$200,000,000

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                                   DATED AS OF

                                  MARCH 1, 1998

                                      AMONG

                               APPLE SOUTH, INC.,

                                   AS BORROWER

                       WACHOVIA BANK, NATIONAL ASSOCIATION

                                       AND

                      ANY OTHER BANK OR BANKS LISTED ON THE
                            SIGNATURE PAGE(S) HEREOF,

                                    AS BANKS

                                       AND

                       WACHOVIA BANK, NATIONAL ASSOCIATION

                             AS AGENT FOR THE BANKS







<PAGE>




                                TABLE OF CONTENTS

                                                                            Page

ARTICLE 1.  DEFINITIONS........................................................1
         SECTION 1.1.  Definitions.............................................1
         SECTION 1.2.  Accounting Terms and Determinations....................13
         SECTION 1.3.  References.............................................14
         SECTION 1.4.  Use of Defined Terms...................................14
         SECTION 1.5.  Terminology............................................14

ARTICLE 2.  THE LOAN..........................................................14
         SECTION 2.1.  Commitments to Make the Loan...........................14
         SECTION 2.2.  Method of Borrowing....................................14
         SECTION 2.3.  Notes..................................................14
         SECTION 2.4.  Maturity of Loan.......................................15
         SECTION 2.5.  Interest Rates.........................................15
         SECTION 2.6.  Fees...................................................17
         SECTION 2.7.  Termination and Reduction of Commitments...............17
         SECTION 2.8.  Optional Prepayments...................................17
         SECTION 2.9.  Mandatory Prepayments..................................17
         SECTION 2.10.  General Provisions as to Payments.....................18
         SECTION 2.11.  Computation of Interest and Fees. ....................18

ARTICLE 3.  CONDITIONS TO BORROWING...........................................19
         SECTION 3.1.  Conditions to Borrowing................................19

ARTICLE 4.  REPRESENTATIONS AND WARRANTIES....................................20
         SECTION 4.1.  Corporate Existence and Power..........................20
         SECTION 4.2.  Corporate and Governmental Authorization; No 
                       Contravention..........................................20
         SECTION 4.3.  Binding Effect.........................................20
         SECTION 4.4.  Financial Information; No Material Adverse Effect......20
         SECTION 4.5.  No Litigation..........................................21
         SECTION 4.6.  Compliance with Laws Generally; Compliance with ERISA..21
         SECTION 4.7.  Taxes..................................................21
         SECTION 4.8.  Subsidiaries...........................................22
         SECTION 4.9.  Not a Holding Company, Public Utility, Investment 
                       Company, Investment Adviser............................22
         SECTION 4.10.  Ownership of Property; Liens..........................22
         SECTION 4.11.  No Default............................................22
         SECTION 4.12.  Full Disclosure.......................................22
         SECTION 4.13.  Environmental Matters.................................22
         SECTION 4.14.  Capital Stock.........................................23

                                        i

<PAGE>




         SECTION 4.15.  Margin Stock..........................................23
         SECTION 4.16.  Solvency..............................................23
         SECTION 4.17.  Possession of Franchises, Licenses, Etc...............23
         SECTION 4.18.  Insurance.............................................24

ARTICLE 5.  COVENANTS.........................................................24
         SECTION 5.1.  Information............................................24
         SECTION 5.2.  Inspection of Property, Books and Records..............26
         SECTION 5.3.  Adjusted Funded Debt/Adjusted Capitalization Ratio.....26
         SECTION 5.4.  Minimum Stockholders' Equity.  ........................26
         SECTION 5.5.  Fixed Charge Coverage Ratio............................26
         SECTION 5.6.  Total Funded Debt/EBITDA Ratio.........................27
         SECTION 5.7.  Negative Pledge........................................27
         SECTION 5.8.  Maintenance of Existence...............................28
         SECTION 5.9.  Dissolution............................................28
         SECTION 5.10.  Consolidations, Mergers and Sales of Assets...........28
         SECTION 5.11.  Use of Proceeds.......................................29
         SECTION 5.12.  Compliance with Laws; Payment of Taxes................29
         SECTION 5.13.  Insurance.............................................29
         SECTION 5.14.  Change in Fiscal Year.................................29
         SECTION 5.15.  Maintenance of Property...............................29
         SECTION 5.16.  Environmental Notices.................................30
         SECTION 5.17.  Environmental Matters.................................30
         SECTION 5.18.  Environmental Releases................................30
         SECTION 5.19.  Investments...........................................30
         SECTION 5.20.  Subsidiary Debt.......................................32

ARTICLE 6.  DEFAULTS..........................................................33
         SECTION 6.1.  Events of Default......................................33
         SECTION 6.2.  Notice of Default......................................36

ARTICLE 7.  THE AGENT.........................................................36
         SECTION 7.1.  Appointment; Powers and Immunities.....................36
         SECTION 7.2.  Reliance by Agent......................................37
         SECTION 7.3.  Defaults...............................................37
         SECTION 7.4.  Rights of Agent as a Bank..............................37
         SECTION 7.5.  Indemnification........................................38
         SECTION 7.6.  Payee of Note Treated as Owner.........................38
         SECTION 7.7.  Nonreliance on Agent and Other Banks...................38
         SECTION 7.8.  Failure to Act.........................................39
         SECTION 7.9.  Resignation of Agent...................................39

ARTICLE 8.  CHANGE IN CIRCUMSTANCES; COMPENSATION.............................39

                                       ii

<PAGE>




         SECTION 8.1.  Basis for Determining Interest Rate Inadequate or 
                       Unfair.................................................39
         SECTION 8.2.  Illegality.............................................40
         SECTION 8.3.  Increased Cost and Reduced Return......................40
         SECTION 8.4.  Base Rate Loan Tranche Substituted for Affected 
                       Euro-Dollar Rate Loan Tranche..........................41
         SECTION 8.5.  Replacement of a Lender................................42
         SECTION 8.6.  Compensation...........................................42

ARTICLE 9.  MISCELLANEOUS.....................................................43
         SECTION 9.1.  Notices................................................43
         SECTION 9.2.  No Waivers.............................................43
         SECTION 9.3.  Expenses; Documentary Taxes............................43
         SECTION 9.4.  Indemnification........................................44
         SECTION 9.5.  Sharing of Setoffs.....................................44
         SECTION 9.6.  Amendments and Waivers.................................45
         SECTION 9.7.  No Margin Stock Collateral.............................45
         SECTION 9.8.  Successors and Assigns.................................46
         SECTION 9.9.  Confidentiality........................................47
         SECTION 9.10.  Representation by Banks...............................48
         SECTION 9.11.  Obligations Several...................................48
         SECTION 9.12.  GEORGIA LAW...........................................48
         SECTION 9.13.  Interpretation........................................48
         SECTION 9.14.  CONSENT TO JURISDICTION...............................49
         SECTION 9.15.  Counterparts..........................................49
         SECTION 9.16.  Survival..............................................49
         SECTION 9.17.  Entire Agreement; Amendment; Severability.............49
         SECTION 9.18.  TIME OF THE ESSENCE...................................50
         SECTION 9.19.  Banks Not a Joint Venturer............................50


                                       iii

<PAGE>





EXHIBITS

EXHIBIT A                  Form of Assignment and Acceptance

EXHIBIT B                  Form of Note

EXHIBIT C                  Form of Notice of Borrowing

EXHIBIT D                  Form of Opinion of Counsel for Borrower

EXHIBIT E                  Form of Closing Certificate

EXHIBIT F                  Form of Secretary's Certificate

EXHIBIT G                  Form of Compliance Certificate


SCHEDULES

SCHEDULE 4.8               Existing Subsidiaries

SCHEDULE 5.7               Existing Permitted Liens


                                       iv

<PAGE>




                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT


     THIS SECOND  AMENDED AND RESTATED  CREDIT  AGREEMENT,  dated as of March 1,
1998, is made among APPLE SOUTH,  INC.,  as Borrower;  WACHOVIA  BANK,  NATIONAL
ASSOCIATION  and any other party or parties listed as a "Bank" or the "Banks" on
the signature page(s) hereof, as Banks; and WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent for the Banks.

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

     "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 Per son 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.

     "Agent" means  Wachovia  Bank,  National  Association,  a national  banking
association  organized  under the laws of the United  States of America,  in its
capacity as agent for the Banks  hereunder,  and its  successors  and  permitted
assigns in such capacity.

     "Agent's  Address"  means the address of Agent  referred to or specified in
Section 9.1.

     "Agent's Letter Agreement" means that certain letter agreement, dated on or
prior to the  Closing  Date,  between  the  Borrower  and the Agent  relating to
certain fees from time to time  payable by the  Borrower to the Agent,  together
with all amendments and modifications thereto.

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

  

                                       -1-

<PAGE>

     "Applebee's  Spinoff"  shall  mean  any sale or  other  disposition  by the
Borrower  of any of its  Applebee's  Neighborhood  Grill  & Bar  restaurants  to
Applebee's International,  Inc. or to other third parties, all of which sales in
the aggregate shall result in the sale or other  disposition by Borrower of all,
or  substantially  all, of the Applebee's  Neighborhood  Grill & Bar restaurants
owned by Borrower for an aggregate  amount of not less than Three  Hundred Fifty
Million Dollars ($350,000,000),  in cash, each payment of which shall be made in
full upon the closing of the final sale for such  respective  transaction,  with
all such  sales to occur as soon as  practicable,  but in any event on or before
April 1, 1999.

     "Applicable Margin" means: (i) for any Base Rate Loan Tranche, zero percent
(0%); and (ii) for any  Euro-Dollar  Rate Loan Tranche,  one and one-half of one
percent (1-1/2%) per annum.

     "Assignee" has the meaning set forth in Section 9.8.3.

     "Assignment and Acceptance" means an Assignment and Acceptance  executed in
accordance with Section 9.8.3 in the form attached hereto as Exhibit A.

     "Authority" has the meaning set forth in Section 8.2.

     "Bank"  means  each  bank or  other  financial  institution  listed  on the
signature pages hereof and identified therein as a "Bank."

     "Base Rate" means for any Base Rate Loan  Tranche 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 Tranche" means a Loan Tranche bearing  interest at the Base
Rate pursuant to Section 2.1.

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

     "Borrowing" means a borrowing  hereunder  consisting of a Loan Tranche made
to the  Borrower  at the  same  time by the  Banks  pursuant  to  Article  II. A
Borrowing  is a "Base  Rate  Borrowing"  if such  Borrowing  is a Base Rate Loan
Tranche,  or a "Euro-Dollar  Rate  Borrowing" if such Borrowing is a Euro-Dollar
Rate Loan Tranche.

     "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.

                

                                       -2-

<PAGE>

     "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 8.2.

     "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,  with  respect  to each  Bank,  the  amount  set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Section 2.7 or Section 8.5.

     "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.

     "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 and waived, become an Event of Default.

     "Default Rate" means, with respect to any Loan Tranche, on any day, the sum
of two percent (2%) per annum in excess of the interest rate  otherwise  then or
thereafter  payable on such Loan Tranche,  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.

     "EBITDA"  shall  mean,  for  any  fiscal  period  of the  Borrower  and its
Consolidated  Subsidiaries,   that  amount  equal  to  the  sum,  determined  in
accordance  with GAAP,  of the Consoli  dated Net Income of the Borrower and its
Consolidated Subsidiaries for such period (considered

                                       -3-

<PAGE>


without  regard  to any  extraordinary  gains or  extraordinary  losses),  plus,
without  duplication,  and to the extent  deducted  from revenue in  determining
Consolidated Net Income,  depreciation  and  amortization  expense and any other
non-cash charges for such period,  interest  expense for such period,  and taxes
for such period.

     "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 incorpo rated 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  Require ment,  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.

     "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.

                                       -4-

<PAGE>


     "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 Interest Period,  means that interest
rate per annum equal to the sum of (i) the Adjusted LIBOR Rate for such Interest
Period, plus (ii) the Ap plicable Margin.

     "Euro-Dollar  Rate Loan" means a Loan Tranche 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  Re serve  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 any 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 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 Agent on such day on such
transactions, as determined by the Agent.

