Document:

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                                                                    EXHIBIT 10.1

                                 LOAN AGREEMENT

This Loan Agreement is entered into this 31st day of May, 2000, by and between
Thomaston Mills, Inc., a Georgia corporation (herein referred to as
"BORROWER/GRANTOR"), and WebBank (hereinafter referred to as "LENDER/GRANTEE"),
and the parties hereby agree as follows:

The Lender has agreed to make a Loan to the Borrower in the amount of TEN
MILLION AND 00/100 DOLLARS ($10,000,000) which is ninety percent (90%)
guaranteed by RBS/USDA in accordance with and subject to the terms and
conditions of this Agreement.

                                    ARTICLE I

                                   DEFINITIONS

"LOAN DOCUMENTS" means this Agreement, the Adjustable Rate Promissory Note, the
Security Deed, the Security Agreement, Assignment of Rents, the Guaranty, the
RBS/USDA Guaranty, Environmental Indemnity Agreement, and all other documents
executed by the parties in connection with this transaction.

"DEED TO SECURE DEBT (SECURITY DEED)" means the Security Deed of even date
herewith from the Borrower as grantor to the Lender as grantee given to secure
the Note.

"NOTE" means the Adjustable Rate Promissory Note of the Borrower of even date
herewith in the original principal sum of $10,000,000, payable to the Lender and
secured by the Security Deed and Security Agreements.

"RBS/USDA" means the Rural Business-Cooperative Service, an agency of the United
States Department of Agriculture, and any successor department, agency, or
instrumentality authorized to administer the Business and Industry Guaranteed
Loan Program.

"GAAP" means generally accepted accounting principles in the United States.

"ACCOUNTING TERMS" are those generally accepted in accordance with GAAP
accounting principles in the United States.

"GUARANTOR(S)" mean absolute and unconditional guarantee and guarantee of
payment by the following businesses, joint and several:

         Thomaston Mills FSC, Inc., a subsidiary of Thomaston Mills, Inc.

                                   ARTICLE II

                                    THE LOAN

1.       AMOUNT AND TERM OF LOAN. The amount of the Loan shall be $10,000,000,
and the Loan shall be amortized over a period of twenty (20) years with monthly
installments of principal and interest in accordance with the terms of the Note.

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2.       INTEREST RATE. A variable rate equal to The Wall Street Journal Prime
Interest Rate plus one and one-half percent (1.5%) ("Note Rate"). The initial
Note Rate is 11% per annum. The term "The Wall Street Journal Prime Interest
Rate" as used herein shall mean, as of any particular date, the rate quoted as
the "Prime Rate" (or comparable reference rate) in the Money Rates Column of the
Wall Street Journal as published on such day (or, if such day is not a business
day of the Lender, as published on the most recent business day of the Lender),
but if more than one such rate is quoted on any such day then the rate shall be
the highest of such rates. In the event of the discontinuance of such
publication or such section thereof, the Prime Rate shall mean the average
monthly Prime Rate as reported and published in the Federal Reserve Bulletin
published monthly by the Board of Governors of the Federal Reserve System under
the table styled "Prime Rate Charged by Banks - Short Term Business Loans". The
rate of interest will be adjusted quarterly on January 1st, April 1st, July 1st,
and October 1st of each year. Following an Event of Default as defined in
Article VI hereof, the interest rate charged on the Loan will be immediately,
automatically, and without notice increased to the lesser of five percent (5%)
over the then current note rate of the Adjustable Rate Promissory Note or the
highest interest rate permitted by law and shall remain at this rate as long as
the Loan is in default. Upon curing an Event of Default, the interest rate will
revert to the then current Note rate.

3.       PREPAYMENT PREMIUM. Subject to the provisions of this Section, the
principal balance of the Loan may be prepaid in whole or in part upon not less
than thirty (30) days prior written notice, provided that any such prepayment,
whether made voluntarily or involuntarily because of acceleration of the payment
date due to an Event of Default and whether made directly by the Borrower or
otherwise, shall be accompanied by a Prepayment Premium of five percent (5%) of
the outstanding principal balance prepaid during the first year, four percent
(4%) of the outstanding principal balance prepaid during the second year, three
percent (3%) of the outstanding principal balance prepaid during the third year,
two percent (2%) of the outstanding principal balance prepaid during the fourth
year and one percent (1%) of the outstanding principal balance prepaid during
the fifth year. The Borrower agrees that the Prepayment Premium has been freely
bargained between the parties to provide the Lender with compensation for the
loss of the contracted for return on the Loan, that the prepayment premium is
not a penalty, and that such Prepayment Premium is reasonable. The Lender's
determination of the Prepayment Premium amount shall be conclusive and binding,
absent manifest error.

4.       GOVERNMENT GUARANTEE. A condition precedent to this Loan and its
closing is the receipt by lender from the RBS/USDA of a Conditional Commitment
for the Guarantee of ninety percent (90%) of the Loan amount. Borrower and
Guarantor(s) agrees to execute all documents, furnish all information, and
satisfy all conditions necessary to comply with the rules, regulations, and
requirements of RBS/USDA applicable to this Loan and the guaranty thereof.
Borrower and Guarantor(s) agree to cooperate with Lender in modifying any of the
Loan Documents to meet requirements of RBS/USDA.

5.       COMMITMENT AND ORIGINATION FEE. The loan commitment fee of one-half
percent (.5%) of the total loan commitment amount was paid upon acceptance of
the loan commitment and the origination fee of one percent (1%) of the total
loan amount is due at loan closing (in addition to any fees due RBS/USDA).

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6.       USE OF THE LOAN PROCEEDS. All loan funds are to be utilized in
connection with Borrower's operation located in Thomaston, Upson County,
Georgia. The loan shall be disbursed for the following uses:

<TABLE>
          <S>                                                                   <C>
          Partial payoff of SunTrust, et al. loan (real estate lender)          $ 9,000,000
          Partial payoff of GECC and Foothill loan (equipment lender)               525,000
          USDA guarantee fee                                                        180,000
          Loan origination fee                                                      100,000
          Dean Financial investment banking fee                                      70,000
          Closing attorney fee                                                       20,000
          *Other (Title insurance, surveys, appraisals, etc.)                       105,000
                                                                                -----------
          Total                                                                 $10,000,000
</TABLE>

          * Other: All/any balance left over after paying the items listed in
          this section and other related fees will be applied to further reduce
          the real estate lender (bank group) loan.

