FIFTH AMENDED LOAN AGREEMENT

     This Fifth Amended  Loan Agreement, dated  as of the  ___ day of  December,
1999, is entered into  by and among TACO  CABANA, INC., a Delaware  corporation,
TEXAS TACO CABANA, L.P.,  a Texas limited partnership,  TP ACQUISITION CORP.,  a
Texas corporation,  T.C. MANAGEMENT, INC.,  a Delaware corporation, TACO  CABANA
MANAGEMENT, INC.,  a Texas  corporation, and  TACO  CABANA MULTISTATE,  INC.,  a
Delaware corporation (collectively  the "Borrower"), and  INTERNATIONAL BANK  OF
COMMERCE, a state banking association (the "Lender").

     For good and valuable consideration, the  receipt and sufficiency of  which
is hereby acknowledged, the parties agree as follows:

                             SECTION 1. THE LOANS.

     1.1  Loan  Commitment.   Subject to the  terms and  conditions hereof,  the
Lender agrees to  lend and  advance to  Borrower, from  time to  the time  until
December 31, 2001 (the "Loan Commitment Period"), such sums as the Borrower  may
request, but which shall  not exceed, in the  aggregate principal amount at  any
one time outstanding, the amount of $45,000,000.00 ("Loan Commitment").

     1.2  The Loans.  Each borrowing under the Loan Commitment shall be referred
to herein as a "Loan" (and such borrowings shall be collectively referred as the
"Loans" ),  shall  be deemed  a  separate  and independent  loan  and  shall  be
evidenced and secured  as set  forth below. The  loans (the  "Existing  Loans" )
evidenced by the following described  promissory notes (each a  "Note"  as  such
term is used and defined herein) are also Loans governed by this Agreement:  (i)
that certain  real estate  lien note  in the  original principal  amount of  Ten
Million and  No/100 Dollars  ($10,000,000.00) dated  May 15,  1995, executed  by
Borrower and being payable to the order of Lender; (ii) that certain real estate
lien note  in the  original  principal amount  of  Three Million  Seven  Hundred
Thousand and No/100 Dollars  ($3,700,000.00) dated August  8, 1997, executed  by
Borrower and  being payable  to the  order of  Lender; (iii)  that certain  real
estate lien note in the original  principal amount of Eleven Million and  No/100
Dollars ($11,000,000.00) dated December 23, 1997, executed by Borrower and being
payable to the order of Lender; (iv) that  certain real estate lien note in  the
original principal amount of Thirteen Million  Three Hundred and No/100  Dollars
($13,300,000.00) dated January 15, 1999, executed by Borrower and being  payable
to the  order of  Lender and  (v) that  certain  real estate  lien note  in  the
original principal amount  of Ten  Million and  No/100 Dollars  ($10,000,000.00)
dated of even  date, executed  by Borrower  and being  payable to  the order  of
Lender

     1.3. Note Interest.  Subject to  Section 7 herein,  interest on the  Loans
shall be calculated in accordance with the following:

          a.  All of the  Loans shall bear interest  at the Applicable Rate  (as
defined below).   For  purposes hereof  "Applicable  Rate"  shall  mean, at  any
time, the rate of interest per  annum equal to the  lesser of (i) at  Borrower's
option exercised as set forth below, (A) the LIBOR Rate (as hereinafter defined)
then in effect plus  two and 25/100th  percent (2.25%), to  be recomputed as  of
each Interest  Adjustment  Date, or  (B)  the  New York  Prime  (as  hereinafter
defined), or (ii) the maximum rate of interest allowed by applicable law, as now
or hereafter in effect  (the " Maximum Rate" ).  The term  "Interest  Adjustment
Date"  shall mean each  of December  31, 1999, March  31, 2000,  June 30,  2000,
September 30, 2000, December 31, 2000, March 30, 2001, June 30, 2001,  September
30, 2001 and  December 31, 2001.   The  "New  York Prime  Rate"  shall mean  the
floating annual lending  rate of  interest announced from  time to  time by  the
Chase Manhattan Bank, N.A.,  New York, New York  as its prime  rate, if a  prime
rate is not announced  by Chase Manhattan Bank,  N.A., then the term  "New  York
Prime Rate"  shall mean the floating annual  lending rate of interest  announced
from time to time by Lender as its prime rate  less one percent (1%).  The  term
"LIBOR  Rate"  shall  mean, as  of a particular  date, the  per annum  rate  of
interest identified as the three (3) months London Interbank offered Rate in the
"Money  Rates"  Section of the  Southwest Edition of  the   Wall Street  Journal
most recently published as of Interest  Adjustment Date immediately previous to
such date; provided, however, that if the Wall Street Journal  shall discontinue
or shall fail to regularly publish  such rate in its " Money Rates"  section  or
should the  LIBOR  Rate  become  for any  other  reason  unascertainable  or  be
construed by a court of competent  jurisdiction as not constituting an index  or
formula by which  the foregoing described  rate of interest  can be  determined,
then the LIBOR  Rate option  will no longer  be available  hereunder.   Borrower
acknowledges that Lender makes no warranty  or representation that the New  York
Prime Rate, LIBOR Rate or Lender's prime   rate are more favorable than  another
rate or index,  or that rates  on other loans  or credit facilities  may not  be
based on other indices, or that rates on loans  to others may not be made  below
such rates. Payments of interest under the Loans shall be payable quarterly.

     b.  Upon at least two (2) Business Days' prior written notice from Borrower
to Lender in substantially the form attached hereto as  Exhibit "A"  ,  Borrower
may, on any Interest Adjustment Date elect to use either the New York Prime Rate
or the LIBOR Rate for the calculation of the Applicable Rate; provided, however,
that the rate of interest as  elected in this section must  be the same rate  of
interest as elected in Section 1.3 of that certain Fourth Amended Revolving Loan
Agreement dated of even date herewith by and between Borrower and Lender.

     c.  To the extent Borrower has not made an effective election under and  in
accordance with this Section 1.3, the Applicable Rate shall be calculated  using
the New York Prime Rate.

