Document:

<PAGE>

                                                                   Exhibit 10.30

                                LOAN AGREEMENT

                      ($70,000,000 TERM LOAN A FACILITY,

                       $80,000,000 TERM LOAN B FACILITY

                                      AND

                     $100,000,000 REVOLVING LOAN FACILITY)

                         dated as of December 19, 2000

                                     AMONG

                             CARROLS CORPORATION,
                                 as Borrower,

                           THE CHASE MANHATTAN BANK,
                           as Agent and as a Lender,

                            BANK OF AMERICA, N.A.,
                     as Syndication Agent and as a Lender,

                            SUNTRUST BANK, ATLANTA,
                    as Documentation Agent and as a Lender,

                   MANUFACTURERS AND TRADERS TRUST COMPANY,
                         as Co-Agent and as a Lender,

                                      AND

                      THE OTHER LENDERS NOW OR HEREAFTER
                                PARTIES HERETO
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

                                                                        Page
                                                                        ----

1.   Definitions.......................................................    1
     -----------
     1.1  Certain Defined Terms........................................    1
          ---------------------
     1.2  Miscellaneous................................................   24
          -------------

2.   Commitments and Loans.............................................   24
     ---------------------
     2.1  Loans........................................................   24
          -----
     2.2  Letters of Credit............................................   25
          -----------------
     2.3  Terminations or Reductions of  Commitments...................   29
          ------------------------------------------
     2.4  Commitment Fees..............................................   29
          ---------------
     2.5  Several Obligations..........................................   29
          -------------------
     2.6  Notes........................................................   30
          -----
     2.7  Use of Proceeds..............................................   30
          ---------------

3.   Borrowings, Payments, Prepayments and Interest Options............   30
     ------------------------------------------------------
     3.1  Borrowings...................................................   30
          ----------
     3.2  Prepayments..................................................   31
          -----------
     3.3  Interest Options.............................................   34
          ----------------

4.   Payments; Pro Rata Treatment; Computations, Etc...................   38
     ------------------------------------------------
     4.1  Payments.....................................................   38
          --------
     4.2  Pro Rata Treatment...........................................   39
          ------------------
     4.3  Certain Actions, Notices, Etc................................   40
          ------------------------------
     4.4  Non-Receipt of Funds by Agent................................   40
          -----------------------------
     4.5  Sharing of Payments, Etc.....................................   41
          -------------------------

5.   Conditions Precedent..............................................   41
     --------------------
     5.1  Initial Loans and Letters of Credit..........................   41
          -----------------------------------
     5.2  All Loans and Letters of Credit..............................   43
          -------------------------------

6.   Representations and Warranties....................................   44
     ------------------------------
      6.1  Organization................................................   44
           ------------
      6.2  Financial Statements........................................   44
           --------------------
      6.3  Enforceable Obligations; Authorization......................   44
           --------------------------------------
      6.4  Other Debt..................................................   45
           ----------
      6.5  Litigation..................................................   45
           ----------
      6.6  Title.......................................................   45
           -----
      6.7  Taxes.......................................................   45
           -----
      6.8  Regulations T, U and X......................................   45
           ----------------------
      6.9  Subsidiaries................................................   45
           ------------
     6.10  No Untrue or Misleading Statements..........................   45
           ----------------------------------
     6.11  ERISA.......................................................   46
           -----
     6.12  Investment Company Act......................................   46
           ----------------------

                                       i
<PAGE>

     6.13  Public Utility Holding Company Act..........................  46
           ----------------------------------
     6.14  Solvency....................................................  46
           --------
     6.15  Fiscal Year.................................................  46
           -----------
     6.16  Compliance..................................................  46
           ----------
     6.17  Environmental Matters.......................................  46
           ---------------------
     6.18  Certificate of Title Property; Property of Excluded
           ---------------------------------------------------
            Subsidiaries...............................................  47
            ------------
     6.19  Collateral Covered..........................................  47
           ------------------
     6.20  Subordinated Indebtedness...................................  47
           -------------------------

7.   Affirmative Covenants.............................................  47
     ---------------------
      7.1  Taxes, Existence, Regulations, Property, Etc................  47
           ---------------------------------------------
      7.2  Financial Statements and Information........................  48
           ------------------------------------
      7.3  Financial Tests.............................................  48
           ---------------
      7.4  Inspection..................................................  49
           ----------
      7.5  Further Assurances..........................................  49
           ------------------
      7.6  Books and Records...........................................  49
           -----------------
      7.7  Insurance...................................................  49
           ---------
      7.8  Notice of Certain Matters...................................  50
           -------------------------
      7.9  Interest Rate Risk..........................................  50
           ------------------
     7.10  Capital Adequacy............................................  50
           ----------------
     7.11  ERISA Information and Compliance............................  51
           --------------------------------
     7.12  Additional Security Documents...............................  52
           -----------------------------

8.   Negative Covenants................................................  52
     ------------------
      8.1  Borrowed Money Indebtedness.................................  52
           ---------------------------
      8.2  Liens.......................................................  53
           -----
      8.3  Contingent Liabilities......................................  53
           ----------------------
      8.4  Mergers, Consolidations and Dispositions of Assets..........  53
           --------------------------------------------------
      8.5  Redemption, Dividends and Distributions.....................  54
           ---------------------------------------
      8.6  Nature of Business..........................................  54
           ------------------
      8.7  Transactions with Related Parties...........................  54
           ---------------------------------
      8.8  Loans and Investments.......................................  54
           ---------------------
      8.9  Subsidiaries................................................  54
           ------------
     8.10  Key Agreements..............................................  55
           --------------
     8.11  Organizational Documents....................................  55
           ------------------------
     8.12  Certificate of Title Property; Excluded Subsidiaries........  55
           ----------------------------------------------------
     8.13  Unfunded Liabilities........................................  55
           --------------------
     8.14  Acquisitions of Assets......................................  55
           ----------------------
     8.15  Subordinated Indebtedness...................................  56
           -------------------------
     8.16  Synthetic Repurchases of Equity or Debt.....................  56
           ---------------------------------------

9.   Defaults..........................................................  56
     --------
       9.1  Events of Default..........................................  56
            -----------------
       9.2  Right of Setoff............................................  59
            ---------------
       9.3  Collateral Account.........................................  59
            ------------------
       9.4  Preservation of Security for Unmatured Reimbursement
            ----------------------------------------------------
             Obligations...............................................  59
             -----------

                                       ii
<PAGE>

       9.5  Remedies Cumulative........................................  60
            -------------------

10.   Agent............................................................  60
      -----
      10.1  Appointment, Powers and Immunities.........................  60
            ----------------------------------
      10.2  Reliance...................................................  61
            --------
      10.3  Defaults...................................................  61
            --------
      10.4  Material Written Notices...................................  62
            ------------------------
      10.5  Rights as a Lender.........................................  62
            ------------------
      10.6  Indemnification............................................  62
            ---------------
      10.7  Non-Reliance on Agent and Other Lenders....................  62
            ---------------------------------------
      10.8  Failure to Act.............................................  63
            --------------
      10.9  Resignation or Removal of Agent............................  63
            -------------------------------
     10.10  No Partnership.............................................  63
            --------------
     10.11  Co-Agents..................................................  63
            ---------

11.  Miscellaneous.....................................................  64
     -------------
      11.1  Waiver.....................................................  64
            ------
      11.2  Notices....................................................  64
            -------
      11.3  Expenses, Etc..............................................  64
            --------------
      11.4  Indemnification............................................  65
            ---------------
      11.5  Amendments, Etc............................................  65
            ----------------
      11.6  Successors and Assigns.....................................  66
            ----------------------
      11.7  Limitation of Interest.....................................  68
            ----------------------
      11.8  Survival...................................................  69
            --------
      11.9  Captions...................................................  69
            --------
     11.10  Counterparts...............................................  69
            ------------
     11.11  Governing Law..............................................  69
            -------------
     11.12  Severability...............................................  70
            ------------
     11.13  Tax Forms..................................................  70
            ---------
     11.14  Conflicts Between This Agreement and the Other Loan
            ---------------------------------------------------
             Documents.................................................  70
             ---------
     11.15  Jury Waiver................................................  70
            -----------
     11.16  Limitation on Charges; Substitute Lenders;
            ------------------------------------------
             Non-Discrimination........................................  70
             ------------------
     11.17  Amendment and Restatement; Renewal Notes...................  71
            ----------------------------------------

                                      iii
<PAGE>

EXHIBITS
--------
     A -- Request for Extension of Credit
     B -- Rate Designation Notice
     C -- Term Note A
     D -- Revolving Note
     E -- Assignment and Acceptance
     F -- Compliance Certificate
     G -- Term Note B

                                       iv
<PAGE>

                                 LOAN AGREEMENT
                                 --------------

     THIS LOAN AGREEMENT is made and entered into as of December 19, 2000 (the
"Effective Date"), by and among CARROLS CORPORATION, a Delaware corporation
---------------
(together with its permitted successors, herein called the "Borrower"); each of
                                                            --------
the lenders which is or may from time to time become a party hereto
(individually, a "Lender" and, collectively, the "Lenders"), BANK OF AMERICA,
                  ------                          -------
N.A., as Syndication Agent, SUNTRUST BANK, ATLANTA, as Documentation Agent,
MANUFACTURERS AND TRADERS TRUST COMPANY, as Co-Agent, and THE CHASE MANHATTAN
BANK ("Chase"), a New York banking corporation, as agent for the Lenders (in
       -----
such capacity, together with its successors in such capacity, the "Agent").
                                                                   -----

     The parties hereto agree as follows:

1.   Definitions.
     -----------

     1.1  Certain Defined Terms.
          ---------------------

     Unless a particular term, word or phrase is otherwise defined or the
context otherwise requires, capitalized terms, words and phrases used herein or
in the Loan Documents (as hereinafter defined) have the following meanings (all
definitions that are defined in this Agreement in the singular have the same
meanings when used in the plural and vice versa):
                                     ----------

     Accounts, Equipment, General Intangibles and Inventory shall have the
     --------  ---------  -------------------     ---------
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of New York in force on the Effective Date.

     Additional Interest means the aggregate of all amounts accrued or paid
     -------------------
pursuant to the Notes or any of the other Loan Documents (other than interest on
the Notes at the Stated Rate) which, under applicable laws, are or may be deemed
to constitute interest on the indebtedness evidenced by the Notes.

     Additional Collateral shall have the meaning ascribed to such term in
     ---------------------
Section 7.8 hereof.
-----------

     Additional Collateral Event shall have the meaning ascribed to such term in
     ---------------------------
Section 7.8 hereof.
-----------

     Adjusted LIBOR means, with respect to each Interest Period applicable to a
     --------------
LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.

     Affiliate means any Person controlling, controlled by or under common
     ---------
control with any other Person.  For purposes of this definition, "control"
                                                                  -------
(including "controlled by" and "under common control with") means the
            -------------       -------------------------
possession, directly or indirectly, of the power to direct or cause
<PAGE>

the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.

     Agreement means this Loan Agreement, as it may from time to time be
     ---------
amended, modified, restated or supplemented.

     Annual Audited Financial Statements means the annual financial statements
     -----------------------------------
of a Person, including all notes thereto, which statements shall include a
balance sheet as of the end of such fiscal year and an income statement and a
statement of cash flows for such fiscal year, all setting forth in comparative
form the corresponding figures from the previous fiscal year, all prepared in
conformity with GAAP in all material respects, and accompanied by the opinion of
independent certified public accountants of recognized national standing, which
shall state that such financial statements present fairly in all material
respects the financial position of such Person and, if such Person has any
Subsidiaries (other than Non-Recourse Subsidiaries), its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) as of the date thereof and
the results of its operations for the period covered thereby in conformity with
GAAP.  Such statements of Borrower shall be accompanied by a certificate of such
accountants that in making the appropriate audit and/or investigation in
connection with such report and opinion, such accountants did not become aware
of any Default relating to the financial tests set forth in Section 7.3 hereof
                                                            -----------
or, if in the opinion of such accountants any such Default exists, a description
of the nature and status thereof.

     Applications means all applications and agreements for Letters of Credit,
     ------------
or similar instruments or agreements, in Proper Form, now or hereafter executed
by any Person in connection with any Letter of Credit now or hereafter issued or
to be issued under the terms hereof at the request of any Person.

     Assignment and Acceptance shall have the meaning ascribed to such term in
     -------------------------
Section 11.6 hereof.
------------

     Bankruptcy Code means the United States Bankruptcy Code, as amended, and
     ---------------
any successor statute.

     Base Rate means for any day a rate per annum equal to the lesser of (a) the
     ---------
applicable Margin Percentage from time to time in effect plus the greater of (1)
the Prime Rate for that day and (2) the Federal Funds Rate for that day plus
1/2 of 1% or (b) the Ceiling Rate.  If for any reason Agent shall have
determined (which determination shall be conclusive and binding, absent manifest
error) that it is unable to ascertain the Federal Funds  Rate for any reason,
including, without limitation, the inability or failure of Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base Rate shall,
until the circumstances giving rise to such inability no longer exist, be the
lesser of (a) the Prime Rate plus the applicable Margin Percentage from time to
time in effect or (b) the Ceiling Rate.

     Base Rate Borrowing means that portion of the principal balance of the
     -------------------
Loans at any time bearing interest at the Base Rate.

     BKC means Burger King Corporation, a Florida corporation.
     ---

                                       2
<PAGE>

     BKC Consents means, collectively, (i) the Intercreditor Agreement dated as
     ------------
of February 12, 1999 executed by and among BKC, Borrower, Carrols Holdings and
Agent and (ii) all other Intercreditor Agreements now or hereafter executed by
BKC relating to any of the Mortgaged Properties or Excluded Assets, as the same
may from time to time be amended, modified, supplemented or restated.

      Borrowed Money Indebtedness means, with respect to any Person, without
      ---------------------------
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations of such Person under conditional sale or
other title retention agreements relating to Property purchased by such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property or services (excluding obligations of such Person to creditors
for raw materials, inventory, services and supplies and deferred payments for
services to employees and former employees incurred in the ordinary course of
such Person's business), (v) all capital lease obligations of such Person, (vi)
all obligations of others secured by any lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (vii) Interest Rate Risk Indebtedness of such Person, (viii) all
obligations of such Person in respect of outstanding letters of credit issued
for the account of such Person and (ix) all guarantees of such Person of any of
the foregoing.

     Business Day means any day other than a day on which commercial banks are
     ------------
authorized or required to close in New York City, New York or Houston, Texas.

     Capital Expenditures means, with respect to any Person for any period,
     --------------------
expenditures in respect of fixed or capital assets by such Person, including
capital lease obligations incurred during such period (to the extent not already
included), which would be reflected as additions to Property, plant or equipment
on a balance sheet of such Person and its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries), if any, prepared in accordance with GAAP; but
excluding expenditures during such period for the repair or replacement of any
---------
fixed or capital asset which was destroyed or damaged, in whole or in part, to
the extent financed by the proceeds of an insurance policy maintained by such
Person.

     Carrols Holdings means Carrols Holdings Corporation, a Delaware
     ----------------
corporation.

     Ceiling Rate means, on any day, with respect to any Person, the maximum
     ------------
nonusurious rate of interest permitted for that day by whichever of applicable
federal or New York (or any jurisdiction whose usury laws are deemed to apply to
the Notes or any other Loan Documents despite the intention and desire of the
parties to apply the usury laws of the State of New York) laws permits the
higher interest rate, stated as a rate per annum.  On each day, if any, that the
Texas Finance Code establishes the Ceiling Rate, the Ceiling Rate shall be the
"weekly ceiling" (as defined in (S)303 of the Texas Finance Code) for that day.
Agent may from time to time, as to current and future balances, implement any
other ceiling under the Texas Finance Code by notice to Borrower, if and to the
extent permitted by the Texas Finance Code.  Without notice to Borrower or any
other person or entity, the Ceiling Rate shall automatically fluctuate upward
and downward as and in the amount by which such maximum nonusurious rate of
interest permitted by applicable law fluctuates.

                                       3
<PAGE>

     Co-Agents means, collectively, Manufacturers and Traders Trust Company, in
     ---------
its capacity as Co-Agent hereunder, Bank of America, N.A., in its capacity as
Syndication Agent hereunder, and SunTrust Bank, Atlanta, in its capacity as
Documentation Agent hereunder.

     Code means the Internal Revenue Code of 1986, as amended, as now or
     ----
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.

     Collateral means all Property, tangible or intangible, real, personal or
     ----------
mixed, now or hereafter subject to the Security Documents.

     Commitment Fee Percentage means (i) on any day prior to the first day of
     -------------------------
the fiscal year 2001, 0.375% and (ii) on and after the first day of the fiscal
year 2001, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Total Debt to EBITDA Ratio
as of the last day of the most recently ended fiscal quarter of Borrower
calculated by Agent as soon as practicable after receipt by Agent of all
financial reports required under this Agreement with respect to such fiscal
quarter (including a Compliance Certificate) (provided, however, that if the
Commitment Fee Percentage is increased as a result of the reported Total Debt to
EBITDA Ratio, such increase shall be retroactive to the date that Borrower was
obligated to deliver such financial reports to Agent pursuant to the terms of
this Agreement and provided further, however, that if the Commitment Fee
Percentage is decreased as a result of the reported Total Debt to EBITDA Ratio,
and such financial reports are delivered to Agent not more than ten (10)
calendar days after the date required to be delivered pursuant to the terms of
this Agreement, such decrease shall be retroactive to the date that Borrower was
obligated to deliver such financial reports to Agent pursuant to the terms of
this Agreement):

           Total Debt to                          Commitment
           EBITDA Ratio                         Fee Percentage
           ------------                         --------------

           Greater than or equal to
                3.50                                 0.500

           Less than 3.50                            0.375

     Compliance Certificate shall have the meaning given to it in Section 7.2
     ----------------------                                       -----------
hereof.

     Contribution Agreement shall mean that certain Contribution Agreement dated
     ----------------------
concurrently herewith by and among Borrower, Carrols Holdings and the current
Subsidiaries of Borrower (other than Excluded Subsidiaries and Non-Recourse
Subsidiaries) , as the same may be amended, modified, supplemented and restated-
-and joined in pursuant to a joinder agreement--from time to time.

     Controlled Group means all members of a controlled group of corporations
     ----------------
and all trades or businesses (whether or not incorporated) under common control
which, together with Borrower, are treated as a single employer under Section
414 of the Code.

                                       4
<PAGE>

     Corporation means any corporation, limited liability company, partnership,
     -----------
joint venture, joint stock association, business trust and other business
entity.

     Cost Savings means the sum of $1,000,000, representing cost savings
     ------------
realized upon acquisition of Taco Cabana, Inc., minus, for each day thereafter,
                                                -----
the sum of $2,740.00 (so that Cost Savings shall be reduced to $0 on the one (1)
year anniversary of the Effective Date).

     Cover for Letter of Credit Liabilities shall be effected by paying to Agent
     -----
immediately available funds, to be held by Agent in a collateral account
maintained by Agent at its Principal Office and collaterally assigned as
security for the financial accommodations extended pursuant to this Agreement
using documentation reasonably satisfactory to Agent, in the amount required by
any applicable provision hereof.  Such amount shall be retained by Agent in such
collateral account until such time as in the case of the Cover being provided
pursuant to Sections 2.2(a) or 9.3 hereof, the applicable Letter of Credit shall
            ---------------    ---
have expired and the Reimbursement Obligations, if any, with respect thereto
shall have been fully satisfied; provided, however, that at such time if a
                                 --------  -------
Default or Event of Default has occurred and is continuing, Agent shall not be
required to release such amount in such collateral account until such Default or
Event of Default shall have been cured or waived.

     Debt means, with respect to any Person, the sum, without duplication, of
     ----
(i) all borrowings under the Notes, (ii) any obligation for Borrowed Money
Indebtedness which under GAAP would be shown on the balance sheet of such Person
as a liability (including, without limitation, capitalized lease obligations but
excluding reserves for deferred income taxes, deferred pension liability and
other deferred expenses and reserves), (iii) Indebtedness secured by any Lien
existing on Property owned by such Person, whether or not the Indebtedness
secured thereby shall have been assumed, (iv) guarantees by such Person of
Borrowed Money Indebtedness and endorsements (other than endorsements of
negotiable instruments for collection in the ordinary  course of business) and
(v) Letters of Credit and other letters of credit (whether drawn or undrawn) for
the account of such Person.

     Debt Service means, with respect to any Person for any period, the sum of
     ------------
(i) Interest Expense for such period and (ii) scheduled principal payments on
obligations included within Debt for such period.

     Debt Service Coverage Ratio means, as of any day, the ratio of (a) EBITDA
     ---------------------------
for the 12 months ending on such date plus rent expense of Borrower and its
                                      ----
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) for such 12-
month period to (b) Debt Service of Borrower and its consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) for such 12-month period plus rent
                                                                ----
expense of Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) for such 12-month period.  Notwithstanding the foregoing, (i) at
all times prior to the last day of the fiscal year 2001, the Debt Service
component of the Debt Service Coverage Ratio shall be determined on an
annualized basis using information from the Effective Date forward, (ii) Taco
Cabana, Inc. and its Subsidiaries shall be deemed to have been consolidated
Subsidiaries of Borrower for the entire calculation period for the Debt Service
Coverage Ratio and (iii) Cost Savings  shall be added to the numerator of the
Debt Service Coverage Ratio prior to the one (1) year anniversary of the
Effective Date.

                                       5
<PAGE>

     Default means an Event of Default or an event which with notice or lapse of
     -------
time or both would, unless cured or waived, become an Event of Default.

     Dollars and $ means lawful money of the United States of America.
     -------     -

     EBITDA means, without duplication, for any period the consolidated net
     ------
earnings (excluding any extraordinary gains or losses) of Borrower and its
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) plus, to the
                                                                 ----
extent deducted in calculating consolidated net income, depreciation,
amortization, other non-cash items, Interest Expense, and federal, state and
foreign income tax expense and minus, to the extent added in calculating
                               -----
consolidated net income, non-cash income.

     Effective Date shall have the meaning ascribed to that term in the first
     --------------
paragraph of this Agreement.

     Environmental Claim means any third party (including Governmental
     -------------------
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances.  An "Environmental Claim" includes,
                                                 -------------------
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.

     Environmental Liabilities includes all liabilities arising from any
     -------------------------
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.

     Environmental Permit means any permit, license, approval or other
     --------------------
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or wastes
into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous Substances.

     Equity Interests means shares of the capital stock, partnership interests,
     ----------------
membership interest in a limited liability company, beneficial interests in a
trust or other equity interests in Borrower or

                                       6
<PAGE>

any of its Subsidiaries or other applicable Person or any warrants, options or
other rights to acquire such interests.

     ERISA means the Employee Retirement Income Security Act of 1974, as amended
     -----
from time to time, and all rules, regulations, rulings and interpretations
adopted by the Internal Revenue Service or the U.S. Department of Labor
thereunder.

     Eurodollar Rate means for any day during an Interest Period for a LIBOR
     ---------------
Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
applicable Margin Percentage in effect on the first day of such Interest Period
and (b) the Ceiling Rate.  Each Eurodollar Rate is subject to adjustments for
reserves, insurance assessments and other matters as provided for in Section 3.3
                                                                     -----------
hereof.

     Eurodollar Reserve Requirement means, on any day, that percentage
     ------------------------------
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D.  Each determination of the Eurodollar Reserve
Requirement by Agent shall be conclusive and binding, absent manifest error, and
may be computed using any reasonable averaging and attribution method.

     Event of Default shall have the meaning assigned to it in Section 9 hereof.
     ----------------                                          ---------

     Excess Cash Flow means, without duplication, for any period, (i)  the sum
     ----------------
of EBITDA for such period plus extraordinary cash gains for such period less
                                                                        ----
(ii) the sum of all Debt Service (other than mandatory prepayments calculated on
the basis of Excess Cash Flow), federal, state and foreign income taxes actually
paid, Investments of the nature described in clause (e) of the definition of
                                             ----------
"Permitted Investments" made by Borrower and its consolidated Subsidiaries
(other than Non-Recourse Subsidiaries) during such period, extraordinary cash
losses and unfinanced Capital Expenditures (including the unfinanced portion of
Properties acquired), in each case for Borrower and its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) for such period.

     Excluded Assets means (i) leasehold estates with respect to which BKC is
     ---------------
the lessor, (ii) the real property interest in and to leasehold estates situated
in shopping malls, (iii) those leasehold estates in respect of which the Lease
Agreement requires consent of the lessor/landlord to a collateral assignment and
such lessor/landlord has refused to grant such consent notwithstanding the
commercially reasonable efforts by Borrower to obtain such consent, (iv) assets
owned by the Excluded Subsidiaries, (v) Equity Interests in Excluded
Subsidiaries and (vi) such other Property acquired after the date hereof as the
Majority Lenders may from time to time agree shall be included in "Excluded
Assets".

     Excluded Subsidiaries means Carrols Realty II Corp., a Delaware
     ---------------------
corporation, Carrols J.G. Corp., a Delaware corporation, CDC Theatre Properties,
a Delaware corporation, HNS Leasing and Equipment Services, Inc., a New York
corporation, Quanta Advertising Corp., a New York corporation, Jo-Ann
Enterprises, Inc., a New Jersey corporation, Confectionary Square Corp., a New
Jersey corporation, Pollo Properties, Inc., a North Carolina corporation, T.C.
Lease Holdings III, V

                                       7
<PAGE>

and VI, Inc., a Texas corporation, Taco Cabana Multistate, Inc., a Delaware
corporation, Colorado Cabana, Inc., a Colorado corporation, Taco Cabana Atlanta,
Inc., a Delaware corporation, TC Bevco LLC, a Texas limited liability company,
TC Bevco Holdings LLC, a Texas limited liability company, TC Bevco Management
LLC, a Texas limited liability company, Cabana Bevco LLC, a Texas limited
liability company, Cabana Beverages, Inc., a Texas corporation, Two Pesos Liquor
Corp., a Texas corporation, and Rosa Beverages, Inc., a Texas corporation.
Borrower may at any time cause any of the above listed entities to no longer be
characterized as an "Excluded Subsidiary" by satisfying the conditions set forth
in Section 8.9 hereof as if such entity were a newly acquired Subsidiary.
   -----------

     Federal Funds Rate means, for any day, a fluctuating interest rate per
     ------------------
annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any such day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by Agent in its sole and absolute discretion.

     Fee Simple Sites means all Property with respect to which Borrower or any
     ----------------
of its Subsidiaries owns fee simple title.

     Financing Statements means all such Uniform Commercial Code financing
     --------------------
statements as Agent shall reasonably require, in Proper Form, duly executed by
Borrower (or any other applicable Obligor) to give notice of and to perfect or
continue perfection of Agent's Liens in any applicable Collateral, as any of the
foregoing may from time to time be amended, modified, supplemented or restated.

     Fixed Charge Coverage Ratio means, as of any day, the ratio of (a) EBITDA
     ---------------------------
for the 12 months ending on such day less the current portion of federal, state
                                     ----
and foreign income taxes actually paid during such 12-month period and less
                                                                       ----
Maintenance Capital Expenditures for such 12-month period to (b) the sum of Debt
Service of Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) plus Permitted Dividends actually paid by Borrower for such 12-
              ----
month period.  Notwithstanding the foregoing, (i) at all times prior to the last
day of the fiscal year 2001, the Debt Service and Maintenance Capital
Expenditures components of the Debt Service Coverage Ratio shall be determined
on an annualized basis using information from the Effective Date forward, (ii)
Taco Cabana, Inc. and its Subsidiaries shall be deemed to have been consolidated
Subsidiaries of Borrower for the entire calculation period for the Fixed Charge
Service Coverage Ratio and (iii) Cost Savings  shall be added to the numerator
of the Fixed Charge Coverage Ratio prior to the one (1) year anniversary of the
Effective Date.

     Franchise Agreements means all of the franchise agreements to which
     --------------------
Borrower or any of its Subsidiaries is a party as franchisee, as any of the same
may from time to time be amended, modified, supplemented or restated.

     Funding Loss means, with respect to (a) Borrower's payment of principal of
     ------------
a LIBOR Borrowing on a day other than the last day of the applicable Interest
Period; (b) Borrower's failure

                                       8
<PAGE>

to borrow a LIBOR Borrowing on the date specified by Borrower; (c) Borrower's
failure to make any prepayment of the Loans (other than Base Rate Borrowings) on
the date specified by Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to Section 3.3, in each case
                                                   -----------
whether voluntary or involuntary, any loss, expense, penalty, premium or
liability actually incurred by any Lender (including but not limited to any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain a Loan).

     GAAP means, as to a particular Person, such accounting practice as, in the
     ----
opinion of independent certified public accountants of recognized national
standing regularly retained by such Person, conforms at the time to generally
accepted accounting principles, consistently applied for all periods after the
Effective Date so as to present fairly the financial condition, and results of
operations and cash flows, of such Person.  If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board,
all reports and financial statements required hereunder may be prepared in
accordance with such change so long as Borrower provides to Agent such
disclosures of the impact of such change as Agent may reasonably require. No
such change in any accounting principle or practice shall, in itself, cause a
Default or Event of Default hereunder (but Borrower, Agent and Lenders shall
negotiate in good faith to replace any financial covenants hereunder  to the
extent such financial covenants are affected by such change in accounting
principle or practice).

     Governmental Authority means any foreign governmental authority, the United
     ----------------------
States of America, any State of the United States, and any political subdivision
of any of the foregoing, and any central bank, agency, department, commission,
board, bureau, court or other tribunal having jurisdiction over Agent, any
Lender, any Obligor or their respective Property.

     Guaranties means, collectively, (i) the Guaranties dated heretofore or
     ----------
concurrently herewith executed by Carrols Holdings and by each of the current
Subsidiaries of Borrower (other than Excluded Subsidiaries and Non-Recourse
Subsidiaries) in favor of Agent, for the benefit of Lenders, and (ii) any and
all other guaranties hereafter executed in favor of Agent, for the benefit of
Lenders, relating to the Obligations, as any of them may from time to time be
amended, modified, restated or supplemented.

     Hazardous Substance means petroleum products, and any hazardous or toxic
     -------------------
waste or substance defined or regulated as such from time to time by any law,
rule, regulation or order described in the definition of "Requirements of
Environmental Law".

     Indebtedness means, without duplication, (a) all items which in accordance
     ------------
with GAAP would be included in the liability section of a balance sheet (other
than trade accounts payable and accrued expenses (other than Interest Expense)
arising in the ordinary course of business) on the date as of which Indebtedness
is to be determined (excluding, to the extent applicable, capital stock,
surplus, surplus reserves and deferred credits); (b) all guaranties, letter of
credit contingent reimbursement obligations and other contingent obligations in
respect of, or any obligations to purchase or otherwise acquire, Indebtedness of
others, and (c) all Indebtedness secured by any Lien existing on any interest of
the Person with respect to which Indebtedness is being determined in Property
owned subject to such Lien whether or not the Indebtedness secured thereby shall
have been

                                       9
<PAGE>

assumed; provided, that the term "Indebtedness" shall not mean or include any
         --------
Indebtedness in respect of which monies sufficient to pay and discharge the same
in full (either on the expressed date of maturity thereof or on such earlier
date as such Indebtedness may be duly called for redemption and payment) shall
be deposited with a depository, agency or trustee reasonably acceptable to Agent
in trust or in escrow for the payment thereof.

     Interest Expense means, for any period, total interest expense (including,
     ----------------
without limitation, interest expense attributable to capitalized leases and net
costs under interest rate swap, collar, cap or similar agreements providing
interest rate protection), determined in accordance with GAAP.

     Interest Options means the Base Rate and each Eurodollar Rate, and
     ----------------
"Interest Option" means any of them.
----------------

     Interest Payment Dates  means (a)  for Base Rate Borrowings, the last day
     ----------------------             ------------------------
of the first fiscal quarter of 2001 and the last day of each fiscal quarter
thereafter prior to the Revolving Loan Maturity Date, the Term Loan A Maturity
Date or the Term Loan B Maturity Date, as the case may be, and the Revolving
Loan Maturity Date, the Term Loan A Maturity Date or the Term Loan B Maturity
Date, as the case may be; and (b) for LIBOR Borrowings, the end of the
                                  --------------------
applicable Interest Period (and if such Interest Period exceeds three months'
duration, quarterly, commencing on the first quarterly anniversary of the first
day of such Interest Period) and the Revolving Loan Maturity Date, the Term Loan
A Maturity Date or the Term Loan B Maturity Date, as the case may be.

     Interest Period means, for each LIBOR Borrowing, a period commencing on the
     ---------------
date such LIBOR Borrowing began and ending on the numerically corresponding day
which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2, 3
                                                  -------------------
or 6 months thereafter, as Borrower shall elect in accordance herewith;
provided, (1) unless Agent shall otherwise consent, no Interest Period with
--------
respect to a LIBOR Borrowing shall commence on a date earlier than three (3)
Business Days after this Agreement shall have been fully executed; (2) any
Interest Period with respect to a LIBOR Borrowing which would otherwise end on a
day which is not a LIBOR Business Day shall be extended to the next succeeding
LIBOR Business Day, unless such LIBOR Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding LIBOR
Business Day; (3) any Interest Period with respect to a LIBOR Borrowing which
begins on the last LIBOR Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last LIBOR Business Day of the
appropriate calendar month; (4) no Interest Period for a Revolving Loan shall
ever extend beyond the Revolving Loan Maturity Date and no Interest Period for a
Term Loan shall ever extend beyond the Term Loan A Maturity Date or the Term
Loan B Maturity Date, as the case may be, and (5) Interest Periods shall be
selected by Borrower in such a manner that the Interest Period with respect to
any portion of the Loans which shall become due shall not extend beyond such due
date.

     Interest Rate Risk Agreement means an interest rate swap agreement,
     ----------------------------
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by Borrower for the purpose of reducing Borrower's
exposure to interest rate fluctuations and not for speculative purposes,
approved in writing by Agent (such approval not to be unreasonably withheld), as
it may from time to time be amended, modified, restated or supplemented.

                                       10
<PAGE>

     Interest Rate Risk Indebtedness means all obligations and Indebtedness of
     -------------------------------
Borrower with respect to the program for the hedging of interest rate risk
provided for in any Interest Rate Risk Agreement.

     Investment means the purchase or other acquisition of any securities or
     ----------
Indebtedness of, or the making of any loan, advance, transfer of Property (other
than transfers in the ordinary course of business) or capital contribution to,
or the incurring of any liability (other than trade accounts payable arising in
the ordinary course of business), contingently or otherwise, in respect of the
Indebtedness of, any Person.

     Issuer means the issuer (or, where applicable, each issuer) of a Letter of
     ------
Credit under this Agreement.

     Key Agreements means the Franchise Agreements, the Lease Agreements, any
     --------------
document or paper evidencing, securing or otherwise relating to any Subordinated
Indebtedness, the Underlying Lease Agreements, the Purchase Agreements and the
Material Title Documents.

     Lease Agreements means all of the lease agreements to which Borrower or any
     ----------------
of its Subsidiaries is a party as lessee or tenant, as any of the same may from
time to time be amended, modified, supplemented or restated.  Except for the
Excluded Assets, the leasehold estates created under the Lease Agreements
constitute a part of the real Property comprising the Mortgaged Properties.

     Legal Requirement means any law, statute, ordinance, decree, requirement,
     -----------------
order, judgment, rule, or regulation (or interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental
Authority, whether presently existing or arising in the future.

     Lender Affiliate shall have the meaning ascribed to such term in Section
     ----------------                                                 -------
11.6(b) hereof).
-------

     Lessor and Lender Estoppel Agreements means agreements executed by each
     -------------------------------------
landlord and lessor under any of the Lease Agreements or any of the Underlying
Lease Agreements and by each lender under any of the Material Title Documents,
each in Proper Form, containing such consents, representations and agreements as
Agent may reasonably require, as the same may from time to time be amended,
modified, supplemented or restated.

     Letter of Credit shall have the meaning assigned to such term in Section
     ----------------                                                 -------
2.2 hereof.
---

     Letter of Credit Liabilities means, at any time and in respect of any
     ----------------------------
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
                 ----
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit.  For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in a
currency other than Dollars, such amount shall be converted by Agent to Dollars
by any reasonable method, and such converted amount shall be conclusive and
binding, absent manifest error.

                                       11
<PAGE>

     LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate per
     -----
annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to the
average of the offered quotations appearing on Telerate Page 3750 (or if such
Telerate Page shall not be available, any successor or similar service as may be
selected by Agent and Borrower) as of 10:00 a.m., Houston, Texas time (or as
soon thereafter as practicable) on the day two LIBOR Business Days prior to the
first day of such Interest Period for deposits in United States dollars having a
term comparable to such Interest Period and in an amount comparable to the
principal amount of the LIBOR Borrowing to which such Interest Period relates.
If none of such Telerate Page 3750 nor any successor or similar service is
available, then "LIBOR" shall mean, with respect to any Interest Period for any
applicable LIBOR Borrowing, the rate of interest per annum, rounded upwards, if
necessary, to the nearest 1/16th of 1%, quoted by Agent at or before 10:00 a.m.,
Houston, Texas time (or as soon thereafter as practicable), on the date two
LIBOR Business Days before the first day of such Interest Period, to be the
arithmetic average of the prevailing rates per annum at the time of
determination and in accordance with the then existing practice in the
applicable market, for the offering to Agent by one or more prime banks selected
by Agent in its sole discretion, in the London interbank market, of deposits in
United States dollars for delivery on the first day of such Interest Period and
having a maturity equal to the length of such Interest Period and in an amount
equal (or as nearly equal as may be) to the LIBOR Borrowing to which such
Interest Period relates.  Each determination by Agent of LIBOR shall be
conclusive and binding, absent manifest error, and may be computed using any
reasonable averaging and attribution method.

     LIBOR Borrowing means each portion of the principal balance of the Loans at
     ---------------
any time bearing interest at a Eurodollar Rate.

     LIBOR Business Day means a Business Day on which transactions in United
     ------------------
States dollar deposits between lenders may be carried on in the London interbank
market.

     Lien means any mortgage, pledge, charge, encumbrance, security interest,
     ----
collateral assignment or other lien or restriction of any kind, whether based on
common law, constitutional provision, statute or contract, and shall include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions and other title exceptions.

     Loans means the loans provided for by Section 2.1 hereof.
     -----                                 -----------

     Loan Documents means, collectively, this Agreement, the Notes, the
     --------------
Guaranties, all Applications, the Security Documents, the Contribution
Agreement, the BKC Consents, the Lessor and Lender Estoppel Agreements, the
Notice of Entire Agreement, all instruments, certificates and agreements now or
hereafter executed or delivered by any Obligor to Agent or any Lender pursuant
to any of the foregoing or in connection with the Obligations or any commitment
regarding the Obligations, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.

     Maintenance Capital Expenditures means, for any period, $20,000 multiplied
     --------------------------------
by the number of restaurants which, as of the first day of such period, had been
operated by the Borrower (or the other applicable Obligor) for a period in
excess of one year.

                                       12
<PAGE>

     Make Whole Amount means an amount equal to (i) two percent (2%) of the
     -----------------
amount prepaid if prepayment occurs prior to December 19, 2001 and (ii) one
percent (1%) of the amount prepaid if prepayment occurs on or after December 19,
2001 but prior to December 19, 2002.  On and after December 19, 2002, the Make
Whole Amount shall be $0.  Notwithstanding the foregoing, no Make Whole Amount
shall be payable  in connection with any prepayments made on the Term Loans B
pursuant to Section 3.2(b) hereof.
            --------------

     Majority Lenders means, at any time while no Loans are outstanding, Lenders
     ----------------
having greater than 66-2/3% of the aggregate amount of Revolving Loan
Commitments, and at any time while Loans are outstanding, Lenders having greater
than 66-2/3% of the aggregate amount of Term Loans outstanding plus Revolving
Loan Commitments outstanding; provided that if all Revolving Loan Commitments
                              --------
have terminated, the Majority Lenders shall be Lenders having greater than 66-
2/3% of the aggregate amount of all Loans outstanding.

     Margin Percentage means (a) in the case of the Revolving Loans, Swing Loans
     -----------------
and the Term Loans A:

           (i) on any day prior to the first day of the fiscal year 2001, 1.75%
     with respect to Base Rate Borrowings and 3.25% with respect to LIBOR
     Borrowings and (ii) on and after the first day of the fiscal year 2001, the
     applicable per annum percentage set forth at the appropriate intersection
     in the table shown below, based on the Total Debt to EBITDA Ratio as of the
     last day of the most recently ended fiscal quarter of Borrower calculated
     by Agent as soon as practicable after receipt by Agent of all financial
     reports required under this Agreement with respect to such fiscal quarter
     (including a Compliance Certificate) (provided, however, that if the Margin
     Percentage is increased as a result of the reported Total Debt to EBITDA
     Ratio, such increase shall be retroactive to the date that Borrower was
     obligated to deliver such financial reports to Agent pursuant to the terms
     of this Agreement and provided further, however, that if the Margin
     Percentage is decreased as a result of the reported Total Debt to EBITDA
     Ratio, and such financial reports are delivered to Agent not more than ten
     (10) calendar days after the date required to be delivered pursuant to the
     terms of this Agreement, such decrease shall be retroactive to the date
     that Borrower was obligated to deliver such financial reports to Agent
     pursuant to the terms of this Agreement):

        Total Debt to                    LIBOR Borrowings   Base Rate Borrowings
        EBITDA Ratio                     Margin Percentage   Margin Percentage
        ------------                     -----------------  --------------------

     Greater than or equal to
            4.50                              3.25                  1.75

     Greater than or equal to
     4.00 but less than 4.50                  3.00                  1.50

     Greater than or equal to
     3.50 but less than 4.00                  2.75                  1.25

     Greater than or equal to

                                       13
<PAGE>

     3.00 but less than 3.50                  2.50                  1.00

     Greater than or equal to
     2.50 but less than 3.00                  2.25                  0.75

     Less than 2.50                           2.00                  0.50

     and (b) in the case of Term Loans B, 2.50% with respect to Base Rate
Borrowings and 4.00% with respect to LIBOR Rate Borrowings.

     Material Title Documents means the documents and instruments under or
     ------------------------
pursuant to which any Lien is created or evidenced which covers all or any part
of the Mortgaged Property and which secures Borrowed Money Indebtedness or is
otherwise of a material nature or character and outside of the ordinary course
of business, as any of the same may from time to time be amended, modified,
restated or supplemented.

     Maximum Revolving Loan Available Amount means, at any date, an amount equal
     ---------------------------------------
to the aggregate of the Revolving Loan Commitments.

     Mortgage means each deed of trust, mortgage or other applicable security
     --------
instrument, each in Proper Form, executed or to be executed by Borrower (or any
other applicable Subsidiary of Borrower) in favor of Agent, covering and
affecting the Fee Simple Sites and the leasehold estates created under the Lease
Agreements (except for the Excluded Assets), and all improvements, appurtenances
and personal Property related thereto, together with additional or supplemental
security documents covering and affecting the real Property comprising the
Additional Collateral, as the same may from time to time be amended, modified,
restated or supplemented.

     Mortgaged Properties means all Property of any Person, whether now existing
     --------------------
or hereafter acquired, which is subject to the Lien of a Mortgage or, with the
prior written consent of Agent, a collateral assignment of lease.

     Non-Recourse Debt means Debt or that portion of Debt of a Subsidiary of
     -----------------
Borrower as to which (i) neither Borrower nor any Subsidiary of Borrower (other
than a Non-Recourse Subsidiary) provides credit support or is directly or
indirectly liable and (ii) no default with respect to such Debt (including any
rights which the holders thereof may have to take enforcement action against
such Subsidiary) would permit (upon notice, lapse of time or both) any holder of
any other Debt of Borrower or any other Subsidiary of Borrower to declare a
default on such other Debt or cause the payment thereof to be accelerated or
payable prior to its stated maturity.

     Non-Recourse Subsidiary means a Subsidiary of Borrower which (i) has no
     -----------------------
Borrowed Money Indebtedness other than Non-Recourse Debt and (ii) has been
designated as a Non-Recourse Subsidiary by the Board of Directors of Borrower
and (iii) is engaged in the business of providing food services and (iv) is not
an Obligor.  Concurrently with the financial statements required under

Subsections 7.2(a) and (b) hereof, Borrower shall identify all then current Non-
------------------     ---
Recourse Subsidiaries in a written notice to Agent.

                                       14
<PAGE>

     Notes shall have the meaning assigned to such term in Section 2.6 hereof.
     -----                                                 -----------

     Notice of Entire Agreement means a notice of entire agreement, in Proper
     --------------------------
Form, executed by Borrower, each other Obligor and Agent, as the same may from
time to time be amended, modified, supplemented or restated.

     Obligations means, as at any date of determination thereof, the sum of the
     -----------
following:  (i) the aggregate principal amount of Loans outstanding hereunder on
such date, plus (ii) the aggregate amount of the outstanding Letter of Credit
           ----
Liabilities hereunder on such date, plus (iii) all other outstanding
                                    ----
liabilities, obligations and indebtedness of any Obligor under any Loan Document
on such date.

     Obligors means Borrower, Carrols Holdings and each Subsidiary of Borrower
     --------
other than  Subsidiaries which are not parties to any Guaranty, Security
Agreement or Mortgage.

     Organizational Documents means, with respect to a corporation, the
     ------------------------
certificate of incorporation, articles of incorporation and bylaws of such
corporation;  with respect to a limited liability company, the certificate of
formation and operating agreement or similar document of such limited liability
company; with respect to a partnership, the partnership agreement establishing
such partnership and with respect to a trust, the instrument establishing such
trust; in each case including any and all modifications thereof as of the date
of the Loan Document referring to such Organizational Document and any and all
future modifications thereof.

     Past Due Rate means, on any day, a rate per annum equal to the lesser of
     -------------
(i) the Ceiling Rate for that day or (ii) the Base Rate plus three percent (3%).

     PBGC means the Pension Benefit Guaranty Corporation or any entity
     ----
succeeding to any or all of its functions under ERISA.

     Permitted Bond Repurchases means the repurchase of Senior Subordinated
     --------------------------
Notes in an aggregate amount not to exceed $20,000,000 so long as (i) no Default
or Event of Default shall have occurred and be continuing (or would result from
the closing of the applicable repurchase) and Agent shall have received adequate
information relating to the applicable acquisition to provide confirmation of
this condition, (ii) the notes are repurchased at a price less than or equal to
par and (iii) after giving effect to the proposed repurchase, the Senior Debt to
EBITDA Ratio would be less than 2.50 to 1.00 and Agent shall have received
adequate information relating to the applicable acquisition to provide
confirmation of this condition.

     Permitted Dividends means dividends or distributions by a Subsidiary of
     -------------------
Borrower to Borrower or to another Subsidiary of Borrower which is an Obligor
and, so long as no Default shall have occurred and be continuing (or would
result from the payment of the applicable dividend), (a) dividends by Borrower
to Carrols Holdings for the sole purpose of funding stock repurchases described
in clause (d) of the definition of "Permitted Investments" set forth in this
   ----------
Section 1.1 and (b) in any fiscal year, after the calculation and payment of the
-----------
required prepayment provided for in Section 3.2(b)(2), based on the preceding
                                    -----------------
fiscal year's Excess Cash Flow, an amount not exceeding the lesser of (x) 50% of
such preceding fiscal year's Excess Cash Flow which may be distributed to
Carrols Holdings or (y) the maximum amount permitted to be distributed at such
time under the

                                       15
<PAGE>

present terms of the documents evidencing the Subordinated Indebtedness under
the Senior Subordinated Notes. Notwithstanding anything to the contrary set
forth herein, the aggregate of Permitted Dividends of the nature described in
clause (b) of this definition and Investments of the nature described in clause
----------                                                               ------
(e) of the definition of "Permitted Investments" paid or made, as the case may
---
be, by Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) during any fiscal year may not exceed 50% of the preceding fiscal
year's Excess Cash Flow.

     Permitted Investments means:  (a) readily marketable securities issued or
     ---------------------
fully guaranteed by the United States of America with maturities of not more
than one year; (b) commercial paper rated "Prime 1" by Moody's Investors
Service, Inc. or "A-1" by Standard and Poor's Ratings Services with maturities
of not more than 180 days; (c) certificates of deposit or repurchase obligations
issued by any U.S. domestic bank having capital surplus of at least $100,000,000
or by any other financial institution acceptable to Agent, all of the foregoing
not having a maturity of more than one year from the date of issuance thereof;
(d) so long as no Default shall have occurred and be continuing (or would result
from the closing of the applicable repurchase), repurchases of stock of Carrols
Holdings (including rights, options or warrants to acquire such stock) from
employees of Carrols Holdings or any of its Subsidiaries or their authorized
representatives upon the death, disability or termination of employment of such
employees, in an aggregate amount not to exceed $4,000,000 for the period from
and after the Effective Date through and including the last day of Borrower's
2001 fiscal year and not to exceed $2,000,000 in any fiscal year thereafter;
provided, however, that amounts not expended in any fiscal year may be expended
in succeeding fiscal years so long as no more than $5,000,000 is so expended in
any fiscal year; (e) Investments in Non-Recourse Subsidiaries or in entities in
which Borrower's ownership interest is less than 50% and which are engaged in
the food services business so long as such Investments do not exceed, in the
aggregate after the first day of the fiscal quarter which begins subsequent to
the Effective Date to the end of the most recent fiscal quarter ending prior to
the relevant date of determination, the lesser of (x) $15,000,000 or (y) 50% of
the cumulative net income of Borrower and its Subsidiaries (other than Non-
Recourse Subsidiaries) for such period, on a consolidated basis and determined
in accordance with GAAP, (f) Permitted Bond Repurchases, and (g) Investments by
Borrower or any of its Subsidiaries in Borrower or any of its Subsidiaries,
including Investments in Persons which after giving effect thereto will become a
wholly-owned Subsidiary of Borrower (subject to compliance with the other
provisions of this Agreement) so long as any Borrowed Money Indebtedness of any
Obligor to any other Obligor shall be subordinated to the Obligations in a
manner reasonably acceptable to Agent.  Notwithstanding anything to the contrary
set forth herein, the aggregate of Permitted Dividends of the nature described
in clause (b) of the definition of "Permitted Dividends" and Investments of the
   ----------
nature described in clause (e) of this definition paid or made, as the case may
                    ----------
be, by Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) during any fiscal year may not exceed 50% of the preceding fiscal
year's Excess Cash Flow.

     Permitted Liens means each of the following: (a) artisans' or mechanics'
     ---------------
Liens arising in the ordinary course of business, and Liens for taxes, but only
to the extent that payment thereof shall not at the time be due or if due, the
payment thereof is being diligently contested in good faith and adequate
reserves computed in accordance with GAAP have been set aside therefor; (b)
Liens in effect on the Effective Date and disclosed to the Lenders in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof, in a schedule hereto or in a Title Insurance Policy,
-----------
provided that neither the Borrowed Money Indebtedness secured thereby nor the
--------
Property

                                       16
<PAGE>

covered thereby shall increase after the Effective Date without the prior
written consent of the Majority Lenders; (c) normal encumbrances and
restrictions on title which do not secure Borrowed Money Indebtedness and which
do not have a material adverse effect on the value or utility of the applicable
Property; (d) Liens in favor of Agent or any Lender under the Loan Documents,
including, without limitation, Liens securing Interest Rate Risk Indebtedness
owed to one or more of the Lenders (but not to any Person which is not, at such
time, a Lender); (e) Liens incurred or deposits made in the ordinary course of
business (1) in connection with worker's compensation, unemployment insurance,
social security and other like laws, or (2) to secure insurance in the ordinary
course of business, the performance of bids, tenders, contracts, leases,
licenses, statutory obligations, surety, appeal and performance bonds and other
similar obligations incurred in the ordinary course of business, not, in any of
the cases specified in this clause (2), incurred in connection with the
borrowing of money, the obtaining of advances or the payment of the deferred
purchase price of Property; (f) attachments, judgments and other similar Liens
arising in connection with court proceedings, provided that the execution and
                                              --------
enforcement of such Liens are effectively stayed and the claims secured thereby
are being actively contested in good faith with adequate reserves made therefor
in accordance with GAAP; (g) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are not
yet due or which are being contested in good faith by appropriate proceedings if
adequate reserves with respect thereto are maintained in accordance with GAAP;
(h) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, and restrictions on the use of Property, and
which do not in any case singly or in the aggregate materially impair the
present use or value of the Property subject to any such restriction or
materially interfere with the ordinary conduct of the business of any Obligor;
(i) Liens securing purchase money Indebtedness permitted under Section 8.1
                                                               -----------
hereof and covering the Property so purchased; (j) capital leases and
sale/leaseback transactions permitted under the other provisions of this
Agreement; (k) Liens in favor of unaffiliated third parties securing purchase
money or acquisition and/or development Indebtedness (or Indebtedness incurred
to refinance acquisition and/or development costs of a restaurant so long as the
proceeds of such refinancing are included in the calculation of Excess Cash Flow
for the applicable period--in which event the Agent shall release the Liens of
the Mortgages covering such restaurant) permitted under Section 8.1(e) hereof
                                                        --------------
incurred after the Effective Date and covering assets of restaurants acquired or
developed by the Borrower or its Subsidiaries after the Effective Date,
provided, however, that (1) the Liens securing such Indebtedness may not cover
any Property other than the Property being acquired or developed and (2) such
Indebtedness may not exceed 100% of the fair market value of the property and
equipment acquired or developed at the time of acquisition or development; (l)
pre-existing Liens securing pre-existing Borrowed Money Indebtedness permitted
under Section 8.1(f) hereof covering Property of Subsidiaries or businesses
      --------------
acquired after the Effective Date (provided, however, that no such Liens were
created and no such Borrowed Money Indebtedness was incurred at the instigation
of Borrower in contemplation of the acquisition of such Subsidiary), and (m)
extensions, renewals and replacements of Liens referred to in clauses (a)
                                                              -----------
through (l) of this definition; provided that any such extension, renewal or
        ---                     --------
replacement Lien shall be limited to the Property or assets covered by the Lien
extended, renewed or replaced and that the Borrowed Money Indebtedness secured
by any such extension, renewal or replacement Lien shall be in an amount not
greater than the amount of the Indebtedness secured by the Lien extended,
renewed or replaced.

                                       17
<PAGE>

     Person means any individual, Corporation, trust, unincorporated
     ------
organization, Governmental Authority or any other form of entity.

     Plan means an employee pension benefit plan which is covered by Title IV of
     ----
ERISA or subject to the minimum funding standards under Section 412 of the Code
and is either (a) maintained by Borrower or any member of the Controlled Group
for employees of Borrower or any member of the Controlled Group or (b)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Borrower or any member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions.

     Pollo Subsidiaries means  Pollo Franchise, Inc., a Florida corporation, and
     ------------------
Pollo Operations, Inc., a Florida corporation.

     Prime Rate means, on any day, the prime rate for that day as determined
     ----------
from time to time by Chase.  The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate or a favored rate, and Chase,
Agent and each Lender disclaims any statement, representation or warranty to the
contrary.  Chase, Agent or any Lender may make commercial loans or other loans
at rates of interest at, above or below the Prime Rate.

     Principal Office means the principal office of Agent, presently located at
     ----------------
712 Main Street, Houston, Harris County, Texas 77002.

     Proper Form means in form and substance reasonably satisfactory to Agent.
     -----------

     Property means any interest in any kind of property or asset, whether real,
     --------
personal or mixed, tangible or intangible.

     Purchase Agreements means, collectively, each purchase agreement heretofore
     -------------------
or hereafter entered into by Borrower or any other Obligor providing for the
acquisition of Burger King or other restaurants (or any merger agreement
providing for the acquisition of the Equity Interests in and to a Person owning
any such Burger King or other restaurants), as any of the same may from time to
time be amended, modified, restated or supplemented.

     Quarterly Dates means the last day of each fiscal quarter, provided that if
     ---------------                                            --------
any such date is not a Business Day, then the relevant Quarterly Date shall be
the next succeeding Business Day.

     Quarterly Financial Statements means the quarterly financial statements of
     ------------------------------
a Person, which statements shall include a balance sheet as of the end of such
fiscal quarter and an income statement and a statement of cash flows for such
fiscal quarter and for the fiscal year to date, subject to normal year-end
adjustments, all setting forth in comparative form the corresponding figures as
of the end of and for the corresponding fiscal quarter of the preceding year,
prepared in accordance with GAAP in all material respects except that such
statements are condensed and exclude detailed footnote disclosures and certified
by the chief financial officer or other authorized officer of such Person as
fairly presenting, in all material respects, the financial condition of such
person as of such date.

                                       18
<PAGE>

     Rate Designation Date means that Business Day which is (a) in the case of
     ---------------------
Base Rate Borrowings, 10:00 a.m., Houston, Texas time, on the date one Business
Day preceding the date of such borrowing and (b) in the case of LIBOR
Borrowings, 10:00 a.m., Houston, Texas time, on the date three LIBOR Business
Days preceding the first day of any proposed Interest Period.

     Rate Designation Notice means a written notice substantially in the form of
     -----------------------
Exhibit B.
---------

     Regulation D means Regulation D of the Board of Governors of the Federal
     ------------
Reserve System from time to time in effect and includes any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.

     Regulatory Change means with respect to any Lender, any change on or after
     -----------------
the date of this Agreement in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of lenders including
such Lender under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority.

     Reimbursement Obligations means, as at any date, the obligations of
     -------------------------
Borrower then outstanding, or which may thereafter arise, in respect of Letters
of Credit under this Agreement, to reimburse the applicable Issuers for the
amount paid by such Issuers in respect of any drawing under such Letters of
Credit, which obligations shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other than
Dollars.

     Request for Extension of Credit means a request for extension of credit
     -------------------------------
duly executed by the chief executive officer, chief financial officer or
treasurer of Borrower, appropriately completed and substantially in the form of
Exhibit A attached hereto.
---------

     Requirements of Environmental Law means all requirements imposed by any law
     ---------------------------------
(including for example and without limitation The Resource Conservation and
Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or order of any federal, state or local
executive, legislative, judicial, regulatory or administrative agency, board or
authority in effect at the applicable time which relate to (i) noise; (ii)
pollution, protection or clean-up of the air, surface water, ground water or
land; (iii) solid, gaseous or liquid waste generation, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) regulation of the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.

     Restricted Indebtedness means Borrowed Money Indebtedness of the Borrower
     -----------------------
or any of its Subsidiaries, the payment, prepayment, redemption, repurchase or
defeasance of which is restricted under Sections 8.5 or 8.15 hereof.
                                        ------------    ----

     Revolving Loan means a Loan made pursuant to Section 2.1(b) hereof.
     --------------                               --------------

     Revolving Loan Availability Period means, for each Revolving Loan Lender,
     ----------------------------------
the period from and including the Effective Date to (but not including) the
Revolving Loan Termination Date.

                                       19
<PAGE>

     Revolving Loan Lender means each Lender with (i) prior to the Revolving
     ---------------------
Loan Termination Date, a Revolving Loan Commitment and (ii) on and after the
Revolving Loan Termination Date, any outstanding Revolving Loan Obligations.

     Revolving Loan Commitment means, as to any Lender, the obligation, if any,
     -------------------------
of such Lender to make Revolving Loans and incur or participate in Letter of
Credit Liabilities in an aggregate principal amount at any one time outstanding
up to (but not exceeding) the amount, if any, set forth opposite such Lender's
name on the signature pages hereof under the caption "Revolving Loan
Commitment", or otherwise provided for in an Assignment and Acceptance Agreement
(as the same may be reduced from time to time pursuant to Section 2.3 hereof).
                                                          -----------

     Revolving Loan Commitment Percentage means, as to any Revolving Loan
     ------------------------------------
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Revolving Loan Commitment (or if the Revolving Loan
Commitments have terminated, such Lender's outstanding Revolving Loans) and the
denominator of which is the aggregate of the Revolving Loan Commitments of all
Lenders (or if the Revolving Loan Commitments have terminated, the aggregate
amount of all Revolving Loans).

     Revolving Loan Maturity Date means the maturity date of the Revolving
     ----------------------------
Notes, December 31, 2005.  Upon written request from Borrower at any time after
July 31, 2005 but prior to September 30, 2005, Agent shall make a request to the
Lenders for approval to a one (1) year extension of the Revolving Loan Maturity
Date; provided, however, that no such extension shall be effective without the
      --------  -------
unanimous written consent of the Lenders, which may be given or denied in their
sole discretion, with or without cause.

     Revolving Loan Obligations means, as at any date of determination thereof,
     --------------------------
the sum of the following (determined without duplication):  (i) the aggregate
principal amount of Revolving Loans outstanding hereunder plus (ii) the
                                                          ----
aggregate amount of the Letter of Credit Liabilities hereunder.

     Revolving Loan Termination Date means the earlier of (a) the Revolving Loan
     -------------------------------
Maturity Date or (b) the date specified by Agent in accordance with Section 9.1
                                                                    -----------
hereof.

     Revolving Notes means the Notes of Borrower evidencing the Revolving Loans,
     ---------------
in the form of Exhibit D hereto.
               ---------

     Secretary's Certificate means a certificate, in Proper Form, of the
     -----------------------
Secretary or an Assistant Secretary of a corporation as to (a) the resolutions
of the Board of Directors of such corporation authorizing the execution,
delivery and performance of the documents to be executed by such corporation;
(b) the incumbency and signature of the officer of such corporation executing
such documents on behalf of such corporation, and (c) the Organizational
Documents of such corporation.

     Security Agreements means security agreements, each in Proper Form,
     -------------------
executed or to be executed by Borrower (or any other applicable Subsidiary of
Borrower or other applicable Person) in favor of Agent covering (i) all of the
issued and outstanding equity interests in and to Borrower and each Subsidiary
of Borrower (other than Excluded Subsidiaries and Non-Recourse Subsidiaries) and
(ii) all of the material real and personal Property (other than Excluded Assets)
of Borrower and

                                       20
<PAGE>

its Subsidiaries (other than Non-Recourse Subsidiaries), as the same may from
time to time be amended, modified, restated or supplemented. The term "Security
Agreements" shall include the Trademark Security Agreements.

     Security Documents means, collectively, the Mortgages, the Security
     ------------------
Agreements and any and all other security documents now or hereafter executed
and delivered by any Obligor to secure all or any part of the Obligations, as
any of them may from time to time be amended, modified, restated or
supplemented.

     Senior Debt to EBITDA Ratio means, as of any day, the ratio of (a) Debt
     ---------------------------
(other than Subordinated Indebtedness) of Borrower and its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) as of such date to (b)
EBITDA for the 12 months ending on such date; provided however, that for
                                              -------- -------
purposes of this ratio only, so long as Borrower shall have delivered to Agent
financial information in Proper Form regarding the Property acquired which
disclose the prior operating results of such Property, the pro forma effect of
any acquisition by Borrower or any of its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) of any Property or business during such 12-month
period shall be included in EBITDA as if such acquisition occurred on the first
day of such period.  Notwithstanding the foregoing, (i) Taco Cabana, Inc. and
its Subsidiaries shall be deemed to have been consolidated Subsidiaries of
Borrower for the entire calculation period for the Senior Debt to EBITDA Ratio
and (ii) Cost Savings  shall be added to the denominator of the Senior Debt to
EBITDA Ratio prior to the one (1) year anniversary of the Effective Date.

     Senior Subordinated Notes means Senior Subordinated Notes due 2008 in the
     -------------------------
aggregate principal amount of $170,000,000 issued by Borrower on or about
November 24, 1998 (without amendment except as agreed to in writing by the
Majority Lenders or as otherwise permitted under Section 8.15 hereof).
                                                 ------------

     Stated Rate means the effective weighted per annum rate of interest
     -----------
applicable to the Loans; provided, that if on any day such rate shall exceed the
                         --------
Ceiling Rate for that day, the Stated Rate shall be fixed at the Ceiling Rate on
that day and on each day thereafter until the total amount of interest accrued
at the Stated Rate on the unpaid principal balances of the Notes plus the
Additional Interest equals the total amount of interest which would have accrued
if there had been no Ceiling Rate.  If the Notes mature (or are prepaid) before
such equality is achieved, then, in addition to the unpaid principal and accrued
interest then owing pursuant to the other provisions of the Loan Documents,
Borrower promises to pay on demand to the order of the holder of each Note
interest in an amount equal to the excess (if any) of (a) the lesser of (i) the
total interest which would have accrued on such Note if the Stated Rate had been
defined as equal to the Ceiling Rate from time to time in effect and (ii) the
total interest which would have accrued on such Note if the Stated Rate were not
so prohibited from exceeding the Ceiling Rate, over (b) the total interest
actually accrued on such Note to such maturity (or prepayment) date.  Without
notice to Borrower or any other Person, the Stated Rate shall automatically
fluctuate upward and downward in accordance with the provisions of this
definition.

     Subordinated Indebtedness means all Indebtedness of Borrower and its
     -------------------------
Subsidiaries which has been subordinated on terms and conditions satisfactory to
the Majority Lenders, in their sole discretion, to the Obligations, whether now
existing or hereafter incurred.  Indebtedness shall not be considered as
"Subordinated Indebtedness" unless and until Agent shall have received copies of
the

                                       21
<PAGE>

documentation evidencing or relating to such Indebtedness together with a
subordination agreement, in Proper Form, duly executed by the holder or holders
of such Indebtedness and evidencing the terms and conditions of subordination
required by the Majority Lenders. The term "Subordinated Indebtedness" shall
include Indebtedness under the Senior Subordinated Notes and any Indebtedness
issued in exchange therefor which is governed by subordination provisions
substantially identical to those governing the Senior Subordinated Notes.

     Subsidiary means, as to a particular parent Corporation, any Corporation of
     ----------
which more than 50% of the indicia of equity rights (whether outstanding capital
stock or otherwise) is at the time directly or indirectly owned by, such parent
Corporation.

     Swing Loan shall mean a Loan made pursuant to Section 2.1(d) hereof.
     ----------                                    --------------

     Swing Loan Availability Period shall mean the period from and including the
     ------------------------------
Effective Date to (but not including) the Revolving Loan Termination Date.

     Swing Note shall mean that certain promissory note dated as of the
     ----------
Effective Date herewith in the original principal amount of $5,000,000 executed
by Borrower payable to the order of Chase.

     Synthetic Purchase Agreement means any swap, derivative or other agreement
     ----------------------------
or combination of agreements pursuant to which Borrower or a Subsidiary of
Borrower is or may become obligated to make (i) any payment in connection with a
purchase by any third party from a Person other than Borrower or a Subsidiary of
Borrower of any Equity Interest or Restricted Indebtedness or (ii) any payment
(other than on account of a permitted purchase by it of any Equity Interest or
any Restricted Indebtedness) the amount of which is determined by reference to
the price or value at any time of any Equity Interest or Restricted
Indebtedness; provided that no phantom stock or similar plan providing for
payments only to current or former directors, officers or employees of Borrower
or Subsidiaries of Borrower (or to their heirs or estates) shall be deemed to be
a Synthetic Purchase Agreement.

     Taco Cabana Subsidiaries means Taco Cabana, Inc., a Delaware corporation,
     ------------------------
TP Acquisition Corp., a Texas corporation, Get Real, Inc., a Delaware
corporation, Texas Taco Cabana, L.P., a Texas limited partnership, T.C.
Management, Inc., a Delaware corporation, T.C. Lease Holdings III, V and VI,
Inc., a Texas corporation, Taco Cabana Multistate, Inc., a Delaware corporation,
Colorado Cabana, Inc., a Colorado corporation, Taco Cabana Atlanta, Inc., a
Delaware corporation, Taco Cabana Management, Inc., a Texas corporation, TC
Bevco LLC, a Texas limited liability company, TC Bevco Holdings LLC, a Texas
limited liability company, TC Bevco Management LLC, a Texas limited liability
company, Cabana Bevco LLC, a Texas limited liability company, Cabana Beverages,
Inc., a Texas corporation, Two Pesos Liquor Corp., a Texas corporation, and Rosa
Beverages, Inc., a Texas corporation.

