Document:

<PAGE>

                                                                    Exhibit 10.2

                               AMENDMENT NO. 1 TO
                      AMENDED AND RESTATED CREDIT AGREEMENT

      THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated August 27, 2001, is made and entered into on the terms and
conditions hereinafter set forth, by and among AMERICA SERVICE GROUP INC., a
Delaware corporation (the "Borrower"), the subsidiaries of the Borrower who are
parties to the Credit Agreement, as hereinafter defined (the "Guarantors"), the
several lenders who are now or hereafter become parties to the Credit Agreement
(the "Lenders"), and BANK OF AMERICA, N.A., a national banking association
("Bank of America"), individually and as administrative agent for the Lenders
and the Issuing Bank (in such capacity, the "Administrative Agent"), and as
Issuing Bank.

                                    RECITALS:

      1.    Pursuant to an Amended and Restated Credit Agreement dated as of
August 1, 2000, among the Borrower, the Guarantors, the Administrative Agent,
the Lenders and the Issuing Bank (as the same heretofore may have been and/or
hereafter may be amended, restated, supplemented, extended, renewed, replaced or
otherwise modified from time to time, the "Credit Agreement"), the Lenders have
agreed to make Loans and purchase participations in Letters of Credit issued for
the account of the Borrower, and the Issuing Bank has agreed to issue such
Letters of Credit, all as more specifically described in the Credit Agreement.
Capitalized terms used but not otherwise defined in this Agreement have the same
meanings as in the Credit Agreement.

      2.    The parties hereto desire to amend the Credit Agreement in certain
respects, as more particularly hereinafter set forth.

                                   AGREEMENTS:

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

      1.    AMENDMENT OF SECTION 1.1. Section 1.1 of the Credit Agreement is
hereby amended to insert the following new definitions in the appropriate
locations according to alphabetical order, or to amend and restate existing
definitions to read as indicated, as applicable:

            "Eligible Accounts" shall mean all accounts of the Borrower and the
      Guarantors in which the Administrative Agent, for the benefit of itself,
      the Lenders and the Issuing Bank, has been granted a first and prior
      perfected security interest, excluding all items that the Administrative
      Agent reasonably determines to be ineligible, and with such adjustments
      thereto as the Administrative Agent reasonably determines to be
      appropriate. Without limiting the foregoing, within two (2) weeks after
      receipt of the Field
<PAGE>
      Examination Report, the Administrative Agent, with the concurrence of
      Requisite Lenders, may impose such eligibility limitations as it deems
      appropriate, in the exercise of its discretion, on the basis of its review
      of the Field Examination Report.

            "Eligible Inventory" shall mean all inventory of the Borrower and
      the Guarantors in which the Administrative Agent, for the benefit of
      itself, the Lenders and the Issuing Bank, has been granted a first and
      prior perfected security interest, valued at the lesser of cost or market,
      excluding items that are out-of-date, obsolete or otherwise unmarketable,
      with such adjustments thereto as the Administrative Agent reasonably
      determines to be appropriate. Without limiting the foregoing, within two
      (2) weeks after receipt of the Field Examination Report, the
      Administrative Agent, with the concurrence of Requisite Lenders, may
      impose such eligibility limitations as it deems appropriate, in the
      exercise of its discretion, on the basis of its review of the Field
      Examination Report.

            "Facilities Credit Base" shall mean, as of any date of determination
      occurring during each of the periods indicated below, an aggregate amount
      equal to the sum of the respective percentages of Eligible Accounts and
      Eligible Inventory specified as being applicable during such Fiscal
      Quarter:

<TABLE>
<CAPTION>
                  Period                  Eligible Accounts   Eligible Inventory
      ----------------------------------  -----------------   ------------------
<S>                                       <C>                 <C>
      Through December 31, 2001                  100%                75%
      January 1, 2002 - January 31, 2002         100%                50%
      February 1, 2002 - March 31, 2002           95%                50%
      April 1, 2002 - June 30, 2002               90%                50%
      July 1, 2002 and thereafter                 80%                50%
</TABLE>

      Notwithstanding the foregoing, after receipt of the Field Examination
      Report, the Administrative Agent, with the concurrence of Requisite
      Lenders, in its discretion may reduce the specified percentages of
      Eligible Accounts to a percentage not less than 80%.

            "Field Examination Report" shall have the meaning assigned to such
      term in Section 8.22.

            "IBNR Report" shall mean a report of the "incurred but not reported"
      expense reserves of the Borrower and the Guarantors, setting forth in
      reasonable detail the manner of calculation.

            "Permitted Acquisition" - Not applicable. Any and all provisions of
      this Agreement involving the application of such term shall be disregarded
      as to such term and shall be construed as if such term and language
      relating specifically thereto had not been included.

            "Strategic Transaction Expenses" shall mean expenses in an aggregate
      amount not to exceed $500,000 reasonably incurred by the Borrower during
      the Fiscal Quarter

                                      -2-
<PAGE>
      ending September 30, 2001 in connection with strategic corporate
      initiatives under consideration by the Borrower.

      2.    AMENDMENT OF SECTION 2.1.1. Section 2.1.1 of the Credit Agreement is
hereby amended by adding the following new subsection (d):

            (d)   Notwithstanding the foregoing or any other provision of this
      Agreement that may be to the contrary, in no event shall the aggregate
      amount of the Loans and Letter of Credit Liabilities outstanding on any
      date exceed an amount equal to the amount of the Facilities Credit Base on
      such date. The Borrower shall prepay Loans to the extent necessary so that
      the aggregate amount of the Loans and Letter of Credit Liabilities
      outstanding on any date will not exceed an amount equal to the amount of
      the Facilities Credit Base on such date, and any prepayment pursuant to
      this sentence shall be applied first to Swing Line Loans until the same
      have been fully repaid, then to Base Rate Loans until the same have been
      fully repaid, and then to LIBOR Loans.