     1.4  Commitment Fee.  During the Loan Commitment Period, Borrower agrees to
pay to  Lender a  commitment fee  computed at  the rate  of one-quarter  of  one
percent (0.25%)  per  annum on  the  daily average  unused  amount of  the  Loan
Commitment  during  each  Quarterly  Cycle  (as  hereinafter  defined).     Such
commitment fee shall be payable quarterly, in  arrears, on the last day of  each
March,  June,  September  and  December  during  the  Loan  Commitment   Period,
commencing December 31,  1999 and continuing  in consecutive quarterly  payments
thereafter until the date of expiration of the Loan Commitment Period, on  which
date any accrued and  unpaid fee computed in  accordance with the provisions  of
this Section shall be due and  payable.  For purposes  of this Section 1.4,  the
term "Quarterly Cycle"  shall refer  to each  calendar quarter  during the  Loan
Commitment Period.

     1.5  Replaces Prior Commitment.  This Fifth Amended Loan Agreement replaces
entirely that certain  Fourth Amended Loan  Agreement dated as  of December  31,
1998 which governed the terms of a $35,000,000.00 loan commitment from Lender to
Taco Cabana, Inc.  ("Prior Commitment").   The Borrower  and Lender  acknowledge
that the Prior Commitment is null and void and of no further force or effect.

     1.6.  Revolving Loan Agreement.  The Borrower and Lender have entered  into
a Fifth Amended Revolving Loan Agreement of even date herewith ("Revolving  Loan
Agreement").  The term "Revolving Loan Documents" as used in this Fifth  Amended
Loan Agreement shall have the meaning provided in the Revolving Loan Agreement.

                      SECTION 2. SECURITY AND COLLATERAL.

     2.1  Composition of the Collateral.   The Loans shall be secured  primarily
with first liens  and security interests  upon those tracts  of Borrower's  real
property which are agreed upon between Borrower and Lender ("Security  Tracts"),
together with  the improvements,  furniture, fixtures,  equipment, accounts  and
inventory located on, attributable  to or used in  connection with the  Security
Tracts, as specifically  set out  in, and  together with  such other  mortgages,
liens and security  interests as  set out  in the  Loan Documents  set forth  in
Section 3.2 below.  The security granted by the Loan Documents shall  constitute
collateral for  the  indebtedness established  by  the Loans  and  as  otherwise
established and  set  out  in the  Loan  Documents  (cumulatively  the  "Secured
Indebtedness").  All  of the mortgages,  liens, security  interests, and  rights
granted to  Lender  by the  Loan  Documents shall  secure  any and  all  Secured
Indebtedness.   Lender  shall not  be  required to  release  any of  the  liens,
security interests, and rights  granted or given  to Lender by  any of the  Loan
Documents unless and  until all  of the Secured  Indebtedness has  been paid  in
full.  The Loan Documents shall provide  that a default under any Loan  Document
shall constitute a default under the Loan Documents for all Loans.

     2.2  Priority of Liens.  The liens, security interests, and rights  granted
to Lender to secure the Secured Indebtedness shall be first and prior except for
(i) liens for ad valorem taxes  not yet due or  payable, and (ii) those  matters
expressly approved by Lender, in advance  and in writing, which approval  Lender
is under no obligation to provide.

     2.3  Perfection and Preservation of  Liens.  Borrower will (i) execute  and
deliver to Lender from time to time at  the request of Lender such documents  or
instruments as Lender shall  deem necessary or appropriate,  and will take  such
other and further actions as Lender may from  time to time request, in order  to
perfect, continue, protect and preserve the liens, security interests and rights
granted to Lender by the  Loan Documents; and (ii)  pay or reimburse the  Lender
for all costs and taxes of filing or  recording the same in such public  offices
as the Lender may designate.

                        SECTION 3. CONDITIONS PRECEDENT.

     The obligation of the  Lender to make  a Loan hereunder  is subject to  the
following conditions precedent:

     3.1  Certain  Events.   The following  conditions precedent  must be  fully
satisfied as of the date of any Loan:

          a.   No event of default under this Agreement or any Loan Document, as
defined below, shall  have occurred,  and no event  shall have  occurred and  be
continuing that, with the giving of notice or passage of time, or both, would be
such an event of default.

          b.   Lender shall have received an appraisal of the fair market  value
of the real property and improvements thereon to be granted as security for  the
Loan, in  a  form, and  prepared  by an  appraiser,  approved by  Lender,  which
indicates that the amount of the proposed Loan is no greater than eighty percent
(80%) of the lesser of (i) the appraised fair market value of such property,  or
(ii) the purchase price paid by Borrower for such property.

     3.2  Documents Required for the Closing.  Prior to any disbursement of  any
Loan (the "Closing"), the following documents ("Loan Documents") shall have been
delivered to Lender, fully executed and  acknowledged where required and all  in
form and substance acceptable to Lender:

          a.   This Agreement.

          b.   A Real Estate Lien (Promissory) Note ("Note").

          c.   A Security  Agreement between  Borrower and  Lender, granting  to
Lender a security interest  in, among other property,  all of Borrower's  right,
title and  interest,  whether  now  or  hereafter  acquired,  in  all  accounts,
inventory and equipment, and all proceeds  thereof, located on, attributable  to
or used in connection with the Security Tracts.

          d.   A Deed  of Trust,  Assignment of  Rents, Security  Agreement  and
Financing Statement from Borrower to Thomas  L. Travis, Trustee for the  benefit
of Lender, granting a first lien upon the real property and improvements thereon
to secure t he respective Loan.

          e.   Financing statements as Lender shall deem necessary to file  from
time to time in order to perfect and preserve the security interests granted  by
the Loan Documents.

          f.   A Commitment and Policy for Mortgagee Title Insurance issued by a
title company  acceptable  to  Lender  and  for  the  aggregate  amount  of  the
respective Loan.

          g.   A survey of the real property and improvement thereon prepared by
a surveyor acceptable to Lender.

          h.   Engineering and  other  information  evidencing  the  absence  of
pollution or contamination on the property being acquired and the suitability of
such property for Borrower's intended restaurant operation.

          i.   Tax Certificates evidencing that there are no ad valorem taxes or
assessments which are past due or payable.

