Exhibit 10.46






                                   $25,000,000

                                CREDIT AGREEMENT

                                   DATED AS OF


                               SEPTEMBER 30, 1996

                                     BETWEEN

                               APPLE SOUTH, INC.,

                                   AS BORROWER


                                       AND

                      FIRST UNION NATIONAL BANK OF GEORGIA

                                    AS LENDER







<PAGE>



                                Table of Contents



ARTICLE 1.  DEFINITIONS  .....................................................1
SECTION 1.1.Definitions.......................................................1
                  "Adjusted Capitalization"...................................1
                  "Adjusted Funded Debt"......................................1
                  "Adjusted Funded Debt/Adjusted Capitalization Ratio"........1
                  "Adjusted LIBOR Rate,"......................................1
                  "Affiliate".................................................1
                  "Agreement".................................................2
                  "Assignee"..................................................2
                  "Authority".................................................2
                  "Bank"   ...................................................2
                  "Bank's Address"............................................2
                  "Base Rate".................................................2
                  "Base Rate Loan"............................................2
                  "BB&T"   ...................................................2
                  "BB&T Agreement"............................................2
                  "Borrower"..................................................2
                  "Borrowing".................................................2
                  "Capital Stock".............................................3
                  "Capitalized Lease Obligations".............................3
                  "CERCLA" ...................................................3
                  "CERCLIS"...................................................3
                  "Change of Law".............................................3
                  "Closing Certificate".......................................3
                  "Closing Date"..............................................3
                  "Code"   ...................................................3
                  "Commitment"................................................3
                  "Compliance Certificate"....................................3
                  "Consolidated Net Income,"..................................3
                  "Consolidated Subsidiary"...................................3
                  "Controlled Group"..........................................3
                  "Default"...................................................4
                  "Default Rate"..............................................4
                  "Dollars" or "$"............................................4
                  "Domestic Business Day".....................................4
                  "DR Holdings Lease".........................................4
                  "Environmental Authorizations"..............................4
                  "Environmental Authority"...................................4
                  "Environmental Judgments and Orders"........................4
                  "Environmental Liabilities".................................4
                  "Environmental Notices".....................................4

                                                        i

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                  "Environmental Proceedings".................................5
                  "Environmental Releases"....................................5
                  "Environmental Requirements"................................5
                  "ERISA"  ...................................................5
                  "Euro-Dollar Business Day"..................................5
                  "Euro-Dollar Rate,".........................................5
                  "Euro-Dollar Rate Loan".....................................5
                  "Euro-Dollar Reserve Percentage"............................5
                  "Event of Default"..........................................5
                  "Federal Funds Rate"........................................5
                  "Fiscal Quarter"............................................6
                  "Fiscal Year"...............................................6
                  "Fixed Charge Coverage Ratio"...............................6
                  "Franchise Rights"..........................................6
                  "GAAP"   ...................................................6
                  "Guarantee" or "Guaranty"...................................6
                  "Hazardous Materials".......................................6
                  "Interest Period"...........................................7
                  "Lending Office"............................................7
                  "LIBOR Rate"................................................7
                  "Lien"   ...................................................7
                  "Loan Documents"............................................8
                  "Margin Stock"..............................................8
                  "Material Adverse Effect"...................................8
                  "Monthly Interest Period"...................................8
                  "Multiemployer Plan"........................................8
                  "Note"   ...................................................8
                  "Notice of Borrowing".......................................8
                  "Participant"...............................................8
                  "PBGC"   ...................................................8
                  "Person" ...................................................8
                  "Plan"   ...................................................8
                  "Prime Rate"................................................9
                  "Properties"................................................9
                  "Purchase Money Liens"......................................9
                  "Redeemable Preferred Stock"................................9
                  "Regulation D"..............................................9
                  "Regulation G"..............................................9
                  "Regulation T"..............................................9
                  "Regulation U"..............................................9
                  "Regulation X"..............................................9
                  "Revolving Loan"............................................10
                  "Sale-Leaseback Transaction"................................10
                  "Senior Note Indenture".....................................10
                  "Senior Notes"..............................................10

                                                        ii

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                  "Solvent"...................................................10
                  "Stockholders' Equity"......................................10
                  "Subsidiary"................................................10
                  "Synthetic Lease"...........................................10
                  "Termination Date"..........................................10
                  "Third Parties".............................................11
                  "Total Funded Debt".........................................11
                  "Transferee"................................................11
                  "Unfunded Vested Liabilities"...............................11
                  "Unused Commitment".........................................11
                  "Voluntary Store Closing"...................................11
                  "Wachovia"..................................................11
                  "Wachovia Credit Agreement".................................11
         SECTION 1.2.Accounting Terms and Determinations......................12
         SECTION 1.3.References...............................................12
         SECTION 1.4.Use of Defined Terms.....................................12
         SECTION 1.5.Terminology..............................................12

ARTICLE 2.THE CREDIT  ........................................................12
         SECTION 2.1. Commitment to Lend......................................12
         SECTION 2.2. Method of Borrowing ....................................13
                 2.2.1. Notice to Bank........................................13
                 2.2.2. When Revolving Loans Made.............................13
                 2.2.3. Application of Certain Proceeds.......................13
                 2.2.4. No Borrowing Upon Default.............................13
         SECTION 2.3. Note....................................................13
                 2.3.1. Single Note...........................................13
                 2.3.2. Endorsement to Note...................................13
         SECTION 2.4. Maturity of Revolving Loans.............................14
         SECTION 2.5. Interest Rates..........................................14
                 2.5.1.  Base Rate Loans......................................14
                 2.5.2.  Euro-Dollar Rate Loans...............................14
                 2.5.3.  Bank to Determine....................................14
                 2.5.4.  Savings Clause.......................................15
         SECTION 2.6. Closing Fee.............................................15
         SECTION 2.7. Termination or Reduction of Commitment..................15
                 2.7.1.  Termination of Commitments...........................15
                 2.7.2.  Mandatory Reduction and Reinstatement of Commitment..15
         SECTION 2.8.  Optional Prepayments...................................15
         SECTION 2.9.  Mandatory Prepayments..................................16
         SECTION 2.10. General Provisions as to Payments......................16
                 2.10.1. Timing...............................................16
                 2.10.2. Next Banking Day.....................................16
         SECTION 2.11. Computation of Interest................................16


                                 iii

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ARTICLE 3.  CONDITIONS TO BORROWINGS  ........................................16
         SECTION 3.1.  Conditions to First Borrowing..........................16
                 3.1.1.  This Agreement.......................................16
                 3.1.2.  Note.................................................17
                 3.1.3.  Opinion..............................................17
                 3.1.4.  Closing Certificate..................................17
                 3.1.5.  Other Documents......................................17
                 3.1.6.  Borrowing Notice.....................................17
         SECTION 3.2.  Conditions to All Borrowings...........................17
                 3.2.1.  Notice...............................................17
                 3.2.2.  No Default...........................................17
                 3.2.3.  Truth of Representations.............................17
                 3.2.4.  Not Overadvance......................................17

ARTICLE 4.  REPRESENTATIONS AND WARRANTIES....................................18
         SECTION 4.1.  Corporate Existence and Power..........................18
         SECTION 4.2.  Corporate and Governmental Authorization: 
                          No Contravention....................................18
         SECTION 4.3.  Binding Effect.........................................18
         SECTION 4.4.  Financial Information: No Material Adverse Effect......19
         SECTION 4.5.  No Litigation..........................................19
         SECTION 4.6.  Compliance with Laws Generally; Compliance with ERISA..19
         SECTION 4.7.  Taxes..................................................20
         SECTION 4.8.  Subsidiaries...........................................20
         SECTION 4.9.  Not a Holding Company, Public Utility, Investment Company
                          Investment Adviser..................................20
         SECTION 4.10. Ownership of Property; Liens...........................20
         SECTION 4.11. No Default.............................................20
         SECTION 4.12. Full Disclosure........................................20
         SECTION 4.13. Environmental Matters..................................21
         SECTION 4.14. Capital Stock..........................................21
         SECTION 4.15. Margin Stock...........................................21
         SECTION 4.16. Solvency...............................................22
         SECTION 4.17. Possession of Franchises, Licenses, Etc................22
         SECTION 4.18. Insurance..............................................22

ARTICLE 5.  COVENANTS  .......................................................22
         SECTION 5.1.  Information............................................22
                 5.1.1.  Annual Audit.........................................22
                 5.1.2.  Interim Statements...................................23
                 5.1.3.  Compliance Certificates..............................23
                 5.1.4.  Default Notice.......................................23
                 5.1.5.  Proxy................................................23
                 5.1.6.  Registration Statements..............................23
                 5.1.7.  ERISA Notices........................................23

                                  iv

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                 5.1.8. Wachovia Agreement; BB& T Agreement; Senior Notes.....24
                 5.1.9. Other Reports.........................................24
         SECTION 5.2.  Inspection of Property, Books and Records..............24
         SECTION 5.3.  Adjusted Funded Debt/Adjusted Capitalization Ratio.....24
         SECTION 5.4.  Minimum Shareholders' Equity...........................24
         SECTION 5.5.  Fixed Charge Coverage Ratio............................24
         SECTION 5.6.  Negative Pledge........................................24
         SECTION 5.7.  Maintenance of Existence...............................25
         SECTION 5.8.  Dissolution............................................26
         SECTION 5.9.  Consolidation, Mergers, and Sales of Assets; Sale-
                         Leaseback Transactions...............................26
                 5.9.1.  Consolidation, Mergers, and Sales of Assets..........26
                 5.9.2.  Sale-Leaseback Transactions..........................26
         SECTION 5.10. Use of Proceeds........................................26
         SECTION 5.11. Compliance with Laws; Payment of Taxes.................27
         SECTION 5.12. Insurance..............................................27
         SECTION 5.13. Change is Fiscal Year..................................27
         SECTION 5.14. Maintenance of Property................................27
         SECTION 5.15. Environmental Notices..................................27
         SECTION 5.16. Environmental Matters..................................27
         SECTION 5.17. Environmental Releases.................................28
         SECTION 5.18. Investments............................................28
                  (i)    Current Assets.......................................28
                  (ii)   Capital Expenditures.................................28
                  (iii)  Franchise Fees.......................................28
                  (iv)   Escrow Deposits......................................28
                  (v)    Bank Accounts........................................28
                  (vi)   Surplus Cash.........................................29
                  (vii)  Subsidiaries.........................................29
                  (viii) Travel Advances......................................29
                  (ix)   Special Life Insurance Program.......................29
                  (x)    Applebee's Franchisees...............................29
                  (xi)   Other Restaurant Concepts............................30
                  (xii)  Other Investments Generally..........................30
         SECTION 5.19. Subsidiary Debt........................................30

ARTICLE 6.  DEFAULTS  ........................................................30
         SECTION 6.1. Events of Default.......................................30
                 6.1.1.  Non-Payment..........................................30
                 6.1.2.  Failure to Observe Certain Covenants.................31
                 6.1.3.  Failure to Observe Covenants Generally...............31
                 6.1.4.  Misrepresentation....................................31
                 6.1.5.  Cross-Default........................................31
                 6.1.6.  Voluntary Bankruptcy.................................31
                 6.1.7.  Involuntary Bankruptcy...............................32


                                                         v

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                 6.1.8.  ERISA................................................32
                 6.1.9.  Judgments............................................32
                 6.1.10.  Tax Liens...........................................32
                 6.1.11.  Change of Control...................................32
                 6.1.12.  Loss of Franchise Rights............................33
                 6.1.13.  BB&T Agreement......................................33
                 6.1.14.  Material Adverse Effect.............................33

ARTICLE 7.  CHANGE IN CIRCUMSTANCES; COMPENSATION  ...........................33
         SECTION 7.1. Basis for Determining Interest Rate Inadequate .........33
         SECTION 7.2. Illegality..............................................34
         SECTION 7.3. Increased Cost and Reduced Return.......................34
                 7.3.1.  Change of Law........................................34
                 7.3.2.  Capital Adequacy.....................................35
                 7.3.3.  Notice of Determination..............................35
                 7.3.4.  Assignees Covered....................................35
         SECTION 7.4. Base Rate Loans Substituted for Affected Euro-Dollar Rate 
                         Loans................................................35
         SECTION 7.5. Compensation............................................36

ARTICLE 8.  MISCELLANEOUS  ...................................................36
         SECTION 8.1. Notices.................................................36
         SECTION 8.2. No Waivers..............................................36
         SECTION 8.3. Expenses; Documentary Taxes.............................37
         SECTION 8.4. Indemnification.........................................37
         SECTION 8.5. Amendments and Waivers..................................37
         SECTION 8.6. Successors and Assigns..................................37
                 8.6.1. No Assignment by Borrower.............................37
                 8.6.2. Participation.........................................38
                 8.6.3. Assignments...........................................38
                 8.6.4. Disclosures...........................................38
                 8.6.5. Status of Transferee..................................38
         SECTION 8.7. Confidentiality.........................................38
         SECTION 8.8. GEORGIA LAW.............................................39
         SECTION 8.9. Interpretation..........................................39
         SECTION 8.10.CONSENT TO JURISDICTION.................................39
         SECTION 8.11.Counterparts............................................40
         SECTION 8.12.Survival................................................40
         SECTION 8.13.Entire Agreement: Amendment; Severability...............40
         SECTION 8.14.TIME OF THE ESSENCE.....................................40
         SECTION 8.15.Bank Not a Joint Venturer...............................40

                                    EXHIBITS

EXHIBIT A                  Form of Notice of Borrowing

                                  vi




EXHIBIT B                  Form of Compliance Certificate

                                    SCHEDULES

SCHEDULE 4.8               Existing Subsidiaries
SCHEDULE 5.6               Existing Permitted Liens


                                          vii

<PAGE>



                                CREDIT AGREEMENT


         THIS CREDIT AGREEMENT,  dated as of September 30, 1996, is made between
APPLE SOUTH,  INC., as Borrower;  and FIRST UNION  NATIONAL BANK OF GEORGIA,  as
Lender.

         The parties hereto agree as follows:


ARTICLE 1.  DEFINITIONS

         SECTION 1.1.               Definitions.

         The terms as defined in this Section 1.1 shall for all purposes of this
Agreement  and any  amendment  hereto  (except  as  herein  otherwise  expressly
provided or unless the context otherwise requires),  have the meanings set forth
herein:

     "Adjusted  Capitalization"  shall be  equal to the sum at any date of:  (i)
Adjusted Funded Debt; plus (ii) Stockholders' Equity.

         "Adjusted  Funded  Debt"  shall  mean  and  include  the  sum  (without
duplication)  of  the  following,   at  any  date,  for  the  Borrower  and  its
Consolidated  Subsidiaries on a consolidated  basis: (i) Total Funded Debt; plus
(ii) the  present  value  (discounted  at ten  percent  (10%) per  annum) of the
minimum amount of noncancellable  operating lease payments owing by Borrower and
such Subsidiaries at such date (excluding,  however,  for this purpose, any such
lease payments owing under the DR Holdings Lease);  plus (iii) the present value
(discounted  at ten  percent  (10%) per annum) of the total  payments  of "Rent"
owing by the  Borrower  under the DR  Holdings  Lease for the  entire  remaining
"Lease Term"  (inclusive of the original term and all renewal terms,  whether or
not then effective),  with the terms "Rent" and "Lease Term" as used hereinabove
having the meanings given to such terms in the DR Holdings Lease;  plus (iv) all
Redeemable Preferred Stock.

