Document:

<PAGE>   1

                                                                  Exhibit 10.146

                 SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

         This Sixth Amendment to Loan and Security Agreement (this "SIXTH
AMENDMENT") is entered into as of the 4th day of August, 2000, between RAMSAY
YOUTH SERVICES, INC., a Delaware corporation, f/k/a RAMSAY HEALTH CARE, INC.
("HOLDINGS"), with its principal place of business at Columbus Center, One
Alhambra Plaza, Suite 750, Coral Gables, Florida 33134, each of the Subsidiaries
of Holdings party to this Sixth Amendment and listed in EXHIBIT B to the Loan
Agreement referred to below (the "HOLDINGS SUBSIDIARIES"), each of which is a
corporation or other legal entity as indicated in EXHIBIT B, is organized under
the laws of the jurisdiction indicated in EXHIBIT B, and has its principal place
of business at the location indicated in EXHIBIT B (Holdings, the Holdings
Subsidiaries, and each other Subsidiary of Holdings or of any Subsidiary of
Holdings from time to time party to the Loan Agreement referred to below are
hereinafter collectively referred to as "BORROWERS" and each individually as a
"BORROWER"), and FLEET CAPITAL CORPORATION, a Rhode Island corporation (in its
individual capacity, "FCC"), with offices at 5950 Sherry Lane, Suite 300,
Dallas, Texas 75225, as a Lender, and as agent for all Lenders, in such
capacity, "AGENT"), and such Persons who are or hereafter become parties to the
Loan Agreement as Lenders. Capitalized terms used but not defined in this Sixth
Amendment have the meanings assigned to them in Appendix A of that certain Loan
and Security Agreement dated October 30, 1998, among Borrowers, Lenders and
Agent, as amended (the "LOAN AGREEMENT").

                              W I T N E S S E T H:

         WHEREAS, the Borrowers have requested (i) certain amendments to the
Loan Agreement to increase the Revolving Credit Loan Commitment and the Term
Loan Commitment, and make certain other revisions to the terms of the Loan
Agreement; (ii) a consent to the acquisition of certain assets from Charter
Behavioral Health Systems, LLC; and (iii) a consent to the acquisition of
certain real property from Crescent Real Estate Funding VII, L.P.; and

         WHEREAS, subject to the terms and conditions herein contained, Agent
and Lenders have agreed to the Borrowers' request.

         NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed,
Borrowers, Agent and Lenders hereby agree as follows:

         SECTION 1. Subject to the satisfaction of each condition precedent set
forth in SECTION 3 hereof and in reliance on the representations, warranties,
covenants and agreements contained in this Sixth Amendment, the Loan Agreement
shall be amended effective August 4, 2000 (the "SIXTH AMENDMENT EFFECTIVE DATE")
in the manner provided in this SECTION 1:

         1.1 AMENDED DEFINITIONS. The following definitions contained in
APPENDIX A to the Loan Agreement shall be amended to read in their entirety as
follows:

                                       1
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BORROWING BASE - AS AT ANY DATE OF DETERMINATION THEREOF, AN AMOUNT EQUAL TO THE
LESSER OF:

                           (1) TWELVE MILLION DOLLARS ($12,000,000); OR

                           (2) (A) PRIOR TO THE BORROWING BASE CHANGE DATE, THE
                  AMOUNT EQUAL TO FIFTY PERCENT (50%) OF THE AMOUNT OF NET
                  ACCOUNTS AS DETERMINED FROM THE MOST RECENT CONSOLIDATED
                  BALANCE SHEET OF BORROWERS FURNISHED TO AGENT PURSUANT TO
                  SECTION 8.1.3(II), OR (B) FROM AND AFTER THE BORROWING BASE
                  CHANGE DATE, AN AMOUNT EQUAL TO THE SUM OF (I) EIGHTY-FIVE
                  PERCENT (85%) OF NET ELIGIBLE ACCOUNTS; PLUS (II) THE LESSER
                  OF (X) $3,000,000 AND (Y) EIGHTY-FIVE PERCENT (85%) OF NET
                  ELIGIBLE UNBILLED ACCOUNTS; PLUS (III) THE LESSER OF (X)
                  $350,000 AND (Y) EIGHTY-FIVE PERCENT (85%) OF NET ELIGIBLE
                  SELF-PAY ACCOUNTS; MINUS (IV) ANY AMOUNTS WHICH AGENT
                  REASONABLY EXPECTS IT OR LENDERS MAY BE OBLIGATED TO PAY IN
                  THE FUTURE FOR THE ACCOUNT OF ANY BORROWER.

         MINUS (SUBTRACT (3) BELOW FROM THE LESSER OF (1) OR, AS APPLICABLE,
         (2)(A) OR (2)(B) ABOVE)

                           (3) AN AMOUNT EQUAL TO THE LC AMOUNT.

         EXCESS CASH FLOW - WITH RESPECT TO ANY FISCAL YEAR OF HOLDINGS AND ON A
         CONSOLIDATED BASIS FOR SUCH PERIOD, 50% OF THE AMOUNT DERIVED BY ADDING
         TO ADJUSTED NET EARNINGS FROM OPERATIONS (OR LOSS) FOR SUCH FISCAL
         PERIOD DEPRECIATION, AMORTIZATION AND DEFERRED TAXES FOR SUCH FISCAL
         PERIOD AND SUBTRACTING FROM SUCH SUM (A) REGULARLY SCHEDULED PAYMENTS
         OF PRINCIPAL ON INDEBTEDNESS FOR MONEY BORROWED, (B) CAPITAL
         EXPENDITURES WHICH (I) ARE NOT FINANCED BY ACQUISITION LOANS AND (II)
         ARE NOT ASSOCIATED WITH THE PURCHASE OF REAL PROPERTY FROM CRESCENT
         REAL ESTATE FUNDING VII, L.P. OF UP TO $7,700,000.00, (C) CAPITAL
         LEASES PERMITTED BY THE TERMS HEREOF, OR (D) PERMITTED PURCHASE MONEY
         INDEBTEDNESS PAID IN CASH DURING SUCH FISCAL PERIOD.

         FIXED CHARGES - FOR ANY PERIOD, THE FOLLOWING, EACH CALCULATED (WITHOUT
         DUPLICATION) FOR SUCH PERIOD: (A) CASH INTEREST EXPENSES, PLUS (B)
         INCOME TAXES OF HOLDINGS AND ITS SUBSIDIARIES, PLUS (C) SCHEDULED
         PAYMENTS OF PRINCIPAL WITH RESPECT TO ALL INDEBTEDNESS OF HOLDINGS AND
         ITS SUBSIDIARIES, PLUS (D) CAPITAL EXPENDITURES MADE DURING THE
         APPLICABLE PERIOD EXCLUDING (I) CAPITAL EXPENDITURES FINANCED BY
         ACQUISITION LOANS, EXCEPT CAPITAL EXPENDITURES MADE IN COMPLIANCE WITH
         THE PROVISO CONTAINED IN SECTION 8.2.9, AND (II) CAPITAL EXPENDITURES
         MADE IN CONNECTION WITH THE PURCHASE OF REAL PROPERTY FROM CRESCENT
         REAL ESTATE FUNDING VII, L.P. OF UP TO $7,700,000.00, PLUS (E) PAYMENTS
         MADE DURING THE APPLICABLE PERIOD UNDER CAPITAL

                                       2
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         LEASES PERMITTED BY THE TERMS HEREOF, PLUS (F) PAYMENTS MADE DURING THE
         APPLICABLE PERIOD UNDER PERMITTED PURCHASE MONEY INDEBTEDNESS.

         1.2 CREDIT FACILITY. Section 1 of the Loan Agreement shall be amended
by deleting the words "Total Credit Facility of up to Twenty-Two Million Dollars
($22,000.00)" from the first paragraph of such Section 1 and replacing them with
the words "credit facility". The definition of Total Credit Facility in APPENDIX
A to the Loan Agreement shall be deleted.

         1.3 INCREASE OF REVOLVING CREDIT LOAN COMMITMENT. Section 1.1.1 of the
Loan Agreement shall be amended by deleting the words "Eight Million Dollars
($8,000,000)" from such Section and inserting the words "Twelve Million Dollars
($12,000,000)" in place thereof.