          j.   Liability and casualty insurance coverage in an amount and issued
by carriers approved by Lender.

          k.    For the first Loan made hereunder, certified (as of the date  of
Closing) copies of  (i) resolutions of  the Borrower's board  of directors  (for
each borrower which is a corporation) or a consent of all general partners  (for
each Borrower which is a partnership)  authorizing the execution, delivery,  and
performance of this Agreement and the Loan Documents, and each other document to
be delivered pursuant hereto  including a certification (dated  the date of  the
Closing) of the Borrower's secretary or its managing or general partner, as  the
case may be, as to the incumbency and signatures of the officers of the Borrower
signing the Loan  Documents, and each  other document to  be delivered  pursuant
hereto;  (ii)  Borrower's  bylaws,  or  partnership  agreement,  including   all
amendments thereto; (iii)  Borrower's articles of  incorporation, including  any
and all amendments  thereto; and (iv)  certificates as to  the good standing  of
Borrower from  applicable governmental  authorities.   For each  Loan after  the
first Loan, Borrower shall  deliver to Lender and  the applicable title  insurer
(i) a  current  written  statement of  the  Borrower's  corporate  secretary  or
managing partner, as the case may be, stating that each of the documents  listed
in this Section  3.2(k) delivered  in conjunction  with the  first Loan  remains
valid, unamended and effective and applicable to the particular Loan to be  made
(or, if  such  statement cannot  truthfully  be  given then  a  current  written
statement of Borrower's corporate secretary  stating the particular reasons  why
such statement cannot be truthfully given, together with any amended documents),
and (ii) any of the documents listed  in this Section 3.2(k) which are  required
by the title  insurer for  a particular  Loan, in  order to  issue the  required
mortgagee's title insurance policy.

          l.   Any and all other documents or instruments as may be required  by
Lender.

          m.   Prior to the first Loan, and thereafter at the request of Lender,
a  true  and  complete   list  of  all   legal  actions,  claims,   proceedings,
investigations and notices thereof, against or affecting Borrower.

                   SECTION 4. REPRESENTATIONS AND WARRANTIES

     4.1  Original.  To induce the Lender  to enter into this Agreement, and  to
fund the Loans to  be made hereunder, each  Borrower represents and warrants  to
the Lender as follows:

          a.   Borrower is  a  corporation  or general  partnership  or  limited
partnership, as  applicable,  duly  organized, validly  existing,  and  in  good
standing under the laws of the state under which it was organized; Borrower  has
the lawful  power  to own  its  properties and  to  engage in  the  business  it
conducts, and is duly qualified and in good standing as a foreign corporation or
foreign partnership  in the  jurisdictions wherein  the nature  of the  business
transacted by it or property owned by it makes such qualification necessary.

          b.   Borrower is not in  default with respect to  any of its  existing
indebtedness, and the  making and  performance of  the Loan  Documents will  not
immediately or with the passage of time, or the giving of notice, or both:   (i)
Violate the charter  or bylaw  or partnership  provisions of  Borrower; or  (ii)
Violate any  Laws or  result in  a  default under  any contract,  agreement,  or
instrument to which Borrower is a party or by which Borrower or its property  is
bound.

          c.   Borrower has the power  and authority to  enter into and  perform
each of the Loan Documents to which it is a party, and to incur the  obligations
herein and therein  provided for,  and has  taken all  corporate or  partnership
action necessary to authorize the execution,  delivery, and performance of  this
Agreement and such other Loan Documents.

          d.   The Loan  Documents are,  and the  Note when  delivered will  be,
valid, binding, and enforceable in accordance with their respective terms.

          e.   There is no pending order, notice, claim, litigation, proceeding,
or investigation  against  or affecting  Borrower,  whether or  not  covered  by
insurance, that would materially and adversely  affect the business of  Borrower
if adversely determined.

          f.   All  financial  information  given   to  Lender,  including   any
schedules and notes pertaining  thereto, have been  prepared in accordance  with
generally accepted  accounting principles  consistently applied,  and fully  and
fairly present the financial condition of Borrower at the dates thereof and  the
results of operations for  the periods covered thereby,  and there have been  no
material adverse changes in the consolidated financial condition or business  of
Borrower set forth therein, to the date hereof.

          g.   Except as otherwise permitted herein, Borrower has filed and paid
all federal, state,  and local tax  returns and other  required reports and  all
taxes, assessments,  and other  governmental charges  that are  due and  payable
prior to the date hereof.

          h.   Except to  the  extent  that the  failure  to  comply  would  not
materially interfere with the conduct of the business of the Borrower,  Borrower
has complied, and shall comply, with all applicable laws and regulations.

          i.   No representation or warranty by the Borrower contained herein or
in any Loan Document or certificate or other document furnished by the  Borrower
contains any untrue or misleading statement of material fact or omits to state a
material fact necessary to make such  representation or warranty not  misleading
in light of the circumstances under which it was made.

          j.   Each  consent,   approval  or   authorization  of,   or   filing,
registration, or qualification required to be obtained by Borrower in connection
with the execution and  delivery of this Agreement,  the Loan Documents, or  the
undertaking or performance of any obligation  hereunder or thereunder, has  been
duly obtained.

     4.2  Survival.   All  of the representations  and warranties  set forth  in
Section 4.1 shall survive until all Secured Indebtedness is satisfied in full.

                       SECTION 5. COVENANTS OF BORROWER.