         "Adjusted  Funded  Debt/Adjusted  Capitalization  Ratio" shall mean the
ratio which (i) the Adjusted  Funded Debt of the  Borrower and its  Consolidated
Subsidiaries  at any  date  bears  to (ii) the  Adjusted  Capitalization  of the
Borrower and its Consolidated Subsidiaries at such date.

         "Adjusted LIBOR Rate," applicable to any Monthly Interest Period, means
that interest rate per annum  determined by the Bank to be equal to the quotient
obtained  (rounded upwards,  if necessary,  to the next higher 1/100th of 1%) by
dividing (i) the applicable  LIBOR Rate for such Monthly Interest Period by (ii)
1.00 minus the then applicable Euro-Dollar Reserve Percentage (if any).


                               1

<PAGE>



         "Affiliate" means, as to any Person (i) any other Person that directly,
or  indirectly  through  one or more  intermediaries,  controls  such  Person (a
"Controlling Person"),  (ii) any other Person which is controlled by or is under
common  control  with such Person or a  Controlling  Person,  or (iii) any other
Person of which such Person owns,  directly or indirectly,  twenty percent (20%)
or more of the common stock or equivalent equity interests.  As used herein, the
term "control" means possession,  directly or indirectly, of the power to direct
or cause the  direction  of the  management  or  policies  of a Person,  whether
through the ownership of voting securities, by contract or otherwise.

         "Agreement" means this Credit  Agreement,  together with all amendments
and modifications hereto.

         "Assignee" has the meaning set forth in Section 8.6.3.

         "Authority" has the meaning set forth in Section 7.2.

         "Bank" means First Union National Bank of Georgia,  a national  banking
association  organized  under the laws of the United States of America,  and its
successors and permitted assigns.

     "Bank's  Address" means the address of the Bank referred to or specified in
Section 8.1.

         "Base  Rate"  means for any Base  Rate  Loan for any day,  the rate per
annum  equal  to the  higher  as of such  day of (i) the  Prime  Rate,  and (ii)
one-half of one  percent  (1/2%) per annum  above the  Federal  Funds Rate.  For
purposes of determining the Base Rate for any day,  changes in the Prime Rate or
the Federal  Funds Rate,  as the case may be,  shall be effective on the date of
each such change.

         "Base Rate Loan" means a Revolving  Loan made at the Base Rate pursuant
to Section 2.1.

         "BB&T" means Branch Banking and Trust Company.

         "BB&T  Agreement" means the credit  agreement,  dated as of November 1,
1995, between the Borrower and BB&T.

         "Borrower"  means Apple  South,  Inc., a Georgia  corporation,  and its
successors and permitted assigns.

         "Borrowing" means a borrowing hereunder  consisting of a Revolving Loan
made to the Borrower by the Bank  pursuant to Article II. A Borrowing is a "Base
Rate  Borrowing" if such  Revolving  Loan is a Base Rate Loan or a  "Euro-Dollar
Rate Borrowing" if such Revolving Loan is a Euro-Dollar Rate Loan.


251094.7/ 383.   840
                                                         2

<PAGE>



         "Capital Stock" means any  nonredeemable  capital stock of the Borrower
or any Consolidated  Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.

         "Capitalized  Lease  Obligations"  shall mean those  liabilities of the
Borrower and its Consolidated Subsidiaries under any leases that are required to
be capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such liabilities  shall be the capitalized  amount of such liabilities
as determined in accordance with GAAP.

     "CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq. and its  implementing  regulations and
amendments.

         "CERCLIS" means the Comprehensive  Environmental  Response Compensation
and Liability Inventory System established pursuant to CERCLA.

         "Change of Law" shall have the meaning set forth in Section 7.2.

         "Closing Certificate" has the meaning set forth in Section 3.1.4.

         "Closing Date" means the date of this  Agreement,  as first  inscribed
hereinabove.

         "Code" means the  Internal  Revenue  Code of 1986,  as amended,  or any
successor Federal tax code.

         "Commitment" means $25,000,000, as such amount is subject to reduction
as provided in Section 2.7.

         "Compliance Certificate"  has the meaning set forth in Section 5.1.3.

         "Consolidated Net Income," for any period, means the net income of the
Borrower and its Consolidated Subsidiaries for such period, determined on a
consolidated  basis in accordance with GAAP,  excluding,  however,  (i) any
extraordinary  items and (ii) any equity  interest  of the  Borrower or any
Consolidated  Subsidiary in the unremitted  earnings of any Person which is
not a Subsidiary,  in each case as likewise  determined  on a  consolidated
basis in accordance with GAAP.

          "Consolidated  Subsidiary"  means at any date any  Subsidiary or other
entity  the  accounts  of  which,  in  accordance   with  GAAP,   would  be
consolidated  with  those of the  Borrower  in its  consolidated  financial
statements as of such date.

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


251094.7/ 383.   840
                                                         3

<PAGE>



         "Default"  means any condition or event which  constitutes  an Event of
Default  or which  with the  giving of  notice  or lapse of time or both  would,
unless cured or waived, become an Event of Default.

         "Default Rate" means,  with respect to any Revolving  Loan, on any day,
the sum of two percent (2%) per annum in excess of the interest  rate  otherwise
then or thereafter  payable on such Revolving Loan, but, in any event,  not less
than two percent (2%) per annum in excess of the Base Rate.

          "Dollars" or "$" means dollars in lawful currency of the United States
of America.

         "Domestic  Business  Day"  means any day except a  Saturday,  Sunday or
other day on which  commercial banks are not required to be open for business in
the State of Georgia.

         "DR  Holdings  Lease" shall mean the Lease and  Development  Agreement,
dated as of March 2,  1995,  between  DR  Holdings,  L.P.,  as  lessor,  and the
Borrower,  as  lessee,  together  with  Appendix  "A"  thereto  and each  "Lease
Supplement"  thereto (as defined  therein),  all "Operative  Documents" (as also
defined therein) and all amendments and modifications  thereto made from time to
time hereafter.

         "Environmental  Authorizations"  means all licenses,  permits,  orders,
approvals,  notices,  registrations or other legal  prerequisites for conducting
the business of the  Borrower or any  Subsidiary  required by any  Environmental
Requirement.

         "Environmental  Authority" means any foreign,  federal, state, local or
regional  government  that exercises any form of jurisdiction or authority under
any Environmental Requirement.

         "Environmental  Judgments and Orders" means all  judgments,  decrees or
orders   arising  from  or  in  any  way  associated   with  any   Environmental
Requirements,  whether  or not  entered  upon  consent  or  pursuant  to written
agreements with an Environmental  Authority or any other entity, arising from or
in any  way  associated  with  any  Environmental  Requirement,  whether  or not
incorporated in a judgment, decree or order.

         "Environmental  Liabilities"  means any  liabilities  whether  accrued,
contingent  or  otherwise,  arising  from  and in any way  associated  with  any
Environmental Requirements.

         "Environmental  Notices" means notice from any Environmental  Authority
or by any other Person, of possible or alleged  noncompliance  with or liability
under  any  Environmental   Requirement,   including,   without  limitation  any
complaints,  citations,  demands or requests from any Environmental Authority or
from any other  Person for  correction  of any  violation  of any  Environmental
Requirement or any investigations  concerning any violation of any Environmental
Requirement.


251094.7/ 383.   840
                                                         4

<PAGE>



         "Environmental   Proceedings"  means  any  judicial  or  administrative
proceedings  arising  from  or in any  way  associated  with  any  Environmental
Requirement.

         "Environmental Releases" means "releases" as defined in CERCLA or under
any applicable state or local environmental law or regulation.

         "Environmental  Requirements"  means any legal requirement  relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or any  Property,  including,  but not  limited to, any such  requirement  under
CERCLA or similar  state  legislation  and all  federal,  state and local  laws,
ordinances, regulations, orders, writs, decrees and common law.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time, or any successor  law. Any reference to any provision
of ERISA shall also be deemed to be a reference  to any  successor  provision or
provisions thereof.

         "Euro-Dollar  Business  Day" means any  Domestic  Business Day in which
dealings in Dollar deposits are carried out in the London interbank  Euro-Dollar
market.

         "Euro-Dollar  Rate,"  applicable to any Monthly Interest Period,  means
that interest rate per annum equal to the sum of (i) the Adjusted LIBOR Rate for
such Monthly Interest Period,  plus (ii) nine-tenths of one percent (.90%). Each
such Euro-Dollar Rate shall remain in effect for the applicable Monthly Interest
Period and shall be  adjusted to a new  Euro-Dollar  Rate as of the first day of
the next Monthly Interest Period.

         "Euro-Dollar  Rate Loan" means a Revolving Loan made at the Euro-Dollar
Rate pursuant to Section 2.1.

         "Euro-Dollar  Reserve  Percentage"  means  for any day that  percentage
(expressed  as a decimal)  which is in effect on such day, as  prescribed by the
Board of  Governors  of the  Federal  Reserve  System  (or any  successor),  for
determining  the maximum  reserve  requirement  for a member bank of the Federal
Reserve System in respect of  "Eurocurrency  liabilities"  (or in respect of any
other category of liabilities  which includes deposits by reference to which the
interest  rate on  Euro-Dollar  Rate  Loans is  determined  or any  category  of
extensions of credit or other assets which includes loans by a non-United States
office of the Bank to United States residents). The Adjusted LIBOR Rate shall be
adjusted  automatically  on and as of the  effective  date of any  change in the
Euro-Dollar Reserve Percentage.

         "Event of Default" has the meaning set forth in Section 6.1.

         "Federal  Funds Rate" means,  for any day, the rate per annum  (rounded
upward,  if necessary,  to the next higher  1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve  System  arranged  by Federal  funds  brokers  on such day,  as
published by the Federal  Reserve Bank of New York on the Domestic  Business Day
next succeeding such day, provided that (i) if the day for which

251094.7/ 383.   840
                                                         5

<PAGE>



such rate is to be determined is not a Domestic  Business Day, the Federal Funds
Rate for such day shall be such rate on such  transactions on the next preceding
Domestic  Business Day as so published on the next succeeding  Domestic Business
Day,  and (ii) if such rate is not so published  for any day, the Federal  Funds
Rate for such day shall be the average  rate  charged to the Bank on such day on
such transactions, as determined by the Bank.

         "Fiscal Quarter" means any fiscal quarter of the Borrower.

         "Fiscal Year" means any fiscal year of the Borrower.

         "Fixed Charge  Coverage  Ratio" shall mean, for any fiscal period,  the
ratio which (A) the sum of Consolidated Net Income for such period plus interest
expense, provision for taxes and operating lease expense of the Borrower and its
Consolidated  Subsidiaries  for such  period,  bears to (B) the sum of  interest
expense  and  operating  lease  expense  of the  Borrower  and its  Consolidated
Subsidiaries for the same such period, all as determined under GAAP.

         "Franchise  Rights" shall mean all rights,  privileges and interests of
the  Borrower  and its  Consolidated  Subsidiaries  to own,  operate and develop
franchised  restaurants as a franchisee,  whether now or hereafter existing, and
whether  with  respect to the  operation of any  "Applebee's"  restaurants,  any
"Hardee's" restaurants or otherwise.

         "GAAP" means  generally  accepted  accounting  principles  applied on a
basis  consistent  with those which,  in accordance  with Section 1.2, are to be
used in making the calculations for purposes of determining  compliance with the
terms of this Agreement.

         "Guarantee"   or  "Guaranty"  by  any  Person  means  any   obligation,
contingent or otherwise,  of such Person directly or indirectly guaranteeing any
debt  or  other  obligation  of any  other  Person  and,  without  limiting  the
generality of the foregoing, any obligation,  direct or indirect,  contingent or
otherwise,  of such Person (i) to secure,  purchase or pay (or advance or supply
funds for the  purchase  or payment of) such debt or other  obligation  (whether
arising by virtue of  partnership  arrangements,  by agreement to keep-well,  to
purchase assets,  goods,  securities or services, to provide collateral security
to take-or-pay,  or to maintain financial statement  conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee of
such debt or other  obligation of the payment thereof or to protect such obligee
against loss in respect  thereof (in whole or in part),  provided  that the term
"Guarantee"  shall not include  endorsements  for  collection  or deposit in the
ordinary course of business.  The terms "Guarantee" or "Guaranty" used as a verb
has a corresponding meaning.

         "Hazardous  Materials"  includes,  without  limitation,  (a)  solid  or
hazardous  waste,  as defined in the Resource  Conservation  and Recovery Act of
1980,  42  U.S.C.  ss.  6901  et  seq.  and  its  implementing  regulations  and
amendments,  or in  any  applicable  state  or  local  law  or  regulation,  (b)
"hazardous substance," "pollutant," or "contaminant" as defined in CERCLA, or in
applicable  state  or  local  law or  regulation,  (c)  gasoline,  or any  other
petroleum product or by-product,  including,  crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or

251094.7/ 383.   840
                                                         6

<PAGE>



regulation, and (e) insecticides, fungicides, or rodenticides, as defined in the
Federal  Insecticide,  Fungicide,  and  Rodenticide  Act  of  1975,  or  in  any
applicable  state or local  law or  regulation,  as each such  Act,  statute  or
regulation may be amended from time to time.

         "Interest  Period"  means with  respect to each  Borrowing,  the period
commencing  on the date of such  Borrowing  and ending on the date on which such
Borrowing  is fully  paid or  converted  to a  Borrowing  of a  different  type;
provided that:

                  (a)  any  Interest  Period  (other  than  an  Interest  Period
         determined  pursuant to paragraph (b) below) which would  otherwise end
         on a day which is not a Domestic  Business Day shall be extended to the
         next succeeding Domestic Business Day;

                  (b) any Interest  Period which begins  before the  Termination
         Date and would  otherwise end after the  Termination  Date shall end on
         the Termination Date.

         "Lending  Office"  means the Bank's  office  located at its address set
forth on the signature  page hereof or such other office in the United States as
the  Bank may  hereafter  designate  as its  Lending  Office  by  notice  to the
Borrower.

         "LIBOR  Rate"  means,  for any  Euro-Dollar  Rate Loan for each Monthly
Interest Period,  the rate per annum determined on the basis of the offered rate
for deposits in Dollars of amounts equal or  comparable to the principal  amount
of such  Euro-Dollar  Rate Loan  offered for a term  comparable  to such Monthly
Interest Period,  which rate appears on the display designated as page "3750" of
the  Telerate  Service  (or such  other  page as may  replace  page 3750 of that
service or such other  service or  services as may be  nominated  by the British
Banker's  Association  for the purpose of displaying  London  interbank  offered
rates for U.S.  dollar  deposits),  determined  as of 10:00 A.M.,  New York City
time,  on the first day of such Monthly  Interest  Period,  provided that (i) if
more than one such offered  rate appears on such page,  the "LIBOR Rate" will be
the arithmetic average (rounded upward, if necessary, to the next higher 1/100th
of 1%) of such offered rates; (ii) if no such offered rates appear on such page,
the "LIBOR Rate" for such Monthly Interest Period will be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted
by not less than two (2) major banks in New York City,  selected by the Bank, at
approximately  10:00 A.M.,  New York City time, on the first day of such Monthly
Interest Period, for deposits in Dollars offered to leading European banks for a
period comparable to such Monthly Interest Period in an amount comparable to the
principal amount of such Euro-Dollar Loan.

