SECTION 1 DEFINITIONS

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EXHIBIT 10.11

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT ("Agreement") is dated as of December
30, 1996 by and between DVI Business Credit Corporation, a Delaware corporation
("Lender"), and America HealthChoice, Inc., a New York corporation; Total
Medical Diagnosis, Inc., a Texas corporation, AHC Physicians Corporation, Inc.,
a Texas corporation, United Chiropractic Clinic Uptown, Inc., a Louisiana
corporation; New Orleans East Chiropractic Clinic, Inc., a Louisiana
corporation, AHC Physicians Corporation, Inc., a Georgia corporation,
Nationwide Sports & Injury, Inc., a Texas corporation, AHC Chiropractic
Clinics, Inc., a Texas corporation (collectively, herein "Borrower").

SECTION 1

DEFINITIONS

SECTION 1.1. SPECIFIC DEFINITIONS. The following definitions
shall apply:

(a) "Account Debtors" shall mean Borrower's customers and
all other persons who are obligated or indebted to Borrower in any manner,
whether directly or indirectly, primarily or secondarily, contingently or
otherwise, with respect to Accounts.

(b) "Accounts" shall mean all accounts, accounts
receivable, monies and debt obligations in any form owing to Borrower (whether
arising in connection with contracts, contract rights, instruments, general
intangibles or chattel paper) arising out of the rendition of services by
Borrower whether or not earned by performance; all deposit accounts, credit
insurance, guaranties, letters of credit, advises of credit and other security
for any of the above; Borrower's Books relating to any of the foregoing.

(d) "Borrower's Books" shall mean all of Borrower's books
and records including but not limited to: minute books, ledgers; records
indicating, summarizing or evidencing Borrower's assets, liabilities and the
Accounts; all information relating to Borrower's business operations or
financial condition; and all computer programs, disk or tape files, printouts,
runs and other computer-prepared information and the equipment containing such
information; provided, however, that confidential patient records shall not be
included therein, except to the extent otherwise provided by law.

(e) "Prime Rate" shall mean the rate of interest
announced publicly by Bank of America from time to time as its prime rate.

(f) "Borrowing Base" shall mean, on the date of
determination thereof, an amount equal to the sum of eighty percent (80%) of
the Net Collectible Value for each type of Eligible Account; provided, however,
that workers compensation lien and personal injury claims may never exceed
fifty percent (50%) of the Borrowing Base.

(g) "Cash Flow Ratio": as of any day, a fraction (a) the
numerator of which is equal to (i) the aggregate collections received during
the two immediately preceding calendar months in respect of Eligible accounts
receivable divided by (ii) 2.0 and (b) the denominator of which is an amount
equal

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to the average daily aggregate NCV of Eligible accounts receivable during such
two immediately preceding calendar months.

(h) "Closing Date" shall mean the date of the first
Advance of the Loan.

(i) "Collateral" shall have the meaning specified in
Section 3.1 hereof.

(j) "Commitment Amount" shall have the meaning set forth
in Section 2.1.

(k) "Distribution" shall mean, with respect to any shares
of capital stock or any warrant or right to acquire shares of capital stock or
any other equity security, (i) the retirement, redemption, purchase or other
acquisition, directly or indirectly, for value by the issuer of any such
security, except to the extent that the consideration therefor consists of
shares of stock, (ii) the declaration or (without duplication) payment of any
dividend in cash, directly or indirectly, on or with respect to any such
security, (iii) any investment in the holder of five percent (5%) or more of
any such security if a purpose of such investment is to avoid characterization
of the transaction as a Distribution and (iv) any other cash payment
constituting a distribution under applicable laws with respect to such
security.

(l) "Eligible Accounts" shall mean Borrower's accounts
receivable from commercial insurance, Medicare, Medicaid, HMO/PPO, workers'
compensation approved and lien and personal injury claims (collectively
referred to as "Retail Accounts"), which have been due and payable for one
hundred fifty (150) or fewer days from the date of service.

(m) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and all references to sections thereof shall include
such sections and any predecessor provisions thereto, including any rules or
regulations issued in connection therewith.

(n) "Event of Default" shall have the meaning specified
in Section 10 hereof.

(o) "Fair Value" means (i) with respect to Borrower's
assets, if Net Fair Value is being determined as of a date on or prior to the
first anniversary of the date hereof, the lower of (1) the value of such assets
as determined in accordance with Bankruptcy Code Section 5487 or (2) the value
of such assets as determined in accordance with the state fraudulent conveyance
or fraudulent transfer law that would be applicable to the determination
whether the obligations and/or the security interest relating thereto would
constitute a fraudulent conveyance or a fraudulent transfer (the "Applicable
State Law"), (ii) with respect to Borrower's assets, if Net Fair Value is being
determined as of a date after the first anniversary of the date hereof, the
value of such assets as determined in accordance with the Applicable State Law,
(iii) with respect to Borrower's liabilities, if Net Fair Value is being
determined as of a date on or prior to the first anniversary of the date
hereof, the lower of (1) the value of such liabilities as determined in
accordance with Bankruptcy Code Section 548 or (2) the value of such
liabilities as determined in accordance with the Applicable State Law, and (iv)
with respect to Borrower's liabilities, if Net Fair Value is being determined
as of a date after the first anniversary of the date hereof, the value of such
liabilities as determined in accordance with the Applicable State Law.

(p) "GAAP" means generally accepted accounting principles
set forth in the opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in statements of the Financial
Accounting Standards Board, consistently applied.

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(q) "Governmental Authority" shall mean any governmental
or political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality thereof, or any court, tribunal,
grand jury or arbitrator, in any case whether foreign or domestic.

(r) "Health Care Laws" shall mean all federal, state and
local laws specifically relating to health care providers and health care
services, including, but not limited to, Section 1877(a) of the Social Security
Act as amended by the Omnibus Budget Reconciliation Act of 1993, 42 USC Section
1395nn.

(s) "Indebtedness" of a Person shall mean (i) all items
(except items of capital stock, capital or paid-in surplus or of retained
earnings) which, in accordance with GAAP, would be included in determining
total liabilities as shown on the liability side of the balance sheet of such
Person as of the date as of which Indebtedness is to be determined, including
any lease which, in accordance with GAAP would constitute indebtedness; (ii)
all indebtedness secured by any mortgage, pledge, security, lien or conditional
sale or other title retention agreement to which any property or asset owned or
held by such Person is subject, whether or not the indebtedness secured thereby
shall have been assumed; and (iii) all indebtedness of others which such Person
has directly or indirectly guaranteed, endorsed (otherwise than for the
collection or deposit in the ordinary course of business), discounted or sold
with recourse or agreed (contingently or otherwise) to purchase or repurchase
or otherwise acquire, or in respect of which such Person has agreed to supply
or advance funds (whether by way of loan, stock or equity purchase, capital
contribution or otherwise) or otherwise to become directly or indirectly
liable.

(t) "Lender Expenses" shall mean (i) all reasonable costs
or expenses (including, without limitation, taxes and insurance premiums)
required to be paid by Borrower under this Agreement or under any of the other
Loan Documents that are paid or advanced by Lender; (ii) filing, recording,
publication and search fees paid or incurred by Lender in connection with
Lender's transaction with Borrower; (iii) reasonable costs and expenses
incurred by Lender to correct any Event of Default or enforce any provision of
the Loan Documents or in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, and preparing for sale or advertising
to sell the Collateral, whether or not a sale is consummated, after the
occurrence of an Event of Default; (iv) reasonable costs and expenses of suit
incurred by Lender in enforcing or defending the Loan Documents or any portion
thereof; (v) reasonable costs and expenses incurred by Lender to convert any
data submitted to Lender by Borrower to an acceptable form; and (vi) Lender's
reasonable attorney fees and expenses incurred (before or after execution of
this Agreement) in advising Lender with respect to, or in structuring,
drafting, reviewing, negotiating, amending, terminating, enforcing, defending
or otherwise concerning, the Loan Documents or any portion thereof,
irrespective of whether suit is brought.

(u) "Lien" shall mean any security interest, mortgage,
pledge, assignment, lien or other encumbrance of any kind, including any
interest of a vendor under a conditional sale contract or consignment and any
interest of a lessor under a capital lease.

(v) "Loan" shall mean each loan or any other loan or
loans made by Lender to Borrower pursuant to this Agreement.

(w) "Loan Availability" shall mean the lesser of (a) the
Commitment Amount or (b) the Borrowing Base minus the aggregate Advances and
other Obligations outstanding under this Agreement.

(x) "Loan Documents" shall mean (i) this Agreement; (ii)
the Note; (iii) any other agreements or documents hereafter delivered to secure
repayment of the Loan; (iv) the Lock Box

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Agreement and (v) any other certificates, documents, instruments, or financing
statements delivered by Borrower to Lender pursuant to the terms of this
Agreement.