     Borrower does hereby covenant  and agree with the  Lender that, so long  as
any of the Secured  Indebtedness remains unpaid, Borrower  will comply with  the
following covenants:

     5.1  Affirmative Covenants.

          a.   Taco Cabana,  Inc.  will furnish  to  Lender within  one  hundred
twenty (120) days  after the  close of each  fiscal year  (or, in  the event  an
extension of the deadline  for filing such information  with the Securities  and
Exchange Commission ("SEC") is  required or authorized by  the SEC, then  within
one hundred eighty (180)  days after the  close of each  fiscal year), for  such
fiscal  year,  the  following  independently  audited  and  prepared   financial
information for itself and  its subsidiaries prepared  on a consolidated  basis:
(i) a statement of stockholders' or partners' equity and a statement of  changes
of cash flows;  ; (ii) income  statements; and (iii)  balance sheets;  , all  in
reasonable  detail,  including  all  supporting  schedules  and  comments,   and
certified by an  independent certified  public accountant  auditor, approved  by
Lender, to have been prepared in  accordance with generally accepted  accounting
principles consistently applied.

          b.   Taco Cabana, Inc. will furnish to  Lender within fifty (50)  days
after the close of each quarterly accounting period in each fiscal year of  each
Borrower and  its subsidiaries,  for such  quarter, prepared  on a  consolidated
basis:  (i) a statement of stockholders' or partners' equity and a statement  of
changes in financial position; (ii) income statements; and (iii) balance  sheets
as of the end  of such quarterly  period, all in  reasonable detail, subject  to
year-end audit adjustments, and  certified by Taco Cabana  Inc.'s secretary   to
have been prepared in accordance  with generally accepted accounting  principles
consistently applied.

          c.   Borrower will furnish to  Lender such other financial  statements
or reports as Lender may reasonably and periodically require, including  without
limitation balance  sheets  and  income  statements  for  each  Borrower  on  an
individual basis.

          d.   Borrower will maintain its inventory, equipment, real estate, and
other properties in good condition and  repair (normal wear and tear  excepted);
will pay and discharge, or cause to be paid and discharged when due, the cost of
repairs to or  maintenance of the  same; and will  pay or cause  to be paid  all
rental or mortgage payments due on such real estate.  The Borrower hereby agrees
that, in the event Borrower fails to pay or  cause to be paid any such  payment,
the Lender may do so and on demand be reimbursed therefor by the Borrower.

          e.   In addition to any requirements  in the Loan Documents,  Borrower
will maintain, or cause  to be maintained, public  liability insurance and  fire
and extended coverage insurance on  all assets owned by  them, all in such  form
and amounts, and with such insurers,  as are reasonably satisfactory to  Lender.
Such policies shall contain a provision  whereby they cannot be canceled  except
after thirty (30) days' written notice to  the Lender, and shall name Lender  as
an additional insured.   Borrower will  furnish to the  Lender such evidence  of
insurance as the Lender may require.  Borrower hereby agrees that, in the  event
it or any Borrower  fails to pay  or cause to  be paid the  premium on any  such
insurance, the Lender  may do so  and on demand  be reimbursed  therefor by  the
Borrower.

          f.   Borrower will  pay  or cause  to  be  paid when  due  all  taxes,
assessments or fees  imposed upon it  or on any  of its property  or that it  is
required to withhold and pay over,  except when, prior to impending  foreclosure
such taxes,  assessments or  fees are  contested in  good faith  by  appropriate
proceedings, with adequate reserves therefor having been set aside on its books.

          g.   Borrower will,  when  requested  so to  do,  make  available  for
inspection by duly authorized representatives of  the Lender any of their  books
and records,  and  will  furnish the  Lender  any  information  regarding  their
business affairs and financial condition within a reasonable time after  written
request therefor.

          h.   Borrower will take all necessary steps to preserve its  corporate
or partnership existence  and franchises and  will comply with  all present  and
future Laws applicable to them in  the operation of their respective  businesses
and all material agreements to which they are subject.

          i.   Within  ten  (10)  days  after  the  Lender's  request  therefor,
Borrower will furnish the Lender with copies of federal income tax returns filed
by the Borrower.

          j.   Borrower will pay when due  (or within applicable grace  periods)
all indebtedness due third parties.  If any Borrower defaults in the payment  of
any  principal  (or  installment   thereof)  of,  or   interest  on,  any   such
indebtedness, the Lender shall  have the right, but  not the obligation, to  pay
such interest or  principal for  the account of  Borrower and  be reimbursed  by
Borrower therefor on demand.

          k.   The Borrower will  notify the  Lender immediately  if it  becomes
aware of the occurrence  of any Event of  Default, as defined  below, or of  any
fact, condition, or event that, with the giving of notice or passage of time, or
both, could become an Event of Default hereunder, or of the failure of  Borrower
to observe any of its undertakings hereunder.

          l.   The Borrower's shareholders' or  partners' equity (as  determined
in  accordance  with  generally  accepted  accounting  principals   consistently
applied) less the value  of any intangible assets  (as determined in  accordance
with generally accepted accounting principles consistently applied) shall at all
times equal  or exceed  90% of  Tangible Net  Worth of  Borrower and  Borrower's
Subsidiaries.

          m.   All cash, cash equivalents and  funds derived from operations  of
the Borrower shall be the property of the Borrower at the close of each business
day, unless such cash, cash equivalents and funds are utilized by other entities
for the  payment  of  obligations  in compliance  with  applicable  law.    This
provision is not  intended to  restrict Borrower's  use of  funds or  Borrower's
usual and regular course of business.

          n.   The Borrower and  its Subsidiaries  have (i)  initiated and  will
pursue to completion a review and assessment of all areas  within  Borrower and
each of  its Subsidiaries' business and operations  (including those affected by
information  received from  suppliers  and vendors ) that  could  reasonably be
expected to  be adversely affected by the Year 2000  Problem, (ii) developed and
will  pursue  to  completion a plan and  timeline for  addressing the Year  2000
Problem  on a  timely  basis,  and ( iii)  to  date,    implemented  that  plan
substantially in accordance  with that  timetable.     The Borrower  reasonably
believes  that  all  computer  applications (   including  those  affected   by
information   received  from  its  suppliers  and vendors) that are material to
Borrower  or any of its Subsidiaries' business  and operations will on a timely
basis be  Year 2000 Compliant,  except to the  extent that a failure  to do so
could not reasonably  be expected to  have a  Material
Adverse Effect.

          o.   The Borrower will  promptly notify the  Lender in  the event  the
Borrower discovers or determines that any computer application (including  those
affected  by information  received  from its  suppliers and  vendors )  that  is
material  to Borrower or any of  its Subsidiaries' business and  operations will
not be  Year 2000 Compliant on a timely basis,  except  to the extent  that such
failure  could not reasonably be expected to have a Material Adverse Affect.

          p.   Borrower  will  maintain  an  average  Quarterly  Cash  Flow  (as
defined) for the  immediately preceding four  (4) fiscal quarters  in an  amount
equal to, or in excess of, $4,000,000.00.