     Taxes shall have the meaning ascribed to it in Section 4.1(d).
     -----                                          --------------

     Term Loan A means a Loan made pursuant to Section 2.1(a) hereof.
     -----------                               --------------

     Term Loan A Lender means each Lender with any outstanding Term Loans A.
     ------------------

                                       22
<PAGE>

     Term Loan A Maturity Date means December 31, 2005.
     -------------------------

     Term Loan B means a Loan made pursuant to Section 2.1(c) hereof.
     -----------                               --------------

     Term Loan B Lender means each Lender with any outstanding Term Loans B.
     ------------------

     Term Loan B Maturity Date means December 31, 2007.
     -------------------------

     Term Loans means Term Loans A and Term Loans B.
     ----------

     Term Notes A means the Notes of Borrower evidencing the Term Loans A, in
     ------------
the form of Exhibit C hereto.
            ---------

     Term Notes B means the Notes of Borrower evidencing the Term Loans B, in
     ------------
the form of Exhibit G hereto.
            ---------

     Term Notes means the Term Notes A and the Term Notes B.
     ----------

     Title Insurance Policies means, collectively, the policies of title
     ------------------------
insurance, in Proper Form, in face amounts satisfactory to Agent, issued in
favor of Agent by a title insurance company satisfactory to Agent and insuring
that title to the Mortgaged Properties is vested in Borrower, free and clear of
any Lien other than Permitted Liens and that each Mortgage creates a valid first
and prior lien on all the Mortgaged Properties affected by such Mortgage,
subject only to such exceptions as may be approved by Agent, together with any
endorsements thereto reasonably requested by Agent.  Each of said policies shall
contain a complete and accurate description of the applicable Mortgages, shall
specify the recording and filing information applicable to it and shall describe
the Mortgaged Properties identically to the description thereof in such
Mortgage.

     Total Debt to EBITDA Ratio means, as of any day, the ratio of (a) Debt of
     --------------------------
Borrower and its consolidated Subsidiaries (other than Non-Recourse
Subsidiaries) as of such date to (b) EBITDA for the 12 months ending on such
date; provided however, that for purposes of this ratio only, so long as
      -------- -------
Borrower shall have delivered to Agent financial information in Proper Form
regarding the Property acquired which disclose the prior operating results of
such Property, the pro forma effect of any acquisition by Borrower or any of its
consolidated Subsidiaries (other than Non-Recourse Subsidiaries) of any Property
or business during such 12-month period shall be included in EBITDA as if such
acquisition occurred on the first day of such period.  Notwithstanding the
foregoing, (i) Taco Cabana, Inc. and its Subsidiaries shall be deemed to have
been consolidated Subsidiaries of Borrower for the entire calculation period for
the Total Debt to EBITDA Ratio and (ii) Cost Savings  shall be added to the
denominator of the Total Debt to EBITDA Ratio prior to the one (1) year
anniversary of the Effective Date.

     Trademark Security Agreements shall mean, collectively, (i) that certain
     -----------------------------
Trademark Security Agreement dated as of February 12, 1999 executed by Borrower
and Agent, (ii) those certain Trademark Security Agreements dated concurrently
herewith executed by Borrower, Pollo Operations, Inc., TP Acquisition Corp. and
Texas Taco Cabana, L.P., respectively, and Agent and (iii) all additional
trademark security agreements executed as security for the Obligations and all

                                       23
<PAGE>

related recordation form cover sheets and any and all amendments, modifications,
renewals, extensions and supplements thereof or thereto from time to time.

     Underlying Lease Agreements means any and all lease agreements (other than
     ---------------------------
the Lease Agreements) now or hereafter affecting any of the Property covered by
any of the Lease Agreements and which is superior to the applicable Lease
Agreement, as any of the same may from time to time be amended, modified,
supplemented or restated.

     Unfunded Liabilities means, with respect to any Plan, at any time, the
     --------------------
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a potential liability
of any member of the Controlled Group to the PBGC or a Plan under Title IV of
ERISA.  With respect to multi-employer Plans, the term "Unfunded Liabilities"
shall also include contingent liability for withdrawal liability under Section
4201 of ERISA to all multi-employer Plans to which Borrower or any member of a
Controlled Group for employees of Borrower contributes in the event of complete
withdrawal from such plans.

     1.2  Miscellaneous.  The words "hereof," "herein," and "hereunder" and
          -------------              ------    ------        ---------
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement.  The
term "annualized" as used herein shall mean the multiplication of the applicable
      ----------
amount for any given period by a fraction, the numerator of which is 365 and the
denominator of which is the number of days elapsed in such period.

2.   Commitments and Loans.
     ---------------------

     2.1  Loans.  Each Lender severally agrees, subject to all of the terms
          -----
and conditions of this Agreement (including, without limitation, Sections 5.1
                                                                 ------------
and 5.2 hereof), to make Loans as follows:
    ---

     (a   Term Loans A.  On December 19, 2000, each Term Loan A Lender shall
          ------------
make a loan to Borrower in the amount set forth opposite such Term Loan A
Lender's name on the signature pages hereof under the caption "Term Loans A".

     (b   Revolving Loans.  From time to time on or after the Effective Date and
          ---------------
during the applicable Revolving Loan Availability Period, each Revolving Loan
Lender shall make loans under this Section 2.1(b) to Borrower in an aggregate
                                   --------------
principal amount at any one time outstanding (including its Revolving Loan
Commitment Percentage of all Letter of Credit Liabilities at such time) up to
but not exceeding such Lender's Revolving Loan Commitment Percentage of the
Maximum Revolving Loan Available Amount.  Subject to the conditions in this
Agreement, any such Revolving Loan repaid prior to the Revolving Loan
Termination Date may be reborrowed pursuant to the terms of this Agreement;
provided, that any and all such Revolving Loans shall be due and payable in full
--------
at the end of the Revolving Loan Availability Period.  Borrower, Agent and the
Lenders agree pursuant to Chapter 346 ("Chapter 346") of the Texas Finance Code,
                                        -----------
that Chapter 346 (which relates to open-end line of credit revolving loan
accounts) shall not apply to this Agreement, the Notes or any Obligation and
that neither the Notes nor any Obligation shall be governed by Chapter 346 or
subject to its provisions in any manner whatsoever.  The aggregate of

                                       24
<PAGE>

all Revolving Loans to be made by the Lenders in connection with a particular
borrowing shall be equal to an integral multiple of $100,000.

     (c   Term Loans B.  On December 19, 2000, each Term Loan B Lender shall
          ------------
make a loan to Borrower in the amount set forth opposite such Term Loan B
Lender's name on the signature pages hereof under the caption "Term Loans B".

     (d   Swing Loans.  From time to time on or after the Effective Date and
          -----------
during the Swing Loan Availability Period, provided no Default or Event of
Default has occurred which is continuing, Chase shall make loans under this

Section 2.1(d) to Borrower in an aggregate principal amount at any one time
--------------
outstanding up to but not exceeding $5,000,000.  Swing Loans shall constitute

"Revolving Loans" for all purposes hereunder, except that until such time as the
----------------                              ------
other Lenders shall have purchased a participating interest in such Swing Loans
as provided for herein, such Swing Loans shall only be considered a utilization
of the Revolving Loan Commitment of Chase (and following such a purchase of a
participating interest, the Revolving Loan Commitment of each Lender shall be
considered utilized by the amount of such participating interest and the amount
of Chase's Revolving Loan Commitment considered to be utilized shall be
decreased by the aggregate amount of such participating interests).
Notwithstanding the foregoing sentence, the aggregate amount of all Revolving
Loans (including, without limitation, all Swing Loans) shall not at any time
exceed the Maximum Revolving Loan Available Amount.  Subject to the conditions
in this Agreement, any Swing Loan repaid prior to the Revolving Loan Termination
Date may be reborrowed pursuant to the terms of this Agreement; provided, that
                                                                --------
any and all such Swing Loans shall be due and payable in full at the end of the
Swing Loan Availability Period.  At any time, upon the request of Chase, each
Revolving Loan Lender (other than Chase) shall, on the first Business Day after
such request is made, purchase a participating interest in any one or more Swing
Loans made in accordance with the first sentence of this Section 2.1(d) in an
                                                         --------------
amount equal to its Revolving Loan Commitment Percentage of such Swing Loans.
Each Revolving Loan Lender will immediately transfer to Chase, in immediately
available funds, the amount of its participation.  Whenever, at any time after
Chase has received from any Lender such Lender's participation in a Swing Loan,
Chase receives payment on account thereof, Chase will distribute to such Lender
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded); provided, however, that in
                                                    --------  -------
the event that such payment received by Chase is required to be returned, such
Lender will return to Chase any portion thereof previously distributed by Chase
to it.  Each Revolving Loan Lender's obligation to purchase such participating
interests shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense of other right which such Lender or any other Person may
have against Chase or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default or Event of Default or the termination of
any Revolving Loan Commitment; (iii) any adverse change in the condition
(financial or otherwise) of any Obligor or any other Lender; (iv) any breach of
this Agreement or any other Loan Document by any Obligor or any other Lender, or
(v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.  Each Swing Loan, once so participated, shall
cease to be a Swing Loan for the purposes of this Agreement, but shall be a
Revolving Loan.  Borrower, Agent and the Lenders agree pursuant to Chapter 346
("Chapter 346") of the Texas Finance Code, that Chapter 346 (which relates to
  -----------
open-end line of credit revolving loan accounts) shall not apply to the Swing
Note or any Swing Loan and that neither the Swing Note nor any Swing Loan shall
be governed by Chapter 346 or subject to its provisions

                                       25
<PAGE>

in any manner whatsoever. Each Swing Loan shall be in an amount equal to
$100,000 or a multiple thereof.

     2.2  Letters of Credit.
          -----------------

     (a   Letters of Credit.  Subject to the terms and conditions of this
          -----------------
Agreement, and on the condition that aggregate Letter of Credit Liabilities
shall never exceed $10,000,000, (i) Borrower shall have the right to, in
addition to Loans provided for in Section 2.1 hereof, utilize the Revolving Loan
                                  -----------
Commitments from time to time during the Revolving Loan Availability Period by
obtaining the issuance of standby letters of credit for the account of Borrower
if Borrower shall so request in the notice referred to in Section 2.2(b)(i)
                                                          -----------------
hereof (such standby letters of credit as any of them may be amended,
supplemented, extended or confirmed from time to time, being herein collectively
called the "Letters of Credit)" and (ii) Chase agrees to issue such Letters of
            ------------------
Credit.  Upon the date of the issuance of a Letter of Credit, the applicable
Issuer shall be deemed, without further action by any party hereto, to have sold
to each Revolving Loan Lender, and each such Lender shall be deemed, without
further action by any party hereto, to have purchased from the applicable
Issuer, a participation, to the extent of such Lender's Revolving Loan
Commitment Percentage, in such Letter of Credit and the related Letter of Credit
Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the Revolving Loan Termination Date.
No Letter of Credit shall have an expiration date later than two (2) years from
date of issuance.  Any Letter of Credit that shall have an expiration date after
the end of the Revolving Loan Availability Period shall be subject to Cover or
backed by a standby letter of credit in form and substance, and issued by a
Person, acceptable to Agent in its sole discretion.  Chase or, with the prior
approval of Borrower and Agent, another Lender shall be the Issuer of each
Letter of Credit.

     (b   Additional Provisions.  The following additional provisions shall
          ---------------------
apply to each Letter of Credit:

           (i) Borrower shall give Agent notice requesting each issuance of a
     Letter of Credit hereunder as provided in Section 4.3 hereof and shall
                                               -----------
     furnish such additional information regarding such transaction as Agent may
     reasonably request.  Upon receipt of such notice, Agent shall promptly
     notify each Revolving Loan Lender of the contents thereof and of such
     Lender's Revolving Loan Commitment Percentage of the amount of such
     proposed Letter of Credit.

           (ii) No Letter of Credit may be issued if after giving effect thereto
     the sum of (A) the aggregate outstanding principal amount of Revolving
     Loans plus (B) the aggregate Letter of Credit Liabilities would exceed the
     Maximum Revolving Loan Available Amount.  On each day during the period
     commencing with the issuance of any Letter of Credit and until such Letter
     of Credit shall have expired or been terminated, the Revolving Loan
     Commitment of each Revolving Loan Lender shall be deemed to be utilized for
     all purposes hereof in an amount equal to such Lender's Revolving Loan
     Commitment Percentage of the amount then available for drawings under such
     Letter of Credit (or any unreimbursed drawings under such Letter of
     Credit).

           (iii)  Upon receipt from the beneficiary of any Letter of Credit of
     any demand for payment thereunder, Agent shall promptly notify Borrower and
     each Lender as to the amount

                                       26
<PAGE>

     to be paid as a result of such demand and the payment date therefor. If at
     any time prior to the earlier of the expiration date of a Letter of Credit
     or the Revolving Loan Termination Date any Issuer shall have made a payment
     to a beneficiary of a Letter of Credit in respect of a drawing under such
     Letter of Credit, each Revolving Loan Lender will pay to Agent immediately
     upon demand by such Issuer at any time during the period commencing after
     such payment until reimbursement thereof in full by Borrower, an amount
     equal to such Lender's Revolving Loan Commitment Percentage of such
     payment, together with interest on such amount for each day from the date
     of demand for such payment (or, if such demand is made after 11:00 a.m.
     Houston time on such date, from the next succeeding Business Day) to the
     date of payment by such Lender of such amount at a rate of interest per
     annum equal to the Federal Funds Rate for such period. To the extent that
     it is ultimately determined that the Borrower is relieved of its obligation
     to reimburse the applicable Issuer because of such Issuer's gross
     negligence or willful misconduct in determining that documents received
     under any applicable Letter of Credit comply with the terms thereof, the
     applicable Issuer shall be obligated to refund to the paying Lenders all
     amounts paid to such Issuer to reimburse Issuer for the applicable drawing
     under such Letter of Credit.

           (iv) Borrower shall be irrevocably and unconditionally obligated
     forthwith to reimburse Agent, on the date on which the Agent notifies
     Borrower of the date and amount of any payment by the Issuer of any drawing
     under a Letter of Credit, for the amount paid by any Issuer upon such
     drawing, without presentment, demand, protest or other formalities of any
     kind, all of which are hereby waived.  Such reimbursement may, subject to
     satisfaction of the conditions in Sections 5.1 and 5.2 hereof and to the
                                       ------------     ---
     Maximum Revolving Loan Available Amount (after adjustment in the same to
     reflect the elimination of the corresponding Letter of Credit Liability),
     be made by the borrowing of Revolving Loans.  Agent will pay to each
     Revolving Loan Lender such Lender's Revolving Loan Commitment Percentage of
     all amounts received from Borrower for application in payment, in whole or
     in part, of the Reimbursement Obligation in respect of any Letter of
     Credit, but only to the extent such Lender has made payment to Agent in
     respect of such Letter of Credit pursuant to clause (iii) above.
                                                  ------------

           (v) Borrower will pay to Agent at the Principal Office for the
     account of each Revolving Loan Lender a letter of credit fee with respect
     to each Letter of Credit equal to the greater of (x) $500 or (y) an amount
     equal to the Margin Percentage applicable from time to time with respect to
     LIBOR Borrowings multiplied by the daily average amount available for
     drawings under each Letter of Credit (and computed on the basis of the
     actual number of days elapsed in a year composed of 360 days), in each case
     for the period from and including the date of issuance of such Letter of
     Credit to and including the date of expiration or termination thereof, such
     fee to be due and payable in advance on the date of the issuance thereof.
     Agent will pay to each Revolving Loan Lender, promptly after receiving any
     payment in respect of letter of credit fees referred to in this clause (v),
                                                                     ----------
     an amount equal to the product of such Lender's Revolving Loan Commitment
     Percentage times the amount of such fees.
                -----

           (vi) The issuance by the applicable Issuer of each Letter of Credit
     shall, in addition to the conditions precedent set forth in Section 5
                                                                 ---------
     hereof, be subject to the conditions precedent (A) that such Letter of
     Credit shall be in such form and contain such terms as shall

                                       27
<PAGE>

     be reasonably satisfactory to Agent, and (B) that Borrower shall have
     executed and delivered such Applications and other instruments and
     agreements relating to such Letter of Credit as Agent shall have reasonably
     requested and are not inconsistent with the terms of this Agreement. In the
     event of a conflict between the terms of this Agreement and the terms of
     any Application, the terms hereof shall control.

           (vii)  Issuer will send to the Borrower and each Lender, immediately
     upon issuance of any Letter of Credit issued by Issuer or any amendment
     thereto, a true and correct copy of such Letter of Credit or amendment.

     (c   Indemnification; Release.  Borrower hereby indemnifies and holds
          ------------------------
harmless Agent, each Revolving Loan Lender and each Issuer from and against any
and all claims and damages, losses, liabilities, costs or expenses which Agent,
such Lender or such Issuer may incur (or which may be claimed against Agent,
such Lender or such Issuer by any Person whatsoever), REGARDLESS OF WHETHER
CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES,
in connection with the execution and delivery of any Letter of Credit or
transfer of or payment or failure to pay under any Letter of Credit; provided
                                                                     --------
that Borrower shall not be required to indemnify any party seeking
indemnification for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (i) the willful misconduct or
gross negligence of the party seeking indemnification, or (ii) the failure by
the party seeking indemnification to pay under any Letter of Credit after the
presentation to it of a request required to be paid under applicable law.
Borrower hereby releases, waives and discharges Agent, each Revolving Loan
Lender and each Issuer from any claims, causes of action, damages, losses,
liabilities, reasonable costs or expenses which may now exist or may hereafter
arise, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
OF THE INDEMNIFIED PARTIES, by reason of or in connection with the failure of
any other Revolving Loan Lender to fulfill or comply with its obligations to
Agent, such Lender or such Issuer, as the case may be, hereunder (but nothing
herein contained shall affect any rights Borrower may have against such
defaulting Lender).  Nothing in this Section 2.2(c) is intended to limit the
                                     --------------
obligations of Borrower under any other provision of this Agreement.

     (d   Additional Costs in Respect of Letters of Credit.  If as a result of
          ------------------------------------------------
any Regulatory Change there shall be imposed, modified or deemed applicable any
tax (other than any tax based on or measured by net income), reserve, special
deposit or similar requirement against or with respect to or measured by
reference to Letters of Credit issued or to be issued hereunder or
participations in such Letters of Credit, and the result shall be to increase
the cost to any Revolving Loan Lender of issuing or maintaining any Letter of
Credit or any participation therein, or materially reduce any amount receivable
by any Revolving Loan Lender hereunder in respect of any Letter of Credit or any
participation therein (which increase in cost, or reduction in amount
receivable, shall be the result of such Lender's reasonable allocation of the
aggregate of such increases or reductions resulting from such event), then such
Lender shall notify Borrower through Agent (which notice shall be accompanied by
a statement setting forth in reasonable detail the basis for the determination
of the amount due), and within 15 Business Days after demand therefor by such
Lender through Agent, Borrower shall pay to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such increased costs or reductions in amount.  Such
statement as to such increased costs or reductions in amount incurred by such
Lender, submitted by such Lender to Borrower, shall be conclusive as to the
amount thereof, absent manifest

                                       28
<PAGE>

error, and may be computed using any reasonable averaging and attribution
method. Each Lender will notify Borrower through Agent of any event occurring
after the date of this Agreement which will entitle such Lender to compensation
pursuant to this Section as promptly as practicable after any executive officer
of such Lender obtains knowledge thereof and determines to request such
compensation, and (if so requested by Borrower through Agent) will designate a
different lending office of such Lender for the issuance or maintenance of
Letters of Credit by such Lender or will take such other action as Borrower may
reasonably request if such designation or action is consistent with the internal
policy of such Lender and legal and regulatory restrictions, can be undertaken
at no additional cost, will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
                                --------
obligation so to designate a different lending office which is not located in
the United States of America).

     2.3  Terminations or Reductions of  Commitments.
          ------------------------------------------

     (a   Mandatory.  On the Revolving Loan Termination Date, all Revolving Loan
          ---------
Commitments shall be terminated in their entirety.

     (b   Optional.  Borrower shall have the right to terminate or reduce the
          --------
unused portion of the Revolving Loan Commitments at any time or from time to
time, provided that (i) Borrower shall give notice of each such termination or
      --------
reduction to Agent as provided in Section 4.3 hereof and (ii) each such partial
                                  -----------
reduction shall be in an integral multiple of $250,000.

     (c   No Reinstatement.  No termination or reduction of the Revolving Loan
          ----------------
Commitments may be reinstated without the written approval of Agent and the
Lenders.

     2.4  Commitment Fees.
          ---------------

     (a   Borrower shall pay to Agent for the account of each Revolving Loan
Lender revolving loan commitment fees for the period from December 19, 2000 to
and including the Revolving Loan Termination Date at a rate per annum equal to
the Commitment Fee Percentage.  Such revolving loan commitment fees shall be
computed (on the basis of the actual number of days elapsed in a year composed
of 360 days) on each day and shall be based on the excess of (x) the aggregate
amount of each Revolving Loan Lender's Revolving Loan Commitment for such day
over (y) the sum of (i) the aggregate unpaid principal balance of such Lender's
Revolving Note (excluding any Swing Loans except as specifically provided in
Section 2.1(d) hereof) on such day plus (ii) the aggregate Letter of Credit
--------------                     ----
Liabilities as to such Lender for such day.  Accrued revolving loan commitment
fees shall be payable in arrears on the Quarterly Dates prior to the Revolving
Loan Termination Date and on the Revolving Loan Termination Date.

     (b   All past due fees payable under this Section shall bear interest at
the Past Due Rate.

     2.5  Several Obligations.  The failure of any Lender to make any Loan to
          -------------------
be made by it on the date specified therefor shall not relieve any other Lender
of its obligation to make its Loan on such date, but neither Agent nor any
Lender shall be responsible or liable for the failure of any other Lender to
make a Loan to be made by such other Lender or to participate in, or co-issue,
any Letter of Credit.  Notwithstanding anything contained herein to the
contrary, (a) no Lender shall be

                                       29
<PAGE>

required to make or maintain Revolving Loans at any time outstanding if as a
result the total Revolving Loan Obligations to such Lender shall exceed the
lesser of (1) such Lender's Revolving Loan Commitment Percentage of all
Revolving Loan Obligations and (2) such Lender's Revolving Loan Commitment
Percentage of the Maximum Revolving Loan Available Amount and (b) if a Revolving
Loan Lender fails to make a Revolving Loan as and when required hereunder, then
upon each subsequent event which would otherwise result in funds being paid to
the defaulting Lender, the amount which would have been paid to the defaulting
Lender shall be divided among the non-defaulting Lenders ratably according to
their respective shares of the outstanding Revolving Loan Commitment Percentages
until the Revolving Loan Obligations of each Revolving Loan Lender (including
the defaulting Lender) are equal to such Lender's Revolving Loan Commitment
Percentage of the total Revolving Loan Obligations.

     2.6  Notes  .  The Revolving Loans made by each Lender (other than the
          -----
Swing Loans) shall be evidenced by a single Revolving Note of Borrower in
substantially the form of Exhibit D hereto payable to the order of such Lender
                          ---------
in a principal amount equal to the Revolving Loan Commitment of such Lender, and
otherwise duly completed.  The Term Loan A made by each Lender shall be
evidenced by a single Term Note A of Borrower in substantially the form of
Exhibit C hereto payable to the order of such Lender in a principal amount equal
---------
to the outstanding principal balance of the Term Loan A made by such Lender, and
otherwise duly completed.  The Term Loan B made by each Lender shall be
evidenced by a single Term Note B of Borrower in substantially the form of
Exhibit C hereto payable to the order of such Lender in a principal amount equal
---------
to the outstanding principal balance of the Term Loan B made by such Lender, and
otherwise duly completed.  The promissory notes described in this Section are
each, together with all renewals, extensions, modifications and replacements
thereof and substitutions therefor, called a "Note" and collectively called the
                                              ----
"Notes".  Each Lender is hereby authorized by Borrower to endorse on the
 -----
schedule (or a continuation thereof) that may be attached to each Note of such
Lender, to the extent applicable, the date, amount, type of and the applicable
period of interest for each Loan made by such Lender to Borrower hereunder, and
the amount of each payment or prepayment of principal of such Loan received by
such Lender, provided, that any failure by such Lender to make any such
             --------
endorsement shall not affect the obligations of Borrower under such Note or
hereunder in respect of such Loan.  Swing Loans shall be evidenced by the Swing
Note.  The Swing Note, and all renewals, extensions, modifications and
replacements thereof and substitutions therefor, shall constitute one of the
"Notes" hereunder.
------

     2.7  Use of Proceeds.  The proceeds of the Loans shall be used to
          ---------------
refinance existing Indebtedness of Borrower, to finance permitted acquisitions
by Borrower and its Subsidiaries (including the acquisition of Taco Cabana,
Inc., the payment of fees and expenses incurred in connection therewith and the
refinancing of outstanding debt of Taco Cabana, Inc. as of the closing thereof)
and new store development by Borrower and its Subsidiaries , and for other
working capital and general corporate purposes.  Neither Agent nor any Lender
shall have any responsibility as to the use of any proceeds of the Loans.

                                       30
<PAGE>

3.   Borrowings, Payments, Prepayments and Interest Options  .
     ------------------------------------------------------

     3.1  Borrowings.  Borrower shall give Agent notice of each borrowing
          ----------
(other than a borrowing of Swing Loans as to which the last sentence of this
Section 3.1 shall apply) to be made hereunder as provided in Section 4.3 hereof
-----------                                                  -----------
and Agent shall promptly notify each Lender of such request.  Not later than
11:00 a.m. Houston time on the date specified for each such borrowing hereunder,
each Lender shall make available the amount of the Loan, if any, to be made by
it on such date to Agent at its Principal Office, in immediately available
funds, for the account of Borrower.  Such amounts received by Agent will be held
in an account maintained by Borrower with Agent.  The amounts so received by
Agent shall, subject to the terms and conditions of this Agreement, be made
available to Borrower by wiring or otherwise transferring, in immediately
available funds, such amount to an account designated by Borrower and approved
by Agent.  Borrower shall give Agent notice of each borrowing of a Swing Loan to
be made hereunder as provided in Section 4.3 hereof and, no later than 11:00
                                 -----------
a.m. Houston time on the date specified for such borrowing hereunder, Chase
shall make available the amount of such Swing Loan to Borrower by depositing the
same, in immediately available funds, in an account designated by Borrower and
approved by Agent.

     3.2  Prepayments.
          -----------

     (a   Optional Prepayments.  Except as provided in Sections 3.2(g) or 3.3
          --------------------                         ---------------    ---
hereof, Borrower shall have the right to prepay, on any Business Day, in whole
or in part, without the payment of any penalty or fee, any Loans at any time or
from time to time, provided that Borrower shall give Agent notice of each such
                   --------
prepayment as provided in Section 4.3 hereof.  Each optional prepayment on a
                          -----------
Loan shall be in an amount equal to an integral multiple of $250,000.  Such
optional prepayments of Term Loans shall be applied in accordance with the
provisions of Section 3.2(h) hereof.  Section 3.2(g) hereof provides for the
              --------------          --------------
payment of the Make Whole Amount upon prepayment of the Term Loans B except
under certain circumstances therein set forth.

                                       31
<PAGE>

     (b   Mandatory Prepayments and Cover.  Except, in each case, as provided in
          -------------------------------
Section 3.3 hereof,
-----------

           (1 Insurance Proceeds and Condemnation Awards.
              ------------------------------------------

               (i) Promptly following the receipt thereof by any Obligor,
           Borrower shall deposit or cause to be deposited with Agent in an
           interest bearing account (but without any obligation to maximize such
           interest) all of the net cash proceeds of any payment or award in
           excess of $500,000 made to any Obligor under any policy of Property
           insurance with respect to any of the Collateral or pursuant to any
           condemnation award with respect to any of the Collateral provided
           such amounts have not theretofore been reasonably expended for the
           restoration or replacement of the asset in respect of which such
           payment or award was made.  Such amounts shall be collaterally
           assigned to Agent as security for the same portion of the Obligations
           as the applicable Collateral secured in a manner reasonably
           acceptable to Agent.  Upon delivery to Agent of written certification
           by Borrower that the applicable Obligor has reasonably expended
           amounts or committed in writing to expend amounts for the restoration
           or replacement of the asset in respect of which such payment or award
           was made, specifying the amount expended or committed, so long as no
           Default or Event of Default shall have occurred and be continuing any
           such amount deposited with Agent shall be released by Agent to
           Borrower; provided, however, that, in the event that within 365 days
                     --------  -------
           of receipt of such payment or award by Borrower, to the extent
           Borrower shall not have certified to Agent its intention to expend an
           equivalent amount for the restoration or replacement of the asset in
           respect of which such payment or award was made, Borrower shall make
           a prepayment on the Term Loans (using any funds deposited with Agent
           pursuant to this Section 3.2(b)(1) or other funds) in the amount of
                            -----------------
           the excess of the amount of such payment or award over the amount of
           such expenditures and/or commitment on such 365th day.

               (ii) In cases where the amount of the net cash proceeds of any
           payment or award is equal to or less than $500,000 and no Default or
           Event of Default has occurred and is continuing, such proceeds may be
           paid to any Obligor, and if received by Agent shall be paid by Agent
           to Borrower, for use in paying for replacements or repairs of or
           substitutes for the damaged, destroyed or taken assets.

           (2 Excess Cash Flow.  Within fifteen (15) Business Days after the
              ----------------
     delivery of the Annual Audited Financial Statements pursuant to Section 7.2
                                                                     -----------
     hereof with respect to each fiscal year of Borrower (commencing with the
     fiscal year 2001), Borrower shall  make a prepayment on the Term Loans in
     an amount equal to (i) Excess Cash Flow for such fiscal year times 50% less
                                                                  -----     ----
     (ii) optional prepayments made on the Term Loans during such fiscal year.
     The calculation of Excess Cash Flow for any fiscal year based upon the
     applicable Annual Audited Financial Statements shall be conclusive, absent
     manifest error.

     (c   Term Loan A Amortization.   The principal of the Term Notes A shall be
          ------------------------
due and payable in quarterly installments, each  due on a Quarterly Date,
beginning on the last day of the first fiscal quarter of 2001, equal to the
amount set forth in the following table opposite the applicable

                                       32
<PAGE>

payment (allocated among the Term Loan A Lenders pro rata in accordance with the
unpaid principal balances of their respective Term Notes A):

     Payment                               Payment  Amount
     -------                               ---------------

     first through fourth                       $1,500,000
     fifth through eighth                       $1,875,000
     ninth through twelfth                      $2,500,000
     thirteenth through nineteenth              $3,125,000

On the Term Loan A Maturity Date, the entire unpaid principal balance of each
Term Note A and all accrued and unpaid interest on the unpaid principal balance
of each Term Note A shall be finally due and payable.

     (d   Term Loan B Amortization.   The principal of the Term Notes B shall be
          ------------------------
due and payable in quarterly installments, each  due on a Quarterly Date,
beginning on the last day of the first fiscal quarter of 2001, equal to the
amount set forth in the following table opposite the applicable payment
(allocated among the Term Loan B Lenders pro rata in accordance with the unpaid
principal balances of their respective Term Notes B):

     Payment                                Payment Amount
     -------                                --------------

     first through twentieth                    $  250,000
     twenty-first through twenty-seventh        $8,750,000

On the Term Loan B Maturity Date, the entire unpaid principal balance of each
Term Note B and all accrued and unpaid interest on the unpaid principal balance
of each Term Note B shall be finally due and payable.

     (e   Interest Payments.  Accrued and unpaid interest on the unpaid
          -----------------
principal balance of the Loans shall be due and payable on the Interest Payment
Dates.

     (f   Payments and Interest on Reimbursement Obligations.  Borrower will pay
          --------------------------------------------------
to Agent for the account of each Lender the amount of each Reimbursement
Obligation on the date on which the Agent notifies Borrower of the date and
amount of the applicable payment by the Issuer of any drawing under a Letter of
Credit.  The amount of any Reimbursement Obligation may, if the applicable
conditions precedent specified in Sections 5.1 and 5.2 hereof have been
                                  ------------     ---
satisfied, be paid with the proceeds of Revolving Loans.  Subject to Section
                                                                     -------
11.7 hereof, Borrower will pay to Agent for the account of each Lender interest
----
at the applicable Past Due Rate on any Reimbursement Obligation and on any other
amount payable by Borrower hereunder to or for the account of such Lender (but,
if such amount is interest, only to the extent legally allowed), which shall not
be paid in full within five (5) days after the date due (whether at stated
maturity, by acceleration or otherwise), for the period commencing on the
expiration of such five (5) day period until the same is paid in full.

     (g   Payment of Make Whole Amount.  Borrower hereby expressly (a) waives
          ----------------------------
any and all rights it may have under applicable law to prepay without penalty or
premium all or any part of

                                       33
<PAGE>

the Term Loans B prior to January 1, 2003, either voluntarily or upon an
acceleration of the maturity date of the applicable Term Note B and (b) agrees
that if, due to a voluntary prepayment of the Term Notes B or the acceleration
of the maturity date of the applicable Term Note B or any other reason (except
as provided in the last sentence of this Section 3.2(g)), a prepayment of all or
                                         --------------
any part of the principal of the Term Loans B is made by or on behalf of
Borrower at any time prior to January 1, 2003, then Borrower or any other party
making any such prepayment shall be obligated to pay, concurrently therewith, as
a prepayment charge, an amount equal to the applicable Make Whole Amount and the
payment of such Make Whole Amount shall be secured by the Security Documents.
Notwithstanding the foregoing, no Make Whole Amount shall be payable in
connection with any prepayments made on the Term Loans B pursuant to Section
                                                                     -------
3.2(b) hereof.
------

     (h   Application of Prepayments on Term Loans.  Any prepayments made on the
          ----------------------------------------
Term Loans pursuant to Section 3.2(b) hereof, and any  voluntary prepayments
                       --------------
made on the Term Loans pursuant to Section 3.2(a) hereof on or after January 1,
                                   --------------
2003, will be applied pro rata between the Term Notes A and the Term Notes B
based on their respective unpaid principal balances.  Notwithstanding the
foregoing, the holder of any Term Loan B Note may elect to waive its right to
receive any prepayment required to be made under Section 3.2(b) hereof, such
                                                 --------------
election to be exercisable by delivery of written notice thereof to Agent no
later than one (1) Business day prior to disbursement by Agent to Lenders of the
applicable prepayment.  If the holder of any Term Loan B Note so waives its
right to receive any such prepayment, such prepayment shall be allocated among
the holders of the other Term Notes.  Any voluntary prepayments made on the Term
Loans pursuant to Section 3.2(a) hereof prior to January 1, 2003 shall be
                  --------------
applied, at Borrower's option exercisable by delivery of written notice thereof
to Agent concurrently with the applicable prepayment, either (i) to the Term
Loans A or (ii) pro rata between the Term Notes A and the Term Notes B based on
their respective unpaid principal balances.  All prepayments made on any Term
Note shall be applied to scheduled principal installments on such Term Note in
inverse order of their maturities.

     3.3  Interest Options
          ----------------

     (a   Options Available.  The outstanding principal balance of the Notes
          -----------------
(including, without limitation, the Swing Note) shall bear interest at the Base
Rate; provided, that (1) all past due amounts, both principal and accrued
      --------
interest, shall bear interest at the Past Due Rate, and (2) subject to the
provisions hereof, Borrower shall have the option of having all or any portion
of the principal balances of the Notes (other than the Swing Note) from time to
time outstanding bear interest at a Eurodollar Rate.  The records of Agent and
each of the Lenders with respect to Interest Options, Interest Periods and the
amounts of Loans to which they are applicable shall be binding and conclusive,
absent manifest error.  Interest on the Loans shall be calculated at the Base
Rate except where it is expressly provided pursuant to this Agreement that a
Eurodollar Rate is to apply.  Interest on the amount of each advance against the
Notes shall be computed on the amount of that advance and from the date it is
made.  Notwithstanding anything in this Agreement to the contrary, for the full
term of the Notes the interest rate produced by the aggregate of all sums paid
or agreed to be paid to the holders of the Notes for the use, forbearance or
detention of the debt evidenced thereby (including all interest on the Notes at
the Stated Rate plus the Additional Interest) shall not exceed the Ceiling Rate.

                                       34
<PAGE>

     (b   Designation and Conversion.  Borrower shall have the right to
          --------------------------
designate or convert its Interest Options in accordance with the provisions
hereof.  Provided no Event of Default has occurred and is continuing and subject
         --------
to the last sentence of Section 3.3(a) and the provisions of Section 3.3(c),
                        --------------                       --------------
Borrower may elect to have a Eurodollar Rate apply or continue to apply to all
or any portion of the principal balance of the Notes (other than the Swing
Note).  Each change in Interest Options shall be a conversion of the rate of
interest applicable to the specified portion of the Loans, but such conversion
shall not change the respective outstanding principal balances of the Notes.
The Interest Options shall be designated or converted in the manner provided
below:

       i)  Borrower shall give Agent telephonic notice, promptly confirmed by a
           Rate Designation Notice (and Agent shall promptly inform each Lender
           thereof).  Each such telephonic and written notice shall specify the
           amount of the Loan and type (i.e. Revolving Loan, Term Loan A or Term
           Loan B) which is the subject of the designation, if any; the amount
           of borrowings into which such borrowings are to be converted or for
           which an Interest Option is designated; the proposed date for the
           designation or conversion and the Interest Period or Periods, if any,
           selected by Borrower.  Such telephonic notice shall be irrevocable
           and shall be given to Agent no later than the applicable Rate
           Designation Date.

      ii)  No more than twelve (12) LIBOR Borrowings shall be in effect with
           respect to the Loans at any time.

     iii)  Each designation or conversion of a LIBOR Borrowing shall occur on a
           LIBOR Business Day.

      iv)  Except as provided in Section 3.3(c) hereof, no LIBOR Borrowing shall
                                --------------
           be converted to a Base Rate Borrowing or another LIBOR Borrowing on
           any day other than the last day of the applicable Interest Period.

       v)  Each request for a LIBOR Borrowing shall be in the amount equal to
           $250,000 or a multiple of $100,000 in excess thereof.

      vi)  Each designation of an Interest Option with respect to the Revolving
           Notes shall apply to all of the Revolving Notes ratably in accordance
           with their respective outstanding principal balances.  Each
           designation of an Interest Option with respect to the Term Notes A
           shall apply to all of the Term Notes A ratably in accordance with
           their respective outstanding principal balances.  Each designation of
           an Interest Option with respect to the Term Notes B shall apply to
           all of the Term Notes B ratably in accordance with their respective
           outstanding principal balances.  If any Lender assigns an interest in
           any of its Notes when any LIBOR Borrowing is outstanding with respect
           thereto, then such assignee shall have its ratable interest in such
           LIBOR Borrowing.

                                       35
<PAGE>

     (c   Special Provisions Applicable to LIBOR Borrowings.
          -------------------------------------------------

     i)  Options Unlawful.  If the adoption of any applicable Legal Requirement
         ----------------
after the Effective Date or any change after the Effective Date in any
applicable Legal Requirement or in the interpretation or administration thereof
by any Governmental Authority or compliance by any Lender with any request or
directive (whether or not having the force of law) issued after the Effective
Date by any central bank or other Governmental Authority shall at any time make
it unlawful or impossible for any Lender to permit the establishment of or to
maintain any LIBOR Borrowing, the commitment of such Lender to establish or
maintain such LIBOR Borrowing shall forthwith be canceled and Borrower shall
forthwith, upon demand by Agent to Borrower, (1) convert the LIBOR Borrowing of
such Lender with respect to which such demand was made to a Base Rate Borrowing;
(2) pay all accrued and unpaid interest to date on the amount so converted; and
(3) pay any amounts required to compensate each Lender for any additional cost
or expense which any Lender may incur as a result of such adoption of or change
in such Legal Requirement or in the interpretation or administration thereof and
any Funding Loss which any Lender may incur as a result of such conversion.  If,
when Agent so notifies Borrower, Borrower has given a Rate Designation Notice
specifying a LIBOR Borrowing but the selected Interest Period has not yet begun,
as to the applicable Lender such Rate Designation Notice shall be deemed to be
of no force and effect, as if never made, and the balance of the Loans made by
such Lender specified in such Rate Designation Notice shall bear interest at the
Base Rate until a different available Interest Option shall be designated in
accordance herewith.

     ii)  Increased Cost of Borrowings.  If the adoption after the Effective
          ----------------------------
Date of any applicable Legal Requirement or any change after the Effective Date
in any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by any Lender with any
request or directive (whether or not having the force of law) issued after the
Effective Date by any central bank or Governmental Authority shall at any time
as a result of any portion of the principal balances of the Notes being
maintained on the basis of a Eurodollar Rate:

           (1) subject any Lender to any Taxes, or any deduction or withholding
               for any Taxes, on or from any payment due under any LIBOR
               Borrowing or other amount due hereunder, other than income and
               franchise taxes of the United States or its political
               subdivisions or such other jurisdiction in which the applicable
               Lender has its principal office or applicable lending office; or

           (2) change the basis of taxation of payments due from Borrower to any
               Lender under any LIBOR Borrowing (otherwise than by a change in
               the rate of taxation of the overall net income of such Lender);
               or

           (3) impose, modify, increase or deem applicable any reserve
               requirement (excluding that portion of any reserve requirement
               included in the calculation of the applicable Eurodollar Rate),
               special deposit requirement or similar requirement (including,
               but not limited to, state law requirements and Regulation D)
               against assets of any Lender, or against deposits with any
               Lender, or against loans made by any Lender, or against any other
               funds, obligations or other property owned or held by any Lender;
               or

                                       36
<PAGE>

           (4) impose on any Lender any other condition regarding any LIBOR
               Borrowing;

and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by Agent (accompanied by a statement setting forth
in reasonable detail the applicable Lender's basis therefor), Borrower shall pay
to Agent additional amounts which shall compensate each Lender for such
increased cost or reduced amount.  The determination by any Lender of the amount
of any such increased cost, increased reserve requirement or reduced amount
shall be conclusive and binding, absent manifest error.  Borrower shall have the
right, if it receives from Agent any notice referred to in this paragraph, upon
three Business Days' notice to Agent (which shall notify each affected Lender),
either (i) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or (ii)
to convert the LIBOR Borrowing which is the subject of the notice to a Base Rate
Borrowing; provided, that any such repayment or conversion shall be accompanied
           --------
by payment of (x) the amount required to compensate each Lender for the
increased cost or reduced amount referred to in the preceding paragraph; (y) all
accrued and unpaid interest to date on the amount so repaid or converted, and
(z) any Funding Loss which any Lender may incur as a result of such repayment or
conversion.  Each Lender will notify Borrower through Agent of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, and (if
so requested by Borrower through Agent) will designate a different lending
office of such Lender for the applicable LIBOR Borrowing or will take such other
action as Borrower may reasonably request if such designation or action is
consistent with the internal policy of such Lender and legal and regulatory
restrictions, will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
                                --------
obligation so to designate a different lending office which is located in the
United States of America).

     iii)  Inadequacy of Pricing and Rate Determination.  If, for any reason
           --------------------------------------------
with respect to any Interest Period, Agent (or, in the case of clause 3 below,
                                                               --------
the applicable Lender) shall have determined (which determination shall be
conclusive and binding upon Borrower, absent manifest error) that:

           (1) Agent is unable through its customary general practices to
               determine any applicable Eurodollar Rate, or

           (2) by reason of circumstances affecting the applicable market,
               generally, Agent is not being offered deposits in United States
               dollars in such market, for the applicable Interest Period and in
               an amount equal to the amount of any applicable LIBOR Borrowing
               requested by Borrower, or

           (3) any applicable Eurodollar Rate will not adequately and fairly
               reflect the cost to any Lender of making and maintaining such
               LIBOR Borrowing hereunder for any proposed Interest Period,

then Agent shall give Borrower notice thereof and thereupon, (A) any Rate
Designation Notice previously given by Borrower designating the applicable LIBOR
Borrowing which has not

                                       37
<PAGE>

commenced as of the date of such notice from Agent shall be deemed for all
purposes hereof to be of no force and effect, as if never given, and (B) until
Agent shall notify Borrower that the circumstances giving rise to such notice
from Agent no longer exist, each Rate Designation Notice requesting the
applicable Eurodollar Rate shall be deemed a request for a Base Rate Borrowing,
and any applicable LIBOR Borrowing then outstanding shall be converted, without
any notice to or from Borrower, upon the termination of the Interest Period then
in effect with respect to it, to a Base Rate Borrowing.

     iv)  Funding Losses.  Borrower shall indemnify each Lender against and hold
          --------------
each Lender harmless from any Funding Loss.  This indemnity shall survive the
payment of the Notes.  A certificate of such Lender (explaining in reasonable
detail the amount and calculation of the amount claimed) as to any additional
amounts payable pursuant to this paragraph submitted to Borrower shall be
conclusive and binding upon Borrower, absent manifest error.

     (d) Funding Offices; Adjustments Automatic; Calculation Year.  Any Lender
         --------------------------------------------------------
may, if it so elects, fulfill its obligation as to any LIBOR Borrowing by
causing a branch or affiliate of such Lender to make such Loan and may transfer
and carry such Loan at, to or for the account of any branch office or affiliate
of such Lender; provided, that in such event for the purposes of this Agreement
                --------
such Loan shall be deemed to have been made by such Lender and the obligation of
Borrower to repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it for the account of such branch or affiliate.  Without notice
to Borrower or any other Person, each rate required to be calculated or
determined under this Agreement shall automatically fluctuate upward and
downward in accordance with the provisions of this Agreement.  Interest at the
Prime Rate shall be computed on the basis of the actual number of days elapsed
in a year consisting of 365 or 366 days, as the case may be.  All other interest
required to be calculated or determined under this Agreement shall be computed
on the basis of the actual number of days elapsed in a year consisting of 360
days, unless the Ceiling Rate would thereby be exceeded, in which event, to the
extent necessary to avoid exceeding the Ceiling Rate, the applicable interest
shall be computed on the basis of the actual number of days elapsed in the
applicable calendar year in which accrued.

     (e) Funding Sources.  Notwithstanding any provision of this Agreement to
         ---------------
the contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the Eurodollar Rate for such Interest Period.

                                       38
<PAGE>

4.   Payments; Pro Rata Treatment; Computations, Etc.
     ------------------------------------------------

     4.1  Payments.
          --------

     (a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
Borrower hereunder, under the Notes and under the other Loan Documents shall be
made in Dollars, in immediately available funds, to Agent at the Principal
Office (or in the case of a successor Agent, at the principal office of such
successor Agent in the United States), not later than 10:00 a.m. Houston time on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day).  Agent, or any Lender for whose account any such payment is made,
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time to any ordinary deposit account of Borrower with Agent
or such Lender, as the case may be.

     (b) Borrower shall, at the time of making each payment hereunder, under any
Note or under any other Loan Document, specify to Agent the Loans or other
amounts payable by Borrower hereunder or thereunder to which such payment is to
be applied.  Each payment received by Agent hereunder, under any Note or under
any other Loan Document for the account of a Lender shall be paid promptly to
such Lender, in immediately available funds.  If Agent fails to send to any
Lender the applicable amount by the close of business on the date any such
payment is received by Agent if such payment is received prior to 10:00 a.m.
Houston time (or on the next succeeding Business Day with respect to payments
which are received after 10:00 a.m. Houston time), Agent shall pay to the
applicable Lender interest on such amount from such date at the Federal Funds
Rate.  Borrower, the Lenders and Agent acknowledge and agree that this provision
and each other provision of this Agreement or any of the other Loan Documents
relating to the application of amounts in payment of the Obligations shall be
subject to the provisions of Section 4.2(d) regarding pro rata application of
                             --------------           --- ----
amounts after an Event of Default shall have occurred and be continuing.

     (c) If the due date of any payment hereunder or under any Note falls on a
day which is not a Business Day, the due date for such payment (except as
otherwise provided in Section 3.3 hereof) shall be extended to the next
                      -----------
succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension.

     (d) All payments by the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for or on account of any
present or future income, stamp, or other taxes, fees, duties, withholding or
other charges of any nature whatsoever imposed by any taxing authority excluding
in the case of each Lender taxes imposed on or measured by its net income or
franchise taxes imposed by the jurisdiction in which it is organized or through
which it acts for purposes of this Agreement (such non-excluded items being
hereinafter referred to as "Taxes").  If as a result of any change in law (or
                            -----
the interpretation thereof) after the date that the applicable Lender became a
"Lender" under this Agreement any withholding or deduction from any payment to
be made to, or for the account of, a Lender by the Borrower hereunder or under
any other Loan Document is required in respect of any Taxes pursuant to any
applicable law, rule, or regulation, then the Borrower will (i) pay to the
relevant authority the full amount required to be so withheld or deducted; (ii)
to the extent available, promptly forward to the Agent an official receipt or
other documentation reasonably satisfactory to the Agent evidencing such payment
to such

                                       39
<PAGE>

authority; and (iii) pay to the Agent, for the account of each affected
Lender, such additional amount or amounts as are necessary to ensure that the
net amount actually received by such Lender will equal the full amount such
Lender would have received had no such withholding or deduction been required.
Each Lender shall determine such additional amount or amounts payable to it
(which determination shall, in the absence of manifest error, be conclusive and
binding on the Borrower).  If a Lender becomes aware that any such withholding
or deduction from any payment to be made by the Borrower hereunder or under any
other Loan Document is required, then such Lender shall promptly notify the
Agent and the Borrower thereof stating the reasons therefor and the additional
amount required to be paid under this Section.  Each Lender shall execute and
deliver to the Agent and Borrower such forms as it may be required to execute
and deliver pursuant to Section 11.13 hereof.  To the extent that any such
                        -------------
withholding or deduction results from the failure of a Lender to provide a form
required by Section 11.13 hereof (unless such failure is due to some prohibition
            -------------
under applicable Legal Requirements), the Borrower shall have no obligation to
pay the additional amount required by clause (iii) above.  Anything in this
                                      ------------
Section notwithstanding, if any Lender elects to require payment by the Borrower
of any material amount under this Section, the Borrower may, within 60 days
after the date of receiving notice thereof and so long as no Default shall have
occurred and be continuing, elect to terminate such Lender as a party to this
Agreement; provided that, concurrently with such termination the Borrower shall
           --------
(i) if the Agent and each of the other Lenders shall consent, pay that Lender
all principal, interest and fees and other amounts owed to such Lender through
such date of termination or (ii) have arranged for another financial institution
approved by the Agent (such approval not to be unreasonably withheld) as of such
date, to become a substitute Lender for all purposes under this Agreement in the
manner provided in Section 11.6; provided further that, prior to substitution
                   ------------  ----------------
for any Lender, the Borrower shall have given written notice to the Agent of
such intention and the Lenders shall have the option, but no obligation, for a
period of 60 days after receipt of such notice, to increase their Commitments in
order to replace the affected Lender in lieu of such substitution.

     4.2  Pro Rata Treatment.  Except to the extent otherwise provided herein:
          ------------------
(a) each borrowing from the Lenders under Section 2.1 hereof shall be made (x)
                                          -----------
in the case of Term Loans, ratably from the Term Loan Lenders in accordance with
the amounts set forth opposite their signature lines hereto under the headings
"Term Loan A" and "Term Loan B", respectively, and (y) in the case of Revolving
Loans, ratably from the Revolving Loan Lenders in accordance with their
respective Revolving Loan Commitments, provided that borrowings of Swing Loans
                                       --------
shall be for Chase's own account; (b) each payment of revolving loan commitment
fees shall be made for the account of the Revolving Loan Lenders, and each
termination or reduction of the Revolving Loan Commitments of the Revolving Loan
Lenders under Section 2.3 hereof shall be applied, pro rata, according to the
              -----------                          --------
Revolving Loan Lenders' respective Revolving Loan Commitments; (c) each payment
by Borrower of principal of or interest on the Term Loans or Revolving Loans, as
the case may be, prior to the occurrence of an Event of Default (or after the
applicable Event of Default shall have been fully cured) shall be made to Agent
for the account of the Lenders pro rata in accordance with the respective unpaid
                               --------
principal amounts of such Term Loans or Revolving Loans, as the case may be,
held by the Lenders, provided that payments of Swing Loans prior to the
                     --------
occurrence of an Event of Default (or after the applicable Event of Default
shall have been fully cured) shall be for Chase's own account; (d) subject to
the provisions of Sections 3.2(g) and (h) hereof, each payment by Borrower of
                  ---------------     ---
principal of or interest on the Term Loans or Revolving Loans (including Swing
Loans), as the case may be, after an Event of Default shall have occurred and be
continuing shall be made to Agent for the account of the Lenders pro rata in
                                                                 --------
accordance with the respective unpaid

                                       40
<PAGE>

principal amounts of the Obligations held by the Lenders (i.e. such payments
shall be shared by all of the Lenders and not restricted to the holders of the
Swing Note or Revolving Notes or Term Notes, regardless of any attempted
contrary designation by Borrower), and (e) the Revolving Loan Lenders (other
than the applicable Issuer) shall purchase from the applicable Issuer
participations in each Letter of Credit to the extent of their respective
Revolving Loan Commitment Percentages.

     4.3  Certain Actions, Notices, Etc.    Notices to Agent of any termination
          ------------------------------
or reduction of Revolving Loan Commitments and of borrowings and optional
prepayments of Loans and requests for issuances of Letters of Credit shall be
irrevocable and shall be effective only if received by Agent not later than
10:00 a.m. Houston time on the number of Business Days prior to the date of the
relevant termination, reduction, borrowing and/or prepayment specified below:

                                         Number of Business Days Prior Notice
                                         ------------------------------------

           Termination or Reduction of
           Revolving Loan Commitments                5

           Borrowings or prepayments of              same day
           Swing Loans

           Revolving Loan repayment                  1

           Borrowing at the Base Rate                1

           Letter of Credit issuance                 5

           Prepayments required pursuant to
           Section 3.2(b)                            same day
           --------------

           Optional prepayment of
           Term Loan                                 5

Each such notice of termination or reduction shall specify the amount of the
applicable Revolving Loan Commitment to be terminated or reduced.  Each such
notice of borrowing or prepayment shall specify the amount of the Loans to be
borrowed or prepaid and the date of borrowing or prepayment (which shall be a
Business Day).  Agent shall promptly notify the affected Lenders of the contents
of each such notice.  Any selection of a Eurodollar Rate with respect to a Loan
shall be subject to the advance notice requirements set forth in Section 3.3
                                                                 -----------
hereof.

     4.4  Non-Receipt of Funds by Agent.  Unless Agent shall have been
          -----------------------------
notified by a Lender or Borrower (the "Payor") prior to the date on which such
                                       -----
Lender is to make payment to Agent of the proceeds of a Loan (or funding of a
drawing under a Letter of Credit or reimbursement with respect to any drawing
under a Letter of Credit) to be made by it hereunder or Borrower is to make a
payment to Agent for the account of one or more of the Lenders, as the case may
be (such payment being herein called the "Required Payment"), which notice shall
                                          ----------------
be effective upon receipt, that the Payor does not intend to make the Required

                                       41
<PAGE>

Payment to Agent, Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to Agent, the recipient of such
payment (or, if such recipient is the beneficiary of a Letter of Credit,
Borrower and, if Borrower fails to pay the amount thereof to Agent forthwith
upon demand, the Lenders ratably in proportion to their respective Revolving
Loan Commitment Percentages) shall, on demand, pay to Agent the amount made
available by Agent, together with interest thereon in respect of the period
commencing on the date such amount was so made available by Agent until the date
Agent recovers such amount at a rate per annum equal to the Federal Funds Rate
for such period.

     4.5  Sharing of Payments, Etc.    If a Lender shall obtain payment of any
          -------------------------
principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or lien granted under Section 9.2 hereof),
                                                      -----------
banker's lien, counterclaim or similar right, or otherwise, it shall promptly
purchase from the other Lenders participations in the Loans made, or
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid Obligations
                            --------
then due to each of them.  To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored.  Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
Lender so purchasing a participation in the Loans made, or Reimbursement
Obligations or other Obligations held, by other Lenders may exercise all rights
of set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans, or
Reimbursement Obligations or other Obligations in the amount of such
participation.  Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of Borrower.

5.   Conditions Precedent.
     --------------------

     5.1  Initial Loans and Letters of Credit  .  The obligation of each Lender
          -----------------------------------
or each Issuer to make its initial Loans or issue or participate in a Letter of
Credit (if such Letter of Credit is issued prior to the funding of the initial
Loans) hereunder is subject to the following conditions precedent, each of which
shall have been fulfilled or waived to the satisfaction of the Majority Lenders:

     (a) Authorization and Status.  Agent shall have received from the
         ------------------------
appropriate Governmental Authorities certified copies of the applicable
Organizational Documents of each Obligor required to be filed with such
Governmental Authorities, and evidence satisfactory to Agent of all action taken
by each Obligor authorizing the execution, delivery and performance of the Loan
Documents and all other documents related to this Agreement to which it is a
party (including, without limitation, a certificate of the secretary of each
such party which is a corporation setting forth the resolutions of its Board of
Directors authorizing the transactions contemplated thereby and attaching a copy
of its bylaws), together with such certificates as may be appropriate to
demonstrate the qualification and good standing of and payment of taxes by each
Obligor in the jurisdiction of

                                       42
<PAGE>

its organization and in each other jurisdiction where the failure in which to
qualify would have a material adverse effect on the business, condition
(financial or otherwise), operations or Properties of any Obligor.

     (b) Incumbency.  Each Obligor shall have delivered to Agent a certificate
         ----------
in respect of the name and signature of each of the officers (i) who is
authorized to sign on its behalf the applicable Loan Documents related to any
Loan or the issuance of any Letter of Credit and (ii) who will, until replaced
by another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with any Loan or the issuance of any Letter
of Credit.  Agent and each Lender may conclusively rely on such certificates
until they receive notice in writing from the applicable Obligor to the
contrary.

     (c) Notes.  Agent shall have received the appropriate Notes of Borrower for
         -----
each Lender, duly completed and executed.

     (d) Loan Documents.  Each Obligor shall have duly executed and delivered
         --------------
the Loan Documents to which it is a party (in such number of copies as Agent
shall have requested).  Each such Loan Document shall be in substantially the
form furnished to the Lenders prior to their execution of this Agreement,
together with such changes therein as Agent may approve.

     (e) Security Matters.  All such action as Agent shall have requested to
         ----------------
perfect the Liens created pursuant to the Security Documents shall have been
taken, including, without limitation, where applicable, the filing and recording
of the Security Documents with the appropriate Governmental Authorities.  Agent
shall also have received evidence satisfactory to it that the Liens created by
the Security Documents constitute first priority Liens, except for the
exceptions expressly provided for herein, including, without limitation, Uniform
Commercial Code search reports, satisfactory title evidence in form and
substance acceptable to Agent, and executed releases of any prior Liens (except
as permitted by Section 8.2).  Agent shall be granted a first priority Lien
                -----------
securing all of the Obligations upon all of the issued and outstanding  equity
interests in and to Borrower and each of its Subsidiaries (other than Excluded
Subsidiaries and Non-Recourse Subsidiaries), pursuant to Loan Documentation in
Proper Form, as a condition precedent to any Loan.

     (f) Fees and Expenses. Borrower shall have paid to Agent all unpaid fees in
         -----------------
the amounts previously agreed upon in writing among Borrower and Agent; and
shall have in addition paid to Agent all amounts payable under Section 11.3
                                                               ------------
hereof, on or before the date of this Agreement, except for amounts which Agent,
in its sole discretion, agrees may be paid at a later date.

     (g) Insurance.  Borrower shall have delivered to Agent certificates of
         ---------
insurance satisfactory to Agent evidencing the existence of all insurance
required to be maintained by each Obligor by this Agreement and the Security
Documents (including without limitation environmental insurance which may be
required by Agent).

     (h) Opinions of Counsel.  Agent shall have received such opinions of
         -------------------
counsel to Obligors as the Majority Lenders shall reasonably request with
respect to Obligors and the Loan Documents.

                                       43
<PAGE>

     (i) Consents.  Agent shall have received evidence satisfactory to the
         --------
Lenders that all material consents of each Governmental Authority and of each
other Person, if any, reasonably required in connection with (a) the Loans and
the Letters of Credit and (b) the execution, delivery and performance of this
Agreement and the other Loan Documents have been satisfactorily obtained.

     (j) Key Agreements.  Agent shall have received copies of the Key
         --------------
Agreements, in Proper Form, and, where applicable, shall have received evidence
satisfactory to Agent that the transactions contemplated therein have been
consummated, subject only to the requested funding of Loans.  Upon request of
Agent or the Majority Lenders, the copies of any designated Key Agreements shall
be certified as true, correct and complete by Borrower.

     (k) Title Insurance Policies.  To the extent requested by Agent or the
         ------------------------
Majority Lenders, Agent shall have received the Title Insurance Policies and
legible copies of any matters referred to therein, together with a survey or
surveys of the Mortgaged Property, in Proper Form.

     (l) Taco Cabana Purchase.  The transaction contemplated by that certain
         --------------------
Agreement and Plan of Merger dated as of October 6, 2000 executed by and among
Borrower, Spur Acquisition Corp. and Taco Cabana, Inc. (without amendment except
as approved in writing by the Majority Lenders) shall have been consummated and
the total consideration paid by Borrower and its Subsidiaries in connection
therewith shall not have exceeded $160,000,000.

     (m) Other Documents.  Agent shall have received such other documents
         ---------------
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as Agent or the Majority Lenders may reasonably request.

     5.2  All Loans and Letters of Credit  .  The obligation of each Lender to
          -------------------------------
make any Loan to be made by it hereunder or to issue or participate in any
Letter of Credit is subject to (a) the accuracy, in all material respects, on
the date of such Loan or such issuance of all representations and warranties of
each Obligor contained in this Agreement and the other Loan Documents; (b) Agent
shall have received the following, all of which shall be duly executed and in
Proper Form: (1) a Request for Extension of Credit as to the Loan or the Letter
of Credit, as the case may be, no later than 10:00 a.m. Houston time on the
Business Day on which such Request for Extension of Credit must be given under
Section 4.3 hereof, (2) in the case of a Letter of Credit, an Application, and
-----------
(3) such other documents as Agent or the Majority Lenders may reasonably
require; (c) prior to the making of such Loan or the issuance of such Letter of
Credit, there shall have occurred no material adverse change in the assets,
liabilities, financial condition, business or affairs of the Borrower and the
Obligors, on a consolidated basis; (d) no Default or Event of Default shall have
occurred and be continuing; (e) the making of such Loan or the issuance of such
Letter of Credit shall not be illegal or prohibited by any Legal Requirement;
(f) in the case of a Revolving Loan, all Swing Loans then outstanding shall have
been paid or shall be paid with the proceeds of such Revolving Loan, and (g)
Borrower shall have paid all fees and expenses of the type described in Section
                                                                        -------
11.3 hereof and all other fees owed to Agent or any Lender under the Loan
----
Documents which are due and payable, in each case, prior to or on the date of
such Loan or such issuance.  The submission by the Borrower of a Request for
Extension of Credit shall be deemed to be a representation and warranty that the
conditions precedent to the applicable Loan or Letter of Credit have been
satisfied.

6.   Representations and Warranties.
     ------------------------------

                                       44
<PAGE>

     To induce the Lenders to enter into this Agreement and to make the Loans
and issue or participate in the Letters of Credit, Borrower represents and
warrants (such representations and warranties to survive any investigation and
the making of the Loans and the issuance of any Letters of Credit) to the
Lenders and Agent as follows:

     6.1  Organization.  Each Obligor (a) is duly organized, validly existing
          ------------
and in good standing under the laws of the jurisdiction of its organization; (b)
has all necessary power and authority to conduct its business as presently
conducted, and (c) is duly qualified to do business and in good standing in the
jurisdiction of its organization and in all jurisdictions in which the failure
to so qualify would reasonably be expected to have a material adverse effect on
the business, condition (financial or otherwise), operations or Properties of
any Obligor.

     6.2  Financial Statements.  Borrower has furnished to Agent (i) audited
          --------------------
financial statements (including a balance sheet) as to Borrower which fairly
present in all material respects, in accordance with GAAP, the consolidated
financial condition and the results of operations of Borrower as at the end of
Borrower's 1999 fiscal year, (ii) unaudited financial statements (including a
balance sheet) as to Borrower which fairly present in all material respects, in
accordance with GAAP, the consolidated financial condition and the results of
operations of Borrower as at the end of the third quarter of Borrower's 2000
fiscal year, (iii) audited financial statements (including a balance sheet) as
to Taco Cabana, Inc. which fairly present in all material respects, in
accordance with GAAP, the consolidated financial condition and the results of
operations of Taco Cabana, Inc. and its Subsidiaries as at the end of Taco
Cabana's 1999 fiscal year and (iv) unaudited financial statements (including a
balance sheet) as to Taco Cabana, Inc. which fairly present in all material
respects, in accordance with GAAP, the consolidated financial condition and the
results of operations of Taco Cabana, Inc. as at the end of the third quarter of
Taco Cabana, Inc.'s 2000 fiscal year.   Except for the acquisition of Taco
Cabana, Inc., no events, conditions or circumstances have occurred from the date
that the financial statements were delivered to Agent through the Effective Date
which would cause said financial statements to be misleading in any material
respect.  There are no material instruments or liabilities which should be
reflected in such financial statements provided to Agent which are not so
reflected (and disclosed to Lenders in writing prior to the Effective Date).

     6.3  Enforceable Obligations; Authorization.  The Loan Documents are
          --------------------------------------
legal, valid and binding obligations of each applicable Obligor, enforceable in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency and other similar laws and judicial decisions affecting creditors'
rights generally and by general equitable principles.  The execution, delivery
and performance of the Loan Documents (a) have all been duly authorized by all
necessary action; (b) are within the power and authority of each applicable
Obligor; (c) do not and will not contravene or violate any Legal Requirement
applicable to any applicable Obligor or the Organizational Documents of any
applicable Obligor, the contravention or violation of which would reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise), operations or Properties of any Obligor; (d) do not and will not
result in the breach of, or constitute a default under, any material agreement
or instrument by which any Obligor or any of its Property may be bound, and (e)
do not and will not result in the creation of any Lien upon any Property of any
Obligor, except in favor of Agent or as expressly contemplated therein.  All
necessary permits, registrations and consents for such making and performance
have been obtained.

                                       45
<PAGE>

Except as otherwise expressly stated in the Security Documents, the Liens of the
Security Documents, will constitute valid and perfected first and prior Liens on
the Property described therein, subject to no other Liens whatsoever except
Permitted Liens.

     6.4  Other Debt.  No Obligor is in default in the payment of any other
          ----------
Indebtedness or under any agreement, mortgage, deed of trust, security agreement
or lease to which it is a party and which default would reasonably be expected
to have a material adverse effect on the business, condition (financial or
otherwise), operations or Properties of any Obligor or on the ability of any
Obligor to perform its respective obligations under any Loan Document to which
it is a party.

     6.5  Litigation.  There is no litigation or administrative proceeding, to
          ----------
the knowledge of any executive officer of any Obligor, pending or threatened
against, nor any outstanding judgment, order or decree against, any Obligor
before or by any Governmental Authority which does or would reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise), operations or Properties of any Obligor or on the ability of any
Obligor to perform its respective obligations under any Loan Document to which
it is a party.  No Obligor is in default with respect to any judgment, order or
decree of any Governmental Authority where such default would have a material
adverse effect on the business, condition (financial or otherwise), operations
or Properties of any Obligor.

     6.6  Title.  Each Obligor has good and marketable title to the Collateral
          -----
pledged (or purported to be pledged) thereby pursuant to the Security Documents,
free and clear of all Liens except Permitted Liens.

     6.7  Taxes.  Each Obligor has filed all tax returns required to have been
          -----
filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained and those which are being contested in good faith.

     6.8  Regulations T, U and X.  None of the proceeds of any Loan will be
          ----------------------
used for the purpose of purchasing or carrying directly or indirectly any margin
stock or for any other purpose would constitute this transaction a "purpose
credit" within the meaning of Regulations T, U and X of the Board of Governors
of the Federal Reserve System, as any of them may be amended from time to time.

     6.9  Subsidiaries.  As of the Effective Date, Borrower has no
          ------------
Subsidiaries other than Carrols Realty Holdings Corp., a Delaware corporation,
Carrols Realty I Corp., a Delaware corporation, the Excluded Subsidiaries, the
Pollo Subsidiaries and the Taco Cabana Subsidiaries.