(y) "Net Collectible Percentage" shall mean the
percentages described on Exhibit A attached hereto. The Net Collectible
Percentage may change from time to time in Lender's sole and absolute
discretion, written notification of which shall be given to Borrower by Lender.

(z) "Net Collectible Value" shall mean, for each type of
Eligible Account, the Net Collectible Percentage times the aggregate current
outstanding amount for such type of Eligible Account.

(aa) "Net Fair Value" the amount by which the Fair Value
of Borrower's assets exceeds the Fair Value of Borrower's liabilities
(including contingent liabilities).

(bb) "Note" shall mean the Secured Promissory Note
executed by Borrower pursuant to the terms of this Agreement.

(cc) "Obligations" means (1) all obligations (monetary or
otherwise) of Borrower arising under or in connection with this Agreement, the
Note and all other Loan Documents.

(dd) "Permitted Liens" shall mean (i) Liens for property
taxes and assessments or governmental charges or levies and Liens securing
claims or demands of mechanics and materialmen, provided that payment thereof
is not yet due or is being contested as permitted in this Agreement; (ii) Liens
of or resulting from any judgment or award, the time for the appeal or petition
for rehearing of which has not expired, or in respect of which Borrower is in
good faith prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review has been
secured; (iii) Liens and priority claims incidental to the ordinary course
conduct of business or the ownership of properties and assets (including
warehouse's and attorney's Liens and statutory landlord's Liens); deposits,
pledges or Liens to secure the performance of bids, tenders, or trade
contracts, or to secure statutory obligations; and surety or appeal bonds or
other Liens of like general nature incurred in the ordinary course of business
and not in connection with the borrowing of money; provided that in each case
the obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings; and further provided that any
such warehouse's or statutory landlord's Liens have been subordinated to the
Liens of Lender in a manner satisfactory to Lender; and (iv) Liens existing on
the date of this Agreement that secure Indebtedness of Borrower outstanding on
such date and that are disclosed on Schedule 1.1 hereto;

(ee) "Person" shall mean an individual corporation,
partnership, limited liability company, trust, unincorporated association,
joint venture, joint-stock company, government (including political
subdivisions), Governmental Authority or any other entity.

(ff) "Proceeds" shall mean all proceeds and products of
Collateral and documents covering Collateral; all property received wholly or
partly in trade or exchange for Collateral; all claims against third parties
arising out of damage, destruction or decrease in value of the Collateral; all
leases of Collateral; and all rents, revenues, issues, profits and proceeds
arising from the sale, lease, license, encumbrance, collection or any other
temporary or permanent disposition of the Collateral or any interest therein.

(gg) "Subordinate Obligations" shall mean all Indebtedness
of Borrower subordinated to the Obligations pursuant to subordination and/or
intercreditor agreements in form satisfactory to Lender.

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(hh) "Termination Date" shall mean the last day of any
term as to which a written notice of non-renewal pursuant to Section 2.7 has
been received or, in the case of a termination due to a prepayment under
Section 2.7, the date of such prepayment.

(ii) "Unmatured Default" shall mean any event or condition
that, with notice, passage of time, or a determination by Lender or any
combination of the foregoing would constitute an Event of Default.

SECTION 1.2. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
UNIFORM COMMERCIAL CODE. All financial terms used in this Agreement, other
than those defined in this Section 1, have the meanings accorded to them under
GAAP. All other terms used in this Agreement, other than those defined in this
Section 1, have the meanings accorded to them in the Uniform Commercial Code as
enacted any applicable jurisdiction.

SECTION 1.3. CONSTRUCTION

(a) Unless the context of this Agreement clearly requires
otherwise, the plural includes the singular, the singular includes the plural,
the part includes the whole, "including" is not limiting, and "or" has the
inclusive meaning of the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder" and other similar terms in this Agreement refer to this
Agreement as a whole and not exclusively to any particular provision of this
Agreement.

(b) Neither this Agreement nor any uncertainty or
ambiguity shall be construed or resolved against Lender or Borrower, whether
under any rule of construction or otherwise. On the contrary, this Agreement
has been reviewed by each of the parties and its counsel and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish the purposes and intentions of all parties hereto fairly.

SECTION 2

LOAN

SECTION 2.1. THE LOAN. Subject to the terms and conditions
and relying on the representations and warranties set forth herein, Lender
agrees to make Advances to Borrower from time to time in an aggregate amount
not to exceed the lesser of (i) Two Million and no/100 Dollars ($2,000,000.00)
(the "Commitment Amount"), or (ii) the Borrowing Base. Within the limits of
the Loan Availability, Borrower may borrow, make repayments and reborrow
pursuant to Section 2.4. If, at any time, the aggregate Advances and other
Obligations outstanding exceed the then Loan Availability, then Borrower shall
pay to Lender a sum sufficient to reduce the Advances and other Obligations
outstanding to an amount not greater than the Loan Availability. Lender's
commitment to make Advances shall expire, and the amount of the Loan then
outstanding shall mature and be repaid by Borrower, without further action on
the part of Lender, on the Termination Date.

SECTION 2.2. NOTE. All Loans made by the Lender under this
Agreement shall be evidenced by, and repaid with interest in accordance with, a
single promissory note of Borrower in substantially the form of Exhibit 2.02
duly completed, in the original principal amount equal to the initial
Commitment Amount, date the Closing Date, payable to the Lender and maturing as
to principal on the Termination Date (the "Note"). The amount of each Advance
and payment of principal amount received by the Lender shall be recorded in the
books and records of the Lender, which books and records shall, in the absence
of manifest error, be conclusive as to the outstanding balance of and other
information

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related to the Loan. Lender shall be entitled at any time to endorse on a
schedule attached to the Note the amount and type of each Advance and
information relating thereto.

SECTION 2.3. THE BORROWING BASE. On no less than a monthly
basis the Borrowing Base will be recalculated by adding monthly xxxxxxxx to the
prior month's Eligible Accounts and subtracting deposits and adjustments, if
applicable, and then multiplying this amount by the Net Collectible Percentage.
The Borrowing Base shall be calculated on the basis of the reports delivered to
Lender pursuant to Section 5.4.

SECTION 2.4. NOTICE OF BORROWING. Whenever Borrower desires
to borrow under Section 2.1, Borrower shall deliver to Lender a Drawdown
Request Form, in a form reasonably satisfactory to Lender, signed by an
authorized officer no later than 2:00 p.m. Pacific Standard Time at least one
(1) business day in advance of the proposed funding date. The Drawdown Request
Form shall specify (i) the funding date (which shall be a business day) with
respect to the requested Loan and (ii) the amount of the proposed Advance.

SECTION 2.5. USE OF PROCEEDS. The proceeds of the Loan shall
be used by Borrower to provide working capital.

SECTION 2.6. LOAN REPAYMENT VIA BLOCKED/SERVICER ACCOUNT.
Upon the execution hereof, Borrower shall become a party to the Blocked Account
Agreement which provides for the receipt and processing of Account payments.
Borrower shall, on a daily basis, irrevocably direct/deposit all Account
payments to an account established in Lender's name and control. The Blocked
Account provides for such accounts to be (i) at a financial institution
acceptable to Lender, and (ii) governed by terms and conditions acceptable to
Lender. Deposits (net of fees) shall be applied to reduce the Loan balance
including Advances, interest, fees, all applicable charges and other payments,
if applicable, within 24 hours. Deposits/receipts will reduce the Borrowing
Base in accordance with Section 2.3 above. Any receipts (net of such
servicer's fees) remaining after all such payments to Lender will be paid to
Borrower within 24 hours of receipt. Borrower shall bear all charges for
establishing and maintaining the post office box accounts and all bank charges
for such deposit accounts. Lender shall deduct from the deposit accounts all
sums Borrower owes to it hereunder, including fees, interest, reimbursements
and principal payments. Any obligations not paid by such deduction shall be
satisfied by direct payment to Lender at 0000 XxxXxxxxx Xxxx., Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000. Any amounts hereunder not paid as agreed
shall be assessed a late payment penalty of five percent (5%).

SECTION 2.7. TERM OF AGREEMENT; PREPAYMENT. The Term of this
Agreement is two (2) years. Provided that no Event of Default or any Unmatured
Event of Default exists, Borrower may terminate this Agreement provided that it
pays to Lender an amount equal to two and one half percent (2.5%) f the
Commitment Amount if canceled in year 1 of the initial term; and one and one
half percent (1.5%) of the Commitment Amount if canceled in year 2. This
Agreement shall be renewed for consecutive one (1) year terms unless this
Agreement is terminated, effective as of the last day of a term, by written
notice by Lender or Borrower no later than thirty (30) days before the
expiration of such term. All of lender's obligations, responsibilities and
duties shall cease upon the date of termination of this Agreement, except for
its obligation to remit excess receipts from the lock box deposit accounts in
accordance with the terms of this Agreement.