7.       COLLATERAL/SECURITY. The collateral/security for the Loan shall consist
of the following:

         A.       A first security deed on the Borrower's Lakeside property and
                  improvements located in and around Thomaston, Upson County,
                  Georgia, as described in Exhibit B and as described in the
                  appraisal dated December 21, 1999 and modified April 12, 2000
                  prepared by M. Tal Wilcher, Jr. of Leggett, Wilcher and Gates,
                  Inc. attached to Exhibit B. The Borrower must have good and
                  marketable title to the property and shall not allow
                  additional debt on the property without the consent of the
                  Lender.

         B.       A first security interest in the Borrower's Lakeside material
                  handling machinery and equipment located in and around
                  Thomaston, Upson County, Georgia, as specified on the UCC
                  filing attached as Exhibit B, as described in Exhibit B, as
                  described in the appraisal dated December 21, 1999 and
                  modified April 12, 2000 prepared by M. Tal Wilcher, Jr. of
                  Leggett, Wilcher and Gates, Inc. attached to Exhibit B. The
                  Borrower must have good and marketable title to the machinery
                  and equipment and shall not allow additional debt on the
                  machinery and equipment without the consent of the Lender.

         C.       Any sale or other disposition of the collateral described in
                  this Paragraph 7 must be approved by the Lender.

8.       INSURANCE. Borrower shall obtain and maintain all required insurance at
its own expense, except as modified by Paragraph 9 below at the Lender's option.
Required insurance shall include, but not be limited to, the following:

         A.       Borrower shall maintain a policy of general liability
                  insurance of not less than five million and no/100 dollars
                  ($5,000,000) designating the Lender as an additional insured
                  party, placed with an insurance company or companies
                  acceptable to Lender.

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         B.       Borrower shall maintain hazard insurance during the entire
                  term of the Loan with a standard mortgage clause naming the
                  Lender as beneficiary in an amount which is at least the
                  lesser, with the Lender reserving the right to require the
                  greater of such, of the depreciated replacement value of the
                  Loan security or the amount of the Loan balance and that must
                  contain a replacement cost guarantee. Hazard insurance
                  includes fire, windstorm, lightning, hail, explosion, riot,
                  civil commotion, aircraft, vehicle, marine, smoke, builder's
                  risk, property damage, flood or mud slide, or other hazard
                  insurance that may be required to protect the collateral,
                  placed with an insurance company or companies acceptable to
                  Lender. Borrower shall maintain flood insurance if the
                  collateral property is located in an area designated as an
                  area for special hazards under the National Flood Insurance
                  Act of 1968. The flood insurance must be in an amount equal to
                  at least 100% of the value of the insured improvements of the
                  collateral property.

         C.       Borrower shall maintain Worker's Compensation Insurance as
                  required by the laws of the State of Georgia during the period
                  of time the Loan is unpaid, placed with an insurance company
                  or companies acceptable to Lender.

         D.       Borrower shall maintain business interruption insurance in an
                  amount acceptable to the Lender. Borrower agrees to maintain
                  said insurance during such period of time that the Loan is
                  unpaid and shall furnish proof of the existence of said
                  insurance on each anniversary date of the Loan, placed with an
                  insurance company or companies acceptable to Lender.

9.       ESCROW FUND. At the option of the Lender, after an event of default has
occurred, Lender may require the Borrower to establish an Escrow Fund (defined
below) sufficient to discharge its obligations for the payment of taxes,
insurance premiums, and maintenance pursuant to Article II. Paragraph 8, and
Article IV, Paragraph 1(I), hereof. (The initial deposits together with the
amounts in (a), (b), and (c) below shall be called the "Escrow Fund"). Initial
deposits for taxes, premiums, and maintenance shall be made by Borrower to
Lender in amounts determined by Lender in its discretion to be held in Lender's
Escrow Fund which sum shall not exceed the total of the anticipated taxes,
insurance premiums and maintenance for the next year. Additionally, Borrower
shall pay to Lender on the first day of each calendar month: (a) one-twelfth of
an amount which would be sufficient to pay the taxes payable, or estimated by
Lender to be payable, upon the due dates established by the appropriate taxing
authority during the ensuing twelve (12) months; (b) one-twelfth of an amount
which would be sufficient to pay the insurance premiums due for the renewal of
the coverage afforded by the policies upon the expiration thereof; and (c)
one-twelfth of an amount which would be sufficient to pay all costs associated
with maintenance and upkeep of buildings, grounds, equipment, and all other
property which needs to be maintained in the ordinary course of business
("CAM"). Borrower agrees to notify Lender immediately of any changes to the
amounts, schedules, and instructions for payment of taxes, insurance premiums,
and CAM of which it has obtained knowledge and authorized Lender or its agent to
obtain the bills for taxes and other charges directly from the appropriate
taxing authority. The Escrow Fund and the payments of interest or principal, or
both, payable pursuant to the Note, shall be added together, and shall be paid
as the aggregate sum by Borrower to Lender. Provided there are sufficient
amounts in the Escrow Fund and no Event of Default exists, Lender shall be
obligated to pay on behalf of Borrower the taxes,

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insurance premiums, and CAM as they become due on their respective due dates by
applying the Escrow Fund to the payments of such taxes, insurance premiums, and
CAM required to be made by Borrower pursuant to Article II, Paragraph 8, and
Article IV, Paragraph 1(I) hereof. If the amount of the Escrow Fund shall exceed
the amounts due for taxes, insurance, and CAM pursuant to Article II, Paragraph
8, and Article IV, Paragraph 1(I), hereof, Lender shall, at its discretion,
apply any excess against future payments to be made to the Escrow Fund. In
allocating such excess, Lender may deal with the persons shown on the records of
Lender to be the owner of the property. If the Escrow Fund is not sufficient to
pay the items set forth in (a), (b), and (c) above, Borrower shall promptly pay
to Lender, upon demand, an amount, which Lender shall reasonably estimate as
sufficient to make up the deficiency. The Escrow Fund shall not constitute a
trust fund and may be commingled with other monies held by Lender. Unless
otherwise required by applicable law, no earnings or interest, if any, on the
Escrow Fund shall be payable to Borrower. In the event Lender does not establish
an Escrow Fund, Borrower shall make all required payments herein described in a
timely manner and shall provide evidence thereof as required by Lender.