     6.10  No Untrue or Misleading Statements.  No representation or warranty
           ----------------------------------
made by Borrower in any Loan Document or in any document, instrument or other
writing furnished to the Lenders by or on behalf of any Obligor in connection
with the transactions contemplated in any Loan Document does or will contain any
untrue material statement of fact or will omit to state any such fact (of which
any executive officer of any Obligor has knowledge) necessary to make the
representations, warranties and other statements contained herein or in such
other document, instrument or writing not misleading in any material respect.

                                       46
<PAGE>

     6.11  ERISA.  With respect to each Plan, Borrower and each member of the
           -----
Controlled Group have fulfilled their obligations in all material respects,
including obligations under the minimum funding standards of ERISA and the Code
and are in compliance in all material respects with the provisions of ERISA and
the Code.  No event has occurred which could result in a liability of Borrower
or any member of the Controlled Group to the PBGC or a Plan (other than to make
contributions in the ordinary course) would reasonably be expected to have a
material adverse effect on the Properties, liabilities, condition (financial or
otherwise), business or operations of any Obligor.  There have not been any nor
are there now existing any events or conditions that would cause the Lien
provided under Section 4068 of ERISA to attach to any Property of Borrower or
any member of the Controlled Group.  Unfunded Liabilities as of the date hereof
do not exceed $500,000.  No "prohibited transaction" has occurred with respect
to any Plan.

     6.12  Investment Company Act.  No Obligor is an investment company within
           ----------------------
the meaning of the Investment Company Act of 1940, as amended, or, directly or
indirectly, controlled by or acting on behalf of any Person which is an
investment company, within the meaning of said Act.

     6.13  Public Utility Holding Company Act.  No Obligor is an "affiliate"
           ----------------------------------
or a "subsidiary company" of a "public utility company," or a "holding company,"
or an "affiliate" or a "subsidiary company" of a "holding company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.

     6.14  Solvency.  None of Borrower, any Obligor, or Borrower and its
           --------
Subsidiaries (other than Non-Recourse Subsidiaries), on a consolidated basis, is
"insolvent," as such term is used and defined in (i) the Bankruptcy Code and
(ii) the fraudulent conveyance statutes of the States of New York or Texas or of
any jurisdiction in which any of the Collateral may be located.

     6.15  Fiscal Year.  The fiscal year of each Obligor ends on the Sunday
           -----------
nearest December 31.

     6.16  Compliance.  Each Obligor is in compliance with all Legal
           ----------
Requirements applicable to it, except to the extent that the failure to comply
therewith would not reasonably be expected to have a material adverse effect on
the business, condition (financial or otherwise), operations or Properties of
any Obligor or the ability of any Obligor to perform its obligations under this
Agreement or the Loan Documents to which it is a party.

     6.17  Environmental Matters.  Each Obligor has, to the best knowledge of
           ---------------------
their respective executive officers, obtained and maintained in effect all
Environmental Permits (or the applicable Person has initiated the necessary
steps to transfer the Environmental Permits into its name or obtain such
permits), the failure to obtain which would reasonably be expected to have a
material adverse effect on the Properties, liabilities, condition (financial or
otherwise), business or operations of any Obligor.  Each Obligor and its
Properties, business and operations have been and are, to the best knowledge of
their respective executive officers, in compliance with all applicable
Requirements of Environmental Law and Environmental Permits the failure to
comply with which would reasonably be expected to have a material adverse effect
on the Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor.  Each Obligor and its Properties, business and
operations are not subject to any (A) Environmental Claims or (B), to the best
knowledge of their

                                       47
<PAGE>

respective executive officers (after making reasonable inquiry of the personnel
and records of their respective Corporations), Environmental Liabilities, in
either case direct or contingent, arising from or based upon any act, omission,
event, condition or circumstance occurring or existing on or prior to the date
hereof which would reasonably be expected to have a material adverse effect on
the Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor. None of the officers of any Obligor has received any
notice of any violation or alleged violation of any Requirements of
Environmental Law or Environmental Permit or any Environmental Claim in
connection with its Properties, liabilities, condition (financial or otherwise),
business or operations which would reasonably be expected to have a material
adverse effect on the Properties, liabilities, condition (financial or
otherwise), business or operations of any Obligor. Borrower does not know of any
event or condition with respect to currently enacted Requirements of
Environmental Laws presently scheduled to become effective in the future with
respect to any of the Properties of any Obligor which would reasonably be
expected to have a material adverse effect on the Properties, liabilities,
condition (financial or otherwise), business or operations of any Obligor, for
which the applicable Obligor has not made good faith provisions in its business
plan and projections of financial performance.

     6.18  Certificate of Title Property; Property of Excluded Subsidiaries.
           ----------------------------------------------------------------
The aggregate value (based on the greater of book or market value) of the
Collateral which is subject to certificate of title laws is equal to or less
than $250,000 on the date hereof.  The aggregate value (based on the greater of
book or market value) of the Property owned by the Excluded Subsidiaries is
equal to or less than $1,000,000 on the date hereof.

     6.19  Collateral Covered.  As of the Effective Date, the Collateral
           ------------------
covered by the Security Documents constitutes substantially all material real
and personal Property (other than Excluded Assets) owned by the Borrower and its
Subsidiaries (other than Non-Recourse Subsidiaries).

     6.20  Subordinated Indebtedness.  The Obligations constitute "Senior
           -------------------------
Indebtedness" under the terms of the Subordinated Indebtedness existing as of
the date hereof and this Agreement constitutes the "Senior Credit Facility"
under the terms of the Subordinated Indebtedness existing as of the date hereof.

7.   Affirmative Covenants.
     ---------------------

     Borrower covenants and agrees with Agent and the Lenders that prior to the
termination of this Agreement it will do, and cause each other Obligor to do,
and if necessary cause to be done, each and all of the following:

     7.1  Taxes, Existence, Regulations, Property, Etc.    At all times (a) pay
          ---------------------------------------------
when due all taxes and governmental charges of every kind upon it or against its
income, profits or Property, unless and only to the extent that the same shall
be contested diligently in good faith and adequate reserves in accordance with
GAAP have been established therefor; (b) do all things necessary to preserve its
existence, qualifications, rights and franchises in all jurisdictions where such
failure to qualify would reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise), operations or
Properties of any Obligor; (c) comply with all applicable Legal Requirements
(including without limitation Requirements of Environmental Law) in respect of
the conduct of its business and the ownership of its Property, the noncompliance
with which would

                                       48
<PAGE>

reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations or Properties of any Obligor or
on the ability of any Obligor to perform its respective obligations under any
Loan Document to which it is a party; and (d) cause its Property to be
protected, maintained and kept in good repair and make all replacements and
additions to such Property as may be reasonably necessary to conduct its
business properly and efficiently.

     7.2  Financial Statements and Information.  Furnish to Agent and each
          ------------------------------------
Lender each of the following: (a) as soon as available and in any event within
100 days after the end of each applicable fiscal year, beginning with the fiscal
year 2000, Annual Audited Financial Statements of Borrower and Carrols Holdings;
(b) as soon as available and in any event within 45 days after the end of each
fiscal quarter (other than the last fiscal quarter) of each applicable fiscal
year and within 100 days after the end of the last fiscal quarter of each fiscal
year, Quarterly Financial Statements of Borrower and Carrols Holdings; (c)
concurrently with the financial statements provided for in Subsections 7.2(a)
                                                           ------------------
and (b) hereof, such schedules, computations and other information, in
    ---
reasonable detail, as may be required by Agent to demonstrate compliance with
the covenants set forth herein or reflecting any non-compliance therewith as of
the applicable date, all certified and signed by the president or chief
financial officer of Borrower (or other authorized officer approved by Agent) as
true and correct in all material respects to the best knowledge of such officer
and, commencing with the annual statement prepared as of the last day of the
fiscal year 2000, a compliance certificate ("Compliance Certificate") in the
                                             ----------------------
form of Exhibit F hereto, duly executed by such authorized officer; (d) by the
        ---------
last day of each fiscal year, Borrower's annual business plan for the next
fiscal year (including its balance sheet and income and cash flow projections
for such fiscal year); (e) promptly upon their becoming publicly available, each
financial statement, report, notice or definitive proxy statements sent by any
Obligor to shareholders generally and each regular or periodic report and each
registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by any Obligor with, or received
by any Obligor in connection therewith from, any securities exchange or the
Securities and Exchange Commission or any successor agency, and (f) such other
information relating to the condition (financial or otherwise), operations,
prospects or business of any Obligor as from time to time may be reasonably
requested by Agent.  Financial Statements for Borrower and Carrols Holding shall
be prepared on a consolidated basis, and shall provide comparison to the
corresponding period of the previous fiscal year.  Each delivery of a financial
statement pursuant to this Section 7.2 shall constitute a restatement of the
                           -----------
representations contained in the last two sentences of Section 6.2.
                                                       -----------

     7.3  Financial Tests.  Borrower will have and maintain:
          ---------------

           (a) Debt Service Coverage Ratio - a Debt Service Coverage Ratio of
               ---------------------------
     not less than 1.25 to 1.00 at all times.

           (b) Senior Debt to EBITDA Ratio - a Senior Debt to EBITDA Ratio of
               ---------------------------
     not greater than (1) 3.00 to 1.00 at all times during the period commencing
     on the date hereof through and including the last day of the fiscal year
     2001; (2) 2.75 to 1.00 at all times during the period commencing on the
     first day of the fiscal year 2002 through and including the last day of the
     fiscal year 2002; (3) 2.50 to 1.00 at all times during the period
     commencing on the first day of the fiscal year 2003 through and including
     the last day of the fiscal year 2003, and (4) 2.00 to 1.00 at all times
     thereafter.

                                       49
<PAGE>

           (c) Total Debt to EBITDA Ratio - a Total Debt to EBITDA Ratio of not
               --------------------------
     greater than (1) 5.25 to 1.00 at all times during the period commencing on
     the date hereof through and including the last day of the fiscal year 2001;
     (2) 5.00 to 1.00 at all times during the period commencing on the first day
     of the fiscal year 2002 through and including the last day of the fiscal
     year 2002; (3) 4.50 to 1.00 at all times during the period commencing on
     the first day of the fiscal year 2003 through and including the last day of
     the fiscal year 2003, and (4) 4.00 to 1.00 at all times thereafter.

           (d) Fixed Charge Coverage Ratio - a Fixed Charge Coverage Ratio of
               ---------------------------
     not less than 1.10 to 1.00 at all times.

     7.4  Inspection.  Permit Agent and each Lender upon 3 days' prior notice
          ----------
(unless a Default or an Event of Default has occurred which is continuing, in
which case no prior notice is required) to inspect its Property, to examine its
files, books and records, except privileged communication with legal counsel and
classified governmental material, and make and take away copies thereof, and to
discuss its affairs with its officers and accountants, all during normal
business hours and at such intervals and to such extent as Agent or any Lender
may reasonably desire.

     7.5  Further Assurances.  Promptly execute and deliver, at Borrower's
          ------------------
expense, any and all other and further instruments which may be reasonably
requested by Agent to cure any defect in the execution and delivery of any Loan
Document in order to effectuate the transactions contemplated by the Loan
Documents, and in order to grant, preserve protect and perfect the validity and
priority of the security interests created by the Security Documents.

     7.6  Books and Records.  Maintain books of record and account which
          -----------------
permit financial statements to be prepared in accordance with GAAP.

     7.7  Insurance.  Borrower will (and will cause each other Obligor to)
          ---------
maintain  insurance with such insurers, on such of its Property, with
responsible companies in such amounts, with such deductibles and against such
risks as are usually carried by owners of similar businesses and properties in
the same general areas in which the applicable Obligor operates or as Agent may
otherwise reasonably require, and furnish Agent satisfactory evidence thereof
promptly upon request.  These insurance provisions are cumulative of the
insurance provisions of the Security Documents.  Agent shall be provided with
copies of the policies of insurance and a certificate of the insurer that the
insurance required by this Section may not be canceled, reduced or affected in
any material manner without thirty (30) days' prior written notice to Agent.
Wherever applicable, such insurance shall name Agent as loss payee and/or
mortgagee insured.

     7.8  Notice of Certain Matters.  Give Agent written notice of the
          -------------------------
following promptly after any executive officer (vice president or more senior)
of Borrower shall become aware of the same:

     (a) the issuance by any court or governmental agency or authority of any
injunction, order or other restraint prohibiting, or having the effect of
prohibiting, the performance of this Agreement, any other Loan Document, or the
making of the Loans or the initiation of any litigation, or any claim or
controversy which would reasonably be expected to result in the initiation of
any litigation, seeking any such injunction, order or other restraint;

                                       50
<PAGE>

     (b) the filing or commencement of any action, suit or proceeding, whether
at law or in equity or by or before any court or any Governmental Authority
involving claims in excess of $2,500,000 or which may reasonably be expected to
result in a Default hereunder; and

     (c) any Event of Default or Default, specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with the respect
thereto.

Borrower will also notify Agent in writing at least 30 days prior to the date
that any Obligor changes its name or the location of its chief executive office
or principal place of business or the place where it keeps its books and
records.  After the Effective Date, Borrower will notify Agent in writing at
least 45 days prior to any Obligor's acquisition of any real Property or any
material personal Property (other than Accounts, Inventory and Equipment),
wherever located, other than the Collateral covered by the Security Documents
and other than the Excluded Assets (such acquisition or ownership being herein
called an "Additional Collateral Event" and the Property so acquired or owned
           ---------------------------
being herein called "Additional Collateral").  Any such acquisition shall be
                     ---------------------
subject to the provisions of Section 8.14 hereof.
                             ------------

     7.9  Interest Rate Risk.  Borrower shall comply with and shall maintain
          ------------------
in full force and effect a program for the hedging of interest rate risk (which
may include one or more Interest Rate Risk Agreements) upon terms and in a
manner acceptable to Agent providing for a notional amount equal to the excess
amount of (i) the aggregate unpaid principal balance of Borrowed Money
Indebtedness of Borrower (on a consolidated basis) bearing interest at a
variable rate over (ii) 50% of the aggregate unpaid principal balance of the
Borrowed Money Indebtedness of Borrower (on a consolidated basis).

     7.10  Capital Adequacy.  If any Lender shall have determined that the
           ----------------
adoption after the Effective Date or effectiveness after the Effective Date
(whether or not previously announced) of any applicable law, rule, regulation or
treaty regarding capital adequacy, or any change therein after the Effective
Date, or any change in the interpretation or administration thereof after the
Effective Date by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive after the Effective Date regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section 7.10, after demand by such Lender
                                       ------------
(with a copy to Agent) as provided below, pay (subject to Section 11.7 hereof)
                                                          ------------
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction.  The certificate of any Lender setting forth such amount or
amounts as shall be necessary to compensate it and the basis thereof and reasons
therefor shall be delivered as soon as practicable to Borrower and shall be
conclusive and binding, absent manifest error.  Borrower shall pay the amount
shown as due on any such certificate within five (5) Business Days after the
delivery of such certificate.  In preparing such certificate, a Lender may
employ such

                                       51
<PAGE>

assumptions and allocations of costs and expenses as it shall in good faith deem
reasonable and may use any reasonable averaging and attribution method.

     7.11  ERISA Information and Compliance.  Promptly furnish to Agent (i)
           --------------------------------
immediately upon receipt, a copy of any notice of complete or partial withdrawal
liability under Title IV of ERISA and any notice from the PBGC under Title IV of
ERISA of an intent to terminate or appoint a trustee to administer any Plan,
(ii) if requested by Agent, promptly after the filing thereof with the United
States Secretary of Labor or the PBGC or the Internal Revenue Service, copies of
each annual and other report with respect to each Plan or any trust created
thereunder, (iii) immediately upon becoming aware of the occurrence of any
"reportable event," as such term is defined in Section 4043 of ERISA, for which
the disclosure requirements of Regulation Section 2615.3 promulgated by the PBGC
have not been waived, or of any "prohibited transaction," as such term is
defined in Section 4975 of the Code, in connection with any Plan or any trust
created thereunder, a written notice signed by the President or the principal
financial officer of Borrower or the applicable member of the Controlled Group
specifying the nature thereof, what action Borrower or the applicable member of
the Controlled Group is taking or proposes to take with respect thereto, and,
when known, any action taken by the PBGC, the Internal Revenue Service or the
Department of Labor with respect thereto, (iv) promptly after the filing or
receiving thereof by Borrower or any member of the Controlled Group of any
notice of the institution of any proceedings or other actions which may result
in the termination of any Plan, and (v) each request for waiver of the funding
standards or extension of the amortization periods required by Sections 303 and
304 of ERISA or Section 412 of the Code promptly after the request is submitted
by Borrower or any member of the Controlled Group to the Secretary of the
Treasury, the Department of Labor or the Internal Revenue Service, as the case
may be.  To the extent required under applicable statutory funding requirements,
Borrower will fund, or will cause the applicable member of the Controlled Group
to fund, all current service pension liabilities as they are incurred under the
provisions of all Plans from time to time in effect, and comply with all
applicable provisions of ERISA, in each case, except to the extent that failure
to do the same would not reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise), operations or
Properties of any Obligor.  Borrower covenants that it shall and shall cause
each member of the Controlled Group to (1) make contributions to each Plan in a
timely manner and in an amount sufficient to comply with the contribution
obligations under such Plan and the minimum funding standards requirements of
ERISA; (2) prepare and file in a timely manner all notices and reports required
under the terms of ERISA including but not limited to annual reports; and (3)
pay in a timely manner all required PBGC premiums, in each case, except to the
extent that failure to do the same would not reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise),
operations or Properties of any Obligor.

     7.12  Additional Security Documents.  As soon as practicable and in any
           -----------------------------
event within three (3) calendar months after an Additional Collateral Event,
Borrower shall (a) execute and deliver or cause to be executed and delivered a
Mortgage and/or other applicable Security Documents, in Proper Form and in an
amount reasonably satisfactory to the Majority Lenders, in favor of Agent and
duly executed by the applicable Obligor, granting a first-priority Lien upon the
applicable Additional Collateral (other than Excluded Assets) securing all of
the Obligations (except as the Majority Lenders may otherwise agree in order to
limit recording taxes or similar charges based upon the amount secured), and
such other documents (including, without limitation, all items required in
connection with the applicable Security Documents previously executed hereunder,
such as surveys, environmental assessments, certificates, legal opinions, all in
Proper Form) as may be

                                       52
<PAGE>

required by Agent or the Majority Lenders in connection with the execution and
delivery of such Security Documents; (b) where applicable, deliver to Agent
Franchise Agreements covering the Additional Collateral and all such amendments
to the BKC Consent (or additional BKC Consents), in Proper Form, as Agent or the
Majority Lenders may require to incorporate the Additional Collateral; (c) where
applicable, cause a title insurance underwriter satisfactory to Agent to issue
to Agent a Title Insurance Policy, in Proper Form, insuring the first-priority
Lien of each applicable Mortgage in such amount as is satisfactory to the
Majority Lenders; (d) deliver or cause to be delivered such other documents or
certificates consistent with the terms of this Agreement and relating to the
transactions contemplated hereby as Agent or the Majority Lenders may reasonably
request, and (e) pay in full all documentary stamps, filing and recording fees,
taxes and other fees and charges payable in connection with the filing and
recording of any Mortgage and/or any other Security Document.

8.   Negative Covenants.
     ------------------

     Borrower covenants and agrees with Agent and the Lenders that prior to the
termination of this Agreement it will not, and will not suffer or permit any
other Obligor (other than Carrols Holdings) to, do any of the following:

     8.1  Borrowed Money Indebtedness.  Create, incur, suffer or permit to
          ---------------------------
exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Borrowed Money Indebtedness, whether direct,
indirect, absolute, contingent or otherwise, except the following: (a)
Indebtedness under this Agreement and the other Loan Documents and Indebtedness
secured by Liens permitted by Section 8.2 hereof; (b) the liabilities existing
                              -----------
on the date of this Agreement and disclosed in the financial statements
delivered on or prior to the Effective Date pursuant to Section 6.2 hereof
                                                        -----------
(other than Borrowed Money Indebtedness of Taco Cabana, Inc. or any of its
Subsidiaries), and subject to Section 8.10 hereof, all renewals, extensions and
                              ------------
replacements (but not increases) of any of the foregoing; (c) the Interest Rate
Risk Indebtedness; (d) Subordinated Indebtedness; (e) Borrowed Money
Indebtedness incurred by Borrower for the acquisition and/or development of
restaurants acquired or developed by Borrower or any of its Subsidiaries after
the Effective Date and  pre-existing Indebtedness (excluding any Indebtedness
incurred at the instigation of Borrower in contemplation of the acquisition of
such Subsidiary) of any Subsidiary or business acquired after the Effective Date
in an aggregate amount not to exceed, at any one time outstanding, $20,000,000;
(f) Borrowed Money Indebtedness of Borrower or any of its Subsidiaries to
Borrower or any of its Subsidiaries that is a Guarantor so long as such Borrowed
Money Indebtedness shall be subordinated to the Obligations in a manner
acceptable to Agent and the Majority Lenders, and (g) capitalized lease
obligations to the extent allowed by the other provisions of this Agreement.

     8.2  Liens.  Create or suffer to exist any Lien upon any of its Property
          -----
now owned or hereafter acquired, or acquire any Property upon any conditional
sale or other title retention device or arrangement or any purchase money
security agreement; or in any manner directly or indirectly sell, assign, pledge
or otherwise transfer any of its Accounts or General Intangibles; provided,
                                                                  --------
however, that any Obligor may create or suffer to exist Permitted Liens.
-------

     8.3  Contingent Liabilities.  Directly or indirectly guarantee the
          ----------------------
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed

                                       53
<PAGE>

to Agent in the financial statements delivered on or prior to the Effective Date
pursuant to Section 6.2 hereof (but not increases of such obligations after the
            -----------
Effective Date), and (c) those liabilities permitted under Section 8.1 hereof.
                                                           -----------

     8.4  Mergers, Consolidations and Dispositions of Assets.  In any single
          --------------------------------------------------
transaction or series of transactions, directly or indirectly:

     (a)   liquidate or dissolve (provided that Subsidiaries of Borrower which
           are not parties to any Security Agreement or Mortgage may be
           liquidated or dissolved);

     (b)   be a party to any merger or consolidation unless and so long as (i)
           no Default or Event of Default has occurred that is then continuing,
           (ii) immediately thereafter and giving effect thereto, no event will
           occur and be continuing which constitutes a Default, (iii) an Obligor
           is the surviving Person; (iv) the surviving Person ratifies and
           assumes each Loan Document to which any party to such merger was a
           party, and (v) Agent is given at least 30 days' prior notice of such
           merger or consolidation;

     (c)   sell, convey or lease all or any substantial part of its assets,
           except for sale/leaseback transactions, sales of Property in the
           ordinary course of business, sales to other Obligors and other sales
           not exceeding, for any fiscal year, $20,000,000; provided, however,
           that, unless the Majority Lenders shall have otherwise consented in
           writing, the net proceeds realized from assets sales permitted under
           this exception (other than sales of Property in the ordinary course
           of business or sales to other Obligors) must, within two hundred
           seventy (270) days after the applicable sale, either (I) be used to
           make a prepayment on all of the Term Loans pro rata based on their
           outstanding principal balances (with such payments to be credited pro
           rata to all of the installments required to be paid on such Term
           Loans) or (II) be applied to repayment of Revolving Loan Obligations
           or applied to a portion of the closing costs in respect of an
           acquisition permitted under the terms hereof or otherwise reinvested
           in the business of Borrower and its Subsidiaries in a manner
           acceptable to Agent;

     (d)   enter into any sale/leaseback transaction unless the Agent, for the
           benefit of the Lenders, shall be granted a lien (concurrently with
           the applicable sale/leaseback transaction unless the Majority Lenders
           shall otherwise consent in writing) on the resulting leasehold
           interests securing the Obligations (or such portion thereof as the
           Majority Lenders may require); provided, however, that, unless the
                                          --------  -------
           Majority Lenders shall have otherwise consented in writing, the net
           proceeds realized from asset sales permitted under this exception
           must be applied or used in the same manner as provided in Section
                                                                     -------
           8.4(c) (Borrower agrees that, in calculating  the Senior Debt to
           ------
           EBITDA Ratio and the Total Debt to EBITDA Ratio, the leases executed
           in connection with any sale/leaseback transaction which provides for
           a sales price equal to or greater than $20,000,000 shall be treated
           as if they had been in effect for the entire calculation period, with
           rental payable thereunder for such period), or

                                       54
<PAGE>

     (e)   except for Liens in favor of Agent, pledge, transfer or otherwise
           dispose of any equity interest in any Obligor or any Indebtedness of
           any Obligor or issue or permit any other Obligor (other than Carrols
           Holdings) to issue any additional equity interest.  Nothing in this
           Agreement or any of the other Loan Documents shall prohibit any
           Obligor from selling obsolete equipment or from replacing used
           equipment in the ordinary course of business.

     8.5  Redemption, Dividends and Distributions.  At any time:  (a) make any
          ---------------------------------------
distributions of any Property or cash to the owner of any of the equity
interests in any Obligor other than Permitted Dividends or (b) redeem, retire or
otherwise acquire, directly or indirectly, any equity interest in any Obligor,
other than to the extent included in the definition of "Permitted Investments"
set forth in Section 1.1 hereof.
             -----------

     8.6  Nature of Business.  Change the nature of its business or enter into
          ------------------
any business which is substantially different from the business in which it is
presently engaged.  The primary business of each Obligor (other than Carrols
Holdings, the Pollo Subsidiaries and the Taco Cabana Subsidiaries) shall at all
times be the direct or indirect ownership and operation of restaurants under
Burger King franchises.  The primary business of the Pollo Subsidiaries and the
Taco Cabana Subsidiaries shall at all times be the direct or indirect ownership,
operation or franchise of restaurants.  Borrower agrees that at least 50% of the
restaurants owned and operated by Borrower, directly or indirectly through
Subsidiaries, will at all times be under Burger King franchises.

     8.7  Transactions with Related Parties.  Enter into any transaction or
          ---------------------------------
agreement with any officer, director or holder of any equity interest in any
Obligor (or any Affiliate of any such Person) unless the same is upon terms
substantially similar to those obtainable from wholly unrelated sources (to the
best knowledge of the executive officers of the applicable Obligor or Affiliate,
after making reasonable inquiry of the personnel and records of the applicable
Obligor or Affiliate).  Performance under the present terms of  the Purchase
Agreements and the Lease Agreements (without amendment except as agreed to in
writing by Agent) shall not cause a Default hereunder.

     8.8  Loans and Investments.  Make any loan, advance, extension of credit
          ---------------------
or capital contribution to, or make or have any Investment in, any Person, or
make any commitment to make any such extension of credit or Investment, except
(a) Permitted Investments, (b) normal and reasonable advances in the ordinary
course of business to officers and employees and (c) loans or advances permitted
under Section 8.1 hereof.
      -----------

     8.9  Subsidiaries.  Form, create or acquire any Subsidiary except for
          ------------
Non-Recourse Subsidiaries and except that Borrower or any of its Subsidiaries
may form, create or acquire a wholly-owned Subsidiary so long as (a) immediately
thereafter and giving effect thereto, no event will occur and be continuing
which constitutes a Default; (b) such Subsidiary (and, where applicable,
Borrower) shall execute and deliver a Guaranty and such Security Documents as
the Agent may reasonably require to effectuate the provisions of this Agreement
regarding Collateral to be covered by the Security Documents, and (c) Agent is
given at least 30 days' prior notice of such formation, creation or acquisition.

     8.10  Key Agreements.  Terminate or agree to the termination of any Key
           --------------
Agreement or amend, modify or obtain or grant a waiver of any provision of any
of the Key Agreements if such

                                       55
<PAGE>

action would reasonably be expected to have a material adverse effect on the
Properties, liabilities, condition (financial or otherwise), business or
operations of any Obligor. Borrower will not accept or permit any assignment to
any Obligor of the leasehold interest under any of the Underlying Lease
Agreements without the express prior written consent of Agent.

     8.11  Organizational Documents  .  Amend, modify, restate or supplement any
           ------------------------
of its Organizational Documents if such action would reasonably be expected to
materially and adversely affect any Collateral, Loan or Obligation or the
abilities of Borrower or any other Obligor to perform its Obligations under any
Loan Document, unless such action shall be consented to in writing by Agent.

     8.12  Certificate of Title Property; Excluded Subsidiaries.  Borrower
           ----------------------------------------------------
will not permit (i) the aggregate value (determined on the greater of book or
market value) of Property owned by any Obligor (other than Carrols Holdings)
which is subject to certificate of title laws to exceed $250,000 or (ii) the
aggregate value (determined on the greater of book or market value) of the
Property owned by the Excluded Subsidiaries to exceed $1,000,000, in each case
unless the Lenders shall have otherwise consented in writing.

     8.13  Unfunded Liabilities.  Incur any Unfunded Liabilities after the
           --------------------
Effective Date or allow any Unfunded Liabilities in excess of $500,000, in the
aggregate, to arise or exist.

     8.14  Acquisitions of Assets.  Acquire any real Property or any material
           ----------------------
personal Property after the Effective Date unless the following conditions
precedent shall have been satisfied:

           (a) No Default or Event of Default shall have occurred and be
     continuing (or would result from the closing of the applicable
     acquisition), and Agent shall have received adequate information relating
     to the applicable acquisition to provide confirmation of this condition.

           (b) If the (i) aggregate purchase price of the applicable acquisition
     equals $50,000,000 or more or (ii) applicable acquisition does not involve
     Burger King franchised units, such acquisition shall require the prior
     written approval of the Majority Lenders (Lenders agree that they shall
     respond to any request for such approval within thirty (30) days after
     receipt of such request in writing accompanied by adequate information
     relating to such acquisition in order to evaluate its projected impact.  If
     any Lender shall fail to respond to such a request within such thirty (30)
     day period, the applicable Lender shall be deemed to have given its consent
     to such acquisition).

     8.15  Subordinated Indebtedness.  Except as expressly permitted in
           -------------------------
writing by the Majority Lenders, Borrower will not purchase, redeem, retire or
otherwise acquire for value, deposit any monies with any Person with respect to
or make any payment or prepayment of the principal of or any other amount owing
in respect of, any Subordinated Indebtedness (other than Permitted Bond
Repurchases).  Except as expressly permitted in writing by the Majority Lenders,
Borrower will not amend, modify or obtain or grant a waiver of any provision of
any document or instrument evidencing any Subordinated Indebtedness in any
manner which would reasonably be expected to have an adverse effect on the
Lenders.

                                       56
<PAGE>

     8.16  Synthetic Repurchases of Equity or Debt.  Enter into or be party
           ---------------------------------------
to, or make any payment under, any Synthetic Purchase Agreement unless (i) in
the case of any Synthetic Purchase Agreement related to any Equity Interest, the
payments required to be made by the Borrower or its Subsidiaries are limited to
amounts permitted to be paid under Section 8.5 hereof, (ii) in the case of any
                                   -----------
Synthetic Purchase Agreement related to any Restricted Indebtedness, the
payments required to be made by the Borrower or its Subsidiaries thereunder are
limited to the amount permitted under Section 8.15 hereof and (iii) in the case
                                      ------------
of any Synthetic Purchase Agreement, the obligations of the Borrower and its
Subsidiaries thereunder are subordinated to the Obligations on terms
satisfactory to the Majority Lenders.

9.   Defaults.
     --------

     9.1  Events of Default.  If any one or more of the following events
          -----------------
(herein called "Events of Default") shall occur, then Agent shall, at the
                -----------------
direction of the Majority Lenders, do any or all of the following:  (1) without
notice to Borrower or any other Person, declare the Revolving Loan Commitments
terminated (whereupon the Revolving Loan Commitments shall be terminated) and/or
accelerate the Revolving Loan Termination Date to a date as early as the date of
termination of the Revolving Loan Commitments; (2) terminate any Letter of
Credit allowing for such termination, by sending a notice of termination as
provided therein and require Borrower to provide Cover for outstanding Letters
of Credit; (3) declare the principal amount then outstanding of and the unpaid
accrued interest on the Loans and Reimbursement Obligations and all fees and all
other amounts payable hereunder, under the Notes and under the other Loan
Documents to be forthwith due and payable, whereupon such amounts shall be and
become immediately due and payable, without notice (including, without
limitation, notice of acceleration and notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrower; provided that in the case of the occurrence
                                     --------
of an Event of Default with respect to any Obligor referred to in clause (f),
                                                                  ----------
(g) or (h) of this Section 9.1, the Revolving Loan Commitments shall be
---    ---         -----------
automatically terminated and the principal amount then outstanding of and unpaid
accrued interest on the Loans and the Reimbursement Obligations and all fees and
all other amounts payable hereunder, under the Notes and under the other Loan
Documents shall be and become automatically and immediately due and payable,
without notice (including, without limitation, notice of acceleration and notice
of intent to accelerate), presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by Borrower, and (4) exercise
any or all other rights and remedies available to Agent or any of the Lenders
under the Loan Documents, at law or in equity:

           (a) Payments - (i) any Obligor shall fail to make any payment or
               --------
     required prepayment of any installment of principal on the Loans or any
     Reimbursement Obligation payable under the Notes, this Agreement or the
     other Loan Documents when due or (ii) any Obligor fails to make any payment
     or required prepayment of interest with respect to the Loans, any
     Reimbursement Obligation or any other fee or amount under the Notes, this
     Agreement or the other Loan Documents when due and such failure to pay
     continues unremedied for a period of five days; or

           (b) Other Obligations - any Obligor shall default in the payment when
               -----------------
     due of any principal of or interest on any Indebtedness having an
     outstanding principal amount of at least $2,500,000 (other than the Loans
     and Reimbursement Obligations) and such default

                                       57
<PAGE>

     shall continue beyond any applicable period of grace; or any event or
     condition shall occur which results in the acceleration of the maturity of
     any such Indebtedness or enables (or, with the giving of notice or lapse of
     time or both, would enable) the holder of any such Indebtedness or any
     Person acting on such holder's behalf to accelerate the maturity thereof
     and such event or condition shall not be cured within any applicable period
     of grace; or

           (c) Representations and Warranties - any representation or warranty
               ------------------------------
     made or deemed made by or on behalf of any Obligor in this Agreement or any
     other Loan Document or in any certificate furnished or made by any Obligor
     to Agent or the Lenders in connection herewith or therewith shall prove to
     have been incorrect, false or misleading in any material respect as of the
     date thereof or as of the date as of which the facts therein set forth were
     stated or certified or deemed stated or certified; or

           (d) Affirmative Covenants - (i) default shall be made in the due
               ---------------------
     observance or performance of any of the covenants or agreements contained
     in Section 7.3 hereof, (ii)  default shall be made in the due observance or
        -----------
     performance of any of the covenants or agreements contained in Sections
                                                                    --------
     7.2, 7.4, 7.7 or 7.8 hereof and, in each case, such default continues
          ---  ---    ---
     unremedied for a period of 20 days after (x) notice thereof is given by
     Agent to Borrower or (y) such default otherwise becomes known to any
     executive officer of Borrower, whichever is earlier, or (iii) default is
     made in the due observance or performance of any of the other covenants and
     agreements contained in Section 7 hereof or any other affirmative covenant
                             ---------
     of any Obligor contained in this Agreement or any other Loan Document and
     such default continues unremedied for a period of 30 days after (x) notice
     thereof is given by Agent to Borrower or (y) such default otherwise becomes
     known to any executive officer of Borrower, whichever is earlier; or

           (e) Negative Covenants - default is made in the due observance or
               ------------------
     performance by Borrower of any of the other covenants or agreements
     contained in Section 8 of this Agreement or of any other negative covenant
                  ---------
     of any Obligor contained in this Agreement or any other Loan Document; or

           (f) Involuntary Bankruptcy or Receivership Proceedings - a receiver,
               --------------------------------------------------
     conservator, liquidator or trustee of any Obligor or of any of its Property
     is appointed by the order or decree of any court or agency or supervisory
     authority having jurisdiction, and such decree or order remains in effect
     for more than 60 days; or any Obligor is adjudicated bankrupt or insolvent;
     or any of such Person's Property is sequestered by court order and such
     order remains in effect for more than 60 days; or a petition is filed
     against any Obligor under any state or federal bankruptcy, reorganization,
     arrangement, insolvency, readjustment or debt, dissolution, liquidation or
     receivership law or any jurisdiction, whether now or hereafter in effect,
     and is not dismissed within 60 days after such filing; or

           (g) Voluntary Petitions or Consents - any Obligor commences a
               -------------------------------
     voluntary case or other proceeding or order seeking liquidation,
     reorganization, arrangement, insolvency, readjustment of debt, dissolution,
     liquidation or other relief with respect to itself or its debts or other
     liabilities under any bankruptcy, insolvency or other similar law now or
     hereafter in effect or seeking the appointment of a trustee, receiver,
     liquidator, custodian or other similar official of it or any substantial
     part of its Property, or consents to any such relief or to the

                                       58
<PAGE>

     appointment of or taking possession by any such official in an involuntary
     case or other proceeding commenced against it, or fails generally to, or
     cannot, pay its debts generally as they become due or takes any corporate
     action to authorize or effect any of the foregoing; or

           (h) Assignments for Benefit of Creditors or Admissions of Insolvency
               ----------------------------------------------------------------
     - any Obligor makes an assignment for the benefit of its creditors, or
     admits in writing its inability to pay its debts generally as they become
     due, or consents to the appointment of a receiver, trustee, or liquidator
     of such Obligor or of all or any substantial part of its Property; or

           (i) Undischarged Judgments - a final non-appealable judgment or
               ----------------------
     judgments for the payment of money exceeding, in the aggregate, $2,500,000
     (exclusive of amounts covered by insurance) is rendered by any court or
     other governmental body against any Obligor and such Obligor does not
     discharge the same or provide for its discharge in accordance with its
     terms, or procure a stay of execution thereof within 30 days from the date
     of entry thereof; or

           (j) Security Documents - any Security Document for any reason ceases
               ------------------
     to create a valid and perfected Lien of the first priority (subject to the
     Permitted Liens), required thereby on any of the Collateral purported to be
     covered thereby and securing that portion of the Obligations which is
     therein designated as being secured, or any Obligor (or any other Person
     who may have granted or purported to grant such Lien) will so state in
     writing or Agent shall cease to have a first priority Lien upon all of the
     equity interests of Borrower and each of its Subsidiaries (other than
     Excluded Subsidiaries) securing all of the Obligations; or

           (k) Concealment - any Obligor shall have concealed, removed, or
               -----------
     permitted to be concealed or removed, any part of its Property, with intent
     to hinder, delay or defraud its creditors or any of them, or shall have
     made any transfer of its Property to or for the benefit of a creditor at a
     time when other creditors similarly situated have not been paid; or

           (l) Ownership Change or Encumbrance - any Person other than Carrols
               -------------------------------
     Holdings shall own any equity interest in Borrower or any Person other than
     Agent shall acquire any Lien on any of the equity interests in Borrower;
     the executive management (vice president or more senior) of Borrower, BIB
     Holdings (Bermuda) Ltd., Madison Dearborn Capital Partners, L.P. and
     Madison Dearborn Capital Partners II, L.P., and/or one or more of their
     Affiliates, shall cease to own (and control the voting rights in respect
     of), in the aggregate, at least 67% of the equity interests in Carrols
     Holdings at all times prior to the closing of any initial public offering
     by Borrower or Carrols Holdings and 51% at all times thereafter; or any
     Subsidiary of Borrower (other than a Non-Recourse Subsidiary or to the
     extent otherwise expressly permitted in writing by the Majority Lenders)
     shall cease to be a wholly-owned Subsidiary of Borrower (direct or
     indirect) or any Person shall acquire any Lien on Borrower's interest in
     and to the equity interest in any Subsidiary of Borrower (other than a Non-
     Recourse Subsidiary or to the extent otherwise expressly permitted in
     writing by the Majority Lenders).

     9.2  Right of Setoff.  Upon the occurrence and during the continuance of
          ---------------
any Event of Default, each Lender is hereby authorized at any time and from time
to time, without notice to any

                                       59
<PAGE>

Obligor (any such notice being expressly waived by Borrower and the other
Obligors), to setoff and apply any and all deposits (general or special, time or
demand, provisional or final but excluding the funds held in accounts clearly
designated as escrow or trust accounts held by Borrower or any other Obligor for
the benefit of Persons which are not Affiliates of any Obligor, whether or not
such setoff results in any loss of interest or other penalty, and including
without limitation all certificates of deposit) at any time held, and any other
funds or Property at any time held, and other Indebtedness at any time owing by
such Lender to or for the credit or the account of Borrower or any other Obligor
against any and all of the Obligations irrespective of whether or not such
Lender or Agent will have made any demand under this Agreement, the Notes or any
other Loan Document. Should the right of any Lender to realize funds in any
manner set forth hereinabove be challenged and any application of such funds be
reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to Borrower pro rata in accordance with their Revolving
Loan Commitments. Each Lender agrees to promptly notify Borrower and Agent after
any such setoff and application, provided that the failure to give such notice
will not affect the validity of such setoff and application. The rights of Agent
and the Lenders under this Section are in addition to other rights and remedies
(including without limitation other rights of setoff) which Agent or the Lenders
may have. This Section is subject to the terms and provisions of Sections 4.5
                                                                 ------------
and 11.7 hereof.
    ----

     9.3  Collateral Account.  Borrower hereby agrees, in addition to the
          ------------------
provisions of Section 9.1 hereof, that upon the occurrence and during the
              -----------
continuance of any Event of Default, it shall, if requested by Agent or the
Majority Lenders (through Agent), pay to Agent an amount in immediately
available funds equal to the then aggregate amount available for drawings under
all Letters of Credit issued for the account of Borrower, which funds shall be
held by Agent as Cover.

     9.4  Preservation of Security for Unmatured Reimbursement Obligations.
          ----------------------------------------------------------------
In the event that, following (i) the occurrence of an Event of Default and the
exercise of any rights available to Agent or any Lender under the Loan
Documents, and (ii) payment in full of the principal amount then outstanding of
and the accrued interest on the Loans and Reimbursement Obligations and fees and
all other amounts payable hereunder and under the Notes and all other amounts
secured by the Security Documents, any Letters of Credit shall remain
outstanding and undrawn upon, Agent shall be entitled to hold (and Borrower and
each other Obligor hereby grants and conveys to Agent a security interest in and
to) all cash or other Property ("Proceeds of Remedies") realized or arising out
                                 --------------------
of the exercise of any rights available under the Loan Documents, at law or in
equity, including, without limitation, the proceeds of any foreclosure, as
collateral for the payment of any amounts due or to become due under or in
respect of such Letters of Credit.  Such Proceeds of Remedies shall be held for
the ratable benefit of the Lenders.  The rights, titles, benefits, privileges,
duties and obligations of Agent with respect thereto shall be governed by the
terms and provisions of this Agreement and, to the extent not inconsistent with
this Agreement, the applicable Security Documents.  Agent may, but shall have no
obligation to, invest any such Proceeds of Remedies in such manner as Agent, in
the exercise of its sole discretion, deems appropriate.  Such Proceeds of
Remedies shall be applied to Reimbursement Obligations arising in respect of any
such Letters of Credit and/or the payment of any Lender's obligations under any
such Letter of Credit when such Letter of Credit is drawn upon.  Nothing in this
Section shall cause or permit an increase in the maximum amount of the Revolving
Loan Obligations permitted to be outstanding from time to time under this
Agreement.

                                       60
<PAGE>

     9.5  Remedies Cumulative.  No remedy, right or power conferred upon Agent
          -------------------
or any Lender is intended to be exclusive of any other remedy, right or power
given hereunder or now or hereafter existing at law, in equity, or otherwise,
and all such remedies, rights and powers shall be cumulative.

10.  Agent.
     -----

     10.1  Appointment, Powers and Immunities.  Each Lender hereby irrevocably
           ----------------------------------
appoints and authorizes Agent to act as its agent hereunder, under the Letters
of Credit and under the other Loan Documents with such powers as are
specifically delegated to Agent by the terms hereof and thereof, together with
such other powers as are reasonably incidental thereto.  Any Loan Documents
executed in favor of Agent shall be held by Agent for the ratable benefit of the
Lenders. Agent ("Agent" as used in this Section 10 shall include reference to
                                        ----------
its Affiliates and its own and its Affiliates' respective officers,
shareholders, directors, employees and agents) (a) shall not have any duties or
responsibilities except those expressly set forth in this Agreement, the Letters
of Credit, and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any Lender;
(b) shall not be responsible to any Lender for any recitals, statements,
representations or warranties contained in this Agreement, the Letters of Credit
or any other Loan Document, or in any certificate or other document referred to
or provided for in, or received by any of them under, this Agreement, the
Letters of Credit or any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing, registration,
collectibility, recording, perfection, existence or sufficiency of this
Agreement, the Letters of Credit, or any other Loan Document or any other
document referred to or provided for herein or therein or any Property covered
thereby or for any failure by any Obligor or any other Person to perform any of
its obligations hereunder or thereunder, and shall not have any duty to inquire
into or pass upon any of the foregoing matters; (c) shall not be required to
initiate or conduct any litigation or collection proceedings hereunder or under
the Letters of Credit or any other Loan Document except to the extent requested
by the Majority Lenders; (d) shall not be responsible for any mistake of law or
fact or any action taken or omitted to be taken by it hereunder or under the
Letters or Credit or any other Loan Document or any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, including, without limitation, pursuant to its own negligence, except
for its own gross negligence or willful misconduct; (e) shall not be bound by or
obliged to recognize any agreement among or between Borrower and any Lender to
which Agent is not a party, regardless of whether Agent has knowledge of the
existence of any such agreement or the terms and provisions thereof; (f) shall
not be charged with notice or knowledge of any fact or information not herein
set out or provided to Agent in accordance with the terms of this Agreement or
any other Loan Document; (g) shall not be responsible for any delay, error,
omission or default of any mail, telegraph, cable or wireless agency or
operator, and (h) shall not be responsible for the acts or edicts of any
Governmental Authority.  Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.  Without in any way
limiting any of the foregoing, each Lender acknowledges that Agent shall have no
greater responsibility in the operation of the Letters of Credit than is
specified in the Uniform Customs and Practice for Documentary Credits (1993
Revision, International Chamber of Commerce Publication No. 500).  In any
foreclosure proceeding concerning any Collateral, each holder of an Obligation
if bidding for its own account or for its own account and the accounts of other
Lenders is prohibited from including in the amount of its bid an amount to be
applied as a credit against the Obligations held by it or the Obligations held
by the

                                       61
<PAGE>

other Lenders; instead, such holder must bid in cash only. However, in any such
foreclosure proceeding, Agent may (but shall not be obligated to) submit a bid
for all Lenders (including itself) in the form of a credit against the
Obligations, and Agent or its designee may (but shall not be obligated to)
accept title to such collateral for and on behalf of all Lenders.

     10.2  Reliance.  Agent shall be entitled to rely upon any certification,
           --------
notice or other communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (which may be counsel for Borrower), independent
accountants and other experts selected by Agent.   Agent shall not be required
in any way to determine the identity or authority of any Person delivering or
executing the same.  As to any matters not expressly provided for by this
Agreement, the Letters of Credit, or any other Loan Document, Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions of the Majority Lenders, and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders.  Pursuant to instructions of the Majority Lenders (or, where required
by the terms hereof, all of the Lenders), Agent shall have the authority to
execute releases of the Security Documents on behalf of the Lenders without the
joinder of any Lender.  If any order, writ, judgment or decree shall be made or
entered by any court affecting the rights, duties and obligations of Agent under
this Agreement or any other Loan Document, then and in any of such events Agent
is authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own
choosing is binding upon it under the terms of this Agreement, the relevant Loan
Document or otherwise; and if Agent complies with any such order, writ, judgment
or decree, then it shall not be liable to any Lender or to any other Person by
reason of such compliance even though such order, writ, judgment or decree may
be subsequently reversed, modified, annulled, set aside or vacated.

     10.3  Defaults.   Agent shall not be deemed to have knowledge of the
           --------
occurrence of a Default (other than the non-payment of principal of or interest
on Loans or Reimbursement Obligations) unless Agent has received notice from a
Lender or Borrower specifying such Default and stating that such notice is a
"Notice of Default."  In the event that Agent receives such a Notice of Default,
------------------
Agent shall give prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment).  Agent shall (subject to Section
                                                                         -------
10.7 hereof) take such action with respect to such Notice of Default as shall be
----
directed by the Majority Lenders and within its rights under the Loan Documents
and at law or in equity, provided that, unless and until Agent shall have
                         --------
received such directions, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, permitted hereby with respect to
such Notice of Default as it shall deem advisable in the best interests of the
Lenders and within its rights under the Loan Documents, at law or in equity.

     10.4  Material Written Notices.  In the event that Agent receives any
           ------------------------
written notice of a material nature from the Borrower or any Obligor under the
Loan Documents, Agent shall promptly inform each of the Lenders thereof.

     10.5  Rights as a Lender.  With respect to its Revolving Loan Commitments
           ------------------
and the Loans made and Letter of Credit Liabilities, Chase in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting in its agency
capacity, and the term "Lender" or "Lenders" shall, unless the context otherwise
                        ------      -------
indicates, include Agent in its individual capacity.  Agent may (without having
to account

                                       62
<PAGE>

therefor to any Lender) accept deposits from, lend money to and generally engage
in any kind of banking, trust, letter of credit, agency or other business with
Borrower (and any of its Affiliates) as if it were not acting as Agent, and
Agent may accept fees and other consideration from Borrower (in addition to the
fees heretofore agreed to between Borrower and Agent) for services in connection
with this Agreement or otherwise without having to account for the same to the
Lenders.

     10.6  Indemnification.  The Lenders agree to indemnify Agent (to the
           ---------------
extent not reimbursed under Section 2.2(c), Section 11.3 or Section 11.4 hereof,
                            --------------  ------------    ------------
but without limiting the obligations of Borrower under said Sections 2.2(c),
                                                            ----------------
11.3 and 11.4), ratably in accordance with the sum of the Lenders' respective
----     ----
Revolving Loan Commitments and Term Loans, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever, REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES,
which may be imposed on, incurred by or asserted against Agent in any way
relating to or arising out of this Agreement, the Letters of Credit or any other
Loan Document or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which Borrower is obligated to pay under
Sections 2.2(c), 11.3 and 11.4 hereof, interest, penalties, attorneys' fees and
---------------------     ----
amounts paid in settlement, but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents; provided that no Lender shall be liable
                                        --------
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.  The obligations of the
Lenders under this Section 10.6 shall survive the termination of this Agreement
                   ------------
and the repayment of the Obligations.

     10.7  Non-Reliance on Agent and Other Lenders.  Each Lender agrees that
           ---------------------------------------
it has received current financial information with respect to Borrower and each
other Obligor and that it has, independently and without reliance on Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and each other Obligor and
decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents.  Agent shall not be required to keep itself
informed as to the performance or observance by any Obligor of this Agreement,
the Letters of Credit or any of the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Obligor.  Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by Agent
hereunder, under the Letters of Credit or the other Loan Documents, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition or business of any
Obligor (or any of their affiliates) which may come into the possession of
Agent.

     10.8  Failure to Act.  Except for action expressly required of Agent
           --------------
hereunder, under the Letters of Credit or under the other Loan Documents, Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Lenders of their indemnification obligations under Section 10.6 hereof
                                                       ------------
against any

                                       63
<PAGE>

and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.

     10.9  Resignation or Removal of Agent.  Subject to the appointment and
           -------------------------------
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving notice thereof to the Lenders and Borrower, and Agent may be removed
at any time with or without cause by the Majority Lenders; provided, that Agent
                                                           --------
shall continue as Agent until such time as any successor shall have accepted
appointment as Agent hereunder.  Upon any such resignation or removal, (i) the
Majority Lenders without the consent of Borrower shall have the right to appoint
a successor Agent so long as such successor Agent is also a Lender at the time
of such appointment and (ii) the Majority Lenders shall have the right to
appoint a successor Agent that is not a Lender at the time of such appointment
so long as Borrower consents to such appointment (which consent shall not be
unreasonably withheld).  If no successor Agent shall have been so appointed by
the Majority Lenders and accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent.  Any successor Agent shall be a bank which
has an office in the United States and a combined capital and surplus of at
least $250,000,000.  Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under any other Loan Documents.  Such successor Agent shall
promptly specify by notice to Borrower its Principal Office referred to in
Section 3.1 and Section 4 hereof.  After any retiring Agent's resignation or
-----------     ---------
removal hereunder as Agent, the provisions of this Section 10 shall continue in
                                                   ----------
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent.

     10.10  No Partnership.  Neither the execution and delivery of this
            --------------
Agreement nor any of the other Loan Documents nor any interest the Lenders,
Agent or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
Agent.  The relationship between the Lenders, on the one hand, and Agent, on the
other, is and shall be that of principals and agent only, and nothing in this
Agreement or any of the other Loan Documents shall be construed to constitute
Agent as trustee or other fiduciary for any Lender or to impose on Agent any
duty, responsibility or obligation other than those expressly provided for
herein and therein.

     10.11  Co-Agents.  The Co-Agents, in their capacity as such, shall have
            ---------
no rights, powers, duties, obligations or liabilities under this Agreement or
any of the other Loan Documents, but to the extent that for any reason any
Person makes a claim against a Co-Agent in its capacity as Co-Agent and not as a
Lender the indemnification provisions in Section 10.6 shall apply to such Co-
                                         ------------
Agent.

                                       64
<PAGE>

11.  Miscellaneous.
     -------------

     11.1  Waiver.  No waiver of any Default or Event of Default shall be a
           ------
waiver of any other Default or Event of Default.  No failure on the part of
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law or in equity.

     11.2  Notices.  All notices and other communications provided for herein
           -------
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy
(confirmed by mail), cable or other writing and telexed, telecopied,
telegraphed, cabled, mailed or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof (or
provided for in an Assignment and Acceptance); or, as to any party hereto, at
such other address as shall be designated by such party in a notice (given in
accordance with this Section) (i) as to Borrower, to Agent, (ii) as to Agent, to
Borrower and to each Lender, and (iii) as to any Lender, to Borrower and Agent.
Except as otherwise provided in this Agreement, all such notices or
communications shall be deemed to have been duly given when (i) transmitted by
telex or telecopier or delivered to the telegraph or cable office, (ii)
personally delivered (iii) one Business Day after deposit with an overnight mail
or delivery service, postage prepaid or (iv) three Business Days' after deposit
in a receptacle maintained by the United States Postal Service, postage prepaid,
registered or certified mail, return receipt requested, in each case given or
addressed as aforesaid.

     11.3  Expenses, Etc.    Whether or not any Loan is ever made or any Letter
           --------------
of Credit ever issued, Borrower shall pay or reimburse within 10 days after
written demand (a) Agent for paying the reasonable fees and expenses of legal
counsel to Agent, together with the reasonable fees and expenses of each local
counsel to Agent, in connection with the preparation, negotiation, execution and
delivery of this Agreement (including the exhibits and schedules hereto), the
Security Documents and the other Loan Documents and the making of the Loans and
the issuance of Letters of Credit hereunder, and any modification, supplement or
waiver of any of the terms of this Agreement, the Letters of Credit or any other
Loan Document; (b) Agent for any lien search fees, collateral audit fees,
appraisal fees, survey fees, environmental study fees, and title insurance costs
and premiums; (c) Agent for reasonable out-of-pocket expenses incurred in
connection with the preparation, documentation, administration and syndication
(with reimbursable syndication expenses not to exceed $10,000)  of the Loans or
any of the Loan Documents (including, without limitation, the advertising,
marketing, printing, publicity, duplicating, mailing and similar expenses) of
the Loans and Letter of Credit Liabilities; (d) Agent for paying all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement, any Letter of
Credit or any other Loan Document or any other document referred to herein or
therein; (e) Agent for paying all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated by this Agreement, the Title
Insurance Policies, any Security Document or any document referred to herein or
therein, and (f) following the occurrence and during the continuation of an
Event of Default, any Lender or Agent for paying all amounts reasonably
expended, advanced or incurred by such Lender or Agent to satisfy any obligation
of any Obligor under this Agreement

                                       65
<PAGE>

or any other Loan Document, to protect the Collateral, to collect the
Obligations or to enforce, protect, preserve or defend the rights of the Lenders
or Agent under this Agreement or any other Loan Document, including, without
limitation, fees and expenses incurred in connection with such Lender's or
Agent's participation as a member of a creditor's committee in a case commenced
under the Bankruptcy Code or other similar law, fees and expenses incurred in
connection with lifting the automatic stay prescribed in (S) 362 of the
Bankruptcy Code and fees and expenses incurred in connection with any action
pursuant to (S) 1129 of the Bankruptcy Code and all other customary out-of-
pocket expenses incurred by such Lender or Agent in connection with such
matters, together with interest thereon at the Past Due Rate on each such amount
until the date of reimbursement to such Lender or Agent.

     11.4  Indemnification.  Borrower shall indemnify each of Agent, the
           ---------------
Lenders, and each affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, insofar as such losses, liabilities, claims or damages
arise out of or result from any (i) actual or proposed use by Borrower of the
proceeds of any extension of credit (whether a Loan or a Letter of Credit) by
any Lender hereunder; (ii) breach by any Obligor of this Agreement or any other
Loan Document; (iii) violation by any Obligor of any Legal Requirement; (iv)
investigation, litigation or other proceeding relating to any of the foregoing,
and Borrower shall reimburse Agent, each Lender, and each Affiliate thereof and
their respective directors, officers, employees and agents, upon demand for any
reasonable expenses (including reasonable legal fees) incurred in connection
with any such investigation or proceeding, or (v) taxes (excluding income taxes
and franchise taxes) payable or ruled payable by any Governmental Authority in
respect of the Obligations or any Loan Document, together with interest and
penalties, if any; provided, however, that Borrower shall not have any
                   --------  -------
obligations pursuant to this Section with respect to any losses, liabilities,
claims, damages or expenses incurred by the Person seeking indemnification by
reason of the gross negligence or willful misconduct of that Person or with
respect to any disputes between or among any and all of Agent, Lenders and
Issuers.  Nothing in this Section is intended to limit the obligations of
Borrower under any other provision of this Agreement.  Agent and each Lender,
respectively, shall indemnify Borrower and hold Borrower harmless from and
against the gross negligence or willful misconduct of Agent or such Lender, as
the case may be.

     11.5  Amendments, Etc.    No amendment or modification of this Agreement,
           ----------------
the Notes or any other Loan Document shall in any event be effective against
Borrower unless the same shall be agreed or consented to in writing by Borrower.
No amendment, modification or waiver of any provision of this Agreement, the
Notes or any other Loan Document, nor any consent to any departure by Borrower
therefrom, shall in any event be effective against the Lenders unless the same
shall be agreed or consented to in writing by the Majority Lenders, and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, that no amendment, modification,
                                      --------
waiver or consent shall, unless in writing and signed by each Lender affected
thereby, do any of the following:  (a) increase any Revolving Loan Commitment of
any of the Lenders (or reinstate any termination or reduction of the Revolving
Loan Commitments) or subject any of the Lenders to any additional obligations;
(b) reduce the principal of, or interest on, any Loan, Reimbursement Obligation
or fee or other sum to be paid hereunder; (c) postpone or extend the Revolving
Loan Maturity Date, the Term Loan A Maturity Date, the Term Loan B

                                       66
<PAGE>

Maturity Date, the Revolving Loan Termination Date, the Revolving Loan
Availability Period or any scheduled date fixed for any payment of principal of,
or interest on, any Loan, Reimbursement Obligation, fee or other sum to be paid
hereunder or waive any Event of Default described in Section 9.1(a) hereof; (d)
                                                     --------------
change the percentage of any of the Revolving Loan Commitments or of the
aggregate unpaid principal amount of any of the Loans and Letter of Credit
Liabilities, or the percentage of Lenders, which shall be required for the
Lenders or any of them to take any action under this Agreement; (e) change any
provision contained in Sections 2.2(c), 3.2(b), 7.10, 10, 11.3 or 11.4 hereof or
                                --------------------------------------
this Section 11.5; (f) release any Person from liability under a Guaranty or
     ------------
release all or substantially all of the security for the Obligations or release
Collateral (exclusive of Collateral with respect to which Agent is obligated to
provide a release pursuant to this Agreement or any of the other Loan Documents
or by law) in any one (1) calendar year ascribed an aggregate value on the most
recent financial statements of Borrower delivered to Agent in excess of
$1,000,000, or (g) modify the provisions of Sections 4.1(b) or 4.2 hereof
                                            --------------     ---
regarding pro rata application of amounts after an Event of Default shall have
          --- ----
occurred and be continuing. Notwithstanding anything in this Section 11.5 to the
                                                             ------------
contrary, no amendment, modification, waiver or consent shall be made with
respect to Section 10 without the consent of Agent to the extent it affects
           ----------
Agent, as Agent and no amendment, modification, waiver or consent shall be made
with respect to Section 10.11 without the consent of each Co-Agent.
                -------------

     11.6  Successors and Assigns.
           ----------------------

     (a) This Agreement shall be binding upon and inure to the benefit of
Borrower, Agent and the Lenders and their respective successors and assigns;
provided, however, that Borrower may not assign or transfer any of its rights or
--------  -------
obligations hereunder without the prior written consent of all of the Lenders,
and any such assignment or transfer without such consent shall be null and void.
Each Lender may sell participations to any Person in all or part of any Loan, or
all or part of its Notes, Revolving Loan Commitments or interests in Letters of
Credit, in which event, without limiting the foregoing, the provisions of the
Loan Documents shall inure to the benefit of each purchaser of a participation;
provided, however, the pro rata treatment of payments, as described in Section
--------  -------      --- ----                                        -------
4.2 hereof, shall be determined as if such Lender had not sold such
---
participation.  Any Lender that sells one or more participations to any Person
shall not be relieved by virtue of such participation from any of its
obligations to Borrower under this Agreement relating to the Loans.  In the
event any Lender shall sell any participation, such Lender shall retain the sole
right and responsibility to enforce the obligations of Borrower relating to the
Loans, including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement other than amendments,
modifications or waivers with respect to (i) any fees payable hereunder to the
Lenders, (ii) the amount of principal or the rate of interest payable on, or the
dates fixed for the scheduled repayment of principal of, the Loans and (iii) the
release of the Liens on all or substantially all of the Collateral.

     (b) Each Lender may assign to one or more Lenders or any other Person all
or a portion of its interests, rights and obligations under this Agreement;
provided, however, that (i) the aggregate amount of the Revolving Loan
--------  -------
Commitments and the Term Loans of the assigning Lender subject to each such
assignment shall not (unless the Agent shall otherwise consent) be less than the
lesser of the assignor Lender's entire remaining interest hereunder or (x)
$5,000,000 in the case of an assignment of Revolving Loan Commitments or Term
Loans A and (y) $1,000,000 in the case of an assignment of Term Loans B; (ii)
other than in the case of an assignment to another Lender (that is,

                                       67
<PAGE>

at the time of the assignment, a party hereto) or to a Lender Affiliate
(hereinafter defined) of such Lender or to a Federal Reserve Bank, Agent and, so
long as no Event of Default shall have occurred and be continuing, Borrower must
each give its prior written consent, which consents shall not be unreasonably
withheld, and (iii) the parties to each such assignment shall execute and
deliver to Agent, for its acceptance an Assignment and Acceptance in the form of
Exhibit E hereto (each an "Assignment and Acceptance") with blanks appropriately
---------                  -------------------------
completed, together with any Note or Notes subject to such assignment and a
processing and recording fee of $3,000 paid by the assignee (for which Borrower
will have no liability). Upon such execution, delivery and acceptance, from and
after the effective date specified in each Assignment and Acceptance, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto except in respect of provisions of this
Agreement which survive payment of the Obligations and termination of the
Commitments). Notwithstanding anything contained in this Agreement to the
contrary, any Lender may, without the consent of Agent or Borrower, at any time
assign all or any portion of its rights under this Agreement and the Notes
issued to it as collateral (i) to a Federal Reserve Bank or (ii) if such Lender
is a "fund" which purchase loans in the ordinary course of its business, to
secure such Lender's indebtedness; provided that no such assignment shall
release such Lender from any of its obligations hereunder. The term "Lender
Affiliate" as used herein means, (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of
such Lender and (b) with respect to any Lender that is a fund which invests in
bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

     (c) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows:  (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant thereto; (ii) such Lender assignor makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under this Agreement or any of the other Loan Documents
or any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 6.2 hereof and such
                                                  -----------
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon Agent, such Lender
assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under

                                       68
<PAGE>

this Agreement and the other Loan Documents; (v) such assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all obligations that by the terms of this Agreement
and the other Loan Documents are required to be performed by it as a Lender.

     (d) The entries in the records of Agent as to each Assignment and
Acceptance delivered to it and the names and addresses of the Lenders and the
Revolving Loan Commitments of, and principal amount of the Loans owing to, each
Lender from time to time shall be conclusive, in the absence of manifest error,
and Borrower, Agent and the Lenders may treat each Person the name of which is
recorded in the books and records of Agent as a Lender hereunder for all
purposes of this Agreement and the other Loan Documents.

     (e) Upon Agent's receipt of an Assignment and Acceptance executed by an
assigning Lender and the assignee thereunder, together with any Note or Notes
subject to such assignment and the written consent to such assignment (to the
extent consent is required), Agent shall, if such Assignment and Acceptance has
been completed with blanks appropriately filled, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in its records and
(iii) give prompt notice thereof to Borrower.  Within five Business Days after
receipt of notice, Borrower, at its own expense, shall execute and deliver to
Agent in exchange for the surrendered Notes new Notes to the order of such
assignee in an amount equal to the Revolving Loan Commitments and the Term Loans
(or any of them) assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained Revolving Loan Commitments and Term Loans
(or any of them) hereunder, new Notes to the order of the assigning Lender in an
amount equal to the Revolving Loan Commitment and the Term Loans (or any of
them) retained by it hereunder.  Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the respective Note.
Thereafter, such surrendered Notes shall be marked renewed and substituted and
the originals thereof delivered to Borrower (with copies, certified by Borrower
as true, correct and complete, to be retained by Agent).

     (f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.6, disclose to
                                                      ------------
the assignee or participant or proposed assignee or participant, any information
relating to Borrower furnished to such Lender by or on behalf of Borrower.

     11.7  Limitation of Interest.  Borrower and the Lenders intend to
           ----------------------
strictly comply with all applicable federal and New York laws, including
applicable usury laws (or the usury laws of any jurisdiction whose usury laws
are deemed to apply to the Notes or any other Loan Documents despite the
intention and desire of the parties to apply the usury laws of the State of New
York).  Accordingly, the provisions of this Section 11.7 shall govern and
                                            ------------
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section, even if such provision
declares that it controls.  As used in this Section, the term "interest"
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law, provided that, to the maximum
                                                --------
extent permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than

                                       69
<PAGE>

the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall Borrower or any other Person be obligated
to pay, or any Lender have any right or privilege to reserve, receive or retain,
(a) any interest in excess of the maximum amount of nonusurious interest
permitted under the laws of the State of New York or the applicable laws (if
any) of the United States or of any other jurisdiction, or (b) total interest in
excess of the amount which such Lender could lawfully have contracted for,
reserved, received, retained or charged had the interest been calculated for the
full term of the Obligations at the Ceiling Rate. The daily interest rates to be
used in calculating interest at the Ceiling Rate shall be determined by dividing
the applicable Ceiling Rate per annum by the number of days in the calendar year
for which such calculation is being made. None of the terms and provisions
contained in this Agreement or in any other Loan Document (including, without
limitation, Section 9.1 hereof) which directly or indirectly relate to interest
            -----------
shall ever be construed without reference to this Section 11.7, or be construed
                                                  ------------
to create a contract to pay for the use, forbearance or detention of money at an
interest rate in excess of the Ceiling Rate. If the term of any Obligation is
shortened by reason of acceleration of maturity as a result of any Default or by
any other cause, or by reason of any required or permitted prepayment, and if
for that (or any other) reason any Lender at any time, including but not limited
to, the stated maturity, is owed or receives (and/or has received) interest in
excess of interest calculated at the Ceiling Rate, then and in any such event
all of any such excess interest shall be canceled automatically as of the date
of such acceleration, prepayment or other event which produces the excess, and,
if such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of Borrower's obligations
to such Lender, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.

