Exhibit 10.1
    

    
      AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND 
    

    
      SECURITY AGREEMENT
    

    
      THIS AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND
      SECURITY AGREEMENT (this "Amendment No. 1"), dated as of
      March 4, 2008, is entered into by and among AMERICA SERVICE GROUP
      INC. ("ASG") a Delaware corporation, PRISON HEALTH
      SERVICES, INC. ("PHS"), a Delaware corporation, EMSA
      LIMITED PARTNERSHIP ("EMSA LP"), a Florida limited
      partnership, PRISON HEALTH SERVICES OF INDIANA, L.L.C. ("PHS Indiana"),
      an Indiana limited liability company, SECURE PHARMACY PLUS, LLC
      ("SPP"), a Tennessee limited liability company, and CORRECTIONAL
      HEALTH SERVICES, LLC, ("CHS") a New Jersey limited
      liability company (ASG, PHS, EMSA LP, PHS Indiana, SPP and CHS)
      are hereinafter referred to, individually and collectively as the "Borrower"),
      CAPITALSOURCE FINANCE LLC, a Delaware limited liability company ("CapitalSource"),
      as administrative agent and collateral agent for Lenders (in such
      capacities, the "Agent"), and the Lenders party hereto.
    

    
      RECITALS
    

    
      A. Pursuant to that certain Second Amended and Restated Revolving Credit
      and Security Agreement dated as of February 22, 2008, by and between
      Borrower, Agent and the Lenders identified therein, (as amended to date,
      and as amended, supplemented, modified and restated from time to time,
      collectively, the "Loan Agreement"), the Lenders agreed
      to make available to Borrower the Loans and other credit facilities
      contemplated thereby.
    

    
      B. The parties hereto desire to enter into this Amendment No. 1 to amend
      the Loan Agreement in certain respects as provided herein.
    

    
      NOW, THEREFORE, in consideration of the foregoing, the terms and
      conditions, premises and other mutual covenants set forth in this
      Amendment No. 1, and other good and valuable consideration, the receipt
      and adequacy of which are hereby acknowledged, and intending to be
      legally bound, Borrower, Agent and the Lenders hereby agree as follows:
    

    
      Section 1. Definitions. Unless otherwise defined
      herein, all capitalized terms used and not defined herein shall have the
      meanings assigned to such terms in the Loan Agreement (as amended
      hereby).
    

    
      Section 2. Amendment to Section 7.5 (Dividends,
      Redemptions, Equity) of the Loan Agreement. Section 7.5 of the
      Loan Agreement is hereby amended by amending and restating clause (iii)
      therein to read in its entirety as follows:
    

    
      ", and (iii) ASG may repurchase shares of its common stock in any single
      transaction or series of transactions pursuant to a Stock Repurchase
      Authorization (defined below), provided, that, (w) the
      aggregate dollar amount of cash paid by ASG in connection therewith does
      not exceed $15,000,000, (x) such transaction or transactions shall be
      consummated on or prior to December 31, 2009, (y) no Default or Event of
      Default shall have occurred or be continuing as of the effective date of
      any such transaction or would result from any such transaction, and (z)
      not less than three (3) Business Days prior to giving effect to the
      initial stock repurchase contemplated by this clause (iii), ASG shall
      have provided Agent with a copy of the resolutions duly authorized by
      the board of directors of ASG to give effect to the stock repurchase
      contemplated by this clause (iii) (the "Stock Repurchase
      Authorization"), together with an officer’s compliance certificate
      demonstrating compliance with the terms of the preceding subclauses (w),
      (x) and (y)."
    

    
      
        

        

      

      
        
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      Section 3. Representations and Warranties.
    