      3.    ADDITION OF NEW SECTION 2.1.3. Article 2 of the Credit Agreement is
hereby amended by adding the following new Section 2.1.3:

            2.1.3. Mandatory Reductions of Commitments.

                  (a)   On the forty-fifth (45th) day following the end of each
            Fiscal Quarter ending on each of the dates specified below, the
            Commitments shall be permanently reduced by an amount equal to
            seventy-five percent (75%) of the amount by which EBITDA for such
            Fiscal Quarter exceeds the EBITDA amount specified below for such
            Fiscal Quarter:

<TABLE>
<CAPTION>
                 Fiscal Quarter                        EBITDA
               ------------------                   -----------
<S>                                                 <C>
                  June 30, 2002                     $ 3,700,000
               September 30, 2002                     4,300,000
                December 31, 2002                     4,200,000
                 March 31, 2003                       3,600,000
</TABLE>

                                      -3-
<PAGE>
                  (b)   The Commitments also shall be permanently reduced on
            each date set forth below by the corresponding amount specified for
            such date:

<TABLE>
<CAPTION>
                                                     Reduction
                Reduction Date                        Amount
               ------------------                  ------------
<S>                                                <C>
               November 1, 2001                    $ 1,000,000
               December 1, 2001                      1,500,000
                January 1, 2002                      2,500,000
               February 1, 2002                      1,000,000
                 March 1, 2002                       1,500,000
                 April 1, 2002                       2,500,000
                 July 1, 2002                        5,000,000
                January 1, 2003                      5,000,000
               Commitment Period
                Expiration Date             Remaining Commitments
</TABLE>

            provided, however, that on the effective date of any voluntary
            reduction in the Commitments pursuant to Section 2.1.2, the amount
            of the scheduled reduction on the first scheduled reduction date
            following the date of such voluntary reduction shall be reduced by
            the amount of such voluntary reduction and to the extent that the
            amount of such voluntary reduction exceeds the amount of such
            scheduled reduction, the excess shall be applied to reduce the
            amount of the scheduled reduction on the next succeeding scheduled
            reduction date and each scheduled reduction date thereafter until
            applied in full. Except as set forth in the proviso of the preceding
            sentence, the reduction dates set forth above shall not be extended,
            nor shall the scheduled amount of any reduction set forth above be
            reduced, without the written consent of the Administrative Agent and
            all of the Lenders.

                                      -4-
<PAGE>
      4.    AMENDMENT OF SECTION 2.13. Section 2.13 of the Credit Agreement is
hereby amended to read as follows:

            2.13  Interest and Fees Margins. For purposes of interest and fee
      computations hereunder involving the Applicable Base Rate Margin, the
      Applicable LIBOR Margin, the Applicable Letter of Credit Fee Percentage
      and the Applicable Commitment Fee Percentage, such margins and percentages
      shall be determined as follows:

<TABLE>
<CAPTION>
                                                    Applicable     Applicable
                     Applicable      Applicable      Letter of     Commitment
                        LIBOR         Base Rate     Credit Fee         Fee
          Tier         Margin          Margin       Percentage     Percentage
          ----       ----------      ----------     ----------     ----------
<S>                  <C>             <C>            <C>            <C>
            1           1.50%           0.00%          1.50%         0.300%
            2           1.75%           0.25%          1.75%         0.375%
            3           2.00%           0.50%          2.00%         0.375%
            4           2.25%           0.75%          2.25%         0.500%
            5           2.75%           1.25%          2.75%         0.500%
            6           3.25%           1.75%          3.25%         0.500%
            7           3.75%           2.25%          3.75%         0.625%
</TABLE>

            Except as expressly hereinafter provided, the applicable tier at any
      time shall be determined with reference to the Borrower's Leverage Ratio
      at such time, as follows:

<TABLE>
<CAPTION>
      Tier     Leverage Ratio
      ----     -----------------------------------------------------------------
<S>            <C>
        1      Less than 1.00 to 1.00

        2      Equal to or greater than 1.00 to 1.00 but less than 1.50 to 1.00

        3      Equal to or greater than 1.50 to 1.00 but less than 2.00 to 1.00

        4      Equal to or greater than 2.00 to 1.00 but less than 2.50 to 1.00

        5      Equal to or greater than 2.50 to 1.00 but less than 2.75 to 1.00

        6      Equal to or greater than 2.75 to 1.00 but less than 3.00 to 1.00

        7      Equal to or greater than 3.00 to 1.00
</TABLE>

      Any adjustment in the margins set forth above shall take effect on the
first Pricing Tier Determination Date following the Fiscal Quarter as to which
such ratio was calculated.