     "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: (i) Consolidated Net Income for such period; plus (ii) the
sum  (without  duplication)  of (a) interest  expense for such  period,  (b) any
dividends paid in respect of Redeemable  Preferred Stock during such period, and
(c) any payments made (howsoever denominated or construed) in respect of any tax
deductible,  convertible  preferred stock  ("TECONS") or similar  tax-advantaged
investment  vehicles,  regardless of maturity or the timing of any redemption or
repurchase rights granted in regard

                                       -5-

<PAGE>

thereto   (the sum of (a),  (b)  and  (c)  above   being  called,  collectively,
"Investment  Costs");  plus (iii) any provision  for taxes and  operating  lease
expense;  in each case, for the Borrower and its  Consolidated  Subsidiaries for
such period;  bears to (B) the sum (without  duplication) of: (i) all Investment
Costs; plus (ii) operating lease expense; in each case, for 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  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 pur poses 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 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:  (1)  with  respect  to  each  Euro-Dollar  Rate
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically  corresponding  date in the first,  second,  third or sixth calendar
month  thereafter,  as the  Borrower  may  elect  in the  applicable  Notice  of
Borrowing; provided that:

                                       -6-

<PAGE>


     (a) any Interest Period (other than an Interest Period determined  pursuant
to  paragraph  (c)  below)  which  would  otherwise  end on a day which is not a
Euro-Dollar  Business Day shall be extended to the next  succeeding  Euro-Dollar
Business  Day unless such  Euro-Dollar  Business  Day falls in another  calendar
month,  in which  case such  Interest  Period  shall  end on the next  preceding
Euro-Dollar Business Day;

     (b) any Interest Period which begins on the last  Euro-Dollar  Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the ap propriate  subsequent calendar month) shall,  subject to paragraph
(c)  below,  end on  the  last  Euro-Dollar  Business  Day  of  the  appropriate
subsequent calendar month; and

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

     (2) with respect to each Base Rate Borrowing,  the period commencing on the
date of such  Borrowing and ending on the date on which such Base Rate Borrowing
is fully paid or converted to a Euro-Dollar Rate Borrowing; 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, as to each Bank, its office located at its address
set forth on the signature  pages hereof (or  identified on the signature  pages
hereof as its Lending  Office) or such other office in the United States as such
Bank may hereafter designate as its Lending Office by notice to the Borrower and
the Agent.

     "LIBOR Rate" means,  for any Euro-Dollar  Rate Loan for the Interest Period
of such Euro-Dollar Rate Loan, the rate per annum determined by the Agent 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 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 Bankers'  Association for the purpose of displaying London interbank
offered rates for U.S.  dollar  deposits),  determined as of 11:00 A.M.,  London
time, two (2) Euro-Dollar Business Days prior to the first day of such In terest
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  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

                                       -7-

<PAGE>




the Agent, at approximately  10:00 A.M., New York City time, two (2) Euro-Dollar
Business  Days prior to the first day of such Interest  Period,  for deposits in
Dollars  offered  to  leading  European  banks for a period  comparable  to such
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 lessor under any  conditional  sale  agreement,  capital
lease or other title retention agreement relating to such asset.

     "Loan" means the non-revolving  loan in the principal amount of Two Hundred
Million Dollars  ($200,000,000)  made by the Banks to the Borrower in accordance
with, and pursuant to, Section 2.1.

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

     "Loan  Tranche"  shall mean each  subdivision  of the Loan  selected by the
Borrower for the purpose of  determining  the interest  rate payable  thereon in
accordance with, and pursuant to, Section 2.5.

     "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 Borrower and its Consolidated  Subsidiaries  taken as a whole, (b)
the rights and remedies of the Agent or the Banks 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, any Note or any Loan Document.

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

                                       -8-

<PAGE>




     "Net Cash  Proceeds"  shall mean,  the total cash proceeds  received by the
Borrower from any Applebee's Spinoff, less (i) provisions for all taxes actually
paid or payable as a result thereof,  (ii) any direct costs incurred by Borrower
or  any  Subsidiary   associated   therewith,   (iii)  any  payments  (including
prepayments of rent and termination  charges)  required to be made in such event
under the DR Holdings Lease and (iv) any payments made to repay any indebtedness
or other  obligation  outstanding  at the time of an Applebee's  Spinoff that is
secured by a Purchase Money Lien on the property or assets sold.

     "New Banks" means all those Banks (if any) other than the Original Banks.

     "Notes"  means,   collectively,   the  promissory  notes  of  the  Borrower
evidencing,  collectively, Loan, each to be substantially in the form of Exhibit
B, together with all amendments,  consolidations,  modifications,  renewals, and
supplements thereto.

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

     "Original  Banks" means those Banks party to the Original Credit  Agreement
as of the Closing Date, immediately prior to this Agreement becoming effective.

     "Original  Commitments" means the "Commitments" (as that term is defined in
the  Original  Credit  Agreement")  of the  Original  Banks as in  effect on the
Closing Date, immediately prior to this Agreement becoming effective.

     "Original   Credit   Agreement"  means  the  Amended  and  Restated  Credit
Agreement,  dated as of  September  9, 1997,  as amended,  among  Borrower,  the
Original Banks, and Wachovia, as agent for the Original Banks.

     "Participant" has the meaning set forth in Section 9.8.2.

     "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.

     "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 them making or  accruing an  obligation  to make  contributions  or has
within the preceding five plan years made contributions.

                                       -9-

<PAGE>




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

     "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.

     "Required Banks" means any Bank or Banks having (i) more than fifty percent
(50%) of the aggregate amount of the Commitments or (ii), if the Commitments are
no longer in effect, more than fifty percent (50%) of the aggregate  outstanding
principal amount of the Notes.


                                      -10-

<PAGE>




     "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.

     "Tangible Net Worth" shall mean the  difference at any time between (i) the
Stockholders  Equity of the Borrower and its  Consolidated  Subsidiaries at such
time and (ii) the sum of all those assets of the  Borrower and its  Consolidated
Subsidiaries  at such  time  constituting  (A)  goodwill,  patents,  copyrights,
trademarks,  trade names and other intangible  assets, as determined under GAAP,
plus (B) write-ups of any assets occurring subsequent to December 31, 1996, plus
(C) unamortized  debt discount and expense,  as determined  under GAAP, plus (D)
deferred charges,  as determined under GAAP, plus (E) any indebtedness  owing to
such Person by any Affiliate of such Person.

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

     "Third Parties" means all lessees, sublessees, 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 in  debtedness  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

                                      -11-

<PAGE>




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),  it being understood and
agreed that,  subject to such limitation,  no debts,  liabilities or obligations
(including any constituting  Guaranteed Obligations) under the DR Holdings Lease
shall be included in the definition of Total Funded Debt.

     "Transferee" has the meaning set forth in Section 9.8.4.

     "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.

     "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,  National  Association,  a national banking
associa tion, and its successors.

                SECTION 1.2. Accounting Terms and Determinations.

     Unless 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 ac countants 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 Banks; provided,  however, that upon any change in
GAAP material to Borrower occurring hereafter, the Banks 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.


                                      -12-

<PAGE>




                            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 re quire 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 LOAN

                   SECTION 2.1. Commitments to Make the Loan.

     Each Bank severally agrees, to the extent of its individual Commitment,  to
make the Loan to the Borrower.

                        SECTION 2.2. Method of Borrowing.

     The Loan shall be made to the Borrower,  in a single  disbursement,  on the
Closing Date, for the purpose described in Section 5.11.

                               SECTION 2.3. Notes.

     2.3.1 Single Notes.  That portion of the Loan  allocable to each Bank shall
be  evidenced by a single Note payable to the order of such Bank for the account
of its Lending  Office in an amount  equal to the original  principal  amount of
such Bank's Commitment.

     2.3.2  Endorsements to Notes.  Upon receipt of each Bank's Note pursuant to
Section  3.1.2,  the Agent shall  deliver such Note to such Bank.  Each Bank may
record and,  prior to any  transfer of its Note shall,  endorse on the  schedule
forming a part thereof appropriate  notations to evidence the date and amount of
each payment of principal  made by the Borrower with respect  thereto,  and such
schedule  shall  constitute  rebuttable  presumptive  evidence of the  principal
amount

                                      -13-

<PAGE>




owing and unpaid on such Bank's Note;  provided  that the failure of any Bank to
make any such recordation or endorsement  shall not affect the obligation of the
Borrower  hereunder  or  under  the  Notes.  Each  Bank  is  hereby  irrevocably
authorized  by the  Borrower so to endorse its Notes and to attach to and make a
part of any Note a continuation of any such schedule as and when required.

                         SECTION 2.4. Maturity of Loan.

     The Loan shall mature,  and the principal  amount thereof then  outstanding
and unpaid, shall be due and payable, on the Termination Date.

                          SECTION 2.5. Interest Rates.

     Subject to Section  8.1, the Borrower  shall have the  continuing  right to
select the interest  rate payable on the Loan, or a portion  thereof,  by giving
the Agent written notice (a "Notice of Borrowing"), which shall be substantially
in the form of Exhibit C, not later than 11:00 a.m.  (Atlanta,  Georgia time) on
the Domestic  Business Day of each Base Rate  Borrowing and not later than 11:00
a.m. ( Atlanta,  Georgia time) at least three (3)  Euro-Dollar  Business Days in
the case of a Euro-Dollar Borrowing, specifying:

     (a) the date of such Borrowing,  which shall be a Domestic  Business day in
the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,

     (b) the aggregate  amount of such  Borrowing,  which shall be not less than
One Million Dollars ($1,000,000) or any larger multiple of Five Hundred Thousand
Dollars ($500,000), in the case of a Base Rate Loan Tranche, and in an aggregate
principal amount of Two Million Dollars ($2,000,000),  or any larger multiple of
One Million Dollars ($1,000,000), in the use of a Euro-Dollar Rate Loan Tranche;

     (c) whether the  Borrowing is to be a Base Rate  Borrowing or a Euro-Dollar
Rate Borrowing;  provided,  however, that not more than six (6) Euro-Dollar Rate
Borrowings may be outstanding at any given time; and

     (d) the duration of the Interest Period applicable thereto,  subject to the
definition of "Interest Period."

     2.5.1  Base Rate Loan  Tranche.  Each Base  Rate Loan  Tranche  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,  plus the Applicable Margin. Such
interest  shall  be  payable  quarterly,  in  arrears,  on the  last day of each
calendar  quarter,  in respect  of  interest  accrued in such month (or  portion
thereof), commencing on March 31, 1998 (with the first payment date to cover the
period  from the  Closing  Date  until  March  31,  1998),  until  maturity  and
thereafter on demand. Any overdue principal of and,

                                      -14-

<PAGE>




to the extent  permitted by applicable  law,  overdue  interest on any Base Rate
Loan Tranche 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 Loan Tranche.  Each  Euro-Dollar Rate Loan Tranche
shall  bear  interest  on the  outstanding  principal  amount  thereof,  for the
Interest Period  applicable  thereto,  at the Euro-Dollar Rate for such Interest
Period.  Such interest shall be payable for each Interest Period on the last day
thereof; provided,  however, if any Interest Period is for a period of more than
three (3) months,  accrued  interest shall also be due and payable at the end of
each consecutive three (3) month period within such Interest Period,  commencing
with the first day  thereof,  as well as on the last day  thereof.  Any  overdue
principal  of and,  to the extent  permitted  by law,  overdue  interest  on any
Euro-Dollar Rate Loan Tranche 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 any Euro-Dollar Rate Loan Tranche shall
not give rise to the  breakage  of an  Interest  Period,  but only an  increased
margin applicable thereto.

     2.5.3 Agent to Determine.  The Agent shall  determine each interest rate ap
plicable  to the Loan  hereunder.  The Agent  shall  give  prompt  notice to the
Borrower and the Banks by telecopier of each rate of interest so determined,  if
so requested to do so, 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 Banks 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 any 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
such Bank shall  promptly  refund to the Borrower any interest  received by such
Bank in excess of the maximum  lawful rate or, if so requested by the  Borrower,
shall apply such excess to the principal  balance of that Bank's Note. It is the
intent  hereof that the  Borrower not pay or contract to pay, and that the Banks
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.

     2.5.5  Rollover  of  Existing  Loans.  If, and to the extent  that,  on the
Closing Date,  there exists any  outstanding  indebtedness of the Borrower under
the Original Credit Agreement,  then, such indebtedness  shall be deemed "rolled
over" to each Bank's  account  under this  Agreement  for the  remainder  of the
Interest  Period(s)  thereon in order to avoid the  imposition of any prepayment
premium,  fee or charge,  notwithstanding any other term of this Agreement which
may be to the contrary.


                                      -15-

<PAGE>




                               SECTION 2.6. Fees.

     2.6.1  Upfront Fee. The Borrower  shall pay to the Agent for the account of
each Bank on the Closing Date a fully  earned,  non-refundable  upfront fee, the
amount  of  which  shall  be equal to  twenty-five  thousandths  of one  percent
(0.025%) of its respective Commitment.

