SIXTH AMENDMENT TO PARTICIPATION AGREEMENT

     THIS SIXTH AMENDMENT TO PARTICIPATION AGREEMENT (hereinafter,  as it may be
modified,  amended or supplemented from time to time, called this  "Amendment"),
made and entered  into as of December  22, 2000,  among (i) AVADO  BRANDS,  INC.
formerly known as Apple South, Inc., a corporation  organized and existing under
the laws of Georgia (herein,  together with its successors and assigns permitted
hereunder, called the "Lessee"), (ii) FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a  national  banking  association  ("First  Security"),  not in  its  individual
capacity except as expressly  provided herein, but solely as Owner Trustee under
Apple  South  Trust  No.  97-1  (herein  in such  capacity,  together  with  its
successors and assigns permitted hereunder,  called the "Owner Trustee"),  (iii)
STI CREDIT  CORPORATION,  a Nevada  corporation,  as assignee of SunTrust  Bank,
formerly known as SunTrust Bank,  Atlanta,  in its capacity as the holder of the
beneficial  interest in the trust estate established under Apple South Trust No.
97-1 (in such capacity as of the date hereof,  the  "Holder",  and together with
its successors and assigns permitted hereunder,  called the "Holders"), (iv) the
financial  institutions now parties to the  Participation  Agreement (as defined
below) as Lenders (each herein in such  capacity,  together with its  successors
and  assigns  permitted  hereunder,  called a  "Lender"  and  collectively,  the
"Lenders"),  and (v) SUNTRUST BANK,  formerly known as SunTrust Bank, Atlanta, a
banking   corporation   organized  and  existing  under  the  laws  of  Georgia,
("SunTrust"),  as collateral agent and administrative  agent for the Lenders and
the Holders (in such capacity, the "Administrative Agent").

                               W I T N E S S E T H

     WHEREAS,  the Lessee,  the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent are parties to that certain Participation Agreement,  dated
as of September 24, 1997, as amended by the First Amendment to the Participation
Agreement, dated as of March 27, 1998, as amended by the Second Amendment to the
Participation  Agreement,  dated as of August 14, 1998,  as amended by the Third
Amendment to the  Participation  Agreement,  dated as of November  13, 1998,  as
amended by the Fourth  Amendment  to the  Participation  Agreement,  dated as of
February  22,  1999,  and as amended  by the Fifth  Amendment  to  Participation
Agreement,  dated as of  August  24,  1999 (as so  amended,  the  "Participation
Agreement");

     WHEREAS,  the Owner  Trustee  and the  Lessee are  parties to that  certain
Master Equipment Lease Agreement,  dated as of September 24, 1997, as amended by
the First  Amendment  to Lease  Agreement,  dated as of March 27,  1998,  and as
amended by the Second Amendment to Lease Agreement, dated as of May, 1999 (as so
amended, the "Lease Agreement");

     WHEREAS,  the Lessee,  the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent have agreed to amend the Participation Agreement in certain
respects and to waive certain covenant defaults,  as described more particularly
below.

     NOW,  THEREFORE,  in consideration of the sum of TEN DOLLARS ($10.00),  the
foregoing  premises,  to  induce  the  Holder  and  the  Lenders  to  amend  the
Participation Agreement and to continue to perform their obligations thereunder,
and for other good and valuable  consideration,  the  sufficiency and receipt of
all of which are acknowledged,  the Lessee,  the Owner Trustee,  the Holder, the
Lenders and the Administrative Agent agree as follows:

                                 A. DEFINITIONS

     Unless the context  otherwise  requires,  all capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in Appendix A
to the Participation  Agreement for all purposes of this Amendment.  The General
Provisions of Appendix A to the Participation  Agreement are hereby incorporated
by reference herein.


                                       1
<PAGE>
                                  B. AMENDMENTS

     1.  Amendment  to Existing  Section 5.5:  Section 5.5 of the  Participation
Agreement  (Fixed Charge Coverage  Ratio) is hereby amended by deleting  Section
5.5 in its entirety and substituting in its place the following  revised Section
5.5:

5.5      Fixed Charge Coverage Ratio.

     Lessee's Fixed Charge Coverage Ratio, measured on a rolling four (4) Fiscal
Quarters'  basis,  as of the end of each  Fiscal  Quarter,  commencing  with the
Fiscal  Quarter  ending  closest to October 1, 2000,  shall be not less than the
ratio  prescribed below for each Fiscal Quarter  prescribed below  corresponding
thereto:
---------------------------------------- ------------------------------
Fiscal Quarter Ending:                                  Ratio
---------------------------------------- ------------------------------
October 1, 2000                                         1.10:1
---------------------------------------- ------------------------------
December 31, 2000                                       1.25:1
---------------------------------------- ------------------------------
April 4, 2001                                           1.30:1
---------------------------------------- ------------------------------
July 1, 2001                                            1.30:1
---------------------------------------- ------------------------------
September 30, 2001                                      1.40:1
--------------------------------------- ------------------------------
December 30, 2001                                       1.45:1
---------------------------------------- ------------------------------
March 31, 2002 and thereafter                           1.50:1
---------------------------------------- ------------------------------