10.      AUTOMATIC DEBIT PAYMENTS. The Borrower agrees to make payments of
principal, interest, or other amounts which may be due from time to time
hereafter with respect to the Loan or any of the Loan Documents, with debits to
Borrower's bank account.

                                  ARTICLE III

                               FINANCIAL COVENANTS

1.       FINANCIAL STATEMENTS. An internally prepared financial statement
prepared on an accrual basis in accordance with generally accepted accounting
principles (GAAP), less than sixty days old for the Borrower is required at Loan
closing. Borrower may satisfy this requirement by providing a copy of its SEC
10-Q report containing a financial statement meeting designated criteria.
Quarterly internally prepared financial statements for the Borrower, prepared on
an accrual basis in accordance with generally accepted accounting principles
(GAAP), are to be submitted to the Lender within forty-five (45) days of the end
of each fiscal quarter. An annual audited financial statement prepared on an
accrual basis by a Certified Public Accountant in accordance with generally
accepted accounting principles (GAAP) is required from the Borrower and will be
forwarded to the Lender within ninety (90) days of the Borrower's fiscal year
end. Aging of accounts receivable reports for the Borrower, aging of accounts
payable reports for the Borrower and certificates certifying Borrower's
compliance with the revolving loan agreement are to be submitted to the Lender
with the quarterly and annual financial statements. SEC 10-Q reports, SEC 10-K
reports and proxy statements for the Borrower shall be provided within thirty
(30) days of filing. Additional financial statements as may be requested by the
Lender shall be submitted in a timely manner in a form acceptable to the Lender.
Should information described in this paragraph not be forwarded to the Lender by
the Borrower within the time periods required in this paragraph, the interest
rate charged on the Loan will be immediately, automatically, and without notice
increased to five percent (5%) over the then current note rate of the Adjustable
Rate Promissory Note as adjusted from time to time pursuant to the terms of the
Note and shall remain at this rate as long as these requirements are not met.
Upon meeting said requirements, the interest rate will revert to the then
current Note rate.

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2.       CERTIFICATE OF NO DEFAULT. Concurrently with the delivery to the Lender
of the Borrower's internally prepared quarterly financial statements and
concurrently with delivery to the Lender of the Borrower's annual audited
financial statement prepared by a Certified Public Accountant as set forth in
Article III, Paragraph 1, a certificate of the chief financial officer of the
Borrower or the Certified Public Accountant with reference to any audited
financial statement shall be delivered to the Lender, certifying (i) compliance
with each financial covenant in Article III hereof, and (ii) that to the best of
his knowledge no default or Event of Default has occurred and is continuing, or
if default or Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action proposed to be taken with respect thereto.
Should information described in this paragraph not be forwarded to the Lender by
the Borrower within the time periods required in this paragraph, the interest
rate charged on the Loan will be immediately, automatically, and without notice
increased to five percent (5%) over the then current note rate of the Adjustable
Rate Promissory Note as adjusted from time to time pursuant to the terms of the
Note and shall remain at this rate as long as these requirements are not met.
Upon meeting said requirements, the interest rate will revert to the then
current Note rate.

3.       DIVIDENDS. The Borrower shall not, during the life of the guaranteed
Loan, declare or pay a cash dividend unless the RBS/USDA guaranteed loan
payments have been current for twenty-four (24) consecutive months, all other
debts are paid current, a minimum 1.2 debt service coverage is being maintained,
an after-tax profit was made in the preceding fiscal year, dividends do not
exceed 50% of net earnings, all loan terms, conditions, covenants, ratios and
RBS/USDA regulations are being met, are in compliance and will continue to be on
the annual financial statement after any payments, payments would not result in
a reduction of capital and/or retained earnings below the prior fiscal year end
level, tangible net worth would be 30% minimum after payments, and prior written
consent of the Lender is obtained.

4.       COMPENSATION OF OFFICERS AND OWNERS.

         A.       The Borrower will not increase salaries and compensation paid
                  to the Hightower Family officers and owners unless the
                  RBS/USDA guaranteed loan payments have been current for
                  twenty-four (24) consecutive months, an after tax profit was
                  made in the preceding fiscal year, all debts are paid to a
                  current status, a 1.2 minimum debt service coverage is being
                  maintained before and after the proposed transaction, and the
                  RBS/USDA guaranteed loan is in compliance with all other loan
                  conditions and RBS/USDA regulations, and prior written consent
                  of the Lender is obtained. Any increase will be limited to 10%
                  over the prior year, unless otherwise authorized in writing by
                  the Lender and RBS/USDA.

         B.       The Borrower shall, during the life of the RBS/USDA guaranteed
                  loan, refrain from paying cash bonuses to the Hightower Family
                  officers and owners unless the RBS/USDA guaranteed loan
                  payments have been current for twenty-four (24) consecutive
                  months, all other debts are paid current, a minimum 1.2 debt
                  service coverage is being maintained, an after-tax profit was
                  made in the preceding fiscal year, all loan terms, conditions,
                  covenants, ratios and RBS/USDA regulations are being met, are
                  in compliance and will continue to be on the annual financial
                  statement after any payments, payments would not result in a
                  reduction of capital and/or retained earnings below the prior
                  fiscal year and level, tangible net worth

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                  would be 30% minimum after payments, and prior written consent
                  of the Lender is obtained.

         C.       The Borrower will not, during the life of the RBS/USDA
                  guaranteed loan, make any advances or loans to officers,
                  owners/stockholders, affiliates and/or others, without the
                  written approval of the Lender and RBS/USDA. Any and all
                  existing debts to officers, owners/stockholders and affiliates
                  are subordinate to the RBS/USDA guaranteed Loan.

5.       FIXED ASSET LIMITATION.

         A.       The Borrower shall not make purchases of fixed assets directly
                  related to the collateral for the loan (described in Article
                  II, Paragraph 7) in any fiscal year, which in aggregate
                  exceeds $4,000,000, without the consent of the Lender and
                  RBS/USDA. This restriction is not intended to apply in cases
                  where machinery and/or equipment is being replaced due to
                  damage, depreciation and/or obsolescence.

         B.       Capital expenditures (including assignments, transfers and
                  leases) by the Borrower in any fiscal year, which in the
                  aggregate, exceed depreciation for that year, require prior
                  written consent of the Lender and RBS/USDA.