     2.6.2 Other Fees. The Borrower shall pay to the Agent,  for the account and
sole  benefit  of the  Agent,  such fees and other  amounts at such times as set
forth in the Agent's Letter Agreement.

     SECTION 2.7.  Termination  and Reduction of  Commitments.  The  Commitments
shall terminate on April 1, 1999 (the  "Termination  Date"),  and any portion of
the Loan then outstanding  (together with accrued interest thereon) shall be due
and  payable,  in  full,  on  such  date.  In  addition  to the  foregoing,  the
Commitments  shall  reduce,  dollar-for-dollar,  at the time of any  optional or
mandatory  prepayment  of the  Loan,  by an amount  equal to the  amount of such
prepayment,  which  reduction  shall be allocated  ratably among the Banks,  and
shall  reduce to zero on that date on which the Loan is paid in full,  if sooner
prepaid pursuant hereto.

                       SECTION 2.8. Optional Prepayments.

     The Borrower  may, on any Business  Day, upon giving notice to the Agent by
not later than 11:00 A.M.  (Atlanta,  Georgia  time) on such  Business  Day, and
making  payment  to the Agent,  for the  ratable  benefit of the Banks,  on such
Business Day of any  compensation  required by Section 8.6, 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 ratably the Loan Tranche included
in such Borrowing.  Upon receipt of a notice of prepayment  pursuant to this Sec
tion 2.8, the Agent shall promptly notify each Bank of the contents  thereof and
of such  Bank's  ratable  share of such  prepayment  and such  notice  shall not
thereafter be revocable by the Borrower.

                       SECTION 2.9. Mandatory Prepayments.

     On each date on which any  Applebee's  Spinoff  shall  occur,  the Borrower
shall  prepay  the Loan by an  amount  equal  to the  entire  Net Cash  Proceeds
therefrom; provided, however, that if, in so doing, the Borrower would incur any
costs under Section 8.6 below, then, Borrower shall have the option to delay the
date by which such prepayment of the Loan shall occur, subject,  however, to the
following  conditions:  (i) the  Borrower  shall  specify  in its notice of such
Applebee's  Spinoff  required  under Section 5.10 below the date on which actual
prepayment of the Loan shall,  instead,  occur, which must be not later than the
earlier of: (A) the  Termination  Date or (B) ninety (90) days after the date on
which such Applebee's  Spinoff actually occurs;  (ii) the Borrower shall deliver
to the Agent on the date on which such Applebee's  Spinoff occurs the entire Net
Cash Proceeds therefrom, to be held thereafter by the Agent in a deposit account
in its name as Agent as cash collateral for the

                                      -16-

<PAGE>




payment of the Loan (the "Cash  Collateral  Account");  (iii) the Borrower shall
have no right to make withdrawals from the Cash Collateral  Account and Wachovia
shall have no right to exercise any set off against the Cash Collateral  Account
except in its  capacity  as Agent for the  benefit of the Banks;  (iv) the Agent
shall pay the Borrower,  by crediting same to such deposit account,  interest at
the rate then being  currently  paid by Wachovia  for deposits of like tenor and
amount,  for any sums on deposit in the Cash Collateral Account until withdrawal
thereof;  and (v) the  Agent is hereby  authorized  and  empowered,  on the date
specified by the  Borrower for  prepayment  of the Loan in  accordance  with the
requirements  set forth above or,  sooner,  if any Event of Default has occurred
which is then  continuing,  to apply  from  funds  then on  deposit  in the Cash
Collateral  Account an amount equal to the Net Cash Proceeds  deposited  therein
for  each  affected  Applebee's  Spinoff  for  prepayment  to the  Loan,and  any
remaining  funds then on deposit in the Cash  Collateral  Account,  representing
earned  interest,  shall be returned to the Borrower or, if any Event of Default
has occurred which is then continuing, continued to be held by the Agent as cash
collateral for the Loan. Each such mandatory  prepayment shall be applied,  when
made, to prepay the Loan ratably among the Banks.

                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 Loan and of fees and any other sums owing hereunder,  not later
than  11:00 A.M.  (Atlanta,  Georgia  time) on the date when due,  in federal or
other funds immediately  available in Atlanta,  Georgia, to the Agent's Address.
The Agent will  promptly  distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks.

     2.10.2 Next Banking Day.  Whenever any payment of principal of, or interest
on,  the Loan or of any fee or other sum owing  hereunder  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. Whenever any payment of
principal of, or interest on, any Euro-Dollar  Rate Loan Tranche shall be due on
a day which is not a  Euro-Dollar  Business  Day,  the date for payment  thereof
shall be extended to the next  succeeding  Euro-Dollar  Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day.

                 SECTION 2.11. Computation of Interest and Fees.

     Interest  on the Loan 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.  Any fees or other sums payable hereunder on a per annum basis shall be
computed  on the basis of a year of 360 days and paid for the  actual  number of
days elapsed (including the first day but excluding the last day).



                                      -17-

<PAGE>




                       ARTICLE 3. CONDITIONS TO BORROWING

                      SECTION 3.1. Conditions to Borrowing.

     The  obligation  of each  Bank to make  its  allocable  share  of the  Loan
available to the Borrower on the Closing Date is subject to receipt by the Agent
of the following in a sufficient number of counterparts (except as to the Notes)
for delivery of a counterpart  to each Bank and retention of one  counterpart by
the Agent):

     3.1.1 This Agreement.  From each of the parties hereto of either (i) a duly
executed  counterpart of this Agreement signed by such party or (ii) a facsimile
transmission  stating that such party has duly  executed a  counterpart  of this
Agreement and sent such counterpart to the Agent;

     3.1.2 Notes.  A duly executed  Note for the account of each Bank  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,  substantially  in the form of  Exhibit  D and  covering  such  additional
matters  relating to the  transactions  contemplated  hereby as the Agent or any
Bank may reasonably request;

     3.1.4 Closing Certificate. A certificate ("Closing Certificate"),  dated as
of the Closing Date, substantially in the form of Exhibit E, 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  Agent or any Bank may
reasonably  request  relating to the  existence of the  Borrower,  the corporate
authority for and the validity of this  Agreement,  the Notes and the other Loan
Documents,  and any other  matters  relevant  hereto,  all in form and substance
satisfactory  to the Agent,  including,  without  limitation,  a certificate  of
incumbency of the Borrower, signed by the Secretary or an Assistant Secretary of
the  Borrower,  in  substantially  the form of Exhibit F,  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 Notes and
the other Loan Documents to which the Borrower is a party;

     3.1.6 Borrowing Notice. The initial Notice of Borrowing.


                                      -18-

<PAGE>




                    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 of this Agreement,
the Notes and the other Loan Documents (i) are within the  Borrower'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, 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 Notes and the other  Loan
Documents,  when executed and delivered in accordance with this Agreement,  will
constitute  valid  and  binding  obligations  of the Bor  rower  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.

         SECTION 4.4. Financial Information; No Material Adverse Effect.

     The audited balance sheet of the Borrower and its Consolidated Subsidiaries
as of the Fiscal  Year ended  closest to  December  31,  1996,  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,  and  the  unaudited  financial   statements  of  the  Borrower  and  its
Consolidated  Subsidiaries  as of and for the Fiscal  Quarter  ended  closest to
December  31,  1997,  copies of which have been  delivered to each of the Banks,
fairly present, in conformity with GAAP,

                                      -19-

<PAGE>




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, 1996, 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 Bor rower 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 Notes 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 gov ernmental  authorities  (including,  but not limited
to,  PBGC),  noncompliance  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 Bor rower 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.

                               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.

                                      -20-

<PAGE>




                           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 5.8.

                            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 con tinuing.

                         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 Agent or any Bank
for  purposes  of or in  connection  with  this  Agreement  or  any  transaction
contemplated  hereby is, and all such  information  hereafter  furnished  by the
Borrower to the Agent or any 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 Banks 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

                                      -21-

<PAGE>




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, gener ated, 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  materi  als  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 the  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.

                             SECTION 4.16. Solvency.

     After giving effect to the execution and delivery of the Loan Documents and
the making of the Loan, 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

                                      -22-

<PAGE>




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 area by companies of established  repute engaged in the same or
similar business.


                              ARTICLE 5. COVENANTS

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

                            SECTION 5.1. Information.

                 The Borrower will deliver to each of the Banks:

     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 Con  solidated  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  this  paragraph  may be  satis  fied 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 con  solidated  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

                                      -23-

<PAGE>




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 G (a  "Compliance  Certificate"),  of the
chief financial  officer of the Borrower (i) setting forth in reasonable  detail
the  calculations  required  to  establish  (A) the then  effective  "Applicable
Margin" for Euro-Dollar Rate Loans, (B) the then effective "Applicable Rate" for
commitment  fees  and (C)  whether  the  Borrower  was in  compliance  with  the
requirements  of  Sections  5.3,  5.4,  5.5,  5.6 and  5.19 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  the  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  which  might
constitute  grounds for a termination  of such 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 copy 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

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


                                      -24-

<PAGE>




             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 any Bank at such 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
accountants.  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 at any time
exceed .65:1.

                   SECTION 5.4. Minimum Stockholders' Equity.

     Stockholders'  Equity  will  at no  time  be  less  than  the  sum  of  (i)
$180,000,000,  as of the Fiscal  Quarter ended closest to December 31, 1996 (the
"Base Fiscal Quarter"), plus (ii) fifty percent (50%) of Consolidated Net Income
(if positive)  for each Fiscal  Quarter  subsequent to the Base Fiscal  Quarter;
plus, without duplication,  (iii) seventy-five percent (75%) of any net proceeds
received  by  Borrower  from any  offering  of  equity  securities  (other  than
Redeemable  Preferred  Stock) by Borrower  subsequent to the Closing Date; plus,
without  duplication,  (iv)  seventy-five  percent  (75%)  of any  net  proceeds
received by Borrower from any  conversion of debt into equity  subsequent to the
Closing Date; plus, without  duplication,  (v) seventy-five percent (75%) of any
adjustment  to equity due to any pooling of interests  occurring  subsequent  to
December 31, 1996; plus, without duplication, (vi) seventy-five percent (75%) of
any increase in Stockholders'  Equity resulting from the issuance or exchange of
any equity securities in furtherance of any acquisition constituting a permitted
investment under Section 5.19.

                    SECTION 5.5. Fixed Charge Coverage Ratio.

     Borrower's  Fixed  Charge  Coverage  Ratio,  measured on a rolling four (4)
Fiscal Quar ters' basis as of the end of each Fiscal  Quarter,  commencing  with
the Fiscal  Quarter  ended  closest to December 31, 1997,  shall be (i) not less
than 1.80:1,  for the Fiscal Quarters ending closest to December 31, 1997, March
31, 1998 and June 30, 1998,  (ii) not less than 1.90:1,  for the Fiscal  Quarter
ending closest to September 30, 1998;  and (iii) not less than 2.00:1,  for each
Fiscal Quarter ending thereafter.


                                      -25-

<PAGE>




                  SECTION 5.6. Total Funded Debt/EBITDA Ratio.

     The  ratio  which  (i)  the  Total  Funded  Debt  of the  Borrower  and its
Consolidated Subsidiaries at the end of any Fiscal Quarter,  commencing with the
Fiscal  Quarter ended closest to December 31, 1997,  bears to (ii) the EBITDA of
the Borrower and its Consolidated  Subsidiaries,  measured on a rolling four (4)
Fiscal  Quarters' basis as of the end of such Fiscal  Quarter,  shall be (i) not
more than 3.80:1,  for the Fiscal  Quarters  ending closest to December 31, 1997
and closest to March 31, 1998,  and (ii) not more than  3.50:1,  for each Fiscal
Quarter  ending  thereafter.  In  computing  EBITDA in respect of the  foregoing
ratio,  (a) any asset or stock  dispositions  by the Borrower  consisting of the
sale of a business line,  segment or other group of related  stores  (including,
particularly,  for this purpose,  the  Applebee's  Spinoff)  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; and (b) any asset or stock acquisitions
by the Borrower consisting of the purchase of a business, line, segment or other
group of related stores 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;  in each instance,  on an historical basis, in a manner which Borrower
shall determine, but subject to prior review with, and approval by, the Agent.

