<PAGE>
Exhibit 4.1 Loan and Security Agreement, $500,000 working capital facility,
Suntrust Bank, Atlanta, GA
Borrower
ALLIANCE HEALTHCARD, INC.
COMMERCIAL
SunTrust VARIABLE RATE
REVOLVING OR
SunTrust Bank DRAW NOTE
P.O. Box 4418 MC 154-B
Atlanta, GA 30302
(404) 588-7711 "LENDER"
ADDRESS
3500 PARKWAY LANE STE 310
NORCROSS, GA 30092
TELEPHONE NO. IDENTIFICATION NO
(770) 734-9255 58-2445301-149
<TABLE>
<CAPTION>
Principal
Officer Amount/Credit Funding/Agreement Customer
Identification Interest Rate Limit Date Maturity Date Number Loan Number
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0793 Variable $500,000.00 05/17/00 03/31/01
------------------------------------------------------------------------------------------------------------------------
</TABLE>
Purpose: START-UP AND ONGOING CAPITAL
--------------------------------------
PROMISE TO PAY: For value received, Borrower promises to pay to the order of
Lender the principal amount of Five Hundred Thousand and no/100 Dollars
($500,000.00) or, less, the aggregate unpaid principal amount of all loans or
advances made by the Lender to the Borrower under this Note, plus interest on
the unpaid principal balance at the rate and in the manner described below,
until all amounts owing under this Note are paid in full. All amounts received
by Lender shall be applied first to late charges and expenses, accrued unpaid
interest, then to unpaid principal, or in any other order as determined by
Lender, in Lender's sole discretion, as permitted by law.
REVOLVING OR DRAW FEATURE: [X] This Note possesses a revolving feature. Upon
satisfaction of the conditions set forth in this Note, Borrower shall be
entitled to borrow up to the full principal amount of the Note and to repay and
reborrow from time to time during the term of this Note. This Note possesses a
draw feature. Upon satisfaction of the conditions set forth in this Note,
Borrower shall be entitled to draw one or more times under this Note. Any
repayment may not be reborrowed. The aggregate amount of such draws shall not
exceed the full principal amount of this Note.
Information with regard to any loans or advances under this Note shall be
recorded and maintained by Lender in its internal records and such records shall
be conclusive of the principal and interest owed by Borrower under this note
unless there is a material error in such records. The Lender's failure to
record the date and amount of any loan or advance shall not limit or otherwise
affect the obligations of the Borrower under this Note to repay the principal
amount of the loans or advances together with all interest accruing thereon.
Borrower shall be entitled to inspect or obtain a copy of the records during
Lender's business hours.
CONDITIONS FOR ADVANCES: If no Event or Default has occurred under this Note,
Borrower shall be entitled to borrow monies under this Note (subject to the
limitations described above) under the following conditions:
Disbursements will be made at the sole discretion of the Lender unless the
Lender has otherwise specifically made
A legally binding written commitment to make disbursements hereunder.
INTEREST RATE: This Note has a variable rate feature. The interest rate on
this Note may change from time to time if the Index Rate identified below
changes. Interest shall be computed on the basis of the actual number of days
-------------------------
over 360 days per year. Interest on this Note shall be calculated and payable
--------------
at a variable rate equal to 0.500% per annum over the Index Rate. The initial
------- ----
interest rate on this Note shall be 9.500% per annum. Any change in the
------
interest rate resulting from a change in the Index Rate will be effective on:
Each day the Index Rate changes
-------------------------------
<PAGE>
INDEX RATE: The Index Rate for this Note shall be:
The rate of interest from time to time designated by the Lender as its
"Prime Rate", which rate is not necessarily
The Lender's best or lowest rate of interest.
If the Index Rate is redefined or becomes unavailable, then Lender may select
another index rate which is substantially similar.
DEFAULT RATE: If there is an Event or Default under this Note, the Lender may,
in its discretion, increase the interest rate on this Note to: 4% per annum
------------
above interest rate accruing at maturity or at acceleration
-----------------------------------------------------------
Of the maximum interest rate Lender is permitted to charge by law, whichever is
less.
PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to
the following schedule:
Interest only payments beginning June 17, 2000 and continuing at monthly
time intervals thereafter. A final payment of the unpaid principal balance
plus accrued interest is due and payable on March 31, 2001.
PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, any partial
prepayment will not affect the due date or the amount of any subsequent
installment, unless agreed to, in writing, by Borrower and Lender. If this Note
is prepaid in full, there will be: [X] No minimum finance charge. [_] A
minimum finance charge of $______.
LATE CHARGE: If a payment is received more than 15 days late, Borrower will be
--
charged a late charge of : [_]% of the unpaid
Portion of the payment; [X] $50.00 or 5.00% of the unpaid portion of the
---------------
payment, whichever is [_] greater [X] less.
COLLATERAL: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in all of Borrower's
right, title, and interest in all monies, instruments, savings, checking and
other accounts of Borrower (excluding IRA, Keogh and other accounts subject to
tax penalties if so assigned) that are now or in the future in Lender's custody
or control. [_] If checked, the obligations under this Note are also secured by
the collateral described in any security instruments executed in connection with
this Note, and any collateral described in any other security instruments
securing this Note or all of Borrower's obligations to Lender.
RENEWAL: [_] If checked, this Note is a renewal, but not a satisfaction, of
Loan Number ____________________________.
--------------------------------------------------------------------------------
THE PERSONALS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND
AGREE TO THE PROVISIONS OF THIS NOTE, INCLUDING THE TERMS AND CONDITIONS ON THE
REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE.
Dated: May 17, 2000
BORROWER: ALLIANCE HEALTHCARD INC. BORROWER: ALLIANCE HEALTHCARD, INC.
By: By:
---------------------------------- ------------------------------------
ROBERT D. GARCES THOMAS KISER
CHIEF EXECUTIVE OFFICER PRESIDENT
TERMS AND CONDITIONS
1. EVENT OF DEFAULT. An Event or Default shall occur under this Note in the
event that Borrower, any guarantor or any other third party pledging
collateral to secure this Note.
a. Fails to make any payment on this Note or any other indebtedness to
Lender when due:
b. Fails to perform any obligation or breaches any warranty or covenant
to Lender contained in this Note, any security instrument, or any
other present or future written agreement regarding this or any other
indebtedness of Borrower to Lender.
c. Provides or causes any false or misleading signature or representation
to be provided to Lender:
d. Sells, conveys, or transfers rights in any collateral securing this
Note without the written approval of Lender; or destroys, loses or
damages such collateral in any material respect: or subjects such
collateral to seizure, confiscation or condemnation.
e. Has a garnishment, judgement, tax levy, attachment or lien entered or
served against Borrower, any guarantor, or any third party pledging
collateral to secure this Note or any of their property;
2
<PAGE>
f. Dies, becomes legally incompetent, is dissolved or terminated, ceases
to operate its business, becomes insolvent, makes an assignment for
the benefit of creditors, fails to pay debts as they become due, or
becomes the subject of any bankruptcy, insolvency or debtor
rehabilitation proceeding;
g. Fails to provide Lender evidence of satisfactory financial condition;
h. Has a majority of its outstanding voting securities sold, conveyed, or
transferred to any person or entity other than any person or entity
that has the majority ownership as of the date of the execution of
this agreement; or
i. If Lender deems itself insecure in good faith with respect to any of
the obligations or indebtedness.
2. RIGHTS OF LENDER ON EVENT OF DEFAULT. If there is an Event or Default under
this Note, Lender will be entitled to exercise one or more of the following
remedies without notice or demand (except as required by law):
a. to declare the principal amount plus accrued interest under this Note
and all other present and future obligations of Borrower immediately
due and payable in full; such acceleration shall be automatic and
immediate if the Event of Default is a filing under the Bankruptcy
Code;
b. to collect the outstanding obligations of Borrower with or without
resorting to judicial process;
c. to cease making advances under this Note or any other agreement
between Borrower and Lender;
d. to take possession of any collateral in any manner permitted by law;
e. to require Borrower to deliver and make available to Lender any
collateral at a place reasonably convenient to Borrower and Lender;
f. to sell, lease or otherwise dispose of any collateral and collect any
deficiency balance with or without resorting to legal process;
g. to set-off Borrower's obligations against any amounts due to Borrower
including, but not limited to, monies, instruments, and deposit
accounts maintained with Lender; and
h. to exercise all other rights available to Lender under any other
written agreement or applicable law.