         "Lien" means,  with respect to any asset, any mortgage,  deed to secure
debt, deed of trust, lien, pledge, charge, security interest,  security title or
other preferential arrangement, which has the practical effect of constituting a
security  interest or  encumbrance,  or  encumbrance or servitude of any kind in
respect  of such  asset to secure or assure  payment  of a debt or a  Guarantee,
whether by  consensual  agreement  or by  operation of statute or other law. For
purposes of this  Agreement,  the Borrower or any Subsidiary  shall be deemed to
own  subject to a Lien any asset which it has  acquired or holds  subject to the
interest of a vendor or

251094.7/ 383.   840
                                                         7

<PAGE>



lessor  under any  conditional  sale  agreement,  capital  lease or other  title
retention agreement relating to such asset.

         "Loan  Documents"  means  this  Agreement,  the  Note,  any  Subsidiary
Guaranty, any other documents evidencing or relating to the Revolving Loans, and
any other document, instrument, certificate or agreement delivered in connection
with  this  Agreement,  the  Note or the  Revolving  Loans,  as such  documents,
instruments, certificates and agreements may be amended or modified from time to
time.

         "Margin  Stock" means "margin  stock" as defined in Regulations G, T, U
or X.

         "Material  Adverse  Effect"  means,  with  respect to any  event,  act,
condition or occurrence of whatever nature (including any adverse  determination
in any litigation,  arbitration,  or governmental  investigation or proceeding),
whether  singly or in conjunction  with any other event or events,  act or acts,
condition or conditions, occurrence or occurrences, whether or not related, that
such event or events, act or acts, condition or conditions, and/or occurrence or
occurrences  results in a material  adverse change in, or has a material adverse
effect  upon,  any of (a) the  financial  condition,  operations,  business,  or
properties of the Borrower and its Consolidated  Subsidiaries  taken as a whole,
(b) the rights and remedies of the Bank under the Loan Documents, or the ability
of the Borrower to perform its obligations  under the Loan Documents to which it
is a party, as applicable,  or (c) the legality,  validity or  enforceability of
this Agreement, the Note or any Loan Document.

         "Monthly  Interest Period" shall mean, with respect to Euro-Dollar Rate
Borrowings, the period beginning on the first day of a calendar month and ending
on the last day of such calendar month.

          "Multiemployer  Plan"  shall  have the  meaning  set forth in  Section
4001(a)(3) of ERISA.

         "Note" means the promissory note, dated of even date herewith, from the
Borrower to the Bank in the original amount of the Commitment and evidencing the
Revolving Loans,  together with all amendments,  consolidations,  modifications,
renewals, and supplements thereto.

         "Notice of Borrowing" has the meaning set forth in Section 2.2.1.

         "Participant" has the meaning set forth in Section 8.6.2.

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

         "Person"  means  an  individual,  a  corporation,  a  partnership,   an
unincorporated  association,  a  trust  or any  other  entity  or  organization,
including,  but not limited to, a  government  or  political  subdivision  or an
agency or instrumentality thereof.

251094.7/ 383.   840
                                                         8

<PAGE>



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

         "Prime Rate" refers to that interest rate so denominated and set by the
Bank from time to time as an interest rate basis for borrowings.  The Prime Rate
is but one of several  interest  rate bases used by the Bank.  The Bank lends at
interest rates above and below the Prime Rate.

         "Properties"  means  all  property  owned,  leased or  otherwise  used,
operated or occupied by the Borrower or any Subsidiary,  wherever  located,  and
whether real property or personal property.

         "Purchase  Money  Liens"  means Liens  securing  the  repayment  of any
purchase money debt permitted  hereunder incurred to finance the purchase of any
Property hereafter acquired by the Borrower or any Consolidated  Subsidiary,  so
long as such Liens are limited  solely to the Property so acquired,  secure only
the purchase money debt so incurred and are  terminated  upon payment in full of
such purchase money debt.

         "Redeemable  Preferred  Stock" of any Person means any preferred  stock
issued by such Person which is at any time prior to the Termination  Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.

         "Regulation  D" means  Regulation  D of the Board of  Governors  of the
Federal  Reserve  System,  as in  effect  from time to time,  together  with all
official rulings and interpretations issued thereunder.

         "Regulation  G" means  Regulation  G of the Board of  Governors  of the
Federal  Reserve  System,  as in  effect  from time to time,  together  with all
official rulings and interpretations issued thereunder.

         "Regulation  T" means  Regulation  T of the Board of  Governors  of the
Federal  Reserve  System,  as in  effect  from time to time,  together  with all
official rulings and interpretations issued thereunder.

         "Regulation  U" means  Regulation  U of the Board of  Governors  of the
Federal  Reserve  System,  as in  effect  from time to time,  together  with all
official rulings and interpretations issued thereunder.


251094.7/ 383.   840
                                                         9

<PAGE>



         "Regulation  X" means  Regulation  X of the Board of  Governors  of the
Federal  Reserve  System,  as in  effect  from time to time,  together  with all
official rulings and interpretations issued thereunder.

         "Revolving Loan" means a Base Rate Loan or a Euro-Dollar Rate Loan made
by the Bank pursuant to Section 2.1.

         "Sale-Leaseback   Transaction"  means  any  sale-leaseback  transaction
involving the sale of any assets or properties of the Borrower or any Subsidiary
to any other  Person  and the  leasing  back of such  asset or  property  by the
Borrower or any Subsidiary.

         "Senior Note Indenture"  means the Indenture of Trust,  dated as of May
1, 1996,  between  SunTrust Bank and the Borrower,  and including all applicable
covenants with respect to the Senior Notes contained in the Prospectus, dated as
of May 6, 1996, as supplemented May 23, 1996, for the Senior Notes.

          "Senior  Notes" means the Borrower's  $125,000,000  9.75% Senior Notes
due June 1, 2006.

         "Solvent"  means as to any Person,  that such Person (i) owns  Property
whose fair saleable value is greater than the amount required to pay all of such
Person's total debts, direct or indirect,  contingent or otherwise, (ii) is able
to pay all of such  debts as and when such debts  mature  and (iii) has  capital
sufficient to carry on the business and  transactions in which it is engaged and
all business and transactions in which it is about to engage.

         "Stockholders'  Equity" means, at any time, the stockholders' equity of
the Borrower and its Consolidated Subsidiaries, as set forth or reflected on the
most recent  consolidated  balance  sheet of the Borrower  and its  consolidated
Subsidiaries  prepared in accordance  with GAAP,  but  excluding any  Redeemable
Preferred  Stock  of the  Borrower  or any  of  its  Consolidated  Subsidiaries.
Shareholders'  Equity generally would include, but not be limited to (i) the par
or stated value of all outstanding  Capital Stock,  (ii) capital surplus,  (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock,  (B) valuation  allowances,  (C)  receivables  due from an employee stock
ownership plan, and (D) employee stock ownership plan debt Guarantees.

         "Subsidiary"  means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons  performing similar functions are at the
time directly or indirectly owned by the Borrower.

         "Synthetic  Lease"  shall  mean any  agreement,  or series  of  related
agreements,  between  the  Borrower  and one or more  other  parties  which  are
intended to be treated, for accounting purposes,  as an operating lease with the
Borrower as lessee and, for tax purposes,  as a financing  arrangement  with the
Borrower as debtor.


251094.7/ 383.   840
                                                        10

<PAGE>



         "Termination Date" has the meaning set forth in Section 2.7.1.

         "Third Parties" means all leases, subleases,  licensees and other users
of the  Properties,  excluding  those users of the  Properties  in the  ordinary
course of the Borrower's business and on a temporary basis.

         "Total Funded Debt" shall mean that portion of the total liabilities of
the  Borrower  and its  Consolidated  Subsidiaries  at any date equal to the sum
(without  duplication)  of: (i) all indebtedness for borrowed money at such date
(including,  for  this  purpose,  indebtedness  in  respect  of any  outstanding
bankers' acceptances);  plus (ii) all Capitalized Lease Obligations  outstanding
at such date;  plus  (iii) all  debts,  liabilities  and  obligations  which are
Guaranteed by the Borrower or any Consolidated  Subsidiary as of such date; plus
(iv) all debts,  liabilities or obligations at such date to any seller  incurred
to pay the  deferred  price of property or services  having a deferred  purchase
price of One Million  Dollars  ($1,000,000)  or more,  excepting,  in any event,
trade accounts  payable  arising in the ordinary course of business and purchase
options prior to their exercise; plus (v) all debts, liabilities and obligations
outstanding  at  such  date  in  respect  of  any  Synthetic  Leases,  excluding
therefrom,  however, any debts, liabilities or obligations under the DR Holdings
Lease up to a maximum thereof of Twenty-Eight Million Dollars  ($28,000,000.00),
it being  understood  and agreed  that,  subject to such  limitation,  no debts,
liabilities or obligations (including any constituting  Guaranteed  Obligations)
under the DR Holding  Lease shall be included in the  definition of Total Funded
Debt.

         "Transferee" has the meaning set forth in Section 8.6.4.

         "Unfunded Vested  Liabilities"  means,  with respect to any Plan at any
time,  the  amount  (if  any) by  which  (i) the  present  value  of all  vested
nonforfeitable  benefits  under such Plan  exceeds (ii) the fair market value of
all Plan assets  allocable to such benefits,  all determined as of the then most
recent  valuation  date for such Plan,  but only to the extent  that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.

         "Unused Commitment" means at any date an amount equal to the Commitment
less the aggregate outstanding principal amount of the Revolving Loans.

         "Voluntary  Store  Closing"  shall  mean any  voluntary  closing by the
Borrower or any Subsidiary of any franchised restaurant location in the ordinary
course of its  business  which  does not cause,  or result  in, the  forfeiture,
suspension, loss, rejection, disclaimer, impairment, curtailment, alteration of,
or other adverse  effect on, any Franchise  Rights with respect to the operation
or development of any other existing or future franchised restaurant location or
locations.

         "Wachovia"  means  Wachovia Bank of Georgia,  National  Association,  a
national banking association, and its successors.



                                                        11

<PAGE>



         "Wachovia Credit Agreement" means the Credit Agreement,  dated February
27, 1996, among Borrower, Wachovia, as agent, and the banks that are signatories
thereto.

         SECTION 1.2.               Accounting Terms and Determinations.

         Unlike otherwise specified herein, all terms of an accounting character
used herein shall be interpreted,  all accounting determinations hereunder shall
be made, and all financial  statements  required to be delivered hereunder shall
be prepared in accordance with GAAP,  applied on a basis consistent  (except for
changes  concurred  with by the  Borrower's  independent  public  accountants or
otherwise  required  by a change  in GAAP)  with the then  most  recent  audited
consolidated   financial   statements  of  the  Borrower  and  its  Consolidated
Subsidiaries  delivered to the Bank; provided,  however, that upon any change in
GAAP material to Borrower occurring hereafter,  the Bank shall have the right to
require either that  conforming  adjustments be made to any financial  covenants
hereafter set forth, or the components thereof,  affected by such change or that
the  Borrower  report  its  financial  condition  based  on  GAAP  as in  effect
immediately prior to such change occurring.

         SECTION 1.3.               References.

         Unless otherwise indicated, references in this Agreement to "Articles,"
"Exhibits,"  "Schedules,"  "Sections" and other  Subdivisions  are references to
articles, exhibits, schedules, sections and other subdivisions hereof.

         SECTION 1.4.               Use of Defined Terms.

         All  terms  defined  in this  Agreement  shall  have the  same  defined
meanings when used in any of the other Loan Documents,  unless otherwise defined
therein or unless the context shall require otherwise.

         SECTION 1.5.               Terminology.

         All  personal  pronouns  used in this  Agreement,  whether  used in the
masculine,  feminine or neuter  gender,  shall  include all other  genders;  the
singular  shall  include the plural,  and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience  only, and
neither limit nor amplify the provisions of this Agreement.

ARTICLE 2.  THE CREDIT

         SECTION 2.1.               Commitment to Lend.

         The Bank agrees,  on the terms and conditions set forth herein, to make
Revolving Loans to the Borrower from time to time before the  Termination  Date;
provided that, immediately after each such Revolving Loan is made, the aggregate
principal  amount  of  Revolving  Loans  shall  not  exceed  the  amount  of the
Commitment,  as the same may be reduced  from time to time  pursuant  to Section
2.7. Each Borrowing under this Section shall be in an

251094.7/ 383.   840
                                                        12

<PAGE>



aggregate principal amount of One Million Dollars  ($1,000,000.00) or any larger
multiple of Five Hundred  Thousand Dollars  ($500,000.00)  (except that any such
Borrowing may be in the aggregate amount of the Unused Commitment).  Withing the
foregoing limits,  the Borrower may borrow under this Section,  repay or, to the
extent  permitted by Section 2.8, prepay Revolving Loans and reborrow under this
Section at any time or from time to time before the Termination Date.

         SECTION 2.2.               Method of Borrowing.

          2.2.1.  Notice to Bank.  The  Borrower  shall give the Bank  notice (a
"Notice of Borrowing"), which shall be substantially in the form of Exhibit
A, not later  than 11:00 a.m.  (Atlanta,  Georgia  time) on the day of each
Borrowing, specifying:

                  (a)      the date of such Borrowing,

                  (b)      the aggregate amount of such Borrowing, and

                  (c) whether such  Borrowing  is to be a Base Rate Loan or  
                      Euro-Dollar Rate Loan.

          2.2.2.  When  Revolving  Loans Made.  Not later than 1:00 p.m.
(Atlanta, Georgia time) on the date of each Borrowing, the Bank shall (except as
provided in Section 2.2.3) make available  such  Borrowing,  in Federal or other
funds immediately  available in Atlanta,  Georgia, to the Borrower at the Bank's
Address unless the Bank  determines that any applicable  condition  specified in
Article 3 has not been satisfied.

          2.2.3.  Application of Certain  Proceeds.  If the Bank makes a
Revolving  Loan  hereunder on a day on which the Borrower is to repay all or any
part of an outstanding  Revolving Loan, the Bank shall apply the proceeds of its
new  Revolving  Loan to make  such  repayment  and only an  amount  equal to the
difference  (if any)  between the amount  being  borrowed  and the amount  being
repaid shall be made available to the Borrower as provided in Section 2.2.2.

          2.2.4.  No Borrowing  Upon  Default.  Notwithstanding  anything to the
contrary  contained in this  Agreement,  no Borrowing  may be made if there 
shall have  occurred a Default,  which Default shall not have been cured or
waived.

         SECTION 2.3.               Note.

          2.3.1.  Single  Note.  The  Revolving  Loans shall be evidenced by the
Note,  payable  to the  order of the Bank for the  account  of its  Lending
Office,  in an  amount  equal  to  the  original  principal  amount  of the
Commitment.

          2.3.2.  Endorsement  to Note.  The Bank may record  and,  prior to any
transfer of the Note shall,  endorse on the schedule forming a part thereof
appropriate notations to

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                                                        13

<PAGE>



evidence the date,  amount and  maturity of each  Revolving  Loan,  the date and
amount of each payment of principal  made by the Borrower  with respect  thereto
and whether such Revolving  Loan is a Base Rate Loan or  Euro-Dollar  Rate Loan,
and such  schedule  shall  constitute  rebuttable  presumptive  evidence  of the
principal amount owing and unpaid on the Note;  provided that the failure of the
Bank to make any such recordation or endorsement shall not affect the obligation
of the  Borrower  hereunder  or under the Note.  The Bank is hereby  irrevocably
authorized  by the  Borrower  so to endorse the Note and to attach to and make a
part of the Note a continuation of any such schedule as and when required.