     5.2  Negative Covenants.

          a.   For  so  long  as  any  indebtedness  under  the  Loans   remains
outstanding, Borrower shall not without the prior written consent of the  holder
of the Note:

               (1)  Permit the ratio of  Consolidated Cash Flow to  Consolidated
Fixed Charges for the immediately preceding four (4) fiscal quarters  to be less
than 2.0:1.0;

               (2)  Permit Consolidated Net Worth  at any time  to be less  than
the Minimum Consolidated Net Worth (as defined below) then in effect.

               (3)  Permit the ratio  of Debt to  Consolidated Net  Worth to  be
greater than 1.0:1.0  at any  time provided,  however, that  all treasury  stock
purchases shall be excluded when calculating Consolidated Net Worth;

               (4)  Permit the ratio  of Intangible Assets  to Consolidated  Net
Worth to be greater than 0.40:1.0 at any time; or

               (5)  Incur capital expenditures (as defined below): (i) in excess
of $25,000,000.00 during  the 1999 fiscal  year of Borrower;  (ii) in excess  of
$30,000,000.00 during the  2000 fiscal year  of Borrower or  (iii) in excess  of
$35,000,000.00 during the 2001 fiscal year of Borrower.

     For purposes of subsections 5.1(l), (n),  (o) and (p), and this  subsection
5.2(a), the following terms shall have the following meanings:

    "Capital  Expenditures"  as  to Borrower  shall mean  the aggregate  amount
paid or accrued by Borrower and its Subsidiaries for the rental, lease, purchase
(including by way of the acquisition of securities of another person or entity),
construction or use of any  property the value or  cost of which, in  accordance
with generally accepted accounting principles consistently applied would  appear
on Borrower's balance sheet in the category of property, plant or equipment

     "Consolidated Cash Flow"  for any period  shall mean  the consolidated  net
income of the Borrower and all Subsidiaries for such period (after having  taken
into account the  effects of income  tax), plus  (without duplication)  interest
expense, depreciation,  amortization  and all  other  non-cash charges,  all  as
determined  in  accordance   with  generally   accepted  accounting   principles
consistently applied.

     "Consolidated Fixed Charges"  for any  period shall  mean (i)  consolidated
interest expense, and obligations under capitalized leases for such period, plus
(ii) matured debt and any additional debt  maturing within one year of the  date
of determination, plus (iii) dividends and distributions to partners in  respect
of their partnership  interest, for the  Borrower and all  Subsidiaries, all  as
determined  in  accordance   with  generally   accepted  accounting   principles
consistently applied.

     "Consolidated Net Worth" shall mean consolidated shareholders' or partners'
equity of the  Borrower and all  Subsidiaries as determined  in accordance  with
generally accepted accounting principles consistently applied.

     "Debt" means,  with respect  to the  Borrower and  its Subsidiaries,  on  a
consolidated basis,  (i) indebtedness  for borrowed  money or  for the  deferred
purchase price of property or services, (ii) obligations as lessee under  leases
which shall  have been  or  should be,  in  accordance with  generally  accepted
accounting principles,  recorded  as  capital leases,  (iii)  obligations  under
direct or  indirect guaranties  in respect  of  and obligations  (contingent  or
otherwise) to purchase or otherwise acquire,  or otherwise to assure a  creditor
against loss in respect of, indebtedness  or obligations of others of the  kinds
referred to in  clause (i) or  (ii) above, and  (iv) liabilities  in respect  of
unfunded vested  benefits  under plans  covered  by  Title IV  of  the  Employee
Retirement Income Security Act of 1974, as amended.

     "Intangible  Assets"  means,   with  respect  to   the  Borrower  and   its
Subsidiaries,  on  a  consolidated  basis,  goodwill,  organizational  expenses,
trademarks, tradenames, and any other items which are treated as intangibles  in
conformity with generally accepted accounting principles consistently applied.

     "Material  Adverse Effect"   means a  material adverse  effect on  (i)  the
business,  properties,  prospects,   operations  or   condition,  financial   or
otherwise, of the  Borrower and  its Subsidiaries, taken  as a  whole, (ii)  the
ability of the  Borrower to pay  or perform  Borrower's respective  obligations,
liabilities and indebtedness under the Revolving Loan Documents as such  payment
or performance becomes due  in accordance with the  terms thereof, or (iii)  the
rights, powers and remedies of the  Lender under any Revolving Loan Document  or
the validity, legality or enforceability thereof.

     "Minimum  Consolidated  Net  Worth"   means,  during  any  calendar   year,
($40,000,000.00 minus the  amount paid by  Borrower in any  allowed purchase  of
capital  stock  consummated  pursuant  to  Section  5.25b),  plus  50%  of   the
consolidated net income of Borrower (as determined in accordance with  generally
accepted accounting principles, consistently applied) for the period  commencing
January 1, 1999 to  December 31 of  the calendar year  immediately prior to  the
calendar  year in which the determination of Minimum Tangible Net Worth is being
made.

     "Quarterly Cash Flow"  shall mean for  any fiscal quarter  of Borrower  the
consolidated net income of Borrower and its Subsidiaries for such period  (after
having taken into account the effects of income tax) plus (without  duplication)
interest expense, depreciation, amortization and all other non-cash charges, all
as determined  in  accordance  with  generally  accepted  accounting  principles
consistently applied.

     "Subsidiaries" means all corporations or partnerships of which at least 99%
of the partnership interests, or of the shares of stock of every class of which,
outstanding at the time as of which any determination is being made, is owned by
the Borrower, either directly or through a Subsidiary.  "Subsidiary" means  each
of the Subsidiaries.

     "Tangible  Net  Worth"  means,  with  respect  to  the  Borrower  and   its
Subsidiaries, on a consolidated basis, Consolidated Net Worth less the value  of
any intangible  assets  as  determined in  accordance  with  generally  accepted
accounting principles consistently applied.