SECTION 2.8. LENDER'S FEES. Upon execution hereof, Lender
shall be entitled to an origination fee equal to one and one half percent
(1.5%) of $1,500,000, less $10,000.00 currently on deposit, plus one and one
half percent (1.5%) of $500,000 upon the Borrowing base availability first
exceeding $1,500,000. Increases to the Commitment Amount during the term will
be charged on the

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incremental increase at the same origination percentage. On or before the
first day of each month Borrower shall pay Lender a monthly maintenance fee of
One Thousand Two Hundred Seventy-Five and no/100 Dollars ($1,275.00). On or
before the first day of each month Borrower shall pay Lender an annual
unutilized loan fee of equal to (.5%) of the difference between the Commitment
Amount and the average outstanding Loan amount as of the previous month;
provided however, that such unutilized loan fee shall not exceed $1,000 per
month. Lender's fees will be deducted, when due, directly from receipts from
accounts receivable deposited in accordance with Section 2.6.

SECTION 2.9. INTEREST ON THE LOANS. All Advances shall bear
interest on the unpaid principal amount thereof from the date made until paid
in full at a fluctuating rate equal to the Prime Rate plus three percent (3%).
Interest shall be payable monthly in arrears on the first day of each month for
the preceding month. Interest shall be calculated on the basis of a year of
360 days, but for the actual number of days elapsed. Interest accrued but not
paid pursuant to Section 2.6 shall be treated as an Advance if not otherwise
paid within five (5) days of the end of the month in which it accrues.

SECTION 2.10. CONDITIONS TO THE CLOSING. Lender's obligation
to make the initial Advance hereunder on the Closing Date is subject to
Lender's determination that Borrower as of the date of the Advance has
satisfied, and continues to satisfy, the following conditions:

(a) The representations and warranties set forth in this
Agreement and in the other Loan Documents shall be true and correct on and as
of the ate hereof and shall be true and correct in all material respects as of
the Closing Date and Borrower shall have performed all obligations which were
to have been performed by it hereunder.

(b) Borrower shall have executed and delivered to Lender
(or shall cause to be executed and delivered to Lender by the appropriate
Persons) the following:

(i) this Agreement;

(ii) the Note;

(iii) UCC-1 Financing Statements;

(iv) the Blocked Account Agreement;

(v) certified copies of resolutions of the Board
of Directors of Borrower authorizing the execution and delivery of Loan
Documents to be executed by Borrower; and

(vi) copies of the Articles of Incorporation of
Borrower certified by the Secretary of State of the applicable issuing state.

(vii) a certificate from an officer of Borrower
indicating that the representations and warranties contained herein are true
and correct as of the Closing Date.

(d) Borrower or Guarantor shall not have suffered a
material adverse change in its business, operations or financial condition from
that reflected in the Financial Statements of Borrower or Guarantor delivered
to Lender or otherwise.

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(e) Lender shall have received such additional supporting
documents, certificates and assurances as Lender shall reasonably request which
shall be satisfactory to Lender in form and substance.

SECTION 2.11. If there is more than one Borrower, the
obligations hereunder are joint and several obligations of the Borrowers.
Notwithstanding any other provision hereof, a Borrower's liability for the
obligations at any time shall not exceed the greater of (1) the sum of (a) the
total principal of the obligations that such Borrower directly or indirectly
received and (b) the interest and expenses accrued with respect to such
principal, and (2) the greater of (a) ninety-five percent (95%) of such
Borrower's Net Fair Value on the date hereof, and (b) ninety-five percent (95%)
of such Borrower's highest Net Fair Value during the period commencing after
such date and terminating on the date of determination of liability hereunder.

SECTION 3

SECURITY INTEREST

SECTION 3.1. GRANT OF SECURITY INTEREST. In order to secure
prompt payment and performance of all Obligations, Borrower hereby grants to
Lender a continuing first-priority pledge and security interest in the
following intangible property of Borrower (the "Collateral"), whether now owned
or existing or hereafter acquired or arising and regardless of where located,
subject only to Permitted Liens. This security interest in the Collateral shall
attach to all Collateral without further action on the part of Lender or
Borrower. The Collateral shall consist of the following, subject in each case
only to Permitted Liens together with such third-party consents, lien waivers
and estoppel certificates as Lender shall reasonably require: All of
Borrower's present and future Accounts.

SECTION 4

SPECIFIC REPRESENTATIONS

SECTION 4.1. NAME OF BORROWER

The exact name, state law under which Borrower was organized,
prior legal names, current or prior trade names are set forth on Schedule 4.1.

SECTION 4.2. MERGERS AND CONSOLIDATIONS. Except as disclosed
on Schedule 4.2, no entity has merged into any of Borrower or been consolidated
with Borrower.

SECTION 4.3. PURCHASE OF ASSETS. Except as disclosed on
Schedule 4.3, no entity has sold substantially all of its assets to Borrower or
sold assets to Borrower outside the ordinary course of such seller's business
at any time in the past.

SECTION 4.4 CHANGE OF NAME OR IDENTITY. Borrower shall not
change its name, business structure or identity or use a new trade name without
prior notification to Lender or merge into or consolidate with any other
entity.

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SECTION 5

PROVISIONS CONCERNING ACCOUNTS

SECTION 5.1. OFFICE AND RECORDS OF BORROWER. Borrower's
chief executive offices are located at: 0000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxx. Borrower maintains all of it records with respect to Accounts
at 0000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx. Borrower has not at
any time within the past four (4) months maintained their chief executive
office or their records with respect to Accounts at any other location and
shall not do so hereafter except with the prior written consent of Lender.

SECTION 5.2. REPRESENTATIONS. Borrower represents and
warrants that each Account at the time of its assignment to Lender (a) will be
owned solely by Borrower, (b) will be for a liquidated amount maturing as
stated in Borrower's Books; (c) will be a bona fide existing obligation created
by the rendition of services to Account Debtors or their insured by Borrower in
the ordinary course of its business; and (d) will not be subject to any known
deduction, offset, counterclaim, return privilege, or other condition, except
as reflected on Borrower's Books. Borrower shall neither redate any invoices
nor reissue new invoices in full or partial satisfaction of old invoices.
Allowances, if any, as between Borrower and its customers will be on the same
basis and in accordance with the usual customary practices of Borrower as they
exist on the date of this Agreement.

SECTION 5.3. RETURNS AND REPOSSESSIONS. Borrower shall
notify Lender within five (5) business days of occurrence of all material
claims asserted by Account Debtors.

SECTION 5.4. BORROWING BASE REPORTS. Borrower shall on no
less than a monthly basis execute and deliver to Lender, in form and content
satisfactory to Lender, (i) a Borrowing Base report; (ii) a detailed aging of
Accounts; and (iii) a charges, collections and adjustment summary for the
month. Borrower shall, upon the request of Lender execute and deliver to
Lender an updated Borrowing Base report reflecting additional xxxxxxxx,
write-offs and deposits and all of Borrower's accounts receivable data in a
computer disc or tape format acceptable to Lender. On a monthly basis, and no
later than the 10th day of each month, Borrower shall submit to Lender (i) a
month-end Borrowing Base Report, (ii) an accounts receivable aging report as of
the last day of the preceding month, and (iii) charges, collections and
adjustments summary for the preceding month. Lender shall periodically review
Borrower's actual adjustments to cash receipts and write-offs, as well as
Borrower's payor profile. To the extent Borrower's adjustments, write-offs and
payor profile materially changes, Lender may, in its sole discretion, change
the Net Collectible Percentage attributable to each type of account by written
notice to Borrower of such change.

SECTION 5.5. COMPLIANCE CERTIFICATE. With each final
month-end Borrowing Base report which Borrower delivers to Lender, Borrower
also shall deliver to Lender a Compliance Certificate in the form of Exhibit
5.5 attached hereto, which Compliance Certificate shall be completed and signed
by an officer of Borrower.

SECTION 5.6. LENDER'S RIGHTS. Any officer, employee or agent
of Lender shall have the right, at any time or times hereafter, in the name of
Lender or its nominee (including Borrower), with prior reasonable notice to
Borrower,to verify the validity, amount or any other matter relating to any
Accounts by mail, telephone or otherwise; and all reasonable costs thereof
shall be payable by Borrower to Lender. Lender, or its designee may at any
time after default by Borrower hereunder notify customers or Account Debtors
that Accounts have been assigned to Lender or of Lender's security interest
therein and after default by Borrower hereunder collect the same directly and
charge all reasonable collection costs and expenses to Borrower's account.

