Amendment to Loan Documents


 EXHIBIT 10.1 
  

			
	

	 	                                       
                 Private Client Group
	 	  
                                       
                  Merrill Lynch Business
                                       
                  Financial Services Inc.
                                        
                 222 North LaSalle Street
                                        
                 17th Floor
                                        
                 Chicago, Illinois 60601
                                        
                 (312) 269-1363
                                        
                 FAX: (312) 368-1387

		
	 	 	                                       
                 February 1, 2005

  
 Dynacq Healthcare, Inc. 
 10304 Interstate 10 East, Suite 369 
 Houston, Texas 77029 
  
 Re: Amendment to Loan Documents 
  
 This Letter Agreement will serve to confirm certain agreements of Merrill Lynch Business
Financial Services Inc. (“MLBFS”) and Dynacq Healthcare, Inc. (“Customer”) with respect to: (i) that certain WCMA REDUCING REVOLVER LOAN AND SECURITY AGREEMENT NO. 582-07L53 between MLBFS and Customer (including any
previous amendments and extensions thereof), and (ii) all other agreements between MLBFS and Customer or any party who has guaranteed or provided collateral for Customer’s obligations to MLBFS (a “Guarantor”) in connection therewith
(collectively, the “Loan Documents”). Capitalized terms used herein and not defined herein shall have the meaning set forth in the Loan Documents. 
  
 Subject to the terms hereof, effective as of the “Effective Date” (as defined below), the Loan Documents are hereby amended as follows: 
  
 (a) The “Maturity Date” shall be amended to be May 1, 2005 
  
 (b) The term “Interest Rate” shall mean a variable per annum rate of interest equal
to the sum of 2.85% and the One-Month LIBOR. “One-Month LIBOR” shall mean, as of the date of any determination, the interest rate then most recently published in the “Money Rates” section of The Wall Street Journal as the
one-month London Interbank Offered Rate. The Interest Rate will change as of the date of publication in The Wall Street Journal of a One-Month LIBOR that is different from that published on the preceding Business Day. In the event that The
Wall Street Journal shall, for any reason, fail or cease to publish the One-Month LIBOR, MLBFS will choose a reasonably comparable index or source to use as the basis for the Interest Rate. 
  
 Except as expressly amended hereby, the Loan Documents shall continue in full force and
effect upon all of their terms and conditions. 
  
 By their execution of this
Letter Agreement, the below-named Guarantors hereby consent to the foregoing modifications to the Loan Documents, and hereby agree that the “Obligations” under their respective Unconditional Guaranty and/or agreements providing collateral
shall extend to and include the Obligations of Customer under the Loan Documents, as amended hereby. 
  
 Customer and said Guarantors acknowledge, warrant and agree, as a primary inducement to MLBFS to enter into this Agreement, that: (a) no Default or Event of Default has occurred and is continuing under the Loan
Documents; (b) each of the warranties of Customer in the Loan Documents are true and correct as of the date hereof and shall be deemed remade as of the date hereof; (c) neither Customer nor any of said Guarantors have any claim against MLBFS or any
of its affiliates arising out of or in connection with the Loan Documents or any other matter whatsoever; and (d) neither Customer nor any of said Guarantors have any defense to payment of any amounts owing, or any right of counterclaim for any
reason under, the Loan Documents. 






 The obligations of MLBFS under this Letter Agreement are subject to its receipt (where applicable) and satisfaction with
the following: 
  
 An extension fee of $1,000.00 is due and payable with this
Letter Agreement 
  
 Provided that no Event of Default, or event which with the
giving of notice, passage of time, or both, would constitute an Event of Default, shall then have occurred and be continuing under the terms of the Loan Documents, and the condition specified above shall have been met to our satisfaction, the
amendments and agreements in this Letter Agreement will become effective on the date (the “Effective Date”) upon which: (a) Customer and the Guarantors shall have executed and returned the duplicate copy of this Letter Agreement and the
other documents enclosed herewith; and (b) an officer of MLBFS shall have reviewed and approved this Letter Agreement and such other documents as being consistent in all respects with the original internal authorization hereof. 
  
 Notwithstanding the foregoing, if Customer and the Guarantors do not execute and return the
duplicate copy of this Letter Agreement and said other documents within 14 days from the date hereof, or if for any other reason (other than the sole fault of MLBFS) the Effective Date shall not occur within said 14-day period, then all of said
amendments and agreements will, at the sole option of MLBFS, be void. 
  
 Very
truly yours, 
  

			
	Merrill Lynch Business Financial Services Inc.
		
	By:	 	 /s/ Anju Varadhachary


	 	 	Anju Varadhachary
	 	 	Senior Credit Manager
	
	Accepted:
	
	Dynacq Healthcare, Inc.
		
	By:	 	 /s/ Philip Chan


	Printed Name: Philip Chan
	Title:	 	Vice President - Finance








			
	Approved:
	
	Vista Healthcare, Inc.
		
	By:	 	 /s/ Philip Chan


	Printed Name: Philip Chan
	Title:	 	President
	
	Vista Land and Equipment, L.L.C.
		
	By:	 	Doctors Practice Management, Inc., Manager
		
	By:	 	 /s/ Philip Chan


	Printed Name: Philip Chan
	Title:	 	President
	
	Doctors Practice Management, Inc.
		
	By:	 	 /s/ Philip Chan


	Printed Name: Philip Chan
	Title:	 	President
	
	Vista Community Medical Center, LLP
		
	By:	 	Doctors Practice Management, Inc., Its General Partner
		
	By:	 	 /s/ Philip Chan


	Printed Name: Philip Chan
	Title:	 	President








			
	Ambulatory Infusion Therapy Specialist, Inc.
		
	By:	 	 /s/ Connie Hudec


	Printed Name: Connie Hudec
	Title:	 	President
	
	Surgi+Group, Inc.
		
	By:	 	 /s/ Philip Chan


	Printed Name: Philip Chan
	Title:	 	President