                                      -5-
<PAGE>
      Notwithstanding the foregoing, from the date hereof to but not including
the first Pricing Tier Determination Date after December 31, 2001, the following
margins shall be applicable:

<TABLE>
<CAPTION>
                                              Applicable       Applicable
           Applicable        Applicable        Letter of       Commitment
             LIBOR           Base Rate        Credit Fee           Fee
             Margin            Margin         Percentage       Percentage
           ----------        ----------       ----------       ----------
<S>                          <C>              <C>              <C>
             3.50%             2.00%             3.50%           0.500%
</TABLE>

      5.    AMENDMENT OF SECTION 8.1.3. Section 8.1.3 of the Credit Agreement is
hereby amended to read as follows:

            8.1.3 Monthly Financial Statements and Reports. Furnish to the
      Administrative Agent and each Lender (a) as soon as available and in any
      event within thirty (30) days after the end of each month (other than the
      last month in a Fiscal Quarter, in which case the period shall be
      forty-five (45) days), an unaudited consolidated balance sheet of the
      Borrower and its Subsidiaries as of the end of such month, the related
      consolidated statement of income of the Borrower and its Subsidiaries for
      such month and a schedule of Service Contract operating margins for such
      month, certified by a Responsible Officer of the Borrower, together with a
      certificate of a Responsible Officer of the Borrower stating that no
      Default has occurred and is continuing or, if in the opinion of such
      officer, a Default has occurred and is continuing, a statement as to the
      nature thereof and the action that the Borrower proposes to take with
      respect thereto, and (b) within thirty (30) days after the end of each
      month, a certificate of a Responsible Officer of the Borrower calculating
      the Facilities Credit Base as of the end of such month.

      6.    ADDITION OF NEW SECTION 8.1.4. Section 8.1 of the Credit Agreement
is hereby amended by adding the following new Section 8.1.4 and renumbering
existing Section 8.1.4 as 8.1.5:

            8.1.4. IBNR Reports. Furnish to the Administrative Agent and each
      Lender (a) as soon as available and in any event within thirty (30) days
      after the end of each month, an IBNR Report as of the end of such month,
      certified by a Responsible Officer of the Borrower, and (b) as soon as
      practicable and in any event within forty-five (45) days after the end of
      each Fiscal Quarter of the Borrower ending on or before September 30,
      2002, an IBNR Report as of the end of such Fiscal Quarter, prepared by
      independent public accountants or another third-party consulting
      professional acceptable to the Administrative Agent, certified by a
      Responsible Officer of the Borrower.

      7.    ADDITION OF NEW SECTIONS 8.22, 8.23 AND 8.24. Article 8 of the
Credit Agreement is hereby amended by adding the following new Sections 8.22,
8.23 and 8.24:

            8.22. Field Examination and Report. Permit a field examination of
      the accounts of the Borrower and the Guarantors to be made by the
      Administrative Agent or its designee, at the expense of the Borrower and
      the Guarantors, such that a report with

                                      -6-
<PAGE>
      respect to such accounts (the "Field Examination Report") can be prepared
      and delivered to the Lenders on or before September 28, 2001.

            8.23  IBNR Reserves. Until the end of the Fiscal Year of the
      Borrower and the Guarantors ending December 31, 2002, maintain their
      "incurred but not reported" expense reserves within the ranges recommended
      by the third-party IBNR Reports described in clause (b) of Section 8.1.4.

            8.24. Deposits and Collections. Maintain, and cause their respective
      Subsidiaries to maintain, all of their deposit accounts with the
      Administrative Agent, and in connection therewith the Borrower and the
      Guarantors agree as follows:

                  (a)   The Borrower and the Guarantors will instruct all of
            their respective account debtors to remit all sums owing to the
            Borrower or a Guarantor to a specific "lockbox" account maintained
            with the Administrative Agent, and will take all actions necessary
            to assure that not less than ninety percent (90%) of the aggregate
            dollar amount of all remittances to the Borrower and the Guarantors
            from their account debtors are remitted directly to the lockbox
            account.

                  (b)   The Borrower and the Guarantors hereby grant to the
            Administrative Agent, for the benefit of itself, the Lenders and the
            Issuing Bank, a security interest in all deposit accounts now or
            hereafter maintained with the Administrative Agent, all funds now or
            hereafter on deposit therein and all proceeds thereof, as security
            for their respective Obligations. Upon the occurrence of an Event of
            Default, the Administrative Agent may prevent further withdrawals
            from such deposit accounts by the Borrower and the Guarantors and
            shall have all rights and remedies of a secured party with respect
            thereto.

      8.    AMENDMENT OF SECTION 10.1.1. Section 10.1.1 of the Credit Agreement
is hereby amended to read as follows:

            10.1.1. Minimum Net Worth. Permit Net Worth as of the end of any
      Fiscal Quarter ending on or after September 30, 2001 to be less than the
      sum of (a) ninety percent (90%) of Net Worth as of the end of the Fiscal
      Quarter ended June 30, 2001, plus (b) ninety percent (90%) of cumulative
      Consolidated Net Income for each Fiscal Quarter beginning with the Fiscal
      Quarter ending September 30, 2001, with no decrease for any negative
      Consolidated Net Income during any Fiscal Quarter. It is understood and
      agreed that solely for purposes of calculating compliance with this
      covenant as of any date subsequent to September 30, 2001, Strategic
      Transaction Expenses shall be added to Net Worth to the extent that such
      expenses were deducted in calculating Consolidated Net Income for the
      Fiscal Quarter ending September 30, 2001.

                                      -7-
<PAGE>
      9.    AMENDMENT OF SECTION 10.1.2. Section 10.1.2 of the Credit Agreement
is hereby amended to read as follows:

            10.1.2. Fixed Charge Coverage Ratio. Permit the Fixed Charge
      Coverage Ratio for each of the Fiscal Quarters ending on the dates
      indicated below to exceed the Fixed Charge Coverage Ratio specified for
      such Fiscal Quarter:

<TABLE>
<CAPTION>
               Fiscal Quarter                        Fixed Charge Coverage Ratio
            --------------------------               ---------------------------
<S>                                                  <C>
             September 30, 2001                              1.00 to 1.00
              December 31, 2001                              1.05 to 1.00
               March 31, 2002                                1.05 to 1.00
                June 30, 2002                                1.05 to 1.00
             September 30, 2002                              1.05 to 1.00
      December 31, 2002 and thereafter                       1.25 to 1.00
</TABLE>

      It is understood and agreed that (a) solely for purposes of calculating
      the Fixed Charge Coverage Ratio for the Fiscal Quarter ending September
      30, 2001, the imputed principal amortization component shall be five
      percent (5%) of the aggregate principal balance of the Loans and Letter of
      Credit Liabilities outstanding on September 30, 2001 instead of ten
      percent (10%) of such aggregate principal balance as currently specified
      in the definition of "Fixed Charge Coverage Ratio", and (b) solely for
      purposes of calculating the Fixed Charge Coverage Ratio for the Fiscal
      Quarters ending September 30, 2001 and December 31, 2001, Strategic
      Transaction Expenses shall be added to EBITDA to the extent that such
      expenses were deducted in calculating Consolidated Net Income for the
      Fiscal Quarter ending September 30, 2001.