     2.  Amendment  to Existing  Section 5.6:  Section 5.6 of the  Participation
Agreement (Total Debt/EBITDA Ratio) is hereby amended by deleting Section 5.6 in
its entirety and substituting in its place the following revised Section 5.6:

5.6      Total Debt/EBITDA Ratio.

     The ratio  which  (i) the Total  Debt of the  Lessee  and its  Consolidated
Subsidiaries  at the end of any  Fiscal  Quarter,  commencing  with  the  Fiscal
Quarter ended closest to October 1, 2000, bears to (ii) the EBITDA of the Lessee
and its  Consolidated  Subsidiaries,  measured  on a  rolling  four  (4)  Fiscal
Quarters'  basis as of the end of such Fiscal  Quarter  (the "Total  Debt/EBITDA
Ratio"), shall be not more than the ratio prescribed below as of the end of each
Fiscal Quarter corresponding thereto:

---------------------------------------- ------------------------------
Fiscal Quarter Ending:                                  Ratio
---------------------------------------- ------------------------------
October 1, 2000                                         6.00:1
---------------------------------------- ------------------------------
December 31, 2000                                       4.70:1
---------------------------------------- ------------------------------
April 4, 2001                                           4.45:1
---------------------------------------- ------------------------------
July 1, 2001                                            4.40:1
---------------------------------------- ------------------------------
September 30, 2001                                      4.10:1
---------------------------------------- ------------------------------
December 30, 2001                                       3.90:1
---------------------------------------- ------------------------------
March 31, 2002 and thereafter                           3.75:1
---------------------------------------- ------------------------------



                                       2
<PAGE>
     In  computing  EBITDA in respect of the  foregoing  ratio and the ratio set
forth in Section 5.7 below and the minimum amount of EBITDA set forth in Section
5.7A below, (a) any asset or stock  dispositions by the Lessee consisting of the
sale of a business line, segment or other group of related restaurants occurring
within a Fiscal  Quarter  shall  be  accounted  for by  reducing  EBITDA  by the
individual  EBITDA  attributable to each store within such group for such Fiscal
Quarter and the three (3)  preceding  Fiscal  Quarters or, in the event that any
such restaurant had negative  individual EBITDA for such periods,  by increasing
EBITDA  by the  amount  of such  negative  EBITDA;  and (b) any  asset  or stock
acquisitions  by the Lessee,  to the extent  otherwise  then  permitted to occur
hereunder (and without implying such permission),  consisting of the purchase of
a business, line, segment or other group of related restaurants occurring within
a Fiscal  Quarter shall be accounted for by increasing  EBITDA by the individual
EBITDA  attributable to each store within such group for such Fiscal Quarter and
for the three (3) preceding Fiscal Quarters or, in the event that any such store
had negative  individual  EBITDA for such periods,  by decreasing  EBITDA by the
amount of such negative EBITDA;  in each instance,  on an historical basis, in a
manner which the Lessee shall  determine,  but subject to prior review with, and
approval by, the Administrative Agent.

     3.  Amendment  to Existing  Section 5.7:  Section 5.7 of the  Participation
Agreement (Total Senior Debt/EBITDA Ratio) is hereby amended by deleting Section
5.7 in its entirety and substituting in its place the following  revised Section
5.7:

5.7      Total Senior Debt/EBITDA Ratio.

     The  ratio  which  (i)  the  Total  Senior  Debt  of  the  Lessee  and  its
Consolidated Subsidiaries at the end of any Fiscal Quarter,  commencing with the
Fiscal  Quarter  ended  closest to October 1, 2000,  bears to (ii) EBITDA of the
Lessee and its Consolidated Subsidiaries,  measured on a rolling four (4) Fiscal
Quarters'  basis as of the end of such Fiscal  Quarter  (adjusted,  however,  as
reflected in Section 5.6),  shall be not more than the amounts  prescribed below
for each Fiscal Quarter prescribed below corresponding thereto:

---------------------------------------- ------------------------------
Fiscal Quarter Ending:                                  Ratio
---------------------------------------- ------------------------------
October 1, 2000                                         4.30:1
---------------------------------------- ------------------------------
December 31, 2000                                       3.25:1
---------------------------------------- ------------------------------
April 4, 2001                                           3.05:1
---------------------------------------- ------------------------------
July 1, 2001                                            3.00:1
---------------------------------------- ------------------------------
September 30, 2001                                      2.75:1
---------------------------------------- ------------------------------
December 30, 2001                                       2.55:1
---------------------------------------- ------------------------------
March 31, 2002 and thereafter                           2.50:1
---------------------------------------- ------------------------------

     and  there  shall  be  added to the  Participation  Agreement,  immediately
following  amended Section 5.7 thereof (see above),  a new Section 5.7A, to read
as follows:


                                       3
<PAGE>
     SECTION 5.7A.  Minimum  EBITDA.  EBITDA of the Lessee and its  Consolidated
Subsidiaries  for each of the following  Fiscal  Quarters shall be at least that
amount prescribed opposite such Fiscal Quarter:

---------------------------------------- ------------------------------
Fiscal Quarter Ending:                                EBITDA
---------------------------------------- ------------------------------
December 31, 2000                                   $17,900,000
---------------------------------------- ------------------------------
April 4, 2001                                       $17,700,000
---------------------------------------- ------------------------------
July 1, 2001                                        $20,000,000
---------------------------------------- ------------------------------
September 30, 2001                                  $15,000,000
---------------------------------------- ------------------------------
December 30, 2001                                   $19,000,000
---------------------------------------- ------------------------------
March 31, 2002 and thereafter                       $17,000,000
---------------------------------------- ------------------------------

     4. Amendment to Existing  Section  5.11:Section  5.11 of the  Participation
Agreement  (Consolidations,  Mergers  and Sales of Assets) is hereby  amended by
deleting the entire existing second proviso, beginning with the words "provided,
further,  that the Lessee may consummate  Asset Sales ..." and ending at the end
of existing  Section 5.11 and  substituting  in is place the  following  revised
version of said second proviso:

     provided,  further,  that the Lessee may consummate Asset Sales so long as,
unless  otherwise  approved in writing by the Required  Lenders and the Required
Holders,  each of the  following  conditions  is met: (i) the Asset Sales are to
Persons other than Affiliates, (ii) the Asset Sales are made for cash, (iii) the
Net Cash Proceeds  from all such Asset Sales are applied in the manner  provided
in Section  2.9.2 of the Credit  Agreement,  and for no other  purpose,  (iv) no
Default has occurred  which is then  continuing  or otherwise  would result from
such  sale  occurring,  and  (v) if the  Asset  Sale  concerns  the  sale of any
collateral  then held as security for the revolving  loans and swing loans under
the Credit Agreement,  the prior written consent of the required banks under the
Credit  Agreement,  shall be required as a condition  to such sale to the extent
such consent is required under the Credit Agreement.  The term "Asset Sales," as
used herein,  shall extend to and include,  without  limitation,  sale-leaseback
transactions, provided that the Administrative Agent first shall have separately
approved the terms of the "leaseback"  portion of such  transaction as a further
condition to the Lessee or any Subsidiary entering into such transaction.

     5. Amendment to Existing Section  5.19:Section 5.19(b) of the Participation
Agreement  (Capital  Expenditures) is hereby amended by deleting Section 5.19(b)
in its entirety and  substituting  in its place the  following  revised  Section
5.19(b):

     (ii) Capital Expenditures. Make capital expenditures in the ordinary course
of business;  provided,  however, commencing with the Fiscal Year ending closest
to  December  31,  2000,  capital  expenditures  shall be  limited  in amount as
follows:  (i)  for  the  Fiscal  Year  ending  closest  to  December  31,  2000,
$50,000,000;  (ii) for the Fiscal Year  ending  closest to  December  31,  2001,
$25,000,000;  provided,  however,  that within the Fiscal Year ending closest to
December 31, 2001, in addition to the aforesaid  overall  limitation (A) capital
expenditures  shall  not  exceed,  in any event (1)  $6,600,000  for the  Fiscal
Quarter ending April 4, 2001, (2)  $13,200,000,  on a cumulative  basis, for the
two (2) Fiscal Quarters'  period ending July 1, 2001, and (3) $20,400,000,  on a
cumulative basis, for the three (3) Fiscal Quarters' period ending September 30,
2001, and (B) no such capital  expenditures  in excess of $3,000,000 may be made
in any one Fiscal  Quarter in such  Fiscal  Year  unless and until the Agent has
received  financial  statements  from the  Borrower  confirming  its  continuing
compliance  with all  financial  covenants set forth in Sections 5.4 through 5.7
hereof and this clause (ii) of Section 5.20 as of and for the  preceding  Fiscal


                                       4
<PAGE>
Quarter;  and (iii) for each  Fiscal Year  subsequent  to the fiscal year ending
closest to December 31, 2001, $12,500,000. In addition to the foregoing, in each
Fiscal Year  subsequent to the Fiscal Year ending  closest to December 31, 2000,
capital expenditures shall not include any expenditures for the purchase of land
or  buildings  or real  estate  interests  other  than  fixtures  and  leasehold
improvements.

     6.  Amendment  to  Existing  Section   5.19(j):   Section  5.19(j)  of  the
Participation  Agreement  (Restaurant  Concepts)  is hereby  amended by deleting
Section  5.19(j) in its entirety  and  substituting  in its place the  following
revised Section 5.19(j):

     (j)  Restaurant  Concepts.  So  long  as no  Default  has  occurred  and is
continuing or would be caused  thereby,  the Lessee may invest up to $1,000,000,
in  the  aggregate,  in  the  "San  Marzano"  restaurant  concept/joint  venture
subsequent to the Amendment  Date (the amount of investment by Lessee therein as
of the Amendment Date being zero);  provided,  however,  that, subsequent to the
Amendment  Date no further  investments  may be made  pursuant  to said  Section
5.20(x), of whatever sort, in any restaurant concept or joint venture except for
the aforementioned "San Marzano" investment.