     11.8  Survival.  The obligations of Borrower under Sections 2.2(c),
           --------                                     ----------------
2.2(d), 7.10, 11.3 and 11.4 hereof and all other obligations of Borrower in any
---------------------------
other Loan Document (to the extent stated therein), the obligations of each
Issuer under the last sentence of Section 2.2(b)(iii) and the obligations of the
                                  -------------------
Lenders under Section 10.5 and 11.7 hereof, shall, notwithstanding anything
              ------------     ----
herein to the contrary, survive the repayment of the Loans and Reimbursement
Obligations and the termination of the Revolving Loan Commitments and the
Letters of Credit.

     11.9  Captions.  Captions and section headings appearing herein are
           --------
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

     11.10  Counterparts.  This Agreement may be executed in any number of
            ------------
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.

     11.11  Governing Law.  THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED)
            -------------
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS OF THE STATE OF NEW YORK AND THE UNITED STATES OF AMERICA
FROM TIME TO TIME IN EFFECT.

                                       70
<PAGE>

     11.12  Severability.  Whenever possible, each provision of the Loan
            ------------
Documents shall be interpreted in such manner as to be effective and valid under
applicable law.  If any provision of any Loan Document shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan Document shall not
be affected or impaired thereby.

     11.13  Tax Forms.  Each Lender which is organized under the laws of a
            ---------
jurisdiction outside the United States shall, on the day of the initial
borrowing from each such Lender hereunder and from time to time thereafter if
requested by Borrower or Agent, provide Agent and Borrower with the forms
prescribed by the Internal Revenue Service of the United States certifying as to
such Lender's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Lender
hereunder or other documents satisfactory to such Lender, Borrower and Agent
indicating that all payments to be made to such Lender hereunder are not subject
to United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty or, if such Lender is not a "bank" within the meaning
of Section 881(a)(3)(A) of the Code and intends to claim exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest," a Form W-8 or W-8BEN, or any subsequent
versions thereof or successors thereto (and, if such Lender delivers a Form W-8
or W-8BEN, a certificate representing that such Lender is not a "bank" for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Lender claiming complete exemption from, or a reduced rate of, United States
withholding tax on payments of interest by the Borrower under this Agreement and
the other Loan Documents.  Unless Borrower and Agent shall have received such
forms or such documents indicating that payments hereunder are not subject to
United States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, Borrower or Agent shall withhold taxes from such payments
at the applicable statutory rate.

     11.14  Conflicts Between This Agreement and the Other Loan Documents.  In
            -------------------------------------------------------------
the event of any conflict between the terms of this Agreement and the terms of
any of the other Loan Documents, the terms of this Agreement shall control.

     11.15  Jury Waiver.  BORROWER, AGENT AND LENDERS EACH WAIVE ANY RIGHT TO
            -----------
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.  INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

     11.16  Limitation on Charges; Substitute Lenders; Non-Discrimination.
            -------------------------------------------------------------
Anything in Sections 3.3(c) or 7.10 notwithstanding:
            ---------------    ----

                                       71
<PAGE>

           (1) Borrower shall not be required to pay to any Lender reimbursement
     with regard to any costs or expenses described in such Sections, unless
     such Lender notifies Borrower of such costs or expenses within 90 days
     after the date paid or incurred;

           (2) none of the Lenders shall be permitted to pass through to
     Borrower charges and costs under such Sections on a discriminatory basis
     (i.e., which are not also passed through by such Lender to other customers
     of such Lender similarly situated where such customer is subject to
     documents providing for such pass through); and

           (3) if any Lender elects to pass through to Borrower any material
     charge or cost under such Sections or elects to terminate the availability
     of LIBOR Borrowings for any material period of time, Borrower may, within
     60 days after the date of such event and so long as no Default shall have
     occurred and be continuing, elect to terminate such Lender as a party to
     this Agreement; provided that, concurrently with such termination Borrower
                     --------
     shall (i) if Agent and each of the other Lenders shall consent, pay that
     Lender all principal, interest and fees and other amounts owed to such
     Lender through such date of termination or (ii) have arranged for another
     financial institution approved by Agent (such approval not to be
     unreasonably withheld) as of such date, to become a substitute Lender for
     all purposes under this Agreement in the manner provided in Section 11.6;
                                                                 ------------
     provided further that, prior to substitution for any Lender, Borrower shall
     ----------------
     have given written notice to Agent of such intention and the Lenders shall
     have the option, but no obligation, for a period of 60 days after receipt
     of such notice, to increase their Revolving Loan Commitments in order to
     replace the affected Lender in lieu of such substitution.

     11.17  Amendment and Restatement; Renewal Notes.  This Agreement amends
            ----------------------------------------
and restates in its entirety that certain Loan Agreement dated as of February
12, 1999 executed by and among Borrower, The Chase Manhattan Bank (successor by
merger to Chase Bank of Texas, National Association), as Agent, and certain
financial institutions therein set forth.  The Revolving Notes have been given
in renewal, extension and modification of the revolving credit facility
previously provided to Borrower pursuant to such Loan Agreement and the Term
Loan Notes have been given in renewal, extension and modification of the term
loans previously made to Borrower  pursuant to such Loan Agreement.

                                       72
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.

                              CARROLS CORPORATION,
                              a Delaware corporation

                              By:  /s/ Joseph A. Zirkman
                                   ---------------------------------------------
                                       Joseph A. Zirkman,
                                       Vice President

                              Address for Notices:

                              968 James Street
                              Syracuse, New York 13203
                              Attention: Mr. Alan Vituli
                              Telecopy No.: (315) 425-8874
<PAGE>

                              THE CHASE MANHATTAN BANK,
                              as Agent and as a Lender

                              By:  /s/ Kara J. Nordstrom
                                   ---------------------------------------------
                              Name:  Kara J. Nordstrom
                                     -------------------------------------------
                              Title:  Vice President
                                      ------------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    712 Main Street
                              Houston, Texas 77002
$18,076,923.07                Attention:  Manager, Franchise and Trademark
                                         Finance Division
                              Telecopy No.:  (713) 216-6710
Term Loan A:
                              with a copy to:
$11,298,076.93
                              Mr. Muniram Appanna
                              Loan and Agency Services
Term Loan B:                  One Chase Manhattan Plaza
                              8th Floor
$28,500,000                   New York, New York 10081
                              Telecopy No.: 212-552-2261
<PAGE>

                              BANK OF AMERICA, N.A.,
                              as Syndication Agent and as a Lender

                              By:  /s/ Robert J. Beckley
                                   ---------------------------------------------
                              Name:  Robert J. Beckley
                                     -------------------------------------------
                              Title:  Vice President
                                      ------------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    600 Peachtree St.
                              19th Floor
$18,076,923.08                Atlanta, Georgia 30308
                              Attention: Mr. William Tucker
                              Telecopy No.: (404) 607-4075
Term Loan A:

$11,298,076.92

Term Loan B:

$5,000,000.00
<PAGE>

                              SUNTRUST BANK,
                              as Documentation Agent and as a Lender

                              By:  /s/ J. Scott Deviney
                                   ---------------------------------------------
                              Name:  J. Scott Deviney
                                     -------------------------------------------
                              Title:  Vice President
                                      ------------------------------------------

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

                              Address for Notices:

                              303 Peachtree Street, NE
                              2nd Floor, MC 1922
Revolving Loan Commitment:    Atlanta, Georgia 30308
                              Attention: Mr. Scott Deviney
$18,076,923.08                Telecopy No.:  (404) 588-7189

Term Loan A:

$11,298,076.92

Term Loan B:

$5,000,000.00
<PAGE>

                              MANUFACTURERS AND TRADERS TRUST
                              COMPANY, as Co-Agent and as a Lender

                              By:  /s/ Michele J. Martin
                                   ---------------------------------------------
                              Name:  Michele J. Martin
                                     -------------------------------------------
                              Title:  Vice President
                                      ------------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    101 South Salina Street, 8th Floor
                              Syracuse, New York 13202
$18,076,923.08                Attention: Ms. Michele Martin
                              Telecopy No.: (315) 424-6777

Term Loan A:

$11,298,076.92

Term Loan B:

$5,000,000.00
<PAGE>

                              THE NORTHERN TRUST COMPANY

                              By:  /s/ Yvette Underwood
                                   -------------------------------------------
                              Name:  Yvette Underwood
                                     -----------------------------------------
                              Title:  Vice President
                                      ----------------------------------------
                              Address for Notices:

Revolving Loan Commitment:    50 S. LaSalle Street
                              Chicago, Illinois 60675
$12,307,692.31                Attention: Ms. Yvette Underwood
                              Telecopy No.: (312) 444-7028
Term Loan A:

$7,692,307.69

Term Loan B:

$0
<PAGE>

                              INTERNATIONAL BANK OF COMMERCE

                              By:  /s/ Steve Edlund
                                   -------------------------------------------
                              Name:  Steve Edlund
                                     -----------------------------------------
                              Title:  Executive Vice President
                                      ------------------------------------------

                              Address for Notice:
Revolving Loan Commitment:    130 East Travis
                              San Antonio, Texas 78201
$9,230,769.23                 Attention: Steve Edlund
                              Telecopy No.: 210-518-2591
Term Loan A:

$5,769,230.77

Term Loan B:

$0
<PAGE>

                              HELLER FINANCIAL, INC.

                              By:  /s/ K. Craig Gallehugh
                                   ---------------------------------------------
                              Name:  K. Craig Gallehugh
                                     -------------------------------------------
                              Title:  Senior Vice President
                                      ------------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    500 W. Monroe Street
                              Chicago, Illinois 60661
$0                            Attention: K. Craig Gallehugh
                              Telecopy No.: (312) 441-7357

Term Loan A:

$7,500,000.00

Term Loan B:

$7,500,000.00
<PAGE>

                              BSB BANK & TRUST COMPANY

                              By:  /s/ John S. Gibbs
                                   -------------------------------------------
                              Name:  John S. Gibbs
                                     -----------------------------------------
                              Title:  Assistant Vice President
                                      ------------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    431 East Fayette Street
                              Syracuse, New York 13202-1914
$6,153,846.15                 Attention: John Gibbs
                              Telecopy No.: 315-422-2153
Term Loan A:

$3,846,153.85

Term Loan B:

$0
<PAGE>

                              FOOTHILL INCOME TRUST II, L.P.

                              By:  /s/ Dennis R. Ascher
                                   -------------------------------------------
                              Name:  Dennis R. Ascher
                                     -----------------------------------------
                              Title:  Managing Member
                                      ----------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    c/o Foothill Capital Corporation
                              2450 Colorado Avenue, Suite 3000 West
$0                            Santa Monica, California 90406
                              Attention: Dennis Ascher
                              Telecopy No.: 310-453-7472
Term Loan A:

$0

Term Loan B:

$10,000,000.00
<PAGE>

                              KZH WATERSIDE LLC

                              By:  The Chase Manhattan Bank

                                   By:  /s/ Peter Chin
                                        --------------------------------------
                                   Name:  Peter Chin
                                          ------------------------------------
                                   Title:  Authorized Agent
                                           -----------------------------------

                              Address for Notices:

Revolving Loan Commitment:    c/o The Chase Manhattan Bank
                              140 East 45th Street, 11th Floor
$0                            New York, New York 10017
                              Attention: Ms. Virginia Conway
Term Loan A:                  Telecopy No.: (212) 622-0123

$0

Term Loan B:

$5,000,000.00
<PAGE>

                              BALANCED HIGH-YIELD FUND II LTD.

                              By:  /s/ John J. D'Angelo
                                   -------------------------------------------
                              Name:  John J. D'Angelo
                                     -----------------------------------------
                              Title:  Vice President - Asset Management
                                      ----------------------------------------

                              By:  /s/ Christine Norman
                                   -------------------------------------------
                              Name:  Christine Norman
                                     -----------------------------------------
                              Title:  Associate
                                      ----------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    c/o BHF (USA) Capital Corporation
                              590 Madison Avenue
$0                            New York, New York 10022
                              Attention: John D'Angelo
                              Telecopy No.: 212-756-5536
Term Loan A:

$0

Term Loan B:

$5,000,000.00
<PAGE>

                              STEIN ROE FLOATING RATE LIMITED
                              LIABILITY COMPANY

                              By:  /s/ Brian W. Good
                                   -------------------------------------------
                              Name:  Brian W. Good
                                     -----------------------------------------
                              Title:  Senior Vice President
                                      ----------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    c/o Stein, Roe & Franham Incorporated
                              One South Wacker Drive, 33rd Floor
$0                            Chicago, Illinois 60606-4685
                              Attention: Zoltan Donovan
                              Telecopy No.: 312-368-7857
Term Loan A:

$0

Term Loan B:

$4,000,000.00
<PAGE>

                              LIBERTY - STEIN ROE ADVISOR FLOATING
                              RATE ADVANTAGE FUND

                              By:  Stein Roe & Farnham Incorporated as
                                   Advisor

                              By:  /s/ Brian W. Good
                                   -------------------------------------------
                              Name:  Brian W. Good
                                     -----------------------------------------
                              Title:  Sr. Vice President & Portfolio Manager
                                      ----------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    c/o Stein, Roe & Franham Incorporated
                              One South Wacker Drive, 33rd Floor
$0                            Chicago, Illinois 60606-4685
                              Attention: Zoltan Donovan
                              Telecopy No.: 312-368-7857
Term Loan A:

$0

Term Loan B:

$2,500,000.00
<PAGE>

                              SRF 2000 LLC

                              By:  /s/ Ann E. Morris
                                   -------------------------------------------
                              Name:  Ann E. Morris
                                     -----------------------------------------
                              Title:  Assistant Vice President
                                      ----------------------------------------

                              Address for Notices:

Revolving Loan Commitment:    c/o Bank of America Securities LLC
                              100 North Tryon Street
$0                            NC1-001-15-01
                              Charlotte, North Carolina 28273
                              Attention: April Mays
Term Loan A:                  Telecopy No.: 704-409-0828

$0

Term Loan B:

$2,500,000.00<PAGE>   1
                                                                   EXHIBIT 10.1

================================================================================

                  FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                                     among

                             ECLIPSYS CORPORATION,

                           THE LENDERS NAMED HEREIN,

                                      and

                           FIRST UNION NATIONAL BANK,
                                    as Agent

                                      and

                                BANKBOSTON, N.A.

                                  as Co-Agent

                      $50,000,000 Senior Credit Facilities

                                  Arranged by
                          FIRST UNION CAPITAL MARKETS,
                   a division of Wheat First Securities, Inc.

                            Dated as of May 29, 1998

================================================================================
<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>      <C>                                                                                                 <C>
                                                              ARTICLE I

                                                             DEFINITIONS

1.1      Defined Terms  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
1.2      Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
1.3      Other Terms; Construction  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

                                                              ARTICLE II

                                                    AMOUNT AND TERMS OF THE LOANS

2.1      Commitments; Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
2.2      Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
2.3      Disbursements; Funding Reliance; Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . .  27
2.4      Notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
2.5      Termination and Reduction of Revolving Credit Commitments and
              Swingline Commitment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
2.6      Mandatory Repayments and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
2.7      Voluntary Prepayments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
2.8      Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
2.9      Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
2.10     Interest Periods   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
2.11     Conversions and Continuations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
2.12     Method of Payments; Computations   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
2.13     Recovery of Payments   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
2.14     Use of Proceeds  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
2.15     Pro Rata Treatment; Sharing of Payments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
2.16     Increased Costs; Change in Circumstances; Illegality; etc  . . . . . . . . . . . . . . . . . . . .  39
2.17     Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
2.18     Compensation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44

                                                             ARTICLE III

                                                          LETTERS OF CREDIT

3.1      Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
3.2      Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
3.3      Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
3.4      Reimbursement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
3.5      Payment by Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  46
3.6      Payment to Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
3.7      Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
3.8      Cash Collateral Account  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
</TABLE>

                                       i
<PAGE>   3
<TABLE>
<S>      <C>                                                                                                 <C>
3.9      Effectiveness  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50

                                                              ARTICLE IV
                                                     CONDITIONS TO EFFECTIVENESS

4.1      Conditions of Initial Borrowing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
4.2      Conditions of All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53

                                                              ARTICLE V

                                                    REPRESENTATIONS AND WARRANTIES

5.1      Corporate Organization and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
5.2      Authorization; Enforceability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
5.3      No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
5.4      Authorizations; Permits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
5.5      Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
5.6      Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
5.7      Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
5.8      Full Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
5.9      Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
5.10     No Material Adverse Change   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
5.11     Financial Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
5.12     Ownership of Properties  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
5.13     ERISA  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
5.14     Environmental Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
5.15     Compliance With Laws   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
5.16     Regulated Industries   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
5.17     Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
5.18     Certain Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
5.19     Capitalization   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
5.20     Security Documents   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
5.21     Solvency   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61

                                                              ARTICLE VI

                                                        AFFIRMATIVE COVENANTS

6.1      Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62
6.2      Other Business and Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  63
6.3      Existence; Franchises; Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . .  66
6.4      Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
6.5      Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
6.6      Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
6.7      Maintenance of Books and Records; Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
6.8      Creation or Acquisition of Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
6.9      Year 2000  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
</TABLE>

                                       ii
<PAGE>   4
<TABLE>
<S>      <C>                                                                                                 <C>
6.10     Additional Security; Further Assurances  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68

                                                             ARTICLE VII

                                                         FINANCIAL COVENANTS

7.1      Ratio of Consolidated Funded Debt to Annualized EBITDA . . . . . . . . . . . . . . . . . . . . . .  69
7.2      Ratio of Annualized EBITDA to Annualized Interest Expense  . . . . . . . . . . . . . . . . . . . .  69
7.3      Ratio of Consolidated Funded Debt to Consolidated Total Capital  . . . . . . . . . . . . . . . . .  69
7.4      Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  69

                                                             ARTICLE VIII

                                                          NEGATIVE COVENANTS

8.1      Merger; Consolidation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  70
8.2      Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  70
8.3      Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  72
8.4      Liens  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  73
8.5      Disposition of Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74
8.6      Investments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  75
8.7      Restricted Payments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  79
8.8      Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  80
8.9      Lines of Business  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  80
8.10     Certain Amendments   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
8.11     Limitation on Certain Restrictions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
8.12     No Other Negative Pledges  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
8.13     Fiscal Year  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
8.14     Accounting Changes   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82

                                                              ARTICLE IX

                                                          EVENTS OF DEFAULT

9.1      Events of Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
9.2      Remedies:  Termination of Revolving Credit Commitments,
              Swingline Commitment, Acceleration, etc . . . . . . . . . . . . . . . . . . . . . . . . . . .  85
9.3      Remedies:  Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  86

                                                              ARTICLE X

                                                              THE AGENT

10.1     Appointment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  87
10.2     Nature of Duties   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  87
10.3     Exculpatory Provisions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  87
10.4     Reliance by Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  87
10.5     Non-Reliance on Agent and Other Lenders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  88
</TABLE>

                                      iii
<PAGE>   5
<TABLE>
<S>      <C>                                                                                                 <C>
10.6     Notice of Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  88
10.7     Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  89
10.8     The Agent in its Individual Capacity   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  89
10.9     Successor Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  90
10.10    Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  90
10.11    Issuing Lender and Swingline Lender  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  90

                                                              ARTICLE XI

                                                            MISCELLANEOUS

11.1     Fees and Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  91
11.2     Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  91
11.3     Governing Law; Consent to Jurisdiction   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  92
11.4     Arbitration; Preservation and Limitation of Remedies   . . . . . . . . . . . . . . . . . . . . . .  93
11.5     Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  94
11.6     Amendments, Waivers, etc   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  94
11.7     Assignments, Participations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  95
11.8     No Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  98
11.9     Successors and Assigns   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  98
11.10    Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  98
11.11    Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  98
11.12    Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  99
11.13    Confidentiality  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  99
11.14    Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  99
11.15    Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  99
</TABLE>

                                    EXHIBITS

Exhibit A-1          Form of Notice of Revolving Borrowing
Exhibit A-2          Form of Notice of Swingline Borrowing
Exhibit B-1          Form of Revolving Credit Note
Exhibit B-2          Form of Swingline Note
Exhibit C            Form of Notice of Prepayment
Exhibit D            Form of Notice of Conversion/Continuation
Exhibit E            Form of Letter of Credit Notice
Exhibit F            Form of Amended and Restated Subsidiary Guaranty
Exhibit G            Form of Amended and Restated Borrower Pledge and Security
                         Agreement
Exhibit H            Form of Amended and Restated Subsidiary Pledge and
                         Security Agreement
Exhibit I            Form of Opinion of Borrower's Counsel
Exhibit J            Form of Financial Condition Certificate
Exhibit K            Form of Compliance Certificate
Exhibit L            Form of Assignment and Acceptance
Exhibit M            Form of Landlord Consent

                                       iv
<PAGE>   6
                                   SCHEDULES

Schedule 5.3         No Violation
Schedule 5.4         Consents and Approvals
Schedule 5.5         Litigation
Schedule 5.6         Taxes
Schedule 5.7         Subsidiaries
Schedule 5.10        No Material Adverse Change
Schedule 5.12(a)     Claims Against Intellectual Property
Schedule 5.12(b)     Leases
Schedule 5.15        Compliance with Laws
Schedule 5.17        Insurance
Schedule 5.18        Certain Contracts
Schedule 5.19        Capital Stock
Schedule 8.2         Indebtedness
Schedule 8.3         Contingent Obligations
Schedule 8.4         Liens
Schedule 8.6         Investments
Schedule 8.8         Transactions with Affiliates

                                       v
<PAGE>   7
                           FIRST AMENDED AND RESTATED
                                CREDIT AGREEMENT

         THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 29th
day of May , 1998 (this "Agreement"), is made among ECLIPSYS CORPORATION, a
Delaware corporation with its chief executive office in Delray Beach, Florida
(the "Borrower"), the banks and financial institutions listed on the signature
pages hereof or that become parties hereto after the date hereof (collectively,
the "Lenders"), FIRST UNION NATIONAL BANK (formerly known as First Union
National Bank of North Carolina) ("First Union"), as agent for the Lenders (in
such capacity, the "Agent") and BANKBOSTON, N.A., as Co-Agent.

                                    RECITALS

         A.      The Borrower, certain banks and other financial institutions,
and the Agent are parties to a Credit Agreement, dated as of January 24, 1997
(as amended, the "Original Credit Agreement") providing credit facilities in
the aggregate principal amount of $30,000,000.

         B.      The Borrower has requested certain amendments to the Original
Credit Agreement and that the Lenders make available to the Borrower revolving
credit facilities in the aggregate principal amount of $50,000,000, all as more
fully described herein.

         C.      The Lenders are willing to make such amendments to the
Original Credit Agreement and to make available to the Borrower the credit
facilities described herein subject to and on the terms and conditions set
forth in this Agreement.

                                   AGREEMENT

         NOW, THEREFORE, in consideration of the mutual provisions, covenants
and agreements herein contained, the parties hereto hereby agree that, as of
the Amendment Effective Date, the Original Credit Agreement shall be amended
and restated in its entirety as follows:

                                   ARTICLE I

                                  DEFINITIONS

         1.1     Defined Terms.  For purposes of this Agreement, in addition to
the terms defined elsewhere herein, the following terms shall have the meanings
set forth below (such meanings to be equally applicable to the singular and
plural forms thereof):

<PAGE>   8

         "ABR Loan" shall mean, at any time, any Loan that bears interest at
such time at the applicable Adjusted Alternate Base Rate.

         "Account Designation Letter" shall mean a letter from the Borrower to
the Agent, duly completed and signed by an Authorized Officer and in form and
substance satisfactory to the Agent, listing any one or more accounts to which
the Borrower may at any time and from time to time request the Agent to forward
the proceeds of any Loans made hereunder.

         "Acquisition" shall mean any transaction or series of related
transactions, consummated on or after the date hereof, by which the Borrower
directly, or indirectly through one or more Subsidiaries, (i) acquires any
going business or division, or all or substantially all of the assets, of any
Person, whether through purchase of assets, merger or otherwise, or (ii)
acquires securities or other ownership interests of any Person having at least
a majority of combined voting power of the then outstanding securities or other
ownership interests of such Person.

         "Acquisition Amount" shall mean, with respect to any Permitted
Acquisition, the sum (without duplication) of (i) the amount of cash paid by
the Borrower and its Subsidiaries in connection with such Permitted
Acquisition, (ii) the Fair Market Value of all capital stock or other ownership
interests of the Borrower or any of its Subsidiaries issued or given in
consideration of such Permitted Acquisition, (iii) the amount (determined by
using the face amount or the amount payable at maturity, whichever is greater)
of all debt incurred, assumed or acquired in connection with such Permitted
Acquisition, (iv) all additional purchase price amounts in the form of earnouts
and other contingent obligations that should be recorded on the financial
statements of the Borrower and its Subsidiaries in accordance with Generally
Accepted Accounting Principles, (v) all amounts paid in respect of covenants
not to compete, consulting agreements and other similar contracts in connection
with such Permitted Acquisition and (vi) the aggregate Fair Market Value of all
other consideration given by the Borrower and its Subsidiaries in connection
with such Permitted Acquisition.

         "Adjusted Alternate Base Rate" shall mean, at any time with respect to
any ABR Loan, a rate per annum equal to the Alternate Base Rate as in effect at
such time plus the Applicable Margin Percentage for such ABR Loan, as in effect
at such time.

         "Adjusted LIBOR Rate" shall mean, at any time with respect to any
LIBOR Loan, a rate per annum equal to the LIBOR Rate as in effect at such time
plus the Applicable Margin Percentage for such LIBOR Loan, as in effect at such
time.

         "Affiliate" shall mean, as to any Person, each other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person; provided that no Person shall be deemed to be an
Affiliate of another Person solely by reason of an officer or director of such
Person serving as an officer or director of such other Person.  For purposes of
this definition, with respect to any Person, "control" shall mean (i) the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of such  Person, whether through the ownership
of voting securities, by contract or otherwise, or (ii) the beneficial
ownership of securities or other ownership interests of such Person having 10%
or more of the combined voting power of the

                                       2
<PAGE>   9

then outstanding securities or other ownership interests of such Person
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors or other governing body of such
Person.

         "Agent" shall mean First Union, in its capacity as Agent appointed
under ARTICLE X, and its successors and permitted assigns in such capacity.

         "Agreement" shall mean this First Amended and Restated Credit
Agreement, as amended, modified or supplemented from time to time.

         "Alternate Base Rate" shall mean the higher of (i) the per annum
interest rate publicly announced from time to time by First Union in Charlotte,
North Carolina, to be its prime rate (which may not necessarily be its best
lending rate), as adjusted to conform to changes as of the opening of business
on the date of any such change in such prime rate, or (ii) 0.5% per annum plus
the Federal Funds Rate, as adjusted to conform to changes as of the opening of
business on the date of any such change in the Federal Funds Rate. In the event
First Union shall abolish or abandon the practice of announcing its prime rate
or should the same be unascertainable, the Agent shall, with the Borrower's
consent, designate a comparable reference rate, which shall, once so
designated, be deemed to be the rate referred to in clause (i) above for
purposes of determining the Alternate Base Rate.

         "Amendment Effective Date" shall mean the date on which all of the
conditions precedent set forth in SECTION 4.1 have been satisfied or waived in
accordance with the terms of this Agreement.

         "Annualized EBITDA" shall mean, as of the last day of each fiscal
quarter, two (2) times Consolidated EBITDA for the period of two consecutive
fiscal quarters then ending.

         "Annualized Interest Expense" shall mean, as of the last day of each
fiscal quarter, two (2) times Consolidated Interest Expense for the period of
two consecutive fiscal quarters then ending.

         "Applicable Margin Percentage" shall mean, at any time from and after
the Amendment Effective Date, 0.0% if such Revolving Loan is an ABR Loan and
1.0% if such Revolving Loan is a LIBOR Loan; provided, however, that on each
Adjustment Date, the Applicable Margin Percentage for all Revolving Loans shall
be adjusted effective as of such date (based upon the calculation of the ratio
of Consolidated Funded Debt to Annualized EBITDA as of the last day of the
fiscal period to which such Adjustment Date relates) in accordance with (i)
matrix A set forth in Annex I hereto for any such fiscal periods ending prior
to the successful consummation of a Qualified Public Offering or (ii) matrix B
set forth in Annex I hereto for any such fiscal periods ending  concurrently
with or any time after the successful consummation of a Qualified Public
Offering; and provided further that, notwithstanding the foregoing or anything
in Annex I to the contrary, (A) if at any time the Borrower shall have failed
to deliver the financial statements and a Compliance Certificate as required by
SECTION 6.1(a) or SECTION 6.1(b) (as the case may be) and SECTION 6.2(a), then
at all times from and including the date on which such statements and
Compliance Certificate are required to have been delivered to the date on which
the same shall

                                       3
<PAGE>   10

have been delivered (or until clause (B) below shall apply because a Default or
Event of Default shall have occurred and be continuing), each Applicable Margin
Percentage shall be determined in accordance with matrix A or B, as applicable,
of Annex I as if the ratio of Consolidated Funded Debt to Annualized EBITDA
(notwithstanding the actual ratio) was the highest level ratio set forth on
such applicable matrix, and (B) if at any time a Default or Event of Default
shall have occurred and be continuing, then at all times from and including the
date of occurrence of such Default or Event of Default to the date on which
such Default or Event of Default shall be cured or waived, each Applicable
Margin Percentage shall be determined in accordance with matrix A or B, as
applicable, of Annex I as if the ratio of Consolidated Funded Debt to
Annualized EBITDA (notwithstanding the actual ratio) was the highest level
ratio set forth on such applicable matrix.  For purposes of this definition,
"Adjustment Date" shall mean, with respect to any fiscal quarter of the
Borrower, beginning with the fiscal quarter ending June 30, 1998, the fifth
(5th) day (or, if such day is not a Business Day, on the next succeeding
Business Day) after delivery by the Borrower in accordance with SECTION 6.1(a)
or SECTION 6.1(b), as the case may be, of (i) financial statements for the most
recently completed applicable fiscal period and (ii) a duly completed
Compliance Certificate with respect to such fiscal period.

         "Asset Disposition" shall mean any sale, assignment, transfer or other
disposition by the Borrower or any of its Subsidiaries to any other Person
(other than to the Borrower or to a Wholly Owned Subsidiary), whether in one
transaction or a series of related transactions, of any of its assets, business
units or other properties (including any interests in property, whether
tangible or intangible, and including Capital Stock of Subsidiaries), but
excluding the sale or other disposition of assets permitted under clauses (i),
(ii), (iii), (iv), (v) and (vi) of SECTION 8.5.

         "Assignee" shall have the meaning given to such term in SECTION
11.7(a).

         "Assignment and Acceptance" shall mean an Assignment and Acceptance
entered into between a Lender and an Assignee and accepted by the Agent and the
Borrower, in substantially the form of EXHIBIT L.

         "Authorized Officer" shall mean any individual properly authorized by
resolution of the board of directors of the Borrower or other Person (or in
accordance with the terms of its bylaws, operating agreement, partnership
agreement or other  applicable organizational document) to take the action
specified herein on its behalf, and in each case whose signature and incumbency
shall have been certified to the Agent by the secretary or an assistant
secretary (or such other individual who is properly authorized to perform the
duties normally associated with the title of secretary or assistant secretary)
of the Borrower or such other Person, as the case may be.

         "Bankruptcy Code" shall mean 11 U.S.C. Sections 101 et seq., as
amended from time to time, and any successor statute.

         "Borrower Pledge and Security Agreement" shall mean the amended and
restated pledge and security agreement made by the Borrower in favor of the
Agent, in substantially the form of EXHIBIT G, as amended, modified or
supplemented from time to time.

                                       4
<PAGE>   11

         "Borrowing" shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to
SECTION 2.11) on a single date of a group of Loans of a single Type (or a
Swingline Loan made by the Swingline Lender) and, in the case of LIBOR Loans,
as to which a single Interest Period is in effect.

         "Borrowing Date" shall mean, with respect to any Borrowing, the date
upon which such Borrowing is made.

         "Business Day" shall mean (i) any day other than a Saturday or Sunday,
a legal holiday or a day on which commercial banks in Charlotte, North Carolina
are required by law to be closed and (ii) in respect of any determination
relevant to a LIBOR Loan, any such day that is also a day on which tradings are
conducted in the London interbank Eurodollar market.

         "Capital Expenditures" shall mean, for any period, without
duplication, the aggregate amount (whether paid in cash or accrued as a
liability) that would, in accordance with Generally Accepted Accounting
Principles, be included on the consolidated statement of cash flows of the
Borrower and its Subsidiaries for such period as additions to equipment, fixed
assets, real property or improvements or other capital assets (including,
without limitation, capital lease obligations); provided, however, that Capital
Expenditures shall not include any such expenditures for replacements and
substitutions for capital assets, to the extent made with the proceeds of
insurance.

         "Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in corporate stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants or options to
purchase any of the foregoing.

         "Cash Collateral Account" shall have the meaning given to such term in
SECTION 3.8.

         "Cash Equivalents" shall mean (i) securities or other direct
obligations issued or unconditionally guaranteed by the United States of
America or any agency or instrumentality thereof, backed by the full faith and
credit of the United States of America and maturing within 180 days from the
date of acquisition, (ii) securities or other direct obligations issued by any
state in the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within 180 days from the
date of acquisition, and at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Rating Services or Moody's Investors
Service, Inc.; (iii) commercial paper issued by any Person organized under the
laws of the United States of America, maturing within 180 days from the date of
acquisition and, at the time of acquisition, having a rating of at least A-1 or
the equivalent thereof by Standard & Poor's Ratings Services or at least P-1 or
the equivalent thereof by Moody's Investors Service, Inc., (iv) time deposits
and certificates of deposit maturing within 180 days from the date of issuance
and issued by a bank or trust company organized under the laws of the United
States of America or any state thereof that has combined capital and surplus of
at least $500,000,000 and that has (or is a subsidiary of a bank holding
company that has) a long-term

                                       5
<PAGE>   12

unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by Moody's
Investors Service, Inc., (v) repurchase obligations with a term not exceeding
seven (7) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (vi) money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above.

         "Casualty Event" shall mean, with respect to any property (including
any interest in property) of the Borrower or any of its Subsidiaries, any loss
of, damage to, or condemnation or other taking of, such property for which the
Borrower or such Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation.

         "Collateral" shall mean all the assets, property and interests in
property that shall from time to time be pledged or be purported to be pledged
as direct or indirect security for the Obligations pursuant to any one or more
of the Security Documents.

         "Compliance Certificate" shall mean a fully completed and duly
executed certificate in the form of Exhibit K, together with a Covenant
Compliance Worksheet.

         "Consolidated EBITDA" shall mean, for any period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) the sum of Consolidated
Interest Expense, federal, state, local and other income taxes, depreciation,
amortization of intangible assets, and other non-cash expenses or charges
reducing income for such period all to the extent taken into account in the
calculation of Consolidated Net Income for such  period, minus (iii) non-cash
credits increasing Consolidated Net Income for such period, to the extent taken
into account in the calculation of Consolidated Net Income for such period;
provided, however, that the calculation of Consolidated EBITDA shall only
include income of Designated Non-Guarantor Subsidiaries to the extent of the
amount of cash dividends or cash distributions paid to the Borrower or any
Wholly Owned Subsidiary by such Designated Non-Guarantor Subsidiary.

         "Consolidated Funded Debt" shall mean, as of any date, the aggregate
(without duplication) of all Indebtedness of the Borrower and its Subsidiaries
as of such date, determined on a consolidated basis, other than accrued
expenses, current trade or other accounts payable (unless such expenses and
accounts payable are 90 days or more past due) and other current liabilities
arising in the ordinary course of business and not incurred through the
borrowing of money.

         "Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of (i) total interest expense of the Borrower and its
Subsidiaries for such period in respect of Consolidated Funded Debt of the
Borrower and its Subsidiaries (including, without limitation, all such interest
expense attributable to capital lease obligations) and, determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles,
and (ii) all net amounts paid or accrued by the Borrower and its Subsidiaries
during such period under or in respect of Hedge Agreements.

                                       6
<PAGE>   13

         "Consolidated Net Income" shall mean, for any period, net income (or
loss) of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles
but excluding as income (a) gains on the sale, conversion or other disposition
of capital assets, (b) gains on the acquisition, retirement, sale or other
disposition of Capital Stock of the Borrower or any of its Subsidiaries, (c)
gains on the collection of life insurance proceeds, (d) any write-up of any
asset, and (e) any other gain or credit of an extraordinary nature.

         "Consolidated Net Revenues" shall mean for any period the total net
revenues of the Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with Generally Accepted Accounting Principles.

         "Consolidated Net Worth" shall mean, as of any date, the net worth of
the Borrower and its Subsidiaries as of such date, determined on a consolidated
basis in accordance with Generally Accepted Accounting Principles (including,
without limitation, the Series B Preferred Stock and Series C Preferred Stock
(each as defined in the Preferred Stock Purchase Agreement) having the rights
and preferences set forth in the Transaction Documents and the Amended and
Restated Certificate of Incorporation of the Borrower as existing on the date
hereof and as amended in compliance with the terms hereof) but (i) excluding
any Disqualified Capital Stock of the Borrower, and (ii) without regard to the
requirements of Statements of Financial Accounting Standards No. 115 by the
Financial Accounting Standards Board of  the American Institute of Certified
Public Accountants.

         "Consolidated Total Capital" shall mean, as of any date, the sum of
(i) Consolidated Net Worth as of such date and (ii) Consolidated Funded Debt as
of such date.

         "Contingent Obligation" shall mean, with respect to any Person, any
direct or indirect liability of such Person with respect to any Indebtedness,
liability or other obligation (the "primary obligation") of another Person (the
"primary obligor"), whether or not contingent, (a) to purchase, repurchase or
otherwise acquire such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or provide funds (i) for the
payment or discharge of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor in respect thereof to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss or failure or inability
to perform in respect thereof.  The amount of any Contingent Obligation shall
be deemed to be the amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof; provided, however, that, with respect to the Borrower and its
Subsidiaries, the term Contingent Obligation shall not include endorsements for
collection or deposit in the ordinary course of business.

                                       7
<PAGE>   14

         "Covenant Compliance Worksheet" shall mean a fully completed worksheet
in the form of Attachment A to EXHIBIT K.

         "Credit Documents" shall mean this Agreement, the Notes, the Letters
of Credit, the Fee Letter, the Subordination Agreement, the Borrower Pledge and
Security Agreement, the Subsidiary Guaranty, the Subsidiary Pledge and Security
Agreement, all other Security Documents, any Hedge Agreement to which the
Borrower and any Lender are parties and that is permitted hereunder, and all
other agreements, instruments, documents and certificates now or hereafter
executed and delivered to the Agent or any Lender by or on behalf of the
Borrower or any of its Subsidiaries with respect to this Agreement and the
transactions contemplated hereby, in each case as amended, modified,
supplemented or restated from time to time.

         "Default" shall mean any event or condition that, with the passage of
time or giving of notice, or both, would constitute an Event of Default.

         "Designated Non-Guarantor Subsidiary" shall mean (i) Eclipsys Limited
and (ii) any other Subsidiary of the Borrower that is not a Wholly Owned
Subsidiary and that has elected, by written notice to the Agent given not less
than five (5) Business Days after the creation or acquisition thereof by the
Borrower or any other  Subsidiary, not to become a guarantor under the
Subsidiary Guaranty and not to grant to the Agent a Lien upon and security
interest in its personal property assets pursuant to the Subsidiary Pledge and
Security Agreement.

         "Disqualified Capital Stock" shall mean, with respect to any Person,
any Capital Stock of such Person that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event or otherwise, (i) matures or is mandatorily
redeemable or subject to any mandatory repurchase requirement, pursuant to a
sinking fund obligation or otherwise, (ii) is redeemable or subject to any
mandatory repurchase requirement at the sole option of the holder thereof, or
(iii) is convertible into or exchangeable for (whether at the option of the
issuer or the holder thereof) (a) debt securities or (b) any Capital Stock
referred to in (i) or (ii) above, in each case under (i), (ii) or (iii) above
at any time on or prior to the Revolving Credit Maturity Date; provided,
however, that (A) only the portion of Capital Stock that so matures or is
mandatorily redeemable, is so redeemable at the option of the holder thereof,
or is so convertible or exchangeable on or prior to such date shall be deemed
to be Disqualified Capital Stock, and (B) none of the Borrower's common stock
or Capital Stock having the rights and preferences set forth in the Transaction
Documents or the Amended and Restated Certificate of Incorporation of the
Borrower (in the forms delivered to the Agent on the Closing Date (as defined
in the Original Credit Agreement) or amended or modified in accordance with the
terms of this Agreement) shall be deemed Disqualified Capital Stock hereunder.

         "Dollars" or "$" shall mean dollars of the United States of America.

         "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute, and all rules
and regulations from time to time promulgated thereunder.

                                       8
<PAGE>   15

         "ERISA Affiliate" shall mean any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under "common
control" with, or a member of the same "controlled group" as, the Borrower or
any of its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o)
of the Internal Revenue Code or Section 4001 of ERISA.

         "ERISA Event" shall mean any of the following with respect to a Plan
or Multiemployer Plan, as applicable:  (i) a Reportable Event with respect to a
Plan or a Multiemployer Plan, (ii) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan that results in
liability under Section 4201 or 4204 of ERISA, or the receipt by the Borrower
or any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA, (iii)
the distribution by the Borrower or any ERISA Affiliate under Section 4041 or
4041A of ERISA of a notice of intent to terminate any  Plan or the taking of
any action to terminate any Plan, (iv) the commencement of proceedings by the
PBGC under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from any Multiemployer Plan that such action has been
taken by the PBGC with respect to such Multiemployer Plan, (v) the institution
of a proceeding by any fiduciary of any Multiemployer Plan against the Borrower
or any ERISA Affiliate to enforce Section 515 of ERISA, which is not dismissed
within thirty (30) days, (vi) the imposition upon the Borrower or any ERISA
Affiliate of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, or the imposition
or threatened imposition of any Lien upon any assets of the Borrower or any
ERISA Affiliate as a result of any alleged failure to comply with the Internal
Revenue Code or ERISA in respect of any Plan, (vii) the engaging in or
otherwise becoming liable for a nonexempt Prohibited Transaction by the
Borrower or any ERISA Affiliate, (viii) a violation of the applicable
requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under
Section 401(a) of the Internal Revenue Code by any fiduciary of any Plan for
which the Borrower or any of its ERISA Affiliates may be directly or indirectly
liable or (ix) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Internal Revenue Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which such Plan is a
part if the Borrower or an ERISA Affiliate fails to timely provide security to
such Plan in accordance with the provisions of such sections.

         "Eclipsys Limited" shall mean Eclipsys Limited, formerly known as
ALLTEL Healthcare Information Services Limited, a corporation organized under
the laws of England and Wales.

         "Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States or any state thereof and having total assets in
excess of $1,000,000,000, (ii) a commercial bank organized under the laws of
any other country that is a member of the Organization for Economic Cooperation
and Development or any successor thereto (the "OECD") or a political
subdivision of any such country and having total assets in excess of
$1,000,000,000, provided that such bank or other financial institution is
acting through a branch or agency located in the United States, in the country
under the laws of which it is organized or in another country that is also a
member of the OECD, (iii) the central bank of any country that is a member of
the OECD, (iv) a finance company, insurance company or other financial
institution or fund that is engaged in making, purchasing or otherwise
investing in loans in the ordinary

                                       9
<PAGE>   16

course of its business and having total assets in excess of $500,000,000, (v)
any Affiliate of an existing Lender or (vi) any other Person approved by the
Required Lenders and the Borrower, which approval shall not be unreasonably
withheld.

         "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
accusations, allegations, notices of noncompliance or violation, investigations
(other than  internal reports prepared by any Person in the ordinary course of
its business and not in response to any third party action or request of any
kind) or proceedings relating in any way to any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (collectively,
"Claims"), including, without limitation, (i) any and all Claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law and
(ii) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from Hazardous Substances or arising from alleged injury or threat of injury to
human health or the environment.

         "Environmental Laws" shall mean any and all federal, state and local
laws, statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations, rules of common law and orders of courts or Governmental
Authorities, relating to the protection of occupational safety or the
environment, now or hereafter in effect and in each case as amended from time
to time, including, without limitation, requirements pertaining to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Substances.

         "Equity Issuance" shall mean (i) the issuance, sale or other
disposition by the Borrower or any of its Subsidiaries of its Capital Stock
(including, without limitation, pursuant to an initial registered public
offering of the Borrower's Capital Stock), any rights, warrants or options to
purchase or acquire any shares of its Capital Stock or any other security or
instrument representing, convertible into or exchangeable for an equity
interest in the Borrower or any of its Subsidiaries, and (ii) the receipt by
the Borrower or any of its Subsidiaries of any capital contribution (whether or
not evidenced by any security or instrument); provided, however, that the term
Equity Issuance shall not include (t) the purchase by employees of the Borrower
or any of its Subsidiaries of any Capital Stock of the Borrower or its
Subsidiaries in accordance with stock option plans or employee stock purchase
plans established by the board of directors of the Borrower or any such
Subsidiary, as applicable, (u) the issuance or sale (A) by any Subsidiary of
its Capital Stock to the Borrower or another Subsidiary, provided that (except
as provided in SECTION 8.6(IX)) such Capital Stock is pledged to the Agent
pursuant to the Borrower Pledge and Security Agreement or the Subsidiary Pledge
and Security Agreement, as applicable, or (B) by any Designated Non-Guarantor
Subsidiary of its Capital Stock to its partners, members or stockholders (other
than the Borrower or any Subsidiary), (v) the issuance of the Borrower's
Preferred Stock and Warrants pursuant to the Preferred Stock Purchase
Agreement, (w) the issuance of the Borrower's Preferred Stock to AIS pursuant
to the Merger Agreement, (x) any capital contribution to any Subsidiary, to the
extent made directly or indirectly by the Borrower, (y) any Capital Stock or
other equity securities of the Borrower issued or sold in connection with any
Permitted Acquisition and constituting all or a portion of the applicable
purchase price, or

                                       10
<PAGE>   17

(z) any other transaction described  in clauses (i) or (ii) above if the
related Net Cash Proceeds of any such transaction are less than $20,000.

         "Equity Purchasers" shall mean General Atlantic Partners 38, L.P., a
Delaware limited partnership, GAP Coinvestment Partners, L.P., a New York
limited partnership, First Union Corporation, a North Carolina corporation, BT
Investment Partners, Inc., a Delaware corporation, Wilfam Ltd., a Florida
limited partnership, Brean Murray Associates IHS L.P., a Delaware limited
partnership, Gerald Manolovici, St. Paul Venture Capital, IV, L.L.C., a
Delaware limited liability company, and Peter Karmanos, Jr.

         "Event of Default" shall have the meaning given to such term in
SECTION 9.1.

         "Excess Cash" shall mean the amount of cash and Cash Equivalents held
by the Borrower and its Subsidiaries (including any amounts of cash and Cash
Equivalents pledged to the Agent) exceeding $5,000,000 plus outstanding
Revolving Loans and Swingline Loans.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

         "Existing Revolving Loans" shall have the meaning assigned to such
term in SECTION 2.1(a).

         "Fair Market Value" shall mean, with respect to any capital stock,
other ownership interests or other property issued or given by the Borrower or
any of its Subsidiaries in connection with a Permitted Acquisition or a
redemption permitted by SECTION 8.7, or received by the Borrower or any
Subsidiary in connection with an Asset Disposition, as of the close of business
on the Business Day immediately preceding such Permitted Acquisition,
redemption or Asset Disposition (i) in the case of common stock of the Borrower
or other securities that are then designated as a national market system
security by the National Association of Securities Dealers, Inc. ("NASDAQ") or
are listed on a national securities exchange, the average for the five Business
Days ending on the date of determination of the average of the last reported
bid and ask quotations or closing prices (as applicable) reported thereon for
such securities or (ii) in all other cases, the reasonable determination of the
fair market value thereof in good faith by a majority of members of the board
of directors of the Borrower or such Subsidiary (excluding any director with a
direct or indirect (other than by virtue of being a director or stockholder)
economic interest in such Permitted Acquisition, redemption or Asset
Disposition), provided that if such determination is not reasonably
satisfactory to the Required Lenders, such determination shall be made by a
nationally recognized investment banking firm selected by the Borrower and the
Required Lenders, the expenses of which shall be borne by the Borrower.

         "Federal Funds Rate" shall mean, for any period, a fluctuating per
annum interest rate (rounded upwards, if  necessary, to the nearest 1/100 of
one percentage point) equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the

                                       11
<PAGE>   18

Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.

         "Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System or any successor thereto.

         "Fee Letter" shall mean the letter from First Union to the Borrower,
dated April 9, 1998, relating to certain fees payable by the Borrower in
respect of the transactions contemplated by this Agreement, as amended,
modified or supplemented from time to time.

         "Financial Condition Certificate" shall mean a financial condition
certificate, substantially in the form of EXHIBIT J, duly executed by a
Financial Officer of the Borrower.

         "Financial Officer" shall mean, with respect to the Borrower, the
chief financial officer, vice president-finance, principal accounting officer
or treasurer of the Borrower.

         "Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles, as set forth in the statements, opinions and
pronouncements of the Accounting Principles Board, the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board (or,
to the extent not so set forth in such statements, opinions and pronouncements,
as generally followed by entities similar in size to the Borrower and engaged
in generally similar lines of business), consistently applied and maintained
and in conformity with those used in the preparation of the most recent
financial statements of the Borrower referred to in SECTION 5.11(a).

         "Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any central bank thereof, any
municipal, local, city or county government, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

         "Hazardous Substances" shall mean any substances or materials (i) that
are or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence
of which require investigation or response under any Environmental Law, (iv)
that constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring  properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance or (vi)
that contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

         "Hedge Agreement" shall mean any interest or foreign currency rate
swap, cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.

                                       12
<PAGE>   19

         "Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness, obligations and liabilities of such Person
for borrowed money or in respect of loans or advances, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi) all
obligations of such Person as lessee under leases that are or should be, in
accordance with Generally Accepted Accounting Principles, recorded as capital
leases, to the extent such obligations are required to be so recorded, (vii)
all Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any (for purposes
hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock
which does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Agreement, and if such price is
based upon, or measured by, the fair market value of such Disqualified Capital
Stock, such fair market value to be determined reasonably and in good faith by
the board of directors or other governing body of the issuer of such
Disqualified Capital Stock), (viii) the net termination obligations of such
Person under any Hedge Agreements, calculated as of any date as if such
agreement or arrangement were terminated as of such date, (ix) all Contingent
Obligations of such Person and (x) all indebtedness referred to in clauses (i)
through (ix) above secured by any Lien on any property or asset owned or held
by such Person regardless of whether the indebtedness secured thereby shall
have been assumed by such Person or is nonrecourse to the credit of such
Person.

         "Intellectual Property" shall have the meaning set forth in SECTION
5.12.

         "Interest Period" shall have the meaning given to such term  in
SECTION 2.10.

         "Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.

         "Issuing Lender" shall mean First Union in its capacity as issuer of
the Letters of Credit, and its successors in such capacity.

         "LIBOR Loan" shall mean, at any time, any Revolving Loan that bears
interest at such time at the Adjusted LIBOR Rate.

         "LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising
part of the same Borrowing for any Interest Period, an interest rate per annum
obtained by dividing (i) (y) the rate of interest (or, if more than one such
rate appears, the arithmetic mean of rates) for deposits in Dollars that
appears on Telerate Page 3750 (or any successor page) or (z) if no such rate is

                                       13
<PAGE>   20

available, the rate of interest determined by the Agent to be the rate or the
arithmetic mean of rates (rounded upward, if necessary, to the nearest 1/16 of
one percentage point) at which Dollar deposits in immediately available funds
are offered by First Union to first-tier banks in the London interbank
Eurodollar market, in each case under (y) and (z) above at approximately 11:00
a.m., London time, two (2) Business Days prior to the first day of such
Interest Period for a period substantially equal to such Interest Period and in
an amount substantially equal to the amount of First Union's LIBOR Loan
comprising part of such Borrowing, by (ii) the amount equal to 1.00 minus the
Reserve Requirement (expressed as a decimal) for such Interest Period.

         "Landlord Consents" shall mean, collectively, (i) a waiver and consent
from each landlord with respect to certain of the properties of the Borrower
and its Subsidiaries listed on SCHEDULE 5.12(b) and designated by the Agent and
(ii) all other similar waivers and consents that the Agent or the Required
Lenders may reasonably require of the Borrower or any of its Subsidiaries from
time to time in respect of amendments, modifications or renewals of the leases
referred to in clause (i) above or in respect of any other leases to which the
Borrower or any of its Subsidiaries is now or hereafter a party, in each case
in form and substance reasonably satisfactory to the Agent, and in each case as
amended, modified or supplemented from time to time.

         "Lender" shall mean each financial institution signatory hereto as a
"Lender" or the "Swingline Lender" and each other financial institution that
becomes a "Lender" or the "Swingline Lender" hereunder pursuant to SECTION
11.7, and their respective successors and assigns.

         "Lending Office" shall mean, with respect to any Lender, the office of
such Lender designated as its "Lending Office" on its signature page hereto or
in an Assignment and Acceptance, or such other office as may be otherwise
designated in writing from time  to time by such Lender to the Borrower and the
Agent.  A Lender may designate separate Lending Offices as provided in the
foregoing sentence for the purposes of making or maintaining different Types of
Loans, and, with respect to LIBOR Loans, such office may be a domestic or
foreign branch or Affiliate of such Lender.

         "Letter of Credit Exposure" shall mean, with respect to any Lender at
any time, such Lender's Revolving Credit Percentage of the sum of (i) the
aggregate Stated Amount of all Letters of Credit outstanding at such time and
(ii) the aggregate amount of all Reimbursement Obligations outstanding at such
time.

         "Letter of Credit Notice" shall have the meaning given to such term in
SECTION 3.2.

         "Letters of Credit" shall have the meaning given to such term in
SECTION 3.1.

         "Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary,
including, without limitation, the interest of any vendor or lessor under any
conditional sale agreement, title retention agreement, capital lease or any
other lease or arrangement having substantially the same effect as any of the
foregoing.

                                       14
<PAGE>   21

         "Loans" shall mean any or all of the Revolving Loans and the Swingline
Loans.

         "Margin Stock" shall have the meaning given to such term in Regulation
U.

         "Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, properties, assets or
prospects of the Borrower and its Subsidiaries, taken as a whole.

         "Material Adverse Effect" shall mean a material adverse effect upon
(i) the condition (financial or otherwise), operations, business, properties,
assets or prospects of the Borrower and its Subsidiaries, taken as a whole,
(ii) the ability of the Borrower or any of its Subsidiaries to perform its
obligations under this Agreement or any of the other Credit Documents to which
the Borrower or any such Subsidiary is a party, or (iii) the legality, validity
or enforceability of this Agreement and the other Credit Documents taken as a
whole or the rights and remedies of the Agent and the Lenders under this
Agreement and the other Credit Documents taken as a whole.

         "Merger Agreement" shall mean the Agreement of Merger, dated as of
January 24, 1997, as amended, modified and supplemented from time to time.

         "Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate makes, is making or is obligated  to make contributions or has made
or been obligated to make contributions.

         "Net Cash Proceeds" shall mean (i) in the case of any Equity Issuance,
the aggregate cash payments received by the Borrower and its Subsidiaries less
reasonable and customary fees and expenses (including, as applicable,
accounting and legal expenses, selling and brokerage expenses and discounts,
and underwriting discounts and commissions) incurred (or reasonably estimated
by the Borrower to be payable) by the Borrower and its Subsidiaries in
connection therewith, (ii) in the case of any Casualty Event, the aggregate
cash proceeds of insurance, condemnation awards and other compensation received
by the Borrower and its Subsidiaries in respect of such Casualty Event net of
any permitted replacement repurchases and less (y) reasonable fees and expenses
incurred (or reasonably estimated by the Borrower to be payable) by the
Borrower and its Subsidiaries in connection therewith and (z) contractually
required repayments of Indebtedness to the extent secured by Liens on the
property subject to such Casualty Event and any income or transfer taxes paid
or reasonably estimated by the Borrower to be payable by the Borrower and its
Subsidiaries as a result of such Casualty Event, and (iii) in the case of any
Asset Disposition, the aggregate amount of all cash payments and the Fair
Market Value of any noncash consideration received by the Borrower and its
Subsidiaries in connection with such Asset Disposition less (x) reasonable fees
and expenses incurred (or reasonably estimated by the Borrower to be payable)
by the Borrower and its Subsidiaries in connection therewith, (y) Indebtedness
to the extent the amount thereof is secured by a Lien on the property that is
the subject of such Asset Disposition and the transferee of (or holder of the
Lien on) such Property requires that such Indebtedness be repaid as a condition
to such Asset Disposition, and (z) any income or transfer taxes paid or
reasonably estimated by the Borrower to be payable by the Borrower and its
Subsidiaries as a result of such Asset Disposition.

                                       15
<PAGE>   22

         "Notes" shall mean any or all of the Revolving Notes and the Swingline
Note.

         "Notice of Conversion/Continuation" shall have the meaning given to
such term in SECTION 2.11(b).

         "Notice of Prepayment" shall have the meaning given to such term in
SECTION 2.7(a).

         "Notice of Revolving Borrowing" shall have the meaning given to such
term in SECTION 2.2(b).

         "Notice of Swingline Borrowing" shall have the meaning given to such
term in SECTION 2.2(d).

         "Obligations" shall mean all principal of and interest (including, to
the greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations and all fees, expenses, indemnities and other
obligations owing, due or payable at any time by the Borrower to  the Agent,
any Lender, the Issuing Lender or any other Person entitled thereto, under this
Agreement or any of the other Credit Documents.

         "Original Credit Agreement" shall have the meaning given to such term
in the recitals hereof.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.

         "Participant" shall have the meaning given to such term in SECTION
11.7(d).

         "Partners/B&W Agreements" shall mean (i) each of the Information
Systems Technology License and the Technical Services Agreement, dated as of
May 3, 1996, between Partners Healthcare System, Inc., a Massachusetts
not-for-profit corporation, Brigham and Women's Hospital, Inc., a Massachusetts
not-for-profit corporation, and the Borrower, and (ii) the Partners Affiliates
Assistance Agreement, dated as of May 3, 1996, between Partners Healthcare
System, Inc., a Massachusetts not-for-profit corporation, and its affiliates,
and the Borrower, in each case as amended, restated, modified or supplemented
in accordance with the terms thereof.

         "Permitted Acquisition" shall have the meaning given to such term in
SECTION 8.6(vi).

         "Permitted Liens" shall have the meaning given to such term in SECTION
8.4.

         "Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.

         "Plan" shall mean any "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA that is subject to the provisions of Title IV
of ERISA (other than a Multiemployer Plan) and to which the Borrower or any
ERISA Affiliate may have any liability.

                                       16
<PAGE>   23

         "Preferred Stock" shall mean, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation (including the Series B 8.5% Redeemable Preferred Stock, Series C
8.5% Redeemable Preferred Stock, Series D Convertible Preferred Stock, Series E
Convertible Preferred Stock, Series F Convertible Preferred Stock and the
Series G Convertible Preferred Stock of the Borrower issued pursuant to the
Preferred Stock Purchase Agreement and the Merger Agreement and the Series G
Convertible Preferred Stock Agreement).

         "Preferred Stock Purchase Agreement" shall mean the Preferred Stock
and Warrant Purchase Agreement, dated January 24, 1997, as amended, between the
Borrower, the Equity Purchasers, General Atlantic Partners 28, L.P., a Delaware
limited partnership, and GAP Coinvestment Partners, L.P., First Union
Corporation, BT Investment Partners, Inc., Wilfam, Ltd, Brean Murray Associates
IHS L.P., Gerald Manolovici, St. Paul Venture Capital IV, LLC,  ALLTEL
Information Services, Inc. and Peter Karmonos, Jr. pursuant to which the Equity
Purchasers have agreed to purchase certain Preferred Stock and Warrants of the
Borrower, as amended, modified or supplemented from time to time in accordance
with the terms of this Agreement.

         "Prepayment Account" shall have the meaning given to such term in
SECTION 2.6(f).

         "Prepayment Event" shall have the meaning given to such term in
SECTION 2.6(g).

         "Pro Forma Balance Sheet" shall have the meaning given to such term in
SECTION 5.11(c).

         "Pro Rata Share" of any amount shall mean, with respect to any Lender
at any time, the product of such amount, multiplied by, such Lender's Revolving
Credit Percentage.

         "Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.

         "Projections" shall have the meaning given to such term in SECTION
5.11(d).

         "Qualified Capital Stock" shall mean any Capital Stock that is not
Disqualified Capital Stock.

         "Qualified Public Offering" shall mean a registered initial public
offering of common stock of the Borrower, underwritten by a nationally
recognized underwriter and yielding proceeds of at least $60,000,000 (net of
underwriter's commission and expenses of the offering).

                                       17
<PAGE>   24

         "Refunded Swingline Loans" shall have the meaning given to such term
in SECTION 2.2(e).

         "Register" shall have the meaning given to such term in SECTION
11.7(b).

         "Registration Rights Agreement" shall mean the Second Amended and
Restated Registration Rights Agreement, dated January 28, 1998, as amended,
among the Borrower, the Equity Purchasers, Partners Healthcare System, Inc.,
General Atlantic Partners 28, L.P., General Atlantic Partners 38, L.P., General
Atlantic Partners 47, L.P., GAP Coinvestment Partners, L.P., Partners
Healthcare System, Inc., Wilfam, Ltd., Alltel Information Services, Inc., First
Union Corporation, BT  Investment Partners, Inc., Brean Murray Associates IHS,
L.P., Gerald Manolovici, St. Paul Capital IV, L.L.C., Peter Karmanos, Jr., the
Kaufman Stockholders (as therein defined), Motorola, Inc. and Harvey J. Wilson,
as amended, modified or supplemented from time to time in accordance with the
terms of this Agreement and certain holders of its Capital Stock, as further
amended, modified or supplemented from time to time in accordance with the
terms of this Agreement.

         "Regulations D, G, U and X" shall mean Regulations D, G, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.

         "Reimbursement Obligation" shall have the meaning given to such term
in SECTION 3.4.

         "Reportable Event" shall mean (i) any "reportable event" within the
meaning of Section 4043(c) of ERISA for which the 30-day notice under Section
4043(a) of ERISA has not been waived by the PBGC (including any failure to meet
the minimum funding standard of, or timely make any required installment under,
Section 412 of the Internal Revenue Code or Section 302 of ERISA, regardless of
the issuance of any waivers in accordance with Section 412(d) of the Internal
Revenue Code), (ii) any such "reportable event" subject to advance notice to
the PBGC under Section 4043(b)(3) of ERISA, (iii) any application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of
the Internal Revenue Code, and (iv) a cessation of operations described in
Section 4062(e) of ERISA.

         "Required Lenders" shall mean the Lenders holding outstanding
Revolving Loans and Revolving Credit Commitments (or, after the termination of
the Revolving Credit Commitments, outstanding Revolving Loans and Letter of
Credit Exposure) representing more than sixty-six and two-thirds percent
(66-2/3%) of the aggregate at such time of all outstanding Revolving Loans and
Revolving Credit Commitments (or, after the termination of the Revolving Credit
Commitments, the aggregate at such time of all outstanding Revolving Loans and
Letter of Credit Exposure).

         "Requirement of Law" shall mean, with respect to any Person, the
charter, articles or certificate of organization or incorporation and bylaws or
other organizational or governing documents of such Person, and any statute,
law, treaty, rule, regulation, order, decree, writ, injunction or determination
of any arbitrator or court or other Governmental Authority, in each case
applicable to or binding upon such Person or

                                       18
<PAGE>   25

any of its property or to which such Person or any of its property is subject
or otherwise pertaining to any or all of the transactions contemplated by this
Agreement and the other Credit Documents.

         "Reserve Requirement" shall mean, with respect to any Interest Period,
the reserve percentage (expressed as a decimal) in effect from time to time
during such Interest Period, as provided by the Federal Reserve Board, applied
for determining the maximum reserve requirements (including, without
limitation, basic, supplemental, marginal and emergency reserves) applicable to
First Union under Regulation D with respect to "Eurocurrency  liabilities"
within the meaning of Regulation D, or under any similar or successor
regulation with respect to Eurocurrency liabilities or Eurocurrency funding.

         "Revolving Credit Commitment" shall mean, with respect to any Lender
at any time, the amount set forth opposite such Lender's name on its signature
page hereto under the caption "Revolving Credit Commitment" or, if such Lender
has entered into one or more Assignment and Acceptances, the amount set forth
for such Lender at such time in the Register maintained by the Agent pursuant
to SECTION 11.7(b) as such Lender's "Revolving Credit Commitment," as such
amount may be reduced at or prior to such time pursuant to the terms hereof.

         "Revolving Credit Commitment Fee" shall have the meaning given to such
term in SECTION 2.9(b).

         "Revolving Credit Maturity Date" shall mean January 24, 2000;
provided, that if the Borrower successfully consummates a Qualified Public
Offering, "Revolving Credit Maturity Date" shall mean the third anniversary of
the date that such Qualified Public Offering is consummated.

         "Revolving Credit Notes" shall mean the promissory notes of the
Borrower in substantially the form of EXHIBIT B, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.

         "Revolving Credit Percentage" shall mean, with respect to any Lender
at any time, a fraction (expressed as a percentage) the numerator of which is
the Revolving Credit Commitment of such Lender at such time and the denominator
of which is the Total Revolving Credit Commitment at such time; provided that
if the Revolving Credit Percentage of any Lender is to be determined after the
Revolving Credit Commitments have been terminated, then such Revolving Credit
Percentage shall be determined immediately prior (and without giving effect) to
such termination.

         "Revolving Credit Termination Date" shall mean the Revolving Credit
Maturity Date or such earlier date of termination of the Revolving Credit
Commitments pursuant to SECTION 2.5 or SECTION 9.2.

         "Revolving Loans" shall have the meaning assigned to such term in
SECTION 2.1.

         "Security Documents" shall mean the Borrower Pledge and Security
Agreement, the Subsidiary Pledge and Security Agreement and all other pledge or
security agreements,

                                       19
<PAGE>   26

mortgages, assignments or other similar agreements or instruments executed and
delivered by the Borrower or any of its Subsidiaries pursuant to SECTION 6.8 or
SECTION 6.9 or otherwise in connection with the transactions contemplated
hereby, in each case as amended, modified or supplemented from time to time.

         "Series A Agreement" shall mean the Preferred Stock Purchase
Agreement, dated May 3, 1996, by and among General Atlantic Partners 28, L.P.,
GAP Coinvestment Partners, L.P., Brean Murray  Associates IHS L.P., Gerald
Manolovici and the Borrower, as amended, modified or supplemented from time to
time in accordance with the terms of this Agreement.

         Series G Preferred Stock Purchase Agreement, dated January 28, 1998,
by and between the Company and General Atlantic Partners 47, L.P. and GAP
Coinvestment Partners, L.P.

         "Stated Amount" shall mean, with respect to any Letter of Credit at
any time, the aggregate amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).

         "Stockholders Agreement" shall mean the Second Amended and Restated
Stockholders Agreement, dated January 28, 1998, among the Borrower, the Equity
Purchasers, Partners Healthcare System, Inc., General Atlantic Partners 28,
L.P., General Atlantic Partners 38, L.P., General Atlantic Partners 47, L.P.,
GAP Coinvestment Partners, L.P. a Delaware limited partnership, Partners
Healthcare Systems, Inc., Wilfam, Ltd., Alltel Information Services, Inc.,
First Union Corporation, BT Investment Partners, Inc., Brean Murray Associates
IHS, L.P., Gerald Manolovici, St. Paul Venture Capital IV, L.L.C., Peter
Karmanos, Jr., the Kaufman Stockholders (as therein defined), Motorola, Inc., a
Delaware corporation, and Harvey J. Wilson, as amended, modified or
supplemented from time to time in accordance with the terms of this Agreement.

         "Solvent" shall mean, as to any Person on any particular date, that
such Person (i) has capital reasonably sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage,
(ii) is able to pay its debts as they mature, (iii) owns property having a fair
saleable value greater than the amount required to pay its probable liability
on existing debts as they mature (including known reasonable contingencies and
contingencies that should be included in notes of the financial statements of
such Person pursuant to Generally Accepted Accounting Principles), and (iv)
does not intend to, and does not believe that it will, incur debts or probable
liabilities beyond its ability to pay such debts or liabilities as they mature.