      10.   AMENDMENT OF SECTION 10.1.3. Section 10.1.3 of the Credit Agreement
is hereby amended to read as follows:

            10.1.3. Leverage Ratio. Permit the Leverage Ratio for each of the
      Fiscal Quarters ending on the dates set forth below to exceed the Leverage
      Ratio specified for such Fiscal Quarter:

<TABLE>
<CAPTION>
               Fiscal Quarter                               Leverage Ratio
            --------------------------               ---------------------------
<S>                                                  <C>
             September 30, 2001                              3.25 to 1.00
              December 31, 2001                              3.15 to 1.00
               March 31, 2002                                3.15 to 1.00
                June 30, 2002                                3.15 to 1.00
             September 30, 2002                              3.00 to 1.00
      December 31, 2002 and thereafter                       2.75 to 1.00
</TABLE>

      It is understood and agreed that (a) solely for purposes of calculating
      the Leverage Ratio for the Fiscal Quarter ending September 30, 2001,
      EBITDA shall be calculated by multiplying EBITDA for such Fiscal Quarter
      by four (4) instead of multiplying EBITDA

                                      -8-
<PAGE>
      for the six (6) month period ending on the last day of such Fiscal Quarter
      by two (2), and (b) solely for purposes of calculating the Leverage Ratio
      for the Fiscal Quarters ending September 30, 2001 and December 31, 2001,
      Strategic Transaction Expenses shall be added to EBITDA to the extent that
      such expenses were deducted in calculating Consolidated Net Income for the
      Fiscal Quarter ending September 30, 2001.

      11.   AMENDMENT OF SECTION 10.1.4. Section 10.1.4 of the Credit Agreement
is hereby amended to read as follows:

            10.1.4. Capital Expenditures. Make Ordinary Capital Expenditures in
      an aggregate amount in excess of $2,000,000 in any one Fiscal Year, or
      make any Reimbursable Capital Expenditure at any time if the aggregate
      unreimbursed amount outstanding in respect of Reimbursable Capital
      Expenditures would exceed the Reimbursable Capital Expenditure Limit.

      12.   ADDITION OF NEW SECTION 10.1.5. Article 10 of the Credit Agreement
is hereby amended by adding the following new Section 10.1.5:

            10.1.5. EBITDA. Permit EBITDA for each of the Fiscal Quarters ending
      on each of the dates set forth below to be less than the EBITDA specified
      for such Fiscal Quarter:

<TABLE>
<CAPTION>
                         Fiscal Quarter                    EBITDA
                       ------------------               -----------
<S>                                                     <C>

                       September 30, 2001               $ 3,800,000
                        December 31, 2001                 3,700,000
                         March 31, 2002                   3,300,000
                          June 30, 2002                   3,100,000
                       September 30, 2002                 3,600,000
</TABLE>

      It is understood and agreed that solely for purposes of calculating
      compliance with this covenant for the Fiscal Quarter ending September 30,
      2001, Strategic Transaction Expenses shall be added to EBITDA to the
      extent that such expenses were deducted in calculating Consolidated Net
      Income for such Fiscal Quarter.

      13.   FEES. In consideration of the agreements of the Lenders set forth
herein, the Borrower agrees to pay to each Lender a fee in an amount equal to
0.25% of such Lender's Commitment. Such fees shall be due and payable
immediately upon the effectiveness of this Amendment as set forth in Section 14
of this Amendment.

      14.   EFFECTIVENESS. This Amendment shall be effective only upon execution
and delivery by the Borrower, the Guarantors, the Administrative Agent, the
Issuing Bank and Requisite Lenders.

      15.   REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND THE GUARANTORS.
As an inducement to the Administrative Agent, the Issuing Bank and the Lenders
to enter into this

                                      -9-
<PAGE>
Amendment, the Borrower and the Guarantors hereby represent and warrant to the
Administrative Agent, the Issuing Bank and the Lenders that, on and as of the
date hereof:

            (a)   the representations and warranties contained in the Credit
      Agreement and the other Loan Documents are true and correct, except for
      (1) representations and warranties that expressly relate to an earlier
      date, which remain true and correct as of said earlier date, and (2)
      representations and warranties that have become untrue or incorrect solely
      because of changes permitted by the terms of the Credit Agreement and the
      other Loan Documents, and

            (b)   no Default or Event of Default other than the Specified
      Defaults has occurred and is continuing.

      16.   EFFECT OF AMENDMENT; CONTINUING EFFECTIVENESS OF CREDIT AGREEMENT
AND LOAN DOCUMENTS.

            (a)   Neither this Amendment nor any other indulgences that may have
      been granted to the Borrower or any of the Guarantors by the
      Administrative Agent, the Issuing Bank or any Lender shall constitute a
      course of dealing or otherwise obligate the Administrative Agent, the
      Issuing Bank or any Lender to modify, expand or extend the agreements
      contained herein, to agree to any other amendments to the Credit Agreement
      or to grant any consent to, waiver of or indulgence with respect to any
      other noncompliance with any provision of the Loan Documents.

