser may have to bring
         proceedings against the Corporation in the courts of any jurisdiction
         or to enforce in any lawful manner a judgment obtained in one
         jurisdiction in any other jurisdiction.

                 10.17    Direct Payment.  Anything in this Agreement or the
         Notes to the contrary notwithstanding, the Corporation will punctually
         pay when due the principal of the Notes, and any interest thereon,
         without any presentment thereof, directly to Purchaser or to the
         nominee of Purchaser at the address set forth in Schedule 10.17 or
         such other address as Purchaser or Purchaser's nominee may from time
         to time designate in writing to the Corporation, or, if a bank account
         with a United States bank is designated for Purchaser or Purchaser's
         nominee on Schedule 10.17 hereto or in any written notice to the
         Corporation from Purchaser or Purchaser's nominee, the Corporation
         will make such payments in immediately available funds to such bank
         account, marked for attention as indicated.  Purchaser agrees that in
         the event that it shall sell or transfer any Notes, it will, prior to
         the delivery of such Notes, make a notation thereon of all principal,
         if any, prepaid on such Notes and will also note thereon the date to
         which interest has been paid on such Notes.  The Corporation agrees
         that transferees of Notes shall be entitled to the benefits of this
         Section 10.17 so long as any such transferee has made the same
         agreements relating to the transferred Notes as Purchaser has made in
         this Section 10.17.  The Corporation shall be entitled to presume
         conclusively that Purchaser or any subsequent noteholders remain the
         holders of the Notes until such Notes shall have been presented to the
         Corporation as evidence of the transfer of such Notes.





                                          -34-
   39

                 The execution hereof by the Corporation and PMI shall
constitute a contract between them for the uses and purposes hereinabove set
forth.



                                     CORRECTIONS CORPORATION OF         
                                     AMERICA,                      
                                     a Delaware corporation        
                                                                   
                                                                   
                                                                   
                                     By: 
                                        --------------------------------
                                     Title:
                                           ----------------------------- 
                                                                         
                                     PMI MEZZANINE FUND, L.P.,           
                                     a Delaware limited partnership      
                                                                         
                                     
                                     By:      Pacific Mezzanine Investors, 
                                              LLC,
                                              a Delaware limited
                                              liability company, its General 
                                              Partner
                                                     
                                                     
                                                     
                                     By:
                                        --------------------------------
                                     Title:
                                           -----------------------------






                                          -35-

EX-23

   1
                                                                   EXHIBIT 23

                  CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS




As independent public accountants, we hereby consent to the incorporation of
our reports included in this Annual Report on Form 10-K of Corrections
Corporation of America and Subsidiaries into the Company's previously filed
Registration Statement File Numbers 33-12503, 33-30825, 33-30826, 33-42068,
33-42614, 33-60590, 33-72496 and 33-61173.



                                          /s/ Arthur Andersen LLP
                                          -----------------------
                                          Arthur Andersen LLP

Nashville, Tennessee
March 26, 1996 

EX-27

 

<ARTICLE> 5
<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               DEC-31-1995
<CASH>                                           2,714
<SECURITIES>                                         0
<RECEIVABLES>                                   39,661
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                46,610
<PP&E>                                         137,019
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 213,478
<CURRENT-LIABILITIES>                           35,517
<BONDS>                                         74,865
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        32,270
<OTHER-SE>                                      64,434
<TOTAL-LIABILITY-AND-EQUITY>                   213,478
<SALES>                                              0
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<OTHER-EXPENSES>                                     0
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<INCOME-PRETAX>                                 23,663
<INCOME-TAX>                                     9,330
<INCOME-CONTINUING>                                  0
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<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    14,333
<EPS-PRIMARY>                                      .38
<EPS-DILUTED>                                      .36