     7.  Amendment  to  Existing  Section   5.19(k):   Section  5.19(k)  of  the
Participation  Agreement  (Other Advances) is hereby amended by deleting Section
5.19(k) in its  entirety and  substituting  in its place the  following  revised
Section 5.19(k):

     (k) Other Advances.  Make a loan to Tom E. Dupree, Jr., in an amount not to
exceed Three Million Dollars ($3,000,000),  on or about October 4, 1999, so long
as, and provided  that,  (A) no Default then has occurred and is  continuing  or
would be caused thereby,  (B) such loan is repaid in full by not later than June
22, 2002,  (C) such loan bears a market rate of interest until paid in full, and
(D) the  proceeds of such loan are used by Tom E. Dupree,  Jr. to repay  certain
personal  indebtedness  then due secured by his equity  interests in the Lessee;
provided,  further,  that,  as to all other  loans and  advances  to  Affiliates
(excluding therefrom, however, Subsidiaries),  shareholders, directors, officers
or employees shall be paid in full by June 22, 2002;

     8.  Amendment  to  Existing  Section   5.19(l):   Section  5.19(l)  of  the
Participation  Agreement  (Acquisitions)  is hereby amended by deleting  Section
5.19(l) in its  entirety and  substituting  in its place the  following  revised
Section 5.19(l):

         (l) INTENTIONALLY OMITTED

     9.  Amendment to Existing  Section  5.20.Clauses  (vii),  (viii)  (limited,
however,  to  clauses  (ix)  and (x)  Section  5.8) and  (ix) of  Section  5.20,
permitting the incurrence of Debt under certain  conditions  described  therein,
are hereby  eliminated  prospectively  as of the Sixth Amendment  Effective Date
such that,  subsequent to the Sixth Amendment Effective Date, no additional Debt
may  be  incurred  in  reliance  upon  said  clauses  (vii),   (viii)  or  (ix).
Furthermore,  henceforth,  other than Debt under the Credit  Agreement,  no Debt
shall be repaid by Lessee or any Subsidiary prior to its scheduled  maturity nor
may any such Person take (or acquiesce in) any action having  substantially  the
same  effect,  such as,  but not  limited  to,  by  terminating  early  any Debt
arrangement  or making  any  settlement  or accord  and  satisfaction  in regard
thereto,  except,  in each case,  with the prior written consent of the Required
Lenders thereto.

     Furthermore,  henceforth,  the Lessee will not, nor will the Lessee  permit
any  Consolidated  Subsidiary  to, acquire any real property (or any interest in
real  property),  or enter into any  commitment  (or  contract)  to acquire  any
thereof,  whether  directly or indirectly,  except with prior written consent of
the  Lenders,  notwithstanding  any term of  Section  5.20 of the  Participation
Agreement which may presently be to the contrary.



                                       5
<PAGE>
     10. Amendment to Existing Section 5.21.  Section 5.21 of the  Participation
Agreement  is deleted and the  following  revised  version of said  Section 5.21
shall be substituted in its place:

     SECTION 5.21 Dividends and Distributions. The Lessee will not, nor will the
Borrower  permit any  Subsidiary  to, (i) pay any cash  dividend;  (ii) make any
capital  distribution,  (iii) redeem,  repurchase or retire for cash any Capital
Stock;  provided,   however,  that,  notwithstanding  the  foregoing,  (A)  each
Subsidiary may make  Distributions on any Capital Stock of such Subsidiary owned
by the Lessee or another Consolidated Subsidiary which is a Subsidiary Guarantor
(as defined in the Credit Agreement),  and (B) the Lessee may make distributions
from  time to time in  respect  of the  TECONS  as and when due and  payable  in
accordance with the terms thereof.

     11. Amendment to Existing Section 5.24:  Section 5.24 of the  Participation
Agreement (Stock Purchases,  Etc.) is hereby amended by deleting Section 5.24 in
its entirety and substituting in its place the following revised Section 5.24:

     5.24 Stock Purchases, Etc.

     The Lessee will not, and will not permit any Consolidated Subsidiary of the
Lessee,  to  purchase  any  Capital  Stock of the  Lessee,  whether  in a "spot"
transaction,  pursuant  to an Equity  Forward  Contract or  otherwise,  nor will
Lessee enter into,  or permit any  Consolidated  Subsidiary  to enter into,  any
Equity Forward Contract or amend or modify any Equity Forward Contract in effect
on the Sixth Amendment  Effective Date so as to increase the amount of, or price
of, any shares of Capital  Stock which are subject to Equity  Forward  Contracts
pending settlement as of the Sixth Amendment Effective Date.


     12. Amendment to Appendix A: Appendix A of the  Participation  Agreement is
amended  by  adding  the  following  definitions  to  Appendix  A in the  proper
alphabetical order:

     "Morgan" shall mean the Morgan Guaranty Trust Company of New York.

     "Morgan Agreement" shall mean that Master Agreement with attached Schedule,
dated as of June 3, 1996, as amended by that certain Waiver and Amendment Letter
dated  April 3,  2000,  between  Morgan  and the  Lessee  and any  confirmations
thereto.

     "Sixth Amendment Effective Date" shall mean, December __, 2000.