            (b)   This Amendment shall constitute a Loan Document for all
      purposes of the Credit Agreement and the other Loan Documents. Any
      noncompliance by the Borrower or any Guarantor with any of the covenants,
      terms, conditions or provisions of this Agreement shall constitute an
      Event of Default. Except to the extent amended hereby, the Credit
      Agreement, the other Loan Documents and all terms, conditions and
      provisions thereof shall continue in full force and effect in all
      respects.

      17.   RELEASE AND WAIVER. The Borrower and the Guarantors hereby
stipulate, acknowledge and agree that they have no claims or causes of action of
any kind whatsoever against the Lenders, the Administrative Agent or the Issuing
Bank. The Borrower and the Guarantors hereby release the Lenders, the
Administrative Agent or the Issuing Bank from any and all claims, causes of
action, demands and liabilities of any kind whatsoever, whether direct or
indirect, fixed or contingent, liquidated or unliquidated, disputed or
undisputed, known or unknown, that the Borrower or the Guarantors may now or
hereafter have relating in any way to any event, circumstance, action or failure
to act on or before the date of this Amendment. The release by the Borrower and
the Guarantors herein, together with the other terms and provisions of this
Amendment, are entered into by Borrower and Guarantors advisedly and without
compulsion, coercion or duress, the Borrower and Guarantors having determined
that this Amendment and all of its terms, conditions and provisions are in the
economic best interests of the Borrower and the Guarantors. The Borrower and the
Guarantors represent that they are entering into this Amendment freely and with
the advice of counsel as to their legal alternatives.

                                      -10-
<PAGE>
      18.   COUNTERPARTS. This Amendment may be executed in multiple
counterparts or copies, each of which shall be deemed an original hereof for all
purposes. One or more counterparts or copies of this Agreement may be executed
by one or more of the parties hereto, and some different counterparts or copies
executed by one or more of the other parties. Each counterpart or copy hereof
executed by any party hereto shall be binding upon the party executing same even
though other parties may execute one or more different counterparts or copies,
and all counterparts or copies hereof so executed shall constitute but one and
the same agreement. Each party hereto, by execution of one or more counterparts
or copies hereof, expressly authorizes and directs any other party hereto to
detach the signature pages and any corresponding acknowledgment, attestation,
witness or similar pages relating thereto from any such counterpart or copy
hereof executed by the authorizing party and affix same to one or more other
identical counterparts or copies hereof so that upon execution of multiple
counterparts or copies hereof by all parties hereto, there shall be one or more
counterparts or copies hereof to which is(are) attached signature pages
containing signatures of all parties hereto and any corresponding
acknowledgment, attestation, witness or similar pages relating thereto.

      19.   MISCELLANEOUS.

            (a)   This Amendment shall be governed by, construed and enforced in
      accordance with the laws of the State of Tennessee, without reference to
      the conflicts or choice of law principles thereof.

            (b)   The headings in this Amendment and the usage herein of defined
      terms are for convenience of reference only, and shall not be construed as
      amplifying, limiting or otherwise affecting the substantive provisions
      hereof.

            (c)   Any reference herein to any instrument, document or agreement,
      by whatever terminology used, shall be deemed to include any and all
      amendments, modifications, supplements, extensions, renewals,
      substitutions and/or replacements thereof as the context may require.

            (d)   When used herein, (1) the singular shall include the plural,
      and vice versa, and the use of the masculine, feminine or neuter gender
      shall include all other genders, as appropriate, (2) "include", "includes"
      and "including" shall be deemed to be followed by "without limitation"
      regardless of whether such words or words of like import in fact follow
      same, and (3) unless the context clearly indicates otherwise, the
      disjunctive "or" shall include the conjunctive "and".

                          [SIGNATURES BEGIN NEXT PAGE]

                                      -11-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.

                  BORROWER:

                  AMERICA SERVICE GROUP INC.
                  a Delaware corporation

                  By: ____________________________________________
                       S. Walker Choppin, Senior Vice President and Chief
                       Financial Officer

                  GUARANTORS:

                  PRISON HEALTH SERVICES, INC.
                  a Delaware corporation

                  By: ____________________________________________
                       S. Walker Choppin, Senior Vice President and Chief
                       Financial Officer

                  PRISON HEALTH SERVICES OF INDIANA, L.L.C.
                  an Indiana limited liability company

                  BY:     PRISON HEALTH SERVICES, INC.
                          a Delaware corporation

                          By: ______________________________________
                              S. Walker Choppin, Senior Vice President and Chief
                              Financial Officer

                  Being the duly authorized General Manager thereof.

                                      -12-
<PAGE>
                  EMSA GOVERNMENT SERVICES, INC.
                  a Florida corporation

                  By: ____________________________________________
                       S. Walker Choppin, Senior Vice President and Chief
                       Financial Officer

                  EMSA CORRECTIONAL CARE, INC.
                  a Florida corporation

                  By: ____________________________________________
                       S. Walker Choppin, Senior Vice President and Chief
                       Financial Officer

                  EMSA MILITARY SERVICES, INC.
                  a Florida corporation

                  By: ____________________________________________
                       S. Walker Choppin, Senior Vice President and Chief
                       Financial Officer

                  EMSA LIMITED PARTNERSHIP
                  a Florida limited partnership

                  BY:     EMSA CORRECTIONAL CARE, INC.
                          a Florida corporation

                          By: ______________________________________
                              S. Walker Choppin, Senior Vice President and
                              Chief Financial Officer

                  Being the duly authorized General Partner thereof.