    
      (a) Notwithstanding any other provision of this Amendment No. 1, each
      Borrower individually hereby (i) confirms and makes all of the
      representations and warranties set forth in the Loan Agreement and other
      Loan Documents with respect to such Borrower as of the date hereof and
      as of the Effective Date and confirms that they are true and correct,
      (ii) represents and warrants to each Lender that it has good and
      marketable title to all of its respective Collateral, free and clear of
      any Lien or security interest in favor of any other Person (other than
      Permitted Liens), and (iii) represents and warrants that since the date
      of the last financial statements of the Borrower provided to Agent there
      has been no material adverse change in the business, operations, results
      of operations, assets, liabilities or financial condition of Borrower.
    

    
      (b) Each Borrower individually hereby represents and warrants as of the
      date of this Amendment No. 1 and as of the Effective Date as follows:
      (i) it is duly incorporated or organized, validly existing and in good
      standing under the laws of its jurisdiction of organization; (ii) the
      execution, delivery and performance by it of this Amendment No. 1 are
      within its powers, have been duly authorized, and do not contravene (A)
      its articles of organization, operating agreement, or other
      organizational documents, or (B) any applicable law; (iii) no consent,
      license, permit, approval or authorization of, or registration, filing
      or declaration with any Governmental Authority or other Person, is
      required in connection with the execution, delivery, performance,
      validity or enforceability of this Amendment No. 1 by or against it;
      (iv) this Amendment No. 1 has been duly executed and delivered by it;
      (v) this Amendment No. 1 constitutes its legal, valid and binding
      obligations enforceable against it in accordance with its terms, except
      as enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforcement of
      creditors’ rights generally or by general principles of equity; and
      (vi) it is not in default under the Loan Agreement and no Default or
      Event of Default exists, has occurred or is continuing.
    

    
      Section 4. Expenses. Borrower shall pay all costs
      and expenses incurred by Agent, Lenders or any of their respective
      Affiliates, including, without limitation, documentation and diligence
      fees and expenses, and all other out-of-pocket charges and expenses and
      reasonable attorneys’ fees and expenses and allocated costs of in-house
      counsel, in connection with entering into, negotiating, preparing,
      reviewing and executing this Amendment No. 1 and all related agreements,
      documents and instruments, and all of the same, to the extent incurred
      and not promptly reimbursed by Borrower, may be charged to Borrower’s
      account as an Advance and shall be part of the Obligations. If Agent,
      any Lender or any of Agent or Lender’s Affiliates uses in-house counsel
      for any of the purposes set forth above Borrower expressly agrees that
      its Obligations include reasonable charges for such work commensurate
      with the fees that would otherwise be charged by outside legal counsel
      selected by such Agent or Lender or such Affiliate in its sole
      discretion for the work performed.
    

    
      Section 5. Reference to the Effect on the Loan Agreement.
      Upon the effectiveness of this Amendment No. 1, (i) each reference in
      the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein"
      or words of similar import shall mean and be a reference to the Loan
      Agreement as amended by this Amendment No. 1, and (ii) each reference in
      any other Loan Document to the "Loan Agreement" shall mean and be a
      reference to the Loan Agreement as amended by this Amendment No. 1. Each
      reference herein to the Loan Agreement shall be deemed to mean the Loan
      Agreement as amended by this Amendment No. 1. Except as specifically
      amended hereby, the Loan Agreement and all other Loan Documents shall
      remain in full force and effect and the terms thereof are expressly
      incorporated herein and are ratified and confirmed in all respects. This
      Amendment No. 1 is not intended to be or to create, nor shall it be
      construed as or constitute, a novation or an accord and satisfaction but
      shall constitute an amendment of the Loan Agreement. The parties hereto
      agree to be bound by the terms and conditions of the Loan Agreement as
      amended by this Amendment No. 1 as though such terms and conditions were
      set forth herein in full. The execution, delivery and effectiveness of
      this Amendment No. 1 shall not, except as expressly provided in this
      Amendment No. 1, operate as a waiver of any right, power or remedy of
      Lender, nor constitute a waiver of any provision of the Loan Agreement
      or any other Loan Document or any other documents, instruments and
      agreements executed or delivered in connection therewith or of any
      Default or Event of Default under any of the foregoing whether arising
      before or after the Effective Date or as a result of performance
      hereunder.
    