         1.4 INCREASE OF TERM LOAN. Section 1.2.1 of the Loan Agreement shall be
amended to read in its entirety as follows:

                  1.2.1 TERM LOAN. ON THE CLOSING DATE, SUBJECT TO THE
         FULFILLMENT OR WAIVER OF ALL CONDITIONS PRECEDENT TO THE EFFECTIVENESS
         OF THIS AGREEMENT, EACH LENDER SHALL MAKE TERM LOANS (COLLECTIVELY THE
         "CLOSING DATE TERM LOAN") TO BORROWERS IN THE AGGREGATE PRINCIPAL
         AMOUNT EQUAL TO THE AMOUNT SET FORTH BELOW SUCH LENDER'S NAME ON THE
         SIGNATURE PAGES HEREOF (SUCH LENDER'S "TERM LOAN COMMITMENT"). ON
         AUGUST 4, 2000, FCC SHALL MAKE A TERM LOAN TO BORROWERS OF $4,500,000
         (THE "AUGUST 2000 TERM LOAN," TOGETHER WITH THE CLOSING DATE TERM LOAN,
         THE "TERM LOANS"). THE PERCENTAGE EQUAL TO THE QUOTIENT OF (X) EACH
         LENDER'S TERM LOAN COMMITMENT, DIVIDED BY (Y) THE AGGREGATE OF ALL TERM
         LOAN COMMITMENTS, IS THE LENDER'S "TERM LOAN PERCENTAGE." AFTER GIVING
         EFFECT TO THE AUGUST 2000 TERM LOAN, THE AGGREGATE AMOUNT OF THE TERM
         LOAN COMMITMENTS IS ELEVEN MILLION ONE HUNDRED SIXTY ONE THOUSAND SIX
         HUNDRED SEVENTY TWO AND 00/100 DOLLARS ($11,161,672.00). THE TERM LOANS
         SHALL BE EVIDENCED BY ONE OR MORE TERM NOTES TO BE EXECUTED AND
         DELIVERED BY BORROWERS TO LENDERS, WHICH SHALL BEAR INTEREST AS
         SPECIFIED IN SECTION 2.1 AND SHALL BE REPAYABLE IN ACCORDANCE WITH THE
         TERMS OF TERM NOTES. AMOUNTS REPAID WITH RESPECT TO THE TERM LOANS MAY
         NOT BE REBORROWED. THE PROCEEDS OF THE TERM LOANS SHALL BE USED BY
         BORROWERS, SOLELY FOR PURPOSES FOR WHICH THE PROCEEDS OF THE REVOLVING
         CREDIT LOANS ARE AUTHORIZED TO BE USED.

         1.5 AMENDMENT TO CAPITAL EXPENDITURES COVENANT. Section 8.2.9 of the
Loan Agreement shall be amended to read in its entirety as follows:

                  8.2.9 CAPITAL EXPENDITURES. MAKE CAPITAL EXPENDITURES
         (INCLUDING, BY WAY OF CAPITALIZED LEASE OBLIGATIONS) WHICH, IN THE
         AGGREGATE, AS TO HOLDINGS AND ITS SUBSIDIARIES, ON A CONSOLIDATED
         BASIS, EXCEED, IN THE AGGREGATE, (A) $2,700,000.00 DURING THE CALENDAR
         YEAR 2000, AND (B) $2,000,000.00 DURING ANY CALENDAR YEAR AFTER 2000.

                                       3
<PAGE>   4

         1.6 AMENDMENT TO INTEREST COVERAGE RATIO. Section 8.3.2 of the Loan
Agreement shall be amended to read in its entirety as follows:

                  8.3.2 INTEREST COVERAGE RATIO. ACHIEVE, AT THE END OF EACH
         FISCAL QUARTER, FOR THE TWELVE CALENDAR MONTH PERIOD THEN ENDING, AN
         INTEREST COVERAGE RATIO OF NOT LESS THAN 3.00 TO 1.0.

         1.7 AMENDMENT TO LEVERAGE RATIO. Section 8.3.3 of the Loan Agreement
shall be amended to read in its entirety as follows:

                  8.3.3 TOTAL INDEBTEDNESS TO EBITDA. AS TO THE LAST DAY OF EACH
         FISCAL QUARTER SET FORTH BELOW (THE "CALCULATION DATE"), A RATIO OF (I)
         HOLDINGS' TOTAL INDEBTEDNESS ON SUCH CALCULATION DATE, TO (II)
         HOLDINGS' EBITDA FOR THE TWELVE CALENDAR MONTH PERIOD ENDING ON SUCH
         CALCULATION DATE, OF NOT GREATER THAN THE RATIO SET FORTH BELOW ON THE
         CALCULATION DATE CORRESPONDING THERETO:

                  CALCULATION DATE                                RATIO
                  ----------------                                -----

         (I)      JUNE 30, 2000                          (I)      3.50 TO 1.0

         (II)     SEPTEMBER 30, 2000                     (II)     3.50 TO 1.0

         (III)    DECEMBER 31, 2000                      (III)    3.50 TO 1.0

         (IV)     MARCH 31, 2001                         (IV)     3.50 TO 1.0

         (V)      JUNE 30, 2001                          (V)      3.50 TO 1.0

         (VI)     SEPTEMBER 30, 2001                     (VI)     3.00 TO 1.00
                  AND ON THE LAST DAY OF
                  EACH THEREAFTER OCCURRING
                  FISCAL QUARTER;

         PROVIDED, HOWEVER, THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY
         CONTAINED HEREIN, THE FOLLOWING AMOUNTS SHALL BE ADDED TO HOLDINGS'
         EBITDA FOR EACH OF THE FOLLOWING FISCAL QUARTERS FOR PURPOSES OF THIS
         SECTION 8.3.3.

                  FISCAL QUARTER ENDING:                      AMOUNT:
                  ----------------------                      -------

                  DECEMBER 31, 1999                           $538,000
                  MARCH 31, 2000                              $664,000
                  JUNE 30, 2000                               $537,000
                  SEPTEMBER 30, 2000                          $222,000

                                       4
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         1.8 COMMITMENTS. As of the Sixth Amendment Effective Date, each
Lender's Term Loan Commitment, Revolving Credit Loan Commitment, Term Loan
Percentage, Revolving Credit Percentage, Acquisition Loan Commitment and
Acquisition Loan Percentage shall be as set forth below such Lender's name on
the signature pages of this Sixth Amendment.

         1.9 AMENDMENT TO EXHIBITS. Exhibits A-1 and B to the Loan Agreement
shall be amended in their entirety by substituting Exhibits A-1 and B, each of
which are attached hereto as ANNEX A.

         SECTION 2. CONSENT.

         2.1 CHARTER CONSENT. Agent and Lenders hereby consent to the purchase
by Ramsay Youth Services of Florida, Inc. of certain assets and contracts from
Charter Behavioral Health Systems, LLC ("CHARTER"), pursuant to that certain
Asset Purchase Agreement among Charter, its subsidiaries and Ramsay Youth
Services, Inc. (the "CHARTER ASSET PURCHASE AGREEMENT") pursuant to the terms
and conditions set forth in the Charter Asset Purchase Agreement. This consent
is conditioned upon the Borrowers' representations and warranties contained in
SECTION 4 of this Sixth Amendment, and it is understood and agreed by the
parties that this consent shall be rendered null, void and without effect upon
any Borrower's breach of any such representations and warranties.

         2.2 CRESCENT CONSENT. Agent and Lenders hereby consent to the purchase
by Ramsay Youth Services of Florida, Inc. of certain real property from Crescent
Real Estate Funding VII, L.P. ("CRESCENT"), pursuant to that certain Real Estate
Purchase Agreement dated as of June 22, 2000 between Crescent and Ramsay Youth
Services, Inc. (the "CRESCENT REAL ESTATE PURCHASE AGREEMENT") pursuant to the
terms and conditions set forth in the Crescent Real Estate Purchase Agreement.

         SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENTS. The
amendments to the Loan Agreement contained in SECTION 1 of this Sixth Amendment
shall be effective only upon the satisfaction of each of the conditions set
forth in this SECTION 3. If each condition set forth in this SECTION 3 has not
been satisfied by August 4, 2000, this Sixth Amendment and all obligations of
Lenders contained herein shall, at the option of Lenders, terminate.

         3.1 DOCUMENTATION. Agent and Lenders shall have received, in form and
substance acceptable to Agent and Lenders and their counsel a duly executed copy
of this Sixth Amendment, a Revolving Credit Note and Term Note in favor of FCC
in the form of ANNEX B attached hereto, and any other documents, instruments and
certificates as Agent and Lenders and their counsel shall require in connection
therewith prior to the date hereof, all in form and substance satisfactory to
Agent and Lenders and their counsel.

         3.2 CHARTER AND CRESCENT DOCUMENTS AND CLOSING. Agent and Lenders shall
have received, in form and substance acceptable to Agent and Lenders and their
counsel, executed copies

                                       5
<PAGE>   6

of all documents, orders, instruments and certificates in connection with the
Charter Asset Purchase Agreement and Crescent Real Estate Purchase Agreement.
Additionally, Ramsay Youth Services of Florida, Inc. shall have acquired the
assets and real property identified in the Charter Asset Purchase Agreement and
Crescent Real Estate Purchase Agreement, respectively.

         3.3 2007 SUBORDINATED DEBT DOCUMENTS. ING and SunTrust shall have
executed amendments to the 2007 Subordination Agreement and the 2007
Subordinated Debt Documents, all in form and substance satisfactory to Agent and
its counsel.

         3.4 CORPORATE EXISTENCE AND AUTHORITY. Agent and Lenders shall have
received such resolutions, certificates and other documents as Agent and Lenders
shall request relative to the authorization, execution and delivery by each Loan
Party of this Sixth Amendment.