                                      -13-
<PAGE>
                  CORRECTIONAL HEALTH SERVICES, INC.
                  a New Jersey corporation

                  By: ____________________________________________
                       Jean L. Byassee, Senior Vice President

                  SECURE PHARMACY PLUS, INC.

                  By: ____________________________________________
                       S. Walker Choppin, Senior Vice President and Chief
                       Financial Officer

                        [SIGNATURES CONTINUED NEXT PAGE]

                                      -14-
<PAGE>
                             ADMINISTRATIVE AGENT, LENDER AND
                             ISSUING BANK:

                             BANK OF AMERICA, N.A.

                             By: ____________________________________________

                                 Title: _____________________________________

                             LENDERS:

                             AMSOUTH BANK,
                             as a Lender and as a Co-Agent

                             By: ____________________________________________

                                 Title: _____________________________________

                             HARRIS TRUST AND SAVINGS BANK
                             as a Lender and as a Co-Agent

                             By: ____________________________________________

                                 Title: _____________________________________

                             COMERICA BANK
                             as a Lender

                             By: ____________________________________________

                                 Title: _____________________________________

                               -15-<PAGE>
                                                                    EXHIBIT 10.3

                           WAIVER AND SECOND AMENDMENT
                    TO AMENDED AND RESTATED CREDIT AGREEMENT

        This WAIVER AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (this "Agreement") dated as of November 13, 2001 by and among AMERICA
SERVICE GROUP INC., a Delaware corporation (the "Borrower"), the subsidiaries of
the Borrower who are parties to the Credit Agreement ("Guarantors"), and BANK OF
AMERICA, N.A., a national banking association as administrative agent and
issuing bank ("Agent") for itself, AMSOUTH BANK, HARRIS TRUST AND SAVINGS BANK,
AND COMERICA BANK (collectively the "Lenders") (as defined in the Credit
Agreement described below).

                              W I T N E S S E T H:
                               - - - - - - - - - -

        WHEREAS, the Borrower, the Lenders, and the Agent are parties to a
certain Amended and Restated Credit Agreement dated as of August 1, 2000 as
amended by that Amendment No. 1 dated August 28, 2001 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"; capitalized
terms used herein without definition shall have the meaning ascribed to such
terms in the Credit Agreement);

        WHEREAS, the Borrower is in default under the terms of the Credit
Agreement; and

        WHEREAS, pursuant to the terms and conditions contained herein the
Agent, on behalf of the Lenders, is willing to waive that default;

        NOW THEREFORE, for and in consideration of the mutual covenants
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

        SECTION 1. Waiver. The Borrower acknowledges that it failed to comply
with (i) the Fixed Charge Coverage Ratio, (ii) the Leverage Ratio, and (iii)
EBITDA covenant for the Fiscal Quarter ending September 30, 2001 ("Third Fiscal
Quarter"), all of which are required by Article 10.1 of the Credit Agreement. As
requested by the Borrower, the Lenders hereby waive any Default or Event of
Default caused by such failure of the Borrower to comply with Section 10.1.2,
10.1.3 and 10.1.5 for the Third Fiscal Quarter. The waivers provided herein
shall extend to and cover only the matters expressly described herein, and shall
be effective and limited to the time period specifically provided herein, and
shall not act as or constitute waivers of or consents to any other Defaults or
Events of Default or to any other transaction, act or omission, whether related
or unrelated to the foregoing. Further, said waivers shall not extend to or
affect any obligation, covenant, agreement, Default or Event of Default not
expressly waived hereby.

        SECTION 2. Amendments to Credit Agreement. Effective as of the Effective
Date (as herein defined), the Credit Agreement is hereby amended as follows:

<PAGE>

        (a) Section 2.1.3(b) is hereby amended to provide for an additional
payment reduction of $1,000,000.00, payable on the Effective Date. Such payment
shall be a permanent reduction of the Commitments.

        (b) The definition of "Maturity Date" is amended to provide that
Maturity Date shall mean April 1, 2003, or such earlier date to which the
maturity of the Obligations may be accelerated pursuant to the terms of the
Agreement.

        (c) Notwithstanding any provision to the contrary in the Credit
Agreement as of the Effective Date, the Applicable Base Rate Margin shall be
3.00% and the Applicable Letter of Credit Fee Percentage shall be 4.50%.

        (d) Section 9.5 - Restricted Payments shall be amended to delete all
exceptions except subsection 9.5(a) to the restrictions on payments. Borrower
and Guarantors shall not declare, pay or make, or permit any of their respective
Subsidiaries to declare, pay or make any Restricted Payments.

        (e) LIBOR pricing and borrowing shall not be available to Borrower after
Effective Date. All Loans shall accrue interest prior to an Event of Default at
the Base Rate plus the applicable Base Rate Margin.

            SECTION 3. Additional Permanent Reduction. In addition to the
mandatory reductions of commitments required in Section 2.1.3, the Borrower
additionally agrees to pay 100% of any proceeds received on account of any tax
refund to Agent immediately upon receipt. The tax refund proceeds shall be
applied as a permanent reduction to the Commitments. Borrower expects to receive
a tax refund during the First Fiscal Quarter of 2002.

            SECTION 4. Full Dominion. The following provision shall be added as
a new provision 3.7 - Full Dominion:

        (a) Borrower and Guarantors will, at the Agent's direction, take such
action as the Agent, in its exclusive, reasonable judgment may deem necessary to
enforce collection or performance of the accounts which are Collateral (the
"Accounts"), and Borrower shall by November 30, 2001 direct and arrange (and
cause each of their respective Subsidiaries to direct and arrange), at the sole
cost and expense of the Borrower, for remittances on all Accounts to be made (i)
directly to one or more lockboxes designated by the Agent under the terms of a
lockbox agreement or (ii) in such other manner as the Agent may direct.