         "Subordinated Indebtedness" shall have the meaning given to such term
in SECTION 8.2(ii).

         "Subordination Agreement" shall mean the Subordination Agreement,
dated as of the Amendment Effective Date, executed by the parties to the
Preferred Stock Purchase Agreement and the Series A Agreement, the Borrower,
and the Agent, as amended, restated, modified or supplemented from time to
time.

                                       20
<PAGE>   27

         "Subsidiary" shall mean, with respect to any Person, any corporation
or other Person of which fifty percent (50%) or more of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or
more of its other Subsidiaries or a combination thereof (irrespective of
whether, at the time, securities of any other class or classes of any such
corporation or other Person shall or might have voting power by reason of the
happening of any contingency). When used without reference to a parent entity,
the term "Subsidiary" shall be deemed to refer to a Subsidiary of the Borrower.

         "Subsidiary Guaranty" shall mean the amended and restated guaranty
agreement executed by the Wholly-Owned Subsidiaries of the Borrower in
substantially the form of EXHIBIT F, as amended, modified or supplemented from
time to time.

         "Subsidiary Pledge and Security Agreement" shall mean the amended and
restated pledge and security agreement executed by the Subsidiaries of the
Borrower in favor of the Agent, in substantially the form of EXHIBIT H, as
amended, modified or supplemented from time to time.

         "Swingline Commitment" shall mean $5,000,000 or, if less, the Total
Revolving Credit Commitments at the time of determination, as such amount may
be reduced at or prior to such time pursuant to the terms hereof.

         "Swingline Lender" shall mean First Union in its capacity as maker of
Swingline Loans, and its successors in such capacity.

         "Swingline Loans" shall have the meaning given to such term in SECTION
2.1(c).

         "Swingline Maturity Date" shall mean the date that is five (5)
Business Days prior to the Revolving Credit Maturity Date.

         "Swingline Note" shall mean the promissory note of the Borrower in
substantially the form of EXHIBIT B-2, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.

         "Total Revolving Credit Commitments" shall mean, at any time, the sum
of the Revolving Credit Commitments of all Lenders at such time.

         "Transaction Documents" shall mean, collectively, this Agreement and
the other Credit Documents, the Merger Agreement, the Preferred Stock Purchase
Agreement, the Warrants, the Stockholders Agreement, the Registration Rights
Agreement, and all other agreements, instruments, certificates and documents
executed and delivered by the Borrower or any of its Subsidiaries in connection
with the transactions contemplated thereby, in each case as amended, modified
or supplemented from time to time in accordance with the terms of this
Agreement

         "Type" shall have the meaning given to such term in SECTION 2.2(a).

                                       21
<PAGE>   28

         "Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412
of the Code for the applicable  plan year.

         "Unutilized Revolving Credit Commitment" shall mean, with respect to
any Lender at any time, such Lender's Revolving Credit Commitment at such time,
in each case, less the sum of (i) the aggregate principal amount of all
Revolving Loans made by such Lender that are outstanding at such time and (ii)
such Lender's Pro Rata Share of all Letter of Credit Exposure at such time.

         "Unutilized Swingline Commitment" shall mean, with respect to the
Swingline Lender at any time, the Swingline Commitment at such time less the
aggregate principal amount of all Swingline Loans that are outstanding at such
time.

         "Warrants" shall mean the warrants to purchase Capital Stock of the
Borrower, issued in connection with the issuance of the Series B 8.5%
Cumulative Redeemable Preferred Stock, par value $.0l per share, of the
Borrower on the terms and conditions set forth in the Preferred Stock Purchase
Agreement, as amended, modified or supplemented from time to time in accordance
with the terms of this Agreement.

         "Wholly Owned" shall mean, with respect to any Subsidiary of any
Person, that 100% of the outstanding Capital Stock of such Subsidiary is owned,
directly or indirectly, by such Person.

         "Wilson Employment Agreement" shall mean the employment agreement,
dated May 1, 1996, between the Borrower and Harvey J.  Wilson, as amended,
restated, modified or supplemented from time to time in accordance with the
terms hereof.

         1.2     Accounting Terms.  Except as specifically provided otherwise
in this Agreement, all accounting terms used herein that are not specifically
defined shall have the meanings customarily given them, and all financial
computations hereunder shall be made, in accordance with Generally Accepted
Accounting Principles.  Notwithstanding the foregoing, in the event that any
changes in Generally Accepted Accounting Principles after the date hereof are
required to be applied to the Borrower and would affect the computation of the
financial covenants contained in SECTIONS 7.1 through 7.6, as applicable, such
changes shall be followed only from and after the date this Agreement shall
have been amended to take into account any such changes.

         1.3     Other Terms; Construction.  Unless otherwise specified or
unless the context otherwise requires, all references herein to sections,
annexes, schedules and exhibits are references to sections, annexes, schedules
and exhibits in and to this Agreement, and all terms defined in this Agreement
shall have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto.  All
references herein to the Lenders or any of them shall be deemed to include the
Issuing Lender unless specifically provided otherwise or unless the context
otherwise requires.

                                       22
<PAGE>   29

                                   ARTICLE II

                        AMOUNT AND TERMS OF THE LOANS

         2.1     Commitments; Loans.

         (a)     The aggregate principal amount of all Revolving Loans (as
defined in the Original Credit Agreement) made pursuant to the Original Credit
Agreement and outstanding on the Amendment Effective Date (collectively, the
"Existing Revolving Loans") is $16,277,988.00.  On the Amendment Effective
Date, the aggregate outstanding principal amount of all Existing Revolving
Loans shall automatically be converted to an equivalent principal amount of
Revolving Loans hereunder, made by the Lenders ratably in accordance with their
respective Revolving Credit Commitments, and for all purposes of this Agreement
shall be deemed to be Revolving Loans hereunder and entitled to the benefits of
(and subject to the terms of) this Agreement and the other Credit Documents.
To the extent possible, all such Revolving Loans hereunder shall be of the same
Type, and shall have the same Interest Period, as the corresponding Existing
Revolving Loans.  All Letters of Credit issued under the Original Credit
Agreement shall be deemed issued hereunder.

         (b)     Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a "Revolving Loan" and
collectively, the "Revolving Loans") to the Borrower, from time to time on any
Business Day during the period from the date hereof to the Revolving Credit
Termination Date in an amount not greater than the excess, if any, of its
Revolving Credit Commitment at such time over its outstanding Revolving Loans
and Letter of Credit Exposure at such time, provided that no Borrowing of
Revolving Loans shall be made if, immediately after giving effect thereto, the
sum of (x) the aggregate principal amount of Revolving Loans outstanding at
such time, (y) the aggregate Letter of Credit Exposure of all Lenders at such
time (excluding the Reimbursement Obligations that are repaid with the proceeds
of Revolving Loans made pursuant to such Borrowing) and (z) the aggregate
principal amount of Swingline Loans outstanding at such time (excluding the
aggregate amount of any Swingline Loans to be repaid with proceeds of Revolving
Loans made pursuant to such Borrowing) would exceed the Total Revolving Credit
Commitments at such time.  Subject to and on the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Loans until
the Revolving Credit Termination Date.

         (c)     The Swingline Lender agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a "Swingline Loan," and
collectively, the "Swingline Loans") to the Borrower, from time to time on any
Business Day during the period from the Amendment Effective Date to but not
including the Swingline Maturity Date (or, if earlier, the Revolving Credit
Termination Date), in an aggregate principal amount at any time outstanding not
exceeding the Swingline Commitment, notwithstanding that the aggregate
principal amount of Swingline Loans outstanding at any time, when added to the
aggregate principal amount of the Revolving Loans made by the Swingline Lender
in its capacity as a Lender outstanding at such time and its Letter of Credit
Exposure at such time, may exceed its  Revolving Credit Commitment at such
time, but provided that no Borrowing of Swingline Loans shall be made (i) if,
immediately after giving effect thereto, the sum of (x) the aggregate principal
amount of Revolving Loans outstanding at such time, (y) the aggregate Letter of
Credit Exposure of all

                                       23
<PAGE>   30

Lenders at such time and (z) the aggregate principal amount of Swingline Loans
outstanding at such time would exceed the Total Revolving Credit Commitments at
such time or (ii) if the Swingline Lender has received written notice from a
Lender that an Event of Default exists hereunder and requesting that the
Swingline Lender cease making Swingline Loans until the Event of Default has
been cured or waived by the Required Lenders.  Subject to and on the terms and
conditions of this Agreement, the Borrower may borrow, repay (including by
means of a Borrowing of Revolving Loans pursuant to SECTION 2.2(e)) and
reborrow Swingline Loans.

         2.2     Borrowings.

         (a)     The Revolving Loans shall, at the option of the Borrower and
subject to the terms and conditions of this Agreement, be either ABR Loans or
LIBOR Loans (each, a "Type" of Loan), provided that all Revolving Loans
comprising the same Borrowing shall, unless otherwise specifically provided
herein, be of the same Type.  The Swingline Loans shall be made and maintained
as ABR Loans at all times.

         (b)     In order to make a Borrowing of Revolving Loans (other than
(x) Borrowings of Swingline Loans, which shall be made pursuant to SECTION
2.2(e), (y) Borrowings for the purpose of repaying Refunded Swingline Loans,
which shall be made pursuant to SECTION 2.2(e), and (z)  Borrowings involving
continuations or conversions of outstanding Revolving Loans, which shall be
made pursuant to SECTION 2.11), the Borrower will give the Agent written notice
not later than 11:00 a.m., Charlotte time, three (3) Business Days prior to
each such Borrowing to be comprised of LIBOR Loans and one (1) Business Day
prior to each such Borrowing to be comprised of ABR Loans; provided, however,
that a request for a Borrowing of any Revolving Loans to be made on the
Amendment Effective Date may, at the discretion of the Agent, be given later
than the times specified hereinabove.  Each such notice (each, a "Notice of
Revolving Borrowing") shall be irrevocable, shall be given in the form of
EXHIBIT A-1 and shall specify (x) the aggregate principal amount and initial
Type of the Revolving Loans to be made pursuant to such Borrowing, (y) in the
case of a Borrowing of LIBOR Loans, the initial Interest Period to be
applicable thereto, and (z) the requested Borrowing Date, which shall be a
Business Day.  Upon its receipt of a Notice of Revolving Borrowing, the Agent
will promptly notify each Lender of the proposed Borrowing.  Notwithstanding
anything to the contrary contained herein:

                 (i)      the aggregate principal amount of each Borrowing of
         Revolving Loans that is comprised of ABR Loans shall not be less than
         $500,000 or, if greater, an integral multiple of $100,000 in excess
         thereof (or, if less, in the amount of the aggregate Unutilized
         Revolving Credit Commitments), and the aggregate principal amount of
         each Borrowing of Revolving Loans that is comprised of LIBOR Loans
         shall not  be less than $1,000,000 or, if greater, an integral
         multiple of $500,000 in excess thereof;

                 (ii)     if the Borrower shall have failed to designate the
         Type of Revolving Loans comprising a Borrowing, the Borrower shall be
         deemed to have requested a Borrowing comprised of ABR Loans; and

                                       24
<PAGE>   31
                 (iii)    if the Borrower shall have failed to select the
         duration of the Interest Period to be applicable to any Borrowing of
         LIBOR Loans, then the Borrower shall be deemed to have selected an
         Interest Period with a duration of one month.

         (c)     Not later than 1:00 p.m., Charlotte time, on the requested
Borrowing Date, each Lender will make available to the Agent for the account of
the Borrower at its office referred to in SECTION 11.5 (or at such other
location as the Agent may designate) an amount, in Dollars and in immediately
available funds, equal to the amount of the Revolving Loan or Revolving Loans
to be made by such Lender.  To the extent the relevant Lenders have made such
amounts available to the Agent as provided hereinabove, the Agent will make the
aggregate of such amounts available to the Borrower by 3:30 p.m., Charlotte
time, on the Borrowing Date in accordance with SECTION 2.3(a) and in like funds
as received by the Agent.

         (d)     In order to make a Borrowing of a Swingline Loan, the Borrower
will give the Agent and the Swingline Lender written notice not later than
11:00 a.m., Charlotte time, on the date of such Borrowing. Each such notice
(each, a "Notice of Swingline Borrowing") shall be irrevocable, shall be given
in the form of EXHIBIT A-2 and shall specify (i) the principal amount of the
Swingline Loan to be made pursuant to such Borrowing (which shall not be less
than $250,000 and, if greater, shall be in an integral multiple of $100,000 in
excess thereof (or, if less, in the amount of the Unutilized Swingline
Commitment)) and (ii) the requested Borrowing Date, which shall be a Business
Day.  Not later than 1:00 p.m., Charlotte time, on the requested Borrowing
Date, the Swingline Lender will make available to the Agent at its office
referred to in SECTION 11.5 (or at such other location as the Agent may
designate) an amount, in Dollars and in immediately available funds, equal to
the amount of the requested Swingline Loan.  To the extent the Swingline Lender
has made such amount available to the Agent as provided hereinabove, the Agent
will make such amount available to the Borrower in accordance with SECTION
2.3(a) and in like funds as received by the Agent.

         (e)     With respect to any outstanding Swingline Loans, the Swingline
Lender may at any time (whether or not an Event of Default has occurred and is
continuing) in its sole and absolute discretion, and is hereby authorized and
empowered by the Borrower to, cause a Borrowing of Revolving Loans to be made
for the purpose of repaying such Swingline Loans by delivering to the Agent (if
the Agent is different from the Swingline Lender) and each other Lender (on
behalf of, and with a copy to, the Borrower), not later than 11:00 a.m.,
Charlotte time, one (1) Business Day prior to the proposed Borrowing Date
therefor, a  notice (which shall be deemed to be a Notice of Borrowing given by
the Borrower) requesting the Lenders to make Revolving Loans (which shall be
made initially as ABR Loans) on such Borrowing Date in an aggregate amount
equal to the amount of such Swingline Loans (the "Refunded Swingline Loans")
outstanding on the date such notice is given that the Swingline Lender requests
to be repaid.  Not later than 1:00 p.m., Charlotte time, on the requested
Borrowing Date, each Lender (other than the Swingline Lender) will make
available to the Agent at its office referred to in SECTION 11.5 (or at such
other location as the Agent may designate) an amount, in Dollars and in
immediately available funds, equal to the amount of the Revolving Loan to be
made by such Lender.  To the extent the Lenders have made such amounts
available to the Agent as provided hereinabove, the Agent will make the
aggregate of such amounts available to the Swingline Lender in like funds as
received by the Agent, which shall apply such amounts in repayment of the
Refunded Swingline Loans. Notwithstanding any provision of this Agreement to
the

                                       25
<PAGE>   32

contrary, on the relevant Borrowing Date, the Refunded Swingline Loans
(including the Swingline Lender's ratable share thereof, in its capacity as a
Lender) shall be deemed to be repaid with the proceeds of the Revolving Loans
made as provided above (including a Revolving Loan deemed to have been made by
the Swingline Lender), and such Refunded Swingline Loans deemed to be so repaid
shall no longer be outstanding as Swingline Loans but shall be outstanding as
Revolving Loans.  If any portion of any such amount repaid (or deemed to be
repaid) to the Swingline Lender shall be recovered by or on behalf of the
Borrower from the Swingline Lender in any bankruptcy, insolvency or similar
proceeding or otherwise, the loss of the amount so recovered shall be shared
ratably among all the Lenders in the manner contemplated by SECTION 2.15(b).

         (f)     If, as a result of any bankruptcy, insolvency or similar
proceeding with respect to the Borrower, Revolving Loans are not made pursuant
to subsection (e) above in an amount sufficient to repay any amounts owed to
the Swingline Lender in respect of any outstanding Swingline Loans, or if the
Swingline Lender is otherwise precluded for any reason from giving a notice on
behalf of the Borrower as provided for hereinabove, the Swingline Lender shall
be deemed to have sold without recourse, representation or warranty, and each
Lender shall be deemed to have purchased and hereby agrees to purchase, a
participation in such outstanding Swingline Loans in an amount equal to its
ratable share (based on its Pro Rata Share of the Total Revolving Credit
Commitments at such time) of the unpaid amount thereof together with accrued
interest thereon.  Upon one (1) Business Day's prior notice from the Swingline
Lender, each Lender (other than the Swingline Lender) will make available to
the Agent at its office referred to in SECTION 11.5 (or at such other location
as the Agent may designate) an amount, in Dollars and in immediately available
funds, equal to its respective participation.  To the extent the Lenders have
made such amounts available to the Agent as provided hereinabove, the Agent
will make the aggregate of such amounts available to the Swingline Lender in
like funds as received by the Agent.  In the event any such Lender fails to
make available to the Agent the amount of such Lender's participation as
provided in this subsection (f),  the Swingline Lender shall be entitled to
recover such amount on demand from such Lender, together with interest thereon
for each day from the date such amount is required to be made available for the
account of the Swingline Lender until the date such amount is made available to
the Swingline Lender at the Federal Funds Rate for the first three (3) Business
Days and thereafter at the Adjusted Alternate Base Rate applicable to Revolving
Loans.  Promptly following its receipt of any payment by or on behalf of the
Borrower in respect of a Swingline Loan, the Swingline Lender will pay to each
Lender that has acquired a participation therein such Lender's ratable share of
such payment.

         (g)     Notwithstanding any provision of this Agreement to the
contrary, the obligation of each Lender (other than the Swingline Lender) to
make Revolving Loans for the purpose of repaying any Refunded Swingline Loans
pursuant to subsection (e) above and each such Lender's obligation to purchase
a participation in any unpaid Swingline Loans pursuant to subsection (f) above
shall be absolute and unconditional and shall not be affected by any
circumstance or event whatsoever, including, without limitation, (i) any
set-off, counterclaim, recoupment, defense or other right that such Lender may
have against the Swingline Lender, the Agent, the Borrower or any other Person
for any reason whatsoever, (ii) the occurrence or continuance of any Default or
Event of Default, (iii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower or any of its Subsidiaries, or (iv) any breach of this Agreement by
any party hereto.

                                       26
<PAGE>   33

         2.3     Disbursements; Funding Reliance; Domicile of Loans.

         (a)     The Borrower hereby authorizes the Agent to disburse the
proceeds of each Borrowing in accordance with the terms of any written
instructions from any of the Authorized Officers, provided that the Agent shall
not be obligated under any circumstances to forward amounts to any account not
listed in an Account Designation Letter.  The Borrower may at any time deliver
to the Agent an Account Designation Letter listing any additional accounts or
deleting any accounts listed in a previous Account Designation Letter.

         (b)     Unless the Agent has received, prior to 1:00 p.m., Charlotte
time, on the relevant Borrowing Date, written notice from a Lender that such
Lender will not make available to the Agent such Lender's ratable portion, if
any, of the relevant Borrowing, the Agent may assume that such Lender has made
such portion available to the Agent in immediately available funds on such
Borrowing Date in accordance with the applicable provisions of SECTION 2.2, and
the Agent may, in reliance upon such assumption, but shall not be obligated to,
make a corresponding amount available to the Borrower on such Borrowing Date.
If and to the extent that such Lender shall not have made such portion
available to the Agent, and the Agent shall have made such corresponding amount
available to the Borrower, such Lender agrees to pay to the Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date  such amount is made available to the Borrower until the date
such amount is repaid to the Agent at the Federal Funds Rate. If such Lender
shall repay to the Agent such corresponding amount within three (3) Business
Days after the Borrowing Date, such amount shall constitute such Lender's
Revolving Loan as part of such Borrowing for purposes of this Agreement.  If
such Lender does not make such amount available to the Agent within three (3)
Business Days after the Borrowing Date, the Agent shall promptly notify the
Borrower thereof, and the Borrower (to the extent the proceeds of the
corresponding Revolving Loan amount have been made available by the Agent, on
behalf of such Lender, to the Borrower) will, upon such notice, repay to the
Agent an amount equal to such amount together with interest thereon at the rate
applicable to the Revolving Loans disbursed on the Borrowing Date, from the
date such amount is made available to the Borrower until such amount is repaid
to the Agent.  The failure of any Lender to make any Revolving Loan required to
be made by it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Revolving Loan as part of such
Borrowing, or relieve the Lender who failed to make such amount available of
its obligation to subsequently repay such amount, or relieve any Lender
(including the Lender that failed to make such amount available) of its
obligation, if any, hereunder to make its ratable portion of any Borrowing
available as part of any subsequent Revolving Loans, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Loan to
be made by such other Lender as part of any Borrowing.

         (c)     Each Lender may, at its option, make and maintain any
Revolving Loan at, to or for the account of any of its Lending Offices,
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Revolving Loan to or for the account of such Lender
in accordance with the terms of this Agreement.

                                       27
<PAGE>   34

         2.4     Notes.

         (a)     The Revolving Loans made by each Lender shall be evidenced by
a Revolving Credit Note appropriately completed in substantially the form of
EXHIBIT B-1.   The Swingline Loans made by the Swingline Lender shall be
evidenced by a Swingline Note appropriately completed in substantially the form
of EXHIBIT B-2.

         (b)     Each Revolving Credit Note issued to a Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender, (iii) be
dated as of the Amendment Effective Date, (iv) be in a stated principal amount
equal to such Lender's Revolving Credit Commitment, (v) bear interest in
accordance with the provisions of SECTION 2.8, as the same may be applicable to
the Revolving Loans made by such Lender from time to time, and (vi) be entitled
to all of the benefits of this Agreement and the other Credit Documents and
subject to the provisions hereof and thereof.  The amount of principal owing on
each Revolving Credit Note at any given time shall be the aggregate amount of
all Revolving Loans made under such Revolving Credit Note, less all payments of
principal theretofore made by the Borrower and  applied thereto in accordance
with the terms of this Agreement.

         (c)     Each Lender (or Swingline Lender, as applicable) will record
on its internal records the amount and Type of each Revolving Loan, or
Swingline Loan, as applicable, made by it and each payment received by it in
respect thereof and will, in the event of any transfer of any of its Revolving
Credit Notes or Swingline Notes, as applicable, either endorse on the reverse
side thereof or on a schedule attached thereto (or any continuation thereof)
the outstanding principal amount and Type of the Revolving Loans, or Swingline
Loan, as applicable, evidenced thereby as of the date of transfer or provide
such information on a schedule to the Assignment and Acceptance relating to
such transfer; provided, however, that the failure of any Lender  (or Swingline
Lender, as applicable) to make any such recordation or provide any such
information, or any error therein, shall not affect the Borrower's obligations
under this Agreement or the Revolving Credit Notes or the Swingline Note.

         (d)     The Swingline Note shall (i) be executed by the Borrower, (ii)
be payable to the order of the Swingline Lender, (iii) be dated as of the
Amendment Effective Date, (iv) be in a stated principal amount equal to the
Swingline Commitment, (v) bear interest in accordance with the provisions of
SECTION 2.8, as the same may be applicable from time to time to the Swingline
Loans, and (vi) be entitled to all of the benefits of this Agreement and the
other Credit Documents and subject to the provisions hereof and thereof. The
amount of principal owing on each Swingline Note at any given time shall be the
aggregate amount of all Swingline Loans made under such Swingline Note, less
all payments of principal theretofore made by the Borrower and applied thereto
in accordance with the terms of this Agreement.

         2.5     Termination and Reduction of Revolving Credit Commitments and
Swingline Commitment.

         (a)     The Revolving Credit Commitments of each Lender shall be
automatically and permanently terminated on the Revolving Credit Termination
Date. The Swingline Commitment

                                       28
<PAGE>   35

shall be automatically and permanently terminated on the Swingline Maturity
Date, unless sooner terminated pursuant to any other provision of this Section
or SECTION 9.2.

         (b)     The Revolving Credit Commitments shall, on each date upon
which a prepayment of the Loans is required under any provision of SECTION 2.6
(exclusive of any such prepayments under SECTION 2.6(c)(ii) resulting from a
Qualified Public Offering), be automatically and permanently reduced by the
amount, if any, by the amount of such required prepayment.

         (c)     At any time and from time to time after the date hereof, upon
not less than five (5) Business Days' prior written notice to the Agent (and,
in the case of a termination or reduction of the Unutilized Swingline
Commitment, the Swingline Lender), the Borrower may terminate in whole or
reduce in part the aggregate Unutilized Revolving Credit Commitments or the
Unutilized Swingline Commitment, provided that any such partial  reduction
shall be in an aggregate amount of not less than $500,000 or, if greater, an
integral multiple of $100,000 in excess thereof ($250,000  and $100,000,
respectively, in the case of the Unutilized Swingline Commitment).  The amount
of any termination or reduction made under this subsection (c) may not
thereafter be reinstated.

         (d)     Each reduction of the Revolving Credit Commitments pursuant to
this Section shall be applied ratably among the Lenders according to their
respective Revolving Credit Commitments.  Notwithstanding any provision of this
Agreement to the contrary, any reduction of the Revolving Credit Commitments
pursuant to this Section that has the effect of reducing the aggregate
Revolving Credit Commitments to an amount less than the amount of the Swingline
Commitment at such time shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the aggregate Revolving Credit
Commitments (as so reduced), without any further action on the part of the
Borrower or the Swingline Lender.

         2.6     Mandatory Repayments and Prepayments.

         (a)     Except to the extent due or paid sooner pursuant to the
provisions of this Agreement, (i) the aggregate outstanding principal of the
Revolving Loans shall be due and payable in full on the Revolving Credit
Maturity Date, and (ii) the aggregate outstanding principal of the Swingline
Loans shall be due and payable in full on the Swingline Maturity Date.

         (b)     In the event that at any time the sum of (x) the aggregate
principal amount of Revolving Loans outstanding at such time, (y) the aggregate
Letter of Credit Exposure of all Lenders at such time (excluding the
Reimbursement Obligations that are prepaid with the proceeds of Revolving Loans
made on the date of determination) and (z) the aggregate principal amount of
Swingline Loans outstanding at such time (excluding the aggregate amount of any
Swingline Loans to be repaid with proceeds of Revolving Loans made on the date
of determination) shall exceed the Total Revolving Credit Commitments at such
time (after giving effect to any concurrent termination or reduction thereof),
the Borrower will immediately prepay the outstanding principal amount of the
Swingline Loans and, to the extent of any excess remaining after prepayment in
full of outstanding Swingline Loans, the Borrower will immediately prepay the
outstanding principal amount of the Revolving Loans in the amount of such
excess; provided that, to the extent such excess amount is greater than the
aggregate

                                       29
<PAGE>   36

principal amount of Revolving Loans outstanding immediately prior to the
application of such prepayment, the amount so prepaid in excess of such
aggregate principal amount of Revolving Loans shall be retained by the Agent
and held in the Cash Collateral Account as cover for the Letter of Credit
Exposure of the Lenders, as more particularly described in SECTION 3.8, and
thereupon such cash shall be deemed to reduce the aggregate Letter of Credit
Exposure by an equivalent amount.

         (c)     Promptly upon (and in any event not later than two (2)
Business Days after) its receipt thereof, in the case of an Equity Issuance
(other than a Qualified Public Offering) the  Borrower will prepay the
outstanding principal amount of the Revolving Loans in an amount equal to the
lesser of (v) 80% of the Net Cash Proceeds from any Equity Issuance (other than
a Qualified Public Offering) and (w) the total outstanding Revolving Loans and
Swingline Loans.  Promptly upon (and in any event not later than two (2)
Business Days after) its receipt thereof, in the case of a Qualified Public
Offering, the Borrower will prepay the outstanding principal amount of the
Revolving Loans in an amount equal to the lesser of (x) 100% of the Net Cash
Proceeds from a Qualified Public Offering or (y) the total outstanding
Revolving Loans and Swingline Loans, and will deliver to the Agent,
concurrently with such prepayment, a certificate signed by a Financial Officer
in form and substance satisfactory to the Agent and setting forth the
calculation of such Net Cash Proceeds.

         (d)     Not later than 180 days after its receipt of any proceeds of
insurance, condemnation award or other compensation in respect of any Casualty
Event (a "Casualty Event Payment Date"), the Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to 100% of the Net
Cash Proceeds from such Casualty Event less any amounts theretofore applied to
the repair or replacement of property subject to such Casualty Event) and will
deliver to the Agent, concurrently with such prepayment, a certificate signed
by a Financial Officer in form and substance satisfactory to the Agent and
setting forth the calculation of such Net Cash Proceeds; provided, however,
that, notwithstanding the foregoing, (i) upon the Borrower's determination not
to repair or replace any property subject to such casualty, the Borrower may,
prior to such Casualty Event Payment Date, use such proceeds (or notify the
Agent to apply any proceeds that are held by the Agent) to make a voluntary
prepayment pursuant to SECTION 2.7, (ii) nothing in this subsection shall be
deemed to limit or otherwise affect any right of the Agent herein or in any of
the other Credit Documents to receive and hold such proceeds as loss payee and
to disburse the same to the Borrower upon the terms hereof or thereof, or any
obligation of the Borrower and each of its Subsidiaries herein or in any of the
other Credit Documents to remit any such proceeds to the Agent upon its receipt
thereof, and (iii) any and all such proceeds received or held by the Agent or
the Borrower or any of its Subsidiaries during the continuance of an Event of
Default (regardless of any proposed or actual use thereof for repair or
replacement) shall be applied to prepay the outstanding principal amount of the
Loans.

         (e)     Promptly upon (and in any event not later than five (5)
Business Days after) its receipt thereof, the Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to 85% of the Net
Cash Proceeds from any Asset Disposition and will deliver to the Agent,
concurrently with such prepayment, a certificate signed by a Financial Officer
in form and substance satisfactory to the Agent and setting forth the
calculation of such Net Cash

                                       30
<PAGE>   37

Proceeds.  Notwithstanding the foregoing, nothing in this subsection shall be
deemed to permit any Asset Disposition not expressly permitted under SECTION
8.5.

         (f)     Promptly upon (and in any event not later than two (2)
Business Days after) its receipt thereof, the Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to 100% of any
proceeds of the key-man life insurance required under SECTION 6.6(b).

         (g)     Each prepayment of the Loans made pursuant to subsections (c)
through (f) above (each, a "Prepayment Event") shall be applied (i) first, to
reduce the outstanding principal amount of the Swingline Loans, with a
corresponding reduction to the Total Revolving Credit Commitments as provided
in SECTION 2.5(b), (ii) second, to the extent of any excess remaining after
application as provided in clause (i) above, to reduce the outstanding
principal amount of the Revolving Loans, with a corresponding reduction to the
Revolving Credit Commitments to the extent provided in SECTION 2.5(b), (iii)
third, to the extent of any excess remaining after application as provided in
clauses (i) and (ii) above, to pay any outstanding Reimbursement Obligations,
and (iv) fourth, to the extent of any excess remaining after application as
provided in the preceding clauses (i) through (iii) above, to cash
collateralize Letter of Credit Exposure (in an aggregate amount equal to the
Stated Amount of any outstanding Letters of Credit) pursuant to SECTION 3.8
and, thereafter, any remaining amounts shall be returned to the Borrower.  Each
such prepayment shall be applied ratably among the Lenders holding the Loans
being prepaid, in proportion to the principal amount held by each, and shall be
applied first to prepay all ABR Loans before any LIBOR Loans are prepaid.  Any
amounts remaining after each application to ABR Loans shall, at the option of
the Borrower, be applied to prepay LIBOR Loans immediately and/or shall be
deposited in a separate Prepayment Account (as defined below) for the LIBOR
Loans.  The Agent shall apply any cash deposited in the Prepayment Account to
prepay LIBOR Loans on the last day of their respective Interest Periods (or, at
the direction of the Borrower, on any earlier date), until all outstanding
LIBOR Loans have been prepaid or until all the allocable cash on deposit in the
Prepayment Account has been exhausted.  For purposes of this Agreement, the
term "Prepayment Account" shall mean an account established by the Borrower
with the Agent and over which the Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal for application in
accordance with this SECTION 2.6(g).  The Agent will, at the request of the
Borrower, invest amounts on deposit in the Prepayment Account in Cash
Equivalents that mature prior to the last day of the applicable Interest
Periods of the LIBOR Loans to be prepaid; provided, however, that (i) the Agent
shall not be required to make any investment that, in its sole judgment, would
require or cause the Agent to be in, or would result in any, violation of any
law, rule or regulation and (ii) if a Default or an Event of Default shall have
occurred and be continuing, the Agent may in its sole discretion, but shall not
be required to, invest such amounts in Cash Equivalents requested by the
Borrower.  The Borrower shall indemnify the Agent for any losses relating to
the investments so that the amount available to prepay LIBOR Loans on the last
day of the applicable Interest Periods is not less than the amount that would
have been available had no investments been made pursuant thereto.  Other than
any interest earned on such investments, the Prepayment Accounts shall not bear
interest.  Interest or  profits, if any, on such investments shall be deposited
in the applicable Prepayment Account and reinvested and disbursed as specified
above.  If the maturity of the Loans has been accelerated pursuant to ARTICLE
IX, the Agent may, in its sole discretion, apply all amounts on

                                       31
<PAGE>   38

deposit in the Prepayment Account to satisfy any of the Obligations (provided
that such amounts shall be applied first to prepay all outstanding ABR Loans).
The Borrower hereby pledges and assigns to the Agent, for its benefit and the
benefit of the Lenders, each Prepayment Account established hereunder to secure
the Obligations.

         (h)     In the event and on each occasion that a Prepayment Event
occurs, the Borrower shall give to the Agent and the Lenders at least five (5)
Business Days' prior written notice of such event (to the extent practicable),
the amount of Loans anticipated to be prepaid and the application of such
prepayment as set forth in subsection (g) above.

         (i)     Each payment or prepayment of a LIBOR Loan made pursuant to
the provisions of this SECTION 2.6 on a day other than the last day of the
Interest Period applicable thereto shall be made together with all amounts
required under SECTION 2.18 to be paid as a consequence thereof.

         2.7     Voluntary Prepayments.

         (a)     At any time and from time to time, the Borrower shall have the
right to prepay the Loans, in whole or in part, without premium or penalty
(except as provided in clause (iii) below), upon written notice to the Agent in
the form of EXHIBIT C (each, a "Notice of Prepayment"), given not later than
11:00 a.m., Charlotte time, three (3) Business Days prior to each intended
prepayment, provided that (i) each partial prepayment shall be in an aggregate
principal amount of not less than $500,000 ($250,000 in the case of Swingline
Loans) or, if greater, an integral multiple of $100,000 in excess thereof, (ii)
no partial prepayment of LIBOR Loans made pursuant to any single Borrowing
shall reduce the aggregate outstanding principal amount of the remaining LIBOR
Loans under such Borrowing to less than $1,000,000 or to any greater amount not
an integral multiple of $500,000 in excess thereof, and (iii) unless made
together with all amounts required under SECTION 2.18 to be paid as a
consequence of such prepayment, a prepayment of a LIBOR Loan may be made only
on the last day of the Interest Period applicable thereto.  Each such Notice of
Prepayment shall specify the proposed date of such prepayment and the aggregate
principal amount and Type of Loans to be prepaid (and, in the case of LIBOR
Loans, the Interest Period of the Borrowing pursuant to which made) and shall
be irrevocable and shall bind the Borrower to make such prepayment on the terms
specified therein.  Revolving Loans and Swingline Loans prepaid pursuant to
this subsection (a) may be reborrowed, subject to the terms and conditions of
this Agreement.

         (b)     Each payment of Loans made pursuant to subsection (a) above
shall be applied to such Loans outstanding as directed by the Borrower in the
related Notice of Prepayment.  Each prepayment of the Loans pursuant to this
SECTION 2.7 shall be applied ratably among the Lenders holding the Loans being
prepaid  in accordance with this subsection (b), in proportion to the principal
amount held by each.

         2.8     Interest.

         (a)     The Borrower will pay interest in respect of the unpaid
principal amount of each Loan, from the date of Borrowing thereof until such
principal amount shall be paid in full, (i) at

                                       32
<PAGE>   39

the Adjusted Alternate Base Rate, as in effect from time to time during such
periods as such Loan is an ABR Loan, and (ii) at the Adjusted LIBOR Rate, as in
effect from time to time during such periods as such Loan is a LIBOR Loan.

         (b)     Upon the occurrence and during the continuance of an Event of
Default as the result of failure by the Borrower to pay any principal of or
interest on any Loan, any fees or other amount hereunder when due (whether at
maturity, pursuant to acceleration or otherwise), and (at the election of the
Required Lenders) upon the occurrence and during the continuance of any other
Event of Default, all outstanding principal amounts of the Loans and, to the
greatest extent permitted by law, all interest accrued on the Loans and all
other accrued and outstanding fees and other amounts hereunder, shall bear
interest at a rate per annum equal to the interest rate applicable from time to
time thereafter to such Loans (whether the Adjusted Alternate Base Rate or the
Adjusted LIBOR Rate) plus 2% (or, in the case of fees and other amounts, at the
Adjusted Alternate Base Rate applicable to Revolving Loans plus 2%), and, in
each case, such default interest shall be payable on demand.  To the greatest
extent permitted by law, interest shall continue to accrue after the filing by
or against the Borrower of any petition seeking any relief in bankruptcy or
under any law pertaining to insolvency or debtor relief.

         (c)     Accrued (and theretofore unpaid) interest shall be payable as
follows:

                 (i)      in respect of each ABR Loan (including any ABR Loan
         or portion thereof paid or prepaid pursuant to the provisions of
         SECTION 2.6, except as provided hereinbelow), in arrears on the last
         Business Day of each calendar quarter, beginning with the first such
         day to occur after the Amendment Effective Date; provided, that in the
         event the Loans are repaid or prepaid in full and the Revolving Credit
         Commitments and the Swingline Commitment have been terminated, then
         accrued interest in respect of all ABR Loans shall be payable together
         with such repayment or prepayment on the date thereof,

                 (ii)     in respect of each LIBOR Loan (including any LIBOR
         Loan or portion thereof paid or prepaid pursuant to the provisions of
         SECTION 2.6, except as provided hereinbelow), in arrears on the last
         Business Day of the Interest Period applicable thereto (subject to the
         provisions of clause (iv) in SECTION 2.10); provided, that in the
         event all LIBOR Loans made pursuant to a single Borrowing are repaid
         or prepaid in full, then accrued interest in respect of such LIBOR
         Loans shall be payable  together with such repayment or prepayment on
         the date thereof; and

                 (iii)    in respect of any Loan, at maturity (whether pursuant
         to acceleration or otherwise) and, after maturity, on demand.

         (d)     Nothing contained in this Agreement or in any other Credit
Document shall be deemed to establish or require the payment of interest to any
Lender at a rate in excess of the maximum rate permitted by applicable law.  If
the amount of interest payable for the account of any Lender on any interest
payment date would exceed the maximum amount permitted by applicable law to be
charged by such Lender, the amount of interest payable for its account on such
interest payment date shall be automatically reduced to such maximum
permissible amount.

                                       33
<PAGE>   40

In the event of any such reduction affecting any Lender, if from time to time
thereafter the amount of interest payable for the account of such Lender on any
interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest
payable for its account on such subsequent interest payment date shall be
automatically increased to such maximum permissible amount, provided that at no
time shall the aggregate amount by which interest paid for the account of any
Lender has been increased pursuant to this sentence exceed the aggregate amount
by which interest paid for its account has theretofore been reduced pursuant to
the previous sentence.

         (e)     The Agent shall promptly notify the Borrower and the Lenders
upon determining the interest rate for each Borrowing of LIBOR Loans after its
receipt of the relevant Notice of Revolving Borrowing or Notice of
Conversion/Continuation, and upon each change in the Alternate Base Rate;
provided, however, that the failure of the Agent to provide the Borrower or the
Lenders with any such notice shall neither affect any obligations of the
Borrower or the Lenders hereunder nor result in any liability on the part of
the Agent to the Borrower or any Lender.  Each such determination (including
each determination of the Reserve Requirement) shall, absent manifest error, be
conclusive and binding on all parties hereto.

         2.9     Fees.  The Borrower agrees to pay:

         (a)     To First Union for its own account, on the date of execution
of this Agreement, the fee described in the second paragraph of the Fee Letter,
in the amount set forth therein as due and payable on such date;

         (b)     To the Agent, for the account of each Lender, a commitment fee
(the "Revolving Credit Commitment Fee") for the period from the date of this
Agreement to the Revolving Credit Termination Date, at a per annum rate equal
to 0.375% on such Lender's average daily aggregate Unutilized Revolving Credit
Commitment, payable in arrears (i) on the last Business Day of each calendar
quarter, beginning with the first such day to occur after the Amendment
Effective Date, and (ii) on the Revolving Credit Termination Date;

         (c)     To the Agent, for the account of each Lender with a Revolving
Credit Commitment, a letter of credit fee for each calendar quarter in respect
of all Letters of Credit outstanding during such quarter, at a per annum rate
equal to the Applicable Margin Percentage from time to time during such quarter
for Revolving Loans that are maintained as LIBOR Loans, on such Lender's
ratable share (based on the proportion that its Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments) of the daily average
aggregate Stated Amount of such Letters of Credit, payable in arrears (i) on
the last Business Day of each calendar quarter, beginning with the first such
day to occur after the Amendment Effective Date, and (ii) on the later of the
Revolving Credit Termination Date and the date of termination of the last
outstanding Letter of Credit;

         (d)     To the Issuing Lender, for its own account, a facing fee for
each calendar quarter in respect of all Letters of Credit outstanding during
such quarter, at a per annum rate of 0.125% on the daily average aggregate
Stated Amount of such Letters of Credit, payable in arrears (i) on the last
Business Day of each calendar quarter, beginning with the first such day to
occur after

                                       34
<PAGE>   41

the Amendment Effective Date, and (ii) on the later of the Revolving Credit
Termination Date and the date of termination of the last outstanding Letter of
Credit; and

         (e)     To the Agent, for its own account, the annual administrative
fee described in the third paragraph of the Fee Letter, on the terms and
conditions, in the amount and at the times set forth therein.

         2.10    Interest Periods.  Concurrently with the giving of (y) a
Notice of Revolving Borrowing or (z) a Notice of Conversion/Continuation in
respect of any Borrowing comprised of ABR Loans to be converted into, or LIBOR
Loans to be continued as, LIBOR Loans, the Borrower shall have the right to
elect, pursuant to such notice, the interest period (each, an "Interest
Period") to be applicable to such LIBOR Loans, which Interest Period shall, at
the option of the Borrower, be a one, two or three-month period; provided,
however, that:

                 (i)      all LIBOR Loans comprising a single Borrowing shall
         at all times have the same Interest Period;

                 (ii)     the initial Interest Period for any LIBOR Loan shall
         commence on the date of the Borrowing of such LIBOR Loan (including
         the date of any continuation of, or conversion into, such LIBOR Loan),
         and each successive Interest Period applicable to such LIBOR Loan
         shall commence on the day on which the next preceding Interest Period
         applicable thereto expires;

                 (iii)    LIBOR Loans may not be outstanding under more than
         six (6) separate Interest Periods at any one time (for which purpose
         Interest Periods shall be deemed to be separate even if they are
         coterminous);

                 (iv)     if any Interest Period otherwise would expire on  a
         day that is not a Business Day, such Interest Period shall expire on
         the next succeeding Business Day unless such next succeeding Business
         Day falls in another calendar month, in which case such Interest
         Period shall expire on the next preceding Business Day;

                 (v)      the Borrower may not select any Interest Period that
         begins prior to the third (3rd) Business Day after the Amendment
         Effective Date or that expires after the Revolving Credit Maturity
         Date, with respect to Revolving Loans that are to be maintained as
         LIBOR Loans;

                 (vi)     if any Interest Period begins on a day for which
         there is no numerically corresponding day in the calendar month during
         which such Interest Period would otherwise expire, such Interest
         Period shall expire on the last Business Day of such calendar month;
         and

                 (vii)    if, upon the expiration of any Interest Period
         applicable to a Borrowing of LIBOR Loans, the Borrower shall have
         failed to elect a new Interest Period to be applicable to such LIBOR
         Loans, then the Borrower shall be deemed to have elected to

                                       35
<PAGE>   42

         convert such LIBOR Loans into ABR Loans as of the expiration of the
         then current Interest Period applicable thereto.

         2.11    Conversions and Continuations.

         (a)     The Borrower shall have the right, on any Business Day
occurring on or after the Amendment Effective Date, to elect (i) to convert all
or a portion of the outstanding principal amount of any ABR Loans into LIBOR
Loans, or to convert any LIBOR Loans the Interest Periods for which end on the
same day into ABR Loans, or (ii) to continue all or a portion of the
outstanding principal amount of any LIBOR Loans the Interest Periods for which
end on the same day for an additional Interest Period, provided that (x) any
such conversion of LIBOR Loans into ABR Loans shall involve an aggregate
principal amount of not less than $500,000 or, if greater, an integral multiple
of $100,000 thereof; any such conversion of ABR Loans into, or continuation of,
LIBOR Loans shall involve an aggregate principal amount of not less than
$1,000,000 or, if greater, an integral multiple of $500,000 thereof, and no
partial conversion of LIBOR Loans made pursuant to a single Borrowing shall
reduce the outstanding principal amount of such LIBOR Loans to less than
$1,000,000 or to any greater amount not an integral multiple of $500,000 in
excess thereof, (x) except as otherwise provided in SECTION 2.16(D), LIBOR
Loans may be converted into ABR Loans only on the last day of the Interest
Period applicable thereto (and, in any event, if a LIBOR Loan is converted into
an ABR Loan on any day other than the last day of the Interest Period
applicable thereto, the Borrower will pay, upon such conversion, all amounts
required under SECTION 2.18 to be paid as a consequence thereof), (y) no such
conversion or continuation shall be permitted with regard to any ABR Loans that
are Swingline Loans, and (z) no conversion of ABR Loans into LIBOR Loans or
continuation of LIBOR Loans upon the expiration of the Interest Period therefor
shall be permitted during the  continuance of a Default or Event of Default.

         (b)     The Borrower shall make each such election by giving the Agent
written notice not later than 11:00 a.m., Charlotte time, three (3) Business
Days prior to the intended effective date of any conversion of ABR Loans into,
or continuation of, LIBOR Loans and one (1) Business Day prior to the intended
effective date of any conversion of LIBOR Loans into ABR Loans.  Each such
notice (each, a "Notice of Conversion/Continuation") shall be irrevocable,
shall be given in the form of EXHIBIT D and shall specify (x) the date of such
conversion or continuation (which shall be a Business Day), (y) in the case of
a conversion into, or a continuation of, LIBOR Loans, the Interest Period to be
applicable thereto, and (z) the aggregate amount and Type of the Revolving
Loans being converted or continued.  Upon the receipt of a Notice of
Conversion/Continuation, the Agent will promptly notify each Lender of the
proposed conversion or continuation.  In the event that the Borrower shall fail
to deliver a Notice of Conversion/Continuation as provided herein with respect
to any outstanding LIBOR Loans, such LIBOR Loans shall automatically be
converted to ABR Loans upon the expiration of the then current Interest Period
applicable thereto (unless repaid pursuant to the terms hereof).

         2.12    Method of Payments; Computations.

         (a)     All payments by the Borrower hereunder shall be made without
setoff, counterclaim or other defense, in Dollars and in immediately available
funds to the Agent, for

                                       36
<PAGE>   43

the account of the Lenders entitled to such payment (except as otherwise
expressly provided herein as to payments required to be made directly to the
Issuing Lender and the Lenders), at the Agent's office referred to in SECTION
11.5, prior to 12:00 noon, Charlotte time, on the date payment is due.  Any
payment made as required hereinabove, but after 12:00 noon, Charlotte time,
shall be deemed to have been made on the next succeeding Business Day.  If any
payment falls due on a day that is not a Business Day, then such due date shall
be extended to the next succeeding Business Day (except that in the case of
LIBOR Loans to which the proviso of clause (iv) in SECTION 2.10 is applicable,
such due date shall be the next preceding Business Day), and such extension of
time shall then be included in the computation of payment of interest, fees or
other applicable amounts.

         (b)     The Agent will distribute to the Lenders like amounts relating
to payments made to the Agent for the account of the Lenders as follows:  (i)
if the payment is received by 12:00 noon, Charlotte time, in immediately
available funds, the Agent will make available to each relevant Lender on the
same date, by wire transfer of immediately available funds, such Lender's
ratable share of such payment (based on the percentage that the amount of the
relevant payment owing to such Lender bears to the total amount of such payment
owing to all of the relevant Lenders), and (ii) if such payment is received
after 12:00 noon, Charlotte time, or in other than immediately available funds,
the Agent will make available to each such Lender its ratable share of such
payment by wire transfer of immediately available funds on the next succeeding
Business Day (or in the case of uncollected funds, as  soon as practicable
after collected).  If the Agent shall not have made a required distribution to
the appropriate Lenders as required hereinabove after receiving a payment for
the account of such Lenders, the Agent will pay to each such Lender, on demand,
its ratable share of such payment with interest thereon at the Federal Funds
Rate for each day from the date such amount was required to be disbursed by the
Agent until the date repaid to such Lender.  The Agent will distribute to the
Issuing Lender like amounts relating to payments made to the Agent for the
account of the Issuing Lender in the same manner, and subject to the same terms
and conditions, as set forth hereinabove with respect to distributions of
amounts to the Lenders.

         (c)     Unless the Agent shall have received written notice from the
Borrower prior to the date on which any payment is due to any Lender hereunder
that such payment will not be made in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date, and the Agent
may, in reliance on such assumption, but shall not be obligated to, cause to be
distributed to such Lender on such due date an amount equal to the amount then
due to such Lender.  If and to the extent the Borrower shall not have so made
such payment in full to the Agent, and without limiting the obligation of the
Borrower to make such payment in accordance with the terms hereof, such Lender
shall repay to the Agent forthwith on demand such amount so distributed to such
Lender, together with interest thereon for each day from the date such amount
is so distributed to such Lender until the date repaid to the Agent, at the
Federal Funds Rate.

         (d)     Each Lender for whose account any payment is to be made
hereunder may, but shall not be obligated to, debit the amount of any such
payment not made as and when required hereunder to any ordinary deposit account
of the Borrower with such Lender (with prompt notice

                                       37
<PAGE>   44

to the Agent and the Borrower); provided, however, that the failure to give
such notice shall not affect the validity of such debit by such Lender.

         (e)     All computations of interest and fees hereunder (including
computations of the Reserve Requirement) shall be made on the basis of a year
consisting of (i) in the case of interest on ABR Loans, 365 days, or (ii) in
all other instances, 360 days; and in each instance under (i) and (ii) above,
with regard to the actual number of days (including the first day, but
excluding the last day) elapsed.

         2.13    Recovery of Payments.

         (a)     The Borrower agrees that to the extent the Borrower makes a
payment or payments to or for the account of the Agent, the Issuing Lender or
any Lender, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the Obligation intended to be
satisfied shall be revived and continued in full force and effect as if such
payment  had not been received.

         (b)     If any amounts distributed by the Agent to any Lender are
subsequently returned or repaid by the Agent to the Borrower or its
representative or successor in interest, whether by court order or by
settlement approved by the Lender in question, such Lender will, promptly upon
receipt of notice thereof from the Agent, pay the Agent such amount.  If any
such amounts are recovered by the Agent from the Borrower or its representative
or successor in interest, the Agent will redistribute such amounts to the
Lenders on the same basis as such amounts were originally distributed.

         2.14    Use of Proceeds.  The proceeds of the Loans shall be used
solely for working capital and general corporate purposes and to finance
Permitted Acquisitions in accordance with the terms and provisions of this
Agreement, including, without limitation, the provisions set forth in SECTION
8.6(vi).

         2.15    Pro Rata Treatment; Sharing of Payments.

         (a)     All fundings, continuations and conversions of Revolving Loans
shall be made by the Lenders pro rata on the basis of their respective
Revolving Credit Commitments or on the basis of their respective outstanding
Revolving Loans (in the case of continuations and conversions of Revolving
Loans pursuant to SECTION 2.11, and additionally in all cases in the event the
Revolving Credit Commitments have expired or have been terminated), as the case
may be from time to time.  All payments on account of principal of or interest
on any Revolving Loans, fees or any other Obligations owing to or for the
account of any one or more Lenders with Revolving Credit Commitments shall be
apportioned ratably among such Lenders in proportion to the amounts of such
principal, interest, fees or other Obligations owed to them respectively.

                                       38
<PAGE>   45

         (b)     Each Lender agrees that if it shall receive any amount
hereunder (whether by voluntary payment, realization upon security, exercise of
the right of setoff or banker's lien, counterclaim or cross action, or
otherwise, other than pursuant to SECTION 11.7) applicable to the payment of
any of the Obligations that exceeds its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of such Obligations due and payable
to all Lenders at such time) of payments on account of such Obligations then or
therewith obtained by all the Lenders to which such payments are required to
have been made, such Lender shall forthwith purchase from the other Lenders
such participations in such Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery, together with an amount equal to such other Lender's ratable share
(according to the proportion of (i) the amount of such other Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered.  The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to the provisions of
this subsection may, to the fullest extent permitted by law, exercise any and
all rights of payment (including, without limitation, setoff, banker's lien or
counterclaim) with respect to such participation as fully as if such
participant were a direct creditor of the Borrower in the amount of such
participation.  If under any applicable bankruptcy, insolvency or similar law,
any Lender receives a secured claim in lieu of a setoff to which this
subsection applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this subsection to share in the benefits of any
recovery on such secured claim.

         2.16    Increased Costs; Change in Circumstances; Illegality; etc.

         (a)     If, at any time after the Amendment Effective Date and from
time to time, the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender with any guideline or directive from any
such Governmental Authority (whether or not having the force of law), shall (i)
subject such Lender to any tax or other charge (other than "Taxes," as such
term is defined in SECTION 2.17, and taxes imposed on the overall net income or
profits of, or any branch or franchise tax applicable to such Lender or the
Lending Office of such Lender), or change the basis of taxation of payments to
such Lender, in respect of any of its LIBOR Loans or its obligation to make,
fund or maintain any LIBOR Loans (other than changes in "Taxes," as such term
is defined in SECTION 2.17, and taxes on the overall net income or profits of,
or any branch or franchise tax applicable to such Lender or its applicable
Lending Office), (ii) impose, modify or deem applicable any reserve, special
deposit or similar requirement (other than as a result of any damage in the
Reserve Requirement) against assets of, deposits with or for the account of, or
credit extended by, such Lender or its applicable Lending Office, or (iii)
impose on such Lender or its applicable Lending Office any other condition, and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any LIBOR Loans or issuing or participating in

                                       39
<PAGE>   46

Letters of Credit or to reduce the yield or rate of return received or
receivable by such Lender in respect thereof, such Lender (or the Agent on
behalf of such Lender) shall, promptly after receiving notice thereof, notify
the Borrower (with a copy to the Agent), and the Borrower shall, within fifteen
(15) days after delivery of such notice by such Lender, pay to such Lender such
additional amounts as shall compensate such Lender for such increase in costs
or reduction in return.

         (b)     If, at any time after the Amendment Effective Date and from
time to time, any Lender shall have reasonably determined  that the
introduction of or any change in any applicable law, rule or regulation
regarding capital adequacy or in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender with any guideline or directive from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect, as a consequence of such Lender's Revolving Credit
Commitment, Swingline Commitment, Loans or issuance of or participations in
Letters of Credit hereunder, of reducing the rate of return on the capital of
such Lender or any Person controlling such Lender to a level below that which
such Lender or controlling Person could have achieved but for such
introduction, change or compliance (taking into account such Lender's or
controlling Person's policies with respect to capital adequacy), such Lender
shall (or the Agent on behalf of such Lender), promptly after receiving notice
thereof, notify the Borrower (with a copy to the Agent), and the Borrower
shall, within fifteen (15) days after delivery of such notice by such Lender,
pay to such Lender such additional amounts as will compensate such Lender for
such reduction in return; provided, however, that the Borrower shall not be
required to compensate any Lender upon this subsection (b) to the extent that
any such adoption, implementation or interpretation of or modification in any
such law, rule, or regulation is applied by the relevant Governmental Authority
solely to such Lender or to the extent such Lender does not seek compensation
in respect thereof generally from substantially all of its similarly situated
borrowers that are bound by indemnities requiring that such compensation be
paid.

         (c)     If, on or prior to the first day of any Interest Period, (y)
the Agent shall have determined that adequate and reasonable means do not exist
for ascertaining the applicable LIBOR Rate for such Interest Period or (z) the
Agent shall have received written notice from the Required Lenders of their
determination that the rate of interest referred to in the definition of "LIBOR
Rate" upon the basis of which the Adjusted LIBOR Rate for LIBOR Loans for such
Interest Period is to be determined will not adequately and fairly reflect the
cost to such Lenders of making or maintaining LIBOR Loans during such Interest
Period, the Agent will forthwith so notify the Borrower and the Lenders.  Upon
such notice, (i) all then outstanding LIBOR Loans shall automatically, on the
expiration date of the respective Interest Periods applicable thereto (unless
then repaid in full), be converted into ABR Loans, (ii) the obligation of the
Lenders to make, to convert ABR Loans into, or to continue, LIBOR Loans shall
be suspended (including pursuant to the Borrowing to which such Interest Period
applies), and (iii) any Notice of Revolving Borrowing or Notice of
Conversion/Continuation given at any time thereafter with respect to LIBOR
Loans shall be deemed to be a request for ABR Loans, in each case until the
Agent or the Required Lenders, as the case may be, shall have determined that
the circumstances giving rise to such suspension no longer

                                       40
<PAGE>   47

exist.  Promptly after the Agent or the Required Lenders (as the case may be)
determine that the circumstances giving rise to such suspension no longer
exist, the Required Lenders (if making such determination) shall notify the
Agent, and the Agent shall notify the Borrower, and the  obligation of the
Lenders to make, convert and continue LIBOR Loans shall be reinstated.

         (d)     Notwithstanding any other provision in this Agreement, if, at
any time after the Amendment Effective Date and from time to time, any Lender
shall have determined in good faith that the introduction of or any change in
any applicable law, rule or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance with any guideline or
directive from any such Governmental Authority (whether or not having the force
of law), has or would have the effect of making it unlawful for such Lender to
make or to continue to make or maintain LIBOR Loans, such Lender will forthwith
so notify the Agent and the Borrower.  Upon such notice, (i) each of such
Lender's then outstanding LIBOR Loans shall automatically, on the expiration
date of the respective Interest Period applicable thereto (or, to the extent
any such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until such
expiration date, upon such notice), be converted into an ABR Loan, (ii) the
obligation of such Lender to make, to convert ABR Loans into, or to continue,
LIBOR Loans shall be suspended (including pursuant to any Borrowing of
Revolving Loans for which the Agent has received a Notice of Revolving
Borrowing but for which the Borrowing Date has not arrived), and (iii) any
Notice of Revolving Borrowing or Notice of Conversion/Continuation given at any
time thereafter with respect to LIBOR Loans shall, as to such Lender, be deemed
to be a request for an ABR Loan, in each case until such Lender shall have
determined in good faith that the circumstances giving rise to such suspension
no longer exist and shall have so notified the Agent, and the Agent shall have
so notified the Borrower.

         (e)     Determinations by the Agent or any Lender for purposes of this
SECTION 2.16 of any increased costs, reduction in return, market contingencies,
illegality or any other matter shall, absent manifest error, be conclusive,
provided that such determinations are made in good faith.  Each Lender agrees
that, upon the occurrence of any event giving rise to the operation of this
Section with respect to such Lender, it will, if requested by the Borrower and
to the extent permitted by law, endeavor in good faith to designate another
Lending Office for its LIBOR Loans, but only if such designation would make it
lawful for such Lender to continue to make or maintain LIBOR Loans hereunder;
provided that such designation is made on such terms that such Lender, in its
good faith determination, suffers no increased cost or economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of this Section.  In addition, if, after the
Amendment Effective Date, any Lender designates any new Lending Office that is
not approved by the Borrower, then the Borrower shall not be obligated to pay
any additional amounts described in this Section to the extent such amounts
arise solely as a result of such change in Lending Office; provided that (i)
the Borrower shall be deemed to have approved any change in Lending Office
three (3) Business Days after receiving notice thereof, unless it has otherwise
reasonably objected in writing to the Agent and such Lender, and (ii) this
sentence shall not apply to any change  in Lending Office made by any Lender as
a result of the introduction or any change in applicable law, rule or
regulation or the interpretation or administration thereof, or compliance by
any Lender with any guideline or directive from any Governmental Authority
(whether or not having the force of law).  No failure by the Agent or any
Lender at any time to demand payment of any amounts payable under this

                                       41
<PAGE>   48

SECTION 2.16 shall constitute a waiver of its right to demand payment of any
additional amounts arising at any subsequent time.  Nothing in this SECTION
2.16 shall require or be construed to require the Borrower to pay any interest,
fees, costs or other amounts in excess of that permitted by applicable law.

         2.17    Taxes.

         (a)     Any and all payments by the Borrower hereunder or under any
Note shall be made, in accordance with the terms hereof and thereof, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, other than net income and franchise taxes imposed on the Agent or any
Lender by the United States or by the jurisdiction under the laws of which the
Agent or such Lender, as the case may be, is organized or in which its
principal office or (in the case of a Lender) its applicable Lending Office is
located, or any political subdivision or taxing authority thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes").  If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to the Agent or any Lender, (i) the sum payable
shall (without any obligation on the part of the Borrower to pay such amounts
ratably in accordance with the provisions of SECTION 2.15) be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 2.17), the Agent or
such Lender, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower will make
such deductions, (iii) the Borrower will pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law and (iv) the Borrower will deliver to the Agent or such Lender, as the case
may be, evidence of such payment.

         (b)     The Borrower will indemnify the Agent and each Lender for the
full amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this SECTION 2.17) paid by the Agent or
such Lender, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or legally asserted.  This indemnification shall
be made within 30 days from the date the Agent or such Lender, as the case may
be, makes written demand therefor.

         (c)     Each of the Agent and the Lenders agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Taxes (i) previously paid by it and  as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under clause (i) of subsection (a) above), the Agent or such
Lender, as the case may be, shall reimburse the Borrower to the extent of the
amount of any such recovery or permanent net tax benefit (but only to the
extent of indemnity payments made, or additional amounts paid, by or on behalf
of the Borrower under this SECTION 2.17 with respect to the Taxes giving rise
to such recovery or tax benefit); provided, however, that the Borrower, upon
the request of the Agent or such Lender, agrees to repay to the Agent or such
Lender, as the case may be, the amount paid over to the Borrower (together with
any penalties, interest or other charges), in the event the Agent or such
Lender is required to repay such amount to the relevant

                                       42
<PAGE>   49

taxing authority or other Governmental Authority. The determination by the
Agent or any Lender of the amount of any such recovery or permanent net tax
benefit shall, in the absence of manifest error, be conclusive and binding.

         (d)     On or prior to the Amendment Effective Date (or, in the case
of a Lender that becomes a party to this Agreement as a result of an assignment
after the Amendment Effective Date, on the effective date of such assignment),
each Lender will deliver to each of the Agent and the Borrower a properly
completed Internal Revenue Service Form W-8 or W-9, as applicable (or successor
forms).  If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof or
its Lending Office is located in a jurisdiction other than the United States of
America or any state thereof (a "Non-U.S. Lender"), such Non-U.S. Lender will
deliver to each of the Agent and the Borrower, on or prior to the Amendment
Effective Date (or, in the case of a Non-U.S. Lender that becomes a party to
this Agreement as a result of an assignment after the Amendment Effective Date
or a change in such Lender's Lending Office, on or prior to the effective date
of such assignment or change in Lending Office), (i) in the case of a Non-U.S.
Lender that is a "bank" for purposes of Section 881(c)(3)(A) of the Internal
Revenue Code, a properly completed Internal Revenue Service Form 4224 or 1001,
as applicable (or successor forms), certifying that such Non-U.S. Lender is
entitled to an exemption from withholding on account of United States federal
income taxes in connection with payments under this Agreement or any of the
Notes, and (ii) in the case of a Non-U.S. Lender that is not a "bank" for
purposes of Section 881(c)(3)(A) of the Internal Revenue Code, a certificate in
form and substance reasonably satisfactory to the Agent and the Borrower and to
the effect that such Non-U.S. Lender (x) is not a "bank" for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, is not subject to regulatory
or other legal requirements as a bank in any jurisdiction, and has not been
treated as a bank for purposes of any tax, securities law or other filing or
submission made to any governmental authority, any application made to a rating
agency or qualification for any exemption from any tax, securities law or other
legal requirements, (y) is not a 10-percent shareholder of the Borrower for
purposes of Section 881(c)(3)(B) of the Internal Revenue Code and (z) is not a
controlled foreign corporation related to the  Borrower for purposes of Section
881(c)(3)(C) of the Internal Revenue Code.  Each Lender further agrees to
deliver to each of the Agent and the Borrower an additional copy of each such
relevant form on or before the date that such form expires or becomes obsolete
or after the occurrence of any event (including a change in its applicable
Lending Office) requiring a change in the most recent forms so delivered by it,
in each case certifying that such Lender is entitled to an exemption from
withholding on account of United States federal income taxes in connection with
payments under this Agreement or any of the Notes, unless in any such case any
change in treaty, law, rule or regulation, or in the interpretation or
application thereof, has occurred prior to the date on which any such delivery
would otherwise be required, which event renders all such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Agent and the Borrower that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes.  Each such
Non-U.S. Lender will promptly notify the Agent and the Borrower of any changes
in circumstances that would modify or render invalid any claimed exemption or
reduction.

         (e)     If any Lender is entitled to a reduction in (and not a
complete exemption from) the applicable withholding tax, the Borrower and the
Agent may withhold from any interest, fees

                                       43
<PAGE>   50

or other payments (other than principal payments) to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction.  If any of the forms or other documentation required under
subsection (d) above are not delivered to the Agent as therein required, then
the Borrower and the Agent may withhold from any interest, fees or other
payments (other than principal payments) to such Lender not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax, and the Borrower shall not have any obligation to pay any amount to or for
the account of any Lender pursuant to SECTION 2.17(b).

         2.18    Compensation.  The Borrower will compensate each Lender upon
demand for all losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund or
maintain LIBOR Loans) that such Lender may incur or sustain (i) if for any
reason (other than (x) a default by such Lender or (y) a suspension or
limitation of the right of the Borrower to select LIBOR Loans pursuant to the
terms of this Agreement) a borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Revolving
Borrowing or Notice of Conversion/Continuation, (ii) if any repayment,
prepayment or conversion of any LIBOR Loan occurs on a date other than the last
day of an Interest Period applicable thereto (including as a consequence of
acceleration of the maturity of the Revolving Loans pursuant to SECTION 9.2),
(iii) if any prepayment of any LIBOR Loan is not made on any date specified in
a notice of prepayment given by the Borrower or (iv) as a consequence of any
other failure by the Borrower to make any payments with respect to any LIBOR
Loan when due hereunder.  Calculation of all amounts payable to a Lender under
this SECTION 2.18 shall be made as  though such Lender had actually funded its
relevant LIBOR Loan through the purchase of a Eurodollar deposit bearing
interest at the LIBOR Rate in an amount equal to the amount of such LIBOR Loan,
having a maturity comparable to the relevant Interest Period; provided,
however, that each Lender may fund its LIBOR Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this SECTION 2.18.  Determinations by any Lender for
purposes of this SECTION 2.18 of any such losses, expenses or liabilities
shall, absent manifest error, be conclusive, provided that such determinations
are made in good faith.