         3.5 NO DEFAULT. No Default or Event of Default shall exist.

         3.6 NO LITIGATION. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of this Sixth
Amendment, the Loan Agreement or the consummation of the transactions
contemplated hereby.

         3.7 FEE. Borrowers shall have paid Agent the restructuring fee
contemplated in that certain letter agreement dated July 18, 2000 between
Holdings and Agent.

         3.8 PARTICIPATION. Paul Ramsay Holdings Pty. Limited ("LIMITED") shall
execute an amendment to that certain participation letter agreement dated
November 17, 1999 ("PARTICIPATION AGREEMENT"), which amendment shall add
conditions to Limited's right to repayment of its participation under the
Participation Agreement, which amendment shall be in form and substance
acceptable to Agent and its counsel.

         SECTION 4. REPRESENTATIONS AND WARRANTIES OF BORROWERS. To induce Agent
and Lenders to enter into this Sixth Amendment, each Borrower hereby represents
and warrants to Agent and Lenders as follows:

         4.1 CHARTER AND CRESCENT PURCHASE PRICE. The total purchase price of
the assets under the Charter Asset Purchase Agreement and the Crescent Real
Estate Purchase Agreement (including all payments made to third parties and all
contingent liabilities and obligations assumed by any Borrower) do not exceed
$7,900,000.

         4.2 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of any Loan Party contained in the Loan Agreement
and the other Loan Documents, as amended hereby, is true and correct on the date
hereof and will be true and correct after giving effect to the amendments set
forth in SECTION 1 hereof.

                                       6
<PAGE>   7

         4.3 NO OUTSTANDING JUNIOR SUBORDINATED DEBT OR PREFERRED STOCK. As of
the date hereof, there is no outstanding Indebtedness with respect to the Junior
Subordinated Debt Documents and no Preferred Stock is outstanding.

         4.4 CORPORATE AUTHORITY; NO CONFLICTS. The execution, delivery and
performance by each Borrower of this Sixth Amendment and all documents,
instruments and agreements contemplated herein are within each Borrower's
respective corporate powers, have been duly authorized by necessary action,
require no action by or in respect of, or filing with, any court or agency of
government and do not violate or constitute a default under any provision of
applicable Law or any material agreement binding upon any Loan Party or result
in the creation or imposition of any Lien upon any of the assets of any Loan
Party except as permitted in the Loan Agreement, as amended hereby.

         4.5 ENFORCEABILITY. This Sixth Amendment constitutes the valid and
binding obligation of each of the Borrowers enforceable in accordance with its
terms, except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor's rights generally, and (ii) the
availability of equitable remedies may be limited by equitable principles of
general application.

         4.6 NO DEFENSES. No Loan Party has any defenses to payment,
counterclaims or rights of set off with respect to the Obligations.

         SECTION 5. MISCELLANEOUS.

         5.1 REAFFIRMATION OF LOAN DOCUMENTS; EXTENSION OF LIENS. Any and all of
the terms and provisions of the Loan Agreement and the Loan Documents shall,
except as amended and modified hereby, remain in full force and effect.
Borrowers hereby extend the Liens securing the Obligations until the Obligations
have been paid in full, and agree that the amendments and modifications herein
contained shall in no manner affect or impair the Obligations or the Liens
securing the payment and performance thereof.

         5.2 PARTIES IN INTEREST. All of the terms and provisions of this Sixth
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

         5.3 LEGAL EXPENSES. The Borrowers hereby agree to pay promptly
following receipt of an invoice detailing all reasonable fees and expenses of
counsel to Agent and Lenders incurred by Agent or any Lender, in connection with
the preparation, negotiation and execution of this Sixth Amendment and all
related documents.

         5.4 COUNTERPARTS. This Sixth Amendment may be executed in counterparts,
and all parties need not execute the same counterpart. However, no party shall
be bound by this Sixth Amendment until all parties have executed a counterpart.
Facsimiles shall be effective as originals.

                                       7
<PAGE>   8

         5.5 COMPLETE AGREEMENT. THIS SIXTH AMENDMENT, THE LOAN AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         5.6 HEADINGS. The headings, captions and arrangements used in this
Sixth Amendment are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Sixth Amendment, nor
affect the meaning thereof.

                            (SIGNATURE PAGE FOLLOWS)

                                       8
<PAGE>   9

         IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment
to be duly executed by their respective authorized officers on the date and year
first above written.

BORROWERS:

RAMSAY YOUTH SERVICES, INC.

By: /s/ MARCIO CABRERA
   ----------------------
   Marcio Cabrera
   Executive Vice President

BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
GREAT PLAINS HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
RAMSAY EDUCATIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGED CARE, INC.
RAMSAY YOUTH SERVICES OF ALABAMA, INC.
RAMSAY YOUTH SERVICES OF FLORIDA, INC.
RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC.
RHCI SAN ANTONIO, INC.
TRANSITIONAL CARE VENTURES, INC.
TRANSITIONAL CARE VENTURES (TEXAS), INC.

By: /s/ MARCIO CABRERA
   ----------------------
   Marcio Cabrera
   Vice President

H. C. PARTNERSHIP
By:  H.C. CORPORATION, General Partner
By:  HSA HILL CREST CORPORATION, General Partner

        By: /s/ MARCIO CABRERA
           ----------------------
           Marcio Cabrera
           Vice President

<PAGE>   10

AGENT AND LENDERS:

FLEET CAPITAL CORPORATION
("Agent" and a "Lender")

By: /s/ DENNIS M. HANSEN
   ----------------------
Name:  Dennis M. Hansen
      ---------------------------
Title: Senior Vice President
      ---------------------------

Revolving Credit Loan Commitment:           $10,690,000.00
Revolving Credit Percentage:                 89.08333333%
Term Loan Commitment:                       $10,068,013.12
Term Loan Percentage:                        90.15231508%
Acquisition Loan Commitment
(terminated on November 30, 1999 and
February 28, 2000):                         $6,000,000.00
Acquisition Loan Percentage:                 100%

SUNTRUST BANK
(a "Lender")

By: /s/ WILLIAM H. CRAWFORD
    ---------------------------
Name: William H. Crawford
     ---------------------------
Title: Assistant Vice President
     ---------------------------

Revolving Credit Loan Commitment:           $1,310,000.00
Revolving Credit Percentage:                10.91666667%
Term Loan Commitment:                       $1,093,658.88
Term Loan Percentage:                       9.84768492%
Acquisition Loan Commitment
(terminated on November 30, 1999 and
February 28, 2000):                         $0
Acquisition Loan Percentage:                 0%

<PAGE>   11

                            CONSENT AND REAFFIRMATION

       The undersigned (each a "GUARANTOR") hereby (i) acknowledges receipt of a
copy of the foregoing Sixth Amendment to Loan and Security Agreement (the "SIXTH
AMENDMENT"); (ii) consents to Borrowers' execution and delivery thereof; (iii)
agrees to be bound thereby; and (iv) affirms that nothing contained therein
shall modify in any respect whatsoever its guaranty of the obligations of the
Borrowers to Lenders pursuant to the terms of its Guaranty in favor of Agent and
the Lenders (the "GUARANTY") and reaffirms that the Guaranty is and shall
continue to remain in full force and effect. Although Guarantor has been
informed of the matters set forth herein and has acknowledged and agreed to
same, Guarantor understands that the Lenders have no obligation to inform
Guarantor of such matters in the future or to seek Guarantor's acknowledgment or
agreement to future amendments or waivers, and nothing herein shall create such
duty.

       IN WITNESS WHEREOF, the undersigned has executed this Consent and
Reaffirmation on and as of the date of the Sixth Amendment.

GUARANTOR:

RAMSAY HOSPITAL CORPORATION OF LOUISIANA, INC.
RAMSAY YOUTH SERVICES PUERTO RICO, INC.

By: /s/ MARCIO CABRERA
   ----------------------
   Marcio Cabrera
   Vice President

<PAGE>   12

                                     ANNEX A

                                   EXHIBIT A-1

                              AMENDED AND RESTATED
                             SECURED PROMISSORY NOTE

                                   (Term Note)

$
 -------------                                           --------------, ----
                                                         --------------, ----

         FOR VALUE RECEIVED, each of the undersigned, jointly and severally,
(hereinafter collectively referred to as "BORROWER", and each individually, a
"BORROWER"), hereby promises to pay to the order of ________________ ,
a__________ corporation (hereinafter "Lender"), or its registered assigns at the
office of Fleet Capital Corporation, as agent for such Lender, or at such other
place in the United States of America as the holder of this Note may designate
from time to time in writing, in lawful money of the United States, in
immediately available funds, at the time of payment, the principal sum of
________________Dollars ($__________), together with interest from and after the
date hereof on the unpaid principal balance outstanding from time to time.