6.       ADDITIONAL DEBT.

         A.       Additional borrowing (in addition to existing loan agreements)
                  for capital expenditures for any fiscal year is allowed up to
                  an amount not exceeding depreciation for that fiscal year if
                  the financial ratios in Article III are met after incurring
                  the debt.

         B.       Additional borrowing shall not reduce the current ratio below
                  1.2 to 1, reduce the debt service coverage ratio below 1.2 to
                  1, or increase the debt to tangible net, worth ratio above 3
                  to 1.

         C.       The Borrower shall not co-sign or endorse liabilities,
                  obligations or indebtedness of other persons or entities
                  during the term of this loan if such would constitute a lien
                  or encumbrance on the collateral for this loan. The Borrower
                  shall not co-sign or endorse any liability or obligation which
                  will substantially weaken its financial condition. The
                  Borrower shall not obligate itself without prior approval of
                  Lender for liabilities of any other persons or entities in
                  excess of ten percent (10%) of the Borrower's tangible net
                  worth outside the normal course of business. The Borrower will
                  not assume the liabilities or obligations of others without
                  the prior written concurrence of the Lender.

7.       CURRENT RATIO. The Borrower shall maintain a minimum current ratio of
1.2 to 1, in accordance with generally accepted accounting principles (GAAP),
subsequent to the closing of this loan and throughout the term of this loan.

8.       RESERVED.

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9.       DEBT TO EQUITY. The Borrower shall maintain a maximum debt to tangible
equity ratio of 3 to 1, in accordance with generally accepted accounting
principles (GAAP), subsequent to the closing of this loan and throughout the
term of this loan.

10.      EQUITY. An outside accountant, utilizing the financial statement
required at Loan closing (Article III, Paragraph 1), must certify Thomaston
Mills, Inc.'s tangible balance sheet equity in accordance with generally
accepted accounting principles (GAAP), certify that Thomaston Mills, Inc. meets
the ten percent (10%) minimum tangible equity requirement of the RBS/USDA
conditional commitment, and disclose the amount of total assets, tangible
assets, liabilities and percent of equity. The Borrower agrees to take no action
that would result in a reduction of capital and/or retained earnings reflected
on the Borrower's financial statement utilized at Loan closing.

11.      CONSOLIDATIONS, MERGERS, SALE OF BUSINESS, BUSINESS ACTIVITIES. The
Borrower will not merge, consolidate, reclassify, change ownership, sell the
business or its capital stock (except normal stock market activity) without the
written approval of the Lender and RBS/USDA. The Borrower will not assign,
transfer, sell, lease or otherwise dispose of all or a substantial portion of
its assets except in the ordinary course of business as planned and documented
in the RBS/USDA guaranteed loan application. The Borrower will not purchase any
Treasury stock or redeem any of its capital stock from any shareholders without
the written approval of the Lender and RBS/CTSDA. The Borrower shall make no
investments outside of the day-to-day operation of the business. The Borrower
will conduct and carry on business in substantially the same field of activity
as has been originally planned and as documented in the RBS/USDA guaranteed loan
application.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

1.       REPRESENTATIONS OF BORROWER. The Borrower represents and warrants to
the Lender that:

         A.       INCORPORATION, GOOD STANDING, AND DUE QUALIFICATION. The
                  Borrower is a corporation duly incorporated, validly existing,
                  and having an active status under the laws of the State of
                  Georgia; has the corporate power and authority to own its
                  assets and to transact the business in which it is now engaged
                  or proposed to be engaged; and is duly qualified as a foreign
                  corporation and in good standing under the Laws of each other
                  jurisdiction in which such qualification is required, if any.

         B.       CORPORATE POWER AND AUTHORITY. The execution, delivery, and
                  performance by the Borrower of the Loan Documents to which it
                  is a party have been duly authorized by all necessary
                  corporate action and do not and will not: (1) require any
                  consent or approval of the stockholders of the Borrower; (2)
                  contravene Borrower's charter or bylaws; (3) violate any
                  provision of any law, rule, regulation (including, without
                  limitation, Regulation U of the Board of Governors of the
                  Federal Reserve System), order, writ, judgment, injunction,
                  decree, determination, or award presently in effect having
                  applicability to Borrower; (4)

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                  result in a breach of or constitute a default under any
                  indenture or loan or credit agreement or any other agreement,
                  lease, or instrument to which the Borrower is a party or by
                  which it or its properties may be bound or affected; (5)
                  result in or require the creation or imposition of any lien
                  upon or with respect to any of the properties now owned or
                  hereafter acquired by the Borrower; and (6) cause the Borrower
                  to be in default under any such law, rule, regulation, order,
                  writ, judgment, injunction, decree, determination, or award or
                  any such indenture, agreement, lease, or instrument.

         C.       LEGALLY ENFORCEABLE AGREEMENT. This Agreement is and each of
                  the other Loan Documents to which the Borrower is a party,
                  when delivered under this Agreement, will be legal, valid, and
                  binding obligations of the Borrower enforceable against the
                  Borrower in accordance with their respective terms except to
                  the extent that such enforcement may be limited by applicable
                  bankruptcy, insolvency, and other similar laws affecting
                  creditors' rights generally and principles of equity. Borrower
                  represents and warrants that neither it or any Guarantor is
                  insolvent or contemplating filing a voluntary petition for
                  bankruptcy nor is Borrower aware of any possibility or threat
                  of being subject to any petition for involuntary bankruptcy.

         D.       FINANCIAL STATEMENTS. All financial statements of Borrower
                  which have been furnished to the Lender are complete and
                  correct and fairly present the financial condition of the
                  Borrower and the results of the operations of the Borrower for
                  the periods covered by such statements, all in accordance with
                  GAAP consistently applied to Borrower's statements, and there
                  has been no material adverse change in the condition
                  (financial or otherwise), business, or operations of the
                  Borrower. There are no liabilities of the Borrower, fixed or
                  contingent, which are material but are not reflected in the
                  financial statements or in the notes thereto, other than
                  liabilities arising in the ordinary course of business of
                  Borrower. No information, exhibit or report furnished by the
                  Borrower to the Lender in connection with the negotiation of
                  this Agreement contained any material misstatement of fact or
                  omitted to state a material fact or any fact necessary to make
                  the statement contained therein not materially misleading.