     "Year  2000 Compliant"  means  all computer  applications (including  those
affected by  information  received from  its  suppliers and  vendors)  that  are
material to the  Borrower or any  of its Subsidiaries'  business and  operations
will on a  timely basis  be able  to perform  properly data-sensitive  functions
involving all dates on and after January 1, 2000.

     "Year 2000 Problem"  means the risk that computer applications used by  the
Borrower and its Subsidiaries (including those affected by information  received
from its suppliers and vendors) may be unable to recognize and perform  properly
data-sensitive functions involving certain dates on and after January 1, 2000.

          b.   No Borrower  shall  change  its  name,  enter  into  any  merger,
consolidation, reorganizations or  recapitalization, or  reclassify its  capital
stock without the prior  written consent of Lender,  which consent shall not  be
unreasonably withheld,  except  that Borrower  shall  be permitted  to  purchase
common stock of Borrower in an aggregate amount expended in the purchase thereof
after December 31, 1999, not to exceed $5,000,000.00.

          c.   No Borrower shall sell, transfer, lease, or otherwise dispose  of
all, or (except in the  ordinary course of business)  any material part of,  its
assets, without the prior written consent of Lender, which consent shall not  be
unreasonably withheld.

          d.   No Borrower shall mortgage, pledge, grant,  or permit to exist  a
security interest in or lien upon any of the security given for the Loans, other
than pursuant to the Loan Documents  and Revolving Loan Documents and  statutory
liens in the ordinary course of its business.

          e.   Borrower shall not  furnish the  Lender with  any certificate  or
other document that will contain any  untrue statement of material fact or  that
will omit to state a material fact necessary to make it not misleading in  light
of the circumstances under which it was furnished.

          f.   No Borrower shall transfer,  alienate, sell, assign, or  encumber
any of its capital stock or partnership interests in any Subsidiary.

          g.   No  Borrower  shall   incur,  create,  assume,   or  permit   any
indebtedness other than  (i) under  the Revolving  Loan Documents  and the  Loan
Documents; (ii) obligations under leases for  real or personal property used  in
Borrower's business; (iii) loans between Borrowers; (iv) loans between Borrowers
and nonborrower Subsidiaries  not exceeding  the aggregate  principal amount  of
$100,000.00 without  the consent  of  the Lender,  which  consent shall  not  be
unreasonably withheld; (v) normal accruals  and trade accounts payable  incurred
in the ordinary  course of  business; or  otherwise become  liable, directly  or
indirectly, as  guarantor  or  otherwise for  any  obligation  (other  than  the
endorsement of commercial paper for deposit or collection in the ordinary course
of business and guaranties of affiliate transactions made in the ordinary course
of business).

          h.   Borrower shall not  make any loans  or advances  to any  officer,
shareholder, director, or employee  of Borrower or of  any Subsidiary which,  at
ant time, exceed the outstanding aggregate principal amount of $300,000.00.

                              SECTION 6. DEFAULT.

     6.1  Events of Default.  The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:

          a.   Any installment of principal and/or interest on the Loans or  any
other sums due by Borrower under the Loan  Documents shall not be paid when  due
and payable.

          b.   Any Borrower  shall breach  any of  the affirmative  or  negative
covenants contained herein and the breach is  not cured within five days of  the
receipt of written notice of the breach from the Lender to the Borrower.

          c.   Any Borrower shall fail to perform, keep or otherwise observe any
other  obligation,  term,  provision,   covenant,  warranty  or   representation
contained herein or in any of the Loan  Documents and such failure is not  cured
within five days of the receipt of written notice of the breach from the  Lender
to the Borrower.

          d.   Any financial statement or  report, representation, warranty,  or
certificate made or  furnished by  any Borrower to  the Lender  hereunder or  in
connection with  this Agreement,  any Loan  or  any Loan  Documents, or  in  any
separate statement or document to be  delivered under the Loan Documents to  the
Lender, shall  be  materially  false, incorrect,  or  incomplete  when  made  or
furnished.

          e.   Any Borrower shall admit its inability  to pay its debts as  they
mature, or  shall make  an assignment  for the  benefit  of its  or any  of  its
creditors.

          f.   Proceedings in  bankruptcy,  or  for  the  dissolution,  full  or
partial liquidation or reorganization of any  Borrower, or for the  readjustment
of any of their respective debts, under the Bankruptcy Code, as amended, or  any
part thereof, or under any other laws, whether state or federal, for the  relief
of debtors, now or hereafter existing, shall be commenced by Borrower.

          g.   If an application is made by any Borrower for the appointment  of
a receiver, trustee, or  custodian for Borrower or  for any substantial part  of
their  respective  assets,  or  any  Borrower  shall  discontinue  business   or
materially change the nature of its business.

          h.   If a receiver, trustee, or custodian  shall be appointed for  any
Borrower or for any part of their respective assets, and shall not be discharged
within 30 days of such appointment.

          i.   If all  or any  of any  borrower's assets  are attached,  seized,
subjected to a writ, or are  levied upon, or come  within the possession of  any
receiver, trustee, custodian or assignee for the benefit of creditors.

          j.   If any Borrower is permanently enjoined, restrained or in any way
prevented by  court order  from conducting  any material  part of  its  business
affairs.

          k.   If a notice of lien, levy  or assessment is filed of record  with
respect to  all  or  any of  Borrower's  assets  by the  United  States  or  any
department,  agency  or  instrumentality  thereof,  or  by  any  state,  county,
municipality or other governmental agency, or if any taxes or debts owing at any
time or times hereafter to any one or more of  them becomes a lien, upon all  or
any material portion of Borrower's assets.

          l.   A judgment creditor  of any Borrower  shall obtain possession  of
any of the collateral securing repayment  of the Loans by any means,  including,
but without limitation, levy, distraint, replevin, or self-help.

          m.   Any Event of Default occurs under the  terms of any  of the  Loan
Documents or under the terms of any of the Revolving Loan Documents.

          n.   Any Borrower shall  dissolve, liquidate,  or otherwise  terminate
its existence, or take any action to effect such termination.