        (b) All remittances on all Accounts processed in accordance with this
section and received by the Agent shall be promptly deposited in one or more
Controlled Disbursement Accounts as defined below designated by the Agent,
subject to withdrawal by the Agent only, as provided below. In connection
therewith, the Agent is irrevocably authorized to cause all remittances on all
Accounts and any net proceeds or other collections on any other Collateral
received by the Agent from whatever means, whether pursuant to a lockbox
agreement or

                                       2
<PAGE>

otherwise, to be promptly deposited in such Controlled Disbursement Account(s)
designated by the Agent. All amounts and proceeds (including instruments)
received by any Borrower or any Guarantor in respect of the Accounts shall be
received in trust for the benefit of the Agent for itself and the benefit of the
Lenders, shall be segregated from other funds of Borrower (or such Guarantor, if
applicable) and shall be forthwith paid over to the Agent for itself and the
benefit of the Lenders in the same form as so received (with any necessary
endorsement) to be deposited in the lockbox account, held as cash collateral and
applied as specified in the Credit Agreement.

        (c) All collections or proceeds of Accounts and other Collateral
received by the Agent from the lockbox agreement shall be applied automatically
by the Agent to reduce the outstanding balances of the Loans (first to cost and
expenses, then to interest accrued and due, with the balance to principal),
subject to the continued accrual of interest on the Loans to which such
remittances and payments are applied for one (1) Business Day (or for two (2)
Business Days in the case of remittances and payments received after _________
p.m., Charlotte, North Carolina time) and in any event subject to final
collection in cash of the item deposited.

        (d) For purposes of this section, Controlled Disbursement Account shall
mean any controlled disbursement account or any other accounts designated by
Agent, subject to withdrawal by Agent only, maintained by Borrower or Guarantors
with the Agent or another bank in connection with, and linked to, a lockbox
account.

        (e) Borrower and Guarantors shall disclose to Agent on or before
November 16, 2001, the name, the location and account number of all depository
accounts which are not with Agent. Borrower and Guarantors agree to execute such
further documentation as Agent may reasonably require to implement the
provisions of this section.

            SECTION 5. Effective Date. This Agreement shall be deemed effective
(the "Effective Date") when this Amendment shall have been executed by Borrower
and the Lenders and delivered to the Agent.

            SECTION 6. Additional Financial Reporting. Borrowers and Guarantors
agree to cooperate with the Agent and its professionals to provide such
additional information and report as Agent may request regarding their financial
condition and the status of the Collateral.

            SECTION 7. Representations and Warranties of Borrower. Borrower,
without limiting the representations and warranties provided in the Credit
Agreement, represents and warrants to the Lenders and the Agent as follows:

        (a) The execution, delivery and performance by Borrower of this
Agreement is within Borrower's corporate powers, have been duly authorized by
all necessary corporate action (including any necessary shareholder action) and
do not and will not (i) violate any provision of any law, rule or regulation,
any judgment, order or ruling of any court or governmental agency, the articles
of incorporation or by-laws of Borrower or any indenture, agreement or other
instrument to which Borrower is a party or by which Borrower or any of its
properties is bound

                                       3
<PAGE>

or (ii) be in conflict with, result in a breach of, or constitute with notice or
lapse of time or both a default under any such indenture, agreement or other
instrument.

        (b) This Agreement constitutes the legal, valid and binding obligations
of Borrower, enforceable against Borrower in accordance with their respective
terms.

        (c) No Default or Event of Default, which has not been waived by this
Agreement, has occurred and is continuing as of the Effective Date.

            SECTION 8. Survival. Each of the foregoing representations and
warranties and each of the representations and warranties made in the Credit
Agreement shall be made at and as of the Effective Date. Each of the foregoing
representations and warranties shall constitute a representation and warranty of
Borrower under the Credit Agreement, and it shall be an Event of Default if any
such representation and warranty shall prove to have been incorrect or false in
any material respect at the time when made. Each of the representations and
warranties made under the Credit Agreement (including those made herein) shall
survive and not be waived by the execution and delivery of this Amendment or any
investigation by the Lenders or the Agent.

            SECTION 9. No Waiver, Etc. Except as otherwise provided herein,
Borrower hereby agrees that nothing herein shall constitute a waiver by the
Lenders of any Default or Event of Default, whether known or unknown, which may
exist under the Credit Agreement. Borrower hereby further agrees that no action,
inaction or agreement by the Lenders, including without limitation, any
indulgence, waiver, consent or agreement altering the provisions of the Credit
Agreement which may have occurred with respect to the non-payment of any
obligation during the terms of the Credit Agreement or any portion thereof, or
any other matter relating to the Credit Agreement, shall require or imply any
future indulgence, waiver, or agreement by the Lenders.

            SECTION 10. Release and Waiver. The Borrower and the Guarantors
hereby stipulate, acknowledge and agree that they have no claims or causes of
action of any kind whatsoever against the Lenders, the Administrative Agent or
the Issuing Bank. The Borrower and the Guarantors hereby release the Lenders,
the Administrative Agent and the Issuing Bank from any and all claims, causes of
action, demands and liabilities of any kind whatsoever, whether direct or
indirect, fixed or contingent, liquidated or unliquidated, disputed or
undisputed, known or unknown, that the Borrower or the Guarantors may now or
hereafter have relating in any way to any event, circumstance, action or failure
to act on or before the date of this Amendment. The release by the Borrower and
the Guarantors herein, together with the other terms and provisions of this
Amendment, are entered into by Borrower and Guarantors advisedly and without
compulsion, coercion or duress, the Borrower and Guarantors having determined
that this Amendment and all its terms, conditions and provisions are in the
economic best interests of the Borrower and Guarantors. The Borrower and
Guarantors represent that they are entering into this Amendment freely and with
the advice of counsel as to their legal alternatives.