         E.       OTHER AGREEMENTS. The Borrower is not a party to any
                  indenture, loan, or credit agreement, or, to Borrower's
                  knowledge, to any lease or other agreement or instrument, or
                  subject to any charter or corporate restriction which could
                  have a material adverse effect on the business, properties,
                  assets, operations, or conditions, financial or otherwise, of
                  the Borrower or the ability of the Borrower to carry out its
                  obligations under the Loan Documents to which it is a party.
                  The Borrower is not in default in any material respect in the
                  performance, observance, or fulfillment of any title
                  obligations, covenants, or conditions contained in any
                  agreement or instrument material to its business to which it
                  is a party.

         F.       LITIGATION. There is no pending or, to Borrower's knowledge,
                  threatened action or proceedings against or affecting the
                  Borrower before any court, governmental agency or arbitrator
                  which may, in any one case or in the aggregate, materially

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                  adversely affect the financial condition, operations,
                  properties, or business of the Borrower or the ability of the
                  Borrower to perform its obligation under the Loan Documents to
                  which it is a party.

         G.       NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. The Borrower
                  has satisfied all judgments, and the Borrower is not in
                  default with respect to any judgment, writ, injunction,
                  decree, rule or regulation of any court, arbitrator, or
                  federal, state, municipal, or other governmental authority,
                  commission, board, bureau, agency or instrumentality, domestic
                  or foreign.

         H.       OPERATION OF BUSINESS. To the best of Borrower's knowledge, it
                  possesses all licenses, permits, franchises, patents,
                  copyrights, trademarks and trade names, or rights thereto, to
                  conduct its business substantially as now conducted and as
                  presently proposed to be conducted, is not in violation of any
                  valid rights of others with respect to any of the foregoing,
                  and is in compliance with all rules and regulations regarding
                  the operation of its business.

         I.       TAXES. The Borrower has filed all tax returns (federal, state
                  and local) required to be filed and has paid all taxes,
                  assessments, and governmental charges and levies thereon which
                  are due, including interest and penalties, except certain tax
                  obligations which are to be paid from the Loan proceeds of the
                  Loan contemplated hereby.

         J.       SEC DOCUMENTS. The Borrower has filed all required to be filed
                  SEC documents including 10-Q, 10-K, proxies.

2.       ADVERSE CHANGE. Borrower certifies that by accepting the RBS/USDA
guarantee Loan, the Borrower understands that the intent of USDA/RBS Instruction
4279-B; Section 4279.181(m), is that no adverse change has occurred during the
period of time from RBS/USDA's issuance of the Conditional Commitment to
issuance of the Loan Note Guarantee relating to Borrower, regardless of the
cause or causes of the change and whether the change or cause(s) of the change
were within the Borrower's control.

         Upon the issuance of the USDA/RBS Loan Note Guaranty, the Borrower must
certify that there have been no unremedied adverse changes since the date of the
application in the financial or other condition of the Borrower, which warrant
withholding or not making the Loan. Therefore, Borrower does hereby certify to
Lender that there have been no adverse changes since the date of its initial
loan application in its financial condition except as follows: None.

         The Borrower shall, upon closing of this loan and at such other times
as Lender from time to time request after closing, execute the Certification on
the attached Exhibit A.

                                   ARTICLE V

           CERTAIN PROVISIONS OF SECURITY DEED AND SECURITY AGREEMENT

Borrower acknowledges that the Security Deed and Security Agreement shall have
certain provisions including, but not limited to, a provision whereby the sale
or transfer of any portion

                                       10
<PAGE>   11

of the property which is collateral for Lender's Loan, or additional encumbrance
of same, may not be made without the Lender's prior written consent, and
further, that the Borrower shall be required to furnish yearly evidence of
payment of property taxes to the Lender in the manner required in the Loan
Documents unless the Borrower elects to utilize Escrow Fund as set forth in
Article II, Paragraph 9.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

In the event any representation or warranty made or deemed made by the Borrower
in this Agreement or which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in connection with
any Loan Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made, or in the event the Borrower should fail
to perform or observe any term, covenant, or agreement, contained in any of the
Loan Documents, then the Lender, at its option, may declare a default and take
such action as may be provided by this Loan Agreement and all other such action
as may be available to it under the laws as permitted by the State of Georgia.
Should an Event of Default be declared, Borrower shall be responsible for all of
Lender's reasonable attorney fees and court costs, appeals, and any anticipated
post-judgment collection services incurred in connection with the Lender
enforcing its rights under any of the Loan Documents. This Agreement, also
secures all of these amounts.

If a monetary default shall occur hereunder or should a non-monetary default
occur hereunder and remain uncured for thirty (30) days or more after written
notice of such non-monetary default to Borrower, then, without further notice to
Borrower, the full amount of the Note together with all accrued interest shall
become immediately due and payable, at the option of Lender, as fully and
completely as if said aggregate sum were originally stipulated to be paid at
such time. A monetary default shall be deemed to include failure to make payment
of the Note amount, should it be drawn or debited, as well as payments of
escrow, taxes, CAM, governmental assessments, and premiums for insurance under
this Loan Agreement and any other agreement, securing the Note. That, is to say,
upon the breach of any of the terms or covenants herein to be performed by
Borrower and the failure of Borrower to cure such breach within the applicable
curative period set, forth above, Lender shall have the right to accelerate the
maturity of this Loan as though it were due and payable on the day following
such curative period and to demand payment in full of the Note amount or any
unpaid balance thereof including, but not limited to, the Prepayment Premium as
set forth in Article II, Paragraph 3, and to exercise all the rights and
remedies herein or by law reserved to Lender.

                                  ARTICLE VII

                                  MISCELLANEOUS

1.       AMENDMENTS, ETC. No amendment, modification, termination, or waiver of
any provision of any Loan Document to which the Borrower is a party nor consent
to any departure by the Borrower from any Loan document to which it is a party
shall in any event, be effective unless the same shall be in writing and signed
by the Lender and RBS/USDA, and then such

                                       11
<PAGE>   12

waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

2.       NOTICES, ETC. All notices and other communications provided for under
this Agreement, and under the other Loan Documents to which the Borrower is a
party shall be in writing (including telefacsimile or telegraphic
communications) and faxed, mailed, telegraphed, or delivered

If to the Borrower:        Thomaston Mills, Inc.
                           115 East Main Street
                           Thomaston, GA  30286

If to the Lender:          WebBank
                           6440 S. Wasatch Blvd., Suite 300
                           Salt Lake City, Utah  84121

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section. All such notices and connotations shall, when mailed or
telegraphed, be effective when deposited in the mails or delivered to the
telegraph company, respectively, addressed as aforesaid, and when faxed, when
machine confirmation of receipt is acquired, except that notices to the Lender
pursuant to the provisions of Article III shall not be effective until received
by the Lender.