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SECTION 5.7. DISCLAIMER OF LIABILITY. Lender shall not be
liable to Borrower or any third person for the correctness, validity or
genuineness of any instruments or documents released or endorsed to Borrower by
Lender (which shall automatically be deemed to be without recourse to Lender in
any event) or for the existence, character, quantity, quality, condition, value
or delivery of any goods purporting to be represented by any such documents;
and Lender, by accepting a Lien on the Collateral or by releasing any
Collateral to Borrower, shall not be deemed to have assumed any obligation or
liability to any supplier or creditor of Borrower or to any other third party.
Borrower agrees to indemnify and defend Lender and hold it harmless in respect
to any claim or proceeding arising out of any matter referred to in this
Section 5.7.

SECTION 5.8. POST DEFAULT RIGHTS. If an Event of Default has
occurred and is continuing hereunder, no discount, credit or allowance shall be
granted or permitted by Borrower to any Account Debtor; provided, however,
that, notwithstanding the existence of an Event of Default, (i) Borrower may
continue to invoice and xxxx Account Debtors under discount, credit and
allowance arrangements that Borrower maintained in the ordinary course of
business prior to such Event of Default occurring, and (ii) Account Debtors
may, during the continuance of an Event of Default, utilize discount, credit
and allowance arrangements that Borrower extended to them in the ordinary
course of business. Lender may, after default by Borrower, settle or adjust
disputes and claims directly with Account Debtors for amounts and upon terms
that Lender considers advisable, and in such cases, Lender will credit
Borrower's account with only the net amounts received by Lender in payment of
such disputed Accounts, after deducting all Lender Expenses incurred in
connection therewith.

SECTION 5.9. ACCOUNTS OWED BY FEDERAL GOVERNMENT. If any
Accounts shall arise out of a contract with the United States of America or any
department, agency, subdivision or instrumentality thereof, Borrower shall
promptly notify Lender thereof in writing and take all other action requested
by Lender to protect Lender's Lien on such Accounts under the provisions of the
federal laws on assignment of claims.

SECTION 5.10. BUSINESS ACTIVITY REPORTS. Borrower has filed
and shall file all legally required notices and reports of its business
activities with all the appropriate taxing authorities and the appropriate
Governmental Authority of each jurisdiction in which Borrower is legally
required to file such a notice or report.

SECTION 6

PROVISIONS CONCERNING GENERAL INTANGIBLES

SECTION 6.1. CONTRACTS

(a) Schedule 6.1. is a true and complete list of all
material contracts and agreements to which Borrower is a party.

(b) Borrower shall not materially amend, modify or
supplement any contract or agreement included in the Collateral or waive any
provisions thereof other than in accordance with Borrower's standard business
practice, nor shall such standard business practice be materially changed
without Lender's consent, which shall not be unreasonably withheld.

(c) Borrower shall remain liable to perform all of its
duties and obligations under any contracts and agreements included in
Collateral to the same extent as if this Agreement had not been executed; and
Lender shall not have any obligation or liability under such contracts and
agreements by reason of this Agreement or otherwise.

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(d) Borrower need not pay any amount due under any
contract or agreement listed on Schedule 6.1, nor otherwise perform any action
required under the terms of any such contract or agreement, if such payment or
performance is being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted, if Lender is notified in advance
of such contest, and if Borrower establishes any reserve or the appropriate
provision required by GAAP and deposits with Lender cash or an acceptable bond
reasonably requested by Lender.

SECTION 7

OTHER PROVISIONS CONCERNING COLLATERAL

SECTION 7.1. FURTHER ASSURANCES. Borrower shall execute and
deliver to Lender, concurrent with Borrower's execution of this Agreement and
at any time or times hereafter at the request of Lender, all financing
statements, continuation financing statements, security agreements,
assignments, affidavits, reports, notices, schedules of Accounts, letters of
authority and all other documents Lender may reasonably request, in form
satisfactory to Lender,to perfect and maintain perfected Lender's Liens in the
Collateral as defined in Section 3.1 and in order to consummate fully all of
the transactions contemplated under the Loan Documents. Borrower hereby
irrevocably makes, constitutes and appoints Lender (and any of Lender's
officers, employees or agents designated by Lender) as Borrower's true and
lawful attorney with power to sign the name of Borrower on any of the
above-described documents or on any other similar documents that need to be
executed, recorded or filed in order to perfect or continue to be perfected
Lender's Liens in the Collateral.

SECTION 7.2. LENDER'S DUTY OF CARE. Lender shall have no
duty of care with respect to the Collateral except that Lender shall exercise
reasonable care with respect to the Collateral in Lender's custody. Lender
shall be deemed to have exercised reasonable care is such property is accorded
treatment substantially equal to that which Lender accords its own property of
if Lender takes such action with respect to the collateral as Borrower shall
request or agree to in writing provided that neither failure to comply with any
such request nor any omission to do any such act requested by Borrower shall be
deemed a failure to exercise reasonable care. Lender's failure to take steps
to preserve rights against any parties or property shall not be deemed to be
failure to exercise reasonable care with respect to the Collateral in Lender's
custody. All risk, loss, damage or destruction of the Collateral shall be
borne by Borrower.

SECTION 7.3. REINSTATEMENT OF LIENS. If, at any time after
payment in full by Borrower of all Obligations and termination of Lender's
Liens, any payments on Obligations previously made by Borrower or any other
Person must be disgorged by Lender for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy, or reorganization of Borrower
or such other Person), this Agreement and Lender's Liens granted hereunder
shall be reinstated as to all disgorged payments as though such payments had
not been made, and Borrower shall sign and deliver to Lender all documents and
other items necessary to perfect all terminated Liens.

SECTION 7.4. LENDER EXPENSES. If Borrower fails, as required
by the terms hereof, (i) to pay any moneys (whether taxes, assessments,
insurance premiums or otherwise) due to third persons or entities, (ii) to make
any deposits or furnish any required proof of payment or deposit or (iii) to
discharge any Lien not permitted hereby, then Lender may, to the extent that it
determines that such failure by Borrower could have a material adverse effect
on Lender's interests in the Collateral, in its discretion and without 24 prior
notice to Borrower, make payment of the same, or any part thereof; provided
however, that Lender shall not obligated to give 24 hours notice and may

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make payments immediately if Lender, in its reasonable judgement determines
that such 24 hour notice might adversely impact its interest in the Collateral.
Any amounts paid or deposited by Lender shall constitute Lender Expenses, shall
become part of the Obligations, shall bear interest at the rate of eighteen
percent (18%) per annum, and shall be secured by the Collateral. Any payments
made by Lender shall not constitute (a) an agreement by Lender to make similar
payments in the future or (b) a waiver by Lender of any Event of Default under
this Agreement. Lender need not inquire as to, or contest the validity of, any
such expense, tax, security interest, encumbrance or Lien and the receipt of
the usual official notice for the payment of moneys to a governmental entity
shall be conclusive evidence that the same was validly due and owing.

Borrower shall immediately and without demand reimburse Lender
for all sums expended by Lender that constitute Lender Expenses, and Borrower
hereby authorizes and approves all advances and payments by Lender for items
constituting Lender Expenses.

SECTION 7.5 INSPECTION OF RECORDS. During usual business
hours, Lender shall have the right to inspect Borrower's Books and records in
order to verify the amount or condition of, or any other matter relating to,
the Collateral and Borrower's financial condition and to copy and make extracts
therefrom. Borrower waives the right to assert a confidential relationship, if
any, it may have with any accounting firm or service bureau in connection with
any information requested by Lender pursuant to this Agreement and agrees that
Lender may directly contact any such accounting firm or service bureau in order
to obtain such information solely for Lender's own use or to effectuate the
purpose of this Agreement.

SECTION 7.6. WAIVERS. Except as specifically provided for
herein, Borrower waives demand, protest, notice of protest, notice of default
or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension or renewal
of any or all commercial paper, accounts, documents, instruments, chattel paper
and guaranties at any time held by Lender on which Borrower may in any way be
liable except as provided for in this Agreement.

SECTION 8

REPRESENTATIONS AND WARRANTIES

As of the date hereof Borrower hereby warrants and represents
to Lender the following:

SECTION 8.1. CORPORATE STATUS. Borrower is a corporation
validly existing and in good standing under the laws of the state of its
incorporation; and is qualified and licensed to do business and is in good
standing in any state in which the conduct of its business or its ownership of
property requires that it be so qualified or licensed, and has the power and
authority (corporate and otherwise) to execute and carry out the terms of the
Loan Documents to which it is a party, to own its assets and to carry on its
business as currently conducted.