                                  ARTICLE III

                               LETTERS OF CREDIT

         3.1     Issuance.  Subject to and upon the terms and conditions herein
set forth, so long as no Default or Event of Default has occurred and is
continuing, the Issuing Lender will, at any time and from time to time on and
after the Amendment Effective Date and prior to the earlier of (i) the seventh
day prior to the Revolving Credit Maturity Date and (ii) the Revolving Credit
Termination Date, and upon request by the Borrower in accordance with the
provisions of SECTION 3.2, issue for the account of the Borrower one or more
irrevocable standby letters of

                                       44
<PAGE>   51

credit denominated in Dollars and in a form customarily used or otherwise
approved by the Issuing Lender (together with all amendments, modifications and
supplements thereto, substitutions therefor and renewals and restatements
thereof, collectively, the "Letters of Credit").  The Stated Amount of each
Letter of Credit shall not be less than $250,000.  Notwithstanding the
foregoing:

         (a)     No Letter of Credit shall be issued the Stated Amount upon
issuance of which (i) when added to the aggregate Letter of Credit Exposure of
the Lenders at such time, would exceed $5,000,000 or, (ii) when added to the
sum of (x) the aggregate Letter of Credit Exposure of all Lenders at such time,
(y) the aggregate principal amount of all Revolving Loans then outstanding, and
(z) the aggregate principal amount of all Swingline Loans then outstanding,
would exceed the Total Revolving Credit Commitments at such time;

         (b)     Unless the Issuing Lender otherwise agrees, there shall not be
more than five (5) Letters of Credit issued and outstanding at any time;

         (c)     No Letter of Credit shall be issued that by its terms expires
later than the seventh day prior to the Revolving Credit Maturity Date or, in
any event, more than one (1) year after its date of issuance; provided,
however, that a Letter of Credit may, if requested by the Borrower, provide by
its terms, and on terms acceptable to the Issuing Lender, for renewal for
successive periods of one year or less (but not beyond the seventh day prior to
the Revolving Credit Maturity Date), unless and until the Issuing Lender shall
have delivered a notice of nonrenewal to the beneficiary of such Letter of
Credit; and

         (d)     The Issuing Lender shall be under no obligation to issue any
Letter of Credit if, at the time of such proposed issuance, (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall purport by
its terms to enjoin or restrain the Issuing Lender from issuing such Letter of
Credit, or any Requirement of Law applicable to the Issuing Lender or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Lender shall
prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which the Issuing Lender is
not otherwise compensated) not in effect on the Amendment Effective Date, or
any unreimbursed loss, cost or expense that was not applicable, in effect or
known to the Issuing Lender as of the Amendment Effective Date and that the
Issuing Lender in good faith deems material to it, or (ii) the Issuing Lender
shall have actual knowledge, or shall have received notice from any Lender,
prior to the issuance of such Letter of Credit that one or more of the
conditions specified in SECTIONS 4.1 (if applicable) or 4.2 are not then
satisfied (or have not been waived in writing as required herein) or that the
issuance of such Letter of Credit would violate the provisions of subsection
(a) above.

         3.2     Notices.  Whenever the Borrower desires the issuance of a
Letter of Credit, the Borrower will give the Issuing Lender written notice
(with a copy to the Agent) not later than 11:00 a.m., Charlotte time, three (3)
Business Days (or such shorter period as is acceptable to the Issuing Lender in
any given case) prior to the requested date of issuance thereof.  Each such
notice (each, a "Letter of Credit Notice") shall be irrevocable, shall be given
in the form of EXHIBIT E and shall specify (i) the requested date of issuance,
which shall be a Business Day, (ii) the requested Stated Amount and expiry date
of the Letter of Credit, and (iii) the name and address of the requested
beneficiary or beneficiaries of the Letter of Credit. The Borrower will

                                       45
<PAGE>   52

also complete any application procedures and documents required by the Issuing
Lender in connection with the issuance of any Letter of Credit.  Upon its
issuance of any Letter of Credit, the Issuing Lender will promptly notify the
Agent of such issuance, and the Agent will give prompt notice thereof to each
Lender.

         3.3     Participations.  Immediately upon the issuance of any Letter
of Credit, the Issuing Lender shall be deemed to have sold and transferred to
each Lender with a Revolving Credit Commitment, and each such Lender shall be
deemed irrevocably and unconditionally to have purchased and received from the
Issuing Lender, without recourse or warranty, an undivided interest and
participation, pro rata (based on the percentage of the aggregate Revolving
Credit Commitments represented by such Lender's Revolving Credit Commitment),
in such Letter of Credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto and any Collateral or
other security therefor or guaranty pertaining thereto; provided, however, that
the fee relating to Letters of Credit described  in SECTION 2.9(d) shall be
payable directly to the Issuing Lender as provided therein, and such Lenders
shall have no right to receive any portion thereof.  Upon any change in the
Revolving Credit Commitments of any of the Lenders pursuant to SECTION 11.7(a),
with respect to all outstanding Letters of Credit and Reimbursement Obligations
there shall be an automatic adjustment to the participations pursuant to this
Section to reflect the new pro rata shares of the assigning Lender and the
Assignee.

         3.4     Reimbursement.  The Borrower hereby agrees to reimburse the
Issuing Lender by making payment to the Agent, for the account of the Issuing
Lender, in immediately available funds, for any payment made by the Issuing
Lender under any Letter of Credit (each such amount so paid until reimbursed,
together with interest thereon payable as provided hereinbelow, a
"Reimbursement Obligation") immediately after, and in any event within one (1)
Business Day after its receipt of notice of, such payment, together with
interest on the amount so paid by the Issuing Lender, to the extent not
reimbursed prior to 1:00 p.m., Charlotte time, on the date of such payment or
disbursement, for the period from the date of the respective payment to the
date the Reimbursement Obligation created thereby is satisfied, at the Adjusted
Alternate Base Rate applicable to Revolving Loans as in effect from time to
time during such period, such interest also to be payable on demand.  The
Issuing Lender will provide the Agent and the Borrower with prompt notice of
any payment or disbursement made under any Letter of Credit, although the
failure to give, or any delay in giving, any such notice shall not release,
diminish or otherwise affect the Borrower's obligations under this Section or
any other provision of this Agreement.  The Agent will promptly pay to the
Issuing Lender any such amounts received by it under this Section.

         3.5     Payment by Revolving Loans.  In the event that the Issuing
Lender makes any payment under any Letter of Credit and the Borrower shall not
have timely satisfied in full its Reimbursement Obligation to the Issuing
Lender pursuant to SECTION 3.4, and to the extent that any amounts then held in
the Cash Collateral Account established pursuant to SECTION 3.8 shall be
insufficient to satisfy such Reimbursement Obligation in full, the Issuing
Lender will promptly notify the Agent, and the Agent will promptly notify each
Lender with a Revolving Credit Commitment, of such failure.  If the Agent gives
such notice prior to 11:00 a.m., Charlotte time, on any Business Day, each such
Lender will make available to the Agent, for the account of the Issuing Lender,
its Pro Rata Share of the amount of such payment on such Business Day in

                                       46
<PAGE>   53

immediately available funds.  If the Agent gives such notice after 11:00 a.m.,
Charlotte time, on any Business Day, each such Lender shall make its Pro Rata
Share of such amount available to the Agent on the next succeeding Business
Day.  If and to the extent any such Lender shall not have so made its Pro Rata
Share of the amount of such payment available to the Agent, such Lender agrees
to pay to the Agent, for the account of the Issuing Lender, forthwith on demand
such amount, together with interest thereon at the Federal Funds Rate for each
day from such date until the date such amount is paid to the Agent.  The
failure of any such Lender to make available to  the Agent its Pro Rata Share
of any payment under any Letter of Credit shall not relieve any such other
Lender of its obligation hereunder to make available to the Agent its Pro Rata
Share of any payment under any Letter of Credit on the date required, as
specified above, but no such Lender shall be responsible for the failure of any
such other Lender to make available to the Agent such other Lender's Pro Rata
Share of any such payment.  Each such payment by a Lender with a Revolving
Credit Commitment under this SECTION 3.5 of its Pro Rata Share of an amount
paid by the Issuing Lender shall constitute a Revolving Loan by such Lender
(the Borrower being deemed to have given a timely Notice of Revolving Borrowing
therefor) and shall be treated as such for all purposes of this Agreement;
provided that for purposes of determining the aggregate Unutilized Revolving
Credit Commitments immediately prior to giving effect to the application of the
proceeds of such Revolving Loans, the Reimbursement Obligation being satisfied
thereby shall be deemed not to be outstanding at such time.

         3.6     Payment to Lenders.  Whenever the Issuing Lender receives a
payment in respect of a Reimbursement Obligation as to which the Agent has
received, for the account of the Issuing Lender, any payments from the Lenders
with a Revolving Credit Commitment pursuant to SECTION 3.5, the Issuing Lender
will promptly pay to the Agent, and the Agent will promptly pay to each Lender
with a Revolving Credit Commitment that has paid its Pro Rata Share thereof, in
immediately available funds, an amount equal to such Lender's ratable share
(based on the proportionate amount funded by such Lender to the aggregate
amount funded by all Lenders) of such Reimbursement Obligation.

         3.7     Obligations Absolute.  The Reimbursement Obligations of the
Borrower, and the obligations of the Lenders with a Revolving Credit Commitment
under SECTION 3.5 to make payments to the Agent, for the account of the Issuing
Lender, with respect to Letters of Credit, shall be irrevocable, shall remain
in effect until the Issuing Lender shall have no further obligations to make
any payments or disbursements under any circumstances with respect to any
Letter of Credit, and, except to the extent resulting from any gross negligence
or willful misconduct on the part of the Issuing Lender, shall be absolute and
unconditional, shall not be subject to counterclaim, setoff or other defense or
any other qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:

         (a)     Any lack of validity or enforceability of this Agreement, any
of the other Credit Documents or any documents or instruments relating to any
Letter of Credit;

         (b)     Any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations in respect of any Letter of
Credit or any other amendment, modification or waiver of or any consent to
departure from any Letter of Credit or any

                                       47
<PAGE>   54

documents or instruments relating thereto, in each case whether or not the
Borrower has notice or knowledge thereof;

         (c)     The existence of any claim, setoff, defense or other right
that the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Agent, the Issuing Lender, any Lender or
other Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated hereby or any unrelated transactions (including
any underlying transaction between the Borrower and the beneficiary named in
any such Letter of Credit);

         (d)     Any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect, any errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, telecopier or otherwise, or any errors in
translation or in interpretation of technical terms;

         (e)     Any defense based upon the failure of any drawing under a
Letter of Credit to conform to the terms of the Letter of Credit, any
nonapplication or misapplication by the beneficiary or any transferee of the
proceeds of such drawing or any other act or omission of such beneficiary or
transferee in connection with such Letter of Credit;

         (f)     The exchange, release, surrender or impairment of any
Collateral or other security for the Obligations;

         (g)     The occurrence of any Default or Event of Default; or

         (h)     Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.

Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing
Lender to the Borrower or any Lender.  It is expressly understood and agreed
that, for purposes of determining whether a wrongful payment under a Letter of
Credit resulted from the Issuing Lender's gross negligence or willful
misconduct, (i) the Issuing Lender's acceptance in good faith of documents that
appear on their face to comply with the terms of such Letter of Credit, without
responsibility for further investigation, (ii) the Issuing Lender's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect (so long as such document appears on its face to comply with the terms
of such Letter of Credit), and whether or not any other statement or any other
document presented pursuant to such Letter of Credit proves  to be forged or
invalid or any statement therein proves to be

                                       48
<PAGE>   55

inaccurate or untrue in any respect whatsoever, and (iii) any noncompliance in
any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute gross
negligence or willful misconduct of the Issuing Lender.

         3.8     Cash Collateral Account.  At any time and from time to time
(i) after the occurrence and during the continuance of an Event of Default, the
Agent, at the direction or with the consent of the Required Lenders, may
require the Borrower to deliver to the Agent such additional amount of cash as
is equal to the aggregate Stated Amount of all Letters of Credit at any time
outstanding (whether or not any beneficiary under any Letter of Credit shall
have drawn or be entitled at such time to draw thereunder) and (ii) in the
event of a prepayment under SECTION 2.6(b), or to the extent any amount of a
required prepayment under any of SECTIONS 2.6(c) through 2.6(d) remains after
prepayment of all outstanding Loans and Reimbursement Obligations and
termination of the Revolving Credit Commitments and the Swingline Commitments,
as contemplated by SECTION 2.6(g), the Agent will retain such amount as may
then be required to be retained pursuant to SECTION 2.6(g), such amounts in
each case under clauses (i) and (ii) above to be held by the Agent in a cash
collateral account (the "Cash Collateral Account").  The Borrower hereby grants
to the Agent, for the benefit of the Issuing Lender and the Lenders, a Lien
upon and security interest in the Cash Collateral Account and all amounts held
therein from time to time as security for Letter of Credit Exposure, and for
application to the Borrower's Reimbursement Obligations as and when the same
shall arise.  The Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
on the investment of such amounts in Cash Equivalents, which investments shall
be made at the direction of the Borrower (unless a Default or Event of Default
shall have occurred and be continuing, in which case the determination as to
investments shall be made at the option and in the discretion of the Agent),
amounts in the Cash Collateral Account shall not bear interest.  Interest and
profits, if any, on such investments shall accumulate in such account.  In the
event of a drawing, and subsequent payment by the Issuing Lender, under any
Letter of Credit at any time during which any amounts are held in the Cash
Collateral Account, the Agent will deliver to the Issuing Lender an amount
equal to the Reimbursement Obligation created as a result of such payment (or,
if the amounts so held are less than such Reimbursement Obligation, all of such
amounts) to reimburse the Issuing Lender therefor.  Any amounts remaining in
the Cash Collateral Account after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Lender for all of its obligations
thereunder shall (i) with respect to any amounts held by the Agent pursuant to
SECTION 2.6(g), be immediately returned to the Borrower (together with any
interest or of earnings thereon) and (ii) with respect to any amounts held by
the Agent pursuant to clause (i) of the first sentence of this SECTION 3.8 be
held by the Agent, for the benefit of the Borrower, to be applied against the
Obligations, if any, in such order and manner as the Agent may direct.  If the
Borrower is required to provide cash collateral  pursuant to SECTION 2.6(b),
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower on demand, provided that after giving effect to such return (i) the
sum of (x) the aggregate principal amount of all Revolving Loans outstanding at
such time, (y) the aggregate principal amount of all Swingline Loans
outstanding at such time and (z) the aggregate Letter of Credit Exposure of all
Lenders at such time would not exceed the aggregate Revolving Credit
Commitments at such time and (ii) no Default or Event of Default shall have
occurred and be continuing at such time.  If the Borrower is required

                                       49
<PAGE>   56

to provide cash collateral as a result of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three (3) Business Days after all Events of Default have been cured or waived
together with all interest and other earnings thereon.

         3.9     Effectiveness.  Notwithstanding any termination of the
Revolving Credit Commitments or repayment of the Loans, or both, the
obligations of the Borrower under this ARTICLE III shall remain in full force
and effect until the Issuing Lender and the Lenders shall have no further
obligations to make any payments or disbursements under any circumstances with
respect to any Letter of Credit.

                                   ARTICLE IV

                          CONDITIONS TO EFFECTIVENESS

         4.1     Conditions of Initial Borrowing.  The effectiveness of this
Agreement, the amendment and restatement of the Original Credit Agreement and
the obligation of each Lender to make Revolving Loans and the obligation of the
Issuing Lender to issue Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent:

         (a)     The Agent shall have received the following, each dated as of
the Amendment Effective Date (unless otherwise specified) and, except for the
Revolving Credit Notes and any certificates or instruments required to be
delivered under the Borrower Pledge and Security Agreement and the Subsidiary
Pledge and Security Agreement, in sufficient copies for each Lender:

                          (i)     a Revolving Credit Note for each Lender with
         a Revolving Credit Commitment that is a party hereto as of the
         Amendment Effective Date, in the amount of such Lender's Revolving
         Credit Commitment; and a Swingline Note for the Swingline Lender, in
         the amount of the Swingline Commitment, in each case duly completed in
         accordance with the relevant provisions of SECTION 2.4 and executed by
         the Borrower;

                          (ii)    the Subsidiary Guaranty, duly completed and
         executed by each of the Wholly Owned Subsidiaries of the Borrower
         (other than Eclipsys Limited);

                          (iii)   the Borrower Pledge and Security Agreement,
         duly completed and executed by the Borrower, and the Subsidiary Pledge
         and Security Agreement, duly completed and executed  by each of the
         Subsidiaries of the Borrower (other than Eclipsys Limited), in each
         case together with any certificates evidencing the interests being
         pledged thereunder as of the Amendment Effective Date and undated
         stock powers for any such certificate, duly executed in blank, and any
         promissory notes being pledged thereunder, duly endorsed in blank (or,
         in the case of uncertificated interests, appropriately completed and
         duly executed instructions for registration and notification thereof);

                                       50
<PAGE>   57

                          (iv)    the favorable opinion of Hale and Dorr LLP,
         special counsel to the Borrower and its Subsidiaries, in substantially
         the form of EXHIBIT I, addressed to the Agent and the Lenders and
         addressing such other matters as the Agent or any Lender may
         reasonably request; and

                          (v)     the Subordination Agreement, duly executed by
         the Borrower and each of the parties thereto.

         (b)     The Agent shall have received a certificate, signed by the
chief executive officer, president or chief financial officer of the Borrower,
in form and substance satisfactory to the Agent, certifying that (i) all
representations and warranties of the Borrower contained in this Agreement and
the other Credit Documents are true and correct as of the Amendment Effective
Date, and (ii) no Default or Event of Default has occurred and is continuing.

         (c)     The Agent shall have received a certificate of the secretary
or an assistant secretary of the Borrower, in form and substance satisfactory
to the Agent, certifying (i) that attached thereto is a true and complete copy
of the certificate of incorporation and all amendments thereto of the Borrower,
certified as of a recent date by the Secretary of State of the State of
Delaware, and that the same has not been amended since the date of such
certification, (ii) that attached thereto is a true and complete copy of the
bylaws of the Borrower and all amendments thereto, as in effect on the date of
such certificate and as in effect at all times from the date on which the
resolutions referred to in clause (iii) below were adopted to and including the
date of such certificate, and (iii) that attached thereto is a true and
complete copy of resolutions adopted by the board of directors of the Borrower
authorizing the execution, delivery and performance by the Borrower of this
Agreement and the other Credit Documents to which it is a party, and as to the
incumbency and genuineness of the signature of each officer of the Borrower
executing this Agreement or any of such other Credit Documents on behalf of the
Borrower.

         (d)     The Agent shall have received a certificate of the secretary
or an assistant secretary of each Subsidiary, in form and substance
satisfactory to the Agent, certifying (i) that attached thereto is a true and
complete copy of the certificate or articles of incorporation and all
amendments thereto of such Subsidiary, certified as of a recent date by the
Secretary of State (or other similar official) of such Subsidiary's
jurisdiction of incorporation, and that the same has not been amended since the
date of such certification, (ii) that attached  thereto is a true and complete
copy of the bylaws of such Subsidiary, as in effect on the date of such
certificate and as in effect at all times from the date on which the
resolutions referred to in clause (iii) below were adopted to and including the
date of such certificate, and (iii) that attached thereto is a true and
complete copy of the resolutions adopted by the board of directors of such
Subsidiary authorizing the execution, delivery and performance by such
Subsidiary of the Credit Documents to which it is a party, and as to the
incumbency and genuineness of the signature of each officer of such Subsidiary
executing any of such Credit Documents on behalf of such Subsidiary.

         (e)     The Agent shall have received (i) a certificate as of a recent
date of the good standing of each of the Borrower and each of its Subsidiaries
under the laws of its jurisdictions of incorporation, and (ii) a certificate as
of a recent date of the qualification of each of the

                                       51
<PAGE>   58

Borrower and each of its Subsidiaries to conduct business as a foreign
corporation in each state where such Person is so qualified.

         (f)     All approvals, permits and consents of any Governmental
Authorities or other Persons required in connection with the execution and
delivery of this Agreement shall have been obtained (without the imposition of
conditions that are not acceptable to the Agent), and all related filings, if
any, shall have been made, and all such approvals, permits, consents and
filings shall be in full force and effect and the Agent shall have received
such copies thereof as it shall have requested except for any of the foregoing
the failure of which to obtain or be in full force and effect would not
reasonably be expected to have a Material Adverse Effect; all applicable
waiting periods shall have expired without any adverse action being taken by
any Governmental Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before, and no order, injunction or decree shall have been entered
by, any court or other Governmental Authority, in each case to enjoin, restrain
or prohibit, to obtain substantial damages in respect of, or that is otherwise
related to or arises out of, this Agreement, or that, in the opinion of the
Agent, could reasonably be expected to have a Material Adverse Effect.

         (g)     The Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registrations and other
actions (including, without limitation, the filing of duly completed UCC-1
financing statements in each jurisdiction listed on Annex A to the Borrower
Pledge and Security Agreement or the Subsidiary Pledge and Security Agreement,
as applicable) necessary or, in the reasonable opinion of the Agent, desirable
to perfect the Liens created by the Security Documents shall have been
completed.

         (h)     Since December 31, 1997, both immediately before and after
giving effect to the consummation of the transactions contemplated by this
Agreement, there shall not have occurred any Material Adverse Change or any
event, condition or state of facts that could reasonably be expected to result
in a Material Adverse Change.

         (i)     The Borrower shall have paid (i) to First Union, the fee
described in the second paragraph of the Fee Letter, (ii) all other fees and
expenses of the Agent and the Lenders required hereunder or under any other
Credit Document to be paid on or prior to the Amendment Effective Date
(including reasonable fees and expenses of counsel to the Agent) in connection
with this Agreement and the transactions contemplated hereby and (iii) to the
appropriate Person(s), unpaid and outstanding interest accrued on the Existing
Revolving Loans as of the Amendment Effective Date.

         (j)     The Agent shall have received a Financial Condition
Certificate, together with the Pro Forma Balance Sheet and the Projections as
described in SECTIONS 5.11(c) and 5.11(d), all of which shall be in form and
substance satisfactory to the Agent.

         (k)     The Agent shall have received evidence in form and substance
reasonably satisfactory to it that all of the requirements of SECTION 6.6 and
those provisions of the Borrower Pledge and Security Agreement and the
Subsidiary Pledge and Security Agreement relating to the maintenance of
insurance have been satisfied, including receipt of certificates of insurance

                                       52
<PAGE>   59

evidencing the insurance coverages described on SCHEDULE 5.17 and all other or
additional coverages required under the Borrower Pledge and Security Agreement
and the Subsidiary Pledge and Security Agreement and naming the Agent as loss
payee or additional insured, as its interests may appear; and the Agent shall
have received a collateral assignment of the key-man life insurance required
under SECTION 6.6(B), duly completed and executed by the Borrower and in form
and substance satisfactory to the Agent.

         (l)     The Agent shall have received an Account Designation Letter,
together with written instructions from an Authorized Officer, including wire
transfer information, directing the payment of the proceeds of the initial
Revolving Loans to be made hereunder.

         (m)     The Agent and each Lender shall have received such other
documents, certificates, opinions and instruments in connection with this
Agreement as it shall have reasonably requested.

         4.2     Conditions of All Borrowings.  The obligation of each Lender
to make any Loans hereunder, including the initial Revolving Loans (but
excluding Revolving Loans made for the purpose of repaying Refunded Swingline
Loans pursuant to SECTION 2.2(e)) and the obligation of the Issuing Lender to
issue any Letters of Credit hereunder, is subject to the satisfaction of the
following conditions precedent on the relevant Borrowing Date or date of
issuance:

         (a)     The Agent shall have received a Notice of Revolving Borrowing
in accordance with SECTION 2.2(b) or (together with the Swingline Lender) a
Notice of Swingline Borrowing in accordance with SECTION 2.2(d), or (together
with the Issuing Lender) a Letter of Credit Notice in accordance with SECTION
3.2, as  applicable;

         (b)     Each of the representations and warranties contained in
ARTICLE V and in the other Credit Documents shall be true and correct in all
material respects on and as of such Borrowing Date (including the Amendment
Effective Date, in the case of the initial Revolving Loans made hereunder) or
date of issuance with the same effect as if made on and as of such date, both
immediately before and after giving effect to the Loans to be made or Letter of
Credit to be issued on such date (except to the extent the facts upon which
such representation and warranty are based may be changed as a result of a
transaction or occurrence permitted or contemplated hereby or such
representation or warranty relates solely to a prior date, in which case such
representation or warranty shall be true and correct as of such date); and

         (c)     No Default or Event of Default shall have occurred and be
continuing on such date, both immediately before and after giving effect to the
Loans to be made or Letter of Credit to be issued on such date.

         Each giving of a Notice of Revolving Borrowing, a Notice of Swingline
Borrowing or a Letter of Credit Notice shall be deemed to constitute a
representation by the Borrower that the statements contained in subsections (b)
and (c) above are true, both as of the date of such notice or request and as of
the relevant Borrowing Date or date of issuance.

                                       53
<PAGE>   60

                                   ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         To induce the Agent and the Lenders to enter into this Agreement and
to induce the Lenders to extend the credit contemplated hereby, the Borrower
represents and warrants to the Agent and the Lenders, as follows:

         5.1     Corporate Organization and Power.  Each of the Borrower and
its Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (ii) has
the full corporate power and authority to execute, deliver and perform the
Credit Documents to which it is or will be a party, to own and hold its
property and to engage in its business as presently conducted, and (iii) is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect.

         5.2     Authorization; Enforceability.  Each of the Borrower and its
Subsidiaries has taken all necessary corporate action to execute, deliver and
perform each of the Credit Documents to which it is or will be a party, and has
validly executed and delivered each of the Credit Documents to which it is or
will be  a party.  This Agreement constitutes, and each of the other Credit
Documents upon execution and delivery will constitute, the legal, valid and
binding obligation of each of the Borrower and its Subsidiaries to the extent a
party hereto or thereto, enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general equitable principles.

         5.3     No Violation.  The execution, delivery and performance by each
of the Borrower and its Subsidiaries of this Agreement and each of the other
Credit Documents to which it is or will be a party, compliance by it with the
terms hereof and thereof, and the consummation of the transactions contemplated
by the Credit Documents, do not and will not (i) violate any provision of its
articles or certificate of incorporation or bylaws or contravene any other
Requirement of Law applicable to it, (ii) except as set forth on SCHEDULE 5.3,
conflict with, result in a breach of or constitute (with notice, lapse of time
or both) a default under any indenture, loan agreement or other material
agreement or instrument to which it is a party, by which it or any of its
properties is bound or to which it is subject, (iii) require any approval of
its stockholders that has not been obtained, or (iv) except for the Liens
granted pursuant to the Security Documents and Permitted Liens, result in or
require the creation or imposition of any Lien upon any of its properties or
assets.  No Subsidiary is subject to any restriction or encumbrance on its
ability to make dividend payments or other distributions in respect of its
Capital Stock, to repay Indebtedness owed to the Borrower or any other
Subsidiary, to make loans or advances to the Borrower or any other Subsidiary,
or, except as set forth on SCHEDULE 5.3, to transfer any of its assets or
properties to the Borrower or any other Subsidiary, in each case other than
such restrictions or encumbrances existing under or by reason of (i) the Credit
Documents, (ii) applicable Requirements of Law, (iii) customary non-assignment
provisions in any lease governing a leasehold interest and

                                       54
<PAGE>   61

(iv) customary non-assignment provisions in any license governing Intellectual
Property (as defined in SECTION 5.12) provided by a third party.

         5.4     Authorizations; Permits.

         (a)     No consent, approval, authorization or other action by, notice
to, or registration or filing with, any Governmental Authority is required as a
condition to or otherwise in connection with the due execution, delivery and
performance by each of the Borrower and its Subsidiaries of this Agreement or
any of the other Credit Documents to which it is or will be a party or the
legality, validity or enforceability hereof or thereof, other than (i)
consents, authorizations and filings listed on SCHEDULE 5.4, and (ii) filings
of Uniform Commercial Code financing statements and other instruments necessary
to perfect the Liens created by the Security Documents.

         (b)     Each of the Borrower and its Subsidiaries has, and is in good
standing with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate  its properties, except for those the failure of which
to obtain, or to be in good standing with respect to, would not be reasonably
expected, individually or in the aggregate, to have a Material Adverse Effect.

         5.5     Litigation.  Except as set forth on SCHEDULE 5.5, there are no
actions, investigations, suits or proceedings pending or, to the knowledge of
the Borrower threatened, at law, in equity or in arbitration, before any court,
arbitrator or Governmental Authority, (i) against or affecting the Borrower,
any of its Subsidiaries or any of their respective properties that would, if
adversely determined, be reasonably expected to have a Material Adverse Effect,
or (ii) that question the legality, validity or enforceability of this
Agreement or any Credit Documents.

         5.6     Taxes.  Except as set forth in SCHEDULE 5.6, each of the
Borrower and its Subsidiaries has timely filed all federal, state and local tax
returns and reports required to be filed by it or has obtained extensions for
filing and has paid all taxes, assessments, fees and other charges levied upon
it or upon its properties that are shown thereon as due and payable, other than
those that are being contested in good faith and by proper proceedings and for
which adequate reserves have been established in accordance with Generally
Accepted Accounting Principles.  Such returns accurately reflect in all
material respects all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby.  Except as set forth on SCHEDULE 5.6, there is
no ongoing audit or examination or, to the knowledge of the Borrower, other
investigation by any Governmental Authority of the tax liability of the
Borrower or any of its Subsidiaries, and there is no unresolved claim by any
Governmental Authority concerning the tax liability of the Borrower or any of
its Subsidiaries for any period for which tax returns have been or were
required to have been filed, other than claims for which adequate reserves have
been established in accordance with Generally Accepted Accounting Principles.
Except with respect to the taxes set forth on SCHEDULE 5.6, neither the
Borrower nor, to the knowledge of the Borrower, any of its Subsidiaries has
waived or extended or has been requested to waive or extend the statute of
limitations relating to the payment of any taxes.

         5.7     Subsidiaries.  SCHEDULE 5.7 sets forth a list, as of the
Amendment Effective Date, of all of the Subsidiaries of the Borrower and, as to
each such Subsidiary, the percentage

                                       55
<PAGE>   62

ownership (direct and indirect) of the Borrower in each class of its Capital
Stock and each direct owner thereof.  Except for the shares of Capital Stock
expressly indicated on SCHEDULE 5.7, there are no shares of Capital Stock or
warrants, rights, options or other equity securities of any Subsidiary of the
Borrower outstanding or reserved for any purpose.  All outstanding shares of
Capital Stock of each Subsidiary of the Borrower are duly and validly issued,
fully paid and nonassessable.  The Borrower or the applicable Subsidiary
indicated on SCHEDULE 5.7 is the sole legal, record and beneficial owner of,
and has good and valid title to, all such Capital Stock, free and clear of all
Liens other than the Liens created pursuant to the Borrower Pledge and Security
Agreement and the Subsidiary Pledge and Security Agreement.

         5.8     Full Disclosure.  As of the Amendment Effective Date, (i) none
of the Credit Documents, nor any other document or certificate furnished to the
Agent or any Lender by or on behalf of the Borrower at the Closing, contains
any untrue statement of a material fact, and (ii) the Credit Documents
delivered at the Closing, together with all other documents and certificates
furnished to the Agent or any Lender by or on behalf of the Borrower at the
Closing, taken as a whole, do not omit to state a material fact necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading.

         5.9     Margin Regulations.  Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock.  No proceeds of the Loans will be used, directly or indirectly,
to purchase or carry any Margin Stock, to extend credit for such purpose or for
any other purpose that would violate or be inconsistent with Regulations G, U
or X or any provision of the Exchange Act.

         5.10    No Material Adverse Change.  Except as set forth on SCHEDULE
5.10, there has been no Material Adverse Change relating to the Borrower or its
Subsidiaries since December 31, 1997 and there exists no event, condition or
state of facts that would reasonably be expected to result in a Material
Adverse Change.

         5.11    Financial Matters.

         (a)     The unaudited balance sheet of the Borrower and its
Subsidiaries as of December 31, 1997 and the related statements of income,
stockholders equity and cash flows for the fiscal year period then ended,
copies of which have been delivered to the Agent, have been prepared in
accordance with Generally Accepted Accounting Principles (subject to the
absence of notes required by Generally Accepted Accounting Principles and to
normal year-end adjustments) and fairly present the financial position of the
Borrower as of such date and the results of operations of the Borrower for the
period covered thereby.

         (b)     Except (i) as fully reflected in the financial statements
referred to in subsection (a) above (including the notes thereto, if any), (ii)
incurred in the ordinary course of business since the respective dates of such
financial statements and (iii) for the obligations of the Borrower and its
Subsidiaries under the Credit Documents, neither the Company nor any of its
Subsidiaries has any material direct or indirect obligations or liabilities of
any kind, whether or not required by Generally Accepted Accounting Principles
to be set forth on financial statements.

                                       56
<PAGE>   63

         (c)     The unaudited consolidated pro forma balance sheet of the
Borrower and its Subsidiaries as of December 31, 1997 has been delivered to the
Agent and appears in the Borrower's Form S-1, filed on April 23, 1998 (the "Pro
Forma Balance Sheet").  The Pro Forma Balance Sheet has been prepared in
accordance with  Generally Accepted Accounting Principles (subject to the
absence of footnotes required by Generally Accepted Accounting Principles and
subject to normal year-end adjustments) and, subject to stated assumptions made
in good faith and having a reasonable basis set forth therein, presents fairly
the consolidated financial position of the Borrower and its Subsidiaries on an
unaudited pro forma basis as of the date set forth therein.

         (d)     The Borrower has prepared, and has furnished to the Agent a
copy of, consolidated and consolidating pro forma projected statements of
income of the Borrower and its Subsidiaries for the three-year period beginning
January 1, 1998, prepared on a quarterly basis for fiscal year 1998 and on an
annual basis thereafter, giving effect to the consummation of the Credit
Documents, the extensions of credit made under this Agreement, the payment of
transaction fees and expenses related to the foregoing (the "Projections").  In
the opinion of management of the Borrower, the assumptions used in the
preparation of the Projections were reasonable when made and continue to be
reasonable as of the Amendment Effective Date, subject to the uncertainties and
approximations inherent in any projection.  The Projections have been prepared
in good faith by the executive and financial personnel of the Borrower and
represent, as of the Amendment Effective Date, a reasonable estimate of the
future performance of the Borrower and its Subsidiaries it being acknowledged
by the Agent and the Lenders that these projections as to future events are
subject to the uncertainties and estimations inherent in any projections and
that actual results during the periods covered by such Projections may differ
from the projected results (and that such differences may be material and
adverse).

         5.12    Ownership of Properties.

         (a)     Each of the Borrower and its Subsidiaries (i) has good and
marketable title to all real property owned by it (if any), (ii) holds
interests as lessee under valid leases in full force and effect with respect to
all material leased real and personal property used in connection with its
business, (iii) owns or has valid rights to use patents, trade secrets,
copyrights, trademarks, service marks, trade names, know-how, computer software
and other similar assets (collectively, "Intellectual Property") sufficient to
enable it to continue to conduct its business substantially as heretofore
conducted and without any material infringement of the intellectual property
rights of others, and (iv)  has good title to all of its other properties and
assets reflected in the most recent financial statements referred to in SECTION
5.11(a) (except as sold or otherwise disposed of since the date thereof in the
ordinary course of business), in each case under (i), (ii), (iii) and (iv)
above free and clear of all Liens other than Permitted Liens. Except as set
forth on SCHEDULE 5.12(a), no claim of which the Borrower is aware has been
asserted by any Person challenging or questioning the rights of the Borrower or
any of its Subsidiaries to use any Intellectual Property or the validity of any
Intellectual Property owned or used by the Borrower or any of its Subsidiaries,
nor does the Borrower know of any valid basis for any such claim.

                                       57
<PAGE>   64

         (b)     SCHEDULE 5.12(b) lists, as of the Amendment Effective Date,
all real property leasehold interests of each of the Borrower and its
Subsidiaries, indicating in each case the identity of the lessors, the nature
of the leased premises and the address of the property.  As of the Amendment
Effective Date, neither the Borrower nor any of its Subsidiaries owns any fee
interest in any real property.

         5.13    ERISA.  Each Plan is and has been administered in compliance
in all material respects with all applicable Requirements of Law, including,
without limitation, the applicable provisions of ERISA and the Internal Revenue
Code.  No ERISA Event has occurred and is continuing or, to the knowledge of
the Borrower, is reasonably expected to occur with respect to any Plan, in
either case that could be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.  No Plan has any Unfunded Pension
Liability, and neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA, in
either instance where the same could be reasonably expected, individually or in
the aggregate, to have a Material Adverse Effect.  Neither the Borrower nor any
ERISA Affiliate has any material liability to a Multiemployer Plan.

         5.14    Environmental Matters.

         (a)     Except in each case as would not reasonably be expected to
have a Material Adverse Effect, (i) no Hazardous Substances are or have been
generated, used, located, released, treated, disposed of or stored by the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by
any other Person (including any predecessor in interest) or otherwise, in, on
or under any portion of any real property leased, owned or operated by the
Borrower or any of its Subsidiaries, except in material compliance with all
applicable Environmental Laws, (ii) no portion of any such real property or, to
the knowledge of the Borrower, any other real property at any time leased,
owned or operated by the Borrower or any of its Subsidiaries, has been
contaminated by any Hazardous Substance; and (iii) no portion of any real
property leased, owned or operated by the Borrower or any of its Subsidiaries
has been or is presently the subject of a remedial action.  The Borrower has
delivered to the Agent all environmental audits and assessments (if any) in its
possession relating to any real property owned, leased or operated by the
Borrower or any of its Subsidiaries.

         (b)     Except in each case as would not reasonably be expected to
have a Material Adverse Effect, (i) no portion of any real property leased,
owned or operated by the Borrower or any of its Subsidiaries has been used as
or for a mine, a landfill, a dump or other disposal facility, a gasoline
service station, or (other than for petroleum substances stored in the ordinary
course of business) a petroleum products storage facility; (ii) no portion of
such real property or any other real property at any time leased, owned or
operated by the Borrower or any of its Subsidiaries has, pursuant to any
Environmental Law, been placed on the "National Priorities List" or "CERCLIS
List" (or any  similar federal, state or local list) of sites subject to
possible environmental problems; and (iii) there are not and have never been
any underground storage tanks situated on any real property leased, owned or
operated by the Borrower or any of its Subsidiaries.

                                       58
<PAGE>   65

         (c)     Each of the Borrower and its Subsidiaries has obtained all
licenses and permits under Environmental Laws necessary to their respective
operations, and all such licenses and permits are being maintained in good
standing, and each of the Borrower and its Subsidiaries is in compliance with
all material terms and conditions of such licenses and permits, except for any
such licenses or permits the failure to obtain, maintain or comply with which
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

         (d)     Neither the Borrower nor any of its Subsidiaries has received
(i) any notice or claim to the effect that it is or may be liable to any Person
under any Environmental Law, including, without limitation, any claim relating
to any Hazardous Substances, except as could not reasonably be expected to have
a Material Adverse Effect, or (ii) any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9604) or comparable foreign or state laws
regarding any matter which could reasonably be expected to result in a Material
Adverse Effect, and, to the Borrower's knowledge, neither the Borrower nor any
of its Subsidiaries is involved in any investigation, response or corrective
action relating to or in connection with any Hazardous Substances at any real
property occupied by such Person or at any other location, except for such of
the foregoing which would not reasonably be expected to have a Material Adverse
Effect.

         (e)     Neither the Borrower nor any of its Subsidiaries is subject to
any judicial or administrative proceeding alleging the violation of or
liability under any Environmental Laws which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect.

         (f)     Neither the Borrower nor any of its Subsidiaries nor any of
their respective properties or operations is subject to any outstanding written
order or agreement with any Governmental Authority or private party relating to
any actual or potential violation of or liability under any Environmental Laws
or any Environmental Claims, except for such of the foregoing which would not
reasonably be expected to have a Material Adverse Effect.

         (g)     Neither the Borrower nor any of its Subsidiaries, nor, to the
Borrower's knowledge, any predecessor thereof, has filed any notice under any
Environmental Law indicating past or present treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent.

         (h)     No Lien in favor of any Person relating to or in connection
with any Environmental Claim has been filed or has been attached to any
property of the Borrower or any of its Subsidiaries, except for any such Lien
which would not reasonably  be expected to have a Material Adverse Effect.

         (i)     All activities and operations of each of the Borrower and its
Subsidiaries are in compliance with the requirements of all applicable
Environmental Laws, except to the extent the failure so to comply, individually
or in the aggregate, would not be reasonably expected to have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries is involved in
any suit, action or proceeding, or has received any notice, complaint or other
request for information from any Governmental Authority or other Person, with
respect to any actual or alleged Environmental Claims that, if adversely
determined, would be reasonably expected, individually

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<PAGE>   66

or in the aggregate, to have a Material Adverse Effect; and, to the knowledge
of the Borrower, there are no threatened actions, suits, proceedings or
investigations with respect to any such Environmental Claims, nor any basis
therefor.

         5.15    Compliance With Laws.  Except as set forth on SCHEDULE 5.15,
each of the Borrower and its Subsidiaries has timely filed all material
reports, documents and other materials required to be filed by it under all
applicable Requirements of Law with any Governmental Authority, except for any
filings the failure of which to make, individually or in the aggregate, would
not be reasonably expected to have a Material Adverse Effect, and is otherwise
in compliance with all applicable Requirements of Law in respect of the conduct
of its business and the ownership and operation of its properties, except for
such Requirements of Law the failure to comply with which, individually or in
the aggregate, would not be reasonably expected to have a Material Adverse
Effect.

         5.16    Regulated Industries.  Neither the Borrower nor any of its
Subsidiaries is (i) an "investment company," a company "controlled" by an
"investment company," or an "investment advisor," within the meaning of the
Investment Company Act of 1940, as amended, (ii) a "holding company," a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii)
subject to regulation under the Federal Power Act.

         5.17    Insurance. SCHEDULE 5.17 lists and summarizes all insurance
policies or programs carried or maintained by the Borrower and its Subsidiaries
as of the Amendment Effective Date.  The assets, properties and business of the
Borrower and its Subsidiaries are insured against such hazards and liabilities,
under such coverages and in such amounts, as are customarily maintained by
companies similarly situated and engaged in the same or similar businesses.

         5.18    Certain Contracts.  SCHEDULE 5.18(a) lists, as of the
Amendment Effective Date, each contract, agreement or commitment, written or
oral (other than oral agreements terminable at will by either party), to which
the Borrower or any of its Subsidiaries is a party, by which any of them or
their respective properties is bound or to which any of them is subject and
that (i) relates  to employment of senior executives or labor matters, (ii)
evidences or relates to Indebtedness in excess of $50,000, (iii) involves
aggregate consideration payable to or by any party thereto of $500,000 or more,
or (iv) is otherwise material to the business, condition (financial or
otherwise), operations, performance or properties of the Borrower and its
Subsidiaries, taken as a whole, in each case including customer orders and
letters of intent, and also indicates the parties, subject matter and term
(except with respect to agreements with third party vendors) thereof.  Except
as set forth on SCHEDULE 5.18(b), as of the Amendment Effective Date, each such
contract is in full force and effect, and neither the Borrower nor any of its
Subsidiaries or, to the knowledge of the Borrower, any other party thereto, is
in default under any such contract.

         5.19    Capitalization.  On the Amendment Effective Date, the
authorized capital stock of the Borrower consists of (i) 50,000,000 shares of
Common Stock ("Class A Common Stock" as defined in the Preferred Stock Purchase
Agreement), of which 6,300,000 shares are issued and

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<PAGE>   67

outstanding, (ii) 3,000,000 shares of Non-Voting Common Stock ("Class of Common
Stock" as defined in the Preferred Stock Purchase Agreement), of which no
shares are issued and outstanding, (iii) 30,000 shares of Series B Preferred
Stock (as defined in the Preferred Stock Purchase Agreement), all of which are
outstanding and issued to First Union Corporation ("FUCP") and BT Investment
Partners, Inc. ("BT"), (iv) 25,000 shares of Series C 8.5% Cumulative
Redeemable Preferred Stock (as defined in the Preferred Stock Purchase
Agreement), 15,500 of which are outstanding and issued to Alltel Information
Services, Inc., (v) 7,200,000 shares of Series D Preferred Stock (as defined in
the Preferred Stock Purchase Agreement), of which 7,058,786 are outstanding and
issued to General Atlantic Partners 38, L.P., GAP Coinvestment Partners, L.P.
("GAP Coinvestment"), Wilfam Ltd., Brean Murray Associates IHS, L.P.  ("Brean
Murray"), Gerald Manolovici, St. Paul Venture Capital IV, L.L.C., Peter
Karmanos, Jr., and AIS, (vi) 920,000 shares of Series E Preferred Stock (as
defined in the Preferred Stock Purchase Agreement), of which 896,431 are
outstanding and issued to FUCP and BT, (vii) 1,530,000 shares of Series F
Preferred Stock (as defined in the Preferred Stock Purchase Agreement), of
which 1,478,097 are outstanding and issued to General Atlantic Partners 28,
L.P. ("GAP 28"), GAP Coinvestment, Brean Murray and Manolovici, (viii) 900,000
shares of Series G Convertible Preferred Stock, (as defined in the Series G
Preferred Stock Purchase Agreement) par value $.01 per share, all of which are
outstanding and issued to GAP Coinvestment and General Atlantic Partners 47,
L.P., a Delaware limited partnership, and (ix) 1,100,000 shares, par value $.0l
per share, of undesignated preferred stock.  SCHEDULE 5.19 sets forth a true
and complete list of the stockholders of the Borrower and, opposite the name of
each stockholder, the amount of all outstanding Capital Stock and all
securities or obligations convertible or exchangeable or exercisable for shares
of Capital Stock of the Borrower (including options, warrants, or other
subscription or purchase rights with respect to such Capital Stock) owned by
such stockholder.

         5.20    Security Documents.  The provisions of each of the Security
Documents (whether executed and delivered prior to or on  the Amendment
Effective Date or thereafter) are and will be effective to create in favor of
the Agent, for its benefit and the benefit of the Lenders, a valid and
enforceable security interest in and Lien upon all right, title and interest of
each of the Borrower and its Subsidiaries to the extent a party thereto in and
to the Collateral purported to be pledged by it thereunder and described
therein, and upon (i) the initial extension of credit hereunder, (ii) the
filing of appropriately completed Uniform Commercial Code financing statements
and continuations thereof in the jurisdictions specified therein, (iii) the
filing of appropriately completed short-form assignments in the U.S. Patent and
Trademark Office and the U.S. Copyright Office, (iv) in the case of
uncertificated securities, compliance with Section 8-313 (or its successor
provision) of the applicable Uniform Commercial Code, and (v) the possession by
the Agent of any certificates evidencing the securities pledged thereby, such
security interest and Lien shall constitute a fully perfected and first
priority security interest in and Lien upon such right, title and interest of
each of the Borrower and its Subsidiaries in and to such Collateral, to the
extent that such security interest and Lien can be perfected by such filings,
actions and possession, subject only to Permitted Liens.

         5.21    Solvency. The Borrower and each of its Subsidiaries is
Solvent.

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                                   ARTICLE VI

                             AFFIRMATIVE COVENANTS

         The Borrower covenants and agrees that, until the termination of the
Revolving Credit Commitments, the Swingline Commitment, the termination or
expiration of all Letters of Credit and the payment in full of all principal
and interest with respect to the Loans and all Reimbursement Obligations
together with all other amounts then due and owing hereunder:

         6.1     Financial Statements.  The Borrower will deliver to each
Lender:

         (a)     As soon as available and in any event within forty-five (45)
days after the end of each of the first three fiscal quarters of each fiscal
year (or, if later, within 10 days after the Borrower's receipt of the audit
report for the previous fiscal year, with respect to the first quarter only),
beginning with the fiscal quarter ending June 30, 1998, unaudited consolidated
balance sheets of the Borrower and its consolidated Subsidiaries as of the end
of such fiscal quarter and unaudited consolidated and consolidating (with
respect to the Borrower, on the one hand, and Eclipsys Solutions Corp. and its
Subsidiaries, on the other hand) statements of income, retained earnings and
cash flows for the Borrower and its consolidated Subsidiaries for the fiscal
quarter then ended and for that portion of the fiscal year then ended, in each
case setting forth comparative budgeted figures for such period and comparative
figures as of the end of and for the corresponding period in the preceding
fiscal year, all prepared in accordance with Generally Accepted Accounting
Principles (subject to the absence of notes required by Generally Accepted
Accounting Principles and subject to normal year-end adjustments) applied on a
basis consistent with that of the preceding quarter or containing disclosure of
the effect on the financial condition or results of operations of any change in
the application of accounting principles and practices during such quarter and
certified by a Financial Officer of the Borrower as fairly presenting the
consolidated financial condition and consolidated and consolidating results of
operations of the Borrower and its consolidated Subsidiaries as of the dates
and for the periods indicated;

         (b)     As soon as available and in any event within 90 days after the
end of each fiscal year, beginning with the fiscal year ending December 31,
1999, (i) an audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as of the end of such fiscal year and audited
consolidated statements of income, retained earnings and cash flows for the
Borrower and its consolidated Subsidiaries for the fiscal year then ended, in
each case setting forth comparative figures for the preceding fiscal year and
comparable budgeted figures for the fiscal year then ended, and including the
notes thereto, and (ii) unaudited consolidating (with respect to the Borrower,
on the one hand, and Eclipsys Solutions Corp. and its consolidated
Subsidiaries, on the other hand) statements of income, retained earnings and
cash flows for the Borrower and its Subsidiaries for the fiscal year then
ended, all prepared in accordance with Generally Accepted Accounting Principles
applied on a basis consistent with those of the preceding year or containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during the
year, certified (with respect to the unaudited statements) by a Financial
Officer of the Borrower as fairly presenting the consolidated financial
condition and consolidated and consolidating results of operations of the
Borrower and its consolidated Subsidiaries as of the dates and for the

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<PAGE>   69

periods indicated, together (in the case of the audited statements) with (y) a
report thereon by Price Waterhouse LLP or another certified public accounting
firm of recognized national standing reasonably acceptable to the Required
Lenders that is not qualified as to going concern or scope of audit and to the
effect that such financial statements present fairly the consolidated financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries as of the dates and for the periods indicated in accordance with
Generally Accepted Accounting Principles applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial position or results of operations of any change in the application of
accounting principles and practices during such year, and (z) a certificate by
such accountants to the effect that, based on and in connection with their
examination of the financial statements of the Borrower and its consolidated
Subsidiaries, such accountants obtained no knowledge of the occurrence or
existence of any Default or Event of Default relating to accounting or
financial reporting matters, or a statement specifying the nature and period of
existence of any such Default or Event of Default disclosed by their audit
(provided, however, that such accountants shall not be liable  by reason of the
failure to obtain knowledge of any Default or Event of Default that would not
be disclosed or revealed in the course of an audit conducted in accordance with
Generally Accepted Auditing Standards).

         6.2     Other Business and Financial Information.  The Borrower will
deliver or provide to each Lender:

         (a)     Concurrently with each delivery of the financial statements
described in SECTION 6.1(a) or SECTION 6.1(b), (i) a Compliance Certificate in
the form of EXHIBIT K with respect to the period covered by the financial
statements then being delivered, executed by a Financial Officer of the
Borrower, together with a Covenant Compliance Worksheet reflecting the
computation of the financial covenants set forth in SECTIONS 7.1 through 7.4 as
of the last day of the period covered by such financial statements, and (ii) an
accounts receivable aging schedule as of the last day of such period;

         (b)     As soon as available, but in any event not later than 30 days
prior to the end of each fiscal year, a consolidated operating budget prepared
on a quarterly basis for the Borrower and its Subsidiaries for the next fiscal
year;

         (c)     Promptly upon receipt thereof, copies of any management letter
delivered to the Borrower by its independent certified public accountants in
connection with each annual audit of the Borrower and its Subsidiaries;

         (d)     Promptly upon the sending, filing or receipt thereof, copies
of (i) all regular, periodic and special reports, proxy statements,
registration statements and prospectuses (other than on Form S-8) that the
Borrower or any of its Subsidiaries shall render to or file with the Securities
and Exchange Commission, the National Association of Securities Dealers, Inc.
or any national securities exchange and (ii) all press releases and other
statements made available generally by the Borrower or any of its Subsidiaries
to the public concerning material developments in the business of the Borrower
or any of its Subsidiaries;

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<PAGE>   70

         (e)     Promptly upon (and in any event within five (5) Business Days
after) obtaining knowledge thereof, written notice of any of the following:

                          (i)     the occurrence of any Default or Event of
         Default;

                          (ii)    the institution or threatened institution of
         any action, suit, investigation or proceeding against or affecting the
         Borrower or any of its Subsidiaries, including any such investigation
         or proceeding by any Governmental Authority (other than routine
         periodic inquiries, investigations or reviews), that seeks to enjoin
         or otherwise prevent the consummation of, or to recover damages or
         obtain relief as a result of, any of the Credit Documents, or that
         could, if adversely determined, be reasonably expected, individually
         or in the aggregate, to have a Material Adverse Effect, and any
         material and adverse  development in any litigation or other
         proceeding previously reported pursuant to SECTION 5.5 or this SECTION
         6.2(e)(ii);

                          (iii)   the receipt by the Borrower or any of its
         Subsidiaries from any Governmental Authority of any notice asserting
         any failure by the Borrower or any of its Subsidiaries to be in
         compliance with applicable Requirements of Law or that threatens the
         taking of any action against the Borrower or such Subsidiary or sets
         forth circumstances that, if taken or adversely determined, could be
         reasonably expected to have a Material Adverse Effect;

                          (iv)    the occurrence of any ERISA Event, together
         with (i) a written statement of the chief executive officer or a
         Financial Officer of theBorrower specifying the details of such ERISA
         Event and the action that the Borrower has taken, is taking and
         proposes to take with respect thereto, (ii) a copy of any notice with
         respect to such ERISA Event that may be required to be filed with the
         PBGC and (iii) a copy of any notice delivered by the PBGC to the
         Borrower or such ERISA Affiliate with respect to such ERISA Event;

                          (v)     the termination, resignation or replacement
         of any of the chairman, chief executive officer, or president of the
         Borrower or Eclipsys Solutions Corp. and (together with copies
         thereof) the execution of any material modification of any existing
         employment agreement, or any new employment agreement, with any such
         officer (unless notice has previously been delivered pursuant to
         SECTION 8.10);

                          (vi)    the payment or assertion of a claim for
         payment of any amount in excess of $50,000 by any party to the Merger
         Agreement under SECTIONS 4.4, 10.1 or 10.2 of the Merger Agreement
         (without regard to the "basket" limitation set forth in SECTION 10.6
         thereof), or any other notices delivered or received by the Borrower
         or any of its Subsidiaries under the Merger Agreement;

                          (vii)   the occurrence of any breach, default or
         event of default under (i) the leases identified on SCHEDULE 5.12(b)
         relating to leased properties in Atlanta, Georgia, Roseland, New
         Jersey, or San Jose, California, or (ii) any other lease of real
         property under which the Borrower or any Subsidiary is lessee which
         breach or default could reasonably be expected to have a Material
         Adverse Effect.

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<PAGE>   71

                          (viii)  the occurrence of any material default under,
         or any proposed or threatened termination or cancellation of, any
         material contract or agreement to which the Borrower or any of its
         Subsidiaries is a party, the termination or cancellation of which
         could be reasonably expected to have a Material Adverse Effect;

                          (ix)    the occurrence of any of the following: (i)
         the assertion of any Environmental Claim against or affecting the
         Borrower, any of its Subsidiaries or any real property leased, owned
         or occupied by the Borrower or any of its Subsidiaries; (ii) the
         receipt by the Borrower or any of its  Subsidiaries of notice of any
         alleged violation of or noncompliance with any Environmental Laws; or
         (iii) the taking of any remedial action by the Borrower, any of its
         Subsidiaries or any other Person in response to the actual or alleged
         generation, storage, release, disposal or discharge of any Hazardous
         Substances on, to, upon or from any real property leased, owned or
         occupied by the Borrower or any of its Subsidiaries; but in each case
         under clauses (i), (ii) and (iii) above, only to the extent the same
         could be reasonably expected to have a Material Adverse Effect; and

                          (x)     any other matter or event that has, or could
         be reasonably expected to have, a Material Adverse Effect, together
         with a written statement of the chief executive officer or a Financial
         Officer of the Borrower setting forth the nature and period of
         existence thereof and the action that the Borrower has taken, is
         taking and proposes to take with respect thereto;

         (f)     At the same time required to be provided to the holders of the
Borrower's Preferred Stock or the Warrants, any information or notice required
to be provided to such holders pursuant to the Series A Agreement, the
Preferred Stock Purchase Agreement, the Warrants or the certificate of
incorporation of the Borrower;

         (g)     As soon as reasonably practicable after the consummation of
any Permitted Acquisition, and to the extent not previously provided, copies of
the fully executed acquisition agreement (including schedules and exhibits
thereto) and other material documents and closing papers delivered in
connection therewith;

         (h)     Promptly upon completion thereof, copies of all material
amendments to the certificate or articles of incorporation, bylaws or other
organizational documents of the Borrower or any of its Subsidiaries; and

         (i)     As promptly as reasonably possible, such other information
about the business, condition (financial or otherwise), operations or
properties of the Borrower or any of its Subsidiaries (including any Plan and
any information required to be filed under ERISA, and including any statements,
audits or other reports submitted by or on behalf of the Borrower or any of its
Subsidiaries to any state Governmental Authority) as the Agent or any Lender
may from time to time reasonably request.

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<PAGE>   72

         6.3     Existence; Franchises; Maintenance of Properties.  The
Borrower will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect its corporate existence, except as permitted
otherwise by SECTION 8.1, (ii) obtain, maintain and preserve in full force and
effect all other rights, franchises, licenses, permits, certifications,
approvals and authorizations required by Governmental Authorities and necessary
to the ownership, occupation or use of its properties or the conduct of its
business, except to the extent the failure to do so would not be reasonably
expected to have a  Material Adverse Effect, and (iii) keep all material
properties in good working order and condition (normal wear and tear excepted)
and from time to time make all necessary repairs to and renewals and
replacements of such properties, except to the extent that any of such
properties are obsolete or are being replaced.

         6.4     Compliance with Laws.  The Borrower will, and will cause each
of its Subsidiaries to, comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties, except to the extent the failure so to comply
could not be reasonably expected to have a Material Adverse Effect.

         6.5     Payment of Obligations.  The Borrower will, and will cause
each of its Subsidiaries to, (i) pay all liabilities and obligations as and
when due (subject to any applicable subordination provisions), except to the
extent failure to do so would not be reasonably expected to have a Material
Adverse Effect, and (ii) pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it, upon its income or profits or
upon any of its properties, prior to the date on which penalties would attach
thereto, and all lawful claims that, if unpaid, might become a Lien upon any of
the properties of the Borrower or any of its Subsidiaries; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to pay
any such tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings and as to which the Borrower or such Subsidiary
is maintaining adequate reserves with respect thereto in accordance with
Generally Accepted Accounting Principles, unless and until any tax lien notice
has become effective with respect thereto or until any Lien resulting therefrom
attaches to its properties and becomes enforceable against its other creditors.

         6.6     Insurance.

         (a)     The Borrower will, and will cause each of its Subsidiaries to,
maintain with financially sound and reputable insurance companies insurance
with respect to its assets, properties and business, against such hazards and
liabilities, of such types and in such amounts, as is customarily maintained by
companies of established reputation engaged in the same or similar businesses
similarly situated, and maintain such other or additional insurance on such
terms and subject to such conditions as may be required under any Security
Document.

         (b)     Until the consummation of a Qualified Public Offering, the
Borrower shall maintain and collaterally assign to the Agent, for the benefit
of the Lenders, at least $5,000,000 in key man life insurance on the life of
Harvey J. Wilson with such insurance companies as shall be determined by the
Borrower (provided that such insurance companies shall be reasonably acceptable
to the Agent).

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<PAGE>   73

         6.7     Maintenance of Books and Records; Inspection.  The Borrower
will, and will cause each of its Subsidiaries to, (i) maintain adequate books,
accounts and records, in which full, true and correct entries shall be made of
all financial  transactions in relation to its business and properties, and
prepare all financial statements required under this Agreement, in each case in
accordance with Generally Accepted Accounting Principles and in compliance with
the requirements of any Governmental Authority having jurisdiction over it, and
(ii) permit employees or agents of the Agent or any Lender to inspect its
properties and examine or audit its books, records, working papers and accounts
and make copies and memoranda of them, and to discuss its affairs, finances and
accounts with its officers and employees and, upon notice to the Borrower, the
independent public accountants of the Borrower and its Subsidiaries (and by
this provision the Borrower authorizes such accountants to discuss the finances
and affairs of the Borrower and its Subsidiaries), all at such times and from
time to time, upon reasonable notice and during business hours, as may be
reasonably requested; provided that the Borrower shall not be required to
reimburse the Agent or any Lender in excess of $10,000 per year for the
out-of-pocket or any other expenses incurred in connection with the
administration, monitoring and reviewing of the Loans and the Collateral,
including, without limitation, for travel, meals, long-distance telephone, wire
transfer fees and facsimile transmission charges and copying; provided,
however, that all such expenses incurred upon or during the continuation of any
Event of Default shall not be included in the calculation of the $10,000 amount
referred to above and shall be paid by the Borrower without regard to amount,
subject to the other limitations set forth herein.

         6.8     Creation or Acquisition of Subsidiaries.  Subject to the
provisions of SECTION 8.6, the Borrower may from time to time create or acquire
new Wholly Owned Subsidiaries in connection with Permitted Acquisitions or
otherwise, and the Wholly Owned Subsidiaries of the Borrower may create or
acquire new Wholly Owned Subsidiaries, provided that:

         (a)     Concurrently with the creation or direct or indirect
acquisition by the Borrower thereof, each such new Wholly Owned Subsidiary
(unless such Subsidiary is a Designated Non-Guarantor Subsidiary) will execute
and deliver to the Agent (i) a joinder to the Subsidiary Guaranty, pursuant to
which such new Wholly Owned Subsidiary shall become a guarantor thereunder and
shall agree to guarantee the payment in full of the Obligations of the Borrower
under this Agreement and the other Credit Documents, and (ii) a joinder to the
Subsidiary Pledge and Security Agreement, pursuant to which such new Wholly
Owned Subsidiary shall grant to the Agent a first priority Lien upon and
security interest in its accounts receivable, inventory, equipment, general
intangibles and other personal property as Collateral for its obligations under
the Subsidiary Guaranty, subject only to Permitted Liens;

         (b)     Concurrently with the creation or acquisition of any new
Wholly Owned Subsidiary the Capital Stock of which is directly owned by the
Borrower, the Borrower will execute and deliver to the Agent an amendment or
supplement to the Borrower Pledge and Security Agreement, pursuant to which all
of the Capital Stock of such new Wholly Owned Subsidiary and any promissory
notes from such new Wholly Owned Subsidiary to the Borrower shall be pledged to
the Agent, together with the  certificates evidencing such Capital Stock and
undated stock powers duly executed in blank and any such promissory notes duly
endorsed in blank; and concurrently with the creation or acquisition of any new
Wholly Owned Subsidiary the Capital Stock of which is directly owned by another
Wholly Owned Subsidiary (the "Parent

                                       67
<PAGE>   74

Subsidiary"), the Parent Subsidiary will execute and deliver to the Agent a
joinder, amendment or supplement (as applicable) to the Subsidiary Pledge and
Security Agreement, pursuant to which all of the Capital Stock of such new
Wholly Owned Subsidiary and any promissory notes from such new Wholly Owned
Subsidiary to the Parent Subsidiary shall be pledged to the Agent, together
with the certificates evidencing such Capital Stock and undated stock powers
duly executed in blank and any such promissory notes duly endorsed in blank;

         (c)     As promptly as reasonably possible, the Borrower and its
Subsidiaries will deliver any such other documents, certificates and opinions
(including opinions of local counsel in the jurisdiction of organization of
each such new Wholly Owned Subsidiary), in form and substance reasonably
satisfactory to the Agent, as the Agent may reasonably request in connection
therewith and will take such other action as the Agent may reasonably request
to create in favor of the Agent a first priority perfected security interest in
the Collateral being pledged pursuant to the documents described above, subject
only to Permitted Liens; and

         (d)     Each newly formed or acquired Wholly Owned Subsidiary shall
hold assets located solely in, and shall be organized under the laws of any
jurisdiction of, the United States of America.

         6.9     Year 2000. Borrower shall use its best commercial efforts to
assure that the Borrower's and its Subsidiaries' computer based systems are
able to operate and effectively process data, including dates, on and after
January 1, 2000.  At the request of the Agent, the Borrower shall provide the
Agent assurance acceptable to the Agent of the Borrower's and its Subsidiaries'
Year 2000 capability.

         6.10    Additional Security; Further Assurances.

         (a)     The Borrower will, and will cause each of its Subsidiaries
(other than Designated Non-Guarantor Subsidiaries) to, grant to the Agent from
time to time security interests, Liens and mortgages in and upon such real
properties of the Borrower or such Subsidiary as are not covered by the
Security Documents executed and delivered on the Amendment Effective Date or
pursuant to SECTION 6.8 or as may be requested from time to time by the
Required Lenders (including, without limitation, Liens on real properties
acquired by the Borrower or such Subsidiary in connection with any Permitted
Acquisition); provided that the Borrower will not be obligated to execute and
deliver leasehold mortgages with respect to the leased properties set forth on
SCHEDULE 5.12(b) as of the Amendment Effective Date.  Such security interests,
Liens and mortgages shall be granted pursuant to documentation in form and
substance satisfactory to the Required Lenders and shall constitute valid and
perfected security interests and Liens superior to and prior to the rights  of
all other Persons and subject to no Liens other than Permitted Liens.  Without
limitation of the foregoing, in connection with the grant of any mortgage or
deed of trust with respect to any fee or leasehold interest in real property,
the Borrower will, and will cause each applicable Subsidiary to, at the
Borrower's expense, prepare, obtain and deliver to the Agent any environmental
assessments, appraisals, surveys, title insurance and other matters or
documents (including, without limitation, Landlord Consents) as the Agent may
reasonably request or as may be required under applicable banking laws and
regulations.

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<PAGE>   75

         (b)     The Borrower will, and will cause each of its Subsidiaries to,
make, execute, endorse, acknowledge and deliver any amendments, modifications
or supplements hereto and restatements hereof and any other agreements,
instruments or documents, and take any and all such other actions, as may from
time to time be reasonably requested by the Agent or the Required Lenders to
perfect and maintain the validity and priority of the Liens granted pursuant to
the Security Documents and to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Agent and the Lenders under
this Agreement and the other Credit Documents.

                                  ARTICLE VII

                              FINANCIAL COVENANTS

         The Borrower covenants and agrees that, until the termination of the
Revolving Credit Commitments, the Swingline Commitment, the termination or
expiration of all Letters of Credit and the payment in full of all principal
and interest with respect to the Loans and all Reimbursement Obligations
together with all other amounts then due and owing hereunder:

         7.1     Ratio of Consolidated Funded Debt to Annualized EBITDA.  The
Borrower will not permit the ratio of Consolidated Funded Debt to Annualized
EBITDA (i) as of the last day of any fiscal quarter ending prior to the
successful consummation of a Qualified Public Offering, to be greater than 2.5
to 1.0, and (ii) as of the last day of any fiscal quarter ending after or
concurrently with the successful consummation of a Qualified Public Offering,
to be greater than 3.0 to 1.0.

         7.2     Ratio of Annualized EBITDA to Annualized Interest Expense.
The Borrower will not permit the ratio of Annualized EBITDA to Annualized
Interest Expense to be less than 3.0 to 1.0 as of the last day of any fiscal
quarter.

         7.3     Ratio of Consolidated Funded Debt to Consolidated Total
Capital.  The Borrower will not permit the ratio of Consolidated Funded Debt to
Consolidated Total Capital (i) as of the last day of any fiscal quarter ending
prior to the successful consummation of a Qualified Public Offering, to be
greater than 0.6 to 1.0, and (ii) as of the last day of any fiscal quarter
ending after or concurrently with the successful consummation of a Qualified
Public Offering, to be greater than 0.5 to 1.0.

         7.4     Capital Expenditures.  The Borrower will not permit  Capital
Expenditures during any fiscal year to exceed 6% of the Consolidated Net
Revenues for the previous fiscal year.