3.       NO WAIVER; REMEDIES. No failure on the part of the Lender to exercise
and no delay in exercising any right, power, or remedy under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any rights under any Loan Documents preclude any other or further exercise
thereof of any other right. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.

4.       SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Borrower and the Lender and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its
rights under any Loan Document to which the Borrower is a party without the
prior written consent of the Lender and RBS/USDA. Notwithstanding the foregoing,
an assumption fee equal to one percent (1%) of the outstanding principal balance
shall be paid by the Borrower to the Lender upon written consent of any
assignment.

5.       COSTS, EXPENSE AND TAXES. The Borrower agrees to pay on demand all
costs and expenses in connection with the preparation, execution, delivery,
filing, recording, administration and termination of any of the Loan Documents
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Lender, with respect thereto and with respect to advising the
Lender as to its rights and responsibilities under any of the Loan Documents,
and all costs and expenses, if any, in connection with the enforcement of any of
the Loan Documents all as provided in the Loan commitment letter from the Lender
to the Borrower. In addition, the Borrower shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of any of the Loan Documents and the
other documents to be delivered under any such Loan

                                       12
<PAGE>   13

Documents, and agrees to save the Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees. The Borrower agrees to pay the Lender fifty dollars per
hour for time the Lender spends on Borrower's service request and to reimburse
Lender for expenses incurred on service request. The Borrower agrees to pay the
Lender commitment/origination fee of one and one-half percent of the total
amount of the loan. The Borrower agrees to pay the RBS/USDA guarantee fee of two
percent of ninety percent of the total amount of the Loan.

6.       GOVERNING LAW. This Agreement and the Loan Documents shall be governed
by, and construed in accordance with, the laws of the State of Georgia.

7.       SEVERABILITY OF PROVISIONS. Any provision of any Loan Document, which
is prohibited or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Documents or affecting the validity or enforceability of such provision in any
other jurisdiction.

8.       HEADINGS. Article and Section headings in the Loan Documents are
included in such Loan Documents for the convenience of reference only and shall
not constitute a part of the applicable Loan Documents for any other purpose.

9.       SURVIVE CLOSING. The covenants contained herein, which obligate the
Borrower to perform any covenant following closing, shall be deemed to survive
the closing.

10.      WAIVER OF JURY TRIAL. AS AN IMPORTANT INDUCEMENT TO THE LENDER TO ENTER
THIS AGREEMENT, BORROWER WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING
UNDER OR IN ANY WAY RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.

11.      ATTORNEY OPINION. At or prior to closing of the Loan, Lender must be
furnished, at Borrower's expense, with a written opinion from an attorney
selected by Lender and licensed to practice law in the State of Georgia,
providing that this agreement and the Adjustable Rate Promissory Note, Security
Deed, Mortgage, Deed of Trust, Security Agreement, Guaranty Agreements, and
other documents evidencing or securing the Loan: (a) are duly and fully
enforceable in accordance with their respective terms; (b) comply with all
requirements and will not violate any law, rule, or regulation of the State of
Georgia and that laws, rules, or regulations unique to the Georgia state law
that will not impede or delay Lender from foreclosing on the collateralized
property, obtaining either immediate title to or the proceeds from the sale of
the property.

12.      INTERCREDITOR AGREEMENT. An intercreditor agreement that is acceptable
to Lender and RBS/USDA is required.

13.      INSPECTIONS. The Borrower will permit the Lender and RBS/USDA to visit
and inspect any of the collateral securing the Loan, to conduct a periodic audit
of the number of jobs to determine program effectiveness, and access to
company's books and records for periodic examination. Lender reserves the right
to conduct audits on an as-needed basis, as determined solely by the Lender.

                                       13
<PAGE>   14

14.      COMPLIANCE. The Borrower's facilities that are accessible to the public
must be in compliance with the American With Disabilities Act.

15.      RBS/USDA REQUIREMENTS. The Borrower agrees to all requirements in the
RBS/USDA conditional commitment, which is incorporated herein by reference. The
Borrower shall execute such certification to Lender and RSB/USDA as may be
required from time to time.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above
written.

Signed, sealed and delivered
in the presence of:

                              LENDER:  WebBank

                              By:     /s/
                                      ------------------------------------------
                              Title:  SVP
                                      ------------------------------------------

                              BORROWER:  Thomaston Mills, Inc.

                              By:     /s/  Neil H. Hightower
                                      ------------------------------------------
                              Title:  President & CEO
                                      ------------------------------------------
                              Borrower Certifications to Lender and USDA

                                       14<PAGE>   1

                                                                    EXHIBIT 10.1

                       FIRST AMENDMENT TO CREDIT AGREEMENT

         ENTERED into by and between AMERICAN HEALTHWAYS, INC., formerly known
as American Healthcorp, Inc., a Delaware corporation (the "Borrower"), and
SUNTRUST BANK (the "Lender"), as of this 12th day of May, 2000.

                                    RECITALS

         1. American Healthcorp, Inc., entered into a Credit Agreement with
Lender January 4, 2000 (the "Credit Agreement").

         2. By charter amendment filed with the Secretary of State of Delaware,
American Healthcorp, Inc. changed its name to American Healthways, Inc.

         3. The Borrower desires that the Lender provide it with a letter of
credit sublimit facility as set forth herein.

         4. The Borrower and the Lender desire to enter into this First
Amendment

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Borrower and the Lender agree as follows:

         1. The definition of "Borrower" as set forth in Section 1.1. of the
Credit Agreement shall be amended and restated as follows:

            "Borrower" shall mean American Healthways, Inc., formerly known as
            American Healthcorp, Inc., a Delaware corporation.

         2. The definition of "Credit Documents" as set forth in Section 1.1. of
the Credit Agreement shall be amended and restated as follows:

            "Credit Documents" shall mean, collectively, this Agreement, the
            Revolving Credit Note, any LC Documents, the Subsidiary Guaranties,
            the Security Documents, and all other instruments, documents,
            certificates, agreements, and writings executed in connection
            herewith.