         This Secured Promissory Note (the "Note") is one of the Term Notes
referred to in, and is issued pursuant to, that certain Loan and Security
Agreement dated as of October 30, 1998, by and among Borrowers, the lenders
signatories thereto (including Lender) and Fleet Capital Corporation ("FCC") as
Agent for said lenders (FCC in such capacity, "Agent") (hereinafter, as amended
from time to time, the "Loan Agreement"), and is entitled to all of the benefits
and security of the Loan Agreement. All of the terms, covenants and conditions
of the Loan Agreement and the Security Documents are hereby made a part of this
Note and are deemed incorporated herein in full. All capitalized terms used
herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement.

         For so long as no Event of Default shall have occurred and be
continuing the principal amount and accrued interest of this Note shall be due
and payable on the dates and in the manner hereinafter set forth:

         (a) Interest on the unpaid principal balance outstanding from time to
         time shall be paid at such interest rates and at such times as are
         specified in the Loan Agreement;

<PAGE>   13

         (b) Principal shall be due and payable monthly on the first day of each
         month during the periods set forth below in the amounts set forth
         opposite such periods:

                  DATE                           SCHEDULED INSTALLMENT
                  ----                           ---------------------

         September 1, 2000 through
         October 31, 2000                            $ 83,833.00

         November 1, 2000 through
         October 31, 2001                            $198,416.00

         November 1, 2001 through
         October 31, 2002                            $239,583.00

         November 1, 2002 through
         October 30, 2003                            $302,083.00

         (c) The entire remaining principal amount then outstanding, together
         with any and all other amounts due hereunder, shall be due and payable
         on the Commitment Termination Date.

Notwithstanding the foregoing, the entire unpaid principal balance and accrued
interest on this Note shall be due and payable immediately upon any termination
of the Loan Agreement pursuant to Section 4 thereof.

         This Note shall be subject to mandatory prepayment in accordance with
the provision of Section 3.3 of the Loan Agreement. Borrowers may also prepay
this Note in the manner provided in Section 4 of the Loan Agreement.

         Upon the occurrence, and during the continuation, of an Event of
Default, this Note shall or may, as provided in the Loan Agreement, become or be
declared immediately due and payable.

         The right to receive principal of, and stated interest on, this Note
may only be transferred in accordance with the provisions of the Loan Agreement.

         Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by each Borrower.

<PAGE>   14

         This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of Texas.

RAMSAY YOUTH SERVICES, INC.

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

BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
GREAT PLAINS HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
RAMSAY EDUCATIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGED CARE, INC.
RAMSAY YOUTH SERVICES OF ALABAMA, INC.
RAMSAY YOUTH SERVICES OF FLORIDA, INC.
RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC.
RHCI SAN ANTONIO, INC.
TRANSITIONAL CARE VENTURES, INC.
TRANSITIONAL CARE VENTURES (TEXAS), INC.

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

H. C. PARTNERSHIP
By:  H.C. CORPORATION, General Partner
By:  HSA HILL CREST CORPORATION, General Partner

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

<PAGE>   15

                                    EXHIBIT B

             BORROWERS' AND SUBSIDIARIES EXECUTIVE OFFICES; BUSINESS
                 LOCATIONS AND COLLATERAL LOCATIONS; TRADE NAMES

1.     RAMSAY YOUTH SERVICES, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Youth Services, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

2.     BETHANY PSYCHIATRIC HOSPITAL, INC., AN OKLAHOMA CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Bethany Psychiatric Hospital, Inc.
       Bethany Healthcare Corp.
       Columbia Bethany Hospital
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

                                       1
<PAGE>   16

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

3.     BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., A UTAH CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Bountiful Psychiatric Hospital, Inc.
       Benchmark Behavioral Health System North
       Benchmark Behavioral Health System South

       Benchmark Regional Hospital
       592 West 1350 South
       Woods Cross, Utah 84087

       Briarwood Group Home - Reno
       480 Galetti Way
       Sparks, Nevada 89431

       Briarwood Group Home - Las Vegas
       5105 Smoke Ranch Road
       Las Vegas, Nevada  89108

       PRINCIPAL PLACE OF BUSINESS
       592 West 1350 South
       Woods Cross, Utah 84087

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       592 West 1350 South
       Woods Cross, Utah 84087

       480 Galetti Way
       Sparks, Nevada 89431

       5105 Smoke Ranch Road
       Las Vegas, Nevada  89108

                                       2
<PAGE>   17

4.     EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION, A NORTH CAROLINA
       CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       East Carolina Psychiatric Services Corporation
       Brynn Marr Behavioral Healthcare System
       Brynn Marr Hospital
       192 Village Drive
       Jacksonville, North Carolina 28546

       PRINCIPAL PLACE OF BUSINESS
       192 Village Drive
       Jacksonville, North Carolina 28546

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       192 Village Drive
       Jacksonville, North Carolina 28546

5.     GREAT PLAINS HOSPITAL, INC., A MISSOURI CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Great Plains Hospital, Inc.
       Heartland Behavioral Health Services
       Heartland Hospital
       1500 W. Ashland Street
       Nevada, Missouri 64772

       PRINCIPAL PLACE OF BUSINESS
       1500 W. Ashland Street
       Nevada, Missouri 64772

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

                                       3
<PAGE>   18

       1500 W. Ashland Street
       Nevada, Missouri 64772

6.     GULF COAST TREATMENT CENTER, INC., A FLORIDA CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Gulf Coast Treatment Center, Inc.
       Gulf Coast Treatment Center
       1015 Mar Walt Drive
       Fort Walton, Florida 32548

       Okaloosa Youth Academy
       445 Straight Line Road
       Crestview, Florida  32538

       PRINCIPAL PLACE OF BUSINESS
       1015 Mar Walt Drive
       Fort Walton, Florida 32548

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       1015 Mar Walt Drive
       Fort Walton, Florida 32548

       445 Straight Line Road
       Crestview, Florida  32538

7.     HAVENWYCK HOSPITAL, INC., A MICHIGAN CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Havenwyck Hospital, Inc.
       Havenwyck Hospital
       1525 University Drive
       Auburn Hills, Michigan 48326

       PRINCIPAL PLACE OF BUSINESS
       1525 University Drive
       Auburn Hills, Michigan 48326

                                       4
<PAGE>   19

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       1525 University Drive
       Auburn Hills, Michigan 48326

8.     H.C. CORPORATION, AN ALABAMA CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       H.C. Corporation
       Hill Crest Behavioral Health Services
       Hill Crest Hospital
       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       PRINCIPAL PLACE OF BUSINESS
       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       6869  Fifth Avenue South
       Birmingham, Alabama 35212

9.     H.C. PARTNERSHIP, AN ALABAMA GENERAL PARTNERSHIP

       TRADE NAMES AND LOCATIONS OF FACILITIES
       H.C. Partnership
       Hill Crest Behavioral Health Services
       Hill Crest Hospital
       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       Bessemer Group Home
       212 N. 16 Street
       Bessemer, Alabama  35020

                                       5
<PAGE>   20

       PRINCIPAL PLACE OF BUSINESS
       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       212 N. 16 Street
       Bessemer, Alabama  35020

10.    HSA HILL CREST CORPORATION, AN ALABAMA CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       HSA Hill Crest Corporation
       Hill Crest Behavioral Health Services
       Hill Crest Hospital
       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       Higdon Hill Group Home
       6869 5th Avenue South
       Birmingham, Alabama  35212

       PRINCIPAL PLACE OF BUSINESS
       6869 Fifth Avenue South
       Birmingham, Alabama 35212

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

                                       6
<PAGE>   21

       6869 5th Avenue South
       Birmingham, Alabama  35212

11.    HSA OF OKLAHOMA, INC., AN OKLAHOMA CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       HSA of Oklahoma, Inc.
       Meadowlake Hospital
       Meadowlake Behavioral Health System
       2216 South Van Buren
       Enid, Oklahoma 73703

       PRINCIPAL PLACE OF BUSINESS
       2216 South Van Buren
       Enid, Oklahoma 73703

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       2216 South Van Buren
       Enid, Oklahoma 73703

12.    MICHIGAN PSYCHIATRIC SERVICES, INC., A MICHIGAN CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Michigan Psychiatric Services, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

13.    RAMSAY EDUCATIONAL SERVICES, INC., A DELAWARE CORPORATION

                                       7
<PAGE>   22

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Educational Services, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE AND CORPORATE OFFICES
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

14.    RAMSAY HOSPITAL CORPORATION OF LOUISIANA, INC., A LOUISIANA CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Hospital Corporation of Louisiana, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida  33134

       CHIEF EXECUTIVE AND CORPORATE OFFICES
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida  33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida  33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida  33134

15.    RAMSAY LOUISIANA, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Louisiana, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

                                       8
<PAGE>   23

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

16.    RAMSAY MANAGED CARE, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Managed Care, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

17.    RAMSAY YOUTH SERVICES OF ALABAMA, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Youth Services of Alabama, Inc.
       Ramsay Youth Services - Dothan
       Dothan Youth Services
       700 Cottonwood Road
       Dothan, Alabama 36301