                          SECTION 5.7. 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  5.7,
concerning  existing  debt of the Borrower,  to be set forth and described  more
particularly  therein,  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;  (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 obligations (to
the extent not excepted elsewhere  herein);  (vii) 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) Pur chase  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

                                      -26-

<PAGE>




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 subse quent 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;  (xi)  capital  leases  made in the
ordinary course of business (but excluding, however, sale-leaseback transactions
in any event) 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;  and (xii) rights of lessors in
respect of Properties leased to the Borrower or its Subsidiaries under operating
leases.

                     SECTION 5.8. Maintenance of Existence.

     Except as permitted in Section 5.10,  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 and except with
respect to any Applebee's Spinoff.

                            SECTION 5.9. 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 5.10.

           SECTION 5.10. Consolidations, 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 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,  however,  that  subject  at all times to
Section  5.19,  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 any Subsidiaries of the Borrower may
(i) merge or con  solidate  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;  and, provided,  further, that, the Borrower may, upon
giving at least  two (2)  Business  Days'  advance  written  notice to the Agent
thereof,  consummate an Applebee's  Spinoff if made in accordance with the terms
set forth in the

                                      -27-

<PAGE>




definition  thereof and  provided  that  Borrower  complies  with Section 2.9 in
regard  thereto  respecting  coincident  mandatory  prepayment of the Loan by an
amount equal to the Net Cash Proceeds therefrom.

                         SECTION 5.11. Use of Proceeds.

     The entire  proceeds of the Loan will be used by the  Borrower to refinance
all existing  indebtedness of the Borrower under the Original Credit  Agreement,
by extension and renewal thereof, and for no other purpose.

              SECTION 5.12. 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 Agent,  the Borrower will set up reserves in accordance with
GAAP.

                            SECTION 5.13. 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 5.14. Change in Fiscal Year.

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

                     SECTION 5.15. 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.


                                      -28-

<PAGE>




                      SECTION 5.16. Environmental Notices.

     The  Borrower  shall  furnish to the  Agent,  promptly  after the  Borrower
becomes aware thereof, written notice of all Environmental Liabilities, pending,
threatened  Environmental  Proceedings,   Environmental  Notices,  Environmental
Judgments and Orders and  Environmental  Re leases,  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 5.17. Environmental Matters.

     The  Borrower  will  not,  and will not  permit  any Third  Party to,  use,
produce,  manufac ture, 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  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 5.18. 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 5.19. 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,  the making of any
loan, advance,  extension of credit, credit accommodation,  Guarantee or capital
contribution to or on behalf of any Person, and the leasing or subleasing of any
property to 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  Required  Lenders'  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);


                                      -29-

<PAGE>




     (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 in struments in connection therewith;

     (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, any 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
least "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, (A) ten
percent  (10%) of  consolidated  total assets of Borrower  and its  Consolidated
Subsidiaries  at any time prior to December  30,  1997,  (B) seven and  one-half
percent  (7-1/2%) of consolidated  total assets of Borrower and its Consolidated
Subsidiaries  on or at any time after  December 31, 1997,  but prior to June 30,
1998, and (C) five percent (5%) of consolidated total assets of Borrower and its
Consolidated  Subsidiaries  on or after June 30, 1998; 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,  if and to the extent not already  counted against
such  amount  as  an  investment  of  Borrower;  i.e.,  as a  Capitalized  Lease
Obligation  owing to Borrower as lessor or sublessor;  and (c) the provisions of
this clause  (vii) 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

                                      -30-

<PAGE>




this Section 5.19 (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 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 Required Lenders;

     (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 in dividually 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; or

     (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 Agent from time to time,  but not less  frequently
than quarterly,  or at any time at Agent'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 5.20. Subsidiary Debt.

     Except solely to the extent expressly  permitted in clause (vii) of Section
5.19 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

                                      -31-

<PAGE>




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 the Loan or (ii) shall fail to pay any interest on the 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

     6.1.2  Failure to Observe  Certain  Covenants.  The Borrower  shall fail to
observe or perform any covenant  contained  in Sections  5.3 through 5.9,  5.10,
5.11, 5.12, 5.15 or 5.19, 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 Agent at the request of any 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 any 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
Notes, when due or within any applicable grace period; or any event or condition
shall occur which results in the  acceleration of the maturity of any such debt,
liability  or  obligation   outstanding   of  the  Borrower  or  any  Subsidiary
individually or in the aggregate

                                      -32-

<PAGE>




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 any such 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)
the holders of any such 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 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


                                      -33-

<PAGE>




     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 Bor rower;  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  consisted of  individuals  described in clause (A), or (C) selected or
nominated  to become di rectors 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 and except in connection with any Applebee's Spinoff; 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 except in connection with any Applebee's Spinoff; or

     6.1.13  Material  Adverse  Effect.   The  occurrence  of  any  event,  act,
occurrence, or condition which the Required Banks determine either does or has a
reasonable  probability of causing,  or resulting in, a Material Adverse Effect;
then, and in every such event,  the Agent shall (i) if requested by the Required
Banks,  by notice to the  Borrower  terminate  the  Commitments  and they  shall
thereupon  terminate,  and (ii) if requested by the Required Banks, by notice to
the Borrower declare the Notes (together with accrued  interest  thereon) to be,
and the Notes  shall  thereupon  become,  immediately  due and  payable  without
presentment,

                                      -34-

<PAGE>




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 Agent or the  Banks,  the  Commitments  shall
thereupon terminate and the Notes (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 Agent shall have  available  to it all other  remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Banks.

                         SECTION 6.2. Notice of Default.

     The Agent shall give notice to the  Borrower of any Default  under  Section
6.1.3  promptly  upon being  requested to do so by any Bank and shall  thereupon
notify all the Banks thereof.


                              ARTICLE 7. THE AGENT

                SECTION 7.1. Appointment; Powers and Immunities.

     Each Bank hereby  irrevocably  appoints and  authorizes the Agent to act as
its agent  hereunder and under the other Loan  Documents with such powers as are
specifically  delegated to the Agent by the terms  hereof and thereof,  together
with such other powers as are  reasonably  incidental  thereto.  The Agent:  (a)
shall have no duties or  responsibilities  except as expressly set forth in this
Agreement  and the  other  Loan  Documents,  and  shall  not by  reason  of this
Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be
responsible  to the  Banks  for any  recitals,  statements,  representations  or
warranties  contained in this  Agreement or any other Loan  Document,  or in any
certificate or other document referred to or provided for in, or received by any
Bank under,  this  Agreement or any other Loan  Document,  or for the  validity,
effectiveness,  genuineness,  enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by the Borrower to perform any of its  obligations
hereunder  or  thereunder;  (c) shall not be required to initiate or conduct any
litigation or collection  proceedings hereunder or under any other Loan Document
except to the extent requested by the Required Banks, and then only on terms and
conditions  satisfactory to the Agent;  and (d) shall not be responsible for any
action  taken or  omitted  to be taken by it  hereunder  or under any other Loan
Document or any other document or instrument  referred to or provided for herein
or therein or in  connection  herewith  or  therewith,  except for its own gross
negligence   or   willful   misconduct.   The  Agent  may   employ   agents  and
attorneys-in-fact  and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provi sions of this  Article VII are solely for the benefit of the Agent and the
Banks,  and the Borrower shall not have any rights as a third party  beneficiary
of any of the provisions hereof. In performing its

                                      -35-

<PAGE>




functions and duties under this  Agreement  and under the other Loan  Documents,
the Agent  shall act  solely as agent of the Banks and does not assume and shall
not be deemed to have assumed any obligation  towards or  relationship of agency
or trust with or for the Borrower.  The duties of the Agent shall be ministerial
and  administrative  in nature,  and the Agent  shall not have by reason of this
Agreement or any other Loan Document a fiduciary  relationship in respect of any
Bank.

                         SECTION 7.2. Reliance by Agent.

     The Agent shall be entitled to rely upon any certification, notice or other
com munication (including any thereof by telephone,  telefax, telegram or cable)
believed  by it to be genu ine and correct and to have been signed or sent by or
on behalf of the proper  Person or Persons,  and upon advice and  statements  of
legal counsel,  independent  and  accountants  or other experts  selected by the
Agent.  As to any matters not  expressly  provided for by this  Agreement or any
other Loan Document,  the Agent shall in all cases be fully protected in acting,
or in  refraining  from acting,  hereunder and  thereunder  in  accordance  with
instructions signed by the Required Banks, and such instructions of the Required
Banks in any action taken or failure to act pursuant thereto shall be binding on
all of the Banks.

                             SECTION 7.3. Defaults.

     The Agent  shall not be deemed to have  knowledge  of the  occurrence  of a
Default or an Event of Default  (other than the  nonpayment  of  principal of or
interest on the Loan)  unless the Agent has  received  notice from a Bank or the
Borrower  specifying  such  Default or Event of Default  and  stating  that such
notice is a "Notice of  Default".  In the event that the Agent  receives  such a
notice of the  occurrence  of a Default or an Event of Default,  the Agent shall
give prompt notice  thereof to the Banks.  The Agent shall give each Bank prompt
notice of each nonpayment of principal of or interest on the Loan whether or not
it has received any notice of the occurrence of such nonpayment. The Agent shall
(subject to Section 9.6) take such action hereunder with respect to such Default
or Event of Default as shall be directed by the Required  Banks,  provided that,
unless and until the Agent shall have  received such  directions,  the Agent may
(but shall not be obligated  to) take such  action,  or refrain from taking such
action,  with  respect  to such  Default  or Event of  Default  as it shall deem
advisable in the best interests of the Banks.

                     SECTION 7.4. Rights of Agent as a Bank.

     With respect to its pro rata share of the Loan, Wachovia in its capacity as
a Bank here under shall have the same rights and powers  hereunder  as any other
Bank and may  exercise  the same as though it were not acting as the Agent,  and
the term  "Bank" or "Banks"  shall,  unless  the  context  otherwise  indicates,
include  Wachovia in its individual  capacity.  The Agent may (without having to
account  therefor to any Bank) accept deposits from, lend money to and generally
engage in any kind of banking,  trust or other  business  with the Borrower (and
any of its Affiliates) as if it were not acting as the Agent,  and the Agent may
accept fees and other consideration from the Borrower (in addition to any agency
fees and  arrangement  fees  heretofore  agreed to between the  Borrower and the
Agent)

                                      -36-

<PAGE>




for services in  connection  with this  Agreement or any other Loan  Document or
otherwise without having to account for the same to the Banks.

                          SECTION 7.5. Indemnification.

     Each Bank severally  agrees to indemnify the Agent, to the extent the Agent
shall not have been  reimbursed by the Borrower,  ratably in accordance with its
Commitment,  for  any  and  all  liabilities,   obligations,   losses,  damages,
penalties,  actions,  judgments,  suits,  costs,  expenses  (including,  without
limitation,  counsel fees and  disbursements)  or  disbursements of any kind and
nature  whatsoever  which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this  Agreement or any other Loan
Document  or any other  documents  con  templated  by or  referred  to herein or
therein or the transactions contemplated hereby or thereby (excluding, unless an
Event of Default has occurred and is continuing, the normal administrative costs
and expenses  incident to the performance of its agency duties hereunder) or the
enforcement  of any of the terms hereof or thereof or any such other  documents;
provided,  however that no Bank shall be liable for any of the  foregoing to the
extent they arise from the gross negligence or willful  misconduct of the Agent.
If any indemnity furnished to the Agent for any purpose shall, in the opinion of
the Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence,  to do the acts indemnified  against until
such additional indemnity is furnished.

                  SECTION 7.6. Payee of Note Treated as Owner.

     The Agent may deem and treat the payee of any Note as the owner thereof for
all  purposes  hereof  unless and until a written  notice of the  assignment  or
transfer  thereof  shall have been filed  with the Agent and the  provisions  of
Section  9.8 have been  satisfied.  Any  requests,  authority  or consent of any
Person  who at the time of making  such  request  or giving  such  authority  or
consent  is the  holder  of any Note  shall be  conclusive  and  binding  on any
subsequent  holder,  transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor or replacement thereof.

               SECTION 7.7. Nonreliance on Agent and Other Banks.

     Each Bank agrees  that it has,  independently  and without  reliance on the
Agent or any other Bank, and based on such  documents and  information as it has
deemed appropriate, made its own credit analysis of the Borrower and decision to
enter into this Agreement and that it will,  independently  and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem  appropriate  at the time,  continue to make its own  analysis and
decisions  in taking or not taking  action  under this  Agreement  or any of the
other Loan Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrower of this Agreement or any of the
other Loan Documents or any other document referred to or provided for herein or
therein or to  inspect  the  properties  or books of the  Borrower  or any other
Person.  Except  for  notices,  reports  and  other  documents  and  information
expressly  required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall

                                      -37-

<PAGE>




not have any duty or responsibility to provide any Bank with any credit or other
information  concerning  the  affairs,  financial  condition  or business of the
Borrower or any other  Person (or any of their  Affiliates)  which may come into
the possession of the Agent.