         3. Section 1.1. of the Credit Agreement shall be amended to include the
following new definitions:

            "LC Commitment" shall mean that portion of the Aggregate Revolving
            Commitments that may be used by the Borrower for the issuance of
            Letters of Credit in an aggregate face amount not to exceed
            $4,000,000.

<PAGE>   2

            "LC Disbursement" shall mean a payment made by the Lender pursuant
            to a Letter of Credit.

            "LC Documents" shall mean the Letters of Credit and all
            applications, agreements and instruments relating to the Letters of
            Credit.

            "LC Exposure" shall mean, at any time, the sum of (i) the aggregate
            undrawn amount of all outstanding Letters of Credit at such time,
            plus (ii) the aggregate amount of all LC Disbursements that have not
            been reimbursed by or on behalf of the Borrower at such time.

            "Letter of Credit" shall mean any letter of credit issued pursuant
            to Section 2.1.A. by the Lender for the account of the Borrower
            pursuant to the LC Commitment.

            "Letter of Credit Fee" shall have the same meaning as set forth in
            Section 2.6.(b).

         4. Section 2.1.(a) of the Credit Agreement shall be amended and
restated in its entirety as follows:

                  (a) Subject to and upon the terms and conditions herein set
            forth, the Lender agrees to make to Borrower from time to time on
            and after the Closing Date, but prior to the Maturity Date, Advances
            under the Revolving Credit Note that when added to the LC Exposure
            do not exceed the Borrowing Base.

         5. The Credit Agreement shall be amended to include new Section 2.1.A.
to read as follows:

                  Section 2.1.A. Letters of Credit. (a) From the date hereof
            through December 31, 2000 and provided that no Default or Event of
            Default has occurred, the Lender agrees to issue, at the request of
            the Borrower, Letters of Credit for the account of the Borrower on
            the terms and conditions hereinafter set forth; provided, that (i)
            each Letter of Credit shall expire on the earlier of (A) the date
            one year after the date of issuance of such Letter of Credit (or in
            the case of any renewal or extension thereof, one year after such
            renewal or extension) and (B) the date that is five (5) Business
            Days prior to the Maturity Date; and (ii) the Borrower may not
            request any Letter of Credit, if, after giving effect to such
            issuance (A) the LC Exposure would exceed the LC Commitment or (B)
            the LC Exposure, plus the outstanding Advances would exceed the
            Borrowing Base. The issuance of any Letter of Credit shall reduce
            the Borrower's ability to receive Advances under the Revolving
            Credit Note by an amount equal to the face amount of the Letter of
            Credit for so long as the Letter of Credit remains outstanding. In
            the event that for any reason, the sum of the LC Exposure, plus
            outstanding Advances exceeds the Borrowing Base, the Borrower agrees
            to pay to the Lender immediately on demand such amount as would
            reduce the sum of the LC Exposure, plus outstanding Advances to an
            amount that is equal to or less than the Borrowing Base. Such
            prepayment, if required, shall be subject to the provisions of
            Section 2.12. herein.

                                       2
<PAGE>   3

                  (b) To request the issuance of a Letter of Credit (or any
            amendment, renewal or extension of an outstanding Letter of Credit),
            the Borrower shall give the Lender irrevocable written notice at
            least three (3) Business Days prior to the requested date of such
            issuance specifying the date (which shall be a Business Day) such
            Letter of Credit is to be issued (or amended, extended or renewed,
            as the case may be), the expiration date of such Letter of Credit,
            the amount of such Letter of Credit, the name and address of the
            beneficiary thereof and such other information as shall be necessary
            to prepare, amend, renew or extend such Letter of Credit. In
            addition to the satisfaction of the conditions in Article III, the
            issuance of such Letter of Credit (or any amendment which increases
            the amount of such Letter of Credit) will be subject to the further
            conditions that the Borrower shall have paid to Lender the Letter of
            Credit Fee and such Letter of Credit shall be in such form and
            contain such terms as the Lender shall approve and that the Borrower
            shall have executed and delivered any additional applications,
            agreements and instruments relating to such Letter of Credit as the
            Lender shall reasonably require; provided, that in the event of any
            conflict between such applications, agreements or instruments and
            this Agreement, the terms of this Agreement shall control.

                  (c) The Lender shall examine all documents purporting to
            represent a demand for payment under a Letter of Credit promptly
            following its receipt thereof. The Lender shall notify the Borrower
            of such demand for payment and whether the Lender has made or will
            make a LC Disbursement thereunder; provided, that any failure to
            give or delay in giving such notice shall not relieve the Borrower
            of its obligation to reimburse the Lender with respect to such LC
            Disbursement. The Borrower shall be irrevocably and unconditionally
            obligated to reimburse the Lender for any LC Disbursements paid by
            the Lender in respect of such drawing, without presentment, demand
            or other formalities of any kind.

                  (d) The Borrower shall deposit in an account with the Lender,
            in the name of the Lender and for the benefit of the Lender, an
            amount in cash equal to the LC Exposure as of such date plus any
            accrued and unpaid interest thereon; provided, that the obligation
            to deposit such cash collateral shall become effective immediately,
            and such deposit shall become immediately due and payable, without
            demand or notice of any kind, upon the occurrence of any Event of
            Default with respect to the Borrower described in Section 7.7. Such
            deposit shall be held by the Lender as collateral for the payment
            and performance of the obligations of the Borrower under this
            Agreement. The Lender shall have exclusive dominion and control,
            including the exclusive right of withdrawal, over such account.
            Other than any interest earned on the investment of such deposits,
            which investments shall be made at the option and sole discretion of
            the Lender and at the Borrower's risk and expense, such deposits
            shall not bear interest. Interest and profits, if any, on such
            investments shall accumulate in such account. Moneys in such account
            shall be applied by the Lender to reimburse itself for LC
            Disbursements for which it had not been reimbursed and to the extent
            so applied, shall be held for the satisfaction of the reimbursement
            obligations of the Borrower for the LC Exposure at such time or, if
            the maturity of the Loans has been accelerated, be applied to
            satisfy other obligations of the Borrower under this Agreement. If
            the Borrower is required to provide an amount of cash collateral
            hereunder as a result of the occurrence of an Event of Default, such
            amount (to the extent not so applied as aforesaid) shall be returned
            to

                                        3
<PAGE>   4

            the Borrower within three (3) Business Days after the earlier of:
            (i) all Events of Default have been cured or waived, or (ii) the
            satisfaction or elimination of the LC Exposure.