     13. Amendment to Appendix A: Appendix A of the  Participation  Agreement is
amended by deleting  the  definition  of "Fixed  Charge  Coverage  Ratio" in its
entirety and replacing such definition in Appendix A in the proper  alphabetical
order:

     "Fixed Charge Coverage Ratio" shall mean, for any fiscal period,  the ratio
which (A) the sum of (i) EBITDAR  for such  period;  plus (ii) the sum  (without
duplication) of (a) any dividends paid in respect of Redeemable  Preferred Stock
during such  period,  plus (b) any payments  made or accrued  during such period
(howsoever  denominated  or  construed) in respect of any TECONS in such period,
regardless  of maturity or the timing of any  redemption  or  repurchase  rights
granted in regard thereto (the foregoing herein called "TECONS Payments"), bears
to (B) the sum  (without  duplication)  for the same such  period,  of:  (i) any
dividends paid in respect to Redeemable  Preferred Stock, plus (ii) that portion
of any TECONS  Payments  actually  paid in cash,  plus,  (iii)  operating  lease
expense;  plus (iv)  interest  expense,  plus (v) all payments  made  (including
payments made in  settlement of existing  obligations  or claims)  under,  or in
respect of,  interest rate "hedge,"  "swap,"  "collar" or similar  arrangements,
whether  now or  hereafter  existing,  including,  but  not  limited  to,  those
expressly  permitted  to exist under  clause (ix) of Section 5.20 for the Lessee
and its  Consolidated  Subsidiaries  in each  case,  for  the  Borrower  and its
Consolidated  Subsidiaries  for the same such period,  all as  determined  under
GAAP.


                                       6
<PAGE>
     Appendix A of the  Participation  Agreement  further  amended by adding the
following language to the existing definition of the term "Total Funded Debt":

     provided,  however,  that  notwithstanding  the  foregoing,  in making  the
foregoing   calculation  there  shall  be  excluded  from  clause  (iii)  above,
concerning,  debts,  liabilities  and  obligations  which  are  Guaranteed,  any
Guarantee by the Lessee or any Subsidiary  given in respect of any of the former
Applebee's locations owned or operated by the Lessee or any such Subsidiary.


                             C. WAIVERS AND CONSENTS

     1. Lessee has notified the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent that, (i) effective as of October 3, 1999, a Lease Event of
Default  occurred,  namely,  in respect of Section 14(d) of the Lease Agreement,
concerning Lessee's failure to observe the financial covenant set for in Section
5.6 of the Participation  Agreement (the Total Debt/EBITDA  ratio) as of and for
the Fiscal Quarter ended October 3, 1999, i.e. the required ratio thereunder for
such period being not more than 4.00:1.0 and the actual ratio, based on Lessee's
financial statements for such Fiscal Quarter,  being 4.2:1.0, and (ii) effective
as of January 2, 2000, a Lease Event of Default occurred,  namely, in respect of
Section 14(d) of the Lease Agreement, concerning Lessee's failure to observe the
financial  covenant set for in Section 5.6 of the  Participation  Agreement (the
Total  Debt/EBITDA  ratio) as of and for the Fiscal  Quarter ended  December 31,
1999,  i.e. the required  ratio  thereunder  for such period being not more than
4.00:1.0 and the actual ratio, based on Lessee's  financial  statements for such
Fiscal Quarter, being 5.2:1.0 (collectively,  the "Financial Covenant Default").
The Lessee has further requested that the Owner Trustee, the Holder, the Lenders
and the  Administrative  Agent waive the  Financial  Covenant  Default under the
Lease Agreement and the Participation  Agreement,  as the case may be. The Owner
Trustee,  the Holder, the Lenders and the  Administrative  Agent have considered
the Lessee's  request,  and hereby waive the Financial  Covenant  Default in the
Lease Agreement and the Participation Agreement, as the case may be.

     2. Lessee has notified the Owner Trustee,  the Holder,  the Lenders and the
Administrative  Agent that,  effective as of November 17, 1999, a Lease Event of
Default  occurred,  namely,  in respect of Section 14(d) of the Lease Agreement,
concerning  Lessee's  pledging and granting a first  priority Lien in certain of
its assets,  namely all of the capital  stock and other equity  interests in all
direct  and  indirect  subsidiaries  of the  Lessee  comprising  the  restaurant
concepts of (i) "Don Pablo's", (ii) "Hops", (iii) "McCormick & Schmick" and (iv)
"Canyon Cafe", to the administrative agent and the lenders parties to the Credit
Agreement,  in  violation  of  the  covenant  set  for  in  Section  5.8  of the
Participation  Agreement,  the negative  pledge  covenant,  (the "First Negative
Pledge  Covenant  Default").  The Lessee has  further  requested  that the Owner
Trustee,  the Holder, the Lenders and the  Administrative  Agent waive the First
Negative Pledge Covenant Default under the Lease Agreement and the Participation
Agreement,  as the case may be. The Owner Trustee,  the Holder,  the Lenders and
the Administrative  Agent have considered the Lessee's request, and hereby waive
the First  Negative  Pledge  Covenant  Default  in the Lease  Agreement  and the
Participation Agreement, as the case may be.

