THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT  AGREEMENT,  dated as of March 31, 2000 (the
"Amendment  Date"),  is made among AVADO BRANDS,  INC., as "Borrower";  WACHOVIA
BANK,  NATIONAL  ASSOCIATION;  FLEET  NATIONAL  BANK,  successor  in interest to
BANKBOSTON, N.A., and the other parties listed as a "Bank" or the "Banks" on the
signature page(s) hereof, as "Banks";  WACHOVIA BANK, NATIONAL  ASSOCIATION,  as
"Administrative  Agent" for the Banks, the "Syndication  Agent," and itself; and
FLEET NATIONAL BANK, successor in interest to BANKBOSTON,  N.A., as "Syndication
Agent" for the Banks. The Borrower,  the Banks, the Administrative Agent and the
Syndication  Agent,  are hereinafter  called,  collectively,  the "Parties." The
Parties are parties to a Credit Agreement,  dated as of June 22, 1999 (which, as
modified  and  amended  to  date,  as  more  particularly  described  below,  is
hereinafter called the "Credit Agreement"). Heretofore, the Parties modified and
amended the Credit  Agreement as follows:  (i) pursuant to a First  Amendment to
Credit  Agreement,   dated  as  of  September  15,  1999,  between  the  Parties
("Amendment  No. 1"); (ii) pursuant to a Second  Amendment to Credit  Agreement,
dated as of October 4, 1999,  between the Parties  ("Amendment No. 2"; Amendment
No. 2 and  Amendment  No. 1  hereinafter  sometimes  called,  collectively,  the
"Amendments");  (iii)  pursuant  to a  Consent  and  Waiver  No.  1 into  Credit
Agreement, dated as of November 17, 1999, between the Parties; ("Waiver No. 1");
(iv)  pursuant  to a Consent and Waiver No. 2 to Credit  Agreement,  dated as of
December 31, 1999,  between the Parties  ("Waiver No. 2"); and (v) pursuant to a
Consent and Waiver No. 3 to Credit  Agreement,  dated as of February  29,  2000,
between the Parties  (Waiver No. 3"; Waiver No. 3, Waiver No. 2 and Waiver No. 1
hereinafter  sometimes called,  collectively,  the "Waivers").  The Parties, are
entering  into this  Amendment  for the purpose of further  amending  the Credit
Agreement in the manner specified below.

Accordingly, for value received, the Parties agree as follows:

1. Definitions.

     Terms  Incorporated by Reference.  Capitalized  terms used herein,  but not
expressly  defined  herein,  shall have the meanings  given to such terms in the
Credit Agreement or, as appropriate, in the Amendments or the Waivers.

2. Amendments.

     2.1 Definition of Fixed Charge Coverage Ratio.  The existing  definition of
Fixed Charge Coverage Ratio,  set forth in Section 1.1 of the Credit  Agreement,
shall  be  amended  by  adding  to  existing  clause  (B)  thereof;   i.e.,  the
denominator,  a new subclause (iv),  immediately after existing  subclause (iii)
thereof, to read as follows:

     plus (iv) without  duplication,  all payments made (including payments made
in  settlement  of  existing  obligations  or claims)  under,  or in respect of,
interest rate "hedge," "swap," "collar" or similar arrangements,  whether now or
hereafter existing,  including, but not limited to, those expressly permitted to
exist under clause (ix) of Section 5.21.

     The  remainder of said  definition  shall  remain  unchanged,  however.  In
respect of the  foregoing  amendment,  Borrower  specifically  acknowledges  and
agrees that any payments to Morgan  under or in respect of the Morgan  Agreement
(as those terms  "Morgan" and "Morgan  Agreement,"  are defined and described in
Section  2.15  of  this  Amendment),   howsoever  denominated,   shall,  without
limitation,  be included within the payments described in the  above-referenced,
newly added, clause (iv).