                          SECTION 7.8. Failure to Act.

     Except for action  expressly  required of the Agent  hereunder or under the
other Loan Documents, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder  and  thereunder  unless it shall  receive  further
assurances to its satisfaction by the Banks of their indemnification obligations
under  Section  7.5  against  any and all  liability  and  expense  which may be
incurred  by the Agent by reason of taking,  continuing  to take,  or failing to
take any such action.

                       SECTION 7.9. Resignation of Agent.

     Subject to the  appointment and acceptance of a successor Agent as provided
below,  the Agent may resign at any time by giving notice  thereof to the Banks.
Upon any such resignation,  the Required Banks shall have the right to appoint a
successor  Agent.  If no  successor  Agent shall have been so  appointed  by the
Required Banks and shall have accepted such appointment  within thirty (30) days
after the retiring  Agent's notice of resignation,  then the retiring Agent may,
on behalf of the Banks,  appoint a successor  Agent.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent,  such successor Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring  Agent,  and the retiring  Agent shall be  discharged
from  its  duties  and  obligations   hereunder.   After  any  retiring  Agent's
resignation  or removal  hereunder as Agent,  the  provisions  of this Article 7
shall  continue  in effect for its  benefit in respect of any  actions  taken or
omitted to be taken by it while it was acting as the Agent hereunder.


                ARTICLE 8. CHANGE IN CIRCUMSTANCES; COMPENSATION

     SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair.

     If on or  prior  to the  first  day  of  any  Interest  Period,  the  Agent
determines  that deposits in Dollars (in the  applicable  amounts) are not being
offered in the relevant market for such Interest  Period,  or the Required Banks
advise the Agent that the Adjusted LIBOR Rate, as determined by the Agent,  will
not adequately and fairly reflect the cost to such Banks of funding the relevant
Euro-Dollar  Rate Loan Tranche for such Interest  Period,  then, the Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Agent  notifies  the  Borrower  that  the  circumstances  giving  rise  to  such
suspension no longer exist, the obligations of the Banks to make the Euro-Dollar
Rate Loan  Tranche  specified  in such  notice  shall be  suspended.  Unless the
Borrower  notifies the Agent at least two (2) Domestic  Business days before the
date of any Borrowing of such  Euro-Dollar  Rate Loan Tranche 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.


                                      -38-

<PAGE>




                            SECTION 8.2. 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 any 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 any Bank (or its Lending
Office) to make,  maintain or fund its  Euro-Dollar  Rate Loan  Tranche and such
Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to
the other  Banks and the  Borrower,  whereupon  until  such  Bank  notifies  the
Borrower and the Agent that the circumstances  giving rise to such suspension no
longer exist,  the obligation of such Bank to make Euro-Dollar Rate Loan Tranche
shall be  suspended.  Before  giving  any notice to the Agent  pursuant  to this
Section,   such  Bank  shall  designate  a  different  Lending  Office  if  such
designation  will avoid the need for  giving  such  notice and will not,  in the
judgment of such Bank, be otherwise disadvantageous to such Bank, in any respect
deemed  material  by such  Bank.  If such Bank shall  determine  that it may not
lawfully  continue to maintain and fund any of its outstanding  Euro-Dollar Rate
Loan  Tranches 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  Tranche of such Bank,  together  with  accrued  interest
thereon.  Concurrently  with prepaying each such  Euro-Dollar Rate Loan Tranche,
the Borrower  shall borrow,  pursuant to Section 2.2.3, a Base Rate Loan Tranche
in an equal  principal  amount from such Bank (on which  interest and  principal
shall be  payable  contemporaneously  with the  related  Euro-Dollar  Rate  Loan
Tranches  of the other  Banks),  and such Bank  shall make such a Base Rate Loan
Tranche.

                 SECTION 8.3. Increased Cost and Reduced Return.

     8.3.1  Change  of Law.  If  after  the  date  hereof,  a  Change  of Law or
compliance  by any 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 its allocable portion of the Loan, its Note or its obligation to make
the Loan,  or shall change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its allocable  portion of the
Loan or any other  amounts due under this  Agreement in respect of its allocable
portion of the Loan or its  obligation to make a Loan (except for changes in the
rate of tax on the overall net income of such Bank or its Lending Office imposed
by the jurisdiction in which such 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  requirement  imposed by the Board of Governors of the Federal  Reserve
System, but 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, any Bank (or its Lending  Office);  or (iii) shall impose on
any Bank (or its  Lending  Office)  or the  London  Interbank  Market  any other
similar  condition  affecting its Loan,  its Note or its  obligation to make the
Loan;  and the result of any of the  foregoing  is to increase  the cost to such
Bank (or its Lending

                                      -39-

<PAGE>




Office) of making or maintaining  such Loan, or to reduce the amount of any such
received  or  receiv  able by such  Bank  (or its  Lending  Office)  under  this
Agreement or under its Note with respect  thereto,  by an amount  deemed by such
Bank to be material,  then,  within  fifteen (15) days after demand by such Bank
(with a copy to the Agent),  the Borrower shall pay to such Bank such additional
amount  or  amounts  as will  compensate  such Bank for such  increased  cost or
reduction.

     8.3.2 Capital  Adequacy.  If any 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 any 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 such  Bank's  capital  as a  consequence  of its  obligations
hereunder to a level below that which such Bank could have achieved but for such
adoption,  change or compliance  (taking into consideration such Bank's policies
with  respect  to  capital  adequacy),  by an  amount  deemed by such Bank to be
material,  then from time to time, within fifteen (15) days after demand by such
Bank, the Borrower shall pay to such Bank such  additional  amount or amounts as
will compensate such Bank for such reduction.

     8.3.3 Notice of Determination.  Each Bank will promptly notify the Borrower
and the Agent of any event of which it has knowledge,  occurring  after the date
hereof,  which will en title such 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 such Bank, be otherwise disadvantageous to such Bank, in any respect
deemed  material by such Bank. A certificate  of any 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,  such  Bank  may use  any  reasonable  averaging  and
attribution methods.

     8.3.4  Assignees  Covered.  The  provisions of this Section 8.3 shall be ap
plicable  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 8.4. Base Rate Loan Tranche Substituted for Affected Euro-Dollar
                               Rate Loan Tranche.

     If (i) the  obligation of any Bank to make or maintain a  Euro-Dollar  Rate
Loan  Tranche  has been  suspended  pursuant to Section 8.2 or (ii) any Bank has
demanded  compensation under Sec tion 8.3.1, and the Borrower shall, by at least
five (5) Euro-Dollar Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the  circumstances  giving
rise to such suspension or demand for compensation no longer apply: (i) all Loan
Tranches  which would oth erwise be made by such Bank as  Euro-Dollar  Rate Loan
Tranches, shall be made instead as Base Rate

                                      -40-

<PAGE>




Loan Tranches (in all cases  interest and principal on such Loan Tranches  shall
be payable  contemporaneously  with the related Euro-Dollar Rate Loan Tranche of
the other  Banks),  and (ii) after each  Euro-Dollar  Rate Loan Tranche has been
repaid, all payments of principal which would otherwise be applied to repay such
Euro-Dollar  Rate Loan  Tranches  shall be  applied  to repay its Base Rate Loan
Tranches instead.

                      SECTION 8.5. Replacement of a Lender.

     In addition to the  foregoing,  if (i) the  obligation of any Bank (but not
all Banks) to make available or maintain Euro-Dollar Rate Loan Tranches has been
suspended  pursuant  to  Section  8.2 or (ii) any Bank (but not all  Banks)  has
demanded compensation under Section 8.3, then, in either such case, the Borrower
shall have the right, at its option,  upon giving at least five (5) Euro- Dollar
Business  Days'  prior  notice to such  Bank  through  the  Agent,  either:  (i)
notwithstanding  any  term of  Section  2.7.3 to the  contrary,  to  reduce  the
Commitment  of such Bank to zero, in which case the Borrower  shall  reduce,  by
repayment or prepayment,  as the case may be, its  Borrowings  from such Bank to
zero  effective  upon such  Commitment  reduction  becoming  effective,  and the
Commitment of each remaining Bank shall  remained  unchanged;  or (ii) to obtain
one or more Banks or Assignees  willing to replace such Bank,  in which case the
Bank which is being  replaced shall execute and deliver to such Bank or Assignee
an Assignment  and  Acceptance in accordance  with Section 9.8.3 with respect to
such Bank's entire interest under this Agreement and the Notes.

                           SECTION 8.6. Compensation.

     Upon the request of any Bank,  delivered to the Borrower and the Agent, the
Borrower shall pay to such Bank such amount or amounts as shall  compensate such
Bank for any loss, cost or expense incurred by such Bank (in connection with the
relevant Interest Period) as a result of: (i) any payment or prepayment (whether
pursuant to Section 8.2 or otherwise)  of a  Euro-Dollar  Rate Loan Tranche on a
date other than the last day of an  Interest  Period for such  Euro-Dollar  Rate
Loan Tranche;  or (ii) any failure by the Borrower to prepay a Euro-Dollar  Rate
Loan Tranche 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 Tranche is a part specified in the  applicable  Notice of
Borrowing  delivered  pursuant to Section 2.2. Such compensation  shall include,
without limitation,  an amount equal to the excess, if any, of (x) the amount of
interest  which  would  have  accrued  on the  amount so paid or  prepaid or not
prepaid or borrowed for the period from the date of such payment,  prepayment or
failure to prepay or borrow to the last day of the then current  Interest Period
for such  Euro-Dollar  Rate Loan Tranche (or, in the case of a failure to prepay
or borrow,  the Interest  Period for such  Euro-Dollar  Rate Loan Tranche  which
would  have  commenced  on the date of such  failure to prepay or borrow) at the
applicable rate of interest for such  Euro-Dollar  Rate Loan provided for herein
(excluding, however, therefrom the amount thereof attributable to the imposition
of the  Applicable  Margin)  over (y) the  amount  of  interest  (as  reasonably
determined  by such Bank) such Bank  would have paid on  deposits  in Dollars of
comparable  amounts  having terms  comparable  to such period  placed with it by
leading banks in the London Interbank Market.

                                      -41-

<PAGE>





                            ARTICLE 9. MISCELLANEOUS

                              SECTION 9.1. 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 each 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 Agent under
Article 2 or Article 8 shall not be effective until received.

                            SECTION 9.2. No Waivers.

     No failure or delay by the Agent or any 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.

                    SECTION 9.3. Expenses; Documentary Taxes.

     The  Borrower  shall  pay  (i) all  out-of-pocket  expenses  of the  Agent,
including fees and disbursements of special counsel for the Banks and the Agent,
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 Agent and any Bank,
including fees and disbursements of counsel  (including a reasonable  allocation
of the  cost  of  internal  counsel),  in con  nection  with  such  Default  and
collection and other enforcement  proceedings  resulting  therefrom,  in cluding
out-of-pocket expenses incurred in enforcing this Agreement, the Notes and other
Loan Documents. The Borrower shall indemnify the Agent and each Bank against any
transfer taxes, docu mentary taxes, assessments or charges made by any Authority
by reason of the  execution  and  delivery of this  Agreement,  the Notes or the
other Loan Documents.

                          SECTION 9.4. Indemnification.

     The  Borrower  shall  indemnify  the  Agent,  the Banks 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

                                      -42-

<PAGE>




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 any Bank  hereunder or breach by the Borrower of this  Agreement,  the
Notes 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 Agent and each 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 9.4 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 9.4 are meant to
be without duplication of any other indemnification provisions set forth in this
Agreement.

                        SECTION 9.5. Sharing of Setoffs.