         SECTION 2.4.               Maturity of Revolving Loans.

         Each  Revolving  Loan included in any Borrowing  shall mature,  and the
principal  amount  thereof  shall  be due and  payable,  on the  last day of the
Interest Period applicable to such Borrowing.

         SECTION 2.5.               Interest Rates.

         Subject to the terms of Section 7.1:

                  2.5.1.  Base  Rate  Loans.  Each Base  Rate  Loan  shall  bear
interest on the outstanding  principal  amount thereof,  for the Interest Period
applicable thereto, at a rate per annum equal to the Base Rate, as it may change
from time to time during such Interest  Period.  Such interest  shall be payable
monthly,  in  arrears,  on the last day of each  calendar  month,  in respect of
interest accrued in such month (or portion thereof), commencing on September 30,
1996 (with the first  payment  date to cover the period  from the  Closing  Date
until September 30, 1996),  until maturity and thereafter on demand. Any overdue
principal of and, to the extent permitted by applicable law, overdue interest on
any Base Rate Loan shall bear  interest,  payable on demand,  for each day until
paid at a rate per annum equal to the Default Rate.

                  2.5.2.  Euro-Dollar  Rate Loans.  Each  Euro-Dollar  Rate Loan
shall  bear  interest  on  the  outstanding  principal  amount  thereof  at  the
Euro-Dollar  Rate for such Monthly  Interest  Period (or portion  thereof during
which it is outstanding). If a Euro-Dollar Rate Loan shall be outstanding during
more than one calendar month, the interest rate thereon shall be adjusted to the
new Euro-Dollar Rate as of the first day of the next succeeding Monthly Interest
Period during which it is  outstanding.  Such interest shall be payable for each
Interest  Period on the last day thereof.  Any overdue  principal of and, to the
extent  permitted by law,  overdue  interest on any Euro-Dollar  Rate Loan shall
bear  interest,  payable on demand,  for each day until paid at a rate per annum
equal to the Default  Rate;  provided that the mere  application  of the Default
Rate to these Revolving Loans shall not give rise to the breakage of an Interest
Period, but only an increased margin applicable to these Revolving Loans.

          2.5.3. Bank to Determine.  The Bank shall determine each interest rate
applicable to the  Revolving  Loans  hereunder.  The Bank shall give prompt
notice to the

251094.7/ 383.   840
                                                        14

<PAGE>



Borrower  by  telecopier  of  each  rate  of  interest  so  determined,  and its
determination thereof shall be conclusive in the absence of manifest error.

                  2.5.4.  Savings Clause. In no contingency or event whatsoever,
whether by reason of advancement of the proceeds hereof or otherwise,  shall the
amount  paid or  agreed  to be paid to the  Bank  for the  use,  forbearance  or
detention of money advanced hereunder exceed the highest lawful rate permissible
under  any law  which a court of  competent  jurisdiction  may  deem  applicable
hereto.  In the event that such a court  determines that the Bank has charged or
received interest  hereunder in excess of the highest applicable rate, such rate
shall  automatically  be reduced to the maximum rate permitted by applicable law
and the Bank shall promptly refund to the Borrower any interest  received by the
Bank in excess of the maximum  lawful rate or, if so requested by the  Borrower,
shall apply such excess to the  principal  balance of the Note. It is the intent
hereof  that the  Borrower  not pay or  contract  to pay,  and that the Bank not
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the  Borrower  under  applicable
law.

         SECTION 2.6.               Closing Fee.

         The Borrower  shall pay to the Bank on the Closing Date a fully earned,
non-refundable closing fee of $15,000.

         SECTION 2.7.               Termination or Reduction of Commitment.

                  2.7.1.  Termination  of  Commitments.   The  Commitment  shall
terminate on April 30, 1997 (the  "Termination  Date"),  and any Revolving Loans
then  outstanding  (together  with accrued  interest  thereon)  shall be due and
payable on such date. In addition to the foregoing,  the Borrower shall have the
right  to  terminate  the  Commitment  at any  time if no  Borrowings  are  then
outstanding or all Borrowings are repaid or prepaid in accordance with the terms
of  Section  2.9,  as the case may be,  on or prior to such  early  termination,
provided  that (i) the  Borrower  shall  have  given at least  one (1)  Domestic
Business Day's advance  written notice to the Bank of such election and (ii) any
such notice of termination shall be irrevocable once made.

                  2.7.2. Mandatory Reduction and Reinstatement of Commitment. If
at any time the  Borrower's  "Consolidated  Fixed  Charge  Coverage  Ratio"  (as
defined in the Senior  Note  Indenture)  is equal to or less than  2.5:1.0,  the
Commitment shall be automatically  and without further action on the part of the
Bank, the Borrower or any other Person,  reduced to $20,000,000  minus (but only
prior to the termination of the BB&T Agreement and all  obligations  thereunder)
the outstanding  amount under the BB&T  Agreement.  At such time as the Borrower
provides a written  certification to the Bank that the  "Consolidated  Cash Flow
Coverage Ratio" (as defined in the Senior Note Indenture)  exceeds 2.5:1.0,  the
Commitment  shall  thereafter  be increased to  $25,000,000  without any further
action on the part of the Bank, the Borrower or any other Person.


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                                                        15

<PAGE>



         SECTION 2.8.               Optional Prepayments.

         The Borrower  may, on any Business  Day, upon giving notice to the Bank
by not later than 11:00 A.M.  (Atlanta,  Georgia time) on such Business Day, and
making payment to the Bank, on such Business Day of any compensation required by
Section 7.5,  prepay any Borrowing in whole at any time, or from time to time in
part in  amounts  aggregating  at least One  Million  Dollars  ($1,000,000)  and
integral  multiples of Five Hundred Thousand Dollars  ($500,000),  by paying the
principal  amount to be prepaid  together with accrued  interest  thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay the
Revolving Loans.

         SECTION 2.9.               Mandatory Prepayments.

         On each date, if any, on which the  Commitment is terminated or reduced
pursuant to Section  2.7,  the  Borrower  shall  repay or prepay such  principal
amount of the outstanding  Revolving  Loans, if any, as may be necessary so that
after such payment the aggregate  unpaid principal amount of the Revolving Loans
is  reduced  to zero,  in the case of any  termination,  or does not  exceed the
aggregate  amount  of  the  Commitment  as  then  reduced,  in the  case  of any
reduction,  plus,  in  each  case,  accrued  interest  thereon  to the  date  of
prepayment and any compensation required by Section 7.5.

         SECTION 2.10.              General Provisions as to Payments.

                  2.10.1.  Timing.  The  Borrower  shall  make each  payment  of
principal  of, and interest on, the Revolving  Loans and of any fees  hereunder,
not later  than  2:00  P.M.  (Atlanta,  Georgia  time) on the date when due,  in
Federal or other funds immediately available in Atlanta,  Georgia, to the Bank's
Address.

          2.10.2.  Next  Banking Day.  Whenever any payment of principal  of, or
     interest  on, any Loans or of any fees shall be due on a day which is not a
     Domestic  Business  Day, the date for payment  thereof shall be extended to
     the next succeeding Domestic Business Day.

         SECTION 2.11.              Computation of Interest.

         Interest  on the  Revolving  Loans  shall be computed on the basis of a
year of 360 days and paid for the actual number of days  elapsed,  calculated as
to each  Interest  Period  from and  including  the  first  day  thereof  to but
excluding the last day thereof.

ARTICLE 3.  CONDITIONS TO BORROWINGS

         SECTION 3.1.               Conditions to First Borrowing.

         The  obligation of the Bank to make the initial  Revolving  Loan on the
occasion of the first Borrowing is subject to the satisfaction of the conditions
set forth in Section 3.2 and receipt by the Bank of the following:

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<PAGE>



          3.1.1. This Agreement.  A duly executed  counterpart of this Agreement
     signed by the Borrower;

          3.1.2.  Note.  The duly executed Note complying with the provisions of
     Section 2.3;

          3.1.3.  Opinion.  An  opinion  (together  with any  opinions  of local
     counsel  relied on therein) of legal counsel for the Borrower,  dated as of
     the Closing Date, in form and substance satisfactory to the Bank;

          3.1.4. Closing  Certificate.  A certificate  ("Closing  Certificate"),
     dated as of the Closing  Date, in form and  substance  satisfactory  to the
     Bank, signed by the chief financial officer of the Borrower,  to the effect
     that (i) no Default has occurred and is continuing on the date of the first
     Borrowing  and (ii) the  representations  and  warranties  of the  Borrower
     contained in Article 4 are true on and as of the Closing Date;

          3.1.5.  Other  Documents.  All documents which the Bank may reasonably
     request relating to the existence of the Borrower,  the corporate authority
     for and the  validity  of this  Agreement,  the  Note  and the  other  Loan
     Documents, and any other matters relevant hereto, all in form and substance
     satisfactory to the Bank, including,  without limitation,  a certificate of
     incumbency  of the  Borrower,  signed  by  the  Secretary  or an  Assistant
     Secretary of the Borrower,  certifying as to the names, true signatures and
     incumbency of the officer or officers of the Borrower authorized to execute
     and deliver  the Loan  Documents,  and  certified  copies of the  following
     items: (i) the Borrower's  Articles of  Incorporation,  (ii) the Borrower's
     Bylaws,  (iii) a  certificate  of the  Secretary  of State of the  State of
     Georgia as to the good  standing  of the  Borrower in the State of Georgia,
     and (iv)  the  action  taken by the  Board  of  Directors  of the  Borrower
     authorizing  the  Borrower's  execution,  delivery and  performance of this
     Agreement, the Note and the other Loan Documents to which the Borrower is a
     party;

          3.1.6. Borrowing Notice. A Notice of Borrowing.

         SECTION 3.2.               Conditions to All Borrowings.

         The  obligation of the Bank to make a Revolving Loan on the occasion of
each Borrowing is subject to the satisfaction of the following conditions:

          3.2.1. Notice. Receipt by the Bank of a Notice of Borrowing;

          3.2.2. No Default.  The fact that,  immediately  before and after such
     Borrowing, no Default shall have occurred and be continuing;

          3.2.3. Truth of Representations. The fact that the representations and
     warranties of the Borrower  contained in Article 4 of this Agreement  shall
     be true on and as of the date of such Borrowing; and


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<PAGE>



          3.2.4.  Not  Overadvance.   The  fact  that,  immediately  after  such
     Borrowing,  the  aggregate  outstanding  principal  amount of the Revolving
     Loans will not exceed the amount of the Commitment.

Each Borrowing  hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in Sections
3.2.2, 3.2.3 and 3.2.4.

ARTICLE 4.  REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants that:

         SECTION 4.1.               Corporate Existence and Power.

         Each  of  the  Borrower  and  each  Subsidiary  is a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its  incorporation,  is duly qualified to transact  business in
every jurisdiction  where, by the nature of its business,  such qualification is
necessary,   and  has  all  corporate  powers  and  all  governmental  licenses,
authorizations,  consents and approvals required to carry on its business as now
conducted,  except  where the  failure to so qualify,  or obtain such  licenses,
authorizations,  consents or approvals could not be reasonably  expected to have
or cause a Material Adverse Effect.

         SECTION 4.2.               Corporate and Governmental Authorization: No
                                    Contravention.

         The  execution,  delivery  and  performance  by the  Borrower  and each
Subsidiary which is party thereto of this Agreement, the Note and the other Loan
Documents (i) are within the Borrower's and such Subsidiary's  corporate powers,
(ii) have been duly authorized by all necessary corporate action,  (iii) require
no action by or in respect of or filing with, any governmental  body,  agency or
official,  (iv) do not contravene,  or constitute a default under, any provision
of applicable law or regulation or of the articles of  incorporation  or by-laws
of the Borrower or such Subsidiary or, to the best of the Borrower's  knowledge,
of  any  material  agreement,  judgment,  injunction,  order,  decree  or  other
instrument binding upon the Borrower or any of its Subsidiaries,  and (v) do not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.

         SECTION 4.3.   Binding Effect.

         This  Agreement  constitutes  a  valid  and  binding  agreement  of the
Borrower  enforceable in accordance  with its terms,  and the Note and the other
Loan  Documents,  when executed and delivered in accordance with this Agreement,
will  constitute  valid  and  binding  obligations  of  the  Borrower  and  each
Subsidiary party thereto  enforceable in accordance with their respective terms,
provided that the  enforceability  hereof and thereof is subject in each case to
general  principles  of equity and to  bankruptcy,  insolvency  and similar laws
affecting the enforcement of creditors' rights generally.

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                                                        18

<PAGE>



          SECTION 4.4.   Financial Information: No Material Adverse Effect.

         The  audited  balance  sheet  of  the  Borrower  and  its  Consolidated
Subsidiaries  as of December  31,  1995,  and the related  consolidated  audited
statements  of income,  shareholders'  equity and cash flows of the Borrower and
its Consolidated  Subsidiaries  for the Fiscal Year then ended,  copies of which
have been delivered to the Bank, and the unaudited  financial  statements of the
Borrower  and its  Consolidated  Subsidiaries  as of and for the Fiscal  Quarter
ended closest to June 30, 1996, copies of which have been delivered to the Bank,
fairly present,  in conformity with GAAP, the financial position of the Borrower
and its  Consolidated  Subsidiaries  as of such  dates  and the  results  of its
operations  and cash  flow for such  periods  stated;  provided,  that,  (i) the
interim  statements remain subject to normal year-end audit adjustments and (ii)
during the term of this Agreement after the Closing Date, future representations
as to the  matters  set forth in this  sentence  shall be deemed to refer to the
most recent financial statements delivered pursuant to Sections 5.1.1 and 5.1.2.
Since December 31, 1995, there has been no event,  act,  condition or occurrence
having or which could be expected to have a Material Adverse Effect,  except for
matters  disclosed  in the  quarterly  financial  statements  referred to above;
provided  that during the term of this  Agreement  following  the Closing  Date,
future  representations as to matters set forth in this sentence shall be deemed
to  refer  to the  last day of the  most  recent  audited  financial  statements
delivered by the Borrower pursuant to Section 5.1.1.

         SECTION 4.5.     No Litigation.

         There is no action,  suit or proceeding pending, or to the knowledge of
the  Borrower  threatened,  against  or  affecting  the  Borrower  or any of its
Subsidiaries  before any court or arbitrator or any governmental body, agency or
official which could have a Material Adverse Effect or which in any manner draws
into  question  the  validity of, or could impair the ability of the Borrower to
perform its obligations under, this Agreement, the Note or any of the other Loan
Documents.

         SECTION 4.6.     Compliance with Laws Generally; Compliance with ERISA.

