First Amendment To Amended And Restated Revolving Credit And Security Agreement

FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING
CREDIT AND SECURITY AGREEMENT


THIS FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT, dated as of March 14, 2006 (this "FIRST AMENDMENT"), is entered into by and between AMERICA SERVICE GROUP INC. ("ASG") a Delaware corporation, PRISON HEALTH SERVICES, INC. ("PHS"), a Delaware corporation, EMSA LIMITED PARTNERSHIP ("EMSA LP"), a Florida limited partnership, PRISON HEALTH SERVICES OF INDIANA, L.L.C. ("PHS INDIANA"), an Indiana limited liability company, SECURE PHARMACY PLUS, LLC ("SPP"), a Tennessee limited liability company, and CORRECTIONAL HEALTH SERVICES, LLC, ("CHS") a New Jersey limited liability company (ASG, PHS, EMSA LP, PHS INDIANA, SPP and CHS) are hereinafter referred to, individually and collectively as the "BORROWER"), CAPITALSOURCE FINANCE LLC, a Delaware limited liability company ("CAPITALSOURCE"), as administrative agent and collateral agent for Lenders (in such capacities, the "AGENT"), and the Lenders party hereto.


RECITALS


A. Pursuant to that certain Amended and Restated Revolving Credit and Security Agreement dated as of October 31, 2005, (as amended, and as further amended, supplemented, or otherwise modified from time to time, the "LOAN AGREEMENT") and subject to the terms and conditions set forth therein, Lender has agreed to make available to Borrower the Revolving Facility.


B. The parties hereto desire to enter into this First Amendment to amend the Loan Agreement in certain respects as provided herein.


NOW, THEREFORE, in consideration of the foregoing, the terms and conditions, premises and other mutual covenants set forth in this First Amendment, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Lender and Borrower hereby agree as follows:


SECTION 1. DEFINITIONS. Unless otherwise defined herein, all capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Loan Agreement.


SECTION 2. AMENDMENTS TO LOAN AGREEMENT. The sections, definitions, annexes and exhibits of and to the Loan Agreement referenced and set forth on Annex A to this First Amendment hereby are amended, or amended and restated, as applicable, to read as set forth on such Annex A, which annex is incorporated herein and made a part hereof and of the Loan Agreement.


SECTION 3. REPRESENTATIONS AND WARRANTIES.


(a) Notwithstanding any other provision of this First Amendment, each Borrower individually hereby (i) confirms and makes all of the representations and warranties set forth in the Loan Agreement and other Loan Documents with respect to such Borrower and this First Amendment as of the date hereof and as of the Effective Date and confirms that they are true and correct, (ii) represents and warrants that they are Affiliates of each other, and (iii) specifically represents and warrants to Lender that it has good and marketable title to all of its respective Collateral, free and clear of any Lien or security interest in favor of any other Person (other than Permitted Liens).


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


SECTION 4. EXPENSES. Borrower shall pay all costs and expenses incurred by Lender or any of its Affiliates, including, without limitation, documentation and diligence fees and expenses, all search, audit, appraisal, recording, professional and filing fees and expenses and all other out-of-pocket charges and expenses (including, without limitation, UCC and judgment and tax lien searches and UCC filings and fees for post-Closing UCC and judgment and tax lien searches) and reasonable attorneys' fees and expenses, in connection with entering into, negotiating, preparing, reviewing and executing this First Amendment contemplated hereby and all related agreements, documents and instruments, including, without limitation, the UCC Financing Statements and searches required hereunder and under the Loan Agreement, and all of the same may be charged to Borrower's account and shall be part of the Obligations. If Lender or any of its Affiliates uses in-house counsel for any of the purposes set forth above Borrower expressly agrees that its Obligations include reasonable charges for such work commensurate with the fees that would otherwise be charged by outside legal counsel selected by Lender or such Affiliate in its sole discretion for the work performed.


SECTION 5. EFFECT ON THE LOAN AGREEMENT. Upon the effectiveness of this First Amendment, (i) each reference in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of similar import shall mean and be a reference to the Loan Agreement as amended by this First Amendment, and (ii) each reference in any other Loan Document to the "Loan ...