     Each Bank agrees  that if it shall,  by  exercising  any right of setoff or
counterclaim  or  otherwise,  receive  payment of a proportion  of the aggregate
amount of principal and interest owing with respect to the Note held by it which
is  greater  than the  proportion  received  by any other Bank in respect of the
aggregate  amount of all principal  and interest  owing with respect to the Note
held by such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other Banks owing to
such other Banks, and such other  adjustments  shall be made, as may be required
so that all such  payments of principal  and interest  with respect to the Notes
held by the Banks  owing to such  other  Banks  shall be shared by the Banks pro
rata;  provided  that (i) nothing in this Section  shall impair the right of any
Bank to exercise  any right of setoff or  counterclaim  it may have and to apply
the amount  subject to such  exercise  to the  payment  of  indebtedness  of the
Borrower  other than its  indebtedness  under the Notes,  and (ii) if all or any
portion of such payment received by the purchasing Bank is thereafter  recovered
from such purchasing Bank, such purchase from each other Bank shall be rescinded
and such other Bank shall repay to the  purchasing  Bank the  purchase  price of
such  participation to the extent of such recovery together with an amount equal
to such other Bank's  ratable  share  (according  to the  proportion  of (x) the
amount of such  other  Bank's  required  repayment  to (y) the  total  amount so
recovered  from the  purchasing  Bank) of any  interest or other  amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.  The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law,  that any holder of a  participation  in a Note,  acquired  pursuant to the
foregoing arrangements,  may exercise rights of setoff or counterclaim and other
rights  with re spect to such  participation  as  fully as if such  holder  of a
participation  were a direct  creditor  of the  Borrower  in the  amount of such
participation.


                                      -43-

<PAGE>




                      SECTION 9.6. Amendments and Waivers.

     Any provision of this Agreement,  the Notes 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 Required  Banks (and,  if the rights or duties
of the Agent  are  affected  thereby,  by the  Agent);  provided  that,  no such
amendment or waiver shall,  unless signed by all Banks,  (i) except as otherwise
provided in Section 8.5,  change the  Commitment of any Bank or subject any Bank
to any additional  obligation,  (ii) change the principal of or rate of interest
on the Loan or any fees or other  amounts  payable  hereunder,  (iii) change the
date fixed for any payment of  principal  of or interest on the Loan or any fees
hereunder, (iv) change the amount of principal,  interest, fees or other amounts
payable hereunder due on any date fixed for the payment thereof,  (v) change the
percentage of the Commitments or of the aggregate unpaid amount of the Notes, or
the percentage of Banks, which shall be required for the Banks or any of them to
take any action  under this Section or any other  provision  of this  Agreement,
(vi) change the manner of  application of any payments made under this Agreement
or the Notes,  (vii) release or substitute  all or any  substantial  part of the
collateral (if any) held as security for the Loan,  (viii) release any Guarantee
given to support  payment of the Loan;  (ix) change any terms of clause (vii) of
Section 5.19;  or (x) change any terms of Section  5.20. In connection  with the
foregoing,  the  Borrower  will not solicit,  request or  negotiate  for or with
respect to any proposed  waiver or amendment  of any of the  provisions  of this
Agreement  unless  each Bank shall be  informed  thereof by the  Borrower or the
Agent and shall be afforded an opportunity of considering  the same and shall be
supplied by the Borrower  with  sufficient  information  to enable it to make an
informed  decision with respect thereto.  Executed or true and correct copies of
any waiver or consent  effected  pursuant to the  provisions  of this  Agreement
shall be delivered by the requisite  percentage of Banks. The Borrower will not,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional  interest,  fee or otherwise,  to any Bank (in its
capacity as a Bank) as  consideration  for or as an  inducement  to the entering
into by such Bank of any waiver or amendment of any of the terms and  provisions
of this Agreement  unless such re muneration is  concurrently  paid, on the same
terms, ratably to all such Banks.

                    SECTION 9.7. No Margin Stock Collateral.

     Each of the Banks  represents  to the Agent,  the  Borrower and each of the
other  Banks  that it in good  faith is not,  (i)  directly  or  indirectly  (by
negative  pledge or  otherwise),  relying upon any Margin Stock as collateral in
the extension or  maintenance  of the credit  provided for in this  Agreement or
(ii)  entering  into this  Agreement  with an immediate  intention to resell its
Commitment or its pro rata share of the Loan.

                      SECTION 9.8. Successors and Assigns.

     9.8.1 No Assignment by Borrower.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors  and assigns;  provided that the Borrower may not assign or otherwise
transfer any of its rights under this Agreement.

                                      -44-

<PAGE>




     9.8.2 Participation.  Any Bank may, without the consent of the Borrower, at
any  time  sell to one or more  Persons  (each  a  "Participant")  participating
interests in the allocable portion of the Loan owing to such Bank, any Note held
by such Bank,  any  Commitment of such Bank  hereunder or any other  interest of
such Bank hereunder.  In the event of any such sale by a Bank of a participating
interest to a Participant,  such Bank's  obligations  under this Agreement shall
remain unchanged,  such Bank shall remain solely responsible for the performance
thereof,  such Bank shall  remain  the holder of any such Note for all  purposes
under this  Agreement,  and the  Borrower  and the Agent shall  continue to deal
solely and directly  with such Bank in  connection  with such Bank's  rights and
obligations  under  this  Agreement.  In no  event  shall  a Bank  that  sells a
participation be obligated to the Participant to take or refrain from taking any
action  hereunder  except  that such Bank may agree that it will not  (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the Loan,  (ii)
the change of the  amounts of any  principal,  interest  or fees due on any date
fixed for the payment thereof with respect to the Loan,  (iii) the change of the
principal of the Loan,  (iv) any change in the rate at which either  interest is
payable  thereon or (if the Participant is entitled to any part thereof) any fee
is payable  hereunder  from the rate at which the  Participant  is  entitled  to
receive interest or such fee in respect of such  participation,  (v) the release
or substitution  of all or any substantial  part of the collateral (if any) held
as security for the Loan, or (vi) the release of any Guarantee  given to support
payment of the Loans.  Each Bank selling a participating  interest in respect of
the Loan, or its Note,  Commitment or other interest under this Agreement shall,
within ten (10) Domestic  Business  Days of such sale,  provide the Borrower and
the Agent with  written  notification  stating  that such sale has  occurred and
identifying  the  Participant  and the interest  purchased by such  Participant.
Except as otherwise  expressly  provided in Article 8, the Agent,  the Banks and
the Borrower  agree that each  Participant  shall be entitled to the benefits of
Article 8 with respect to its participation in the Loan outstanding from time to
time,   but  only  to  the  extent  that  such  Bank  which  sold  the  relevant
participation  would have been  entitled  thereto  pursuant to the terms of this
Agreement.

     9.8.3 Assignments.  Any 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 Notes,  and such
Assignee shall assume all such rights and obligations, pursuant to an Assignment
and  Acceptance,  executed by such Assignee,  such transferor Bank and the Agent
(and,  in the case of an  Assignee  that is not then a Bank,  by the  Borrower);
provided  that (i) no interest  may be sold by a Bank  pursuant to this  Section
unless the Assignee  shall agree to assume  ratably  equivalent  portions of the
transferor  Bank's  Commitment,  (ii)  the  amount  of  the  Commitment  of  the
transferor Bank subject to such assignment  (determined as of the effective date
of the assignment) shall be equal to at least Five Million Dollars ($5,000,000),
(iii) no interest may be sold by a Bank pursuant to this Section to any Assignee
that is not then a Bank or an  Affiliate  of a Bank  without  the consent of the
Borrower  and the Agent (which  consent  shall not be unreason  ably  withheld),
except  after the  occurrence  of, and during  the  continuance  of, an Event of
Default,  and (iv) during the term of this  Agreement,  a Bank may not have more
than two Assignees  that are not then Banks at any one time.  Upon (A) execution
of the Assignment and Acceptance by such  transferor  Bank,  such Assignee,  the
Agent and (if applicable) the Borrower,  (B) delivery of an executed copy of the
Assignment and Acceptance of the Borrower and the Agent, (C) payment by

                                      -45-

<PAGE>




such Assignee to such  transferor  Bank of an amount equal to the purchase price
agreed  between such  transferor  Bank and such  Assignee,  and (D) payment of a
processing and recordation fee of Two Thousand Five Hundred Dollars  ($2,500) to
the  Agent,  such  Assignee  shall  for all  purposes  be a Bank  party  to this
Agreement  and shall have all the rights  and  obligations  of a Bank under this
Agreement  to the same  extent as if it were an  original  party  hereto  with a
Commitment as set forth in such  instrument of  assumption,  and the  transferor
Bank shall be released from its future obligations  hereunder to a corresponding
extent, and no further consent or action by the Borrower, the Banks or the Agent
shall be required. Upon the consummation of any transfer to an Assignee pursuant
to this Section  9.8.3,  the  transferor  Bank, the Agent and the Borrower shall
make appropriate arrangements so that, if required, a new Note is issued to such
Assignee.

     9.8.4  Disclosures.  Subject to the provisions of Section 9.9, the Borrower
authorizes  each  Bank  to  disclose  to  any  Participant,  Assignee  or  other
transferee  (each a  "Transferee")  and any  prospective  Transferee any and all
information  in such Bank's  possession  concerning  the Borrower which has been
delivered to such Bank by the Borrower  pursuant to this  Agreement or which has
been  delivered  to such Bank by the  Borrower  in  connection  with such Bank's
credit evaluation prior to entering into this Agreement.

     9.8.5 Status of Transferee.  No Transferee shall be entitled to receive any
greater  payment  under  Section  8.3 than the  transferor  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 8.2 or 8.3  requiring  such 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 9.9. Confidentiality.

     Each Bank and the Agent 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 Agent or such Bank by reason of
a visit or investigation by any Person contemplated in Section 5.2, confidential
from any one other than persons employed or retained by such Bank who are or are
expected  to  become   engaged  in   evaluating,   approving,   structuring   or
administering the Loan; provided,  however that nothing herein shall prevent any
Bank from disclosing  such  information (i) to the Agent or any other Bank, (ii)
upon the order of any court or administrative  agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over such Bank,
(iv) which has been publicly  disclosed  other than by an act or omission of the
Agent or any Bank except as permitted  herein,  (v) to the extent  reasonably re
quired in connection with any litigation (with respect to this Agreement, any of
the other Loan Docu ments, in connection with any of the foregoing, or any other
obligations of the Borrower or any Subsidiary owing to the Agent or any Bank) to
which the Agent, any Bank or their respective  Affili ates may be a party,  (vi)
to the extent reasonably  required in connection with the exercise of any remedy
hereunder,  (vii) to such Bank's  legal  counsel and  independent  auditors  and
(viii) to any actual

                                      -46-

<PAGE>




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 9.9.

                  SECTION 9.10.  Representation by Banks.

     Each Bank hereby  represents  that it is a  commercial  lender or financial
institution which makes loans in the ordinary course of its business and that it
will make its pro rata share of the Loan  hereunder  for its own  account in the
ordinary  course of such business;  provided,  however that,  subject to Section
9.8, the disposition of a Note or the Notes held by that Bank shall at all times
be within its exclusive control.

                       SECTION 9.11. Obligations Several.

     The  obligations of each Bank  hereunder are several,  and no Bank shall be
responsible  for the  obligations  or  commitment  of any other Bank  hereunder.
Nothing contained in this Agreement and no action taken by Banks pursuant hereto
shall be deemed to constitute the Banks to be a partnership,  an association,  a
joint  venture  or any other  kind of entity.  The  amounts  payable at any time
hereunder to each Bank shall be a separate and  independent  debt, and each Bank
shall be  entitled  to  protect  and  enforce  its  rights  arising  out of this
Agreement or any other Loan Document and it shall not be necessary for any other
Bank to be joined as an additional party in any proceeding for such purpose.

                           SECTION 9.12. 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 9.13. 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 9.14. CONSENT TO JURISDICTION.

     THE BORROWER,  AND EACH OF THE BANKS AND THE AGENT IR REVOCABLY (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 NOTES AND THE OTHER  LOAN  DOCUMENTS,  (B)
WAIVES ANY AND ALL PERSONAL  RIGHTS UNDER THE LAW OF ANY  JURISDICTION TO OBJECT
ON ANY BASIS

                                      -47-

<PAGE>




(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 NOTES OR THE OTHER LOAN DOCUMENTS, AND (C) AGREES THAT SERVICE OF
PROCESS  MAY BE MADE UPON IT IN THE MANNER  PRESCRIBED  IN  SECTION  9.1 FOR THE
GIVING OF NOTICE TO THE  BORROWER.  NOTHING  HEREIN  CONTAINED,  HOWEVER,  SHALL
PREVENT THE AGENT FROM BRINGING ANY ACTION OR EXERCISING  ANY RIGHTS AGAINST ANY
SECURITY  AND AGAINST  THE  BORROWER  PERSONALLY,  AND AGAINST ANY ASSETS OF THE
BORROWER, WITHIN ANY OTHER STATE OR JURISDICTION.

                           SECTION 9.15. 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 instru ment.

                             SECTION 9.16. 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 con tinue in full force and effect until the payment of the
Notes and termination of the Commitments.