         The  Borrower and each  Subsidiary  are in  compliance  in all material
respects  with  applicable  laws   (including,   but  not  limited  to,  ERISA),
regulations and similar requirements of governmental authorities (including, but
not limited to, PBGC),  non-compliance with which could have or cause a Material
Adverse Effect, except where the necessity of such compliance is being contested
in good faith through  appropriate  proceedings.  To the best of the  Borrower's
knowledge,  (i) the  Borrower  and each  member  of the  Controlled  Group  have
fulfilled their respective  obligations  under the minimum funding  standards of
ERISA  and the Code  with  respect  to each  Plan and are in  compliance  in all
material  respects  with the  presently  applicable  provisions of ERISA and the
Code,  and have not incurred any  liability to the PBGC or a Plan under Title IV
of ERISA;  and (ii) neither the Borrower nor any member of the Controlled  Group
is or ever has been obligated to contribute to any Multiemployer Plan.


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                                                        19

<PAGE>



         SECTION 4.7.      Taxes.

         There have been filed on behalf of the  Borrower  and its  Subsidiaries
all  federal,  state and local  income,  excise,  property and other tax returns
which  are  required  to be filed by them and all  taxes  due  pursuant  to such
returns or pursuant to any  assessment  received by or on behalf of the Borrower
or any Subsidiary have been paid,  except for amounts that either are immaterial
or are being disputed in good faith and by appropriate proceedings. The charges,
accruals  and  reserves on the books of the  Borrower  and its  Subsidiaries  in
respect  of taxes or other  governmental  charges  are,  in the  opinion  of the
Borrower, adequate.

         SECTION 4.8.       Subsidiaries.

         As of the Closing Date,  the Borrower has no  Subsidiaries,  except for
the  Subsidiaries  set forth on  Schedule  4.8,  all of which  are  Consolidated
Subsidiaries.

         SECTION 4.9.       Not a Holding Company, Public Utility, Investment
                            Company, Investment Adviser.

         Neither the Borrower nor any  Subsidiary  is a "holding  company," or a
"subsidiary  company" of a "holding  company," or an  "affiliate"  of a "holding
company"  or of a  "subsidiary  company"  of a "holding  company,"  or a "public
utility,"  within the meaning of the Public Utility Holding Company Act of 1935,
as amended;  or a "public  utility" within the meaning of the Federal Power Act,
as  amended;  or  an  "investment  company"  or a  company  "controlled"  by  an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended;  or an  "investment  adviser"  within the meaning of the  Investment
Advisers Act of 1940, as amended.

         SECTION 4.10.      Ownership of Property; Liens.

         The Borrower owns  Properties,  or interests in Properties,  sufficient
for the conduct of its business;  and none of such  Properties is subject to any
Lien except as permitted in Section 5.7.

         SECTION 4.11.      No Default.

         Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any agreement,  instrument or undertaking to which it is a party
or by  which it or any of its  Property  is bound  which  could  have or cause a
Material Adverse Effect. No Default has occurred and is continuing.

         SECTION 4.12.      Full Disclosure.

         All written  information and, to the best of the Borrower's  knowledge,
all other  information,  heretofore  furnished  by the  Borrower to the Bank for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all such

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                                                        20

<PAGE>



information  hereafter  furnished  by the  Borrower  to the Bank will be,  true,
accurate and complete in every material respect or based on reasonable estimates
on the date as of which such  information  is stated or certified.  The Borrower
has disclosed to the Bank in writing any and all facts which could reasonably be
expected to have or cause a Material Adverse Effect.

         SECTION 4.13.      Environmental Matters.

         To the best of the Borrower's  knowledge,  (i) neither the Borrower nor
any  Subsidiary is subject to any  Environmental  Liability  which could have or
cause a Material  Adverse Effect and neither the Borrower nor any Subsidiary has
been  designated  as a potentially  responsible  party under CERCLA or under any
state statute  similar to CERCLA.  None of the Properties  located in the United
States, owned by either the Borrower or a Subsidiary, has been identified on any
current or proposed (A) National  Priorities  List under 40 C.F.R.  ss. 300, (B)
CERCLIS  list or (C) any list arising  from a state  statute  similar to CERCLA;
(ii) to the best of the Borrower's  knowledge,  no Hazardous Materials have been
or  are  being  used,  produced,  manufactured,  processed,  treated,  recycled,
generated,  stored,  disposed of, managed or otherwise handled at, or shipped or
transported to or from the  Properties or are otherwise  present at, in or under
the Properties, owned or operated by either the Borrower or a Subsidiary, or, to
the best of the  knowledge  of the  Borrower,  at or from any  adjacent  site or
facility, except for Hazardous Materials, such as cleaning solvents,  pesticides
and other materials used, produced, manufactured,  processed, treated, recycled,
generated,  stored,  disposed of, managed,  or otherwise handled in the ordinary
course of business in compliance with all applicable Environmental Requirements;
and  (iii)  to the  best  of the  Borrower's  knowledge,  the  Borrower  and its
Subsidiaries are in compliance with all Environmental Requirements in connection
with the  ownership,  use and operation of the Properties and the Borrower's and
such Subsidiary's respective businesses.

         SECTION 4.14.      Capital Stock.

         All Capital Stock, debentures, bonds, notes and all other securities of
the Borrower and its  Subsidiaries  presently issued and outstanding are validly
and properly  issued in accordance with all applicable  laws,  including but not
limited  to,  the  "Blue  Sky" laws of all  applicable  states  and the  federal
securities laws.

         SECTION 4.15.      Margin Stock.

         Neither  the   Borrower  nor  any  of  its   Subsidiaries   is  engaged
principally,  or as  one  of  its  important  activities,  in  the  business  of
purchasing  or carrying  any Margin  Stock,  and no part of the  proceeds of any
Revolving  Loan will be used to purchase or carry any Margin  Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock,  or
be used for any  purpose  which  violates,  or which  is  inconsistent  with the
provisions of, Regulations G, T, U or X.


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                                                        21

<PAGE>



         SECTION 4.16.      Solvency.

         After giving effect to the execution and delivery of the Loan Documents
and the making of the Revolving Loans under this Agreement, the Borrower will be
Solvent.

         SECTION 4.17.              Possession of Franchises, Licenses, Etc.

         The Borrower and its  Subsidiaries  possess to the extent  material all
franchises,  certificates,  licenses,  permits  and  other  authorizations  from
governmental  and  political  subdivisions  or regulatory  authorities,  and all
patents,  trademarks,  service  marks,  trade  names,  copyrights,   franchises,
licenses and other rights that are  necessary  for  ownership,  maintenance  and
operation of any of their respective material Properties and assets, and neither
the Borrower nor any of its Subsidiaries is in violation of any thereof,  which,
individually  or in the  aggregate,  would  or might  have or  cause a  Material
Adverse Effect.  Without  limiting the generality of the foregoing,  and, in any
event, the Borrower and its Subsidiaries  possess all Franchise Rights necessary
for the  ownership,  operation  and  development  of its (or  their)  franchised
restaurant  business as  conducted,  or  contemplated  to be  conducted,  by the
Borrower and such Subsidiaries,  including,  without limitation,  in the case of
"Applebee's"  restaurants,  franchise agreements for each franchised  restaurant
location and  exclusive  development  rights for each  designated  area in which
franchised restaurants are located or contemplated to be located.

         SECTION 4.18.              Insurance.

         The Borrower and each of its Subsidiaries  maintains adequate insurance
on, and in respect of the ownership and operation of, its Properties in at least
such amounts and against at least such risks as are usually  insured  against in
the same general areas by companies of established repute engaged in the same or
similar business.

ARTICLE 5.  COVENANTS

         The  Borrower  agrees  that,  so long as the  Bank  has any  Commitment
hereunder or any amount payable hereunder or under the Note remains unpaid:

         SECTION 5.1.               Information.

         The Borrower will deliver to the Bank:

                  5.1.1.  Annual  Audit.  As soon as available  and in any event
within  ninety  (90) days  after the end of each  Fiscal  Year,  a  consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such   Fiscal  Year  and  the  related   consolidated   statements   of  income,
shareholders'  equity and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous fiscal year, all certified
by independent public accountants of nationally  recognized standing,  with such
certification to be free of any material exceptions and qualifications; provided
that, the information required by

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                                                        22

<PAGE>



this paragraph may be satisfied by delivery of information pursuant to
Section 5.1.5 or Section 5.1.6.

                  5.1.2.  Interim  Statements.  As soon as available  and in any
event within fifty (50) days after the end of each of the first three (3) Fiscal
Quarters of each Fiscal Year, a  consolidated  balance sheet of the Borrower and
its  Consolidated  Subsidiaries  as of the end of such  Fiscal  Quarter  and the
related statement of income and statement of cash flows for such quarter and for
the portion of the Fiscal Year ended at the end of such  quarter,  setting forth
in each case in comparative form the figures for the  corresponding  quarter and
the corresponding portion of the previous Fiscal Year, all certified (subject to
normal  year-end   adjustments)  as  to  fairness  of  presentation,   GAAP  and
consistency by the chief financial officer of the Borrower;  provided,  that the
information  required  by  this  paragraph  may  be  satisfied  by  delivery  of
information pursuant to Section 5.1.5 or Section 5.1.6.

                  5.1.3.  Compliance   Certificates.   Simultaneously  with  the
delivery of each set of financial  statements  referred to in Sections 5.1.1 and
5.1.2,  a  certificate,  substantially  in the form of Exhibit B (a  "Compliance
Certificate"),  of the chief financial officer of the Borrower (i) setting forth
in reasonable detail the calculations required to establish whether the Borrower
was in compliance  with the  requirements of Sections 5.3, 5.4, 5.5, and 5.18 on
the date of such  financial  statements  and (ii)  stating  whether  any Default
exists on the date of such certificate and, if any Default then exists,  setting
forth  the  details  thereof  and the  action  which the  Borrower  is taking or
proposes to take with respect thereto;

                  5.1.4.  Default Notice.  Promptly,  (and, in any event, within
five (5)  Domestic  Business  Days)  after  the  Borrower  becomes  aware of the
occurrence of any Default,  a certificate of the chief financial  officer of the
Borrower  setting  forth  details  thereof and the action  which the Borrower is
taking or proposes to take with respect thereto;

                  5.1.5. Proxy.  Promptly upon the mailing thereof to the 
shareholders of the Borrower  generally,  copies  of all  financial  statements,
reports  and proxy statements so mailed;

                  5.1.6.  Registration  Statements.  Promptly  upon the filing
 thereof,  copies  of  all  registration  statements  and  annual, quarterly or
 monthly  reports which the Borrower shall have filed with the Securities and 
Exchange Commission;

                  5.1.7. ERISA Notices. If and when any member of the Controlled
Group  (i) gives or is  required  to give  notice to the PBGC of any  reportable
event (as defined in Section 4043 of ERISA) with respect to any Plan under Title
IV of ERISA,  or knows that the plan  administrator  of any Plan has given or is
required to give notice of any such  reportable  event,  a copy of the notice of
such  reportable  event given or required to be given to the PBGC; (ii) receives
notice of complete or partial  withdrawal  liability  under Title IV of ERISA, a
coy of such  notice;  or (iii)  receives  notice from the PBGC under Title IV of
ERISA of an intent to terminate or appoint a trustee to  administer  any Plan, a
copy of such notice; and


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                                                        23

<PAGE>



                  5.1.8.  Wachovia  Agreement;  BB& T Agreement;  Senior  Notes.
Promptly upon the occurrence  thereof,  (x) notice of any "default" or "event of
default" under, or amendment of, (i) the Wachovia  Agreement,  (ii) prior to the
termination  thereof, the BB&T Agreement or (iii) the Senior Notes or the Senior
Note  Indenture  pursuant to which such Senior  Notes were issued and (y) notice
that the Borrower's  "Consolidated  Fixed Charge  Coverage Ratio" (as defined in
the Senior Note Indenture) does not exceed 2.5:1.0.

                  5.1.9.  Other  Reports.  From time to time  such  additional
information  regarding the financial  position or business of the Borrower 
and its Subsidiaries as the Bank may reasonably request.

         SECTION 5.2.               Inspection of Property, Books and Records.

         The Borrower will keep,  and require each  Subsidiary  to keep,  proper
books  of  record  and  account  in which  full,  true and  correct  entries  in
conformity with GAAP (or, in the case of any non-domestic Subsidiary, such other
accounting standards,  rules, regulations and practices applicable to businesses
operating in the locality in which each such Person operates);  and permit,  and
cause  each  Subsidiary  to  permit,  representatives  of the Bank at the Bank's
expense prior to the occurrence of a Default and at the Borrower's expense after
the occurrence and during the  continuance of a Default to visit and inspect any
of their respective Properties,  to examine and make abstracts from any of their
respective books and records and to discuss their respective  affairs,  finances
and accounts with their respective  officers,  employees and independent  public
accounts.  The  Borrower  agrees to  cooperate  and  assist in such  visits  and
inspections in each case at such reasonable times and as often as may reasonably
be desired.

         SECTION 5.3.        Adjusted Funded Debt/Adjusted Capitalization Ratio.

         The Adjusted Funded  Debt/Adjusted  Capitalization Ratio will not as of
any Fiscal Quarter-end exceed .65:1.

         SECTION 5.4.               Minimum Shareholders' Equity.

         Shareholders' Equity will at no time be less than $180,000,000.

         SECTION 5.5.               Fixed Charge Coverage Ratio.

         Borrower's Fixed Charge Coverage Ratio,  measured on a rolling four (4)
Fiscal  Quarters'  basis as of the end of such Fiscal  Quarter shall be not less
than 2:1.

         SECTION 5.6.               Negative Pledge.

         The Borrower will not, nor will the Borrower  permit any Subsidiary to,
create,  assume or suffer to exist any Lien on any asset now owned or  hereafter
acquired by it,  except:  (i) those Liens,  if any,  described on Schedule  5.6,
concerning  existing  debt of the Borrower,  to be set forth and described  more
particularly therein, together with any Lien arising out of the

251094.7/ 383.   840
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<PAGE>



refinancing,  extension,  renewal or  refunding  of any debt secured by any such
Lien,  provided that such debt is not secured by any additional  assets, and the
amount  of such  debt  secured  by any such Lien is not  increased;  (ii)  Liens
incidental  to the conduct of its business or the  ownership  of its  Properties
which (A) do not secure debt and (B) do not in the aggregate  materially detract
from the value of its  Properties  or  materially  impair the use thereof or the
operation of its business,  including, without limitation,  easements, rights of
way,  restrictive  covenants,  zoning  and other  similar  restrictions  on real
property; (iii) materialmen's, mechanics', warehousemen's, carriers', landlords'
and other similar  statutory Liens which secure debt or other  obligations  that
are not past  due,  or,  if past due are being  contested  in good  faith by the
Borrower or the appropriate  Subsidiary by appropriate  proceedings;  (iv) Liens
for  taxes  not  delinquent  or  taxes  being  contested  in good  faith  and by
appropriate  proceedings;  (v) pledges or deposits in  connection  with worker's
compensation, unemployment insurance and other social security legislation; (vi)
deposits to secure  performance  of bids,  trade  contracts,  leases,  statutory
grants of  security  and  rights of setoff  in  accounts,  securities  and other
Properties  held at banks or  financial  institutions  to secure the  payment or
reimbursement  under  overdraft,  letter of credit,  acceptance and other credit
facilities;  (viii) rights of setoff,  banker's  liens and other similar  rights
arising solely by operation of law; (ix) Purchase Money Liens;  (x) Liens on any
Properties  acquired  by Borrower or any  Subsidiary  subsequent  to the Closing
Date, to the extent that (A) such Liens are existing at the time of acquisition,
(B) the debt secured thereby is not secured by any other  Properties of Borrower
or such Subsidiary except the acquired  Properties,  (C) the amount of such debt
so secured  thereby is not increased at or subsequent to the acquisition and (D)
the total amount of all such debt secured by all such acquired  Properties  does
not exceed at any time, in aggregate  amount,  fifteen percent (15%) of Tangible
Net Worth;  together  with any Lien arising out of the  refinancing,  extension,
renewal or refunding of any debt  secured by any such Lien,  provided  that such
debt is not secured by any additional assets and the amount of such debt secured
by any such Lien is not increased;  and (xi) capital leases made in the ordinary
course of business (but excluding,  however,  Sale-Leaseback Transactions to the
extent not permitted by Section 5.9) in which there is no provision for title to
the leased Property to pass to the Borrower or such Subsidiary at the expiration
of the lease term or as to which no bargain purchase option exists.