SECTION 8.2. AUTHORIZATION. The execution, delivery, and
performance by Borrower of this Agreement and each other Loan Document have
been duly authorized by all necessary corporate or partnership action.
Borrower, has duly executed and delivered this Agreement and each other Loan
Document to which it is a party, and each of them constitutes a valid and
binding obligation of Borrower, as applicable, enforceable according to its
terms except as such enforceability may be limited by equitable principles and
by bankruptcy, insolvency or similar laws affecting the rights of creditors
generally.

SECTION 8.3. NO BREACH. The execution, delivery, and
performance by Borrower of this Agreement and each other Loan Document to which
they are a party (a) will not contravene any law or any governmental rule or
order binding on Collateral; (b) will not violate any provision of the articles
of incorporation, bylaws or partnership agreement, as applicable, of Borrower;
(c) will not violate any agreement or instrument by which Borrower, as
applicable, is bound; (d) do not require any notice to

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consent by any Governmental Authority; and (e) will not result in the creation
of a Lien on any assets of Borrower except the Lien to Lender granted herein.

SECTION 8.4. TAXES. All assessments and taxes, whether real,
personal or otherwise, due or payable by or imposed, levied or assessed against
Borrower or any of its property have been paid in full before delinquency or
before the expiration of any extension period; and Borrower has made due and
timely payment or deposit of all federal, state, and local taxes, assessments
or contributions required of it by law, except only for items that Borrower is
currently contesting diligently and in good faith and that have been fully
disclosed in writing to Lender.

SECTION 8.5. DEFERRED COMPENSATION PLANS. Borrower has made
all required contributions to all deferred compensation plans to which it is
required to contribute, and Borrower has no liability for any unfunded benefits
of any single-employer or multi-employer plans. Borrower is not and at no
time has been a sponsor of, provided, or maintained for any employees any
defined benefit plan.

SECTION 8.6. LITIGATION AND PROCEEDINGS. Except as set forth
on Schedule 8.6 attached hereto, there are no outstanding judgments against
Borrower or any of its assets and there are no outstanding judgments against
Borrower or any of its assets and there are no actions or proceedings pending
by or against Borrower before any court or administrative agency. Borrower has
no knowledge or belief of any pending, threatened, or imminent litigation,
governmental investigations, or claims, complaints, actions, or prosecutions
involving Borrower, except for ongoing collection matters in which Borrower is
the plaintiff and except as set forth in Schedule 8.6 hereto.

SECTION 8.7. BUSINESS. Borrower has all franchises,
authorizations, patents, trademarks, copyrights and other rights necessary to
advantageously conduct its business. They are all in full force and effect and
are not in known conflict with the rights of others. Borrower is not a party
to or subject to any agreement or restriction that is so unusual or burdensome
that it might have a material adverse effect on Borrower's business, properties
or prospects.

SECTION 8.8. LAWS AND AGREEMENTS. Borrower is in compliance
with all material agreements applicable to it, including obligations to
contribute to any employee benefit plan or pension plan regulated by ERISA.
Borrower is in material compliance with all laws applicable to it.

SECTION 8.9. OWNERSHIP OF ACCOUNTS. Prior to the Lender
making any Loan as set forth herein, the Borrower will be the sole owner of,
and have good and marketable title to the Accounts pledged as security for such
Loan.

SECTION 8.10. NO CONFLICT. The granting of a security
interest in the pledged Accounts to the Lender will not violate the terms or
provisions of any loan document or any other agreement to which the Borrower
then is a party or by which is bound.

SECTION 8.11. SECURITY INTEREST. After giving effect to each
Loan contemplated by this Agreement, the Lender will be the holder of a valid
perfected first priority security interest in the pledged Accounts. Accounts
pledged to the lender in connection with any Loan will be free and clear of all
liens.

SECTION 8.12. NO DEFAULTS. As of the date on which an
Account is pledged to the Lender pursuant to the terms hereof thereof shall
have been no default under such Account.

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SECTION 8.13. ORIGINATION. Each Account will have been
originated by the Borrower in the ordinary course of its business in accordance
with the Borrower's regular credit approval process and does not contravene any
laws, rules or regulations applicable thereto. No pledged Account will have
been selected on any basis which would have any adverse effect on the Lender.

SECTION 8.14. LEGALITY. No pledged Account will have been
originated in, or be subject to the laws of, any jurisdiction whose laws would
make the terms hereof or any transaction contemplated hereby unlawful.

SECTION 8.15. CONSENTS. No consent or approval is required
for the pledging of any Accounts to the Lender pursuant to the terms of this
Agreement, except for such consents or approvals as have been obtained.

SECTION 8.16. FINANCIAL CONDITION. All financial statements
and information relating to Borrower that have been or may hereafter be
delivered by Borrower to Lender are accurate and complete and have been
prepared in accordance with GAAP. Borrower has no material obligations or
liabilities of any kind not disclosed in that financial information, and there
has been no material adverse change in the financial condition of Borrower
since the date of the most recent financial statements submitted to Lender.

SECTION 8.17. HEALTH CARE LAWS

(a) Borrower has obtained all permits, licenses and other
authorizations that are required under Health Care Laws applicable to Borrower
and it and is in compliance in all material respects with all terms and
conditions of the required permits, licenses and authorizations, and is also in
compliance in all material respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in such Health Care Laws.

(b) Borrower is not aware of, and has not received notice
of, any past, present or future events, conditions, circumstances, activities,
practices, incidents, actions or plans that may interfere with or prevent
compliance or continued compliance in any material respect with Health Care
Laws.

(c) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of violation,
investigation or proceeding pending or threatened against Borrower, relating in
any way to Health Care Laws.

SECTION 8.18. CUMULATIVE REPRESENTATIONS. The warranties,
representations and agreements set forth herein shall be cumulative and in
addition to any and all other warranties, representations and agreements that
Borrower shall give, or cause to be given, to Lender, either now or hereafter.

SECTION 9

COVENANTS

SECTION 9.1. ENCUMBRANCE OF COLLATERAL. Borrower shall not
create, incur, assume or permit to exist any Lien on any Collateral now owned
or hereafter acquired by Borrower, except for Liens to Lender and Permitted
Liens.

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SECTION 9.2. BUSINESS. Borrower shall engage primarily in
business of the same general character as that now conducted by Borrower and/or
contemplated by Borrower and disclosed in writing at the time of closing.

SECTION 9.3. CONDITION AND REPAIR. Borrower shall maintain
in good repair and working order all properties used in their business and from
time to time shall make all appropriate repairs and replacements thereof.

SECTION 9.4. TAXES. Borrower shall pay all taxes,
assessments and other governmental charges imposed upon it or any of its assets
or in respect of any of its franchises, business, income or profits before any
penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or might become a Lien or
charge upon any of its assets, provided that (unless any material item or
property would be lost, forfeited or materially impaired as a result thereof)
no such charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted, if Lender
is notified in advance of such contest, and if Borrower establishes any reserve
or other appropriate provision required by GAAP. Borrower shall make timely
payment or deposit of all FICA payments and withholding taxes required of it by
applicable laws and will, upon request, furnish Lender with proof satisfactory
to Lender indicating that Borrower has made such payments or deposits.

SECTION 9.5. ACCOUNTING SYSTEM. Borrower at all times
hereafter shall maintain a standard and modern system of accounting in
accordance with GAAP, with ledger and account cards or computer tapes, disks,
printouts and records that contain information pertaining to the Collateral
that may from time to time be requested by Lender. Borrower shall not modify
or change its method of accounting or enter into any agreement hereafter with
any third-party accounting firm or service bureau for the preparation or
storage of Borrower's accounting records without said accounting firm's or
service bureau's agreeing to provide to Lender information regarding the
Collateral and Borrower's financial condition.

SECTION 9.6. QUARTERLY FINANCIAL STATEMENTS. Borrower shall
furnish Lender as soon as practicable but in no event later than forty-five
(45) days after the end of each of the first three quarterly fiscal periods of
each fiscal year with unaudited quarterly financial statements in form and
substance as required by Lender, including a balance sheet, an income statement
and a statement of cash flows, prepared in accordance with GAAP together with a
certificate executed by the chief financial officer of Borrower stating that
the financial statements fairly present the financial condition of Borrower as
of the dated and for the periods covered and that as of the date of such
certificate there has not been any violation of any provision of this Agreement
or the happening of any Event of Default or Unmatured Default hereunder.

SECTION 9.7. ANNUAL FINANCIAL STATEMENTS. Borrower shall
furnish Lender as soon as practicable but in no event later than ninety (90)
days after the close of each fiscal year commencing with fiscal 1996 with
audited annual financial statements, which financial statements shall be
prepared in accordance with GAAP and shall be certified without qualification
by an independent certified public accounting firm satisfactory to Lender.
With all financial statements, Borrower will also deliver a certificate of its
chief financial officer attesting that no Event of Default or Unmatured Default
under the Agreement has occurred and is continuing.