            SECTION 9.17. Entire Agreement; Amendment; Severability.

     This  Agreement  shall  constitute the entire  agreement  among the parties
hereto with respect to the subject  matter  hereof.  This  Agreement  amends and
restates,  in its entirety,  the Original Credit Agreement,  effective as of the
Closing  Date,  except  that,  for  purposes of Sections  5.4,  5.5 and 5.6, the
effective  date of the  amendment and  restatement  of those  sections  pursuant
hereto  shall be deemed to be one (1)  Business Day prior to the last day of the
Fiscal  Quarter  ending  closest to December  31,  1997.  This  Agreement is not
intended  to be, and shall not  constitute,  a novation of the  Original  Credit
Agreement.  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  9.6. 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
circumstance shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.

                       SECTION 9.18. TIME OF THE ESSENCE.

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


                                      -48-

<PAGE>




                    SECTION 9.19. Banks 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 any Bank or the Agent a
partner  or  joint  venturer  with the  Borrower  or as  creat  ing any  similar
relationship or entity.

     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:_________________________________
                                               Erich J. Booth, Chief Financial
                                                 Officer and Treasurer


                                            Attest:_____________________________
                                                   Tonya Benjamin, 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



                                      -49-

<PAGE>




COMMITMENTS

                                            "BANKS"

$60,000,000.00                              WACHOVIA BANK, NATIONAL
                                            ASSOCIATION, as the Agent and as
                                            a Bank
                                            (SEAL)


                                            By:________________________________
                                               W. Tompkins Rison, Vice President
  

                                            Lending Office:

                                            Wachovia Bank, N.A.
                                            191 Peachtree Street, N.E.
                                            30th Floor
                                            Atlanta, Georgia  30303-1757
                                            Attention: Georgia Corporate 
                                            Commercial Group

                                            Telecopier Number:  (404) 332-6920



                                      -50-

<PAGE>




$15,000,000                                 SUNTRUST BANK, ATLANTA
                                            (SEAL)


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lending Office:

                                            SunTrust Bank, Atlanta
                                            25 Park Place
                                            23rd Floor
                                            Atlanta, Georgia  30302

                                            Telecopier Number:  (404) 558-8833


                                      -51-

<PAGE>




$25,000,000                                 BANK OF AMERICA NATIONAL TRUST
                                            AND SAVINGS ASSOCIATION
                                            (SEAL)


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lending Office:

                                            Bank of America National Trust
                                              and Savings Association
                                            231 South LaSalle Street
                                            MC 200-9
                                            Chicago, Illinois  60697

                                            Telecopier Number:  (312) 974-9626

                                            With a copy to:

                                            Bank of America National Trust
                                              and Savings Association
                                            1230 Peachtree Street
                                            Suite 3800
                                            Atlanta, Georgia  30309

                                            Telecopier Number:  (404) 249-6938


                                      -52-

<PAGE>




$20,000,000                                 BANQUE PARIBAS
                                            (SEAL)


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lending Office:

                                            Banque Paribas
                                            787 Seventh Avenue
                                            New York, New York  10019

                                            Telecopier Number:  (212) 841-2333


                                      -53-

<PAGE>




$20,000,000                                 COOPERATIEVE CENTRALE
                                            RAIFFEISEN-BOERENLEENBANK B.A.,
                                            "RABOBANK NEDERLAND,"
                                            NEW YORK BRANCH


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lending Office:

                                            Cooperatieve Central
                                            Raiffeisen-Boerenleenbank B.A.
                                            "Rabobank Nederland"
                                            New York Branch
                                            245 Park Avenue
                                            36th Floor
                                            New York, New York  10167

                                            Telecopier Number:  (212) 818-0233


                                      -54-

<PAGE>




$15,000,000                             CANADIAN IMPERIAL BANK OF COMMERCE, INC.


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lending Office:

                                        Canadian Imperial Bank of Commerce, Inc.
                                            2 Paces West
                                            2727 Paces Ferry Road
                                            Suite 1200
                                            Atlanta, Georgia  30339

                                            Telecopier Number:  (770) 319-4915


                                      -55-

<PAGE>




$10,000,000                                 CRESTAR BANK
                                            (SEAL)


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lending Office:

                                            Crestar Bank
                                            919 East Main Street
                                            Richmond, Virginia  23219

                                            Telecopier Number:  (804) 782-5413


                                      -56-

<PAGE>




$20,000,000                                 BANKBOSTON, N.A.


                                            By:_________________________________
                                                 Debra L. Zurka, Director

                                            Lending Office:

                                         Large Corporate -- Restaurant Division
                                            100 Federal Street
                                            Mail Stop 01-09-05
                                            Boston, Massachusetts  02110

                                            Telecopier Number:  (617) 434-0637



                                      -57-

<PAGE>




$10,000,000                                 COMERICA BANK


                                            By:_________________________________
                                           Kristine L. Andersen, Account Officer

                                            Lending Office:

                                            Comerica Bank
                                            500 Woodward Avenue
                                            9th Floor, MC 3280
                                            Detroit, Michigan  48226

                                            Telecopier Number:  (313) 222-3330


                                      -58-

<PAGE>




$5,000,000                                  AMSOUTH BANK OF ALABAMA


                                            By:_________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                            Lender Office:

                                            AmSouth Bank of Alabama
                                            1900 5th Avenue North
                                            7th Floor
                                            Birmingham, Alabama  35203

                                            Telecopier Number:  (205) 326-5601


$200,000,000 Total Commitments

                                      -59-

<PAGE>




                                    EXHIBIT A

                        FORM OF ASSIGNMENT AND ACCEPTANCE


                            ASSIGNMENT AND ACCEPTANCE

                             Dated ________ __, 19__


     Reference  is made t o the Second  Amended and  Restated  Credit  Agreement
dated as of March 1,  1998  (together  with  all  amendments  and  modifications
thereto,  the "Credit Agreement" among Apple South, Inc., a Georgia  corporation
(the  "Borrower"),  the Banks (as defined in the Credit  Agreement) and Wachovia
Bank, National Association,  as Agent (the "Agent"). Terms defined in the Credit
Agreement are used herein with the same meaning.

         ________________________________________ (the "Assignor") and
        ________________________________________ (the "Assignee") agree
                                  as follows:

     1. The Assignor hereby sells and assigns to the Assignee,  and the Assignee
hereby purchases and assumes from the Assignor,  a ________%  interest in and to
all of the Assignor's  rights and obligations  under the Credit  Agreement as of
the Effective Date (as defined below) (including,  without limitation,  a _____%
interest  (which on the Effective Date hereof is  $__________) in the Assignor's
Commitment  and a  _____  interest  (which  on  the  Effective  Date  hereof  is
$__________)  in that  portion of the Loan owing to the  Assignor  (which on the
Effective Date hereof is $----------).

     2. The  Assignor  (i) makes no  representation  or warranty  and assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in connection with the Credit  Agreement or the execution,  legality,
validity,  enforceability,  genuineness,  sufficiency  or  value  of the  Credit
Agreement or any other instrument or document furnished pursuant thereto,  other
than that it is the legal and beneficial owner of the interest being assigned by
it hereunder, that such interest is free and clear of any adverse claim and that
as of the date  hereof its  Commitment  (without  giving  effect to  assignments
thereof which have not yet become  effective) is  $__________  and the aggregate
outstanding  principal  amount of that  portion of the Loan owing to it (without
giving effect to  assignments  thereof  which have not yet become  effective) is
$__________;   (ii)  makes  no   representation   or  warranty  and  assumes  no
responsibility  with respect to the  financial  condition of the Borrower or the
performance  or observance by the Borrower of any of its  obligations  under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iii) at taches the Note(s)  referred to in  paragraph 1 above and  requests
that the Agent exchange such Note(s) for [a new Note dated  __________,  ____ in
the principal  amount of $__________  payable to the order of the Assignee) (new
Notes as follows: a Note dated __________, ____ in the principal

                                       -1-

<PAGE>




amount of  $__________  payable  to the order of the  Assignor  and a Note dated
__________,  ____ in the principal amount of $__________ payable to the order of
the Assignee].

     3. The  Assignee  (i)  confirms  that it has  received a copy of the Credit
Agreement,  together  with  copies of the  financial  statements  referred to in
Section 4.4.1 thereof (or any more recent  financial  statements of the Borrower
delivered  pursuant to Sections 5.1.1 or 5.1.2 thereof) and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently  and without  reliance  upon the Agent,  the Assignor or any other
Bank and based on such documents and information as it shall deem appropriate at
the time,  continue  to make its own  credit  decisions  in taking or not taking
action under the Credit Agreement; (iii) confirms that it is a bank or financial
institution; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise  such  powers  under the Credit  Agreement  as are
delegated to the Agent by the terms  thereof,  together  with such powers as are
reasonably  incidental  thereto;  (v) agrees that it will perform in  accordance
with  their  terms  all of the  obligations  which by the  terms  of the  Credit
Agreement  are required to be performed by it as a Bank;  (vi)  specifies as its
Lending  Office (and address for notices) the office set forth  beneath its name
on the signature pages hereof, (vii) represents and warrants that the execution,
delivery  and  performance  of this  Assignment  and  Acceptance  are within its
corporate  powers  and have  been duly  authorized  by all  necessary  corporate
action, and (viii) attaches the forms prescribed by the Internal Revenue Service
of the United  States  certifying  as to the  Assignee's  status for purposes of
determining  exemption from United States  withholding taxes with respect to all
payments to be made to the Assignee under the Credit  Agreement and the Notes or
such other  documents as are  necessary to indicate  that all such  payments are
subject to such taxes at a rate reduced by an applicable tax treaty.

     4. The Effective  Date for this  Assignment  and  Acceptance  shall be (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for execution and acceptance by the Agent (and to
the Borrower for execution by the Borrower.  If Assignee is organized  under the
laws of a jurisdiction outside the United States.

     5. Upon such  execution  and  acceptance  by the Agent and execution by the
Borrower,  if the Assignee is not a Bank prior to the Effective  Date,  from and
after  the  Effective  Date,  (i) the  Assignee  shall be a party to the  Credit
Agreement and, to the extent rights and obligations  have been transferred to it
by this  Assignment and  Acceptance,  have the rights and  obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent its rights and obligations
have  been  transferred  to the  Assignee  by this  Assignment  and  Acceptance,
relinquish its rights (other than under Section 8.3 of the Credit Agreement) and
be released from its obligations under the Credit Agreement.

     6. Upon such  execution  and  acceptance  by the Agent and execution by the
Borrower,  if the Assignee is not a Bank prior to the Effective  Date,  from and
after the  Effective  Date,  the Agent shall make all payments in respect of the
interest assigned hereby to the Assignee. The

                                       -2-

<PAGE>




Assignor and Assignee  shall make all  appropriate  adjustments  in payments for
periods prior to such acceptance by the Agent directly between themselves.

     7. This  Assignment and  Acceptance  shall be governed by, and construed in
accordance with, the laws of the State of Georgia.

                                                     [NAME OF ASSIGNOR]


                                                     By:
                                                          Title:


                                                     [NAME OF ASSIGNEE]


                                                     By:
                                                          Title:


                                                     Lending Office:
                                                     [Address]

                                                     WACHOVIA BANK, NATIONAL 
                                                     ASSOCIATION, as Agent


                                                     By:
                                                          Title:


                                                     APPLE SOUTH, INC.
                                                     If  the  Assignee  is not a
                                                     Bank prior to the Effective
                                                     Date.


                                                     By:
                                                          Title:


                                       -3-

<PAGE>




                                    EXHIBIT B

                                  FORM OF NOTE


                                      NOTE

                                Atlanta, Georgia
                                  March 1, 1998


     For  value  received,   APPLE  SOUTH,  INC.,  a  Georgia  corporation  (the
"Borrower"),  promises  to pay to the order of  ________________________________
(the  "Bank"),  for the  account of its Lending  Office,  the  principal  sum of
[______________________________ Dollars ($__________)],  representing the Bank's
pro rata  share of the Loan made by the Banks to the  Borrower  pursuant  to the
Credit Agreement  referred to below, on the dates and in the amounts provided in
the Credit  Agreement.  The  Borrower  promises  to pay  interest  on the unpaid
principal amount of this Note on the dates and at the rate or rates provided for
in the Credit Agreement referred to below.  Interest on any overdue principal of
and, to the extent  permitted by law,  overdue  interest on the principal amount
hereof shall bear  interest at the Default  Rate,  as provided for in the Credit
Agreement.  All such payments of principal and interest  shall be made in lawful
money of the United States in Federal or other  immediately  available  funds at
the office of Wachovia Bank, National  Association,  191 Peachtree Street, N.E.,
Atlanta, Georgia 30303-1757, or such other address as may be specified from time
to time pursuant to the Credit Agreement.