         SECTION 5.7.               Maintenance of Existence.

         Except as permitted in Section 5.9, the Borrower shall, and shall cause
each Subsidiary to,  maintain its corporate  existence and carry on its business
in substantially  the same manner and in  substantially  the same fields as such
business is now carried on and  maintained.  Without  limiting the generality of
the foregoing,  the Borrower shall, and shall cause each Subsidiary to, maintain
at all times in full force and  effect all  Franchise  Rights  necessary  to the
ownership,  operation and  development  of all  franchised  restaurant  business
conducted,   or  contemplated  to  be  conducted,   by  the  Borrower  and  such
Subsidiaries, except with respect to Voluntary Store Closings.


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                                                        25

<PAGE>



         SECTION 5.8.               Dissolution.

         Neither the Borrower nor any of its Subsidiaries shall suffer or permit
dissolution or liquidation  either in whole or in part, except through corporate
reorganization to the extent permitted by Section 5.9.

         SECTION 5.9.               Consolidation, Mergers, and Sales of Assets;
                                    Sale-Leaseback Transactions.

                  5.9.1.  Consolidation,  Mergers,  and  Sales  of  Assets.  The
Borrower will not, nor will it permit any  Subsidiary  to,  consolidate or merge
with or into, or sell,  lease (except  pursuant to  Sale-Leaseback  Transactions
permitted   pursuant  to  Section  5.9.2)  or  otherwise  transfer  all  or  any
substantial part of its assets to, any other Person, or discontinue or eliminate
any business  line or segment,  provided  that,  subject at all times to Section
5.18, the Borrower or any Subsidiary may merge with another Person (which is not
the Borrower or such Subsidiary) if (i) such Person was organized under the laws
of the United States of America or one of its states,  (ii) the Borrower or such
Subsidiary  (as the case may be) is the  corporation  surviving  such merger and
(iii)  immediately  after giving  effect to such merger,  no Default  shall have
occurred and be continuing; and, provided, further, that any Subsidiaries of the
Borrower may (i) merge or  consolidate  with each other or with the Borrower (so
long as the Borrower is the  corporation  surviving  such merger),  or (ii) sell
assets to each other or to the Borrower.

                  5.9.2. Sale-Leaseback Transactions. The Borrower will not, nor
will it permit any  Subsidiary  to,  enter into any  Sale-Leaseback  Transaction
where the  Borrower's  (or its  Subsidiaries')  obligations  with respect to the
principal  component  of all leases  entered  into in  connection  with all such
Sale-Leaseback Transactions exceeds $20,000,000 in the aggregate at any time.

         SECTION 5.10.              Use of Proceeds.

         The proceeds of [the initial  Revolving  Loan will be used to repay the
Borrower's  obligations  under the BB&T  Agreement  and proceeds of  subsequent]
Revolving  Loans will be used by the Borrower to finance  investments  permitted
hereunder, for working capital and for general corporate purposes. No portion of
the  proceeds  of the  Revolving  Loans  will  be used  by the  Borrower  (i) in
connection with, whether directly or indirectly,  any tender offer for, or other
acquisition of, stock of any corporation with a view towards  obtaining  control
of such other corporation if a majority or controlling interest of the officers,
directors  or  shareholders  of  such  corporation  shall  be  opposed  to  such
acquisition  by the  Borrower,  (ii)  directly or  indirectly,  for the purpose,
whether immediate,  incidental or ultimate, of purchasing or carrying any Margin
Stock, or (iii) for any purpose in violation of any term of this Agreement or of
any applicable law or regulation.


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                                                        26

<PAGE>



         SECTION 5.11.              Compliance with Laws; Payment of Taxes.

         The Borrower  will,  and will cause each of its  Subsidiaries  and each
member  of the  Controlled  Group  to,  comply  in all  material  respects  with
applicable  laws  (including but not limited to ERISA),  regulations and similar
requirements  of governmental  authorities  (including but not limited to PBGC),
except where the necessity of such  compliance is being  contested in good faith
through appropriate  proceedings.  The Borrower will, and will cause each of its
Subsidiaries  to,  pay  promptly  when due all taxes,  assessments  governmental
charges,  claims for  labor,  supplies,  rent and other  obligations  which,  if
unpaid,  might  become  a Lien  against  the  Property  of the  Borrower  or any
Subsidiary,  except liabilities being contested in good faith and against which,
if requested by the Bank,  the Borrower will set up reserves in accordance  with
GAAP.

         SECTION 5.12.              Insurance.

         The Borrower will maintain,  and will cause each of its Subsidiaries to
maintain (either in the name of the Borrower or in such  Subsidiary's own name),
with financially sound and reputable insurance  companies,  insurance on, and in
respect of the  ownership  and  operation  of, its  Properties  in at least such
amounts and against at least such risks as are  usually  insured  against in the
same  general area by companies  of  established  repute  engaged in the same or
similar business.

         SECTION 5.13.              Change is Fiscal Year.

         The Borrower will not change its Fiscal Year without the consent of the
Bank.

         SECTION 5.14.              Maintenance of Property.

         The Borrower shall, and shall cause each Subsidiary to, maintain all of
its Properties in good  condition,  repair and working order,  ordinary wear and
tear excepted.

         SECTION 5.15.              Environmental Notices.

         The Borrower  shall  furnish to the Bank,  promptly  after the Borrower
becomes aware thereof, written notice of all Environmental Liabilities, pending,
threatened  Environmental  Proceedings,   Environmental  Notices,  Environmental
Judgements and Orders and  Environmental  Releases,  at, on, in, under or in any
way affecting the Properties or any adjacent property and all facts,  events, or
conditions that could reasonably be expected to lead
to any of the foregoing.

         SECTION 5.16.              Environmental Matters.

         The  Borrower  will not,  and will not permit any Third  Party to, use,
produce,  manufacture,  process,  treat, recycle,  generate,  store, dispose of,
manage at, or otherwise  handled or ship or transport to or from the  Properties
any Hazardous Materials except for

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                                                        27

<PAGE>



Hazardous  Materials  such as cleaning  solvents,  pesticides  and other similar
materials used, produced, manufactured, processed, treated, recycled, generated,
stored,  disposed,  managed,  or  otherwise  handled in the  ordinary  course of
business in compliance with all applicable Environmental Requirements.

         SECTION 5.17.              Environmental Releases.

         The  Borrower  agrees  that  upon the  occurrence  of an  Environmental
Release (except for any  Environmental  Release which (x) occurred in compliance
with all Environmental  Requirements and (y) could not reasonably be expected to
have or cause a Material Adverse Effect), it will act immediately to investigate
the  extent of,  and to take  appropriate  remedial  action to  eliminate,  such
Environmental Release,  whether or not ordered or otherwise directed to do so by
any Environmental Authority.

         SECTION 5.18.              Investments.

         The Borrower will not make (nor will the Borrower permit any Subsidiary
to make) any investment in any Person or Property (which term  "investment," for
purposes hereof, shall mean and include, without limitation,  the acquisition of
any property,  the issuance,  acquisition or exchange of any capital stock, debt
or other obligations or security to, from or with any Person,  and the making of
any loan,  advance,  extension  of credit,  credit  accommodation,  Guarantee or
capital contribution to or on behalf of any Person),  provided,  however,  that,
notwithstanding  the foregoing,  the Borrower (or any Subsidiary) may, from time
to time, undertake the following,  without the necessity of obtaining the Bank's
prior written consent thereto:

                    (i) Current  Assets.  Acquire  current assets for use in, or
               arising  from,  the  sale of goods or  services  in the  ordinary
               course of its business (including,  for this purpose, but without
               limitation, credit card receivables);

                    (ii) Capital Expenditures.  Make capital expenditures in the
               ordinary course of its business;

                    (iii)  Franchise  Fees. Pay franchisee fees and royalties to
               its franchisors in the ordinary course of its business;

                    (iv) Escrow  Deposits.  Make or maintain escrow deposits for
               the payment of taxes, rents, utilities, insurance or like matters
               in the ordinary course of its business;

                    (v) Bank  Accounts.  Make and  maintain  deposits of cash in
               demand  deposit  accounts of banks in the ordinary  course of its
               business,  and  make  endorsements  of  checks,  drafts  or other
               instruments in connection therewith;


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                                                        28

<PAGE>



                    (vi)  Surplus  Cash.   Consistent  at  all  times  with  the
               Borrower's  internal  Statement  of  Investment  Policy,   invest
               surplus cash in (A)  obligations of, or guaranteed by, the United
               States  of  America  or  any  agency   thereof,   (B)  short-term
               certificates  of deposit  issued by, and time deposits  with, the
               Bank or any other financial  institution  domiciled in the United
               States  of  America  with  assets of at least  $500,000,000,  (C)
               short-term  commercial  paper  rated at lest "A1" by  Standard  &
               Poors  or "P1" by  Moody's,  and (D)  fixed  or  adjustable  rate
               corporate debt securities with a credit rating of at least double
               A (Aa/AA) by either  Moody's or Standard & Poors,  provided  that
               any fixed rate debt  securities  have a  maturity  of one year or
               less;

                    (vii)  Subsidiaries.  Make investments in those Consolidated
               Subsidiaries of the Borrower which are wholly-owned,  directly or
               indirectly,  by the  Borrower,  in the  ordinary  course  of, and
               pursuant to the  reasonable  requirements  of, the Borrower's and
               such  Subsidiaries'  respective  businesses,  provided  that  the
               aggregate amount of such investments  which may be outstanding at
               any one time hereafter,  as to all such  Subsidiaries,  shall not
               exceed, in any event,  Twenty-Five Million Dollars ($25,000,000),
               it being  understood  and agreed that (a) there shall be excluded
               from such calculation any investment  deemed made by the Borrower
               in  DF&R  Restaurants,  Inc.,  a  Texas  corporation  which  is a
               wholly-owned,  Consolidated Subsidiary of the Borrower,  pursuant
               to the accounting for the prior  acquisition of such  corporation
               by the  Borrower  as a pooling of  interests;  (b) there shall be
               deducted  in  any  event  from  the  amount  of   investments  in
               Subsidiaries  which may be made pursuant to this clause (vii) the
               aggregate  amount  of  Capitalized   Lease   Obligations  of  all
               Subsidiaries  which  are at any  time  outstanding;  and  (c) the
               provisions of this clause (vii) henceforth shall be the exclusive
               means  by  which  the  Borrower  (or  any  Subsidiary)  may  make
               investments  in any  Subsidiaries  (whether  or not  wholly-owned
               Subsidiaries)  and shall  override any other  provisions  of this
               Section 5.18  (including,  particularly,  clauses  (x),  (xi) and
               (xii)  below)  which may be  construed  otherwise  to permit such
               investments.

                    (viii) Travel Advances.  Make travel and similar advances to
               employees from time to time in the ordinary course of business.

                    (ix) Special Life Insurance Program. The Borrower may invest
               up to Eight Hundred Fifty Thousand Dollars  ($850,000) per Fiscal
               Year in the making of annual premiums payable on the split dollar
               joint  survivor  life  insurance  program  implemented,  or to be
               implemented,  covering  the lives of Tom E.  DuPree,  Jr. and his
               spouse  Anne  DuPree,  with an  initial  death  benefit  of Fifty
               Million Dollars ($50,000,000),  provided,  however, that (i) such
               investments  are made over a period not to exceed ten (10) Fiscal
               Years  and  (ii)  Borrower  maintains  at all  times  during  the
               effective  period of the  program a security  interest  in policy
               proceeds  and  cash  values  of  policies  issued  as part of the
               program  equal in  amount  to not less  than its then  cumulative
               premium investments;

                    (x) Applebee's Franchisees.  Make investments in franchisees
               of  "Applebee's"  restaurants,  but no  investment  in Applebee's
               International,  Inc. (or any Person which subsequent hereto shall
               become the franchisor of "Applebee's" restaurants) shall be

251094.7/ 383.   840
                                                        29

<PAGE>



               permitted  to  be  made  subsequent  to  the  Closing  Date,
               notwithstanding  this clause (x) or any other  provision  of this
               Section, except with the prior written consent of the Bank;

                    (xi) Other  Restaurant  Concepts.  Make investments in other
               restaurant concepts,  besides  "Applebee's," so long as the total
               amount of each such investment (either considered individually or
               as part of a series of related, concurrent investments), does not
               exceed ten percent (10%) of Borrower's  consolidated total assets
               immediately  before such  investment  (or the last in a series of
               related, concurrent investments) is made;

                    (xii) Other Investments  Generally.  Make other investments,
               not  described in clauses (i) through (xi) above,  provided  that
               all such investments,  in the aggregate, do not exceed at any one
               time ten percent (10%) of Stockholders' Equity.

               The Borrower  shall  notify the Bank from time to time,  but
               not less frequently than quarterly,  or at any time at the Bank's
               request,  of  the  nature  and  amount  of any  investments  made
               pursuant  to  clauses   (x),   (xi)  and  (xii)   hereof   which,
               individually  or in the  aggregate,  exceed One Hundred  Thousand
               Dollars ($100,000).

         SECTION 5.19.              Subsidiary Debt.

         Except  solely to the extent  expressly  permitted  in clause  (vii) of
Section 5.18 of this  Agreement,  the Borrower will not permit any  Consolidated
Subsidiary  of the  Borrower  which is a  wholly-owned  Subsidiary,  directly or
indirectly,  of the  Borrower,  to  create,  incur or suffer to exist any of the
following:   (i)  indebtedness  for  borrowed  funds;   (ii)  Capitalized  Lease
Obligations, provided, however, that DF&R Restaurants, Inc. and its Subsidiaries
may incur Capitalized Lease Obligations in an aggregate amount not to exceed Ten
Million Dollars  ($10,000,000) at any one time  outstanding;  (iii)  Guarantees;
(iv)  debts,  liabilities  or  obligations  to any  seller  incurred  to pay the
deferred purchase price of property or services having a deferred purchase price
of One Million Dollars  ($1,000,000)  or more,  excepting,  in any event,  trade
accounts payable arising in the ordinary course of business and purchase options
prior to their exercise; and (v) debts, liabilities or obligations in respect of
Synthetic Leases.

ARTICLE 6.  DEFAULTS

         SECTION 6.1.               Events of Default.

