Exhibit 10.46





                                  $3,000,000.00


                                 AMENDMENT NO. 2

                                       TO

                           LOAN AND SECURITY AGREEMENT

                    originally dated as of February 18, 1998

                                  by and among

                              PHC OF MICHIGAN, INC.
                              PHC OF VIRGINIA, INC.
                                PHC OF UTAH, INC.

                           (collectively, "Borrower")

                                       and

                         HELLER HEALTHCARE FINANCE, INC.
                           (f/k/a HCFP FUNDING, INC.)

                                   ("Lender")




                           Amended as of May ___, 2001



                                     - 89 -
<PAGE>
                 AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT


     THIS AMENDMENT NO. 2 TO LOAN AND SECURITY  AGREEMENT (this  "Amendment") is
made as of this ___ day of May,  2001,  by and among PHC OF  MICHIGAN,  INC.,  a
Massachusetts corporation,  PHC OF UTAH, INC., a Massachusetts corporation,  and
PHC OF VIRGINIA, INC., a Massachusetts corporation  (collectively,  "Borrower"),
and HELLER  HEALTHCARE  FINANCE,  INC.  f/k/a  HCFP  FUNDING,  INC.,  a Delaware
corporation ("Lender").

                                    RECITALS

     WHEREAS,  pursuant to that certain Loan and Security  Agreement dated as of
February 18, 1998 (as previously amended by that certain Amendment No. 1 to Loan
and Security  Agreement  dated as of February 17, 2000, as amended hereby and as
it  may  be  further   amended,   modified  and  restated  from  time  to  time,
collectively,  the "Loan  Agreement")  by and among Lender and Borrower,  Lender
agreed to make  available  to  Original  Borrower a  revolving  credit loan (the
"Loan")

     WHEREAS, Borrower and Lender wish to make certain additional changes to the
financing arrangements as set forth in this Amendment.

     NOW, THEREFORE, in consideration of the foregoing, the terms and conditions
set forth in this  Amendment,  and other good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  Lender and Borrower
hereby agree as follows:

     Section 1.  Definitions.  Unless otherwise  defined in this Amendment,  all
capitalized  terms  shall have the  meanings  assigned to such terms in the Loan
Agreement.

     Section 2.  Increase in Maximum  Loan  Amount.  Effective as of the date of
this  Amendment,  Lender  agrees to increase  the  Maximum  Loan Amount from Two
Million  Five  Hundred  Thousand  and No/100  Dollars  ($2,500,000.00)  to Three
Million and No/100 Dollars ($3,000,000.00).

     Section 3. Amendment to Loan Agreement.

     (a) Section  2.1(a) of the Loan Agreement is hereby amended and restated to
read as follows:

     (a)  The maximum aggregate principal amount of credit extended by Lender to
          Borrower  hereunder  (the "Loan") that will be outstanding at any time
          is Three Million and No/100 Dollars ($3,000,000.00) (the "Maximum Loan
          Amount").

     (b)  Section 2.8(a) of the Loan Agreement is hereby amended and restated to
          read as follows:

     (c)  Subject to Lender's  right to cease making  Revolving  Credit Loans to
          Borrower upon or after any Event of Default,  this Agreement  shall be
          in  effect  until  February  18,  2003,   and  this  Agreement   shall
          automatically  renew itself for one-year  periods  thereafter.  unless
          terminated as provided in this Section 2.8."



                                     - 90 -
<PAGE>

     Section 4. Fee. In  consideration  of Lender's  agreement  to increase  the
Maximum Loan Amount, Borrower agrees to unconditionally pay to Lender a fee (the
"Fee")  equal to Seven  Thousand  Five Hundred and No/100  Dollars  ($7,500.00).
Borrower hereby  authorizes Lender to deduct the amount of the Fee from the next
Revolving  Credit  Loan  made by  Lender  under  the Loan  Agreement  after  the
effective date hereof.

     Section 5.  Costs.  Borrower  shall be  responsible  for the payment of all
costs of Lender  incurred in connection  with the preparation of this Amendment,
including but not limited to the reasonable fees of Lender's in-house counsel.

     Section 6.  Effective  Date.  This  Amendment  shall be effective  upon the
execution and delivery to Lender of this Amendment by each Borrower.

     Section 7. Reference to the Effect on the Loan Agreement.

     (a) Upon the  effectiveness  of the  Amendment,  each reference in the Loan
Agreement  to "this  agreement,"  "hereunder,"  "hereof,"  "herein"  or words of
similar  import  shall be a reference  to the Loan  Agreement  as amended by the
Amendment.

     (b) Except as specifically  amended above, the Loan Agreement and all other
Loan Documents  shall remain in full force and effect,  and are hereby  ratified
and confirmed.

     (c) The execution,  delivery and  effectiveness of the Amendment shall not,
except as  expressly  provided  in this  Amendment,  operate  as a waiver of any
right,  power or remedy of Lender,  nor  constitute a waiver of any provision of
the Loan Agreement, or any other documents,  instruments and agreements executed
or delivered in connection with the Loan Agreement.

     Section 8. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of Maryland.

     Section 9.  Headings.  Section  headings in this Amendment are included for
convenience  of reference only and shall not constitute a part of this Amendment
for any other purpose.

     Section 10.  Counterparts.  This Amendment may be executed in counterparts,
and both  counterparts  taken together shall be deemed to constitute one and the
same instrument.




                               [SIGNATURES FOLLOW]


                                     - 91 -
<PAGE>


     IN WITNESS  WHEREOF,  the parties have caused this Amendment to be executed
as of the date first written above.

                                    LENDER:

                                    HELLER HEALTHCARE FINANCE, INC.
                                    (f/k/a HCFP FUNDING, INC.), a Delaware
                                    corporation

                                    By:  /s/ Brett Robinson
                                    Name:    Brett Robinson
                                    Title:   Vice President


                                    BORROWER:

                                    PHC OF MICHIGAN, INC., a Massachusetts
                                    corporation


                                    By:  /s/ Paula C. Wurts
                                    Name:    Paula C. Wurts
                                    Title:   Chief Financial officer


                                    PHC OF UTAH, INC., a Massachusetts
                                    corporation


                                    By:  /s/ Paula C. Wurts
                                    Name:    Paula C. Wurts
                                    Title:   Chief Financial officer


                                    PHC OF VIRGINIA, INC., a Massachusetts
                                    corporation


                                    By:  /s/ Paula C. Wurts
                                    Name:    Paula C. Wurts
                                    Title:   Chief Financial officer