AGREEMENT Release of Claims, Covenant not to Sue, and Older Workers Act Waiver

Exhibit 10.1

AGREEMENT

Release of Claims, Covenant not to Sue, and

Older Workers Act Waiver

This Agreement of Release of Claims, Covenant not to Sue, and Older Workers Act Waiver (“Agreement”) is made by and between John C. Godlesky (“Employee”), an individual, and Cornell Companies, Inc., a Delaware corporation (“CORNELL”).

WHEREAS, Employee and CORNELL executed an Employment Agreement, effective October 20, 2004, wherein Employee and Cornell made certain agreements regarding Employee’s employment and separation from employment; and

WHEREAS, Employee will be separated from employment with CORNELL at the sole discretion of the CEO without cause;

NOW THEREFORE, in consideration of the mutual promises and releases contemplated in that Employment Agreement and contained herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

1.                Salary and Benefits .  Upon the execution of this Agreement, the parties agree as follows:

(a)           Employee shall be separated from employment with CORNELL effective June 30, 2005 (hereinafter referred to as “termination date”).

(b)          CORNELL shall provide Employee regular pay up to and including termination date.

(c)           CORNELL shall provide Employee with payment for Employee’s balance of any vested but unused banked time off hours, banked vacation hours, and banked floating holiday hours, as applicable.

(d)          CORNELL shall provide Employee with up to 40 hours of paid time off, depending on current available balance.

(e)           CORNELL shall provide Employee severance as follows:

i.                   A one-time, lump-sum payment in the amount of $100,000.00;

ii.                A one-time, lump-sum payment in the amount of $ 3,524.00 to cover outplacement costs;

iii.             A one-time, lump-sum payment in the amount of $2,000.00 to cover relocation costs;

iv.            Twenty-six equal, biweekly payments, totaling an amount equivalent to one year’s additional salary after termination date, such payments to be necessarily reduced by any tax and/or related deductions as may be required by law for severance pay; and

v.               An amount equivalent to that assessed by the Landlord of Employee’s apartment in Pittsburgh as penalty due to early termination of the lease, paid upon bona fide proof of amount owed to said Landlord, not to exceed $10,000.00.  Employee agrees to take reasonable steps to negotiate with Landlord to minimize the amount of any such penalty.