SECTION 9.8. Borrower shall maintain at all times during the
term hereof the following financial covenants, measured in accordance with
GAAP: (i) minimum Tangible Net Worth of

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$5,000,000, (ii) Debt to Equity Ratio of not greater than 3.0 to 1.0, (iii)
Interest Expense Coverage of not less than 2.0 to 1.0, and (iv) Current Ratio
of not less than 1.5 to 1.0.

SECTION 9.9. Borrower's Cash Flow Ratio shall not be less
than ten percent (10%) for two (2) consecutive reporting periods.

SECTION 9.10. FURTHER INFORMATION. Borrower shall promptly
supply Lender with such other information concerning its affairs as Lender may
reasonably request from time to time hereafter and shall promptly notify Lender
of any material adverse change in Borrower's financial condition and any
condition or event that constitutes a breach of or event that constitutes an
Event of Default under this Agreement. In addition, Borrower authorizes Lender
to contact credit reporting agencies concerning, Borrower's credit standing.
Borrower also authorizes Lender to utilize Borrower's name in Lender's
marketing materials.

9.11. ERISA COVENANTS. Guarantor or Borrower shall comply
with all applicable provisions of ERISA and all other laws applicable to any
deferred compensation plans with which Guarantor or Borrower is associated, and
shall promptly notify Lender of the occurrence of any event that could result
in any material liability of Borrower to any person to any person whatsoever
with respect to any such plan.

9.12. RESTRICTIONS ON MERGER, CONSOLIDATION, SALE OF ASSETS,
ISSUANCE OF STOCK, ETC. Without prior written consent of Lender, which consent
shall not be unreasonably withheld, Borrower shall not:

(a) merge or consolidate with any Person;

(b) sell, lease or otherwise dispose of its assets in any
transaction or series of related transactions (other than sales in the ordinary
course of business);

(d) acquire interests of any business in excess of Four
Million and no/100 Dollars ($4,000,000.00) in the aggregate in any calendar
year in any business (whether by purchase of assets, purchase of stock, merger
or otherwise); provided, however, that the restrictions under this clause (d)
shall not apply with respect to acquisitions made after the closing of
Borrower's secondary stock offering which is expected to raise approximately
Twenty-Five Million Dollars ($25,000,000) for Borrower, provided that such
secondary offering closed on or prior to June 30, 1997.

(e) become subject to any agreement or instrument which
by its terms would substantially restrict Borrower's right or ability to
perform any of its obligations to Lender pursuant to the terms of the Loan
Documents; or

SECTION 9.13. HEALTH CARE COVENANTS

(a) Borrower shall comply in all material respects with,
and shall obtain all permits required by, all Health Care Laws applicable to
Borrower.

(b) Borrower shall promptly furnish to Lender a copy of
any communication from any Governmental Authority concerning any possible
violation of any Health Care Laws or any

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occurrence of which Borrower would be required to notify any Governmental
Authority with jurisdiction over Health Care Laws.

SECTION 9.14. DISTRIBUTIONS. Borrower shall not make any
Distributions except as (i) set forth on Schedule 9.12 hereto, and (ii)
authorized by Lender, upon Borrower's request, which authorization shall not be
unreasonably withheld and which authorization shall not be deemed to authorize
any Distributions while an Event of Default is continuing or if such
Distribution would cause an Event of Default to occur.

SECTION 9.15. SUBORDINATE OBLIGATIONS. Borrower shall not
voluntarily prepay any principal (including the making of any sinking fund
payment), interest or any other amount in respect of Subordinate Obligations.

SECTION 9.16. AMENDMENTS. Borrower shall not amend any
provision of any Subordinate Obligation if such amendment would (i) affect any
of the subordination provisions thereof, (ii) advance the date of any required
payment or prepayment thereunder, (iii) make covenants therein more burdensome,
when considered in their entirety, to Borrower, (iv) reduce any default or
grace period therein provided, or (v) otherwise have a material adverse effect
on the interests of Lender except as required by law.

SECTION 10

EVENTS OF DEFAULT

An Event of Default shall be deemed to exist if any of the
following event shall have occurred and be continuing:

(a) Borrower fails to make any payment of principal or
interest or any other payment on the Note or any other Obligation when due and
payable, by acceleration or otherwise, and such failure shall continue for five
(5) business days after the payment is due;

(b) Borrower fails to observe or perform any covenant,
condition or agreement to be observed or performed pursuant to the terms hereof
or any other Loan Document to which it is a party and such failure is not cured
as soon as reasonably practicable and in any event within thirty (30) days
after written notice thereof by Lender;

(c) A court enters a decree or order for relief in
respect of Borrower in an involuntary case under any applicable bankruptcy,
insolvency, or other similar law then in effect, or appoints a receiver,
liquidator, assignee, custodian, trustee, or sequestrator (or other similar
official) of Borrower or for any substantial part of its property, or orders
the windup or liquidation of Borrower's affairs; or a petition initiating an
involuntary case under any such bankruptcy, insolvency, or similar law is filed
against Borrower and is pending for sixty (60) days without dismissal;

(d) Borrower commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law then in effect, makes
any general assignment for the benefit of creditors, fails generally to pay its
debts as such debts become due, or takes corporate action in furtherance of any
of the foregoing;

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(e) Final judgment for the payment of money on any claim
in excess of $50,000 is rendered against Borrower and remains undischarged for
twenty (20) days during which execution is not effectively stayed;

(f) Any guarantor of the Obligations revokes or attempts
to revoke its guaranty of any of the Obligations, or becomes the subject of an
insolvency proceeding of the type described in clauses (c) or (d) above with
respect to Borrower or fails to observe or perform any covenant, condition or
agreement to be performed under any Loan Document to which it is a party;

(g) Borrower makes any payment on account of any
Subordinate Obligations, other than payments specifically permitted by the
terms of such subordination or this Agreement;

(h) The Subordination arrangement with respect to any
Subordinate Obligations is terminated for any reason or the Person holding any
Subordinate Obligations asserts that the subordination arrangement with respect
to its Subordinate Obligations is terminated.

(i) Any Collateral or any part thereof is sold, agreed to
be sold, conveyed or allocated by operation of law or otherwise outside the
ordinary course of business;

(j) Borrower defaults under the terms of any Indebtedness
or lease involving total payment obligations of Borrower in excess of $50,000
and such default is not cured within the time period permitted pursuant to the
terms and conditions of such Indebtedness or lease, or an event occurs that
gives any creditor or lessor the right to accelerate the maturity of any such
indebtedness or lease payments and such default is not contested in good faith;

(k) Borrower is enjoined, restrained or in any way
prevented by court order from continuing to conduct all or any material part of
its business affairs;

(l) A judgment or other claim in excess of $100,000
becomes a Lien upon any or all of Borrower's assets, other than a Permitted
Lien;

(m) A notice of Lien, levy or assessment in excess of
$50,000 is filed of record with respect to any or all of Borrower's assets by
the United States Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal or other Government Authority; or
any tax or debt owing at any time hereafter to any one or more of such entities
becomes a Lien upon any or all of Borrower's assets and the same is not paid on
the payment date thereof, except to the extent such tax or debt is being
contested by Borrower as permitted in Section 8.4;

(n) There is a material impairment of the value of the
Collateral or priority of Lender's Liens on the Collateral;

(o) Any of Borrower's assets in excess of $200,000 or any
Collateral are seized, subjected to a distress warrant, levied upon or come
into the possession of any judicial officer;

(p) Any representation or warranty made in writing to
Lender by any officer of Borrower in connection with the transactions
contemplated in this Agreement is materially incorrect when made;

(q) If the aggregate dollar value of all judgments,
defaults, demands, claims and notices of Liens under clauses (e), (j), (k), (m)
and (n) hereof exceeds $200,000; or

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(r) Borrower shall fail to direct all receipts for
Accounts to the Blocked Account.

SECTION 11

REMEDIES

SECTION 11.1. SPECIFIC REMEDIES. Upon the occurrence of any
Event of Default:

(a) Lender may cease advancing money or extending credit
to or for the benefit of Borrower under this Agreement, under any other Loan
Document, or under any other agreement between Borrower and Lender.

(b) Lender may declare all Obligations to be due and
payable immediately, whereupon they shall immediately become due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by Borrower.

(c) Lender may set off against the Obligations all
Collateral, balances, credits, deposits, accounts, or moneys of Borrower then
or thereafter held with Lender, including amounts represented by certificates
of deposit.

(d) Lender may pay, purchase, contest or compromise any
encumbrance, charge or Lien that, in the opinion of Lender, appears to be prior
or superior to its Lien and pay all reasonable expenses incurred in connection
therewith.