    
      
        

        

      

      
        
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      Section 6. Governing Law and Jury Trial. THIS
      AMENDMENT NO. 1 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
      AMENDMENT NO. 1 SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
      ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET FORTH IN THE LOAN
      AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND NOTICE
      PROVISIONS OF THE LOAN AGREEMENT.
    

    
      Section 7. Headings and Counterparts. The captions
      in this Amendment No. 1 are intended for convenience and reference only
      and do not constitute and shall not be interpreted as part of this
      Amendment No. 1 and shall not affect the meaning or interpretation of
      this Amendment No. 1. This Amendment No. 1 may be executed in one or
      more counterparts, all of which taken together shall constitute but one
      and the same instrument. This Amendment No. 1 may be executed by
      facsimile transmission, which facsimile signatures shall be considered
      original executed counterparts for all purposes, and each party to this
      Amendment No. 1 agrees that it will be bound by its own facsimile
      signature and that it accepts the facsimile signature of each other
      party to this Amendment No. 1.
    

    
      Section 8. Amendments. This Amendment No. 1 may not be
      changed, modified, amended, restated, waived, supplemented, discharged,
      canceled or terminated orally or by any course of dealing or in any
      other manner other than by written agreement in accordance with Section
      10.5 of the Loan Agreement. This Amendment No. 1 shall be considered
      part of the Loan Agreement for all purposes under the Loan Agreement.
    

    
      Section 9. Entire Agreement. This Amendment No. 1, the
      Loan Agreement, and the other Loan Documents constitute the entire
      agreement between the parties with respect to the subject matter hereof
      and thereof and supersedes all prior discussions, representations,
      agreements and understandings, if any, relating to the subject matter
      hereof and thereof and may not be contradicted by evidence of prior,
      contemporaneous or subsequent oral agreements between the parties. There
      are no unwritten oral agreements between the parties.
    

    
      Section 10. Miscellaneous. Whenever the context and
      construction so require, all words used in the singular number herein
      shall be deemed to have been used in the plural, and vice versa, and the
      masculine gender shall include the feminine and neuter and the neuter
      shall include the masculine and feminine. This Amendment No. 1 shall
      inure to the benefit of Agent, Lenders, all future holders of any Note,
      any of the Obligations or any of the Collateral and all Transferees and
      Participants, and each of their respective successors and permitted
      assigns. No Borrower may assign, delegate or transfer this Amendment No.
      1 or any of its rights or obligations under this Amendment No. 1 unless
      otherwise permitted by the Loan Documents. No rights are intended to be
      created under this Amendment No. 1 for the benefit of any third party
      donee, creditor or incidental beneficiary of Borrower or any Guarantor.
      Nothing contained in this Amendment No. 1 shall be construed as a
      delegation to Agent or any Lender of any Borrower’s or any Guarantor’s
      duty of performance, including, without limitation, any duties under any
      account or contract in which Lender has a security interest or Lien.
      This Amendment No. 1 shall be binding upon Borrowers and their
      respective successors and assigns.
    

    
      
        

        

      

      
        
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      Section 11. Effective Date. The effectiveness of
      this Amendment No. 1 and the agreements of Agent and Lenders set forth
      herein, are subject to the satisfaction of the following conditions
      precedent (the date on which such conditions shall have been satisfied,
      the "Effective Date"), all in form and substance
      satisfactory to Agent in its sole discretion:
    

    
      (a) Agent shall have received each of the following, each in form and
      substance satisfactory to Agent in its sole discretion, and, where
      applicable, each duly executed by each party thereto:
    

    
      (i) This Amendment No. 1, duly executed by an authorized officer of each
      Borrower and each Lender; and
    

    
      (ii) All other documents Agent may reasonably request with respect to
      any matter relevant to this Amendment No. 1 or the transactions
      contemplated hereby;
    