     All  repayments of the principal  amount hereof may be recorded by the Bank
and, prior to any transfer hereof, endorsed by the Bank on the schedule attached
hereto,  or on a  continuation  of such  schedule  attached  to and  made a part
hereof;  provided that the failure of the Bank to make any such  recordation  or
endorsement shall not affect the obligations of the Borrower  hereunder or under
the Credit Agreement.

     This  Note  is one of the  Notes  referred  to in the  Second  Amended  and
Restated  Credit  Agreement dated as of March 1, 1998,  among the Borrower,  the
Banks  listed  on the  signature  pages  thereof  and  Wachovia  Bank,  National
Association,  as Agent (as the same may be  amended  and  modified  from time to
time, the "Credit  Agreement").  Terms defined in the Credit  Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for the
provisions for the voluntary and mandatory  prepayment and the repayment  hereof
and the acceleration of the maturity hereof.


                                       -1-

<PAGE>




     IN WITNESS WHEREOF,  the Borrower has caused this Note to be duly executed,
under seal,  by its duly  authorized  officer as of the day and year first above
written.


                                                     APPLE SOUTH, INC. 
                                                           (SEAL)


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


                                               Attest:__________________________
                                                      Tonya Benjamin, Assistant
                                                      Secretary



                                       -2-

<PAGE>




                                  Note (cont'd)


                              PAYMENTS OF PRINCIPAL


                                    Amount of
                               Principal Notation
                              Date Repaid Made By

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


                                       -3-

<PAGE>




                                    EXHIBIT C

                           FORM OF NOTICE OF BORROWING


                               NOTICE OF BORROWING

                             ________________, 199_


Wachovia Bank, National
  Association, as Agent
191 Peachtree Street, N.W.
Atlanta, Georgia 30303-1757
Attention:  Commercial Group

         Re:      Second  Amended and Restated  Credit  Agreement (as amended or
                  modified from time to time, the "Credit  Agreement")  dated as
                  of March 1, 1998,  by and among Apple  South,  Inc.,  Wachovia
                  Bank,  National  Association,  as a Bank and as the Agent, and
                  the other Banks from time to time party thereto.

Ladies and Gentlemen:

         Unless otherwise  defined herein,  capitalized  terms used herein shall
have the meanings attributable thereto in the Credit Agreement.

         This Notice of Borrowing is delivered to you pursuant to Section 2.2 of
the Credit Agreement.

         The Borrower  hereby  requests a Borrowing in the  aggregate  principal
amount of $________________ to be established on ______________,  199__, and for
interest to accrue thereon at the rate  established by the Credit  Agreement for
(check one):

         1.       _____    Base Rate Loan Tranche
         2.       _____    Euro-Dollar Rate Loan Tranche

         The duration of the Interest Period with respect thereto in the case of
a Euro-Dollar Rate Loan Tranche shall be (check one):

         1.       _____    1 month
         2.       _____    2 months
         3.       _____    3 months
         4.       _____    6 months

                                       -1-

<PAGE>




     The  Borrower  has caused  this  Notice of  Borrowing  to be  executed  and
delivered  by its duly  authorized  officer  as of this ____ day of  __________,
199__.

                                                     APPLE SOUTH, INC.



                                                     By:
                                                          Title:


                                       -2-

<PAGE>




                                    EXHIBIT D


                               FORM OF OPINION OF
                            COUNSEL FOR THE BORROWER


                                  March 1, 1998


To the Banks and the Agent
  Referred to below
c/o Wachovia Bank,
  National Association, as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia  30303-1757

Ladies and Gentlemen:

     We have acted as legal  counsel to Apple South,  Inc. (the  "Borrower")  in
connection  with the Second Amended and Restated  Credit  Agreement (the "Credit
Agreement")  dated as of March 1, 1998, among the Borrower,  the Banks from time
to time parties  thereto,  and Wachovia Bank,  National  Association,  as Agent.
Terms defined in the Credit Agreement are used herein as therein defined.

     We have examined original or copies,  certified or otherwise  identified to
our satisfaction,  of such documents,  corporate records, certificates of public
officials and other instruments and have conducted such other  investigations of
fact and law as we have  deemed  necessary  or  advisable  for  purposes of this
opinion.  We have  assumed for purposes of our opinions set forth below that the
executed and delivery of the Credit Agreement by each Bank and by the Agent have
been duly authorized by each Bank and by the Agent.

     When facts relevant to these opinions were not independently established by
us, we have relied upon the  certificate  of the Secretary of the  Borrower.  We
have  assumed  the  genuineness  of  all  signatures,  the  authenticity  of all
documents  delivered to us as originals,  the legal capacity of natural persons,
the  conformity  to  original  documents  of all  documents  submitted  to us as
certified or photostatic  copies and the  authenticity  of the originals of such
letter documents.

     Upon the basis of the foregoing,  and subject to the further qualifications
and assumptions set forth below, we are of the opinion that:


                                       -1-

<PAGE>




     1. The Borrower is a corporation duly incorporated, validly existing and in
good  standing  under the laws of the  State of  Georgia  and has all  corporate
powers required to carry on its business as now conducted.

     2. The  execution,  delivery and  performance by the Borrower of the Credit
Agreement,  the Notes and the Other  Agreements  (i) are within  the  Borrower'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 (A)  applicable  law or regulation or (B) the
certificate  of  incorporation  or by-laws of the  Borrower or (C) any  material
judgment, injunction, order or decree which to our knowledge is binding upon the
Borrower or (D) any material indenture,  mortgage, deed of trust, loan agreement
or other financial  agreement or instrument (but not including  leases) known to
us which to our  knowledge  is binding on the  Borrower  and (V) do not,  to our
knowledge,  result in the creation or imposition of any Lien on any asset of the
Borrower.

     3. The Credit Agreement,  the Notes and the Other Agreements  constitutes a
valid and binding agreement of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited:  (i) by
bankruptcy,   insolvency,   reorganization,   fraudulent  conveyance,   voidable
preference,  moratorium or similar laws  applicable to creditors'  rights or the
collection of debtors'  obligations  generally and (ii) by general principles of
equity (including, without limitation, the availability of equitable remedies).

     4. To our knowledge,  there is no action,  suit or proceeding  pending,  or
threatened,  against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any  governmental  body,  agency or official in which
there is a reasonable  possibility of an adverse decision which could materially
adversely affect the business,  consolidated  financial position or consolidated
results  of  operations  of the  Borrower  and  its  Consolidated  Subsidiaries,
considered  as a  whole,  or which  in any  manner  questions  the  validity  or
enforceability of the Credit Agreement or any Note.

     5. The Borrower is not an  "investment  company"  within the meaning of the
Investment Company Act of 1940, as amended.

     We are qualified to practice law in the State of Georgia and do not purport
to be experts on any laws other than the federal  laws of the United  States and
the laws of the State of Georgia, and this opinion is rendered only with respect
to  such  laws.  We  have  made  no  investigation  of the  laws  of  any  other
jurisdiction.

                                                              Very truly yours,


                                       -2-

<PAGE>




                                    EXHIBIT E

                           FORM OF CLOSING CERTIFICATE

                                APPLE SOUTH, INC.

                               CLOSING CERTIFICATE


     Reference is made to the Second Amended and Restated Credit Agreement ("the
Credit Agreement") dated as of March 1, 1998, among Apple South, Inc., the Banks
listed therein, and Wachovia Bank, N.A., as Agent. Capitalized terms used herein
have the meanings ascribed thereto in the Credit Agreement.

     Pursuant to Section 3.1.4 of the Credit Agreement,  the undersigned,  Erich
J. Booth,  the duly authorized  Chief  Financial  Officer and Treasurer of Apple
South,  Inc.,  in his aforesaid  official  capacity and not  personally,  hereby
certifies  to the Agent and the  Banks on  behalf  of the  Borrower  that (i) no
Default has  occurred  and is  continuing  as of the date  hereof,  and (ii) the
representations  and warranties  contained in Article IV of the Credit Agreement
are true on and as of the date hereof.

     IN WITNESS  WHEREOF,  the undersigned has executed this  Certificate in his
aforesaid  official capacity as Chief Financial Officer and not personally as of
March 1, 1998.


                                                    By:
                                                        Erich J. Booth, as Chief
                                                           Financial Officer and
                                                           Treasurer, for and on
                                                           behalf    of    Apple
                                                           South, Inc.


                                       -1-

<PAGE>




                                    EXHIBIT F

                         FORM OF SECRETARY'S CERTIFICATE

                             SECRETARY'S CERTIFICATE


     The undersigned,  being the duly elected, qualified and acting Secretary of
APPLE  SOUTH,  INC., a Georgia  corporation  (the  "Corporation"),  and, in such
capacity,  being duly authorized and empowered to issue this  certificate on its
behalf, does hereby certify that:

     1. On or prior to the date  hereof,  by  unanimous  consent of the Board of
Directors of the Corporation, the resolutions set forth and described on Exhibit
A were unanimously adopted and, being the only effective  resolutions adopted by
the Board of Directors  of this  Corporation  (or any  committee  thereof)  with
respect to the matters referred to therein,  remain unmodified and in full force
and effect as of the date hereof:

     2.  The  following  are the  names  of the duly  elected  officers  of this
Corporation now holding the respective offices indicated, and that the signature
set  forth  opposite  the name of each  such  officer  is the  true and  genuine
signature of such officer (complete as applicable):


Erich J. Booth, Chief Financial                    _____________________________
 Officer and Treasurer                                       (Signature)

Tonya Benjamin, Assistant Secretary                _____________________________
                                                              (Signature)

     3. Attached hereto as Exhibit B is a true, correct and complete copy of the
Articles of  Incorporation  of the  Corporation  as in effect on the date hereof
(including all amendments thereof to date).

     4. Attached hereto as Exhibit C is a true, correct and complete copy of the
By-Laws  of the  Corporation  as in effect  on the date  hereof  (including  all
amendments thereof to date).

     IN WITNESS WHEREOF, I have hereunto set my hand as Assistant  Secretary and
the seal of the Corporation as of the 1st day of March, 1998.


[CORPORATE SEAL]                               ________________________________
                                             Tonya Benjamin, Assistant Secretary

                                       -1-

<PAGE>




                                    EXHIBIT G

                         FORM OF COMPLIANCE CERTIFICATE

                             COMPLIANCE CERTIFICATE


     Reference  is made to that  certain  Second  Amended  and  Restated  Credit
Agreement dated as of March 1, 1998 (as modified and  supplemented and in effect
from time to time, the "Credit  Agreement")  among Apple South,  Inc., the Banks
from time to time party thereto, and Wachovia Bank, National  Association,  as a
Bank and as Agent as ascribed thereto in the Credit Agreement.

     Pursuant to Section 5.1.3 of the Credit  Agreement,  the  undersigned,  the
[Chief  Financial  Officer/Chief  Accounting  Officer] of the  Borrower,  hereby
certifies  that  (i)  attached  hereto  as  Annex 1 are the  true  and  accurate
calculations  required to establish  whether the Borrower was in compliance with
Sections 5.3,  5.4,  5.5, 5.6 and 5.19 of the Credit  Agreement as of the end of
the Fis cal [Quarter/Year] ended __________, 19__, each determined in accordance
with the requirements of the Credit Agreement and (ii) [no Default exists on the
date hereof] [the following  Defaults  (including the details thereof) exist and
the  Borrower is taking or proposes to take the  following  actions with respect
thereto]:

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

     IN WITNESS  WHEREOF,  the undersigned has executed this  Certificate in his
capacity as [Chief  Financial  Officer] and not personally as of the ____ day of
__________, 199___.



                                                    
                                            By:_________________________________
                                                        _______________________,
                                                        as _________________,
                                                        for and on  behalf of
                                                        Apple South, Inc.



                                       -1-

<PAGE>




                                  SCHEDULE 4.8

                               SUBSIDIARY SCHEDULE


                     [TO BE COMPLETED BY APPLE SOUTH, INC.]



                                      -1-

<PAGE>



                                  SCHEDULE 5.7

                                  DEBT SCHEDULE



                                                  Monthly
Description   Short-Term    Long-Term    Total    Payment   Maturity    Security
-----------   ----------    ---------    -----    -------   --------    --------



                     [TO BE COMPLETED BY APPLE SOUTH, INC.]