     3. Lessee has notified the Owner Trustee,  the Holder,  the Lenders and the
Administrative  Agent that,  effective as of December 31, 1999, a Lease Event of
Default  occurred,  namely,  in respect of Section 14(d) of the Lease Agreement,
concerning  Lessee's  granting  a  first  priority  Lien  in all of its  and its
Subsidiaries'  personal property (excluding any equipment or fixtures located at
the corporate  headquarters of Don Pablo's and Canyon Cafe),  and all of its and
its Consolidated Subsidiaries' real property to the administrative agent and the
lenders parties to the Credit Agreement, in violation of the covenant set for in
Section 5.8 of the  Participation  Agreement,  the negative pledge covenant (the
"Second  Negative Pledge Covenant  Default").  The Lessee has further  requested
that the Owner Trustee,  the Holder,  the Lenders and the  Administrative  Agent
waive the Second Negative Pledge Covenant  Default under the Lease Agreement and
the Participation  Agreement, as the case may be. The Owner Trustee, the Holder,


                                       7
<PAGE>
the Lenders and the  Administrative  Agent have considered the Lessee's request,
and  hereby  waive the  Second  Negative  Pledge  Covenant  Default in the Lease
Agreement and the Participation Agreement, as the case may be.

     4. Lessee has notified the Owner Trustee,  the Holder,  the Lenders and the
Administrative  Agent that,  effective as of February 29, 1999, a Lease Event of
Default  occurred,  namely,  in respect of Section 14(d) of the Lease Agreement,
concerning  Lessee's  pledging and granting a first  priority Lien in all of its
equity interests in Belgo Group Plc. to the administrative agent and the lenders
parties to the Credit Agreement, in violation of the covenant set for in Section
5.8 of the  Participation  Agreement,  the negative  pledge (the "Third Negative
Pledge  Covenant  Default").  The Lessee has  further  requested  that the Owner
Trustee,  the Holder, the Lenders and the  Administrative  Agent waive the Third
Negative Pledge Covenant Default under the Lease Agreement and the Participation
Agreement,  as the case may be. The Owner Trustee,  the Holder,  the Lenders and
the Administrative  Agent have considered the Lessee's request, and hereby waive
the Third  Negative  Pledge  Covenant  Default  in the Lease  Agreement  and the
Participation Agreement, as the case may be.

     5. Lessee has notified the Owner Trustee,  the Holder,  the Lenders and the
Administrative  Agent  that,  effective  as of May 22,  2000,  a Lease  Event of
Default  occurred,  namely,  in respect to Section 14(d) of the Lease Agreement,
concerning  Lessee's pledging and granting of first priority Liens in certain of
its assets,  namely any real properties  wherein both (a) the interest of Lessee
or its Subsidiaries is not fee simple; e.g. where Lessee or such Subsidiary is a
tenant under a ground lease or building  lease and (b) any consent of, or notice
to, the lessors of such real properties is required as a condition  precedent to
the grant to such Liens;

     6. Lessee has notified the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent that, by letter dated March 27, 2000, Morgan had declared a
default to exist (the "Morgan Default") under the Morgan Agreement, based on the
Lessee's failure to comply with certain covenants set forth therein incorporated
by  reference   therein  pursuant  to  Section  5(a)(ix)  thereof  (the  "Morgan
Covenants").  The existence and continuation of the Morgan Default constitutes a
Lease Event of Default  under the Lease  Agreement  pursuant  to Section  14.(l)
thereof  (the  "Cross-Default").  The Holder and the  Lenders  have agreed as an
accommodation  to  Lessee to waive the  Cross-Default,  and do hereby  waive the
Cross-Default, subject, however, to the following terms and conditions:

     (a) so long as a Morgan Default is continuing,  then,  notwithstanding  any
term hereof or of the Credit  Agreement  to the  contrary,  the total  amount of
revolving loans and swing loans  outstanding  under the Credit  Agreement at any
one time cannot exceed One Hundred Twenty-five Million Dollars ($125,000,000) or
such lesser amount as shall equal the  outstanding  commitments  thereunder from
time to time; and

     (b) if, at any time  hereafter,  whether  as a result of the  existence  or
continuation  of a Morgan  Default or otherwise,  any of the  following  (herein
called a "Reinstitution Event") shall occur: (i) Morgan designates any day as an
"Early  Termination  Date" (as that term is defined in the Morgan  Agreement) in
respect of all outstanding "Transactions" (as that term is defined in the Morgan
Agreement);  or (ii) any "Automatic Early  Termination" (as that term is defined
in the Morgan  Agreement)  occurs;  or (iii) any acceleration of, or demand for,
payment occurs with respect to any Debts arising under the Morgan Agreement,  or
(iv)  Lessee  enters  into any  settlement,  accord  and  satisfaction  or other
arrangement with Morgan,  or Morgan otherwise  exercises any rights or remedies,
in each instance, having substantially the same effect as if either clauses (i),
(ii) or (iii)  above had  occurred;  then,  automatically,  upon any one of such
conditions  being met,  and without the  necessity of any further act or deed on
the part of the Holder or any Lender,  the Morgan  Default  shall  constitute an
Event of Default  under the Lease  Agreement  and the  Participation  Agreement;
i.e., the Cross Default shall be re-instituted effectively immediately; and

     (c) the  waiver of the  Cross-Default  contained  herein  shall be  limited


                                       8
<PAGE>
solely to  Section  14(l) of the Lease  Agreement  as it  relates  to the Morgan
Default and,  then,  only with respect to the Morgan  Covenants,  and not to any
other Lease Event of Default, and nothing contained herein is intended, or shall
be construed,  to suggest that the Holder and the Lenders have waived,  or would
be  willing to waive,  any other  Lease  Event of  Default,  whether  related or
unrelated, or whether now or hereafter existing.