                  (e) The Borrower's obligation to reimburse LC Disbursements
            hereunder shall be absolute, unconditional and irrevocable and shall
            be performed strictly in accordance with the terms of this Agreement
            under all circumstances whatsoever and irrespective of any of the
            following circumstances:

                        (i) Any lack of validity or enforceability of any Letter
                  of Credit or this Agreement;

                        (ii) The existence of any claim, set-off, defense or
                  other right which the Borrower or any Subsidiary or Affiliate
                  of the Borrower may have at any time against a beneficiary or
                  any transferee of any Letter of Credit (or any Persons or
                  entities for whom any such beneficiary or transferee may be
                  acting), the Lender or any other Person, whether in connection
                  with this Agreement or the Letter of Credit or any document
                  related hereto or thereto or any unrelated transaction;

                        (iii) Any draft or other document presented under a
                  Letter of Credit proving to be forged, fraudulent or invalid
                  in any respect or any statement therein being untrue or
                  inaccurate in any respect;

                        (iv) Payment by the Lender under a Letter of Credit
                  against presentation of a draft or other document to the
                  Lender that does not comply with the terms of such Letter of
                  Credit, unless such payment results from the gross negligence
                  or willful misconduct on the part of the Lender;

                        (v) Any other event or circumstance whatsoever, whether
                  or not similar to any of the foregoing, that might, but for
                  the provisions of this Section, constitute a legal or
                  equitable discharge of, or provide a right of setoff against,
                  the Borrower's obligations hereunder; or

                        (vi) The existence of a Default or an Event of Default.

                  The Lender shall not have any liability or responsibility by
            reason of or in connection with the issuance or transfer of any
            Letter of Credit or any payment or failure to make any payment
            thereunder (irrespective of any of the circumstances referred to
            above), or any error, omission, interruption, loss or delay in
            transmission or delivery of any draft, notice or other communication
            under or relating to any Letter of Credit (including any document
            required to make a drawing thereunder), any error in interpretation
            of technical terms or any consequence arising from causes beyond the
            control of the Lender; provided, that the foregoing shall not be
            construed to excuse the Lender from liability to the Borrower to the
            extent of any direct damages (as opposed to consequential damages,
            claims in respect of which are hereby waived by the Borrower to the
            extent permitted by applicable law) suffered by the Borrower that
            are caused by the Lender's failure to exercise care when determining
            whether drafts or other documents presented under a Letter of Credit
            comply with the terms

                                       4
<PAGE>   5

            thereof. The parties hereto expressly agree, that in the absence of
            gross negligence or willful misconduct on the part of the Lender (as
            finally determined by a court of competent jurisdiction), the Lender
            shall be deemed to have exercised care in each such determination.
            In furtherance of the foregoing and without limiting the generality
            thereof, the parties agree that, with respect to documents presented
            that appear on their face to be in substantial compliance with the
            terms of a Letter of Credit, the Lender may, in its sole discretion,
            either accept and make payment upon such documents without
            responsibility for further investigation, regardless of any notice
            or information to the contrary, or refuse to accept and make payment
            upon such documents if such documents are not in strict compliance
            with the terms of such Letter of Credit.

                  (f) Each Letter of Credit shall be subject to the Uniform
            Customs and Practices for Documentary Credits (1993 Revision),
            International Chamber of Commerce Publication No. 500, as the same
            may be amended from time to time, and, to the extent not
            inconsistent therewith, the governing law of the State of Tennessee.

         6. Section 2.6. of the Credit Agreement shall be amended and restated
as follows:

            Section 2.6. Fees.

                  (a) The Borrower shall pay to the Lender a Facility Fee
            quarterly in arrears equal to the average daily unused amount under
            the Revolving Credit Note (calculated by including the amount of LC
            Exposure as outstanding Advances) multiplied by one quarter of one
            percent (1/4%) per annum.

                  (b) The Borrower shall pay to the Lender quarterly in arrears
            a fee (the "Letter of Credit Fee") which shall accrue at the
            Applicable Margin then in effect on the average daily amount of the
            Lender's LC Exposure (excluding any portion thereof attributable to
            unreimbursed LC Disbursements) attributable to such Letter of Credit
            during the period from and including the date of issuance of such
            Letter of Credit to but excluding the date on which such Letter of
            Credit expires or is drawn in full, as well as the Lender's standard
            fees with respect to issuance, amendment, renewal, or extension of
            any Letter of Credit or processing of drawings thereunder.

         7. The opening clause of Section 3.2. of the Credit Agreement shall be
amended and restated as follows:

                  At the time of the making of any Advances, including the
            initial Advance hereunder, and at the time of the issuance of any
            Letter of Credit, the following conditions shall have been satisfied
            or shall exist:

         8. The concluding clause of Article III of the Credit Agreement shall
be amended and restated as follows:

                  Each request for an Advance or the issuance of a Letter of
            Credit shall constitute a representation and warranty by the
            Borrower, as of the date of the Advance or the Letter of Credit,
            that the applicable conditions specified in Section 3.1. and 3.2.
            have been satisfied.

                                       5
<PAGE>   6

         9. The opening clause of Article V of the Credit Agreement shall be
amended and restated as follows:

                  So long as the Revolving Credit Note, any LC Exposure, or
            other Obligations remain outstanding, the Borrower will:

         10. The opening clause of Article VI of the Credit Agreement shall be
amended and restated as follows:

                  So long as the Revolving Credit Note, any LC Exposure, or
            other Obligations remain outstanding:

         11. The Credit Agreement is not amended in any other respect.

         12. The Borrower reaffirms its obligations under the Credit Agreement
and agrees that its obligations thereunder are its true and lawful obligations,
enforceable in accordance with its terms, subject to no defense, counterclaim,
or objection.

              [REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                            [SIGNATURES ON NEXT PAGE]

                                       6
<PAGE>   7

         ENTERED INTO as of the date first above written.

                                      BORROWER:

                                      AMERICAN HEALTHWAYS, INC.

                                      By:
                                         ---------------------------------------

                                      Title:
                                            ------------------------------------

                                      LENDER:

                                      SUNTRUST BANK

                                      By:
                                          --------------------------------------

                                      Title:
                                             -----------------------------------

                                       7

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