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                                  ARTICLE VIII

                               NEGATIVE COVENANTS

         The Borrower covenants and agrees that, until the termination of the
Revolving Credit Commitments, the Swingline Commitment, the termination or
expiration of all Letters of Credit and the payment in full of all principal
and interest with respect to the Loans and all Reimbursement Obligations
together with all other amounts then due and owing hereunder:

         8.1     Merger; Consolidation.  The Borrower will not, and will not
permit or cause any of its Subsidiaries (other than Eclipsys Limited) to,
liquidate, wind up or dissolve, or enter into any consolidation, merger or
other combination, or agree to do any of the foregoing; provided, however,
that:

                          (i)     the Borrower may merge or consolidate with
         another Person so long as (w) the Borrower is the surviving entity,
         (x) if such other Person is a Subsidiary immediately prior to giving
         effect thereto, the aggregate of any cash or other assets of the
         Borrower or any of its Subsidiaries received as consideration pursuant
         to such transaction by Persons other than the Borrower or a Wholly
         Owned Subsidiary shall be deemed to constitute an Investment made by
         the Borrower pursuant to clause (x) of SECTION 8.6, (y) if such other
         Person is not already a Subsidiary immediately prior to giving effect
         thereto, such merger or consolidation shall constitute a Permitted
         Acquisition and the applicable conditions and requirements of SECTION
         8.6(vi) shall be satisfied, and (z) immediately after giving effect
         thereto, no Default or Event of Default would exist; and

                          (ii)    any Subsidiary may merge or consolidate with
         another Person so long as (w) the surviving entity is the Borrower or
         a Wholly Owned Subsidiary and a party to the Subsidiary Guaranty or
         this Agreement, (x) if such other Person is a Subsidiary immediately
         prior to giving effect thereto, the aggregate of any cash or other
         assets of the Borrower or any of its Subsidiaries received as
         consideration pursuant to such transaction by Persons other than the
         Borrower or a Wholly Owned Subsidiary shall be deemed to constitute an
         Investment made by the Borrower pursuant to (x) of SECTION 8.6, (y) if
         such other Person is not already a Subsidiary immediately prior to
         giving effect thereto, such merger or consolidation shall constitute a
         Permitted Acquisition and the applicable conditions and requirements
         of SECTION 8.6(vi) shall be satisfied, and (z) immediately after
         giving effect thereto, no Default or Event of Default would exist.

         8.2     Indebtedness.  The Borrower will not, and will not permit or
cause any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:

                          (i)     Indebtedness incurred under this Agreement,
         the Notes and the other Credit Documents;

                          (ii)    unsecured Indebtedness of the Borrower and
         Wholly Owned Subsidiaries that is expressly subordinated and made
         junior in right and time of payment to the prior

                                       70
<PAGE>   77

         payment in full of the Obligations and that is evidenced by one or
         more written agreements or instruments the terms, conditions and
         provisions (including, without limitation, covenants, events of
         default and subordination provisions) of which are satisfactory in
         form and substance to the Required Lenders in their sole discretion,
         and that, at a minimum and without limitation, (1) bears a stated
         maturity date not earlier than one year after the Revolving Credit
         Maturity Date, (2) does not by its terms provide for any scheduled
         payments of principal, and does not otherwise require any payments of
         principal under any circumstances (other than pursuant to acceleration
         upon default), to be made at any time earlier than one year after the
         Revolving Credit Maturity Date, and (3) contains covenants and
         undertakings that are, in the judgment of the Required Lenders,
         materially less restrictive taken as a whole than those set forth in
         this Agreement, and without limitation of the foregoing such
         agreements and instruments shall not have any financial, affirmative
         or negative covenants or events of default that are more restrictive
         than those contained in this Agreement (the Indebtedness described in
         this clause (iii), "Subordinated Indebtedness"), provided that,
         immediately prior to and after giving effect to the incurrence of such
         Indebtedness, no Default or Event of Default shall have occurred and
         be continuing, and provided further that, prior to the incurrence of
         any such Subordinated Indebtedness, (y) all agreements and instruments
         evidencing such Subordinated Indebtedness shall have been approved in
         writing by the Required Lenders (or the Agent with their approval and
         on their behalf), and (z) the Borrower shall have delivered to each
         Lender a certificate, signed by a Financial Officer, satisfactory in
         form and substance to the Required Lenders and to the effect that,
         after giving effect to the incurrence of such Subordinated
         Indebtedness, the Borrower is in compliance with the financial
         covenants set forth in SECTIONS 7.1 through 7.4, such compliance
         determined with regard to calculations made on a pro forma basis in
         accordance with Generally Accepted Accounting Principles as of the
         last day of the fiscal quarter then most recently ended and as if such
         Subordinated Indebtedness had been incurred on the first day of the
         period applicable to such covenants (such calculations to be attached
         to such certificate);

                          (iii)   Indebtedness existing on the Amendment
         Effective Date and described in SCHEDULE 8.2;

                          (iv)    accrued expenses, current trade or other
         accounts payable and other current liabilities arising in the ordinary
         course of business and not incurred through the borrowing of money,
         provided that the same shall be paid  when due except to the extent
         being contested in good faith and by appropriate proceedings;

                          (v)     unsecured loans and advances by (y) the
         Borrower and its Subsidiaries to Wholly Owned Subsidiaries (other than
         Eclipsys Limited, except for loans of up to the lesser of (i)
         $1,000,000 annually or (ii) the amount of funds in any manner annually
         distributed by Eclipsys Limited to the Borrower, provided that the
         Borrower is in compliance with the Excess Cash requirements hereunder)
         or (z) by any Wholly Owned Subsidiaries to the Borrower, provided that
         any such loan or advance, if requested by the Agent, is evidenced by a
         promissory note, in form and substance satisfactory to the Agent,
         pledged to the Agent pursuant to the Security Documents and, as to
         Indebtedness

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<PAGE>   78

         described in clause (y), is fully subordinated in right and time of
         payment to the Obligations;

                          (vi)    Contingent Obligations permitted under SECTION
         8.3;

                          (vii)   Indebtedness of the Borrower under Hedge
         Agreements entered into with any Lender in respect of the Indebtedness
         incurred pursuant to this Agreement, provided that the notional amount
         of all such agreements at any time shall not exceed the aggregate
         Revolving Credit Commitments at such time;

                          (viii)  Indebtedness of the Borrower and its
         Subsidiaries of the type described in, and secured by Liens of the
         types described in, clause (vi) of SECTION 8.4 of up to $500,000 at
         any one time outstanding;

                          (ix)    Indebtedness assumed or incurred in
         connection with any Permitted Acquisition to the extent approved in
         writing by the Required Lenders prior to the consummation of such
         Permitted Acquisition;

                          (x)     loans to Designated Non-Guarantor Subsidiaries
         to the extent permitted by SECTION 8.6(ix);

                          (xi)    additional unsecured Indebtedness not
         exceeding $500,000 in aggregate principal amount at any one time
         outstanding; and

                          (xii)   refinancings, refundings or extensions of the
         foregoing; provided, that such refinancing, refunding or extensions
         shall not (u) exceed the principal amount refinanced, refunded or
         extended, (v) shorten the maturity (or weighted average life to
         maturity) of such Indebtedness, (w) increase the interest rate
         applicable to such Indebtedness, (x) cause any covenants or
         undertakings (whether affirmative or negative) of the Borrower or any
         Subsidiary in respect of such Indebtedness to be more restrictive than
         such covenants or undertakings had been prior to such refinancing,
         refunding or extension assumed or incurred in connection with any
         Acquisition to the extent approved in writing by the Required Lender
         prior to the  consummation of such Acquisition, (y) facilitate the
         exercise or enforcement of any remedies of any obligee of such
         Indebtedness in respect of any default or event of default thereunder,
         or (z) result in any amendments or modifications of any of the
         subordination provisions applicable to such Indebtedness.

         8.3     Contingent Obligations.  The Borrower will not, and will not
permit or cause any of its Subsidiaries to, create, incur, assume or suffer to
exist any Contingent Obligation other than:

                          (i)     Contingent Obligations incurred pursuant to
         the Transaction Documents;

                          (ii)    Contingent Obligations consisting of the
         indemnification by the Borrower or any of its Subsidiaries of (u) the
         officers, directors, employees and agents of the

                                       72
<PAGE>   79

         Borrower or such Subsidiary, to the extent permissible under the
         corporation law of the jurisdiction in which the Borrower or such
         Subsidiary is organized, (v) commercial banks, investment bankers and
         other independent consultants or professional advisors pursuant to
         agreements relating to the underwriting of the Borrower's or such
         Subsidiary's securities or the rendering of banking or professional
         services to the Borrower or such Subsidiary, (w) landlords, licensors,
         licensees, suppliers, customers and other parties pursuant to
         agreements entered into in the ordinary course of business by the
         Borrower or such Subsidiary, (x) any seller in an Acquisition, and (y)
         any other Person pursuant to customary indemnification or warranty
         provisions in any agreement entered into in the ordinary course of
         business;

                          (iii)   Contingent Obligations owed to a seller in a
         Permitted Acquisition that relate to customary post-closing
         adjustments and payments;

                          (iv)    guarantees by the Borrower or any of its
         Subsidiaries (other than Eclipsys Limited except as set forth on
         SCHEDULE 8.3) of obligations of the Borrower or its Subsidiaries under
         leases permitted hereunder;

                          (v)     guarantees by the Borrower or any of its
         Subsidiaries of any other Indebtedness permitted under SECTION 8.2
         (provided that any guarantees of Subordinated Indebtedness shall be
         subordinated to guarantees of the Obligations to at least the same
         extent and in the same manner as such Subordinated Indebtedness is
         subordinated to the Obligations);

                          (vi)    guarantees by the Borrower set forth on
         SCHEDULE 8.3 assumed in connection with Acquisitions consummated prior
         to the Amendment Effective Date.

         8.4     Liens.  The Borrower will not, and will not permit or cause
any of its Subsidiaries to, directly or indirectly, make, create, incur, assume
or suffer to exist, any Lien upon or with respect to any part of its property
or assets (including without  limitation any rights to receive income or
profits therefrom), whether now owned or hereafter acquired, or file or permit
the filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, assets, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, or agree to do any of the foregoing, other than
the following (collectively, "Permitted Liens"):

                          (i)     Liens created under the Credit Documents;

                          (ii)    Liens in existence on the Amendment Effective
         Date and set forth on SCHEDULE 8.4;

                          (iii)   Liens imposed by law, such as Liens of
         carriers, warehousemen, mechanics, materialmen and landlords, and
         other similar Liens incurred in the ordinary course of business for
         sums not constituting borrowed money that are not overdue for a period
         of more than thirty (30) days or that are being contested in good
         faith by

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<PAGE>   80

         appropriate proceedings and for which adequate reserves have been
         established in accordance with Generally Accepted Accounting
         Principles;

                          (iv)    Liens (other than any Lien imposed by ERISA,
         the creation or incurrence of which would result in an Event of
         Default under SECTION 9.1(j)) incurred in the ordinary course of
         business in connection with worker's compensation, unemployment
         insurance or other forms of governmental insurance or benefits, or to
         secure the performance of letters of credit, bids, tenders, statutory
         obligations, surety and appeal bonds, leases, trade contracts and
         other similar obligations (other than obligations for borrowed money)
         entered into in the ordinary course of business, provided that all
         such Liens would not have a Material Adverse Effect;

                          (v)     Liens for taxes, assessments or other
         governmental charges or statutory obligations that are not delinquent
         or remain payable without any penalty or that are being contested in
         good faith by appropriate proceedings and for which adequate reserves
         have been established in accordance with Generally Accepted Accounting
         Principles;

                          (vi)    Purchase money Liens upon equipment, fixed
         assets or similar property used or leased by the Borrower or any of
         its Subsidiaries in the ordinary course of its business, incurred in
         compliance with SECTION 7.5 hereof, and securing Indebtedness incurred
         solely to pay all or a portion of the purchase price thereof
         (including in connection with capital leases) and any extensions,
         renewals or replacements of such Liens; provided that any such Lien
         (i) shall attach to such property concurrently with or within ten (10)
         days after the acquisition thereof by the Borrower or such Subsidiary,
         (ii) shall not exceed the lesser of (y) the fair market value of such
         property or (z) the cost thereof to the Borrower or such Subsidiary
         and (iii) shall not encumber any other property of the Borrower or any
         of its Subsidiaries;

                          (vii)   Any attachment or judgment Lien not
         constituting an Event of Default under SECTION 9.1(i) that is being
         contested in good faith by appropriate proceedings and for which
         adequate reserves have been established in accordance with Generally
         Accepted Accounting Principles;

                          (viii)  Liens arising from the filing, for notice
         purposes only, of financing statements in respect of operating leases;

                          (ix)    With respect to any real property occupied by
         the Borrower or any of its Subsidiaries, all easements, rights of way,
         licenses and similar encumbrances on title that do not materially
         impair the use of such property for its intended purposes; and

                          (x)     Liens securing Indebtedness permitted
         pursuant to clause (ix) of Section 8.2.

         8.5     Disposition of Assets.  The Borrower will not, and will not
permit or cause any of its Subsidiaries to, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
all or any portion of its assets, business or properties (including, without

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<PAGE>   81

limitation, any Capital Stock of any Subsidiary), or enter into any arrangement
with any Person providing for the lease by the Borrower or any Subsidiary as
lessee of any asset that has been sold or transferred by the Borrower or such
Subsidiary to such Person, or agree to do any of the foregoing, except for:

                          (i)     the sale of inventory and the license or
         lease of Intellectual Property and other assets, in each case in the
         ordinary course of business;

                          (ii)    the sale or exchange of used or obsolete
         equipment to the extent the proceeds of such sale are applied towards,
         or such equipment is exchanged for, similar replacement equipment or
         other equipment to be utilized in business of the Borrower or its
         Subsidiaries;

                          (iii)   the sale, lease or other disposition of
         assets by the Borrower or a Subsidiary of the Borrower to the Borrower
         or to another Wholly Owned Subsidiary or to a Designated Non-Guarantor
         Subsidiary (provided, that the value of assets sold, leased or
         otherwise disposed shall be included as Investments and subject to the
         limitations set forth in SECTION 8.6(ix) hereof), if, immediately
         after giving effect thereto, no Default or Event of Default would
         exist;

                          (iv)    the sale of the network services and
         international divisions of Eclipsys Solutions Corporation (including
         the stock or assets of Eclipsys Limited), to the extent the aggregate
         proceeds of such dispositions do not exceed $2,000,000;

                          (v)     the sale or disposition of assets outside the
         ordinary course of business for cash, provided that (x) the Net Cash
         Proceeds from such sales or dispositions do not exceed $500,000 in the
         aggregate for the Borrower and its Subsidiaries during any fiscal
         year, (y) in no event shall the Borrower or any of its Subsidiaries
         sell or otherwise dispose of any of the Capital Stock of any
         Subsidiary (except as set forth on clause (iv) above), and (z)
         immediately after giving effect thereto, no Default or Event of
         Default would exist; and

                          (vi)    the sale or disposition of Investments
         expressly permitted to be held pursuant to clause (i) of SECTION 8.6.

         To the extent any Collateral is sold as permitted by this Section,
such Collateral shall be sold free and clear of all liens created by the Credit
Documents, and the Agent shall be authorized to take any actions it deems
appropriate in order to effect the foregoing.

         8.6     Investments.  The Borrower will not, and will not permit or
cause any of its Subsidiaries to, directly or indirectly, purchase, own, invest
in or otherwise acquire any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or
consummate an Acquisition or create or acquire any Subsidiary, or become a
partner or joint venturer in any

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<PAGE>   82

partnership or joint venture (collectively, "Investments"), or make a
commitment or otherwise agree to do any of the foregoing, other than:

                          (i)     Cash Equivalents;

                          (ii)    Investments consisting of the purchase,
         acquisition, license or lease of inventory, supplies, materials,
         equipment, intellectual property and other assets in the ordinary
         course of business;

                          (iii)   Investments consisting of loans and advances
         to employees for reasonable travel, relocation and business expenses
         in the ordinary course of business (provided that the aggregate
         outstanding amount of all such loans and advances shall not exceed
         $400,000 at any time), extensions of trade credit in the ordinary
         course of business, and prepaid expenses incurred in the ordinary
         course of business;

                          (iv)    without duplication, Investments consisting
         of Indebtedness permitted under clause (v) of SECTION 8.2;

                          (v)     Investments existing on the Amendment
         Effective Date and described in SCHEDULE 8.6;

                          (vi)    Investments consisting of Acquisitions with
         respect to which all of the following conditions have been satisfied or
         waived in writing by the Required Lenders or the Agent on their behalf
         ("Permitted Acquisitions"):

                                  (a)     Either (i) the Required Lenders
                          shall have given their prior written consent to the
                          consummation of such Acquisition, which consent may
                          be in their sole discretion and may be given subject
                          to such terms and conditions as the Required Lenders
                          may establish in addition to the terms and
                          conditions set forth in this SECTION 8.6(vi), or (ii)
                          (A) with respect to any Acquisition occurring prior
                          to the successful consummation of a Qualified Public
                          Offering, the Acquisition Amount relating to any such
                          Acquisition does not exceed $500,000 individually
                          and, together with the Acquisition Amount of all
                          Acquisitions under this clause (vi) since the
                          Closing Date (as defined in the Original Credit
                          Agreement), $1,500,000 in the aggregate and (B) with
                          respect to any Acquisition occurring after or
                          concurrently with the successful consummation of a
                          Qualified Public Offering, (1) the total Acquisition
                          Amount for such Acquisition does not exceed
                          $35,000,000 and/or (2) the Borrower incurs a Borrowing
                          directly or indirectly, of less than $5,000,000 in
                          connection with any individual Acquisition or incurs
                          Borrowings of less than $35,000,000, directly or
                          indirectly, in connection with all Acquisitions in
                          the aggregate in any fiscal year of the Borrower;
                          provided that any Acquisition with a total
                          Acquisition Amount of greater than $35,000,000 shall
                          require Required Lender approval;

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<PAGE>   83

                          (b)     With respect to each such Acquisition, no
                 Default or Event of Default shall have occurred and be
                 continuing at the time of the consummation of such Acquisition
                 or would exist immediately after giving effect thereto; and

                          (c)     Not less than ten (10) Business Days prior to
                 the consummation of any such Acquisition, the Borrower shall
                 have delivered to the Agent and each Lender the following
                 items:

                                  (1)      a reasonably detailed description of
                          the material terms of such Acquisition (including,
                          without limitation, the purchase price and method and
                          structure of payment) and of each Person or business
                          that is the subject of such Acquisition (each, a
                          "Target");

                                  (2)      historical financial statements of
                          the Target (or, if there are two or more Targets that
                          are the subject of such Acquisition and that are part
                          of the same consolidated group, consolidated
                          historical financial statements for all such Targets)
                          for the most recent fiscal year available and, if
                          available, for any interim periods since the most
                          recent fiscal year-end (including a calculation of
                          revenue and cash flow during such period) (provided
                          that, with respect to Acquisitions described in
                          clause (ii) of subsection  (a) above, such financial
                          statements shall be delivered as promptly as
                          practicable and not more than ten (10) Business Days
                          after the consummation of the Acquisition);

                                  (3)      consolidated projected income
                          statements of the Borrower and its Subsidiaries
                          (giving effect to such Acquisition and the
                          consolidation with the Borrower of each relevant
                          Target) for the two-year period following the
                          consummation of such Acquisition, in reasonable
                          detail (including a calculation of Consolidated
                          EBITDA during such periods), together with any
                          appropriate statement of assumptions and pro forma
                          adjustments (provided that, with respect to
                          Acquisitions described in clause (ii) of subsection
                          (a) above, such financial statements shall be
                          delivered as promptly as practicable and not more
                          than ten (10) Business Days after the consummation of
                          the Acquisition); and

                                  (4)      a certificate, in form and substance
                          satisfactory to the Agent, executed by a Financial
                          Officer of the Borrower setting forth the applicable
                          purchase price and further to the effect that, to the
                          best of such individual's knowledge, (w) the
                          consummation of such Acquisition will not result in a
                          violation of any provision of this SECTION 8.6(vi),
                          (x) after giving effect to such Acquisition and any
                          Borrowings made in connection therewith, the Borrower
                          is in compliance with the financial covenants
                          contained in SECTIONS 7.1 through 7.4, such
                          compliance determined with regard to calculations
                          made on a pro forma basis in accordance with
                          Generally Accepted Accounting Principles as if each
                          Target had been consolidated with the Borrower and
                          its Subsidiaries for those periods

                                       77
<PAGE>   84

                          applicable to such covenants as determined for the
                          most recent calculation period (such calculations to
                          be attached to the certificate), (y) the Borrower
                          believes in good faith that it will continue to
                          comply with such financial covenants for a period of
                          one year following the date of the consummation of
                          such Acquisition, and (z) after giving effect to such
                          Acquisition and any Borrowings in connection
                          therewith, the Borrower believes in good faith that
                          it will have sufficient availability under the
                          Revolving Credit Commitments to meet its ongoing
                          working capital requirements; and

                          (d)     At the request of the Agent or any Lender,
                 the Borrower will furnish copies of current drafts or, to the
                 extent available, final versions, of the definitive
                 acquisition agreement (including schedules and exhibits
                 thereto) and other material documents and agreements delivered
                 or to be delivered in connection therewith;

                 (vii)   existing Investments in Persons that are Subsidiaries
         on the Amendment Effective Date;

                 (viii)  Investments in Wholly Owned Subsidiaries
         (other than Eclipsys Limited) and the creation of and Investments in
         newly created or acquired Wholly Owned Subsidiaries (other than
         Designated Non-Guarantor Subsidiaries) with respect to which the
         applicable conditions and requirements of SECTION 6.8 have been
         satisfied, excluding in each case Investments in assets, properties or
         Persons located outside the United States of America;

                 (ix)     the creation of and Investments in Designated
         Non-Guarantor Subsidiaries, provided (i) all Investments in any single
         Designated Non-Guarantor Subsidiary do not exceed $350,000, (ii) the
         aggregate of all Investments in Designated Non-Guarantor Subsidiaries
         under this clause (ix) since the Closing Date (as defined in the
         Original Credit Agreement) does not exceed $1,000,000, (iii) the
         Borrower or a Wholly Owned Subsidiary owns not less than 50% of the
         total economic equity or ownership interest in, and otherwise
         exercises a controlling influence over the management and policies of,
         such Designated Non-Guarantor Subsidiary, and (iv) the Capital Stock
         (or a security interest in the dividends or distributions) of such
         Designated Non-Guarantor Subsidiary held (or to be received) by the
         Borrower or any of its Subsidiaries is pledged or granted to the
         Agent, on terms satisfactory to the Agent in its sole discretion,
         pursuant to the Borrower Pledge and Security Agreement or the
         Subsidiary Pledge and Security Agreement (it being acknowledged that
         the Borrower or Subsidiary holding such Capital Stock shall use its
         commercially reasonable efforts (not to include the institution of
         litigation or the payment of any costs or fees other than incidental
         costs or fees relating thereto), including by seeking to obtain any
         necessary consents, to pledge such Capital Stock rather than the
         security interest in such dividends or distributions); and

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<PAGE>   85

                 (x)     Investments (other than Investments specified
         in clauses (i) through (ix) above), in an aggregate amount not
         exceeding $250,000 for all such Investments from and after the
         Amendment Effective Date.

         8.7     Restricted Payments.

         (a)     The Borrower will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, declare or make any dividend payment,
or make any other distribution or payment of cash, property or assets, in
respect of any of its Capital Stock or any warrants, rights or options to
acquire its Capital Stock, or make any payment to any holders of its Capital
Stock or any Warrants, rights or options to acquire its Capital Stock under the
Preferred Stock Purchase Agreement, the Series G Preferred Stock Purchase
Agreement, or the Warrants, or purchase, redeem, retire or otherwise acquire
for value any shares of its Capital Stock (including any Preferred Stock) or
any warrants,  rights or options to acquire its Capital Stock (including the
Warrants), or set aside funds for any of the foregoing, except that:

                 (i)     the Borrower may declare and make dividend
         payments or other distributions payable solely in Qualified Capital
         Stock;

                 (ii)    each Subsidiary of the Borrower may declare
         and make dividend payments or other distributions to the Borrower or
         any Wholly Owned Subsidiary of the Borrower, to the extent not
         prohibited under applicable Requirements of Law;

                 (iii)   the Borrower may purchase or redeem any
         shares of its Capital Stock provided the amount of cash or the Fair
         Market Value of other consideration paid in exchange therefor shall
         not exceed $50,000 for all such transactions after the Amendment
         Effective Date (other than pursuant to SUBSECTION (V) below);

                 (iv)    upon the terms set forth in Section 8 of the
         Stockholders Agreement, the Borrower may purchase its Capital Stock
         held by Partners Healthcare System, Inc. upon the exercise of the
         "Partners Put" (as defined in the Stockholders Agreement), provided
         that the Company Note (as defined in the Stockholders Agreement) is
         subordinated to the obligations on terms satisfactory to the Agent in
         its sole discretion;

                 (v)      concurrently with or immediately following the
         closing of the initial Qualified Public Offering, the Borrower may
         redeem all of the outstanding shares of its Series B 8.5% Redeemable
         Preferred Stock and Series C 8.5% Redeemable Preferred Stock using the
         proceeds of such Qualified Public Offering;

                 (vi)     concurrently with or immediately following the
         closing of the initial Qualified Public Offering and after any
         repayment obligations under Section 2.6(c) of this Agreement have been
         met, the Borrower may pay the subordinated promissory notes, dated
         June 26, 1997, issued jointly by the Borrower and SDK Medical Computer
         Services Corporation in connection with the acquisition of SDK Medical
         Computer Services Corporation in an aggregate amount of $7,588,159.95
         (the "SDK Notes") using the remaining portion of the proceeds of the
         initial Qualified Public Offering after the

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         redemption of shares as set forth in paragraph (v) above and the
         repayment of outstanding amounts under this Agreement pursuant to
         Section 2.6(c); and

                 (vii)    after the successful consummation of a Qualified
         Public Offering, the Borrower may repurchase shares of stock of the
         Borrower in cash in an amount not exceeding $10,000,000 per fiscal
         year as long as (A) such redemption payments are made with Excess Cash
         and (B) no Default or Event of Default has occurred and is continuing
         both before and after giving effect to such dividend  payment.

         (b)     The Borrower will not, and will not permit or cause any of its
Subsidiaries to, make (or give any notice in respect of) any voluntary or
optional payment or prepayment of principal on, or directly or indirectly make
any redemption (including pursuant to any change of control provision),
retirement, defeasance or other acquisition for value of, any Subordinated
Indebtedness, or make any deposit or otherwise set aside funds for any of the
foregoing purposes.

         8.8     Transactions with Affiliates.  The Borrower will not, and will
not permit or cause any of its Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of the Borrower or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate of the Borrower or such Subsidiary;
provided, however, that nothing contained in this Section shall prohibit:

                 (i)     transactions described on SCHEDULE 8.8 or transactions
         otherwise permitted under this Agreement;

                 (ii)    transactions after the Amendment Effective
         Date that are contemplated by the Preferred Stock Purchase Agreement,
         the Series G Preferred Stock Purchase Agreement, the Warrants, the
         Stockholders Agreement, the Registration Rights Agreement and any
         other Transaction Document and that are not prohibited by any other
         provision of this Agreement or any other Credit Document, and the
         performance by the Borrower and its Subsidiaries of their respective
         obligations under the Transaction Documents;

                 (iii)   travel or other reasonable expense advances
         to employees, officers, directors and Board observers in the ordinary
         course of business;

                 (iv)    transactions among or between the Borrower or
         any Subsidiary that are not prohibited by any other provisions of this
         Agreement or any other Credit Document.

         8.9     Lines of Business.  The Borrower will not, and will not permit
or cause any of its Subsidiaries to, engage in any business other than the
businesses in which it is engaged on the date hereof or a business reasonably
related thereto.

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<PAGE>   87

         8.10    Certain Amendments.  The Borrower will not, and will not
permit or cause any of its Subsidiaries to, without the prior written consent
of the Required Lenders (not to be unreasonably withheld or delayed), (i)
amend, modify or waive, or permit the amendment, modification or waiver of, any
provision of any Subordinated Indebtedness, or breach or otherwise violate any
of the subordination provisions applicable thereto, including, without
limitation, restrictions against payment of principal and interest thereon
(other than amendments, modifications or waivers  that do not affect payments,
prepayments, subordination, the definition of senior indebtedness, information,
affirmative or negative covenants, defaults or other provisions that would be
expected to affect the Lenders adversely, as determined in the reasonable
judgment of the Required Lenders), (ii) amend, modify or waive, or permit the
amendment, modification or waiver of, in any manner that would be expected to
affect the Lenders adversely (as determined in the reasonable judgment of the
Required Lenders), any provision of the Preferred Stock Purchase Agreement, the
Series G Preferred Stock Purchase Agreement, the Stockholders Agreement, the
Warrants, the Partners/B&W Agreements, the Wilson Employment Agreement or any
other agreement entered into by it with respect to its Capital Stock, or enter
into any new agreement with respect to its Capital Stock (other than any
underwriting agreement necessary for the consummation of a Qualified Public
Offering), or (iii) amend, modify or change, in any manner that would be
expected to affect the Lenders adversely (as determined in the reasonable
judgment of the Required Lenders), any provision of its certificate or articles
of incorporation, certificate of partnership, certificate or articles of
organization, operating agreement, partnership agreement or bylaws, as
applicable, or the terms of any class or series of its Capital Stock (including
Preferred Stock).  The Borrower will give no less than five (5) Business Days'
prior written notice to the Agent of any proposed amendment, modification or
waiver of or with respect to any document or agreement referenced in this
SECTION 8.10.

         8.11    Limitation on Certain Restrictions.  The Borrower will not,
and will not permit or cause any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any restriction or encumbrance on (i) the ability of the Borrower and its
Subsidiaries to perform and comply with their respective obligations under the
Credit Documents or (ii) the ability of any Subsidiary of the Borrower to make
any dividend payments or other distributions in respect of its Capital Stock,
to repay Indebtedness owed to the Borrower or any other Subsidiary, to make
loans or advances to the Borrower or any other Subsidiary, or to transfer any
of its assets or properties to the Borrower or any other Subsidiary, in each
case other than such restrictions or encumbrances existing under or by reason
of (i) the Credit Documents, (ii) applicable Requirements of Law, (iii)
customary non-assignment provisions in any lease governing a leasehold interest
or in any permitted purchase money security interest document and (iv)
customary non-assignment provisions in any license governing Intellectual
Property provided by a third party.

         8.12    No Other Negative Pledges.  The Borrower will not, and will
not permit or cause any of its Subsidiaries to, directly or indirectly, enter
into or suffer to exist any agreement or restriction that prohibits or
conditions the creation, incurrence or assumption of any Lien upon or with
respect to any part of its property or assets, whether now owned or hereafter
acquired, or agree to do any of the foregoing, other than as set forth in this
Agreement and the Security Documents, other than such restrictions or
encumbrances existing under or by reason of

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<PAGE>   88

(i) customary non-assignment provisions in any lease governing a  leasehold
interest or in permitted purchase money security interest documents and (ii)
customary non-assignment provisions in any license governing Intellectual
Property provided by a third party.

         8.13    Fiscal Year.  The Borrower will not, and will not permit or
cause any of its Subsidiaries to, change the ending date of its fiscal year to
a date other than December 31 unless (i) the Borrower gives the Agent written
notice of its intention to change such fiscal year at least sixty (60) days
prior thereto, and (ii) this Agreement shall have been amended to make any
changes in the financial covenants and other terms and conditions of this
Agreement to the extent necessary in the Required Lenders' reasonable
determination to reflect the new fiscal year end.

         8.14    Accounting Changes.  The Borrower will not, and will not
permit or cause any of its Subsidiaries to, make or permit any material change
in its accounting policies or reporting practices, except as may be required by
Generally Accepted Accounting Principles.

                                   ARTICLE IX

                               EVENTS OF DEFAULT

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

         (a)     The Borrower shall fail to pay any principal of any Loan or
any Reimbursement Obligation when due;

         (b)     The Borrower shall fail to pay any interest on any Loan, any
fee or any other Obligation (other than as set forth in subsection (a) above)
when due, and such failure shall continue unremedied for three (3) days;

         (c)     The Borrower shall fail to observe, perform or comply with, in
any material respect, any condition, covenant or agreement contained in any of
SECTIONS 2.14, 6.2(e)(i), 6.3(i), 6.8, ARTICLE VII or ARTICLE VIII;

         (d)     The Borrower or any of its Subsidiaries shall fail to observe,
perform or comply with any condition, covenant or agreement contained in this
Agreement or any of the other Credit Documents other than those enumerated in
subsections (a) and (b) above, and such failure shall continue unremedied for
any grace period specifically applicable thereto or, if no such grace period is
applicable, for a period of thirty (30) days after the earlier of (i) the date
on which the Borrower acquires knowledge thereof and (ii) the date on which
written notice thereof is delivered by the Agent or any Lender to the Borrower;

         (e)     (i) Any representation or warranty made or deemed made by, or
on behalf of the Borrower or any of its Subsidiaries in this Agreement or any
of the other Credit Documents shall prove to have been false or misleading in
any material respect as of the time made or deemed made; (ii) or any
representation or warranty made or deemed made by or on behalf of ALLTEL

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Healthcare Information Services, Inc. in the Merger Agreement or in any
certificate, instrument, report or other document furnished in connection
therewith or in connection with the transactions contemplated thereby shall
prove to have been false or misleading in any material respect as of the time
made, deemed made or furnished, and in the case of this clause (ii) such
misrepresentation would reasonably be expected to have a Material Adverse
Effect;

         (f)     The Borrower or any of its Subsidiaries shall (i) fail to pay
when due (whether by scheduled maturity, acceleration or otherwise and after
giving effect to any applicable grace period) any principal of or interest on
any Indebtedness (other than the Indebtedness incurred pursuant to this
Agreement) having an aggregate principal amount of at least $250,000; or (ii)
fail to observe, perform or comply with any condition, covenant or agreement
contained in any agreement or instrument evidencing or relating to any such
Indebtedness, or any other event shall occur or condition exist in respect
thereof, and the effect of such failure, event or condition is to cause, or
permit the holder or holders of such Indebtedness (or a trustee or agent on its
or their behalf) to cause (with the giving of notice, lapse of time, or both),
such Indebtedness to become due, or to be prepaid, redeemed (other than
pursuant to a regular schedule therefor), purchased or defeased, prior to its
stated maturity;

         (g)     The Borrower or any of its Subsidiaries shall (i) file a
voluntary petition or commence a voluntary case seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts or
any other relief under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to controvert in a timely and appropriate
manner, any petition or case of the type described in subsection (g) below,
(iii) apply for or consent to the appointment of or taking possession by a
custodian, trustee, receiver or similar official for or of itself or all or a
substantial part of its properties or assets, (iv) fail generally, or admit in
writing its inability, to pay its debts generally as they become due, (v) make
a general assignment for the benefit of creditors or (vi) take any corporate
action to authorize or approve any of the foregoing;

         (h)     Any involuntary petition or case shall be filed or commenced
against the Borrower or any of its Subsidiaries seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts,
the appointment of a custodian, trustee, receiver or similar official for it or
all or a substantial part of its properties or any other relief under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, and such petition or case shall continue
undismissed and unstayed for a period of sixty (60) days; or an order, judgment
or decree approving or ordering any of the foregoing shall be entered in any
such proceeding;

         (i)     Any one or more money judgments, writs or warrants of
attachment, executions or similar processes involving an aggregate amount
(exclusive of amounts fully bonded or covered by insurance as to which the
surety or insurer, as the case may be, has acknowledged its liability in
writing) in excess of $100,000 shall be entered or filed against the Borrower
or any of its Subsidiaries or any of their respective properties and the same
shall not be dismissed, stayed or discharged for a period of thirty (30) days
or in any event later than five days prior to the date of any proposed sale
thereunder;

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         (j)     Any ERISA Event shall occur or exist with respect to any Plan
or Multiemployer Plan, and such ERISA Event, together with all other ERISA
Events then existing, if any, could be reasonably expected to have a Material
Adverse Effect;

         (k)     Any agreement or contract to which the Borrower or any of its
Subsidiaries is a party shall be terminated by the other party thereto prior to
the scheduled termination thereof or shall, for any other reason (other than
pursuant to the scheduled termination thereof or termination by the Borrower or
such Subsidiary), fail to be in full force and effect and enforceable by the
Borrower or such Subsidiary in accordance with its terms, and such event or
condition, together with all other such events or conditions, if any, would be
reasonably expected to have a Material Adverse Effect;

         (l)     Any of the Partners/B&W Agreements shall be terminated other
than pursuant to the scheduled termination thereof (or the license granted to
the Borrower thereunder shall become nonexclusive) or shall, for any other
reason, fail to be in full force and effect and enforceable in accordance with
its terms other than pursuant to the scheduled termination thereof;

         (m)     Any Security Document to which the Borrower or any of its
Subsidiaries is now or hereafter a party shall for any reason cease to be in
full force and effect or cease to be effective to give the Agent a valid and
perfected security interest in and Lien upon the Collateral purported to be
covered thereby, subject to no Liens other than Permitted Liens, in each case
unless any such cessation occurs in accordance with the terms thereof or is due
to any act or failure to act on the part of the Agent or any Lender, or the
Borrower or any of its Subsidiaries shall assert any of the foregoing; or the
Subsidiary Guaranty shall for any reason (except in accordance with the terms
thereof) cease to be in full force and effect, or any Subsidiary or any Person
acting on its behalf shall deny or disaffirm such Subsidiary's obligations
under the Subsidiary Guaranty;

         (n)     Harvey J. Wilson shall cease (i) to be the chief executive
officer of the Borrower, (ii) to perform the normal and customary duties of a
chief executive officer, or (iii) to be involved in the day-to-day operations
of the Borrower, unless upon the occurrence of any event described in (i)-(iii)
above the Borrower shall have hired a new chief executive officer of reasonably
comparable skill and expertise, reasonably acceptable to the Required Lenders,
within ninety (90) days of such occurrence;

         (o)     If any of the following shall occur prior to the successful
consummation of a Qualified Public Offering:  (i) any Person or group of
Persons acting in concert as a partnership or other group (other than the
Equity Purchasers or their Affiliates) shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become, after the date hereof, the "beneficial owner" (within
the meaning of such term under Rule 13d-3 under the Exchange Act) of securities
of the Borrower representing 33 1/3% or more of the combined voting power of
the then outstanding securities of the Borrower ordinarily (and apart from
rights accruing under special circumstances) having the right to vote in the
election of directors; (ii) the replacement of a majority of the Board of
Directors of the Borrower from the directors who constituted the Board of
Directors on the Amendment Effective Date, and such

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replacement shall not have been approved by the Board of Directors of the
Borrower (or its replacement approved by the Board of Directors of the
Borrower) as constituted on the Amendment Effective Date; (iii) General
Atlantic Partners, LLC and its Affiliates collectively shall cease to own
Capital Stock of the Borrower representing at least 80% of the total number of
shares of common stock of the Borrower (determined on an "as converted" fully
diluted basis and after giving effect to any adjustments) held by such Persons
on the Amendment Effective Date; (iv) Partners Healthcare System, Inc. and its
Affiliates collectively shall cease to own Capital Stock of the Borrower
representing at least 80% of the total number of shares of common stock of the
Borrower (determined on an "as converted" fully diluted basis and after giving
effect to any adjustments) held by Partners Healthcare System, Inc. on the
Amendment Effective Date, except as a result of a redemption by the Borrower
(but not any other party) of its Capital Stock upon the exercise of the
"Partners Put" in accordance with clause (iv) of SECTION 8.7(a) above; (v)
Harvey J. Wilson and Wilfam Ltd.  (together with their "Permitted Transferees"
under the Stockholders Agreement) collectively shall cease to own Capital Stock
of the Borrower representing at least 80% of the total number of shares of
common stock of the Borrower (determined on an "as converted" fully diluted
basis and after giving effect to any adjustments) held by such Persons on the
Amendment Effective Date; (vi) General Atlantic Partners LLC and its
Affiliates, Partners Healthcare System, Inc. and its Affiliates, Harvey J.
Wilson, Wilfam, Ltd., and any other employees of the Borrower who own its
Capital Stock on the Amendment Effective Date collectively shall cease to own
at least a majority of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors,
except as a result of a redemption by the Borrower (but not any other party) of
its Capital Stock upon the exercise of the "Partners Put" in accordance with
clause (iv) of SECTION 8.7(a) or (vii) any event giving rise to the "Series B
Put" or the "Series C Put" (referenced in SECTION 8.7(a)(v) above) shall have
occurred, and the Borrower shall have received notice from any of its
stockholders that it wishes to exercise the Series B Put; or

         (p)     Concurrently with or at any time after the successful
consummation of a Qualified Public Offering, (i) any Person or group of Persons
acting in concert as a partnership or other group (other than (i) Harvey J.
Wilson and Wilfam, Ltd. and (ii) General Atlantic Partners, LLC and its
Affiliates) shall become the "beneficial owner" (within the meaning of such
term under Rule 13d-3 under the Exchange Act) of securities of the Borrower
representing 25% or more of the combined voting power of the then outstanding
securities of the Borrower ordinarily (and apart from rights accruing under
special circumstances) having the right to vote in the election of directors.

         9.2     Remedies:  Termination of Revolving Credit Commitments,
Swingline Commitment, Acceleration, etc.  Upon and at any time after the
occurrence and during the continuance of any Event of Default, the Agent shall
at the direction, or may with the consent, of the Required Lenders, take any or
all of the following actions at the same or different times:

         (a)     Declare the Revolving Credit Commitments, the Swingline
Commitment and the Issuing Lender's obligation to issue Letters of Credit, to
be terminated, whereupon the same shall terminate (provided that, upon the
occurrence of an Event of Default pursuant to SECTION 9.1(g)

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<PAGE>   92

or SECTION 9.1(h), the Revolving Credit Commitments, the Swingline Commitment
and the Issuing Lender's obligation to issue Letters of Credit shall
automatically be terminated);

         (b)     Declare all or any part of the outstanding principal amount of
the Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
Default pursuant to SECTION 9.1(g) or SECTION 9.1(h), all of the outstanding
principal amount of the Loans and all other amounts described in this
subsection (b) shall automatically become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower);

         (c)     Direct the Borrower to deposit (and the Borrower hereby
agrees, forthwith upon receipt of notice of such direction from the Agent, to
deposit) with the Agent from time to time such additional amount of cash as is
equal to the aggregate Stated Amount of all Letters of Credit then outstanding
(whether or not any beneficiary under any Letter of Credit shall have drawn or
be entitled at such time to draw thereunder), such amount to be held by the
Agent in the Cash Collateral Account as security for the Letter of Credit
Exposure as described in SECTION 3.8; and

         (d)     Exercise all rights and remedies available to it under this
Agreement, the other Credit Documents and applicable law.

         9.3     Remedies:  Set-Off.  In addition to all other rights and
remedies available under the Credit Documents or applicable law or otherwise,
upon and at any time after the occurrence and during the continuance of any
Event of Default, each Lender may, and each is hereby authorized by the
Borrower, at any such time and from time to time, to the fullest extent
permitted by applicable law, without presentment, demand, protest or other
notice of any kind, all of which are hereby knowingly and expressly waived by
the Borrower (to the fullest extent permitted by applicable law), to set off
and to apply any and all deposits (general or special, time or demand,
provisional or final) at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such Lender
to or for the credit or the account of the Borrower against any or all of the
Obligations to such Lender now or hereafter existing, whether or not such
Obligations may be contingent or unmatured, the Borrower hereby granting to
each Lender a continuing security interest in and Lien upon all such deposits
and other property as security for such Obligations.  Each Lender agrees to
notify the Borrower promptly after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.

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                                   ARTICLE X

                                   THE AGENT

         10.1    Appointment.  Each Lender hereby irrevocably appoints and
authorizes First Union to act as Agent hereunder and under the other Credit
Documents and to take such actions as agent on its behalf hereunder and under
the other Credit Documents, and to exercise such powers and to perform such
duties, as are specifically delegated to the Agent by the terms hereof or
thereof, together with such other powers and duties as are reasonably
incidental thereto.

         10.2    Nature of Duties.  The Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents.  The Agent shall not have, by reason of this Agreement
or any other Credit Document, a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or any other Credit Document, express or
implied, is intended to or shall be so construed as to impose upon the Agent
any obligations or liabilities in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.  The Agent may
execute any of its duties under this Agreement or any other Credit Document by
or through agents or attorneys-in-fact and shall not be responsible to any
Lender for the negligence or misconduct of any agents or attorneys-in-fact that
it selects with reasonable care.  The Agent shall be entitled to consult with
legal counsel, independent public accountants and other experts selected by it
with respect to all matters pertaining to this Agreement and the other Credit
Documents and its duties hereunder and thereunder and shall not be liable to
any Lender for any action taken or omitted to be  taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.  The
Lenders hereby acknowledge that the Agent shall not be under any duty to take
any discretionary action permitted to be taken by it pursuant to the provisions
of this Agreement or any other Credit Document unless it shall be requested in
writing to do so by the Required Lenders (or, where a higher percentage of the
Lenders is expressly required hereunder, such Lenders).

         10.3    Exculpatory Provisions.  Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action taken or omitted to be taken by it or such Person
under or in connection with the Credit Documents, except for its or such
Person's own gross negligence or willful misconduct, (ii) responsible in any
manner to any Lender for any recitals, statements, information, representations
or warranties herein or in any other Credit Document or in any document,
instrument, certificate, report or other writing delivered in connection
herewith or therewith, for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of this Agreement or any other Credit Document,
or for the financial condition of the Borrower, its Subsidiaries or any other
Person, or (iii) required to ascertain or make any inquiry concerning the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document or the existence or possible existence
of any Default or Event of Default, or to inspect the properties, books or
records of the Borrower or any of its Subsidiaries.

         10.4    Reliance by Agent.  The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any notice, statement, consent or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in

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good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons.  The Agent may deem and treat each Lender as the
owner of its interest hereunder for all purposes hereof unless and until a
written notice of the assignment, negotiation or transfer thereof shall have
been given to the Agent in accordance with the provisions of this Agreement.
The Agent shall be entitled to refrain from taking or omitting to take any
action in connection with this Agreement or any other Credit Document (i) if
such action or omission would, in the reasonable opinion of the Agent, violate
any applicable law or any provision of this Agreement or any other Credit
Document or (ii) unless and until it shall have received such advice or
concurrence of the Required Lenders (or, where a higher percentage of the
Lenders is expressly required hereunder, such Lenders) as it deems appropriate
or it shall first have been indemnified to its satisfaction by the Lenders
against any and all liability and expense (other than liability and expense
arising from its own gross negligence or willful misconduct) that may be
incurred by it by reason of taking, continuing to take or omitting to take any
such action.  Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent's acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required  Lenders (or, where a higher
percentage of the Lenders is expressly required hereunder, such Lenders), and
such instructions and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders (including all subsequent Lenders).

         10.5    Non-Reliance on Agent and Other Lenders.  Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representation or warranty to it and that no act by the Agent or any such
Person hereafter taken, including any review of the affairs of the Borrower and
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Agent to any Lender.  Each Lender represents to the Agent that (i) it
has, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to enter into this Agreement and
extend credit to the Borrower hereunder, and (ii) it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
hereunder and under the other Credit Documents and to make such investigation
as it deems necessary to inform itself as to the business, prospects,
operations, properties, financial and other condition and creditworthiness of
the Borrower and its Subsidiaries.  Except as expressly provided in this
Agreement and the other Credit Documents, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Lender with any credit or other information concerning the business, prospects,
operations, properties, financial or other condition or creditworthiness of the
Borrower, its Subsidiaries or any other Person that may at any time come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.

         10.6    Notice of Default.  The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent shall have received written notice from the Borrower or a Lender
referring to this Agreement, describing such Default or

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Event of Default and stating that such notice is a "notice of default."  In the
event that the Agent receives such a notice, the Agent will give notice thereof
to the Lenders as soon as reasonably practicable; provided, however, that if
any such notice has also been furnished to the Lenders, the Agent shall have no
obligation to notify the Lenders with respect thereto.  The Agent shall
(subject to SECTIONS 10.4 and 11.6) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

         10.7    Indemnification.  To the extent the Agent is not reimbursed by
or on behalf of the Borrower, and without limiting the obligation of the
Borrower to do so, the Lenders agree (i) to indemnify the Agent and its
officers, directors, employees, agents, attorneys-in-fact and Affiliates,
ratably in proportion to their respective percentages as used in determining
the Required Lenders as of the date of determination, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, attorneys' fees and
expenses) or disbursements of any kind or nature whatsoever that may at any
time (including, without limitation, at any time following the repayment in
full of the Revolving Loans and the termination of the Revolving Credit
Commitments) be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of this Agreement or any other Credit Document
or any documents contemplated by or referred to herein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing, and (ii) to reimburse the
Agent upon demand, ratably in proportion to their respective percentages as
used in determining the Required Lenders as of the date of determination, for
any expenses incurred by the Agent in connection with the preparation,
negotiation, execution, delivery, administration, amendment, modification,
waiver or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any of the other Credit Documents (including, without
limitation, reasonable attorneys' fees and expenses and compensation of agents
and employees paid for services rendered on behalf of the Lenders); provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the gross negligence or
willful misconduct of the party to be indemnified.

         10.8    The Agent in its Individual Capacity.  With respect to its
Revolving Credit Commitment, the Swingline Commitment, the Loans made by it,
the Letters of Credit issued or participated in by it and the Note or Notes
issued to it, the Agent in its individual capacity and not as Agent shall have
the same rights and powers under the Credit Documents as any other Lender and
may exercise the same as though it were not performing the agency duties
specified herein; and the term "Lenders," "Required Lenders," "holders of
Notes" and any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity.  The Agent and its
Affiliates may accept deposits from, lend money to, make investments in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or any of their respective
Affiliates as if the Agent were not performing the agency duties specified
herein, and may accept fees and other consideration from

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any of them for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.

         10.9    Successor Agent.  The Agent may resign at any time by  giving
ten (10) days' prior written notice to the Borrower and the Lenders.  Upon any
such notice of resignation, the Required Lenders will, with the prior written
consent of the Borrower (which consent shall not be unreasonably withheld),
appoint from among the Lenders a successor to the Agent (provided that the
Borrower's consent shall not be required in the event a Default or Event of
Default shall have occurred and be continuing).  If no successor to the Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within such ten-day period, then the retiring Agent may, on
behalf of the Lenders and after consulting with the Lenders and the Borrower,
appoint a successor Agent from among the Lenders.  Upon the acceptance of any
appointment as Agent by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Credit Documents.  After
any retiring Agent's resignation as Agent, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent.  If no successor to the Agent has accepted appointment as Agent
by the thirtieth (30th) day following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective,
and the Lenders shall thereafter perform all of the duties of the Agent
hereunder and under the other Credit Documents until such time, if any, as the
Required Lenders appoint a successor Agent as provided for hereinabove.

         10.10   Collateral Matters.

         (a)     The Agent is hereby authorized on behalf of the Lenders,
without the necessity of any notice to or further consent from the Lenders,
from time to time (but without any obligation) to take any action with respect
to the Collateral and the Security Documents that may be necessary to perfect
and maintain perfected the Liens upon the Collateral granted pursuant to the
Security Documents.

         (b)     The Lenders hereby irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral (i) upon termination of the Revolving Credit
Commitments and the Swingline Commitments, termination or expiration of all
outstanding Letters of Credit and payment in full of all of the Obligations,
(ii) constituting property sold or to be sold or disposed of as part of or in
connection with any disposition expressly permitted hereunder or under any
other Credit Document or to which the Required Lenders have consented or (iii)
otherwise pursuant to and in accordance with the provisions of any applicable
Credit Document.  Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release Collateral pursuant to this
subsection (b).

         10.11   Issuing Lender and Swingline Lender.  The provisions of this
ARTICLE X (other than SECTION 10.9) shall apply to the Issuing Lender and the
Swingline Lender mutatis mutandis to the same extent as such provisions apply
to the Agent.

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                                   ARTICLE XI

                                 MISCELLANEOUS

         11.1    Fees and Expenses.  The Borrower agrees (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Agent (including,
without limitation, the reasonable fees and expenses of counsel to the Agent
but excluding the allocated costs of internal counsel) in connection with the
preparation, negotiation, execution, delivery and syndication of this Agreement
and the other Credit Documents, and all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Agent, but excluding the allocated costs of internal
counsel) in connection with any amendment, modification or waiver hereof or
thereof or consent with respect hereto or thereto, (ii) to pay upon demand all
reasonable out-of-pocket costs and expenses of the Agent and each Lender
(including, without limitation, the reasonable fees and expenses of counsel to
the Agent or any Lender, but excluding the allocated costs of internal counsel)
in connection with (y) any refinancing or restructuring of the credit
arrangement provided under this Agreement, whether in the nature of a
"work-out," in any insolvency or bankruptcy proceeding or otherwise and whether
or not consummated, and (z) the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement or any of the other
Credit Documents, whether in any action, suit or proceeding (including any
bankruptcy or insolvency proceeding) or otherwise, and (iii) to pay and hold
harmless the Agent and each Lender from and against all liability for any
intangibles, documentary, stamp or other similar taxes, fees and excises, if
any, including any interest and penalties, and any finder's or brokerage fees,
commissions and expenses (other than any fees, commissions or expenses of
finders or brokers engaged by the Agent or any Lender), that may be payable in
connection with the transactions contemplated by this Agreement and the other
Credit Documents.

         11.2    Indemnification.  The Borrower agrees, whether or not the
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold harmless the Agent and each Lender and each of their respective
directors, officers, employees, agents and Affiliates, other than any such
Affiliate solely in its capacity as an equity investor in the Borrower (each,
an "Indemnified Person") from and against any and all claims, losses, damages,
obligations, liabilities, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses but excluding the allocated
costs of internal counsel of the Agent or any Lender) of any kind or nature
whatsoever, whether direct, indirect or consequential (collectively,
"Indemnified Costs"), that may at any time be imposed on, incurred by or
asserted against any such Indemnified Person as a result of, arising from or in
any way relating to the preparation, execution, performance or enforcement of
this Agreement, any of the other Credit Documents, any of the transactions
contemplated herein or therein or any transaction financed or to be financed in
whole or in part, directly or  indirectly, with the proceeds of any Revolving
Loans or Letters of Credit, or any action, suit or proceeding (including any
inquiry or investigation) by any Person, whether threatened or initiated,
related to any of the foregoing (including, without limitation, in connection
with the actual or alleged presence or release of Hazardous Substances in or
upon any real property owned or occupied by the Borrower or any of

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its Subsidiaries, and all other Environmental Claims), and in any case whether
or not such Indemnified Person is a party to any such action, proceeding or
suit or a subject of any such inquiry or investigation; provided, however, that
no Indemnified Person shall have the right to be indemnified hereunder for any
Indemnified Costs to the extent resulting primarily from the gross negligence
or willful misconduct of such Indemnified Person.  All of the foregoing
Indemnified Costs of any Indemnified Person shall be paid or reimbursed by the
Borrower, as and when incurred and upon demand.

         11.3    Governing Law; Consent to Jurisdiction.  THIS AGREEMENT AND
THE OTHER CREDIT DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND
SHALL BE DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND (UNLESS OTHERWISE
EXPRESSLY PROVIDED IN ANY SECURITY DOCUMENTS) SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED
THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO
SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR
DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT FROM TIME
TO TIME (THE "UNIFORM CUSTOMS"), AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM
CUSTOMS, THE LAWS OF THE STATE OF NORTH CAROLINA (WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF).  EACH OF THE PARTIES HERETO HEREBY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG
COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT
OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER
ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE
AGENT OR ANY LENDER OR THE BORROWER IS A PARTY, INCLUDING ANY ACTIONS BASED
UPON, ARISING OUT OF, OR IN CONNECTION WITH, ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT OR ANY
LENDER OR THE BORROWER.  EACH OF THE PARTIES HERETO AGREES TO BE BOUND (SUBJECT
TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED
THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF
JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY
SUCH PROCEEDING.  EACH OF THE PARTIES HERETO CONSENTS THAT ALL SERVICE OF
PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT ITS ADDRESS
SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
THE EARLIER OF ACTUAL RECEIPT THEREOF OR (3) DAYS AFTER DEPOSIT IN THE UNITED
STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED.  NOTHING IN THIS
SECTION SHALL AFFECT THE

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RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY IN
THE COURTS OF ANY OTHER  JURISDICTION.

         11.4    Arbitration; Preservation and Limitation of Remedies.

         (a)     Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any other
Credit Document ("Disputes") between or among the Borrower, the Agent and the
Lenders, or any of them, shall be resolved by binding arbitration as provided
herein.  Institution of a judicial proceeding by a party does not waive the
right of that party to demand arbitration hereunder.  Disputes may include,
without limitation, tort claims, counterclaims, disputes as to whether a matter
is subject to arbitration, claims brought as class actions, claims arising from
documents executed in the future, or claims arising out of or connected with
the transactions contemplated by this Agreement and the other Credit Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA"), as in effect from time to time, and Title
9 of the U.S. Code, as amended.  All arbitration hearings shall be conducted in
the city in which the principal office of the Agent is located.  A hearing
shall begin within 90 days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration.  These time limitations
may not be extended unless a party shows cause for extension and then for no
more than a total of 60 days.  The expedited procedures set forth in Rule 51 et
seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000.  All applicable statutes of limitation shall apply to any Dispute.
A judgment upon the award may be entered in any court having jurisdiction.  The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
AAA.  The single arbitrator selected for expedited procedure shall be a retired
judge from the highest court of general jurisdiction, state or federal, of the
state where the hearing will be conducted.  Notwithstanding the foregoing, this
arbitration provision does not apply to Disputes under or related to Hedge
Agreements.

         (b)     Notwithstanding the preceding binding arbitration provisions,
the parties hereto agree to preserve, without diminution, certain remedies that
any party hereto may employ or exercise freely, either alone, in conjunction
with or during a Dispute.  The Agent, on behalf of the Lenders, shall have the
right to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable:  (i) all rights to
foreclose against any Collateral by exercising a power of sale granted pursuant
to any of the Credit Documents or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale; (ii) all
rights of self-help, including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies, including injunctive relief,
sequestration, garnishment, attachment, appointment of a receiver and filing an
involuntary  bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment.  Preservation of these remedies does not limit the
power of an arbitrator to grant similar remedies that may be requested by a
party in a Dispute.  The parties hereto agree that no party shall have a remedy
of punitive or exemplary

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damages against any other party in any Dispute, and each party hereby waives
any right or claim to punitive or exemplary damages that it has now or that may
arise in the future in connection with any Dispute, whether such Dispute is
resolved by arbitration or judicially.

         11.5    Notices.  All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered to the party to be notified at the following
addresses:

         (a)     if to the Borrower, to Eclipsys Corporation, 777 East Atlantic
Avenue, Suite 200, Delray Beach,       Florida 33483, Attention: Chief
Financial Officer, Telecopy No. (561) 243-9390 with a copy to Hale and Dorr
LLP, 1455 Pennsylvania Avenue, N.W., Washington, D.C. 20004; Attention: Brent
B. Siler, Esq.; Telecopy No. (202) 942-8484;

         (b)     if to the Agent, to First Union National Bank, One First Union
Center, TW-10, 301 South College Street, Charlotte, North Carolina 28288-0608,
Attention: Syndication Agency Services, Telecopy No. (704) 383-0288; and

         (c)     if to any Lender, to it at the address for notices set forth
on its signature page hereto (or if to any Lender not a party hereto as of the
date hereof, at the address for notices set forth in its Assignment and
Acceptance);

         or in each case, to such other address as any party may designate for
itself by like notice to all other parties hereto.  All such notices and
communications shall be deemed to have been given (i) if mailed as provided
above by any method other than overnight delivery service, on the third
Business Day after deposit in the mails, (ii) if mailed by overnight delivery
service, telegraphed, telexed, telecopied or cabled, when delivered for
overnight delivery, delivered to the telegraph company, confirmed by telex
answerback, transmitted by telecopier or delivered to the cable company,
respectively, or (iii) if delivered by hand, upon delivery; provided that
notices and communications to the Agent shall not be effective until received
by the Agent.

         11.6    Amendments, Waivers, etc.  No amendment, modification, waiver
or discharge or termination of, or consent to any departure by the Borrower
from, any provision of this Agreement or any other Credit Document, shall be
effective unless in a writing signed by the Required Lenders (or by the Agent
at the direction or with the consent of the Required Lenders and the Borrower),
and then the same shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
modification, waiver, discharge, termination or consent shall:

         (a)     unless agreed to by each Lender directly affected thereby, (i)
reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other
Obligations (other than fees payable to the Agent for its own account), or (ii)
extend the Revolving Credit Maturity Date, the Swingline Maturity Date or any
other date fixed for the payment of any principal of or interest on any
Revolving Loan or Swingline Loan (other than additional interest payable under
Section 2.8(b) at the election of the Required

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Lenders, as provided therein), any fees (other than fees payable to the Agent
for its own account) or any other Obligations;

         (b)     unless agreed to by all of the Lenders, (i) increase or extend
any Revolving Credit Commitment or Swingline Commitment of any Lender (it being
understood that a waiver of any Event of Default, if agreed to by the requisite
Lenders hereunder, shall not constitute such an increase or extension), (ii)
change the percentage of the Total Revolving Credit Commitments, the Swingline
Commitment or of the aggregate unpaid principal amount of the Loans, or the
number or percentage of Lenders, that shall be required for the Lenders or any
of them to take or approve, or direct the Agent to take or approve, any action
hereunder (including as set forth in the definition of "Required Lenders"),
(iii) except as may be otherwise specifically provided in this Agreement or in
any other Credit Document, release all or substantially all of the Collateral,
or release any material Subsidiary from the Subsidiary Guaranty, or (iv) change
any provision of SECTION 2.15 or this SECTION 11.6;

         (c)     unless agreed to by (i) all of the Lenders, extend the expiry
date of any Letter of Credit beyond the seventh day prior to the Revolving
Credit Maturity Date or reduce or forgive any Reimbursement Obligation, or (ii)
Lenders having more than sixty-six and two-thirds percent (66-2/3%) of the
Revolving Credit Commitments (or, if the Revolving Credit Commitments have been
terminated, Lenders holding more than sixty-six and two-thirds percent
(66-2/3%) of the aggregate outstanding principal amount of the Revolving Loans
and Letter of Credit Exposure), change any other provision of ARTICLE III; and

         (d)     unless agreed to by the Issuing Lender, the Swingline Lender
or the Agent in addition to the Lenders required as provided hereinabove to
take such action, affect the respective rights or obligations of the Issuing
Lender, the Swingline Lender or the Agent, as applicable, hereunder or under
any of the other Credit Documents.

         11.7    Assignments, Participations.

         (a)     Each Lender may assign to one or more other Eligible Assignees
(each, an "Assignee") all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of any of its
Revolving Credit Commitments or Swingline Commitment, the outstanding Loans
made by it, the Note or Notes held by it and its participations in Letters of
Credit); provided, however, that (i) any such assignment (other than an
assignment to a Lender) shall not be  made without the prior written consent of
the Agent and the Borrower (to be evidenced by their counterexecution of the
relevant Assignment and Acceptance), which consents shall not be unreasonably
withheld, provided that the Borrower's consent shall not be required in the
event a Default or Event of Default shall have occurred and be continuing, and
provided further that in the case of an assignment of a Revolving Credit
Commitment, the Issuing Lender must also give its prior written consent thereto
(which consent shall not be unreasonably withheld), (ii) each such assignment
by a Lender of any of its interests relating to Loans shall be made in such
manner so that the same portion of its Revolving Credit Commitment, Swingline
Commitment, Loans, Note or Notes and other interests thereunder is assigned to
the relevant Assignee, (iii) except in the case of an assignment to a Lender or
an Affiliate of a Lender, no such assignment shall be in an aggregate principal
amount (determined

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as of the date of the Assignment and Acceptance with respect to such
assignment) less than $5,000,000, determined by combining the amount of the
assigning Lender's, outstanding Revolving Loans, L/C Exposure and Unutilized
Revolving Credit Commitment being assigned pursuant to such assignment (or, if
less, the full amount of the assigning Lender's Revolving Credit Commitment of
the assigning Lender), and (iv) the parties to each such assignment will
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment, and will pay a nonrefundable processing fee of $3,000 to
the Agent for its own account.  Upon such execution, delivery, acceptance and
recording of the Assignment and Acceptance, from and after the effective date
specified therein, which effective date shall be at least five Business Days
after the execution thereof (unless the Agent shall otherwise agree), (A) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of the assigning Lender
hereunder with respect thereto and (B) the assigning Lender shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (other than rights
under the provisions of this Agreement and the other Credit Documents relating
to indemnification or payment of fees, costs and expenses, to the extent such
rights relate to the time prior to the effective date of such Assignment and
Acceptance) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).  The terms and provisions of each
Assignment and Acceptance shall, upon the effectiveness thereof, be
incorporated into and made a part of this Agreement, and the covenants,
agreements and obligations of each Lender set forth therein shall be deemed
made to and for the benefit of the Agent and the other parties hereto as if set
forth at length herein.

         (b)     The Agent will maintain at its address for notices referred to
herein a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders
and the  Revolving Credit Commitment or Swingline Commitment of, and principal
amount of the Loans owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement.  The Register shall be available for inspection
by the Borrower and each Lender at any reasonable time and from time to time
upon reasonable prior notice.

         (c)     Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and counterexecuted by the
Borrower and the Issuing Lender (if required), together with the Note or Notes
subject to such assignment and the processing fee referred to in subsection (a)
above, the Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the
Register and (iii) give notice thereof to the Borrower and the Lenders. Within
five (5) Business Days after its receipt of such notice, the Borrower, at its
own expense, will execute and deliver to the Agent, in exchange for the
surrendered Note or Notes, a new Note or Notes to the order of the Assignee
(and, if the assigning Lender has retained any portion of its rights and
obligations hereunder, to the order of the assigning Lender), prepared in
accordance with the applicable provisions of

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<PAGE>   103

SECTION 2.4 as necessary to reflect, after giving effect to the assignment, the
Revolving Credit Commitment or Swingline Commitment of the Assignee and (to the
extent of any retained interests) the assigning Lender, dated the date of the
replaced Note or Notes and otherwise in substantially the form of EXHIBITS B-1
and B-2, as applicable.  The Agent will return cancelled Notes to the Borrower.

         (d)     Each Lender may, without the consent of the Borrower, the
Agent or any other Lender, sell to one or more other Persons (each, a
"Participant") participations in any portion comprising less than all of its
rights and obligations under this Agreement (including, without limitation, a
portion of its Revolving Credit Commitment, Swingline Commitment, the
outstanding Loans made by it, the Note or Notes held by it and its
participations in Letters of Credit); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged and such Lender shall
remain solely responsible for the performance of such obligations, (ii) no
Lender shall sell any participation that, when taken together with all other
participations, if any, sold by such Lender, covers all of such Lender's rights
and obligations under this Agreement, (iii) any such participation shall be in
an amount of not less than $3,000,000, (iv) the Borrower, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
no Lender shall permit any Participant to have any voting rights or any right
to control the vote of such Lender with respect to any amendment, modification,
waiver, consent or other action hereunder or under any other Credit Document
(except as to actions that would (x) reduce or forgive the principal amount of
any Loan, reduce the rate of or forgive any interest thereon, or reduce or
forgive any fees or other Obligations, (y) extend the  Revolving Credit
Maturity Date, the Swingline Maturity Date or any other date fixed for the
payment of any principal of or interest on any Loan, any fees or any other
Obligations, or (z) increase or extend any Revolving Credit Commitment or
Swingline Commitment of any Lender), and (v) no Participant shall have any
rights under this Agreement or any of the other Credit Documents, each
Participant's rights against the granting Lender in respect of any
participation to be those set forth in the participation agreement, and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not granted such participation. Notwithstanding the foregoing, each
Participant shall have the rights of a Lender for purposes of SECTIONS 2.16(a),
2.16(b), 2.17, 2.18 and 9.3, and shall be entitled to the benefits thereto, to
the extent that the Lender granting such participation would be entitled to
such benefits if the participation had not been made, provided that no
Participant shall be entitled to receive any greater amount pursuant to any of
such Sections than the Lender granting such participation would have been
entitled to receive in respect of the amount of the participation made by such
Lender to such Participant had such participation not been made.

         (e)     Nothing in this Agreement shall be construed to prohibit any
Lender from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment
shall release a Lender from any of its obligations hereunder.

         (f)     Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the Assignee or Participant or proposed Assignee or Participant any
information relating to the Borrower and its Subsidiaries

                                       97
<PAGE>   104

furnished to it by or on behalf of any other party hereto, provided that such
Assignee or Participant or proposed Assignee or Participant agrees in writing
to keep such information confidential to the same extent required of the
Lenders under SECTION 11.13.