(e) Lender may (i) notify Account Debtors to make payment
on Accounts directly to Lender, (ii) settle, adjust, compromise, extend or
renew Accounts, whether before or after legal proceedings to collect such
Accounts have commenced; (iii) prepare and file any bankruptcy proofs of claim
or similar documents against any Account Debtor; (iv) prepare and file any
notice, assignment, satisfaction, or release of Lien, UCC termination statement
or any similar document; (v) sell or assign Accounts, individually or in bulk,
upon such terms, for such amounts, and at such time or times as Lender deems
advisable; and (vi) complete the performance required of Borrower under any
contract or agreement to which Borrower is a party and out of which Accounts
arise or may arise.

(f) Lender may (i) endorse Borrower's name on all checks,
notes, drafts, money orders or other forms of payment of or security for
Accounts or other Collateral; (ii) sign Borrower's name on drafts drawn on
Account Debtors or issuers of letters of credit; and (iii) notify the postal
authorities in Borrower's name to change the address for delivery of Borrower's
mail to an address designated by Lender, receive and open all mail to addressed
Borrower, copy all mail, return all mail relating to Collateral, and overnight
all other mail to Borrower, at Borrower's expense; provided, however, that
Lender has agreed to cover such expense, with respect to the overnighting of
mail to Borrower relating to the Collateral, for thirty (30) days commencing
five (5) from such date that postal authorities have been notified.

SECTION 11.2. POWER OF ATTORNEY. Borrower hereby appoints
Lender (and any of Lender's officers, employees, or agents designated by
Lender) as Borrower's attorney, with power whether before or after the
occurrence of an Event of Default: (a) to endorse Borrower's name on any
checks, notes, acceptances, money orders, drafts or other forms of payment or
security that may come into Lender's possession; (b) to sign Borrower's name on
drafts against Accounts Debtors, on schedules and assignments of Accounts, on
verifications of Accounts, and on notices to Account Debtors; (c) to send
requests for verification of Accounts; (d) to execute UCC Financing Statements;
and (e) to do all

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things necessary to carry out this Agreement. The appointment of Lender as
Borrower's attorney and each and every one of Lender's rights and powers, being
coupled with an interest, are irrevocable as long as any Obligations are
outstanding. Lender agrees not to exercise the power granted in clause 11.2(b)
or 11.2(e) prior to the occurrence of an Event of Default and agrees not to
exercise the power granted in clause 11.2(d) prior to notification of Borrower
of its intent to do so, but such limitations do not limit the effectiveness of
such power of attorney at any time. Any person dealing with Lender shall be
entitled to rely conclusively on any written or oral statement of Lender that
this power of attorney is in effect. Lender may also use Borrower's stationery
in connection with exercising its rights and remedies and performing the
Obligations of Borrower.

SECTION 11.3. EXPENSES SECURED. All expenses, including
reasonable attorney fees, incurred by Lender in the exercise of its rights and
remedies provided in this Agreement, in the other Loan Documents or by law
shall be payable by Borrower to Lender, shall be part of the Obligations, and
shall be secured by the Collateral.

SECTION 11.4 EQUITABLE RELIEF. Borrower recognizes that in
the event Borrower fails to perform, observe, or discharge any of its
Obligations or liabilities under this Agreement, no remedy of law will provide
adequate relief to Lender, and Borrower agrees that Lender shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.

SECTION 11.5 REMEDIES ARE CUMULATIVE. No remedy set forth
herein is exclusive of any other available remedy or remedies, but each is
cumulative and in addition to every other right or remedy given under this
Agreement or under any other agreement between Lender and Borrower or now or
hereafter existing at law or in equity or by statute. Lender may pursue its
rights and remedies concurrently or in any sequence, and no exercise of one
right or remedy shall be deemed to be an election. No delay by Lender shall
constitute a waiver, election or acquiescence by it.

SECTION 12

INDEMNITY

SECTION 12.1. GENERAL INDEMNITY. Borrower shall protect,
indemnify and defend and save harmless Lender and its directors, officers,
agents and employees from and against any and all loss, cost, liability
(including negligence, tort and strict liability), expense, damage, suits or
demands (including fees and disbursements of counsel) on account of any suit or
proceeding before any Governmental Authority which arises from the transactions
contemplated in this Agreement or otherwise arising in connection with or
relating to the Loan and any security therefor, unless such suit, claim or
damages are caused by the negligence or intentional malfeasance of Lender or
its directors, officer, agents or employees. Upon receiving knowledge of any
suit, claim or demand asserted by a third-party that Lender believes is covered
by this indemnity, Lender shall give Borrower timely notice of the matter and
an opportunity to defend it, at Borrower's sole cost and expense, with legal
counsel acceptable to Lender. Lender may, at its option, also require Borrower
to so defend the matter. This obligation on the part of Borrower shall survive
the termination of this Agreement and the repayment of the Note.

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SECTION 13

MISCELLANEOUS

SECTION 13.1. DELAY AND WAIVER. No delay or omission to
exercise any right shall impair any such right or be a waiver thereof, but any
such right may be exercised from time to time and as often as may be deemed
expedient. A waiver on one occasion shall be limited to that particular
occasion.

SECTION 13.2. COMPLETE AGREEMENT. This Agreement and the
Schedules are the complete agreement of the parties hereto and supersede all
previous understandings relating to the subject matter hereof. This Agreement
may be amended only by an instrument in writing that explicitly states that it
amends this Agreement and is signed by the party against whom enforcement of
the amendment is sought. This Agreement may be executed in counterparts, each
of which will be an original and all of which will constitute a single
agreement.

SECTION 13.3. SEVERABILITY; HEADINGS. If any part of this
Agreement or the application thereof to any Person or circumstance is held
invalid, the remainder of this Agreement shall not be affected thereby. The
section headings herein are included for convenience only and shall not be
deemed to be a part of this Agreement.

SECTION 13.4. BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the respective legal representatives,
successors and assigns of the parties hereto; however, Borrower may not assign
any of its rights or delegate any of its Obligations hereunder without prior
consent of Lender which consent shall not be unreasonably withheld. Lender
(and any subsequent assignee) may transfer and assign this Agreement and
deliver the Collateral to the assignee, who shall thereupon have all of the
rights of Lender; and Lender (or such subsequent assignee who in turn assigns
as aforesaid) shall then be relieved and discharged of any responsibility or
liability with respect to this Agreement and said Collateral.

SECTION 13.5 NOTICES. Any notices under or pursuant to this
Agreement shall be deemed duly sent when delivered in hand or when mailed by
registered or certified mail, return receipt requested, or when delivered by
courier or when transmitted by telex, telecopy, or similar electronic medium to
the following address:

To Borrower: American HealthChoice, Inc.
0000 Xxxx Xxxxxx Xxxx Xxxx, #000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, D.C.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000

To Lender: DVI Business Credit Corporation
0000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Executive Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000

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Copies to: DVI Business Credit Corporation
000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esquire
General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000

Either party may change such address by sending notice of the change
to the other party; such change of address shall be effective only upon actual
receipt of the notice by the other party.

SECTION 13.6 GOVERNING LAW. ALL ACTS AND TRANSACTIONS
HEREUNDER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF CALIFORNIA,
WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES.

SECTION 13.7 WAIVER OF TRIAL BY JURY. LENDER AND BORROWER
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE RELATIONSHIP BETWEEN LENDER
AND BORROWER.

SECTION 13.8 SUBMISSION TO JURISDICTION. (a) BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY CALIFORNIA OR FEDERAL
COURT SITTING IN ORANGE COUNTY, CALIFORNIA, OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT. BORROWER HEREBY AGREES THAT
SERVICE OF COPIES OF SUMMONS AND COMPLAINTS AND ANY OTHER PROCESS WHICH MAY BE
SERVED IN ANY ACTION OR PROCEEDING ARISING HEREUNDER MAY BE MADE BY MAILING OR
DELIVERING A COPY OF SUCH PROCESS BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO BORROWER AT ITS ADDRESS SET FORTH AT THE BEGINNING OF THIS
AGREEMENT.

(b) NOTHING IN THIS PARAGRAPH 13.8 SHALL AFFECT THE RIGHT OF
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
THE RIGHT OF LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ANY
OF ITS PROPERTIES IN THE COURTS OF OTHER JURISDICTIONS TO THE EXTENT OTHERWISE
PERMITTED BY LAW.

(c) TO THE EXTENT THAT BORROWER HAS OR HEREAFTER MAY ACQUIRE (i)
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF CALIFORNIA OR ANY FEDERAL COURT
SITTING IN ORANGE COUNTY, CALIFORNIA OR FROM ANY LEGAL PROCESS OUT OF ANY SUCH
COURT (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, OR (ii) ANY OBJECTION TO THE LAYING OF THE VENUE OR OF AN
INCONVENIENT FORUM OF ANY SUIT, ACTION OR PROCEEDING, OF BROUGHT IN CALIFORNIA
OR FEDERAL COURT SITTING IN ORANGE COUNTY, CALIFORNIA UNDER PROCESS SERVED IN
ACCORDANCE WITH SUBPARAGRAPH (a) ABOVE, BORROWER HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY OR OBJECTION IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE LOANS.