       CHIEF EXECUTIVE AND CORPORATE OFFICES
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       700 Cottonwood Road
       Dothan, Alabama 36301

                                       9
<PAGE>   24

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       700 Cottonwood Road
       Dothan, Alabama 36301

18.    RAMSAY YOUTH SERVICES OF FLORIDA, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Youth Services of Florida, Inc.
       4400 Dixie Highway, N.E.
       Palm Bay, Florida 32907

       Ramsay Youth and Family Counsel Center
       1975 Palm Bay Road, Suites 6 and 7
       Palm Bay, Florida 32905

       Everglades Youth Development Center
       18500 SW 424 Street
       Florida City, Florida  33034

       Florida Institute for Girls
       9680 Fairgrounds Road
       West Palm Beach, Florida  33411

       Kingsley Center
       5867 SW Highway 31
       Arcadia, Florida 34266

       Manatee Palms
       4480 51 Street West
       Bradenton, Florida  34210

       Manatee Adolescent Treatment Services
       1324 37 Avenue East
       Bradenton, Florida 34208

       Southern Glades Youth Camp
       41600 SW 232 Avenue
       Florida City, Florida  33034

       CHIEF EXECUTIVE AND CORPORATE OFFICES
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

                                       10
<PAGE>   25

       PRINCIPAL PLACE OF BUSINESS
       4400 Dixie Highway, N.E.
       Palm Bay, Florida 32907

       1975 Palm Bay Road, Suites 6 and 7
       Palm Bay, Florida 32905

       18500 SW 424 Street
       Florida City, Florida  33034

       9680 Fairgrounds Road
       West Palm Beach, Florida  33411

       41600 SW 232 Avenue
       Florida City, Florida  33034

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       4400 Dixie Highway, N.E.
       Palm Bay, Florida 32907

       1975 Palm Bay Road, Suites 6 and 7
       Palm Bay, Florida 32905

       18500 SW 424 Street
       Florida City, Florida  33034

       9680 Fairgrounds Road
       West Palm Beach, Florida  33411

       41600 SW 232 Avenue
       Florida City, Florida  33034

19.    RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Youth Services of South Carolina, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       Riverstone Youth Services
       2335 Highway 9
       Longs, South Carolina  29568

                                       11
<PAGE>   26

       Coastal Harbor Youth Services
       7055 Ford Taylor Road
       Conway, South Carolina  29526

       Winner Circle Youth Services
       75 Bell Clapper Court
       Aiken, South Carolina  29803

       Bush Berry Group Home
       870 Bush Berry Road
       Pelion, South Carolina  29123

       CHIEF EXECUTIVE AND CORPORATE OFFICES
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       2335 Highway 9 West
       Longs, South Carolina  29568

       7055 Ford Taylor Road
       Conway, South Carolina  29526

       75 Bell Clapper Court
       Aiken, South Carolina  29803

       870 Bush Berry Road
       Pelion, South Carolina  29123

20.    RAMSAY YOUTH SERVICES PUERTO RICO, INC., A PUERTO RICO CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Ramsay Youth Services Puerto Rico, Inc.
       654 Munoz Rivera Ave., #1103
       Hato Rey, Puerto Rico 00918

                                       12
<PAGE>   27

       Centro Detencion de Bayam
       Carreterra #28, KM 1.5
       Barrio Juan Sanchez
       Parque Industrial
       Julio Enrique Managas
       Bayamon, Puerto Rico  00960

       CHIEF EXECUTIVE AND CORPORATE OFFICES
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       654 Munoz Rivera Ave., #1103
       Hato Rey, Puerto Rico 00918

       Carreterra #28, KM 1.5
       Barrio Juan Sanchez
       Parque Industrial
       Julio Enrique Managas
       Bayamon, Puerto Rico  00960

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       654 Munoz Rivera Ave., #1102
       Hato Rey, Puerto Rico 00918

       Carreterra #28, KM 1.5
       Barrio Juan Sanchez
       Parque Industrial
       Julio Enrique Managas
       Bayamon, Puerto Rico  00960

21.    RHCI SAN ANTONIO, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       RHCI San Antonio, Inc.
       Mission Vista Hospital
       14747 Jones Maltsberger
       San Antonio, Texas 78247-3713

       PRINCIPAL PLACE OF BUSINESS
       14747 Jones Maltsberger
       San Antonio, Texas 78247-3713

                                       13
<PAGE>   28

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       14747 Jones Maltsberger
       San Antonio, Texas 78247-3713

22.    TRANSITIONAL CARE VENTURES, INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Transitional Care Ventures, Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

23.    TRANSITIONAL CARE VENTURES (TEXAS), INC., A DELAWARE CORPORATION

       TRADE NAMES AND LOCATIONS OF FACILITIES
       Transitional Care Ventures (Texas), Inc.
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       PRINCIPAL PLACE OF BUSINESS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       CHIEF EXECUTIVE OFFICE
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

       LOCATIONS OF COLLATERAL AND RECORDS
       One Alhambra Plaza, Suite 750
       Coral Gables, Florida 33134

                                       14
<PAGE>   29

                                     ANNEX B

                             SECURED PROMISSORY NOTE

                                   (TERM NOTE)

$10,068,013.12                                                    August 4, 2000
                                                                   Dallas, Texas

       FOR VALUE RECEIVED, each of the undersigned, jointly and severally,
(hereinafter collectively referred to as "BORROWER", and each individually, a
"BORROWER"), hereby promises to pay to the order of FLEET CAPITAL CORPORATION, a
Rhode Island corporation (hereinafter "LENDER"), or its registered assigns at
the office of Fleet Capital Corporation, as agent for such Lender, or at such
other place in the United States of America as the holder of this Secured
Promissory Note (this "NOTE") may designate from time to time in writing, in
lawful money of the United States, in immediately available funds, at the time
of payment, the principal sum of TEN MILLION SIXTY EIGHT THOUSAND THIRTEEN AND
12/100 Dollars ($10,068,013.12), together with interest from and after the date
hereof on the unpaid principal balance outstanding from time to time.

       This Note is one of the Term Notes referred to in, and is issued pursuant
to, that certain Loan and Security Agreement dated as of October 30, 1998, by
and among Borrowers, the lenders signatories thereto (including Lender) and
Fleet Capital Corporation ("FCC") as Agent for said lenders (FCC in such
capacity, "Agent") (as amended from time to time, the "LOAN AGREEMENT"), and is
entitled to all of the benefits and security of the Loan Agreement. All of the
terms, covenants and conditions of the Loan Agreement and the Security Documents
are hereby made a part of this Note and are deemed incorporated herein in full.
All capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan Agreement.

       For so long as no Event of Default shall have occurred and be continuing
the principal amount and accrued interest of this Note shall be due and payable
on the dates and in the manner hereinafter set forth:

         (a) Interest on the unpaid principal balance outstanding from time to
time shall be paid at such interest rates and at such times as are specified in
the Loan Agreement;

         (b) Principal shall be due and payable monthly on the first day of each
month during the periods set forth below in the amounts set forth opposite such
periods:

<PAGE>   30

                  DATE                           SCHEDULED INSTALLMENT
                  ----                           ---------------------

         September 1, 2000 through
         October 31, 2000                            $ 70,069.98

         November 1, 2000 through
         October 31, 2001                            $181,232.79

         November 1, 2001 through
         October 31, 2002                            $215,641.33

         November 1, 2002 through
         October 30, 2003                            $267,880.59

         (c) The entire remaining principal amount then outstanding, together
with any and all other amounts due hereunder, shall be due and payable on the
Commitment Termination Date.

       Notwithstanding the foregoing, the entire unpaid principal balance and
accrued interest on this Note shall be due and payable immediately upon any
termination of the Loan Agreement pursuant to Section 4 thereof.

       This Note shall be subject to mandatory prepayment in accordance with the
provision of Section 3.3 of the Loan Agreement. Borrowers may also prepay this
Note in the manner provided in Section 4 of the Loan Agreement.

       Upon the occurrence, and during the continuation, of an Event of Default,
this Note shall or may, as provided in the Loan Agreement, become or be declared
immediately due and payable.

       The right to receive principal of, and stated interest on, this Note may
only be transferred in accordance with the provisions of the Loan Agreement.

       Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by each Borrower.

       This Note amends, modifies, increases and restates, but does not
extinguish, the indebtedness evidenced by that certain Secured Promissory Note
(Term Note) of Borrowers dated January 25, 2000, payable to the order of FLEET
CAPITAL CORPORATION in the original principal amount of $6,058,503.00.

<PAGE>   31

       This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of Texas.

RAMSAY YOUTH SERVICES, INC.

By: /s/ JORGE RICO
   ------------------------
Name:  Jorge Rico
     ------------------------
Title: Vice President
     ------------------------

BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
GREAT PLAINS HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
RAMSAY EDUCATIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGED CARE, INC.
RAMSAY YOUTH SERVICES OF ALABAMA, INC.
RAMSAY YOUTH SERVICES OF FLORIDA, INC.
RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC.
RHCI SAN ANTONIO, INC.
TRANSITIONAL CARE VENTURES, INC.
TRANSITIONAL CARE VENTURES (TEXAS), INC.