                                       4
<PAGE>

            SECTION 11. Affirmation of Covenants. Borrower hereby affirms and
restates as of the date hereof all covenants set forth in the Credit Agreement
and the other Loan Documents shall remain in full force and effect, and the
parties hereto do expressly ratify and confirm the Credit Agreement as amended
herein. All future references to the Credit Agreement shall be deemed to refer
to the Credit Agreement as amended hereby.

            SECTION 12. Ratification of Credit Agreement. Except as expressly
amended herein, all terms, covenants and conditions of the Credit Agreement and
the other Loan Documents shall remain in full force and effect, and the parties
hereto do expressly ratify and confirm the Credit Agreement as amended herein.
All future references to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.

            SECTION 13. Binding Nature. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective heirs, successors,
successors-in-titles, and assigns.

            SECTION 14. Waiver Fee. Borrower agrees to pay to Agent on behalf of
Lenders a fee of $65,000 simultaneously with the execution of this Agreement.

            SECTION 15. Costs, Expenses and Taxes. Borrower agrees to pay
within five (5) Business Days of the date of the Agent's demand all reasonable
costs and expenses of the Agent in connection with the preparation, execution
and delivery of this Agreement and the other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of professionals for the Agent with respect thereto and
with respect to advising the Agent as to its rights and responsibilities
hereunder and thereunder. In addition, Borrower shall pay any and all stamp and
other taxes payable or determined to be payable in connection with the execution
and delivery of this Agreement and the other instruments and documents to be
delivered hereunder, and agrees to save the Agent and each Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes.

            SECTION 16. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Tennessee.

            SECTION 17. Entire Understanding. This Agreement sets forth the
entire understanding of the parties with respect to the matters set forth
herein, and shall supercede any prior negotiations or agreements, whether
written or oral, with respect thereto.

            SECTION 18. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts
and may be delivered by telecopier. Each counterpart so executed and delivered
shall be deemed an original and all of which taken together shall constitute but
one and the same instrument.

                                       5
<PAGE>

        IN WITNESS WHEREOF, the parties have executed this Waiver and Second
Amendment to the Amended and Restated Credit Agreement through their authorized
officers as of the date first written above.

                                       BORROWER:

                                       AMERICA SERVICE GROUP INC.

                                       By:________________________________
                                       Name:
                                       Title:

                                       GUARANTORS:

                                       PRISON HEALTH SERVICES INC.,
                                       A DELAWARE CORPORATION

                                       By:________________________________
                                       Name:
                                       Title:

                                       PRISON HEALTH SERVICES OF
                                       INDIANA, LLC, AN INDIANA LIMITED
                                       LIABILITY COMPANY

                                       By:________________________________
                                                Prison Health Services Inc., a
                                                Delaware Corporation being the
                                                duly authorized General Manager
                                                thereof

                                       EMSA GOVERNMENT SERVICES INC.,
                                       A FLORIDA CORPORATION

                                       By:________________________________
                                       Name:
                                       Title:

                                       6
<PAGE>

                                       EMSA CORRECTIONAL CARE, INC.,
                                       A FLORIDA CORPORATION

                                       By:________________________________
                                       Name:
                                       Title:

                                       EMSA MILITARY SERVICES, INC.,
                                       A FLORIDA CORPORATION

                                       By:________________________________
                                       Name:
                                       Title:

                                       EMSA LIMITED PARTNERSHIP,
                                       A FLORIDA CORPORATION

                                       By:________________________________
                                                EMSA Correctional Care, Inc.,
                                                a Florida Corporation being the
                                                duly authorized General Partner
                                                thereof

                                       CORRECTIONAL HEALTH SERVICES, INC.,
                                       A NEW JERSEY CORPORATION

                                       By:________________________________
                                       Name:
                                       Title:

                 [SIGNATURE PAGE TO WAIVER AND SECOND AMENDMENT
                    TO AMENDED AND RESTATED CREDIT AGREEMENT]

                                       7
<PAGE>

                                       BANK OF AMERICA, N.A., AS A LENDER
                                       AND AS AGENT

                                       By:________________________________
                                       Name:
                                       Title:

                 [SIGNATURE PAGE TO WAIVER AND SECOND AMENDMENT
                    TO AMENDED AND RESTATED CREDIT AGREEMENT]

                                       8
<PAGE>

                                       HARRIS BANK AND TRUST COMPANY,
                                       AS A LENDER AND CO-AGENT

                                       By:________________________________
                                       Name:
                                       Title:

                 [SIGNATURE PAGE TO WAIVER AND SECOND AMENDMENT
                    TO AMENDED AND RESTATED CREDIT AGREEMENT]

                                       9
<PAGE>

                                       COMERICA BANK, AS A LENDER

                                       By:________________________________
                                       Name:
                                       Title:

                 [SIGNATURE PAGE TO WAIVER AND SECOND AMENDMENT
                    TO AMENDED AND RESTATED CREDIT AGREEMENT]

                                       10
<PAGE>

                                       AMSOUTH BANK, AS  LENDER AND
                                       CO-AGENT

                                       By:________________________________
                                       Name:
                                       Title:

                 [SIGNATURE PAGE TO WAIVER AND SECOND AMENDMENT
                    TO AMENDED AND RESTATED CREDIT AGREEMENT]

                                       11

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