     In  addition  to the  foregoing,  Lessee  acknowledges  and agrees that any
waiver of the  Morgan  Default  or other  arrangement  substantially  similar in
effect thereto (herein, a "Morgan Waiver"), shall require the separate,  written
consent of the  Required  Lenders,  if and to the extent any term,  covenant  or
condition of the Morgan Waiver  conflicts  with,  contravenes or contradicts any
term,  covenant or condition  of the  Participation  Agreement or any  Operative
Document. To facilitate the foregoing,  Lessee agrees to keep the Administrative
Agent  informed  as to  the  status  of  its  ongoing  discussions  with  Morgan
concerning the Morgan Default;  to notify the  Administrative  Agent promptly in
writing if any Reinstitution Event occurs; and to provide  Administrative  Agent
with a copy, prior to its becoming effective,  of any Morgan Waiver proposed for
execution or  acceptance  by the Lessee and Morgan.  Further to  facilitate  the
foregoing,  Lessee hereby certifies to the Holders and the Lenders that attached
hereto  as  Schedule  A is a true,  correct  and  complete  copy  of the  Morgan
Agreement as in effect on the Sixth Amendment  Effective Date, and Lessee agrees
not to enter into any amendment or other  modification  to the Morgan  Agreement
hereafter  which has, or could  reasonably  be  expected to have,  the effect of
increasing  the amount or  frequency of payment of any Debts  thereunder  except
with the prior written consent of the Required Lenders.

     7. In consideration of the Owner Trustee,  the Holder,  the Lenders and the
Administrative Agent waivers and consents, the Lessee agrees to provide to Owner
Trustee,  the  Holder,  the  Lenders  and the  Administrative  Agent  additional
financial information, including but not limited to:

     (a) the "53 Week Report" of all four  concepts on a weekly  basis,  monthly
financial  performance  results by concept and on a consolidated  basis, and any
amended  financial  projections  from those  previously  to the  Lenders and the
Administrative Agent;

     (b)  on the  Sixth  Amendment  Effective  Date,  a  listing  of  all  other
Properties  which the Lessee  intends to sell during the  remaining  term of the
Participation Agreement as described on Schedule 1 hereto, the projected date of
sale thereof, the projected amounts thereof, and the projected Net Cash Proceeds
to be derived therefrom;

     (c)  on the  Sixth  Amendment  Effective  Date,  a  listing  of  all  Asset
Recoveries which the Lessee  anticipates  receiving during the remaining term of
the Participation Agreement, and the projected date of their recovery;

     (d) monthly, subsequent to the Sixth Amendment Effective Date, an update in
respect of all actual and projected Asset Sales  (including the  Sale-Leaseback)
and Asset Recoveries, including reconciliations to date.

     In addition to the foregoing,  beginning with the Sixth Amendment Effective
Date, the interim financial statements and corresponding compliance certificates
presently  required to be delivered  quarterly  under Sections 5.1(b) and 5.(c),
respectively, henceforth shall be delivered monthly by Lessee within twenty-five
(25) days after the end of each Fiscal Month (except that, until further notice,
compliance  with  financial  covenants  shall  continue  to  be  certified  on a
quarterly basis only).

                            D. POST CLOSING COVENANT

     1. The Lessee agrees to deliver to the  Administrative  Agent no later than
January __, 2001, a duly  executed  Mortgagee  Consent and Waiver in the form of
Exhibit A attached  hereto,  for each  parcel of real  property  which is now or
which hereafter becomes subject to a lien in favor of the  administrative  agent


                                       9
<PAGE>
for the benefit of the  lenders  under the Credit  Agreement  or any other third
party.  The Lessee  acknowledges  and agrees  that the  failure of the Lessee to
deliver  such  documents  to the  Administrative  Agent by January 26 2001 shall
constitute  an Event of Default under the  Participation  Agreement or the Lease
Agreement, as the case may be.

     2.  The  Lessee  agrees  to  cause  Pubs  Property  LLC to  deliver  to the
Administrative  Agent no later than January 26, 2001, re-sale  certificates with
proper sales tax  registration  numbers  from the states of  Colorado,  Florida,
Georgia,  Minnesota,  South Carolina and North Carolina that are satisfactory to
the Administrative Agent in its sole discretion.

                                     E. FEES

     1. In consideration of the Owner Trustee,  the Holder,  the Lenders and the
Administrative  Agent's amendments,  waivers and consents hereunder,  the Lessee
agrees to pay to the Administrative Agent, for the benefit of the Holder and the
Lenders, on the Sixth Amendment  Effective Date, an amendment/waiver  fee, which
shall  be  fully  earned  and not  subject  to  rebate,  in an  amount  equal to
$110,000.00.