Lender's rights are cumulative and may be exercised together, separately, and in
any order. Lender's remedies under this paragraph are in addition to those
available under any other written agreement or applicable law.
3. DEMAND FEATURE. [_] If checked, this Note contains a demand feature.
Lender's right to demand payment, at any time, and from time to time, shall
be in Lender's sole and absolute discretion, whether or not any default has
occurred.
4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of
record and account in which full, true and correct entries shall be made in
accordance with generally accepted accounting principles and will deliver to
Lender, within ninety (90) days after the end of each fiscal year of
Borrower, a copy of the annual financial statements of Borrower relating to
such fiscal year, such statements to include (i) the balance sheet of
Borrower as at the end of such fiscal year and (ii) the related income
statement, statement of retained earnings and statement of changes in the
financial position of Borrower for such fiscal year, prepared by such
certified public accountants as may be reasonably satisfactory to Lender.
Borrower also agrees to deliver to Lender within fifteen (15) days after
filing same, a copy of Borrower's income tax returns and also, from time to
time, such other financial information with respect to Borrower as Lender
may request.
5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a
writing signed by Lender. Lender may perform any of Borrower's obligations
or delay or fail to exercise any of its rights without causing a waiver of
those obligations or rights. A waiver on one occasion will not constitute a
waiver on any other occasion. Borrower's obligations under this Note shall
not be affected if Lender amends, compromises, exchanges, fails to exercise,
impairs or releases any of the obligations belonging to any Borrower or
guarantor or any of its rights against any Borrower, guarantor, or any
collateral securing any of Borrower's obligations.
6. SEVERABILITY. If any provision of this Note violates the law or is
unenforceable, the rest of the Note shall remain valid. Notwithstanding
anything contained in this Note to the contrary, in no event shall interest
accrue under this Note, before or after maturity, at a rate in excess of the
highest rate permitted by applicable law, and it interest (including any
charge or fee held to be interest by a court of competent jurisdiction) in
excess thereof be paid, any excess shall constitute a payment of, and be
applied to, the principal balance hereof, and if the principal balance has
been fully paid, then such excess interest shall be repaid to Borrower.
7. ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights,
remedies or obligations described in this Note without the prior written
consent of Lender, which consent may be withheld by Lender in its sole
discretion. Borrower agrees that Lender is entitled to assign some or all of
its rights and remedies described in this Note without notice to or the
prior consent of Borrower.
3
<PAGE>
8. NOTICE. Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and mailed to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.
9. APPLICABLE LAW. This Note shall be governed by the laws of the state
indicated in Lender's address. Unless applicable law provides otherwise,
Borrower consents to the jurisdiction and venue of any court located in such
state selected by Lender, in its discretion, in the event of any legal
proceeding under this Note.
10. COLLECTION COSTS AND ATTORNEYS' FEES. To the extent permitted by law,
Borrower agrees to pay all costs of collection, including attorneys' fees of
15 percent of the principal and interest owing on the indebtedness if the
indebtedness is collected by law or through an attorney at law.
11. MISCELLANEOUS. This note is being executed primarily for commercial,
agricultural, or business purposes. Borrower will provide Lender with
current financial statements and other financial information upon request.
Borrower and Lender agree that time is of the essence. Borrower agrees to
make all payments to Lender at any address designated by Lender and in
lawful United States currency. Borrower and any person who endorses this
Note waives presentment, demand for payment, notice of dishonor and protest
and further waives any right to require Lender to proceed against anyone
else before proceeding against Borrower or said person. All references to
Borrower in this Note shall include all of the parties signing this Note,
and this Note shall be binding upon the heirs, personal representatives,
successors and assigns of Borrower and Lender. If there is more than one
Borrower their obligations under this Note shall be joint and several. This
Note represents the complete and integrated understanding between Borrower
and Lender regarding the terms hereof.
12. JURY TRIAL WAIVER. LENDER AND BORROWER HEREBY WAIVE ANY RIGHT TO A TRIAL
BY JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE
COLLATERAL SECURING THIS NOTE.
