Document:

<PAGE>   1
                                                                    EXHIBIT 10.1

                               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 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.

<PAGE>   2
             "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>
                                                       Eligible      Eligible
                               Period                  Accounts      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 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.

                                      -2-
<PAGE>   3
         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>

                   (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

                                      -3-
<PAGE>   4

            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. 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.

                                      -4-
<PAGE>   5

         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

                                      -5-
<PAGE>   6

         designee, at the expense of the Borrower and the Guarantors, such that
         a report with 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.

                                      -6-
<PAGE>   7

         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>
                                                               Fixed Charge
                  Fiscal Quarter                              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

                                      -7-
<PAGE>   8

         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

                                      -8-
<PAGE>   9

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.

                                      -9-
<PAGE>   10

         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]

                                      -10-
<PAGE>   11

          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/ S. W. Choppin
                                        ----------------------------------------
                                        S. Walker Choppin, Senior Vice President
                                        and Chief Financial Officer

                                    GUARANTORS:

                                    PRISON HEALTH SERVICES, INC.
                                    a Delaware corporation

                                    By: /s/ S. W. Choppin
                                        ----------------------------------------
                                        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/ S. W. Choppin
                                            ------------------------------------
                                            S. Walker Choppin, Senior Vice
                                            President and Chief Financial
                                            Officer

                                    Being the duly authorized General Manager
                                    thereof.

                                      -11-
<PAGE>   12

                                    EMSA GOVERNMENT SERVICES, INC.
                                    a Florida corporation

                                    By: /s/ S. W. Choppin
                                        ----------------------------------------
                                        S. Walker Choppin, Senior Vice President
                                        and Chief Financial Officer

                                    EMSA CORRECTIONAL CARE, INC.
                                    a Florida corporation

                                    By: /s/ S. W. Choppin
                                        ----------------------------------------
                                        S. Walker Choppin, Senior Vice President
                                        and Chief Financial Officer

                                    EMSA MILITARY SERVICES, INC.
                                    a Florida corporation

                                    By: /s/ S. W. Choppin
                                        ----------------------------------------
                                        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/ S. W. Choppin
                                            ------------------------------------
                                            S. Walker Choppin, Senior Vice
                                            President and Chief Financial
                                            Officer

                                    Being the duly authorized General
                                    Partner thereof.

                                      -12-
<PAGE>   13

                                    CORRECTIONAL HEALTH SERVICES, INC.
                                    a New Jersey corporation

                                    By: /s/ Jean L. Byassee
                                        ----------------------------------------
                                        Jean L. Byassee, Senior Vice President

                                    SECURE PHARMACY PLUS, INC.

                                    By: /s/ S. W. Choppin
                                        ----------------------------------------
                                        S. Walker Choppin, Senior Vice President
                                        and Chief Financial Officer

                        [SIGNATURES CONTINUED NEXT PAGE]

                                      -13-
<PAGE>   14

                                    ADMINISTRATIVE AGENT, LENDER AND
                                    ISSUING BANK:

                                    BANK OF AMERICA, N.A.

                                    By: /s/ Elizabeth L. Knox
                                        ----------------------------------------
                                        Title: Senior Vice President

                                    LENDERS:

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

                                    By: /s/ William H. Berrell
                                        ----------------------------------------
                                        Title: Senior Vice President

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

                                    By: /s/ Gloria Compean-Endicott
                                        ----------------------------------------
                                        Title: Vice President

                                    COMERICA BANK
                                    as a Lender

                                    By: Colleen M. Murphy
                                        ----------------------------------------
                                        Title: Vice President

                                      -14-<PAGE>   1
                                                                    EXHIBIT 10.1

                                (WCO LETTERHEAD)

FOR IMMEDIATE RELEASE                        CONTACT:
                                             Investor Relations: Mark E. Patten
August 20, 2001                              Mark@wconet.com
                                             (407) 240-8999 ext. 222

                 WCO ANNOUNCES FILING FOR BANKRUPTCY PROTECTION
                                UNDER CHAPTER 11

(Orlando, FL) August 20, 2001 - World Commerce Online, Inc. (OTCBB: WCOL), a
leading provider in web-enabled technology business solutions for the global
perishable and consumer packaged goods industries, filed today for protection
under Chapter 11 of the Bankruptcy Code.

The Company has not attained sufficient cash flow from operations to fund the
on-going business and additional bridge loan financing that heretofore had been
secured during the latter half of 2000 and the first seven months of 2001 was
not available. Consequently, the Company was not able to fund the current
operating costs of the business or meet the near term obligations of existing
unsecured creditors.

Joseph H. Dugan, President and Chief Executive Officer of WCO, said, " the
decision to file for Chapter 11 was made after long and careful deliberation.
The decision is designed to preserve the value of WCO's assets for its secured
and unsecured creditors and provide WCO with the ability to achieve its business
objectives and thereby allow for full or partial repayment of WCO's legitimate
obligations."

<PAGE>   2

WCO will manage its operations as a debtor-in-possession and it hopes to present
a viable reorganization and restructure plan by early fall of 2001. WCO will
continue to operate while seeking to complete debtor-in-possession financing. It
is the goal of WCO to emerge from Chapter 11 as a financially stable and
operationally sound organization.

ABOUT WCO

Founded in 1994, WCO (OTCBB: WCOL - news) is a technology company that enables
businesses in the perishable products industries, consumer packaged goods
industry and beyond with supply chain e-commerce business solutions. With its
Licensed and Hosted solutions, WCO provides its customers with access to global
markets while providing maximum security and data integrity and complete control
over sensitive business information. WCO's FreshPlex Technologies(TM) currently
powers Private and Branded Trading Solutions in the global perishable products
consumer package goods industries. WCO is headquartered in Orlando, Florida. For
more information about WCO and its e-commerce business solutions, visit our
corporate web site: www.wconet.com.

This release is intended as a forward-looking statement within the meaning of
the Private Securities Litigation Reform Act of 1995. The risks and
uncertainties that may affect the operations, performance development and
results of the Company's business include but are not limited to (i) The ability
to provide e-commerce technology in the future, (ii) Unexpected changes in the
e-commerce/internet market, (iii) The success of the Company's expansion and
sales and marketing strategies (iv) Competition within the e-commerce internet
market (v) The ability of the Company to continue to finance its long-term
strategy and expansion (vi) The ability of the Company to motivate and retain
the services of its key personnel and hire additional qualified personnel to
meet evolving staffing needs.

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