    
      (b) The representations and warranties contained herein, in the Loan
      Agreement and the other Loan Documents, as each is amended hereby, shall
      be true and correct as of the date hereof, as if made on the date
      hereof, except for such representations and warranties as are by their
      express terms limited to a specific date;
    

    
      (c) No Default or Event of Default shall have occurred and be
      continuing; and
    

    
      (d) All corporate proceedings taken in connection with the transactions
      contemplated by this Amendment No. 1 and all documents, instruments and
      other legal matters incident thereto shall be satisfactory to Agent.
    

    
      Section 12. Release by Borrower. BY EXECUTION OF
      THIS AMENDMENT NO. 1, EACH BORROWER ACKNOWLEDGES AND CONFIRMS, ON A
      JOINT AND SEVERAL BASIS, THAT SUCH BORROWER PARTY DOES NOT HAVE ANY
      OFFSETS, DEFENSES OR CLAIMS AGAINST AGENT OR ANY LENDER, OR ANY OF THEIR
      RESPECTIVE PRESENT OR FORMER SUBSIDIARIES, AFFILIATES, OFFICERS,
      DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, REPRESENTATIVES, ATTORNEYS,
      PREDECESSORS, SUCCESSORS OR ASSIGNS WHETHER ASSERTED OR UNASSERTED. TO
      THE EXTENT THAT ANY BORROWER MAY, AS OF THE DATE OF THIS AMENDMENT NO.
      1, HAVE SUCH OFFSETS, DEFENSES OR CLAIMS, EACH BORROWER AND EACH OF ITS
      SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES, AFFILIATES, PREDECESSORS,
      EMPLOYEES, AGENTS, HEIRS, EXECUTORS, AS APPLICABLE, JOINTLY AND
      SEVERALLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, RELEASES AND
      FOREVER DISCHARGES AGENT, EACH LENDER, AND THEIR RESPECTIVE
      SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES,
      AGENTS, ATTORNEYS, PREDECESSORS, SUCCESSORS AND ASSIGNS, BOTH PRESENT
      AND FORMER (COLLECTIVELY THE "LENDER AFFILIATES") OF AND
      FROM ANY AND ALL ACTUAL OR POTENTIAL CLAIMS, DEMANDS, DAMAGES, ACTIONS,
      REQUESTS FOR SANCTIONS AND CAUSES OF ACTION, TORTS, OBLIGATIONS, SUITS,
      DEBTS, CONTROVERSIES, DAMAGES, JUDGMENTS, EXECUTIONS, CLAIMS AND DEMANDS
      WHATSOEVER, ALL OTHER LIABILITIES WHETHER KNOWN OR UNKNOWN, MATURED OR
      UNMATURED, CONTINGENT OR ABSOLUTE, OF ANY KIND OR DESCRIPTION
      WHATSOEVER, EITHER IN LAW OR IN EQUITY, INCLUDING WITHOUT LIMITATION
      UNDER THE UNITED STATES BANKRUPTCY CODE OR OTHERWISE, ASSERTED OR
      UNASSERTED WHICH AGAINST AGENT, ANY LENDER AND/OR LENDER AFFILIATES ANY
      BORROWER EVER HAD, NOW HAVE, CLAIM TO HAVE OR WHICH ANY OF ANY
      BORROWER’S SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES, AFFILIATES,
      PREDECESSORS, EMPLOYEES, AGENTS, HEIRS, EXECUTORS, AS APPLICABLE, BOTH
      PRESENT AND FORMER EVER HAD, NOW HAS, CLAIM TO HAVE, UPON OR BY REASON
      OF ANY MANNER, CAUSE, CAUSES OR THING WHATSOEVER, INCLUDING, WITHOUT
      LIMITATION, ANY PRESENTLY EXISTING CLAIM OR DEFENSE WHETHER OR NOT
      PRESENTLY SUSPECTED, CONTEMPLATED OR ANTICIPATED, AND EACH BORROWER
      HEREBY AGREES THAT SUCH BORROWER IS COLLATERALLY ESTOPPED FROM ASSERTING
      ANY CLAIMS AGAINST AGENT, LENDER OR ANY OF THE LENDER AFFILIATES
      RELATING TO THE FOREGOING.
    