         If one or more of the following events ("Events of Default") shall have
occurred and be continuing:

                  6.1.1.  Non-Payment.  The  Borrower (i) shall fail to pay when
due any principal of any  Revolving  Loan or (ii) shall fail to pay any interest
on any Revolving Loan within five (5) Domestic Business Days after such interest
shall  become due, or (iii)  shall fail to pay any fee or other  amount  payable
hereunder  or under any Loan  Document  within five (5) Domestic  Business  Days
after such fee or other amount becomes due; or

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                                                        30

<PAGE>



     6.1.2.  Failure to Observe  Certain  Covenants.  The Borrower shall fail to
observe or perform any covenant  contained  in Sections  5.3 through  5.8,  5.9,
5.10, 5.11, 5.14, or 5.18, inclusive; or

     6.1.3. Failure to Observe Covenants  Generally.  The Borrower shall fail to
observe or perform any  covenant  or  agreement  contained  or  incorporated  by
reference  in this  Agreement  (other than those  covered by Sections  6.1.1 and
6.1.2) and such failure shall not have been cured within ten (10) days after the
earlier to occur of (i) written notice thereof has been given to the Borrower by
the Bank or (ii) an executive,  senior  financial or  accounting  officer of the
Borrower otherwise becomes aware of any such failure; or

     6.1.4. Misrepresentation.  Any representation,  warranty,  certification or
statement  made  by the  Borrower  in  Article  IV of this  Agreement  or in any
certificate,  financial  statement or other document  delivered pursuant to this
Agreement  shall prove to have been  incorrect  or  misleading  in any  material
respect when made (or deemed made); or

     6.1.5. Cross-Default. The Borrower or any Subsidiary shall fail to make any
payment in respect of the Wachovia  Agreement,  the BB&T  Agreement,  the Senior
Notes or any other debt, liability or obligation outstanding  individually or in
the aggregate with all other such debts, liabilities or obligations, equal to or
in excess of Five Hundred Thousand Dollars ($500,000), other than the Note, when
due or within any applicable grace period; or any event or condition shall occur
which results in the  acceleration  of the maturity of the debt evidenced by the
Wachovia Agreement, the BB&T Agreement, the Senior Notes or any other such debt,
liability  or  obligation   outstanding   of  the  Borrower  or  any  Subsidiary
individually  or in the  aggregate  with all other such  debts,  liabilities  or
obligations equal to or in excess of Five Hundred Thousand Dollars ($500,000) or
the  mandatory  prepayment  or purchase of the debt  evidenced  by the  Wachovia
Agreement,  the  BB&T  Agreement,  the  Senior  Notes or any  such  other  debt,
liability or obligation by the Borrower (or its designee) or such Subsidiary (or
its  designee)  individually  or in the  aggregate  with all other  such  debts,
liabilities  or  obligations  equal to or in  excess  of Five  Hundred  Thousand
Dollars ($500,000) prior to the scheduled maturity thereof, or enables (or, with
the giving of notice or lapse of time or both, would enable) Wachovia, BB&T, the
holders of the Senior Notes or the holders of any such other debt,  liability or
obligation  individually  or  in  the  aggregate  with  all  other  such  debts,
liabilities  or  obligations  equal to or in  excess  of Five  Hundred  Thousand
Dollars  ($500,000) or any Person  acting on such holders'  behalf to accelerate
the maturity  thereof or require the mandatory  prepayment  or purchase  thereof
prior to the scheduled maturity thereof,  without regard to whether such holders
or other Person shall have exercised or waived their right to do so; or

     6.1.6. Voluntary Bankruptcy.  The Borrower or any Subsidiary shall commence
a voluntary case or other  proceeding  seeking  liquidation,  reorganization  or
other  relief  with  respect  to  itself  or its  debts  under  any  bankruptcy,
insolvency  or other  similar  law now or  hereafter  in effect or  seeking  the
appointment  of a trustee,  receiver,  liquidator,  custodian  or other  similar
official of it or any substantial part of its Property,  or shall consent to any
such relief or to the  appointment of or taking  possession by any such official
in an

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                                                        31

<PAGE>



involuntary  case or other  proceeding  commenced  against  it, or shall  make a
general assignment for the benefit of creditors,  or shall fail generally to pay
its debts as they become due, or shall take any  corporate  action to  authorize
any of the foregoing; or

                  6.1.7.  Involuntary  Bankruptcy.  An involuntary case or other
proceeding  shall be commenced  against the Borrower or any  Subsidiary  seeking
liquidation,  reorganization  or other  relief  with  respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian or
other similar official of it or any substantial  part of its Property,  and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days;  or an order for relief shall be entered  against the
Borrower or any Subsidiary under the federal bankruptcy laws as now or hereafter
in effect; or

                  6.1.8.  ERISA.  The  Borrower or any member of the  Controlled
Group shall fail to pay when due any material  amount which it shall have become
liable to pay to the PBGC or to a Plan  under  Title IV of  ERISA;  or notice of
intent to  terminate  a Plan or Plans  shall be filed under Title IV of ERISA by
the Borrower,  any member of the Controlled Group, any plan administrator or any
combination  of the foregoing;  or the PBGC shall  institute  proceedings  under
Title  IV of  ERISA  to  terminate  or to cause a  trustee  to be  appointed  to
administer  any such  Plan or Plans or a  proceeding  shall be  instituted  by a
fiduciary  of any such Plan or Plans to enforce  Section  515 or  4219(c)(5)  of
ERISA and such proceeding  shall not have been dismissed within thirty (30) days
thereafter;  or a  condition  shall  exist by reason of which the PBGC  would be
entitled  to obtain a decree  adjudicating  that any such Plan or Plans  must be
terminated; or

     6.1.9. Judgments.  One or more judgments or orders for the payment of money
in an aggregate  amount equal to or greater than Five Hundred  Thousand  Dollars
($500,000)  shall be rendered  against the Borrower or any  Subsidiary  and such
judgment or order shall continue unsatisfied and unstayed for a period of thirty
(30) days; or

                  6.1.10.  Tax Liens.  A federal tax Lien shall be filed against
the Borrower under Section 6323 of the Code or a Lien of the PBGC shall be filed
against the Borrower or any Subsidiary under Section 4068 of ERISA and in either
case such Lien shall remain  undischarged for a period of thirty (30) days after
the date of filing; or

                  6.1.11.  Change of Control.  Tom E. DuPree, Jr. shall cease to
own and control,  beneficially  and with power to vote, at least fifteen percent
(15%) of the outstanding  shares of the voting common stock of the Borrower;  or
any Person  (other than Tom E.  DuPree,  Jr.) or two or more  Persons  acting in
concert shall have  acquired  beneficial  ownership  (within the meaning of Rule
13d-3 of the Securities and Exchange  Commission  under the Securities  Exchange
Act of 1934) of twenty  percent (20%) or more of the  outstanding  shares of the
voting common stock of the Borrower;  or as of any date, a majority of the Board
of  Directors of the Borrower  consists of  individuals  who were not either (A)
directors of the Borrower as of the corresponding date of the previous year, (B)
selected  or  nominated  to  become  directors  by a Board of  Directors  of the
Borrower of which a majority

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                                                        32

<PAGE>



consisted of  individuals  described in clause (A), or (C) selected or nominated
to  become  directors  by the  Board of  Directors  of the  Borrower  of which a
majority  consisted  of  individuals  described  in clause  (A) and  individuals
described in clause (B); or

                  6.1.12.  Loss of  Franchise  Rights.  If any of the  Franchise
Rights of the Borrower or its Subsidiaries shall be forfeited,  suspended, lost,
rejected,  disclaimed,  impaired,  curtailed or otherwise  adversely  altered or
affected  in any  manner,  in  whole or in any  material  part,  for any  reason
whatsoever,  whether  or not  related  to the  Borrower's  or such  Subsidiary's
performance  of its duties and  obligations  as franchisee at any time hereafter
except with respect to any  Voluntary  Store  Closing;  or there shall occur any
default by the Borrower or any such  Subsidiary in the payment,  performance  or
observance of any terms, covenants or conditions of any franchise or development
agreements  giving  rise  to the  existence  and/or  continuation  of  any  such
Franchise Rights,  and any grace or cure period relative thereto granted therein
shall have expired without such default being waived or cured; or

     6.1.13.  BB&T  Agreement.  The Borrower  shall fail to  terminate  the BB&T
Agreement and repay all of its obligations thereunder within ninety (90) days of
the date hereof; or

     6.1.14.  Material  Adverse  Effect.  The  occurrence  of  any  event,  act,
occurrence,  or  condition  which  the  Bank  determines  either  does  or has a
reasonable probability of causing, or resulting in, a Material Adverse Effect;

then, and in every such event, the Bank may by notice to the Borrower  terminate
the  Commitment  and it shall  thereupon  terminate,  and (ii) by  notice to the
Borrower  declare the Note (together with accrued  interest  thereon) to be, and
the  Note  shall   thereupon   become,   immediately  due  and  payable  without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby  waived by the  Borrower,  together  with  interest at the  Default  Rate
accruing on the principal  amount  thereof from and after the date of such Event
of Default; provided that if any Event of Default specified in Sections 6.1.6 or
6.1.7 above occurs with respect to the Borrower or any  Subsidiary,  without any
notice to the  Borrower  or any other  acts by the Bank,  the  Commitment  shall
thereupon  terminate and the Note (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind,  all of which are hereby  waived by the  Borrower,  together
with  interest  thereon at the Default  Rate  accruing on the  principal  amount
thereof  from and after the date of such Event of Default.  Notwithstanding  the
foregoing,  the Bank shall have  available  to it all other  remedies  at law or
equity, and may exercise any one or all of them at its discretion.

ARTICLE 7.  CHANGE IN CIRCUMSTANCES; COMPENSATION

         SECTION 7.1.            Basis for Determining Interest Rate Inadequate 
                                 or Unfair.

         If on or  prior  to the  first  day of any  Interest  Period,  the Bank
determines  that deposits in Dollars (in the  applicable  amounts) are not being
offered in the relevant market for such

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                                                        33

<PAGE>



Interest  Period,  or the Bank  determines  that the  Adjusted  LIBOR  Rate,  as
determined by the Bank,  will not  adequately and fairly reflect the cost to the
Bank of funding the relevant  Euro- Dollar Rate Loans for such Interest  Period,
then, the Bank shall  forthwith  give notice thereof to the Borrower,  whereupon
until the Bank notifies the Borrower that the circumstances  giving rise to such
suspensions no longer exist, the obligations of the Bank to make the Euro-Dollar
Rate Loans  specified  in such notice  shall be  suspended.  Unless the Borrower
notifies the Bank at least two (2) Domestic Business days before the date of any
Borrowing of such  Euro-Dollar  Rate Loans for which a Notice of  Borrowing  has
previously  been given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing.

         SECTION 7.2.               Illegality.

         If, after the date hereof,  the adoption of any applicable law, rule or
regulation,  or any  change  therein,  or any  change in the  interpretation  or
administration thereof by any governmental authority, central bank or comparable
agency  charged  with the  interpretation  or  administration  thereof (any such
agency being referred to as an "Authority"  and any such event being referred to
as a "Change of Law"),  or compliance  by the Bank (or its Lending  Office) with
any  request  or  directive  (whether  or not  having  the  force of law) of any
Authority  shall make it  unlawful  or  impossible  for the Bank (or its Lending
Office) to make,  maintain or fund its  Euro-Dollar  Rate Loans,  the Bank shall
forthwith give notice thereof to the Borrower, whereupon until the Bank notifies
the Borrower  that the  circumstances  giving rise to such  suspension no longer
exist,  the  obligation  of the Bank to make  Euro-Dollar  Rate  Loans  shall be
suspended.  If the Bank shall  determine  that it may not  lawfully  continue to
maintain and fund any of its outstanding  Euro-Dollar Rate Loans to maturity and
shall so specify in such notice,  the Borrower shall immediately  prepay in full
the then outstanding  principal  amount of each Euro-Dollar Rate Loan,  together
with accrued interest thereon. Concurrently with prepaying each such Euro-Dollar
Rate Loan,  the Borrower  shall borrow,  pursuant to Section  2.2.2, a Base Rate
Loan in an equal  principal  amount (on which  interest and  principal  shall be
payable contemporaneously with the related Euro-Dollar Rate Loans), and the Bank
shall make such a Base Rate Loan.

         SECTION 7.3.               Increased Cost and Reduced Return.

                  7.3.1.  Change of Law. If after the date  hereof,  a Change of
Law or  compliance  by the Bank (or its  Lending  Office)  with any  request  or
directive  (whether or not having the force of law) of any Authority either: (i)
shall subject any Bank (or its Lending  Office) to any tax, duty or other charge
with  respect  to the  Revolving  Loans,  the  Note  or its  obligation  to make
Revolving  Loans,  or shall change the basis of taxation of payments to the Bank
(or its Lending  Office) of the principal of or interest on the Revolving  Loans
or any other amounts due under this Agreement in respect of the Revolving  Loans
or its obligation to make Revolving Loans (except for changes in the rate of tax
on the  overall  net  income of the Bank or its  Lending  Office  imposed by the
jurisdiction in which the Bank's principal executive office or Lending Office is
located); or (ii) shall impose,  modify or deem applicable any reserve,  special
deposit insurance or similar requirement  (including,  without  limitation,  any
such  requirements  imposed by the Board of  Governors  of the  Federal  Reserve
System, but

251094.7/ 383.   840
                                                        34

<PAGE>



excluding any such  requirement  included in an applicable  Euro-Dollar  Reserve
Percentage)  against  assets of,  deposits with or for the account of, or credit
extended by, the Bank (or its Lending Office); or (iii) shall impose on the Bank
(or its  Lending  Office)  or the  London  Interbank  Market  any other  similar
condition  affecting the  Revolving  Loans,  the Note or its  obligation to make
Revolving  Loans; and the result of any of the foregoing is to increase the cost
to the Bank (or its Lending Office) of making or maintaining any Revolving Loan,
or to reduce the amount of any such  received or  receivable by the Bank (or its
Lending Office) under this Agreement or under the Note with respect thereto,  by
an amount  deemed by the Bank to be  material,  then,  within  fifteen (15) days
after  demand by the Bank the  Borrower  shall  pay to the Bank such  additional
amount  or  amounts  as will  compensate  the Bank for  such  increased  cost or
reduction.

                  7.3.2.  Capital  Adequacy.  If the Bank shall have  determined
that  after  the  date  hereof  the  adoption  of any  applicable  law,  rule or
regulation  regarding capital adequacy,  or any change therein, or any change in
the interpretation or administration  thereof, or compliance by the Bank (or its
Lending  Office)  with any  request  or  directive  regarding  capital  adequacy
(whether or not having the force of law) of any Authority, has or would have the
effect of reducing the rate of return on the Bank's  capital as a consequence of
its  obligations  hereunder  to a adoption,  change or  compliance  (taking into
consideration  the Bank's  policies  with  respect to capital  adequacy),  by an
amount deemed by the Bank to be material, then from time to time, within fifteen
(15) days  after  demand by the Bank,  the  Borrower  shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such reduction.

                  7.3.3. Notice of Determination.  The Bank will promptly notify
the Borrower of any event of which it has  knowledge,  occurring  after the date
hereof, which will entitle the Bank to compensation pursuant to this Section and
will  designate a different  Lending Office if such  designation  will avoid the
need for,  or reduce the  amount  of,  such  compensation  and will not,  in the
judgment of the Bank, be otherwise  disadvantageous  to the Bank, in any respect
deemed  material by the Bank. A certificate  of the Bank  claiming  compensation
under this Section and setting forth the additional amount or amounts to be paid
to it  hereunder  shall be  conclusive  in the  absence of  manifest  error.  In
determining  such  amount,  the  Bank  may  use  any  reasonable  averaging  and
attribution methods.