By: /s/ JORGE RICO
   ------------------------
Name:  Jorge Rico
     ------------------------
Title: Vice President
     ------------------------

H. C. PARTNERSHIP
By:  H.C. CORPORATION, General Partner
By:  HSA HILL CREST CORPORATION, General Partner

          By: /s/ JORGE RICO
             ------------------------
          Name:  Jorge Rico
               ------------------------
          Title: Vice President
               ------------------------

<PAGE>   32

                              REVOLVING CREDIT NOTE

$10,690,000.00                                                    August 4, 2000
                                                                   Dallas, Texas

       FOR VALUE RECEIVED, each of the undersigned, jointly and severally,
(hereinafter collectively referred to as "BORROWERS", and each individually, a
"BORROWER"), hereby PROMISES TO PAY to the order of FLEET CAPITAL CORPORATION, a
Rhode Island corporation ("LENDER"), or its registered assigns, at the office of
Fleet Capital Corporation, as agent for such Lender, or at such other place in
the United States of America as the holder of this Revolving Credit Note (this
"NOTE") may designate from time to time in writing, in lawful money of the
United States of America and in immediately available funds, the principal
amount of TEN MILLION SIX HUNDRED NINETY THOUSAND AND NO/100 DOLLARS
($10,690,000.00), or such lesser principal amount as may be outstanding pursuant
to the Loan Agreement (as hereinafter defined) with respect to the Revolving
Credit Loans, together with interest on the unpaid principal amount of this Note
outstanding from time to time.

       This Note is one of the Revolving Credit Notes referred to in, and issued
pursuant to, that certain Loan and Security Agreement dated as of October 30,
1998, by and among Borrowers, the lenders signatories thereto (including Lender)
and Fleet Capital Corporation ("FCC"), as agent for such Lenders (FCC in such
capacity "Agent") (as amended from time to time, the "LOAN AGREEMENT"), and is
entitled to all of the benefits and security of the Loan Agreement. All of the
terms, covenants and conditions of the Loan Agreement and the Security Documents
are hereby made a part of this Note and are deemed incorporated herein in full.
All capitalized terms herein, unless otherwise defined, unless otherwise
specifically defined in this Note, shall have the meanings ascribed to them in
the Loan Agreement.

       The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Loan Agreement and, if
not sooner paid in full, on the Commitment Termination Date, unless the term
hereof is extended in accordance with the Loan Agreement. Interest thereon shall
be paid until such principal amount is paid in full at such interest rates and
at such times as are specified in the Loan Agreement.

       Upon and after the occurrence, and during the continuation, of an Event
of Default, this Note shall or may, as provided in the Loan Agreement, become or
be declared immediately due and payable.

       The right to receive principal of, and stated interest on, this Note may
only be transferred in accordance with the provisions of the Loan Agreement.

       Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by each Borrower.

<PAGE>   33

       This Note amends, modifies, increases and restates, but does not
extinguish, the indebtedness evidenced by that certain Revolving Credit Note of
Borrowers dated January 25, 2000, payable to the order of FLEET CAPITAL
CORPORATION in the original principal amount of $6,690,000.00.

       This Note shall be interpreted, governed by, and construed in accordance
with, the internal laws of the State of Texas.

RAMSAY YOUTH SERVICES, INC.

By: /s/ JORGE RICO
   ------------------------
Name:  Jorge Rico
     ------------------------
Title: Vice President
     ------------------------

BETHANY PSYCHIATRIC HOSPITAL, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION
GREAT PLAINS HOSPITAL, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL, INC.
H. C. CORPORATION
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
RAMSAY EDUCATIONAL SERVICES, INC.
RAMSAY LOUISIANA, INC.
RAMSAY MANAGED CARE, INC.
RAMSAY YOUTH SERVICES OF ALABAMA, INC.
RAMSAY YOUTH SERVICES OF FLORIDA, INC.
RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC.
RHCI SAN ANTONIO, INC.
TRANSITIONAL CARE VENTURES, INC.
TRANSITIONAL CARE VENTURES (TEXAS), INC.

By: /s/ JORGE RICO
   ------------------------
Name:  Jorge Rico
     ------------------------
Title: Vice President
     ------------------------

H. C. PARTNERSHIP
By:  H.C. CORPORATION, General Partner
By:  HSA HILL CREST CORPORATION, General Partner

          By: /s/ JORGE RICO
             ------------------------
          Name:  Jorge Rico
               ------------------------
          Title: Vice President
               ------------------------<PAGE>   1
                      FIRST TENNESSEE NATIONAL CORPORATION
                        1997 EMPLOYEE STOCK OPTION PLAN
                (Adopted 10-22-96, Amended and Restated 4-18-00)

1.       PURPOSE. The 1997 Employee Stock Option Plan (the "Plan") of First
Tennessee National Corporation and any successor thereto, (the "Company") is
designed to enable employees of the Company and its subsidiaries to obtain a
proprietary interest in the Company, and thus to share in the future success of
the Company's business. Accordingly, the Plan is intended as a further means
not only of attracting and retaining outstanding personnel, but also of
promoting a closer identity of interest between employees and shareholders.

2.       DEFINITIONS. As used in the Plan, the following terms shall have the
respective meanings set forth below:

         (a)      "Change in Control" means the occurrence of any one of the
                  following events:

                           (i)      individuals who, on January 21, 1997,
                  constitute the Board (the "Incumbent Directors") cease for
                  any reason to constitute at least a majority of the Board,
                  provided that any person becoming a director subsequent to
                  January 21, 1997, whose election or nomination for election
                  was approved by a vote of at least three-fourths (3/4) of the
                  Incumbent Directors then on the Board (either by a specific
                  vote or by approval of the proxy statement of the Company in
                  which such person is named as a nominee for director, without
                  written objection to such nomination) shall be an Incumbent
                  Director; provided, however, that no individual elected or
                  nominated as a director of the Company initially as a result
                  of an actual or threatened election contest with respect to
                  directors or as a result of any other actual or threatened
                  solicitation of proxies or consents by or on behalf of any
                  person other than the Board shall be deemed to be an
                  Incumbent Director;

                           (ii)     any "Person" (as defined under Section 3(a)
                  (9) of the Securities Exchange Act of 1934, as amended (the
                  "Exchange Act") and as used in Section 13(d) or Section 14(d)
                  of the Exchange Act) is or becomes a "beneficial owner" (as
                  defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Company representing 20% or
                  more of the combined voting power of the Company's then
                  outstanding securities eligible to vote for the election of
                  the Board (the "Company Voting Securities"); provided,
                  however, that the event described in this paragraph (ii)
                  shall not be deemed to be a change in control by virtue of
                  any of the following acquisitions: (A) by the Company or any
                  entity in which the Company directly or indirectly
                  beneficially owns more than 50% of the voting securities or
                  interests (a "Subsidiary"), (B) by an employee stock
                  ownership or employee benefit plan or trust sponsored or
                  maintained by the Company or any Subsidiary, (C) by any
                  underwriter temporarily holding securities pursuant to an
                  offering of such securities, or (D) pursuant to a
                  Non-Qualifying Transaction (as defined in paragraph (iii));

                           (iii)    the shareholders of the Company approve a
                  merger, consolidation, share exchange or similar form of
                  corporate transaction involving the Company or any of its
                  Subsidiaries that requires the approval of the Company's
                  shareholders, whether for such transaction or the issuance of
                  securities in the transaction (a "Business Combination"),
                  unless immediately following such Business Combination: (A)
                  more than 50% of the total voting power of (x) the
                  corporation resulting from such Business Combination (the
                  "Surviving Corporation"), or (y) if applicable, the ultimate
                  parent corporation that directly or indirectly has beneficial
                  ownership of 100% of the voting securities eligible to elect
                  directors of the Surviving Corporation (the "Parent
                  Corporation"), is represented by Company Voting Securities
                  that were outstanding immediately prior to the consummation
                  of such Business Combination (or, if applicable, is
                  represented by shares into which such Company Voting
                  Securities were converted pursuant to such Business
                  Combination), and such voting power among the holders thereof
                  is in substantially the same proportion as the voting power
                  of such Company Voting Securities among the holders thereof
                  immediately prior to the Business Combination, (B) no person

                                       1
<PAGE>   2

                  (other than any employee benefit plan sponsored or maintained
                  by the Surviving Corporation or the Parent Corporation), is
                  or becomes the beneficial owner, directly or indirectly, of
                  20% or more of the total voting power of the outstanding
                  voting securities eligible to elect directors of the Parent
                  Corporation (or, if there is no Parent Corporation, the
                  Surviving Corporation) and (C) at least a majority of the
                  members of the board of directors of the Parent Corporation
                  (or, if there is no Parent Corporation, the Surviving
                  Corporation) were Incumbent Directors at the time of the
                  Board's approval of the execution of the initial agreement
                  providing for such Business Combination (any Business
                  Combination which satisfies all of the criteria specified in
                  (A), (B) and (C) above shall be deemed to be a
                  "Non-Qualifying Transaction"); or

                           (iv)     the shareholders of the Company approve a
                  plan of complete liquidation or dissolution of the Company or
                  a sale of all or substantially all of the Company's assets.