    
      
        

        

      

      
        
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      [SIGNATURES FOLLOW] 
    

    
      
        

        

      

      
        
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      IN WITNESS WHEREOF, the parties have caused this Amendment No. 1
      to Revolving Credit, Term Loan and Security Agreement to be executed by
      their respective officers thereunto duly authorized as of the date first
      written above.
    

    	
          BORROWER:
        	
           
        	

        	
           
        	
          AMERICA SERVICE GROUP INC.
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	

        	

        	
          By:
        	

        	
          /s/ Michael W. Taylor
        
	

        	

        	

        	

        	
          Name: Mr. Michael Taylor
        
	

        	

        	

        	

        	
          Title: Chief Financial Officer
        
	

        	

        	

        	

        	

        
	

        	

        	

        	

        	
          PRISON HEALTH SERVICES, INC.
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	

        	

        	
          By:
        	

        	
          /s/ Michael W. Taylor
        
	

        	

        	

        	

        	
          Name: Mr. Michael Taylor
        
	

        	

        	

        	

        	
          Title: Senior Vice President
        
	

        	

        	

        	

        	

        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          EMSA LIMITED PARTNERSHIP,
        
	

        	

        	

        	

        	
          By its General Partner, PRISON HEALTH SERVICES, INC.
        
	

        	

        	

        	

        	
           
        
	

        	

        	
          By:
        	

        	
          /s/ Michael W. Taylor
        
	

        	

        	

        	

        	
          Name: Mr. Michael Taylor
        
	

        	

        	

        	

        	
          Title: Senior Vice President
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          PRISON HEALTH SERVICES OF INDIANA, LLC
        
	

        	

        	

        	

        	
          By its General Manager, PRISON HEALTH SERVICES, INC.
        
	

        	

        	

        	

        	
           
        
	

        	

        	
          By:
        	

        	
          /s/ Michael W. Taylor
        
	

        	

        	

        	

        	
          Name: Mr. Michael Taylor
        
	

        	

        	

        	

        	
          Title: Senior Vice President
        
	

        	

        	

        	

        	

        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          CORRECTIONAL HEALTH SERVICES, LLC,
        
	

        	

        	

        	

        	
          By its Managing Member, PRISON HEALTH SERVICES, INC.
        
	

        	

        	

        	

        	
           
        
	

        	

        	
          By:
        	

        	
          /s/ Michael W. Taylor
        
	

        	

        	

        	

        	
          Name: Mr. Michael Taylor
        
	

        	

        	

        	

        	
          Title: Senior Vice President
        


    
      
        

        

      

      
        
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            SECURE PHARMACY PLUS, LLC,
          

        
	
          
             
          

        	

        	

        	

        	
          
            By its Managing Member, PRISON HEALTH SERVICES, INC.
          

        
	

        	

        	

        	

        	
          
             
          

        
	

        	

        	
          By:
        	

        	
          /s/ Michael W. Taylor
        
	

        	

        	

        	

        	
          Name: Mr. Michael Taylor
        
	

        	

        	

        	

        	
          Title: Senior Vice President
        
	

        	

        	

        	

        	

        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	
          AGENT AND LENDER:
        	

        	

        	

        	
          CAPITALSOURCE FINANCE LLC
        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
           
        
	

        	

        	
          By:
        	

        	
          
            /s/ C.J. Blagg
          

        
	

        	

        	

        	

        	
          
            Name: C.J. Blagg
          

        
	

        	

        	

        	

        	
          
            Title: Associate General Counsel - HSB
          

        


    
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