                                F. MISCELLANEOUS

     1. Upon the Administrative  Agent's receipt of (i) executed signature pages
from all parties to this  Amendment,  and (ii) the fee  referenced  in Section D
above, all amendments and waivers to the  Participation  Agreement and the Lease
Agreement  made herein  shall  become  effective  as of March 31,  1999,  unless
expressly stated to become  effective as of any other date.  Pursuant to Section
10.1 (a) of the Trust  Agreement,  the Holder  authorizes  and request  that the
Owner Trustee execute this Amendment.

     2. Except as expressly set forth herein, this Amendment shall be deemed not
to waive or modify any  provision  of the  Participation  Agreement or the other
Operative Agreements,  and all terms of the Participation  Agreement, as amended
hereby, and all other Operative Agreements shall be and remain in full force and
effect and shall constitute a legal, valid, binding and enforceable  obligations
of the Lessee.  All references to the Participation  Agreement shall hereinafter
be references to the  Participation  Agreement as amended by this Amendment.  To
the extent any terms and  conditions  in any of the Operative  Agreements  shall
contradict or be in conflict  with any terms or conditions of the  Participation
Agreement,  after giving effect to this Amendment, such terms and conditions are
hereby  deemed  modified  and  amended  accordingly  to  reflect  the  terms and
conditions of the Participation  Agreement as modified and amended hereby. It is
not intended by the parties that this Amendment  constitute,  and this Amendment
shall not constitute, a novation or accord and satisfaction.

     3.  To  induce  the  Owner  Trustee,   the  Holder,  the  Lenders  and  the
Administrative  Agent to enter into this Amendment (A) Lessee hereby  represents
and warrants that the representations and warranties set forth in Section 3.2 of
the Participation  Agreement as amended hereby are true and correct,  (B) Lessee
hereby  restates,  ratifies and reaffirms  each and every term and condition set
forth in the Participation  Agreement,  as amended hereby,  and in the Operative
Agreements as amended hereby, and in the Operative  Agreements,  effective as of
the date hereof;  and (C) Lessee hereby certifies that no Lease Event of Default
has occurred and is continuing.

     4. THIS AMENDMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,
THE LAWS OF THE STATE OF GEORGIA AND ALL APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

     5. This  Amendment  may be  executed in one or more  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same document.


                                       10
<PAGE>
     6. This  Amendment  shall be binding on, and shall inure to the benefit of,
the successors and assigns of the parties hereto.

     7. In the  event  that  any  part of this  Agreement  shall  be found to be
illegal or in violation of public  policy,  or for any reason  unenforceable  at
law, such finding shall not invalidate any other part thereof.

     8. TIME IS OF THE ESSENCE UNDER THIS AGREEMENT.

     9. The parties agree that their  signatures by telecopy or facsimile  shall
be effective  and binding upon them as though  executed in ink on paper but that
the parties shall exchange original ink signatures  promptly  following any such
delivery by telecopy or facsimile.

     10.  Lessee  agrees to pay all costs and expenses of  Administrative  Agent
incurred in connection with the preparation, execution, delivery and enforcement
of this  Amendment  and all other  Operative  Agreements  executed in connection
herewith,   including  the  reasonable  fees  and   out-of-pocket   expenses  of
Administrative Agent's counsel.

     11. This Amendment shall constitute an Operative Agreement for all purposes
of the Participation Agreement and shall be governed accordingly.

                                         [Signatures appear on next page]



                                       11
<PAGE>
     IN WITNESS WHEREOF,  the Lessee, the Owner Trustee, the Holder, each Lender
and the  Administrative  Agent have set their hands as of the day and year first
above written.

                                            "LESSEE"

                                            AVADO BRANDS, INC. formerly known as
                                            Apple South, Inc.


                                            By:_________________________________
                                                Name:
                                                Title:

                                            Attest:_____________________________
                                                Name:
                                                Title:



                                       12
<PAGE>
                                             PARTICIPATION AGREEMENT]
                                            "OWNER TRUSTEE"

                                            FIRST SECURITY BANK, N.A.


                                            By:_________________________________
                                            Name:____________________________
                                            Title:_____________________________



                                       13
<PAGE>
                                           "HOLDER"

                                            STI CREDIT CORPORATION

                                            By:_________________________________
                                            Name:____________________________
                                            Title:_____________________________



                                       14
<PAGE>

                                            "LENDERS"

                                            SUNTRUST  BANK,  formerly  known  as
                                            SunTrust  Bank,  Atlanta,  as the
                                            Administrative Agent and as a Lender


                                            By:_________________________________
                                            Name:____________________________
                                            Title:_____________________________



                                       15
<PAGE>
                                            BANCBOSTON LEASING, INC.


                                            By:_________________________________
                                            Name:____________________________
                                            Title:_____________________________



                                       16
<PAGE>

                                            SOUTHTRUST BANK, N.A.


                                            By:_________________________________
                                            Name:____________________________
                                            Title:_____________________________



                                       17
<PAGE>
     Exhibits and  schedules to this  agreement  are not filed  pursuant to Item
601(b)(2) of SEC Regulation S-K. By the filing of this Form 10-K, the Registrant
hereby  agrees to  furnish  supplementally  a copy of any  ommitted  exhibit  or
schedule to the Commission upon request.



                                       18