         Computations required by paragraph (iii) shall be made on and as of
the date of shareholder approval and shall be based on reasonable assumptions
that will result in the lowest percentage obtainable.

         Notwithstanding the foregoing, a change in control of the Company
shall not be deemed to occur solely because any person acquires beneficial
ownership of more than 20% of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided, that if after such
acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
change in control of the Company shall then occur.

         (b)      "Committee" means the Stock Option Committee or any successor
                  committee designated by the Board of Directors to administer
                  the Stock Option Plan, as provided in Section 5(a) hereof.

         (c)      "Early Retirement" means termination of employment after an
                  employee has fulfilled all service requirements for an early
                  pension, and before his or her Normal Retirement Date, under
                  the terms of the First Tennessee National Corporation Pension
                  Plan, as amended from time to time.

         (d)      "Quota" means the portion of the total number of shares
                  subject to an option which the grantee of the option may
                  purchase during the several periods of the term of the option
                  (if the option is subject to quotas), as provided in Section
                  8(b) hereof.

         (e)      "Retirement" means termination of employment after an
                  employee has fulfilled all service requirements for a pension
                  under the terms of the First Tennessee National Corporation
                  Pension Plan, as amended from time to time.

         (f)      "Subsidiary" means a subsidiary corporation as defined in
                  Section 425 of the Internal Revenue Code.

         (g)      "Successor" means the legal representative of the estate of a
                  deceased grantee or the person or persons who shall acquire
                  the right to exercise an option or related SAR by bequest or
                  inheritance or by reason of the death of the grantee, as
                  provided in Section 10 hereof.

         (h)      "Term of the Option" means the period during which a
                  particular option may be exercised, as provided in Section
                  8(a) hereof.

         (i)      "Three months after cessation of employment" means a period
                  of time beginning at 12:01 A.M. on the day following the date
                  notice of termination of employment was given and ending at
                  11:59 P.M. on the date in the third following month
                  corresponding numerically with the date notice of termination
                  of employment was given ( or in the event that the third
                  following month does not have a date so corresponding, then
                  the last day of the third following month).

                                       2
<PAGE>   3

         (j)      "Five years after (an event occurring on day x)" and "five
                  years from (an event occurring on day x)" means a period of
                  time beginning at 12:01 A.M. on the day following day x and
                  ending at 11:59 P.M. on the date in the fifth following year
                  corresponding numerically with day x (or in the event that
                  the fifth following year does not have a date so
                  corresponding, then the last day of the sixtieth following
                  month).

         (k)      "Voluntary Resignation" means any termination of employment
                  that is not involuntary and that is not the result of the
                  employee's death, disability, early retirement or retirement.

3.       EFFECTIVE DATE OF PLAN. The Plan shall become effective upon approval
by the Board of Director of the Company. No options may be granted under the
Plan after the month and day in the year 2006 corresponding to the day before
the month and day on which the Plan becomes effective. The term of options
granted on or before such date may, however, extend beyond that date.

4.       SHARES SUBJECT TO THE PLAN.

         (a)      The Company may grant options under the Plan authorizing the
                  issuance of no more than 17,200,000 shares of its $0.625 par
                  value (adjusted for any stock splits) common stock, which
                  will be provided from shares purchased in the open market or
                  privately (that became authorized but unissued shares under
                  state corporation law) or by the issuance of previously
                  authorized but unissued shares.

         (b)      Shares as to which options previously granted under this Plan
                  shall for any reason lapse shall be restored to the total
                  number available for grant of options.

5.       PLAN ADMINISTRATION.

         (a)      The Plan shall be administered by a Stock Option Committee
                  (the "Committee") whose members shall be appointed from time
                  to time by, and shall serve at the pleasure of, the Board of
                  Directors of the Company. In addition, all members shall be
                  directors and shall meet the definitional requirements for
                  "non-employee director" (with any exceptions therein
                  permitted) contained in the then current SEC Rule 16b-3 or
                  any successor provision.

         (b)      The Committee shall adopt such rules of procedure as it may
                  deem proper.

         (c)      The powers of the Committee shall include plenary authority
                  to interpret the Plan, and subject to the provisions hereof,
                  to determine the persons to whom options shall be granted,
                  the number of shares subject to each option, the term of the
                  option, and the date on which options shall be granted.

6.       ELIGIBILITY.

         (a)      Options may be granted under the Plan to employees of the
                  Company or any subsidiary selected by the Committee.
                  Determination by the Committee of the employees to whom
                  options shall be granted shall be conclusive.

         (b)      An individual may receive more than one option.

7.       OPTION PRICE. The option price per share to be paid by the grantee to
the Company upon exercise of the option shall be determined by the Committee,
but shall not be less than 100% of the fair market value of the share at the
time the option is granted, nor shall the price per share be less than the par
value of the share. Notwithstanding the prior sentence, the option price per
share may be less than 100% of the fair market value of the share at the time
the option is granted if:

         (a)      The grantee of the option has entered into an agreement with
                  the Company pursuant to which the grant

                                       3
<PAGE>   4

                  of the option is in lieu of the payment of compensation; and

         (b)      The amount of such compensation when added to the cash
                  exercise price of the option equals at least 100% of the fair
                  market value (at the time the option is granted) of the
                  shares subject to option.

"Fair market value" for purposes of the Plan shall be the mean between the high
and low sales prices at which shares of the Company were sold on the valuation
day as quoted by the Nasdaq Stock Market or, if there were no sales on that
day, then on the last day prior to the valuation day during which there were
sales. In the event that this method of valuation is not practicable, then the
Committee, in its discretion, shall establish the method by which fair market
value shall be determined.

8.       TERMS OR QUOTAS OF OPTIONS:

         (a)      TERM. Each option granted under the Plan shall be exercisable
                  only during a term (the "Term of the Option") commencing one
                  year, or such other period of time (which may be less than or
                  more than one year) as is determined to be appropriate by the
                  Committee, after the date when the option was granted and
                  ending (unless the option shall have terminated earlier under
                  other provisions of the Plan) on a date to be fixed by the
                  Committee. Notwithstanding the foregoing, each option granted
                  under the Plan shall become exercisable in full immediately
                  upon a Change in Control.

         (b)      QUOTAS. The Committee shall have authority to grant options
                  exercisable in full at any time during their term, or
                  exercisable in quotas. Quotas or portions thereof not
                  purchased in earlier periods shall be cumulated and be
                  available for purchase in later periods. In exercising his or
                  her option, the grantee may purchase less than the full quota
                  available to him or her.

         (c)      EXERCISE OF STOCK OPTIONS. Stock options shall be exercised
                  by delivering, mailing, or transmitting to the Committee or
                  its designee (for all purposes under the Plan, in the absence
                  of an express designation by the Committee, the Company's
                  Personnel Division Manager is deemed to be the Committee's
                  designee) the following items:

                  (i)      A notice, in the form, by the method, and at times
                  prescribed by the Committee, specifying the number of shares
                  to be purchased; and

                  (ii)     A check or money order payable to the Company for the
                  full option price.

                  In addition, the Committee in its sole discretion may
                  determine that it is an appropriate method of payment for
                  grantees to pay, or make partial payment of, the option price
                  with shares of Company common stock in lieu of cash. In
                  addition, in its sole discretion the Committee may determine
                  that it is an appropriate method of payment for grantees to
                  pay for any shares subject to an option by delivering a
                  properly executed exercise notice together with a copy of
                  irrevocable instructions to a broker to deliver promptly to
                  the Company the amount of sale or loan proceeds to pay the
                  purchase price (a "cashless exercise"). To facilitate the
                  foregoing, the Company may enter into agreements for
                  coordinated procedures with one or more brokerage firms. The
                  value of Company common stock surrendered in payment of the
                  exercise price shall be its fair market value, determined
                  pursuant to Section 7, on the date of exercise. Upon receipt
                  of such notice of exercise of a stock option and upon payment
                  of the option price by a method other than a cashless
                  exercise, the Company shall promptly deliver to the grantee
                  (or, in the event the grantee has executed a deferral
                  agreement, the Company shall deliver to the grantee at the
                  time specified in such deferral agreement) a certificate or
                  certificates for the shares purchased, without charge to him
                  or her for issue or transfer tax.