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IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
by their duly authorized officers as of the date first above written.

LENDER:

DVI BUSINESS CREDIT CORPORATION

By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------

BORROWER:

AMERICAN HEALTHCHOICE, INC. AHC PHYSICIANS CORPORATION, TEXAS

By: /s/ Xx. X.X. Xxxxxx By: /s/ Xx. X.X. Xxxxxx
----------------------------------------------------- ---------------------------------------------
Print Name: Xx. X.X. Xxxxxx Print Name: Xx. X.X. Xxxxxx
--------------------------------------------------- ---------------------------------------
Title: President Title: President
--------------------------------------------------- -----------------------------------------------

AHC PHYSICIANS CORPORATION, GEORGIA UNITED CHIROPRACTIC CLINIC UPTOWN, INC.

NEW ORLEANS CHIROPRACTIC CLINIC, INC. NATIONAL SPORTS & INJURY, INC.

TOTAL MEDICAL DIAGNOSTICS, INC. AHC CHIROPRACTIC CLINICS, INC.

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EXHIBIT 2.02
SECURED PROMISSORY NOTE
DATED DECEMBER 30, 1996

FOR VALUE RECEIVED, the undersigned (collectively and individually
"Maker") jointly and severally hereby promise to pay to DVI Business Credit
Corporation or its assignee (the "Holder") or order,the principal sum of Two
Millions and 00/100 $2,000,000.00) or such amount thereof as may be from time
to time advanced hereunder, pursuant to the terms of that certain Loan and
Security Agreement dated as of the date hereof between Holder as Lender, Maker
as Borrower (the "Agreement"), with interest on the unpaid principal balance
from time to time outstanding until paid at the fluctuating rate of interest
announced publicly by Bank of America, NT&SA in San Francisco, California, from
time to time as its Prime Rate plus three percent (3%) per annum, computed on
the basis of a 360-day year and actual days elapsed, until paid. Interest
shall be payable on the first of each month this Note is outstanding in
accordance with the terms of the Agreement, with all unpaid principal and
interest due and payable in full on the second anniversary of the date hereof.

If any part of the interest due on this Note is not paid when due, it
shall be added to the principal amount of this Note and thereafter bear
interest at the rate provided above. If the specified interest rate shall at
any time exceed the maximum allowed by law, then the applicable interest rate
shall be reduced to the maximum allowed by law.

1. This Note shall be subject to prepayment or redemption in
whole or in part at any time without penalty or premium. Notwithstanding the
foregoing, the Agreement may not be terminated, and will not be terminated by
any prepayment, without payment of the termination fee required pursuant to
Section 2.7 of the Agreement.

2. Principal and interest shall be payable to Holder at 0000
XxxXxxxxx Xxxx., Xxxxx 000, Xxxxxxx Xxxxx, XX 00000, or such other place as the
Holder may, from time to time in writing, appoint.

3. This Note is made pursuant to, and secured by the Agreement.
This Note is also secured by any Security Documents referred to in the
Agreement. The Agreement and the Security Documents create a lien on and
security interest in, the personal property described therein ("Collateral").
The Agreement and the Security Documents shall hereinafter be collectively
referred to as the "Loan and Security Documents" and are hereby incorporated by
reference in and made a part of this Note.

4. The occurrence of any Event of Default under the Agreement
shall, at the election of the Holder, make the entire unpaid balance of the
principal amount of this Note and accrued interest immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or
character.

5. Failure of the Holder to exercise the acceleration option of
paragraph 4 of this Note on the occurrence of any of the events enumerated
therein shall not constitute waiver of the right to exercise such option on the
subsequent occurrence of any of the events enumerated therein.

6. Principal and interest shall be payable in lawful money of the
United States of America which shall be legal tender in payment of all debts
and dues, public and private, at the time of payment. Maker waives
presentment, demand for payment, notice of nonpayment, protest and notice of
protest, and all other notices and demands in connection with the deliver,
acceptance, performance, default or enforcement of this Note. Maker consents
to any and all assignments of this Note, extensions of time,

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renewals and waivers that may be made or granted by the Holder. Maker
expressly agrees that such assignments, extensions of time, renewals or waivers
shall not affect Maker's liability. Maker agrees that Holder may, without
notice to Maker and without affecting the liability of Maker, accept additional
or substitute security for this Note, release any security or any party liable
for this Note or extend or renew this Note.

7. If Maker shall fail to make any payment of interest or
principal, including the payment due upon maturity, when the same is due and
payable and such failure shall continue for five (5) business days after
nonpayment, a late charge by way of damages shall be immediately due and
payable. Maker recognizes that default by Maker in making the payments herein
agreed to be paid when due will result in the Holder incurring additional
expenses, in loss to the Holder of the use of the money due and in frustration
to the Holder in meeting its other commitments. Maker agrees that, if for any
reason Maker fails to pay any amount due under this Note when due, the Holder
shall be entitled to damages for the detriment caused thereby, but that it is
extremely difficult and impractical to ascertain the extent of such damages.
Maker therefore agrees that a sum equal to five cents ($.05) for each one
dollar ($1.00) of each payment which is not received within five (5) business
days after the date it is due and payable is a reasonable estimate of the said
damages to the Holder, which sum Maker agrees to pay on demand.

8. If action be instituted on this Note (including without
limitation, any proceedings for collection hereof in any bankruptcy or probate
matter or case), or if proceedings are commenced on or under any of the Loan
and Security Documents, Maker promises to pay the Holder all costs of
collection and enforcement including, without limitation, reasonable attorneys'
fees.

9. Any and all notices or other communications or payments
required or permitted to be given hereunder shall be effective when received or
refused if given or rendered in writing, in the manner provided in the
Agreement.

10. This Note shall inure to the benefit of the Holder's
successors and assigns. References to the "Holder" shall be deemed to refer to
the holder(s) of this Note at the time such reference becomes relevant.

11. If any term, provision, covenant, or condition of this Note is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the rest of this Note shall remain in full force and effect to the greater
extent permitted by law and shall in no other way be affected, impaired or
invalidated.

12. Nothing contained herein or in the Loan and Security Documents
shall be deemed to prevent recourse to and the enforcement against Maker and
the Collateral of all liabilities, obligations and undertakings contained
herein and in the Loan and Security Documents.

13. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF
THE STATE OF CALIFORNIA AND MAKER AGREES TO SUBMIT TO THE JURISDICTION OF THE
STATE AND/OR FEDERAL COURTS IN THE STATE OF CALIFORNIA.

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MAKER:

AMERICAN HEALTHCHOICE, INC. AHC PHYSICIANS CORPORATION, TEXAS

AHC PHYSICIANS CORPORATION, GEORGIA UNITED CHIROPRACTIC CLINIC UPTOWN, INC.

NEW ORLEANS CHIROPRACTIC CLINIC, INC. NATIONAL SPORTS & INJURY, INC.

TOTAL MEDICAL DIAGNOSTICS, INC. AHC CHIROPRACTIC CLINICS, INC.

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Schedule 4.1

BORROWERS

[Disclose the exact names, state law under which Borrowers were organized,
prior legal names, current or prior trade names.]

1) Same as signature sheet.

2) AHC Chiropractic Clinics, Inc. used prior trade name of United
Chiropractic Clinic.

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Schedule 4.2

MERGERS AND CONSOLIDATIONS

[Disclose Mergers and Consolidations.]

None

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Schedule 4.3

PURCHASES OF ASSETS

OUTSIDE ORDINARY COURSE OF BUSINESS

[Disclose all assets purchased outside of the ordinary course of business.]

None

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Schedule 6.1

CONTRACTS

[List all material Contracts.]

As related to intangible collateral:

1) Govest Management (see copy of agreement)

2) Sands Brothers & Co. Ltd., for public offering

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Schedule 8.6

LITIGATION AND PROCEEDINGS

[List outstanding judgments against Borrower or any of its assets, actions or
proceedings pending by or against Borrower, other threatened or imminent
actions against Borrower and governmental investigations.]

1) Wrongful Discharge alleged by former employee Xxxxx Xxxxxxxx

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Schedule 9.12

PERMITTED DISTRIBUTIONS

1. Amounts per $2,000,000 common stock and note private placement (see
attached agreement)

2. In connection with $300,000 loan from Mr. Xxxxxx Nihon (see attached
memo).

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Table of Contents

SECTION 1 DEFINITIONS

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