13. ADDITIONAL TERMS:
4
<PAGE>
Borrower
ALLIANCE HEALTHCARD, INC.
SCHEDULE OF FEES,
SunTrust CHARGES OR
DISBURSEMENTS
SunTrust Bank
P.O. Box 4418 MC 154-B
Atlanta, GA 30302
(404) 588-7711 "LENDER"
ADDRESS
3500 PARKWAY LANE STE 310
NORCROSS, GA 30092
TELEPHONE NO. IDENTIFICATION NO
(770) 734-9255 58-2445301-149
<TABLE>
<CAPTION>
Principal
Officer Amount/Credit Funding/Agreement Customer
Identification Interest Rate Limit Date Maturity Date Number Loan Number
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
0793 Variable $500,000.00 05/17/00 03/31/01
------------------------------------------------------------------------------------------------------------------------
</TABLE>
Borrower has borrowed money from Lender indicated above pursuant to the above
referenced Promissory Note or Agreement. Borrower acknowledges that the
following fees, charges and disbursements have been made or assessed in
connection with the Note or Agreement.
<TABLE>
<CAPTION>
<S> <C>
LINE OF CREDIT AMOUNT: $500,000.00
------------------
AMOUNT DISBURSED TO BORROWER FROM LINE OF CREDIT: n/a
------------------
AMOUNT DRAWN TO PAY OR CREDIT TO BORROWER'S ACCOUNTS WITH LENDER: $
------------------
ACCOUNT NUMBER CREDITED: ------------------
ACCOUNT NUMBER CREDITED: ------------------
ACCOUNT NUMBER CREDITED: ------------------
ACCOUNT NUMBER CREDITED: ------------------
AMOUNT OF LOAN PROCEEDS PAID TO OTHERS ON THE BORROWERS BEHALF: $
------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
PAYEE: ------------------
TOTAL PROCEEDS DISBURSED: $ N/a
------------------
PAID IN CASH DEDUCTED FROM LINE
AMOUNT PAID TO PUBLIC OFFICIALS: $ $
---------------- ------------------
MOUNT PAID TO INSURANCE COMPANIES: ---------------- ------------------
AMOUNT PAID TO APPRAISERS: ---------------- ------------------
AMOUNT PAID TO CREDIT REPORTING AGENCIES: ---------------- ------------------
TITLE EXAMINATION: ---------------- ------------------
SETTLEMENT/CLOSING FEE: ---------------- ------------------
TITLE INSURANCE BINDER: ---------------- ------------------
ATTORNEY: ---------------- ------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
DOCUMENT PREPARATION FEE: ---------------- -----------------
NOTARY: ---------------- -----------------
SURVEYOR: ---------------- -----------------
PEST INSPECTOR: ---------------- -----------------
ABSTRACT/TITLE SEARCH: ---------------- -----------------
TITLE INSURER: ---------------- -----------------
CITY/COUNTY TAX DEED/MORTGAGE: ---------------- -----------------
STATE TAX DEED, MORTGAGE: ---------------- -----------------
HAZARD INSURANCE PREMIUM: ---------------- -----------------
FLOOD INSURANCE PREMIUM: ---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
---------------- -----------------
LOAN ORIGINATION FEE 1,000.00
---------------- -----------------
POINTS/DISCOUNT ---------------- -----------------
LENDERS INSPECTION FEE ---------------- -----------------
ASSUMPTION FEE ---------------- -----------------
TOTAL PREPAID FINANCE CHARGES AND FEES PAID IN CASH: $ 1,000.00
----------------
TOTAL PREPAID FINANCE CHARGES AND FEES DEDUCTED FROM LINE: $
-----------------
BALANCE REMAINING TO BE DRAWN ON LINE: $ 500,000.00
-----------------
-----------------------------------------------------------------------------------------------------------
</TABLE>
DATED: May 17, 2000
Borrower: ALLIANCE HEALTHCARD INC. Borrower: ALLIANCE HEALTHCARD INC.
By: By:
----------------------------------- -----------------------------------
ROBERT D GARCES THOMAS KISER
CHIEF EXECUTIVE OFFICER PRESIDENT
6