          o.   Any  Borrower  shall  suffer  a  final  judgement  in  excess  of
$250,000.00, and shall not discharge the same within thirty (30) days.

          p.   To furnish the Lender with any certificate or other document that
will contain any untrue statement of material fact or that will omit to state  a
material fact necessary to make it not misleading in light of the  circumstances
under which it was furnished.

          q.   Any material nonborrower Subsidiary shall have failed to pay when
due all taxes, assessments or fees imposed upon it or on any of its property  or
that it is required to  withhold and pay over,  except when, prior to  impending
foreclosure such  taxes, assessments  or fees  are contested  in good  faith  by
appropriate proceedings, with adequate reserves  therefor having been set  aside
on its books.

          r.   Any material nonborrower Subsidiary  fails to take all  necessary
steps to  preserve its  corporate or  partnership existence  and franchises,  or
fails to  comply with  all present  and  future laws  applicable  to it  in  the
operation of its business and all material agreements to which it is subject.

          s.   Lender, at  its discretion  and after  five days  written  notice
given to Borrower,  deems itself  to be  adversely affected  and/or insecure  by
reason of any  material change  in any  of Borrower's  (including any  endorsers
and/or guarantors)  net worth,  or by  reason of  any other  material change  of
condition whether or not described herein.

     6.2  Remedies.  Upon the occurrence of an Event of Default, Lender, at  its
option, may:

          a.   Terminate any obligation  to make any  further Loans and  declare
the entire  principal balance  of the  Secured  Indebtedness and  all  interest,
unpaid accrued and  earned thereon  to be  immediately due  and payable  without
demand for payment, presentment for payment, notices of intention to  accelerate
maturity, notices  of election  to accelerate  maturity, protest  and notice  of
protest or  any other  notice  whatsoever, all  of  which are  hereby  expressly
waived.

          b.   Enforce or avail itself of any and all rights and remedies  given
to it by any or all of the Loan Documents.

          c.   Enforce or avail itself of all rights and remedies allowed by all
applicable laws.

                         SECTION 7. INTEREST LIMITATION

     7.1  Limitation.  Interest on the debt evidenced by the Notes or  otherwise
in connection with the Loans shall not exceed the maximum amount of  nonusurious
interest that may be contracted for, taken, reserved, charged, or received under
law; any interest  in excess of  that maximum amount  shall be  credited on  the
principal of the debt or, if that has been paid, refunded.  On any  acceleration
or  required  or  permitted  prepayment,  any  such  excess  shall  be  canceled
automatically as of the acceleration or prepayment or, if already paid, credited
on the principal of  the debt or, if  the principal of the  debt has been  paid,
refunded.   This provision  overrides other  provisions in  this and  all  other
instruments concerning the debt.   All sums paid  or agreed to  be paid for  the
use, forbearance or detention of the  indebtedness of Borrower to Lender  shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the  full stated term  of such indebtedness  until payment  in
full so that the rate or amount of interest on account of such indebtedness does
not exceed the  maximum rate  of interest allowed  by law  for so  long as  such
indebtedness is outstanding, and  to the extent that  TEX. REV. CIV. STAT.  Ann.
Art. 5069-1.04, as amended,  is applicable to  such indebtedness, the  quarterly
rate ceiling  from time  to time  in  effect under  such  article shall  be  the
applicable ceiling.  This provision overrides  other provisions in this and  all
other instruments concerning the debt.

                            SECTION 8. MISCELLANEOUS

     8.1  No  Permanent Waivers.   No waiver at  any time of  the provisions  or
conditions of this  Agreement or of  any of the  other Loan  Documents shall  be
construed as a waiver  of any of  the other provisions  or conditions hereof  or
thereof nor  be  construed as  a  right to  a  subsequent waiver  or  any  other
provisions or conditions.

     8.2  Severability.  Unenforceability for  any reason against any person  or
persons of any provision  of this Loan Agreement,  or of any  of the other  Loan
Documents or other Agreements between Borrower  and the Lender, shall not  limit
or impair the operation or validity of any other provisions of this Agreement or
any of the other Loan Documents.

     8.3   Descriptive  Headings.   The  descriptive  headings  of  the  various
sections and  subsection  of this  Agreement  and  the Loan  Documents  and  any
schedule, agreement  or other  instrument, executed  with reference  hereto  are
inserted for convenience of reference only, do not constitute a part of any such
document and no  inference is  to be  drawn from  such headings.   Whenever  the
context shall require, words of any gender shall be deemed to include the  other
genders and either the singular or the plural shall include the other.

     8.4   Further Assurance.   From  time to  time, Borrower  will execute  and
deliver to the Lender such additional documents and will provide such additional
information as the Lender may reasonably require to carry out the terms of  this
Agreement and be informed of the Borrower's status and affairs.

     8.5  Enforcement and Waiver by the Lender.  All rights and remedies of  the
Lender are cumulative and  concurrent, and the exercise  of one right or  remedy
shall not be  deemed a waiver  or release  of any other  right or  remedy.   The
Lender shall have  the right  at all  times to  enforce the  provisions of  this
Agreement and the Loan Documents in strict accordance with the terms hereof  and
thereof, notwithstanding any  conduct or  custom on the  part of  the Lender  in
refraining from so doing at any time or times.  Th failure of the Lender at  any
time or  times  to  enforce  its  rights  under  such  provisions,  strictly  in
accordance with the same, shall not be  construed as having created a custom  in
any way or manner contrary to specific provisions of this Agreement or such Loan
Documents or as having in any way or manner modified or waived the same.

     8.6   Expenses of  the Lender.    The Borrower  will,  on demand,  pay,  or
reimburse the lender, for all reasonable expenses, including the reasonable fees
and expenses  of  legal  counsel for  the  Lender,  incurred by  the  Lender  in
connection with  the preparation,  administration, amendment,  modification,  or
enforcement of this  Agreement and  the Loan  Documents, and  the collection  or
attempted collection of any and all Notes.  All reasonable costs, including  but
not limited  to  reasonable  attorney's  fees  of  Borrower,  Lender,  or  other
interested parties, other professional fees,   appraiser's and surveyor's  fees,
taxes and all expenses of all kinds  inured in connection with the Loans,  shall
be borne by Borrower, and  Borrower agrees to indemnify  the Lender and save  it
harmless from the  payment, defense and/or  expense of any  claim or demand  for
such fees, costs, taxes and expenses.