         11.8    No Waiver.  The rights and remedies of the Agent and the
Lenders expressly set forth in this Agreement and the other Credit Documents
are cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise.  No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege or be construed
to be a waiver of any Default or Event of Default.  No course of dealing
between any of the Borrower and the Agent or the Lenders or their agents or
employees shall be effective to amend, modify or discharge any provision of
this Agreement or any other Credit Document or to constitute a waiver of any
Default or Event of Default.  No notice to or demand upon the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of the Agent
or any Lender to exercise any right or remedy or take any  other or further
action in any circumstances without notice or demand.

         11.9    Successors and Assigns.  This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors and assigns; provided, however, that (i) the
Borrower shall not sell, assign or transfer any of its rights, interests,
duties or obligations under this Agreement or any other Credit Document without
the prior written consent of all of the Lenders and (ii) any Assignees shall
have such rights and obligations with respect to this Agreement and the other
Credit Documents as are provided for under and pursuant to the provisions of
SECTION 11.7.

         11.10   Survival.  All representations, warranties and agreements made
by or on behalf of the Borrower or any of its Subsidiaries in this Agreement
and in the other Credit Documents shall survive the execution and delivery
hereof or thereof, the making and repayment of the Loans and the issuance and
repayment of the Letters of Credit.  In addition, notwithstanding anything
herein or under applicable law to the contrary, the provisions of this
Agreement and the other Credit Documents relating to indemnification or payment
of fees, costs and expenses, including, without limitation, the provisions of
SECTIONS 2.16(a), 2.16(b), 2.17, 2.18, 10.7, 11.1 and 11.2, shall survive the
payment in full of all Loans and Letters of Credit, the termination of the
Revolving Credit Commitments, the Swingline Commitment and all Letters of
Credit, and any termination of this Agreement or any of the other Credit
Documents.

         11.11   Severability.  To the extent any provision of this Agreement
is prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.

                                       98
<PAGE>   105

         11.12   Construction.  The headings of the various articles, sections
and subsections of this Agreement have been inserted for convenience only and
shall not in any way affect the meaning or construction of any of the
provisions hereof.  Except as otherwise expressly provided herein and in the
other Credit Documents, in the event of any inconsistency or conflict between
any provision of this Agreement and any provision of any of the other Credit
Documents, the provision of this Agreement shall control.

         11.13   Confidentiality.  Each Lender agrees to keep confidential,
pursuant to its customary procedures for handling confidential information of a
similar nature and in accordance with safe and sound banking practices, all
nonpublic information provided to it by or on behalf of the Borrower or any of
its Subsidiaries in connection with this Agreement or any other Credit
Document; provided, however, that any Lender may disclose such information (i)
to its directors, employees and agents and to  its auditors, counsel and other
professional advisors, (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or any other litigation or proceeding
related hereto or to which it is a party, (iv) to the Agent or any other
Lender, (v) to the extent the same has become publicly available other than as
a result of a breach of this Agreement and (vi) to facilitate assignments and
participations contemplated by SECTION 11.7(f).

         11.14   Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.  This Agreement shall
become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Agent and the Borrower of written or
telephonic notification of such execution and authorization of delivery
thereof.

         11.15   Entire Agreement.  THIS AGREEMENT AND THE OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, EXCLUDING THE FEE LETTER, AND (C) MAY NOT BE
AMENDED, SUPPLEMENTED, CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                                       99
<PAGE>   106

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.

                             ECLIPSYS CORPORATION

                             By:     /s/ ROBERT J. VANARIA
                                     -----------------------------------
                                     Name:     Robert J. Vanaria
                                     Title:    Chief Financial Officer

<PAGE>   107

<TABLE>
<S>                                        <C>
                                           FIRST UNION NATIONAL BANK, as Agent,
                                           Swingline Lender, Issuing Bank and Lender

                                           By:  /s/ JOSEPH H. TOWELL
                                                ---------------------------------------
                                                Joseph H. Towell, Senior Vice President

Revolving Credit Commitment:
$30,000,000                                Instructions for wire transfers to the Agent:

                                           First Union National Bank
                                           ABA Routing No. 053000219
                                           Charlotte, North Carolina
                                           General Ledger No. 465906, RC No. 5007
                                           Attention:  Syndication Agency Services
                                           Re:  Eclipsys Corporation

                                           Address for notices (as a Lender):

                                           First Union National Bank of North Carolina
                                           One First Union Center, 5th Floor
                                           301 South College Street
                                           Charlotte, North Carolina 28288-0735
                                           Attention:  James B. Sloan, Jr.
                                           Telephone:  (704) 383-6784
                                           Telecopy:  (704) 383-9144

                                           Lending Office:

                                           First Union National Bank of North Carolina
                                           One First Union Center, 5th Floor
                                           301 South College Street
                                           Charlotte, North Carolina 28288-0735
                                           Attention:  James B. Sloan, Jr.
                                           Telephone:  (704) 383-6784
                                           Telecopy:  (704) 383-9144
</TABLE>

<PAGE>   108

<TABLE>
<S>                                        <C>
                                           BANKBOSTON, N.A., as Co-Agent and Lender

                                           By:  /s/ WALTER J. MARULLO
                                                ---------------------------------------
                                                Walter J. Marullo, Vice President

Revolving Credit Commitment:
$20,000,000                                Instructions for wire transfers to the Agent:

                                           First Union National Bank
                                           ABA Routing No. 053000219
                                           Charlotte, North Carolina
                                           General Ledger No. 465906, RC No. 5007
                                           Attention:  Syndication Agency Services
                                           Re:  Eclipsys Corporation

                                           Address for notices (as a Lender):

                                           BankBoston, N.A.
                                           100 Federal Street, Mail Code 01-08-06
                                           Boston, Massachusetts 02110
                                           Attention: Walter J. Marullo
                                           Telephone: (617) 434-2308
                                           Telecopy:(617) 434-0819
                                           Reference: Eclipsys Corporation

                                           Lending Office:

                                           100 Federal Street
                                           Mail Code 01-08-06
                                           Boston, Massachusetts 02110
                                           Attention: Walter J. Marullo
</TABLE>

                                       2
<PAGE>   109

                              Annex I
                              to First Amended and Restated Credit Agreement
                              First Union National Bank of North Carolina, as
                              Agent Eclipsys Corporation
                              May    , 1998
                              ---------------------------------------------

                                   ANNEX I

A.       APPLICABLE MARGIN PERCENTAGES (Prior to Qualified Public Offering)

<TABLE>
<CAPTION>

                                                   Applicable Margin               Applicable Margin
      Ratio of Consolidated Funded Debt              Percentage for                  Percentage for
            to Annualized EBITDA                        ABR Loans                      LIBOR Loans
  ----------------------------------------       -------------------              --------------------
     <S>                                                 <C>                             <C>
     Greater than or equal to 3.5 to 1.0                 1.75%                           3.00%

     Greater than or equal to 3.0 to 1.0                 1.25%                           2.50%
          but less than 3.5 to 1.0

     Greater than or equal to 2.5 to 1.0                 0.75%                           2.00%
          but less than 3.0 to 1.0

     Greater than or equal to 2.0 to 1.0                 0.25%                           1.50%
          but less than 2.5 to 1.0

     Greater than or equal to 1.5 to 1.0                 0.00%                           1.25%
          but less than 2.0 to 1.0

            Less than 1.5 to 1.0                         0.00%                           1.00%
</TABLE>

B.       APPLICABLE MARGIN PERCENTAGES (After Qualified Public Offering)

<TABLE>
<CAPTION>

                                                   Applicable Margin               Applicable Margin
      Ratio of Consolidated Funded Debt              Percentage for                  Percentage for
            to Annualized EBITDA                       ABR Loans                       LIBOR Loans
  ----------------------------------------       -------------------              --------------------
     <S>                                                 <C>                             <C>
     Greater than or equal to 2.5 to 1.0                 0.50%                           1.75%

     Greater than or equal to 2.0 to 1.0                 0.25%                           1.50%
          but less than 2.5 to 1.0

     Greater than or equal to 1.5 to 1.0                 0.00%                           1.25%
          but less than 2.0 to 1.0

            Less than 1.5 to 1.0                         0.00%                           1.00%
</TABLE>

<PAGE>   110
                 SECOND AMENDMENT TO FIRST AMENDED AND RESTATED
                          CREDIT AGREEMENT AND CONSENT

        THIS SECOND AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AND CONSENT, dated as of the 18th day of November, 1998 (this "Amendment"), is
made among ECLIPSYS CORPORATION, a Delaware corporation (the "Borrower"), the
Lenders (as hereinafter defined) that have executed this Amendment (the
"Required Lenders"), and FIRST UNION NATIONAL BANK, as agent for the Lenders (in
such capacity, the "Agent").

                                    RECITALS

        A. The Borrower, certain banks and other financial institutions (the
"Lenders") and the Agent are parties to a First Amended and Restated Credit
Agreement, dated as of May 29, 1998 (the "Credit Agreement"), providing for the
availability of certain credit facilities to the Borrower upon the terms and
conditions set forth therein. Capitalized terms used herein without definition
shall have the meanings given to them in the Credit Agreement.

        B. The Borrower has requested the amendment of the Investments covenant
of the Credit Agreement and has additionally requested that the Required Lenders
amend the Credit Agreement and consent to a certain Acquisition, and the
Required Lenders have agreed to effect such amendment and consent upon the
terms and conditions set forth herein.

                            STATEMENT OF AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                    ARTICLE I.

                                   AMENDMENTS

        1.1 Investments. SECTION 8.6(vi)(a) of the Credit Agreement is hereby
amended and restated in its entirety as follows:

            "(a) Either (i) the Required Lenders shall have given their prior
        written consent to the consummation of such Acquisition, which consent
        may be in their sole discretion and may be given subject to such terms
        and conditions as the Required Lenders may establish in addition to the
        terms and conditions set forth in this SECTION 8.6(vi), or (ii)(A) the
        total Acquisition Amount for such Acquisition does not exceed
        $35,000,000 and/or (B) the Borrower incurs a

<PAGE>   111

        Borrowing directly or indirectly, of less than $5,000,000 in connection
        with any individual Acquisition or incurs Borrowings of less than
        $35,000,000, directly or indirectly, in connection with all Acquisitions
        in the aggregate in any fiscal year of the Borrower; provided that any
        Acquisition with a total Acquisition Amount of greater than $35,000,000
        shall require Required Lender approval. Notwithstanding the foregoing,
        for any Acquisition that does not constitute a Permitted Acquisition,
        the Borrower shall notify the Agent and the Lenders of such proposed
        Acquisition on or prior to the date of filing any statement with the
        Securities Exchange Commission with respect thereto and on or prior to
        any public announcement thereof. For all Acquisitions, whether
        Permitted Acquisitions or not, the Borrower will also comply with
        requirements of SECTION 8.6(vi)(c) hereof."

                                    ARTICLE II.

                                     CONSENT

        On October 29, 1998, the Borrower executed a definitive agreement with
respect to its intent to purchase (the "Purchase") the stock of Transition
Systems, Inc. for approximately $270,000,000 pursuant to a share exchange. The
Borrower announced the Purchase on October 29,1998 pursuant to press release.
Pursuant to SECTION 8.6(vi) of the Credit Agreement, the Borrower has requested
the consent of the Required Lenders to the Purchase. The Required Lenders
hereby consent to the Purchase for approximately $270,000,000 pursuant to a
share exchange as executed in the definitive agreement dated October 29, 1998,
provided that in connection with the consummation of the Purchase, the
Borrower complies with the provisions of SECTIONS 8.6(vi)(b), (c) and (d) and
SECTION 6.8 of the Credit Agreement to the reasonable satisfaction of the Agent.
Further, the consent of the Required Lenders set forth herein is limited as
specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Credit Agreement or a waiver of
any Default or Event of Default except as expressly set forth herein.

                                   ARTICLE III.

                         REPRESENTATIONS AND WARRANTIES

        The Borrower hereby represents and warrants as follows:

        3.1 Representations and Warranties. After giving effect to this
Amendment, each of the representations and warranties of the Borrower contained
in the Credit Agreement and in the other Loan Documents is true and correct on
and as of the date hereof with the same effect as if made on and as of the date
hereof (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty is true and correct as of such date).

        3.2 No Default. After giving effect to this amendment, no Default or
Event of Default has occurred and is continuing.

                                        2

<PAGE>   112

                                   ARTICLE IV.

                           CONDITIONS TO EFFECTIVENESS

        The effectiveness of the amendments to the Credit Agreement and waiver
set forth in this Amendment is subject to the satisfaction of the following
conditions:

        4.1 Representations and Warranties; Officer's Certificate. The following
shall be true and the Agent shall have received a certificate, signed by the
chief executive officer or chief financial officer of the Borrower, in form and
substance satisfactory to the Agent, certifying that (i) each of the
representations and warranties of the Borrower contained in this Amendment, the
Credit Agreement and the other Loan Documents is true and correct as of the
date of such certificate after giving effect to this Amendment (except to the
extent any such representation or warranty is expressly stated to have been made
as of a specific date, in which case such representation or warranty is true and
correct as of such date), (ii) no Default or Event of Default has occurred and
is continuing after giving effect to this Amendment, and (iii) each of the
conditions set forth in this ARTICLE IV has been satisfied.

        4.2 Other Documents. The Agent shall have received such other documents,
certificates, opinions and instruments as it shall have reasonably requested,
including without limitation all documents required under SECTIONS 6.8 and
8.6(vi) of the Credit Agreement to include:

           (a) If a new Subsidiary is created or acquired:

               (i)   a joinder to the Subsidiary Guaranty;

               (ii)  a joinder to the Subsidiary Pledge and Security Agreement;

               (iii) an amendment to the Borrower and Pledge and Security
        Agreement, together with delivery of the stock certificate and stock
        power for the new Subsidiary and an intercompany note endorsed in blank;

               (iv)  a secretary certificate for such new Subsidiary, with
        attached articles of incorporation, bylaws, resolutions and incumbancy;

               (v)   an opinion of counsel of the Borrower with respect to such
        new Subsidiary; and

               (vi)  an insurance certificate for such Subsidiary,

        all in form and substance satisfactory to the Agent.

           (b) The document required by SECTIONS 8.6(vi)(c) and (d).

                                       3
<PAGE>   113

                                   ARTICLE V.

                                  MISCELLANEOUS

        5.1 Effect of Amendment. From and after the effective date of the
amendments to the Credit Agreement set forth herein, all references to the
Credit Agreement set forth in any other Loan Document or other agreement or
instrument shall, unless otherwise specifically provided, be references to the
Credit Agreement as amended by this Amendment and as may be further amended,
modified, restated or supplemented from time to time. This Amendment is limited
as specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Credit Agreement or of any other
Loan Document except as expressly set forth herein. Except as expressly amended
hereby, the Credit Agreement shall remain in full force and effect in accordance
with its terms.

        5.2 Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).

        5.3 Expenses. The Borrower agrees to pay upon demand all reasonable
out-of-pocket costs and expenses of the Agent (including, without limitation,
the reasonable fees and expenses of counsel to the Agent) in connection with the
preparation, negotiation, execution and delivery of this Amendment.

        5.4 Severability. To the extent any provision of this Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.

        5.5 Successors and Assigns. This Amendment shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto.

        5.6 Construction. The headings of the various sections and subsections
of this Amendment have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof.

        5.7 Counterparts; Effectiveness. This Amendment may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. This
Amendment shall become effective upon the execution and delivery of a
counterpart hereof by the Borrower, the Agent and the Required Lenders; provided
that the amendments to the Credit Agreement and the waiver set forth herein
shall become effective as provided in Article IV hereof.

                                       4

<PAGE>   114

        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.

                                            ECLIPSYS CORPORATION

                                            By:  /s/ ROBERT J. VANARIA
                                               --------------------------------
                                               Name: Robert J. Vanaria
                                                    ---------------------------
                                               Title: SVP-Administration & CFO
                                                     --------------------------

                                            FIRST UNION NATIONAL BANK, as Agent
                                            and Lender

                                            By:  /s/ JOSEPH H. TOWELL
                                               --------------------------------
                                               Name: Joseph H. Towell
                                                    ---------------------------
                                               Title: SR. V.P.
                                                    ---------------------------

                                            BANKBOSTON, N.A., as Co-Agent and
                                            Lender

                                            By:  /s/ WALTER J. MARULLO
                                               --------------------------------
                                               Name: Walter J. Marullo
                                                    ---------------------------
                                               Title: Vice President
                                                    ---------------------------

                                        5
<PAGE>   115
                 THIRD AMENDMENT TO FIRST AMENDED AND RESTATED
                                CREDIT AGREEMENT

       THIS THIRD AMENDMENT TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of the 1st day of April, 1999 (this "Amendment"), is made among
ECLIPSYS CORPORATION, a Delaware corporation (the "Borrower"), the Lenders (as
hereinafter defined) that have executed this Amendment (the "Required Lenders"),
and FIRST UNION NATIONAL BANK, as agent for the Lenders (in such capacity, the
"Agent").

       The Borrower, certain banks and other financial institutions (the
"Lenders") and the Agent are parties to a First Amended and Restated Credit
Agreement, dated as of May 29, 1998, as amended (the "Credit Agreement"),
providing for the availability of certain credit facilities to the Borrower upon
the terms and conditions set forth therein.  Capitalized terms used herein
without definition shall have the meanings given to them in the Credit
Agreement.

       The Borrower, the Agent and the Lenders have agreed to effect this
amendment upon the terms and conditions set forth herein.

                             STATEMENT OF AGREEMENT

       NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                   AMENDMENT

       Section 6.1(b) of the Credit Agreement is hereby amended by replacing the
date "December 31, 1999", set forth on the second line thereof, with the date
"December 31, 1998".

                                 MISCELLANEOUS

       Effect of Amendment.  All references to the Credit Agreement set forth in
any other Loan Document or other agreement or instrument shall, unless otherwise
specifically provided, be references to the Credit Agreement as amended by this
Amendment and as may be further amended, modified, restated or supplemented from
time to time.  This Amendment is limited as specified and shall not constitute
or be deemed to constitute an amendment, modification or waiver of any provision
of the Credit Agreement or of any other Loan Document except as expressly set
forth herein.  Except as expressly amended hereby, the Credit Agreement shall
remain in full force and effect in accordance with its terms.

       Governing Law.  This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).
<PAGE>   116
       Severability.  To the extent any provision of this Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.

       Successors and Assigns.  This Amendment shall be binding upon, inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto.

       Counterparts; Effectiveness.  This Amendment may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.  This Amendment
shall become effective upon the execution and delivery of a counterpart hereof
by the Borrower, the Agent and the Required Lenders.

                                       2
<PAGE>   117
       IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.

                              ECLIPSYS CORPORATION

                              By:   /s/ ROBERT J. VANARIA
                                 -----------------------------------------------
                                 Name:  Robert J. Vanaria
                                       -----------------------------------------
                                 Title: SVP - CFO
                                       -----------------------------------------

                              FIRST UNION NATIONAL BANK, as Agent
                              and Lender

                              By:   /s/ MARIJANE BOYLE
                                 -----------------------------------------------
                                 Name:  Marijane Boyle
                                       -----------------------------------------
                                 Title: SR. V.P.
                                       -----------------------------------------

                              BANKBOSTON, N.A., as Co-Agent and Lender

                              By:   /s/ WALTER J. MARULLO
                                 -----------------------------------------------
                                 Name:  Walter J. Marullo
                                       -----------------------------------------
                                 Title: Vice President
                                       -----------------------------------------
<PAGE>   118
                                                                  Execution Copy

                      FOURTH AMENDMENT TO CREDIT AGREEMENT

         THIS FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of the 24th day of
October, 2000 (this "Amendment"), is made by and between ECLIPSYS CORPORATION, a
Delaware corporation (the "Borrower"), FIRST UNION NATIONAL BANK ("First Union")
and the other financial institutions party to that certain Credit Agreement
described below (the "Lenders"), and FIRST UNION, as agent for the Lenders (in
such capacity, the "Agent").

                                    RECITALS

        A.      The Borrower, the Lenders and the Agent are parties to a First
Amended and Restated Credit Agreement, dated as of May 29, 1998 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the availability of a credit facility to the Borrower upon the terms and
conditions set forth therein. Capitalized terms used herein without definition
shall have the meanings given to them in the Credit Agreement.

        B.      The Borrower has requested that the Credit Agreement be amended
to extend the permitted time for delivery of the Borrower's annual consolidated
operating budget to the Lenders, and has also requested that the Agent and the
Required Lenders waive certain violations of the Credit Agreement. The Agent and
the Lenders have agreed to effect such amendment and waivers upon the terms and
conditions set forth herein, including without limitation the agreement by the
Borrower to effect the amendments described in paragraphs C and D below.

        C.      Pursuant to the Credit Agreement and the other Credit Documents,
the Lenders have made Revolving Loans available to the Borrower in the principal
amount of up to $50,000,000. The Borrower, the Agent and the Lenders have agreed
to amend the Credit Agreement in order to decrease the Total Revolving Credit
Commitments by $20,000,000, from $50,000,000 to $30,000,000, as more fully set
forth herein.

        D.      The Agent and the Lenders have also requested that the Credit
Agreement be amended in certain other respects, namely (1) to clarify that the
Borrower is prohibited from participating in joint ventures or partnerships, (2)
to extend the Revolving Credit Maturity Date, (3) to change the Applicable
Margin Percentage, (4) to change the Revolving Credit Commitment Fee, (5) to
eliminate the swingline facility and (6) to provide for a minimum borrowing base
for the Loans. The Borrower has agreed to effect each such amendment upon the
terms and conditions set forth herein.

<PAGE>   119

                             STATEMENT OF AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE I

                                   AMENDMENTS

        1.1     Amendment to Section 6.2(b). Section 6.2(b) of the Credit
Agreement shall be amended by deleting the words "30 days prior to the end of
each fiscal year" and substituting therefor the words "December 31 of each
fiscal year."

        1.2     Amendments to Section 8.6.

        (a)     The introductory clause of Section 8.6(vi) of the Credit
Agreement shall be amended by adding the phrase "provided that nothing in this
SECTION 8.6(vi) shall be deemed to permit Borrower to become a partner or joint
venturer in any partnership or joint venture" after the parenthetical
"("Permitted Acquisitions")."

        (b)     Section 8.6(ix) of the Credit Agreement shall be amended by
adding at the end thereof the phrase "provided further that nothing in this
SECTION 8.6(ix) shall be deemed to permit Borrower to become a partner or joint
venturer in any partnership or joint venture; and".

        (c)     Section 8.6(x) of the Credit Agreement shall be amended by
adding the phrase "provided that nothing in this SECTION 8.6(x) shall be deemed
to permit Borrower to become a partner or joint venturer in any partnership or
joint venture" after the term "Amendment Effective Date" at the end thereof.

        1.3     Amendment of Amount of Total Revolving Credit Commitments. The
Total Revolving Credit Commitment shall be reduced from $50,000,000 to
$30,000,000. To effect such reduction, contemporaneously with the execution and
delivery of this Amendment, First Union shall return to the Borrower the
Revolving Credit Note dated October 24, 2000, in the aggregate principal amount
of $50,000,000, delivered to First Union pursuant to the Assignment and
Acceptance of even date therewith between Fleet National Bank and First Union
(for the purposes of this Amendment only, the "Existing Revolving Credit Note"),
and the Borrower shall immediately thereafter and in place thereof execute and
deliver to First Union a decreased Revolving Credit Note in the form attached
hereto as EXHIBIT A (for the purposes of this Amendment only, the "Decreased
Revolving Credit Note") in the aggregate principal amount of $30,000,000. The
Decreased Revolving Credit Note shall amend and restate, renew and decrease the
Existing Revolving Credit Note. From and after the issuance of the Decreased
Revolving Credit Note, all references in the Credit Agreement to a "Revolving
Credit Note" shall mean and refer, with respect to First Union as a Lender, to
the Decreased Revolving Credit Note.

                                       2

<PAGE>   120

        1.4     Amendment of Revolving Credit Maturity Date. The definition of
"Revolving Credit Maturity Date" shall be amended by replacing "August 7, 2001"
therein with the date "May 31, 2002."

        1.5     Amendment of Applicable Margin Percentage. Annex I to the Credit
Agreement shall be deleted in its entirety and replaced by EXHIBIT B hereto.

        1.6     Amendment of Revolving Credit Commitment Fee. Section 2.9(b) of
the Credit Agreement shall be amended by replacing "0.375%" therein with "(x)
0.375%, for each calendar quarter during which Annualized EBITDA for the
preceding calendar quarter was greater than or equal to $15,000,000, and (y)
0.500%, for each calendar quarter during which Annualized EBITDA for the
preceding calendar quarter was less than $15,000,000, in either case".

        1.7     Elimination of Swingline Facility.

        (a)     Each of Sections 2.1(c), 2.2(d), 2.2(e), 2.2(f), 2.2(g) and
2.4(d) shall be deleted in its entirety and shall be replaced with the
following:

        "[Reserved.]"

        (b)     All references in the Credit Documents to the Swingline
Commitment, Swingline Lender, Swingline Loans, Swingline Maturity Date,
Swingline Note and Unutilized Swingline Commitment shall be deleted in their
entirety.

        (c)     Section 2.2 (b) of the Credit Agreement shall be amended by
replacing the phrase "one (1) Business Day prior to each such Borrowing to be
comprised of ABR Loans" in the first sentence thereof with the phrase "11:00
a.m., Charlotte time, on the date of each such Borrowing to be comprised of ABR
Loans".

        1.8     Addition of Borrowing Base Requirement.

        (a)     Section 1.1 of the Credit Agreement shall be amended by adding
the following definitions thereto in proper alphabetical order:

        "       "Account Debtor" shall mean any Person who is or who may become
        obligated to the Borrower under or on account of an Account or Account
        Receivable.

                "Accounts" shall mean the Accounts as defined in the Borrower
        Pledge and Security Agreement and the Subsidiary Pledge and Security
        Agreement.

                "Borrowing Base" shall mean, at any time, the amount, as
        determined with reference to the Borrowing Base Certificate most
        recently delivered by the Borrower to, and accepted by, the Agent, equal
        to seventy-five percent (75%) of the face amount of the Eligible
        Accounts.

                "Borrowing Base Certificate" shall mean a fully completed
        certificate in the form of EXHIBIT N.

                                       3
<PAGE>   121

                "Borrowing Base Period" shall mean any fiscal quarter during
        which Annualized EBITDA for the previous quarter was less than or equal
        to $25,000,000.

                "Eligible Account" means an Account owned by the Borrower or a
        Subsidiary Guarantor that the Agent in the exercise of its reasonable
        commercial discretion determines to be an Eligible Account; provided,
        however, that notwithstanding any other provision of this definition
        (including without limitation the general guidance provided by the
        clauses below) or this Agreement to the contrary, the decision as to
        whether any Account Debtor is creditworthy and the extent to which (if
        at all) an Account of such Account Debtor may be included among Eligible
        Accounts shall be made by the Agent and, when the Agent is so directed,
        the Required Lenders in the exercise of the Agent's and the Required
        Lenders' reasonable commercial judgment. Without limiting the discretion
        of the Agent to establish other criteria of eligibility, an Eligible
        Account shall be limited at all times to the unpaid portion (valued in
        Dollars) of the Net Amount of Eligible Accounts, net of limits and
        deductions provided for by the Agent in its reasonable commercial
        judgment. Without limitation of the foregoing or the discretion of the
        Agent to establish other criteria of eligibility, in order to be an
        Eligible Account, an Account must satisfy and continue to satisfy all of
        the following requirements:

                (i)     The Account is a bona fide existing obligation of the
        named Account Debtor arising from the sale and delivery of materials,
        merchandise or products, the licensing of software or the rendering of
        services to such Account Debtor in the ordinary course of the Borrower
        or a Subsidiary Guarantor's business, is actually and absolutely earned
        and owing to the Borrower or Subsidiary Guarantor, as applicable, and is
        not contingent for any reason, and the Borrower or the applicable
        Subsidiary Guarantor has lawful and absolute title to such Account and
        the unqualified right to assign and grant a security interest therein to
        the Agent as Collateral;

                (ii)    The subject materials, merchandise, software or products
        have been shipped or delivered on open account to the named Account
        Debtor on an absolute sale basis and not on consignment, on approval or
        on a sale or return, bill-and-hold or guaranteed sale basis or subject
        to any other repurchase or return agreement, and no part of the subject
        goods has been returned nor has notice been received by the Borrower or
        the applicable Subsidiary Guarantor that the goods will be returned;

                (iii)   The Account is an "account" as defined in the Uniform
        Commercial Code as in effect in the relevant jurisdiction and, except as
        provided in CLAUSE (xiii) below, the perfection or enforceability of the
        Agent's lien and the Agent's right to obtain direct payment of the
        Account is not governed by any statute other than the Uniform Commercial
        Code; and the Account is not evidenced by chattel paper or a promissory
        note or instrument of any kind, unless

                                       4
<PAGE>   122

        such chattel paper, promissory note or instrument is duly endorsed to
        and is in the possession of the Agent;

                (iv)    The Account Debtor is located in the United States or in
        a territory or possession of the United States;

                (v)     The Account is denominated and payable only in Dollars
        and arises under a contract that has been duly authorized and that,
        together with such Account, is in full force and effect and constitutes
        a valid, legally enforceable obligation of the Account Debtor and is not
        subject to any reduction, cancellation, rebate or refund or any dispute,
        offset (including without limitation discounts or contra accounts),
        counterclaim or defense whatsoever and no claim on the part of such
        Account Debtor denying liability thereunder has been asserted and there
        is no basis known to the Borrower or the applicable Subsidiary Guarantor
        for any such assertion;

                (vi)    The Borrower and its Affiliates are not indebted to the
        Account Debtor in any way, and the Account is not subject to any right
        of setoff or recoupment by the Account Debtor, unless the Account Debtor
        has entered into an agreement reasonably acceptable to the Agent to
        waive setoff rights;

                (vii)   The Agent's first priority Lien on such Account has been
        perfected under the applicable Uniform Commercial Code and a currently
        effective financing statement has been filed in favor of the Agent
        against the Borrower or applicable Subsidiary Guarantor covering such
        Account and is on file in all appropriate filing locations; and, except
        for Permitted Liens under SECTIONS 8.4(i) and 8.4(v), the Account is not
        subject to any Lien whatsoever;

                (viii)  The Account (A) has been invoiced by the Borrower or the
        applicable Subsidiary Guarantor within ninety days of the delivery of
        the subject materials, merchandise, products or software or the
        rendering of services, (B) is required to be paid in full within
        forty-five (45) days or less after its invoice date, and (C) has not
        remained unpaid for a period of more than sixty (60) days from its due
        date;

                (ix)    To the best knowledge of the Borrower and its
        Affiliates, the Account Debtor is Solvent and not the subject of any
        bankruptcy or insolvency proceeding of any kind, and the
        creditworthiness of the Account Debtor is, in all other respects,
        acceptable to the Agent, in its reasonable discretion, at the time in
        question;

                (x)     The Account does not arise out of a transaction with an
        employee, officer, agent, director, stockholder or other Affiliate of
        the Borrower or any of its Subsidiaries;

                (xi)    The Account is not due from an Account Debtor whose
        total Indebtedness to the Borrower and its Subsidiary Guarantors on
        Accounts exceeds twenty percent (20%) of the aggregate amount of all the
        Eligible Accounts;

                                       5
<PAGE>   123

        provided, however, that only Accounts due from such Account Debtor in
        excess of twenty percent (20%) of the aggregate amount of all the
        Eligible Accounts shall be ineligible pursuant to this CLAUSE (xi);

                (xii)   The Account is not due from an Account Debtor (x) whose
        Indebtedness to the Borrower and its Subsidiary Guarantors on Accounts
        which are unpaid sixty (60) days or more after the due date of the
        respective invoices or which are otherwise classified as ineligible
        under the other criteria set forth herein or otherwise established by
        the Agent exceeds fifty percent (50%) of such Account Debtor's total
        Indebtedness to the Borrower and its Subsidiary Guarantors or (y) whose
        Accounts owing to the Borrower and its Subsidiary Guarantors in the
        aggregate exceed the credit limit determined for such Account Debtor by
        the Agent in its reasonable commercial judgment, but Accounts due from
        such Account Debtor shall be ineligible pursuant to this CLAUSE (xii)
        only to the extent such Accounts exceed such limit;

                (xiii)  The Account Debtor of the Account is not a government or
        a governmental subdivision, department, agency, subdivision or
        instrumentality; provided, however, that Accounts due from the Veterans
        Administration shall not be ineligible pursuant to this CLAUSE (xiii);

                (xiv)   The Account, together with the contract related thereto,
        conforms in all material respects with any laws, rules or regulations
        applicable thereto (including without limitation laws, rules and
        regulations relating to usury, truth in lending, fair credit billing,
        fair credit reporting, equal credit opportunity, fair debt collection
        practices and privacy) and with respect to which no party to the
        contract related thereto is in violation of any such law, rule or
        regulation in any material respect if such violation would impair the
        collectability of such Account; and there are no material regulatory,
        administrative or judicial obstacles to the Agent's or the Lenders'
        direct enforcement of the Account against the Account Debtor or to the
        Agent's or the Lenders' intervention in any enforcement action that
        might be brought by the Borrower or the applicable Subsidiary Guarantor
        with respect thereto;

                (xv)    Each of the warranties and representations set forth in
        the Security Documents with respect to such Account are true and correct
        in all material respects;

                (xvi)   The Account Debtor is not located in any state which
        requires that the Borrower or the applicable Subsidiary Guarantor, in
        order to sue any Person in such state's courts, either (x) qualify to do
        business in such state or (y) file a report with the taxation department
        of such state, or, if the Account Debtor is located in any such state,
        the Borrower or the Subsidiary Guarantor, as applicable, has either
        qualified as a foreign corporation authorized to transact business in
        such state or has filed appropriate reports with the taxation division
        for the then current year; and

                                       6
<PAGE>   124

                (xvii)  The Agent does not otherwise believe, in the exercise of
        its reasonable commercial judgment, that there is an impairment of the
        prospect of collection of such Account or likelihood that the Account
        may not be paid by reason of the Account Debtor's financial inability to
        pay.

                (xviii) A Lien on the Account has not been granted to IBM Credit
        Corporation or an affiliate thereof ("IBM"), or such a Lien has been
        granted but the Agent has received evidence, satisfactory to the Agent
        in its sole discretion, that such Lien has been released.

         If any Account at any time ceases to be an Eligible Account, then such
         Account shall promptly be excluded from the calculation of Eligible
         Accounts.

                "Net Amount of Eligible Accounts" shall mean, at any time, the
        gross amount of Eligible Accounts less returns, discounts, claims,
        credits accrued rebates and other allowances, offsets, deductions,
        counterclaims, disputes and other defenses of any nature at any time
        issued, owing, granted, outstanding, available or claimed.

                "Subsidiary Guarantor" shall mean a Subsidiary of the Borrower
        that is party to the Subsidiary Guaranty."

        (b)     The first sentence of Section 2.1(b) of the Credit Agreement
shall be amended and restated to read in its entirety as follows:

        "       (b)   Each Lender severally agrees, subject to and on the terms
        and conditions of this Agreement, to make loans (each, a "Revolving
        Loan" and collectively, the "Revolving Loans") to the Borrower, from
        time to time on any Business Day during the period from the date hereof
        to the Revolving Credit Termination Date in an amount not greater than
        the excess, if any, of its Revolving Credit Commitment at such time over
        its outstanding Revolving Loans and Letter of Credit Exposure at such
        time, provided that no Borrowing of Revolving Loans shall be made if,
        immediately after giving effect thereto, the sum of (x) the aggregate
        principal amount of Revolving Loans outstanding at such time and (y) the
        aggregate Letter of Credit Exposure of all Lenders at such time
        (excluding the Reimbursement Obligations that are repaid with the
        proceeds of Revolving Loans made pursuant to such Borrowing) would
        exceed (A) during a Borrowing Base Period, the lesser of (1) the Total
        Revolving Credit Commitments at such time and (2) the Borrowing Base at
        such time, and (B) at any other time, the Total Revolving Credit
        Commitments at such time."

        (c)     Section 2.6(b) of the Credit Agreement shall be amended and
restated to read in its entirety as follows:

        "       (b) In the event that at any time the sum of (x) the aggregate
        principal amount of Revolving Loans outstanding at such time and (y) the
        aggregate Letter

                                       7
<PAGE>   125

        of Credit Exposure of all Lenders at such time (excluding the
        Reimbursement Obligations that are prepaid with the proceeds of
        Revolving Loans made on the date of determination) shall exceed (A)
        during a Borrowing Base Period, the lesser of (1) the Total Revolving
        Credit Commitments at such time (after giving effect to any concurrent
        termination or reduction thereof) and (2) the Borrowing Base at such
        time, and (B) at any other time, the Total Revolving Credit Commitments
        at such time, the Borrower will immediately prepay the outstanding
        principal amount of the Revolving Loans in the amount of such excess;
        provided that, to the extent such excess amount is greater than the
        aggregate principal amount of Revolving Loans outstanding immediately
        prior to the application of such prepayment, the amount so prepaid in
        excess of such aggregate principal amount of Revolving Loans shall be
        retained by the Agent and held in the Cash Collateral Account as cover
        for the Letter of Credit Exposure of the Lenders, as more particularly
        described in SECTION 3.8, and thereupon such cash shall be deemed to
        reduce the aggregate Letter of Credit Exposure by an equivalent amount."

        (d)     Section 3.1(a) of the Credit Agreement shall be amended and
restated to read in its entirety as follows:

        "       (a)   No Letter of Credit shall be issued the Stated Amount upon
        issuance of which (i) when added to the aggregate Letter of Credit
        Exposure of the Lenders at such time, would exceed $5,000,000 or, (ii)
        when added to the sum of (x) the aggregate Letter of Credit Exposure of
        all Lenders at such time and (y) the aggregate principal amount of all
        Revolving Loans then outstanding, would exceed (A) during a Borrowing
        Base Period, the lesser of (1) the Total Revolving Credit Commitments at
        such time and (2) the Borrowing Base at such time, and (B) at any other
        time, the Total Revolving Credit Commitments at such time;"

        (e)     The eighth sentence of Section 3.8 of the Credit Agreement shall
be deleted in its entirety and shall be replaced with the following:

        "If the Borrower is required to provide cash collateral pursuant to
        SECTION 2.6(b), such amount (to the extent not applied as aforesaid)
        shall be returned to the Borrower on demand, provided that after giving
        effect to such return (i) the sum of (x) the aggregate principal amount
        of all Revolving Loans outstanding at such time and (y) the aggregate
        Letter of Credit Exposure of all Lenders at such time would not exceed
        (A) during a Borrowing Base Period, the lesser of (1) the Total
        Revolving Credit Commitments at such time and (2) the Borrowing Base at
        such time, and (B) at any other time, the Total Revolving Credit
        Commitments at such time, and (ii) no Default or Event of Default shall
        have occurred and be continuing at such time."

                                       8
<PAGE>   126

        (f)     Section 6.2 of the Credit Agreement shall be amended by
renumbering paragraph (i) of such Section 6.2 as paragraph (j) and by adding the
following paragraph thereto as paragraph (i):

        "       (i)   Within twenty (20) days after the last day of each month
        during a Borrowing Base Period, (A) a Borrowing Base Certificate and (B)
        an accounts receivable aging schedule (it being understood that the
        Borrower shall only be required to provide one aging schedule for any
        particular month pursuant to this Section 6.2(f) and Section 6.2(a)) as
        of the last day of such month, each certified by a Financial Officer of
        the Borrower to be correct; and

        (g)     The Credit Agreement shall be amended by adding thereto the form
of Exhibit N attached hereto as EXHIBIT C.

                                   ARTICLE II

                                     WAIVERS

        2.1     Quarterly Financial Statements. The quarterly financial
statements heretofore delivered to the Lenders by the Borrower pursuant to
Section 6.1(a) of the Credit Agreement did not set forth comparative budgeted
figures for the quarters for which they were delivered and comparative figures
as of the end of and for the corresponding quarters in the preceding fiscal
years. The Lenders hereby waive any Default or Event of Default heretofore
arising from noncompliance by the Borrower with Section 6.1(a) of the Credit
Agreement. Beginning with the financial statements for the fiscal quarter ended
September 30, 2000, the Borrower shall comply in all respects with the
requirements of Section 6.1(a).

        2.2     Annual Financial Statements. The annual financial statements
heretofore delivered to the Lenders by the Borrower pursuant to Section 6.1(b)
of the Credit Agreement did not set forth comparable budgeted figures for the
fiscal year then ended and comparative figures for the preceding fiscal year.
The Lenders hereby waive any Default or Event of Default heretofore arising from
noncompliance by the Borrower with Section 6.1(b) of the Credit Agreement.
Beginning with the financial statements for the fiscal year ending December 31,
2000, Borrower shall comply in all respects with the requirements of Section
6.1(b).

        2.3     Accounts Receivable Aging. The Borrower has heretofore failed to
provide to the Lenders on a timely basis the accounts receivable aging schedule
required by Section 6.2(a)(ii) of the Credit Agreement. The Lenders hereby waive
any Default or Event of Default heretofore arising from noncompliance by the
Borrower with Section 6.2(a)(ii) of the Credit Agreement. The Borrower shall
deliver an accounts receivable aging schedule to each Lender (i) concurrently
with the delivery of all required financial statements, beginning with those for
the fiscal quarter ended September 30, 2000, and (ii) when applicable,
concurrently with the delivery of the Borrowing Base Certificate required
pursuant to Section 6.2(i) of the Credit Agreement, as amended hereby.

        2.4     Annual Consolidated Operating Budget. The Borrower has
heretofore failed to deliver its annual consolidated operating budget to the
Lenders as required by, and within the

                                       9
<PAGE>   127

time frame set forth in, Section 6.2(b) of the Credit Agreement. The Lenders
hereby waive any Default or Event of Default heretofore arising from
noncompliance by the Borrower with Section 6.2(b) of the Credit Agreement (as
such Section was in effect immediately prior to giving effect to the amendments
thereto set forth in Section 1.1 hereof). The Borrower shall henceforth deliver
such budget to the Lenders pursuant to the terms of Section 6.2(b), as amended
hereby, beginning with the budget due to be delivered not later than December
31, 2000.

        2.5     Acquisition Documents. The Borrower has heretofore failed to
deliver to the Lenders copies of the fully executed acquisition agreement
(including schedules and exhibits thereto) and other material documents and
closing papers associated with certain Acquisitions and Investments as required
by Sections 6.2(g), 6.8 and 8.6(vi) of the Credit Agreement. The Lenders hereby
waive these failures with respect to all documents required to be delivered
except those listed on EXHIBIT D hereto as Required Documents. The Borrower
shall henceforth comply with the requirements of Sections 6.2(g), 6.8 and
8.6(vi) in connection with all Investments, including without limitation
Permitted Acquisitions.

        2.6     Sale of Med Data. On July 1, 1999, the Borrower sold the assets
of Med Data Systems, Inc. for $5,000,000 (the "Med Data Sale"), in violation of
Section 8.5 of the Credit Agreement. The Lenders hereby waive any Default or
Event of Default arising from noncompliance by the Borrower with Section 8.5 of
the Credit Agreement in connection with the Med Data Sale.

        2.7     Investment in Shared Medical. In March 2000, the Borrower
invested $5,000,000 in Shared Medical Systems Corporation (the "Shared Medical
Investment"), in violation of Section 8.6 of the Credit Agreement. The Lenders
hereby waive any Default or Event of Default arising from noncompliance by the
Borrower with Section 8.6 of the Credit Agreement in connection with the Shared
Medical Investment.

        2.8     Agreement for Merger with HEALTHvision and Neoforma. On March
31, 2000, the Borrower entered into an agreement to merge with HEALTHvision,
Inc. and Neoforma.com, Inc. (the "Healthvision/Neoforma Agreement"). Under this
Healthvision/Neoforma Agreement, the total consideration of the merger would
have exceeded $35,000,0000. Accordingly, execution of the Healthvision/Neoforma
Agreement by the Borrower constituted a violation of Sections 8.1(i) and 8.6 of
the Credit Agreement, even though the merger transaction was never consummated.
The Lenders hereby waive any Default or Event of Default arising from
noncompliance by the Borrower with Sections 8.1(i) and 8.6 of the Credit
Agreement in connection with the Healthvision/Neoforma Agreement.

        2.9     Indebtedness to IBM. The Borrower recently purchased certain
pieces of computer equipment from IBM. In connection with this equipment
purchase, the Borrower (i) incurred Indebtedness to IBM in an aggregate
principal amount not exceeding $3,200,000, in violation of Section 8.2 of the
Credit Agreement and (2) may have granted to IBM purchase money Liens on the
purchased equipment, in violation of Section 8.4 of the Credit Agreement. The
Lenders hereby waive any Default or Event of Default arising from noncompliance
by the Borrower with Section 8.2 and, if applicable, Section 8.4 of the Credit
Agreement in connection

                                       10
<PAGE>   128

with such Indebtedness and purchase money Liens, provided that the aggregate
principal amount of such Indebtedness shall not at any time exceed $3,200,000.

        2.10    Unenumerated Defaults. The Lenders hereby waive any other
Default or Event of Default by the Borrower occurring prior to the date hereof
that falls into any of the categories of Waived Defaults listed on EXHIBIT E
hereto.

        2.11    Violation of Financial Covenants. The Borrower has given notice
to the Agent that (i) it is in violation of the financial covenant set forth in
Section 7.1 of the Credit Agreement as of September 30, 2000, and (ii) it is in
violation of the financial covenant set forth in Section 7.2 of the Credit
Agreement as of September 30, 2000. The Lenders hereby waive any Default or
Event of Default now existing or hereafter arising in connection with the
violation by the Borrower of Sections 7.1 and 7.2 of the Credit Agreement as of
September 30, 2000 and for the fiscal quarter then ending.

        2.12    Sale of Assets of Eclipsys Limited. The Borrower has given
notice to the Agent that Eclipsys Solutions Corporation is considering selling
the assets of Eclipsys Limited on or before December 31, 2000, for consideration
of approximately $15,000,000. This disposition would violate Section 8.5 of the
Credit Agreement. The Lenders hereby waive any Default or Event of Default under
Section 8.5 of the Credit Agreement that now exists or arises on or before
December 31, 2000 in connection with a sale of assets of Eclipsys Limited,
provided that all rights of Eclipsys Solutions Corporation under any contract
governing or evidencing such sale and all promissory notes or other instruments
of indebtedness issued by the purchaser in favor of Eclipsys Solutions
Corporation are assigned to the Agent for the benefit of the Lenders pursuant to
the Subsidiary Pledge and Security Agreement.

        2.13    Waivers Limited. The waivers set forth in this Article II are
based on the representations and warranties of the Borrower contained in Article
III below, are limited as specified and shall not constitute or be deemed to
constitute an amendment, modification or waiver of any provision of the Credit
Agreement or a waiver of any Default or Event of Default except as expressly set
forth herein.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

        The Borrower hereby represent and warrant to the Agent and the Lenders
as follows:

        3.1     Representations and Warranties. After giving effect to this
Amendment, each of the representations and warranties of the Borrower contained
in the Credit Agreement and in the other Credit Documents is true and correct on
and as of the date hereof with the same effect as if made on and as of the date
hereof (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty was true and correct as of such date).

        3.2     No Default. After giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing.

                                       11
<PAGE>   129

                                   ARTICLE IV

                                  MISCELLANEOUS

        4.1     Effect of Amendment. From and after the effective date of the
amendments to the Credit Agreement set forth herein, all references to the
Credit Agreement set forth in any other Credit Document or other agreement or
instrument shall, unless otherwise specifically provided, be references to the
Credit Agreement as amended by this Amendment and as may be further amended,
modified, restated or supplemented from time to time. This Amendment is limited
as specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Credit Agreement except as
expressly set forth herein. Except as expressly amended hereby, the Credit
Agreement shall remain in full force and effect in accordance with its terms.

        4.2     Governing Law. This Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of North Carolina (without
regard to the conflicts of law provisions thereof).

        4.3     Amendment Fee and Expenses.

        (a)     As a condition to the effectiveness of this Amendment and in
consideration of the amendments effected hereby, the Borrower shall have paid to
the Agent, for the account of each Lender, a fee for such Lender equal to 1.00%
of such Lender's Revolving Credit Commitment.

        (b)     The Borrower shall pay all reasonable out-of-pocket costs and
expenses of the Agent (including, without limitation, reasonable fees and
expenses of counsel to the Agent up to $10,000) in connection with the
preparation, negotiation, execution and delivery of this Amendment (including
the preparation of drafts hereof in June and July 2000) and any other Credit
Documents delivered in connection herewith.

        4.4     Severability. To the extent any provision of this Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.

        4.5     Successors and Assigns. This Amendment shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto.

        4.6     Construction. The headings of the various sections and
subsections of this Amendment have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof.

        4.7     Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

                                       12
<PAGE>   130

        4.8     Effectiveness. This Amendment shall become effective upon the
last to occur of (i) execution and delivery of a counterpart hereof by the
Borrower, the Agent and the Lenders, (ii) delivery to the Agent of a Borrowing
Base Certificate based on Eligible Accounts as of September 30, 2000, and (iii)
payment by wire transfer of the fees and expenses of the Agent and the Lenders
required pursuant to Section 4.3 hereof (including without limitation the fees
and expenses of counsel to the Agent, as set forth in Section 4.3(b)).

        4.9     Valid Amendment. The parties acknowledge that the amendments to
the Credit Agreement effected by this Amendment comply in all material respects
with Section 11.6 of the Credit Agreement, which sets forth the requirements for
amendment thereto.

            [the remainder of this page is left blank intentionally]

                                       13
<PAGE>   131

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.

                                             ECLIPSYS CORPORATION

                                             By:    /s/ GREG WILSON
                                                    ---------------------
                                             Title:        CFO
                                                    ---------------------

                                             FIRST UNION NATIONAL BANK, as Agent
                                             and as a Lender

                                             By:    /s/ JOYCE BARRY
                                                    ---------------------
                                             Title: Senior Vice President
                                                    ---------------------

                                       14
<PAGE>   132

                                    EXHIBIT A

                                       TO
                      FOURTH AMENDMENT OF CREDIT AGREEMENT

                        FORM OF DECREASED REVOLVING NOTE

                               Borrower's Taxpayer Identification No. 65-0632092

                              REVOLVING CREDIT NOTE

$30,000,000                                                     October __, 2000
                                                       Charlotte, North Carolina

        FOR VALUE RECEIVED, ECLIPSYS CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of

        FIRST UNION NATIONAL BANK (the "Lender"), at the offices of First Union
National Bank (the "Agent") located at One First Union Center, 301 South College
Street, Charlotte, North Carolina (or at such other place or places as the Agent
may designate), at the times and in the manner provided in the First Amended and
Restated Credit Agreement, dated as of May 29, 1998 (as amended, modified or
supplemented from time to time, the "Amended and Restated Credit Agreement"),
among the Borrower, the Lenders from time to time parties thereto, and First
Union National Bank, as Agent, the principal sum of

        THIRTY MILLION DOLLARS ($30,000,000), or such lesser amount as may
constitute the unpaid principal amount of the Revolving Loans made by the
Lender, under the terms and conditions of this promissory note (this "Revolving
Credit Note") and the Amended and Restated Credit Agreement. The defined terms
in the Amended and Restated Credit Agreement are used herein with the same
meaning. The Borrower also unconditionally promises to pay interest on the
aggregate unpaid principal amount of this Revolving Credit Note at the rates
applicable thereto from time to time as provided in the Amended and Restated
Credit Agreement.

        This Revolving Credit Note is one of a series of Revolving Credit Notes
referred to in the Amended and Restated Credit Agreement and is issued to
evidence the Revolving Loans made by the Lender from time to time pursuant to
the Credit Agreement. All of the terms, conditions and covenants of the Credit
Agreement are expressly made a part of this Revolving Credit Note by reference
in the same manner and with the same effect as if set forth herein at length,
and any holder of this Revolving Credit Note is entitled to the benefits of and
remedies provided in the Amended and Restated Credit Agreement and the other
Credit Documents. Reference is made to the Amended and Restated Credit Agreement
for provisions relating to the interest rate, maturity, payment, prepayment and
acceleration of this Revolving Credit Note.

<PAGE>   133

        In the event of an acceleration of the maturity of this Revolving Credit
Note, this Revolving Credit Note shall become immediately due and payable,
without presentation, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.

        In the event this Revolving Credit Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees.

        This Revolving Credit Note shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina. The Borrower hereby submits to the nonexclusive jurisdiction and venue
of the federal and state courts located in Mecklenburg County, North Carolina,
although the Lender shall not be limited to bringing an action in such courts.

        IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note
to be executed by its duly authorized corporate officer as of the day and year
first above written.

                                   ECLIPSYS CORPORATION

                                   By:
                                            ------------------------------------
                                            Greg Wilson, Chief Financial Officer

<PAGE>   134

                                    EXHIBIT B

                                       TO
                      FOURTH AMENDMENT OF CREDIT AGREEMENT

                                     ANNEX I
                                       TO
                                CREDIT AGREEMENT

APPLICABLE MARGIN PERCENTAGES:

ABR Loans:                 1.00%

LIBOR Loans:               2.25%

<PAGE>   135

                                    EXHIBIT C

                                       TO
                      FOURTH AMENDMENT OF CREDIT AGREEMENT

                                    EXHIBIT N

                                     FORM OF
                           BORROWING BASE CERTIFICATE

<PAGE>   136

                          BORROWING BASE CERTIFICATE
                             ECLIPSYS CORPORATION

<TABLE>
<CAPTION>
ACCOUNTS RECEIVABLE:
-------------------
<S>    <C>                                                       <C>
[ 1 ]  ACCOUNTS RECEIVABLE - Balance as of date of                            [___________]
       determination

[ 2 ]  LESS INELIGIBLES (based on aging dated_____________,
       200 )
       (i)      Contingent sales/imperfect title                  [___________]
       (ii)     Consignment sales, bill-and-hold, etc.            [___________]
       (iii)    Evidenced by chattel paper or promissory note     [___________]
       (iv)     Foreign accounts                                  [___________]
       (v)      Non-US dollars accounts/disputes/counterclaims    [___________]
       (vi)     Indebted to obligor/subject to offset             [___________]
       (vii)    Non-first priority accounts/Liens                 [___________]
       (viii)   Stale invoices/receivables > 60 days past due     [___________]
       (ix)     Insolvent obligors                                [___________]
       (x)      Accounts with affiliates                          [___________]
       (xi)     Customers > 20% of total A/R                      [___________]
       (xii)    50% unpaid > 60 days                              [___________]
       (xiii)   Government account (except VA)                    [___________]
       (xiv)    Not conforming with law                           [___________]
       (xv)     Representations in Security Documents untrue      [___________]
       (xvi)    Enforcement legally restricted                    [___________]
       (xvii)   Subject to IBM Lien                               [_______________________]
       (xviii)  Other                                             [___________]
                             [Total Deductions]                    _______________________]

[ 3 ]  ELIGIBLE ACCOUNTS RECEIVABLE                                           [___________]
       COLLATERAL (Line 1 minus Line 2)
                Multiply times advance rate of 75%

[ 4 ]  BORROWING BASE (Line 3 times 75%)                                      [___________]

[ 5 ]  Loan Balance - As of last prior date of determination      [___________]
         Advances (+)                                             [___________]
         Collections (-)                                          [___________]
         Other Debits (-)/Credits (+)                             [___________]

[ 6 ]  Loan Balance - As of date of determination                             [___________]

<CAPTION>
  AVAILABILITY:
  ------------
<S>    <C>                                                       <C>
[ 7 ]  Borrowing Base (from Line 4 above)                         [___________]
[ 8 ]  Less: Revolving Loans outstanding (from Line 6 above)      [___________]
</TABLE>

<PAGE>   137

<TABLE>
<S>    <C>                                             <C>        <C>
[ 9 ]  Less: Standby L/Cs outstanding                  [___________]

[ 10]  NET EXCESS AVAILABILITY (Line 7 minus Lines 8+9)            [___________]
</TABLE>

  The undersigned Borrower certifies that (a) this report, including all other
  reports and other schedules referred to herein, is true and correct in all
  respects, is in accordance with the books and records of the undersigned and
  is prepared in accordance with the terms of the First Amended and Restated
  Credit Agreement, dated as of May 29, 1998, by and among the Borrower,
  certain financial institutions from time to time party thereto and First
  Union National Bank, as Agent (as amended, modified or supplemented from
  time to time, the "Credit Agreement"); and (b) no Default or Event of
  Default exists under the Credit Agreement.

                                               ECLIPSYS CORPORATION

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

<PAGE>   138

                                  EXHIBIT D

                                      TO
                     FOURTH AMENDMENT OF CREDIT AGREEMENT

The following are Required Documents with respect to each Acquisition or
Investment heretofore undertaken by the Borrower pursuant to the terms of
Section 8.6(vi) or Section 8.6(viii), respectively, during the term of the
Credit Agreement:

1.       Joinder to Subsidiary Guaranty;

2.       Joinder to Subsidiary Pledge and Security Agreement;

3.       Amendment to Borrower Pledge and Security Agreement;

4.       UCC-1 financing statements for each new Subsidiary in each location
         where such Subsidiary has UCC assets with a fair market value greater
         than $500,000, provided that such UCC-1 financing statements shall be
         Required Documents without regard to the dollar value of such assets
         once the Borrower shall have declined pursuant to this provision to
         provide UCC-1 financing statements with respects to assets with an
         aggregate fair market value exceeding $1,500,000;

5.       Stock certificate and stock power for each new Subsidiary;

; provided, however, that (i) with respect to the acquisition by the Borrower
of Intelus Corporation, the documents described in items 1 through 5 above
shall not be deemed to be Required Documents to the extent such documents are
delivered to the Agent on or before November 8, 2000 and (ii) with respect to
the acquisition by the Borrower of each of MSI Solutions, Inc., Hvision, Inc.,
Transition Systems, Inc. and PowerCenter Systems, Inc., the documents
described in item 4 above shall not be deemed to be Required Documents to the
extent such documents are delivered to the Agent on or before November 23,
2000.

<PAGE>   139

                                  EXHIBIT E

                                      TO
                     FOURTH AMENDMENT OF CREDIT AGREEMENT

The occurrence or existence of any of the following prior to the date of this
Agreement shall be deemed to be a Waived Default:

1.      The failure by the Borrower to deliver the financial statements
        required by Sections 6.1(a) and (b) of the Credit Agreement;

2.      The failure by the Borrower to deliver or provide the information
        required by Sections 6.2(a) and (d) of the Credit Agreement;

3.      The failure by the Borrower at any time on or before December 31, 1999
        to comply with the provisions of Section 8.5(v) of the Credit
        Agreement; and

4.      The failure by the Borrower at any time on or before September 30,
        2000 to comply with any other reporting or information provision,
        which failure did not adversely affect the Borrower's ability to
        perform its obligations under the Credit Agreement.

<PAGE>   140

                                                                  Execution Copy

                            ASSIGNMENT AND ACCEPTANCE

        THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is
made this 24th day of October, 2000, by and between Fleet National Bank,
formerly known as BankBoston, N.A. (the "Assignor") and First Union National
Bank (the "Assignee"). Reference is made to the First Amended and Restated
Credit Agreement, dated as of May 29, 1998 (as amended, modified or supplemented
from time to time, the "Amended and Restated Credit Agreement"), among ECLIPSYS
CORPORATION (the "Borrower"), certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), First Union National Bank, as
Agent for the Lenders, and BankBoston, N.A., as Co-Agent. Unless otherwise
defined herein, capitalized terms used herein without definition shall have the
meanings given to them in the Amended and Restated Credit Agreement.

        The Assignor and the Assignee hereby agree as follows:

        1.      Assignment and Assumption. Subject to the terms and conditions
hereof, the Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, without recourse to the Assignor
and, except as expressly provided herein, without representation or warranty by
the Assignor, the interest or interests as of the Effective Date (as hereinafter
defined) in and to all of the Assignor's rights and obligations under the
Amended and Restated Credit Agreement and the other Credit Documents (in its
capacity as a Lender and as Co-Agent thereunder) represented by the percentage
interest or interests specified under the heading "Assigned Share" in Item 4 of
Annex I (each such assigned interest, an "Assigned Share"), including, without
limitation, the Assigned Share of all rights and obligations of the Assignor
with respect to its Revolving Credit Commitment, Letter of Credit Exposure,
Revolving Credit Note and any Revolving Loans.

        2.      The Assignor. The Assignor (i) represents and warrants that it
is the legal and beneficial owner of each interest being assigned by it
hereunder, that each such interest is free and clear of any adverse claim, and
that as of the date hereof the amount of its Revolving Credit Commitment and
outstanding Revolving Loans with regard to which an interest is being assigned
hereunder (and Letter of Credit Exposure, if applicable) is as set forth in Item
4 of Annex I, (ii) except as set forth in clause (i) above, makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Amended and Restated Credit Agreement, any other Credit Document or any other
instrument or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Amended and
Restated Credit Agreement, any other Credit Document or any other instrument or
document furnished pursuant thereto, and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or the performance or observance by
the Borrower or any of its Subsidiaries of any of their respective obligations
under the Amended and Restated Credit Agreement, any other Credit Document or
any other instrument or document furnished pursuant thereto.

<PAGE>   141

        3.      The Assignee. The Assignee (i) represents and warrants that it
is legally authorized to enter into this Assignment and Acceptance, (ii)
confirms that it has received a copy of the Amended and Restated Credit
Agreement, together with copies of the financial statements most recently
delivered under SECTION 6.1 of the Amended and Restated Credit Agreement and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance,
(iii) agrees that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Amended and Restated Credit Agreement,
(iv) confirms that it is an Eligible Assignee, (v) appoints and authorizes the
Agent to take such actions as agent on its behalf under the Amended and Restated
Credit Agreement and the other Credit Documents, and to exercise such powers and
to perform such duties, as are specifically delegated to the Agent by the terms
thereof, together with such other powers and duties as are reasonably incidental
thereto, and (vi) agrees that it will perform in accordance with their
respective terms all of the obligations that by the terms of the Amended and
Restated Credit Agreement are required to be performed by it as a Lender.

        4.      Effective Date. Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, an executed original hereof,
together with all attachments hereto, shall be delivered to each of the Agent
and the Borrower (and also to the Agent, the processing fee referred to in
SECTION 11.7(a) of the Amended and Restated Credit Agreement). The effective
date of this Assignment and Acceptance (the "Effective Date") shall be the
earlier of (i) the date of acceptance hereof by the Agent and the Borrower or
(ii) the date, if any, designated as the Effective Date in Item 5 of Annex I
(which date shall be not less than five (5) Business Days after the date of
execution hereof by the Assignor and the Assignee). As of the Effective Date,
(y) the Assignee shall be a party to the Amended and Restated Credit Agreement
and, to the extent provided in this Assignment and Acceptance, shall have the
rights and obligations of a Lender thereunder and under the other Credit
Documents, and (z) the Assignor shall, to the extent provided in this Assignment
and Acceptance, relinquish its rights (other than rights under the provisions of
the Amended and Restated Credit Agreement and the other Credit Documents
relating to indemnification or payment of fees, costs and expenses, to the
extent such rights relate to the time prior to the Effective Date) and be
released from its obligations under the Amended and Restated Credit Agreement
and the other Credit Documents.

        5.      Payments; Settlement. On or prior to the Effective Date, in
consideration of the sale and assignment provided for herein and as a condition
to the effectiveness of this Assignment and Acceptance, the Assignee will pay to
the Assignor an amount (to be confirmed between the Assignor and the Assignee)
that represents the Assigned Share of the principal amount of the Revolving
Loans, if any, made by the Assignor and outstanding on the Effective Date
(together, if and to the extent the Assignor and the Assignee so elect, with the
Assigned Share of any related accrued but unpaid interest, fees and other
amounts). From and after the Effective Date, the Agent will make all payments
required to be made by it under the Amended and Restated Credit Agreement in
respect of each interest assigned hereunder (including, without limitation, all
payments of principal, interest and fees in respect of the Assigned Share of the
Assignor's Revolving Credit Commitment and any Revolving Loans assigned
hereunder) directly to the Assignee. The Assignor and the Assignee shall be
responsible for making

                                        2

<PAGE>   142

between themselves all appropriate adjustments in payments due under the Amended
and Restated Credit Agreement in respect of the period prior to the Effective
Date. All payments required to be made hereunder or in connection herewith shall
be made in Dollars by wire transfer of immediately available funds to the
appropriate party at its address for payments designated in Annex I.

        6.      Governing Law. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the internal laws of the State of North
Carolina (without regard to the conflicts of laws principles thereof).

        7.      Entire Agreement. This Assignment and Acceptance, together with
the Amended and Restated Credit Agreement and the other Credit Documents, embody
the entire agreement and understanding between the parties hereto and supersede
all prior agreements and understandings of the parties, verbal or written,
relating to the subject matter hereof.

        8.      Successors and Assigns. This Assignment and Acceptance shall be
binding upon, inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.

        9.      Counterparts. This Assignment and Acceptance may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which, when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

                                        3

<PAGE>   143

        IN WITNESS WHEREOF, the parties have caused this Assignment and
Acceptance to be executed by their duly authorized officers as of the date first
above written.

                                            ASSIGNOR:

                                            FLEET NATIONAL BANK,
                                              FORMERLY KNOWN AS BANKBOSTON, N.A.

                                            By: /s/ LORI H. JOU
                                               -------------------------------

                                            Title:      Vice President
                                                  ----------------------------

                                            ASSIGNEE:

                                            FIRST UNION NATIONAL BANK

                                            By: /s/ JOYCE BARRY
                                               -------------------------------

                                            Title:   Senior Vice President
                                                  ----------------------------

Accepted this 24th day of
October, 2000

FIRST UNION NATIONAL BANK, AS AGENT
  AND AS ISSUING LENDER

By: /s/ JOYCE BARRY
   --------------------------------

Title:    Senior Vice President
      -----------------------------

Consented and agreed to:

ECLIPSYS CORPORATION

By:  /s/ GREG WILSON
   --------------------------------

Title:            CFO
      -----------------------------

                                       4
<PAGE>   144

                                    ANNEX I

1.      Borrower:       Eclipsys Corporation

2.      Name and Date of Amended and Restated Credit Agreement:

        First Amended and Restated Credit Agreement, dated as of May 29, 1998,
among Eclipsys Corporation, certain Lenders from time to time parties thereto,
First Union National Bank, as Agent, and BankBoston, N.A., as Co-Agent.

3.      Date of Assignment and Acceptance: October 24, 2000.

4.      Amounts:

<TABLE>
<CAPTION>
                                                                                                 Aggregate
                                                                                 Amount of       for Assignor
                                                Aggregate         Assigned       Assigned        (after
                                                for Assignor      Share          Share           assignment)
                                                ------------      -----          -----           -----------
<S>                                            <C>               <C>            <C>             <C>
(a) Revolving Credit Commitment                 $20,000,000       100%           $20,000,000     $0

(b) Revolving Loans                             $0                100%           $0              $0

(c) Letter of Credit Exposure                   $30,000           100%           $30,000         $0
</TABLE>

5.      Effective Date: October 24, 2000.

6.      Addresses for Notices:

        Assignor:               Fleet National Bank
                                100 Federal Street, Mail Code MA DE l0008E
                                Boston, Massachusetts 02110
                                Attention: Lori H. Jou
                                Telephone: (617) 434-3898
                                Telecopy: (617) 434-2472
                                Reference: Eclipsys Corporation

        Assignee:               First Union National Bank
                                One First Union Center, 5th Floor
                                301 South College Street
                                Charlotte, North Carolina 28288-0760
                                Attention: Joyce Barry
                                Telephone: (704) 374-4151
                                Telecopy: (704) 374-4793

                                       5
<PAGE>   145

        7.     Lending Office of Assignee:
               First Union National Bank
               One First Union Center, 5th Floor
               301 South College Street
               Charlotte, North Carolina 28288-1183
               Attention: Tonya Rhyne
               Telephone: (704)
                                ------------
               Telecopy:  (704)
                                ------------

                                        6

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