         (d)      POSTPONEMENTS. The Committee may postpone any exercise of an
                  option for such period of time as the Committee in its
                  discretion reasonably believes necessary to prevent any acts
                  or omissions that the Committee reasonably believes will be
                  or will result in the violation of any state or federal law;
                  and

                                       4
<PAGE>   5

                  the Company shall not be obligated by virtue of any provision
                  of the Plan or the terms of any prior grant of an option to
                  recognize the exercise of an option or to sell or issue
                  shares during the period of such postponement. Any such
                  postponement shall automatically extend the time within which
                  the option may be exercised, as follows: The exercise period
                  shall be extended for a period of time equal to the number of
                  days of the postponement, but in no event shall the exercise
                  period be extended beyond the last day of the postponement
                  for more days than there were remaining in the option
                  exercise period on the first day of the postponement. Neither
                  the Company nor any subsidiary of the Company, nor any of
                  their respective directors or officers shall have any
                  obligation or liability to the grantee of an option or to a
                  successor with respect to any shares as to which the option
                  shall lapse because of such postponement.

         (e)      NON-TRANSFERABILITY. All options granted under the Plan shall
                  be non-transferable other than by will or by the laws of
                  descent and distribution, subject to Section 10 hereof, and
                  an option may be exercised during the lifetime of the grantee
                  only by him or her or by his/her guardian or legal
                  representative.

         (f)      CERTIFICATES. The stock certificate or certificates to be
                  delivered under this Plan may, at the request of the grantee,
                  be issued in his or her name or, with the consent of the
                  Company, the name of another person as specified by the
                  grantee.

         (g)      RESTRICTIONS. This subsection (g) shall be void and of no
                  legal effect in the event of a Change of Control.
                  Notwithstanding anything in any other section or subsection
                  herein to the contrary, the following provisions shall apply
                  to all options (except options designated by the Committee as
                  FirstShare options), exercises and grantees. An amount equal
                  to the spread realized in connection with the exercise of an
                  option within six months prior to a grantee's voluntary
                  resignation shall be paid to the Company by the grantee in
                  the event that the grantee, within six months following
                  voluntary resignation, engages, directly or indirectly, in
                  any activity determined by the Committee to be competitive
                  with any activity of the Company or any of its subsidiaries.

         (h)      TAXES. The Company shall be entitled to withhold the amount
                  of any tax attributable to amounts payable or shares
                  deliverable under the Plan, and the Company may defer making
                  payment or delivery of any benefits under the Plan if any tax
                  is payable until indemnified to its satisfaction. The
                  Committee may, in its discretion and subject to such rules
                  which it may adopt, permit a grantee to satisfy, in whole or
                  in part, any federal, state and local withholding tax
                  obligation which may arise in connection with the exercise of
                  a stock option, by electing either:

                  (i)      to have the Company withhold shares of Company common
                  stock from the shares to be issued upon the exercise of the
                  option;

                  (ii)     to permit a grantee to tender back shares of Company
                  common stock issued upon the exercise of an option; or

                  (iii)    to deliver to the Company previously owned shares of
                  Company common stock, having, in the case of (i), (ii), or
                  (iii), a fair market value equal to the amount of the
                  federal, state, and local withholding tax associated with the
                  exercise of the option.

         (i)      ADDITIONAL PROVISIONS APPLICABLE TO OPTION AGREEMENTS IN LIEU
                  OF COMPENSATION. If the Committee, in its discretion permits
                  participants to enter into agreements as contemplated by
                  Section 7 herein, then such agreements must be irrevocable
                  and cannot be changed by the participant once made, and such
                  agreements must be made at least prior to the performance of
                  any services with respect to which an option may be granted.
                  If any participant who enters into such an agreement
                  terminates employment prior to the grant of the option, then
                  the option will not be granted and all compensation which
                  would have been covered by the option will be paid to the
                  participant in cash.

                                       5
<PAGE>   6

9.       EXERCISE OF OPTION BY GRANTEE ON CESSATION OF EMPLOYMENT. If a person
to whom an option has been granted shall cease, for a reason other than his or
her death, disability, early retirement, retirement, or voluntary resignation,
to be employed by the Company or a subsidiary, the option shall terminate three
months after the cessation of employment, unless it terminates earlier under
other provisions of the Plan. Until the option terminates, it may be exercised
by the grantee for all or a portion of the shares as to which the right to
purchase had accrued under the Plan at the time of cessation of employment,
subject to all applicable conditions and restrictions provided in Section 8
hereof. If a person to whom an option has been granted shall retire or become
disabled, the option shall terminate five years after the date of early
retirement, retirement or disability, unless it terminates earlier under other
provisions of the Plan. Although such exercise by a retiree or disabled grantee
is not limited to the exercise rights which had accrued at the date of early
retirement, retirement or disability, such exercise shall be subject to all
applicable conditions and restrictions prescribed in Section 8 hereof. If a
person shall voluntarily resign, his option to the extent not previously
exercised shall terminate at once. In the event that the sale of certain assets
and assumption of certain liabilities (referred to herein as "the sale of the
Division") of the HomeBanc Mortgage Corporation division (the "Division") of
First Horizon Home Loan Corporation occurs, then notwithstanding anything
herein to the contrary, if the grantee of one or more stock options described
in the second sentence of Section 7 of the Plan is employed by the Division
immediately prior to the closing of the sale of the Division and is not an
employee of the Equibanc department of the Division and if the employment of
the grantee of such option or options terminates at the time of the closing of
the sale of the Division, then each of such stock options shall terminate at
5:00 p.m. Memphis time on the fifth anniversary of the closing of the sale of
the Division (or if such date is not a business day, then on the immediately
preceding business day), unless it terminates earlier under the Plan. The
exercise of each of such options is subject to all applicable conditions and
restrictions provided in Section 8 hereof.

10.      EXERCISE OF OPTION AFTER DEATH OF GRANTEE. If the grantee of an option
shall die while in the employ of the Company or within three months after
ceasing to be an employee, and if the option was in effect at the time of his
or her death (whether or not its term had then commenced), the option may,
until the expiration of five years from the date of death of the grantee or
until the earlier expiration of the term of the option, be exercised by the
successor of the deceased grantee. Although such exercise is not limited to the
exercise rights which had accrued at the date of death of the grantee, such
exercise shall be subject to all applicable conditions and restrictions
prescribed in Section 8 hereof.

11.      PYRAMIDING OF OPTIONS. The Committee in its sole discretion may from
time to time permit the method of exercising options known as pyramiding (the
automatic application of shares received upon the exercise of a portion of a
stock option to satisfy the exercise price for additional portions of the
option).

12.      SHAREHOLDER RIGHTS. No person shall have any rights of a shareholder by
virtue of a stock option except with respect to shares actually issued to him
or her, and issuance of shares shall confer no retroactive right to dividends.

13.      ADJUSTMENT FOR CHANGES IN CAPITALIZATION. Any increase in the number of
outstanding shares of common stock of the Company occurring through stock
splits or stock dividends after the adoption of the Plan shall be reflected
proportionately:

         (a)      in an increase in the aggregate number of shares then
                  available for the grant of options under the Plan, or
                  becoming available through the termination or forfeiture of
                  options previously granted but unexercised;

         (b)      in the number subject to options then outstanding; and

         (c)      in the quotas remaining available for exercise under
                  outstanding options,

and a proportionate reduction shall be made in the per-share option price as to
any outstanding options or portions thereof not yet exercised. Any fractional
shares resulting from such adjustments shall be eliminated. If changes in
capitalization other than those considered above shall occur, the Board of
Directors shall make such adjustments in the number and class of shares for
which options may thereafter be granted, and in the number and class of shares
remaining subject to options previously granted and in the per-share option
price as the Board in its discretion may consider appropriate, and

                                       6
<PAGE>   7

all such adjustments shall be conclusive.

14.      TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN. The Board of
Directors may at any time terminate, suspend, or modify the Plan, except that
the Board of Directors shall not amend the Plan in violation of law. No
termination, suspension, or modification of the Plan shall adversely affect any
right acquired by any grantee, or by any successor of a grantee (as provided in
Section 10 hereof), under the terms of an option granted before the date of
such termination, suspension, or modification, unless such grantee or successor
shall consent, but it shall be conclusively presumed that any adjustment for
changes in capitalization as provided in Section 13 does not adversely affect
any such right.

15.      APPLICATION OF PROCEEDS. The proceeds received by the Company from the
sale of its shares under the Plan will be used for general corporate purposes.

16.      NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan nor the
granting of any stock option shall confer upon the grantee any right to
continue in the employ of the Company or any of its subsidiaries or interfere
in any way with the right of the Company or the subsidiary to terminate such
employment at any time.

17       GOVERNING LAW.  The Plan and all determinations thereunder shall be
governed by and construed in accordance with the laws of the State of
Tennessee.

18.      SUCCESSORS. This Plan shall bind any successor of the Company, its
assets or its businesses (whether direct or indirect, by purchase, merger,
consolidation or otherwise), in the same manner and to the same extent that the
Company would be obligated under this Plan if no succession had taken place. In
the case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the Company's obligations under this Plan, in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place. The term "Company," as used in the Plan, shall mean
the Company as hereinbefore defined and any successor or assignee to the
business or assets which by reason hereof becomes bound by this Plan.

                                       7

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