                  7.3.4.  Assignees Covered.  The provisions of this Section 7.3
shall be applicable with respect to any Assignee or other Transferee  (excluding
any  Participants),  and any  calculations  required by such provisions shall be
made based upon the circumstances of such Assignee or other Transferee.

         SECTION 7.4.           Rate Loans Substituted for Affected Euro-Dollar
                                Rate Loans.

         If (i) the obligation of the Bank to make or maintain  Euro-Dollar Rate
Loans has been  suspended  pursuant to Section 7.2 or (ii) any Bank has demanded
compensation  under Section 7.3.1,  and the Borrower shall, by at least five (5)
Euro-Dollar  Business  Days'  prior  notice  to the Bank have  elected  that the
provisions of this Section shall apply to the Bank,

251094.7/ 383.   840
                                                        35

<PAGE>



then,  unless and until the Bank  notifies the Borrower  that the  circumstances
giving rise to such suspension or demand for  compensation no longer apply:  (i)
all  Revolving  Loans which would  otherwise be made by the Bank as  Euro-Dollar
Rate Loans,  shall be made instead as Base Rate Loans and (ii) after each of the
Euro-Dollar  Rate Loans has been repaid,  all payments of principal  which would
otherwise  be applied to repay such  Euro-Dollar  Rate Loans shall be applied to
repay its Base Rate Loans instead.

         SECTION 7.5.               Compensation.

         Upon the request of the Bank,  delivered to the Borrower,  the Borrower
shall pay to the Bank such  amount or amounts as shall  compensate  the Bank for
any  actual  out of  pocket  loss,  cost or  expense  incurred  by the  Bank (in
connection with the relevant Interest Period) as a result of: (i) any payment or
prepayment  (whether pursuant to Section 7.2 or otherwise) of a Euro-Dollar Rate
Loan on a date  other  than the last day of an  Interest  Period  for such Euro-
Dollar Rate Loan;  or (ii) any failure by the  Borrower to prepay a  Euro-Dollar
Rate Loan on the date for such  prepayment  specified in the relevant  notice of
prepayment  hereunder;  or  (iii)  any  failure  by the  Borrower  to  borrow  a
Euro-Dollar  Rate Loan on the date for the Euro- Dollar  Borrowing of which such
Euro-Dollar Rate Loan is a part specified in the applicable  Notice of Borrowing
delivered pursuant to Section 2.2.

ARTICLE 8.  MISCELLANEOUS

         SECTION 8.1.               Notices.

         All notices,  requests and other  communications to any party hereunder
or under any Loan Document shall be in writing (including bank wire,  telecopier
or  similar  writing)  and  shall  be  given to such  party  at its  address  or
telecopier  number set forth on the signature pages hereof or such other address
or  telecopier  number as such party may  hereafter  specify  for the purpose by
notice to the other  party.  Each such  notice,  request or other  communication
shall be effective (i) if given by telecopier, when such telecopy is transmitted
to  the  telecopier  number  specified  in  this  Section  and  the  appropriate
confirmation is received,  (ii) if given by mail,  seventy-two  (72) hours after
such  communication  is  deposited  in the United  States mails with first class
postage  prepaid,  addressed  as aforesaid or (iii) if given by any other means,
when delivered at the address  specified in this Section;  provided that notices
to the Bank under Article 2 shall not be effective until received.

         SECTION 8.2.               No Waivers.

         No  failure  or delay by the Bank in  exercising  any  right,  power or
privilege  hereunder  or under any Note shall  operate as a waiver  thereof  nor
shall any  single or  partial  exercise  thereof  preclude  any other or further
exercise  thereof or the exercise of any other right,  power or  privilege.  The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.


251094.7/ 383.   840
                                                        36

<PAGE>



         SECTION 8.3.               Expenses; Documentary Taxes.

         The  Borrower  shall pay (i) all  out-of-pocket  expenses  of the Bank,
including fees and  disbursements of special counsel for the Bank, in connection
with the preparation of this Agreement and the other Loan Documents,  any waiver
or consent  hereunder or thereunder  or any  amendment  hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all   out-of-pocket   expenses   incurred  by  the  Bank,   including  fees  and
disbursements  of counsel  (including  a  reasonable  allocation  of the cost of
internal  counsel),  in connection  with such Default and  collection  and other
enforcement  proceedings resulting therefrom,  including  out-of-pocket expenses
incurred in enforcing this  Agreement,  the Note and other Loan  Documents.  The
Borrower shall indemnify the Bank against any transfer taxes, documentary taxes,
assessments  or charges  made by any  Authority by reason of the  execution  and
delivery of this Agreement, the Note or the other Loan Documents.

         SECTION 8.4.               Indemnification.

         The Borrower shall  indemnify the Bank and each  affiliate  thereof and
their respective directors,  officers,  employees and agents from, and hold each
of them harmless against, any and all losses, liabilities,  claims or damages to
which any of them may  become  subject,  insofar  as such  losses,  liabilities,
claims or damages  arise out of or result from any actual or proposed use by the
Borrower of the  proceeds of any  extension  of credit by the Bank  hereunder or
breach by the Borrower of this Agreement, the Note or any other Loan Document or
from any investigation, litigation or other proceeding (including any threatened
investigation or proceeding)  relating to the foregoing,  and the Borrower shall
reimburse the Bank, and each affiliate  thereof and their respective  directors,
officers, employees and agents, upon demand for any expenses (including, without
limitation,  legal fees) incurred in connection with any such  investigation  or
proceeding;  but  excluding  any such losses,  liabilities,  claims,  damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified.  The indemnification  provisions  (including,  without
limitation, provisions for default interest, to the extent that this Section 8.4
might be construed as duplicating  the Borrower's  obligation to pay interest at
the Default  Rate as required  elsewhere  in this  Agreement)  set forth in this
Section  8.4 are meant to be without  duplication  of any other  indemnification
provisions set forth in this Agreement.

         SECTION 8.5.               Amendments and Waivers.

         Any provision of this  Agreement,  the Note or any other Loan Documents
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Borrower and the Bank.

         SECTION 8.6.               Successors and Assigns.

     8.6.1. No Assignment by Borrower. The provisions of this Agreement shall be
binding  upon  and  insure  to the  benefit  of the  parties  hereto  and  their
respective successors

251094.7/ 383.   840
                                                        37

<PAGE>



and assigns; provided that the Borrower may not assign or otherwise transfer any
of its rights under this Agreement.

                  8.6.2. Participation. The Bank may, without the consent of the
Borrower,  at any  time  sell to one or  more  Persons  (each  a  "Participant")
participating  interests  in  any  Revolving  Loan,  the  Note,  the  Commitment
hereunder or any other interest of the Bank hereunder.  In the event of any such
sale by the  Bank of a  participating  interest  to a  Participant,  the  Bank's
obligations under this Agreement shall remain  unchanged,  the Bank shall remain
solely responsible for the performance thereof, the Bank shall remain the holder
of the Note for all  purposes  under  this  Agreement,  and the  Borrower  shall
continue to deal solely and directly with the Bank in connection with the Bank's
rights  and  obligations  under  this  Agreement.   The  Bank,  if  it  sells  a
participating interest in the Revolving Loan, Note, Commitment or other interest
under this  Agreement,  shall,  within ten (10)  Domestic  Business Days of such
sale, provide the Borrower with written  notification stating that such sale has
occurred and  identifying  the  Participant  and the interest  purchased by such
Participant.  The Bank and the  Borrower  agree that each  Participant  shall be
entitled  to the  benefits  of Article 7 with  respect to its  participation  in
Revolving Loans  outstanding  from time to time, but only to the extent that the
Bank would have been entitled thereto pursuant to the terms of this Agreement.

                  8.6.3. Assignments.  The Bank may at any time assign to one or
more  banks  or  financial   institutions   (each  an  "Assignee")   all,  or  a
proportionate  part of all, of its rights and  obligations  under this Agreement
and the Note, and such Assignee shall assume all such rights and obligations.

                  8.6.4. Disclosures.  Subject to the provisions of Section 8.7,
the Borrower  authorizes  the Bank to disclose to any  Participant,  Assignee or
other  transferee (each a "Transferee")  and any prospective  Transferee any and
all information in the Bank's possession  concerning the Borrower which has been
delivered  to the Bank by the Borrower  pursuant to this  Agreement or which has
been delivered to the Bank by the Borrower in connection  with the Bank's credit
evaluation prior to entering into this Agreement.

                  8.6.5.  Status of Transferee.  No Transferee shall be entitled
to receive any greater  payment  under Section 7.3 than the Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Borrower's prior written consent or by reason of the provisions
of Section 7.2 or 7.3 requiring the Bank to designate a different Lending Office
under certain  circumstances or at a time when the circumstances  giving rise to
such greater payment did not exist.

         SECTION 8.7.               Confidentiality.

         The Bank agrees to exercise its best efforts (and,  in any event,  with
at least the same  degree of care as it  ordinarily  exercises  with  respect to
confidential  information  of its  other  customers)  to  keep  any  information
delivered  or  made  available  by  the  Borrower  to  it,  including,   without
limitation, information obtained by the Bank by reason of a visit or

251094.7/ 383.   840
                                                        38

<PAGE>



investigation by any Person  contemplated in Section 5.2,  confidential from any
one other than persons  employed or retained by the Bank who are or are expected
to become engaged in evaluating,  approving,  structuring or  administering  the
Revolving  Loans;  provided,  however that nothing herein shall prevent the Bank
from  disclosing   such   information  (i)  upon  the  order  of  any  court  or
administrative  agency, (ii) upon the request or demand of any regulatory agency
or authority  having  jurisdiction  over the Bank, (iii) which has been publicly
disclosed  other  than by an act or  omission  of the Bank  except as  permitted
herein, (iv) to the extent reasonably required in connection with any litigation
(with respect to this Agreement,  any of the other Loan Documents, in connection
with any of the  foregoing,  or any other  obligations  of the  Borrower  or any
Subsidiary  owing  to the  Bank) to which  the Bank or its  Affiliates  may be a
party, (v) to the extent reasonably  required in connection with the exercise of
any remedy hereunder,  (vi) to the Bank's legal counsel and independent auditors
and (vii) to any actual or proposed Participant, Assignee or other Transferee of
all or part of its rights  hereunder  which has agreed in writing to be bound by
the provisions of this Section 8.7.

         SECTION 8.8.               GEORGIA LAW.

         THIS AGREEMENT, EACH NOTE AND EACH OTHER LOAN DOCUMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF GEORGIA.

         SECTION 8.9.               Interpretation.

         No provision of this Agreement or any of the other Loan Documents shall
be construed  against or interpreted to the  disadvantage of any party hereto by
any court or other  governmental  or judicial  authority by reason of such party
having or being deemed to have structured or dictated such provision.

         SECTION 8.10.              CONSENT TO JURISDICTION.

         THE BORROWER AND THE BANK  IRREVOCABLY (A) SUBMITS TO THE  NONEXCLUSIVE
PERSONAL JURISDICTION IN THE STATE OF GEORGIA, THE COURTS THEREOF AND THE UNITED
STATES DISTRICT COURTS SITTING  THEREIN,  FOR THE ENFORCEMENT OF THIS AGREEMENT,
THE NOTE AND THE OTHER LOAN  DOCUMENTS,  (B) WAIVE ANY AND ALL  PERSONAL  RIGHTS
UNDER THE LAW OF ANY  JURISDICTION  TO OBJECT ON ANY BASIS  (INCLUDING,  WITHOUT
LIMITATION, INCONVENIENCE OF FORUM) TO JURISDICTION OR VENUE WITHIN THE STATE OF
GEORGIA FOR THE PURPOSE OF LITIGATION TO ENFORCE THIS AGREEMENT, THE NOTE OR THE
OTHER LOAN DOCUMENTS, AND (C) AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT
IN THE  MANNER  PRESCRIBED  IN  SECTION  8.1 FOR THE  GIVING  OF  NOTICE  TO THE
BORROWER.  NOTHING  HEREIN  CONTAINED,  HOWEVER,  SHALL  PREVENT  THE BANK  FROM
BRINGING ANY ACTION OR  EXERCISING  ANY RIGHTS  AGAINST ANY SECURITY AND AGAINST
THE BORROWER PERSONALLY,

251094.7/ 383.   840
                                                        39

<PAGE>



AND AGAINST ANY ASSETS OF THE BORROWER, WITHIN ANY OTHER STATE OR
JURISDICTION.

         SECTION 8.11.              Counterparts.

         This  Agreement  may be signed in any number of  counterparts,  each of
which shall be an original,  with the same effect as if the  signatures  thereto
and hereto were upon the same instrument.

         SECTION 8.12.              Survival.

         All representations, warranties and covenants made herein shall survive
the  execution  and  delivery  of all of  the  Loan  Documents.  The  terms  and
provisions of this  Agreement  shall continue in full force and effect until the
payment of the Note and termination of the Commitment.

         SECTION 8.13.              Entire Agreement: Amendment; Severability.

         This Agreement shall  constitute the entire agreement among the parties
hereto with respect to the subject matter hereof. Neither this Agreement nor any
provision  hereof may be changed,  waived,  discharged,  modified or  terminated
orally,  but only by an instrument in writing in accordance with Section 8.5. If
any  provision of any of the Loan  Documents or the  application  thereof to any
party thereto or circumstances  shall be invalid or unenforceable to any extent,
the remainder of such Loan Documents and the  application of such  provisions to
any other party thereto or circumstances shall not be affected thereby and shall
be enforced to the greatest extent permitted by law.

         SECTION 8.14.              TIME OF THE ESSENCE.

         TIME IS OF THE ESSENCE IN THIS  AGREEMENT,  THE NOTE AND THE OTHER LOAN
DOCUMENTS.

         SECTION 8.15.              Bank Not a Joint Venturer.

         Neither this Agreement nor any  agreements,  instruments,  documents or
transactions  contemplated  hereby (including the Loan Documents),  shall in any
respect  be  interpreted,  deemed or  construed  as making the Bank a partner or
joint  venturer  with the  Borrower or as creating any similar  relationship  or
entity.


                                   {REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


251094.7/ 383.   840
                                                        40

<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed,  under seal, by their respective  authorized officers,  as of the
day and year first above written.

                  "BORROWER"

                  APPLE SOUTH, INC.                                       (SEAL)

                  By:/s/ Erich J. Booth
                         Erich J. Booth, Chief Financial Officer and
                         Treasurer

                  Attest:/s/ Ben Waites
                         Ben Waites, Assistant Secretary


                  Apple South, Inc.
                  Corporate Headquarters
                  Hancock at Washington
                  Madison, Georgia 30650
                  Attn:  Erich J. Booth,
                         Chief Financial Officer

                  Telecopier Number: (706) 342-4057



                                                        41

<PAGE>




                  "BANK"

                   FIRST UNION NATIONAL BANK OF
                   GEORGIA


                   By:/s/ William T. Grasty
                   Title:   Underwriter


                   Lending Office:

                   First Union National Bank of Georgia
                   999 Peachtree Street, N.E.
                   12th Floor
                   Atlanta, Georgia 30309
                   Attention:        Georgia Corporate Banking

                   Telecopier Number: ____________________





                                                        42

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