     8.7   Notices.   Any notices  or  consents required  or permitted  by  this
Agreement shall  be in  writing and  shall  be deemed  given when  delivered  in
person, or upon deposit  in the U.S.  Mail, if sent  by certified mail,  postage
prepaid, return receipt requested, as follows, unless such address is changed by
written notice hereunder:

          a.   If to Borrower:

               Taco Cabana, Inc.
               Texas Taco Cabana, L.P.
               T.P. Acquisition Corp.
               T.C. Management, Inc.
               Taco Cabana Management, Inc.
               Taco Cabana Multistate, Inc.

               8918 Tesoro Drive, Suite 200
               San Antonio, Texas 78217

          b.   If to the Lender:

               International Bank of commerce
               130 East Travis
               San Antonio, Texas 78205
               Attention:  Mr. Steve E. Edlund

     8.8     RELEASE BY  THE  BORROWER.   TO  THE MAXIMUM  EXTENT  PERMITTED  BY
APPLICABLE LAWS,  BORROWER  RELEASES THE  LENDER  AND ITS  DIRECTORS,  OFFICERS,
ATTORNEYS, AGENTS, AND EMPLOYEES FROM ALL CLAIMS, CAUSES, DAMAGES, LIABILITY AND
RELATED EXPENSES ARISING OUT OF ANY ACT OR OMISSION ON THE PART OF ANY OF  THEM,
WITH REGARD  TO  THIS AGREEMENT,  WHICH  DOES NOT  INVOLVE  FRAUD BAD  FAITH  OR
NEGLIGENCE BY LENDER OR ITS DIRECTORS, OFFICERS, ATTORNEYS, AGENTS OR EMPLOYEES.

     8.9   Governing  Law.    This  Agreement is  made  and  accepted,  and  the
obligations of the parties set forth herein shall be performable, in the  County
of Bexar and State of Texas, and this Agreement and all the Loan Documents shall
be governed by, and construed in accordance with, the laws of the State of Texas
except to the  extent that  such laws may  be preempted  by laws  of the  United
States of America.  The parties hereby  agree that this Agreement and the  Loans
to be made pursuant hereto shall not be subject to the provisions of Chapter  15
of the Texas Credit Code.

     8.10  Lender's Relationship  to Other.   Lender is not  a partner or  joint
venturer in any manner whatsoever with any Borrower.

     8.11   Waiver, Modification.   Neither  this  Agreement nor  any  provision
hereof may be changed, waived, discharged  or terminated orally, but only by  an
instrument in  writing signed  by  the party  against  whom enforcement  of  the
change, waiver, discharge or termination is sought.

     8.12  Cumulative Remedies.  The right and remedies of the Lender under  the
Loan Documents shall be cumulative and the exercise, or partial exercise, of any
such right or  remedy shall  not preclude  the exercise  of any  other right  or
remedy.

     8.13  Binding Effect.  This Loan Agreement shall be binding upon and  inure
to the  benefit of  Borrower and  Lender and  their respective   successors  and
assigns, provided  that  no  Borrower  may  assign  its  rights  or  obligations
hereunder.  If more than one party executes this Agreement a Borrower, the  term
"Borrower" shall mean and refer to each such party, jointly and severally.

     8.14 Survival  of Agreement.   The  provisions  thereof shall  survive  the
execution of all instruments herein mentioned, and shall continue in full  force
until the Secured  Indebtedness is paid  in full and  shall prevail and  control
over any conflicting provision contained elsewhere in the Loan Documents.

     8.15  Entire  Agreement.  The  Loan Documents embody  the entire  agreement
between the parties and supersedes all  prior agreements and understandings,  if
any, relating to the  subject matter hereof.   There are  no oral agreements  or
understandings  between  the  parties  which  are  not  evidenced  by  the  Loan
Documents.

     8.16   Subsidiaries.   Except where  otherwise specified  herein, the  term
"Subsidiary" shall  mean every entity of which more than fifty percent (50%)  of
the outstanding voting stock or other ownership interests shall, at the time  of
determination, be owned directly or indirectly by the named Borrower or  through
one or more intermediaries of Borrower.

IN WITNESS WHEREOF, the parties hereto  have duly executed this Agreement as  of
the day and year first above written.

     THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT  BETWEEN THE PARTIES AND  MAY
NOT BE CONTRADICTED  BY EVIDENCE OF  PRIOR, CONTEMPORANEOUS  OR SUBSEQUENT  ORAL
AGREEMENTS OF THE PARTIES.  THERE  ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN  THE
PARTIES.


WITNESS:                           BORROWER:

                                   TACO CABANA, INC., a Delaware corporation

__________________________         By:______________________
Name:____________________              David G. Lloyd, Chief Financial Officer

                                   TEXAS TACO CABANA, L.P., a Texas
                                   limited partnership

                                   By: TACO CABANA MANAGEMENT,
                                      INC., a Texas corporation, General Partner

___________________________        By:_______________________
Name:______________________            David G. Lloyd, Chief Financial Officer

                                   TP ACQUISITION CORP., a Texas corporation

____________________________       By:______________________
Name:_______________________            David G. Lloyd, Chief Financial Officer

                                   T.C. MANAGEMENT, INC.,
                                   a Delaware corporation

____________________________       By:______________________
Name:_______________________            David G. Lloyd, Chief Financial Officer

                                   TACO CABANA MANAGEMENT, INC.,
                                   a Texas corporation

_____________________________      By:______________________
Name:__________________________         David G. Lloyd, Chief Financial Officer


                                   TACO CABANA MULTISTATE, INC.,
                                   a Delaware corporation

_______________________________    By:______________________
Name:__________________________         David G. Lloyd, Chief Financial Officer


                                   INTERNATIONAL BANK OF COMMERCE

                                   By:______________________
                                       Steve E. Edlund, Executive Vice President