     2.2 Interest  Rate.  Notwithstanding  any term of Section 2.5 of the Credit
Agreement  to the  contrary,  unless  and  until the  Total  Debt/EBITDA  Ratio,
determined as of the end of any Fiscal Quarter  subsequent to the Fiscal Quarter
ending  closest to March 31,  2000,  is less than  3.50:1,  (i) all Loans  shall
continue  to be made (or  continued)  as Base  Rate  Loans,  and (ii) all  Loans


<PAGE>
(including  all Swing  Loans) shall  continue to bear  interest at the Base Rate
plus two percent (2%) per annum,  subject,  however, to increase (A) as provided
in the Waivers,  to the extent the Borrower  fails to timely comply with certain
conditions  set forth  therein,  and (B) to the  Default  Rate  pursuant  to the
operation of Section 6.1 of the Credit Agreement subsequent to the occurrence of
an Event of Default. To the extent that, subsequent to the Fiscal Quarter ending
closest to March 31, 2000, the Total Debt/EBITDA Ratio, determined as of the end
of any Fiscal  Quarter,  is less than,  3.50:1,  then and for so long thereafter
such ratio shall be so maintained from Fiscal Quarter-to-Fiscal  Quarter (i) the
right of Borrower to select between Base Rate Loans and Euro-Dollar  Rate Loans,
as provided in Section 2.5, shall be re-established,  and (ii) the interest rate
payable on any Loans then  outstanding or made shall be determined in accordance
with said Section 2.5, as originally provided therein.

     2.3 Mandatory  Reductions in Line of Credit.  Existing Section 2.7.3 of the
Credit  Agreement  shall be deleted in its  entirety and the  following  revised
version of Section 2.7.3 shall be substituted in its place:

     2.7.3. Mandatory Ratable Reductions in Commitments.  The Commitments of the
Banks shall reduce ratably, beginning with the Fiscal Quarter of Borrower ending
closest to September  30, 2000,  and  continuing  thereafter  at the end of each
succeeding Fiscal Quarter,  by the amounts prescribed below as of each quarterly
reduction date prescribed below corresponding thereto:

--------------------------------------------------------------------------------
           Quarterly Reduction Date:              Quarterly Reduction Amount
--------------------------------------------------------------------------------
           October 1, 2000                                 $10,000,000
--------------------------------------------------------------------------------
           December 31, 2000                               $10,000,000
--------------------------------------------------------------------------------
           April 4, 2001                                    $7,500,000
--------------------------------------------------------------------------------
           July 1, 2001                                     $7,500,000
--------------------------------------------------------------------------------
           September 30, 2001                               $7,500,000
--------------------------------------------------------------------------------
           December 30, 2001                                $7,500,000
--------------------------------------------------------------------------------
           March 31, 2002                                   $7,500,000
--------------------------------------------------------------------------------


     Effective  with each  mandatory  reduction  in the  Commitments  prescribed
above,  the  Borrower  shall be  required  to  repay  the  Loans by that  amount
necessary to cause total Loans then  outstanding  not to exceed the total amount
of the Commitments,  as so reduced each quarter, in accordance with the terms of
Section 2.9.1.  If the Borrower  should fail at any time or from time to time to
repay its Borrowings by the amounts  required to be made in conjunction with any
reduction in Commitments prescribed  hereinabove,  as and when so required to be
made,  its failure to do so shall  constitute an Event of Default and permit the
Administrative  Agent,  on behalf of the  Banks,  to  exercise  the  rights  and
remedies provided herein and in the Loan Documents  attendant upon such Event of
Default occurring. Without limitation of such attendant rights and remedies, the
Borrower  acknowledges  and agrees  that the  Administrative  Agent may,  as the
Borrower's  attorney-in-fact,  cause the Capital Stock of Belgo, PLC, then being
held  by  it  as  collateral   hereunder,   or  such  portions  thereof  as  the
Administrative Agent determines,  in its sole discretion, to be sold by the most
expeditious  means  practicable,  after first giving Borrower three (3) Business
Days advance notice thereof (which notice period shall supersede and replace any
notice  period  otherwise  set forth in the Loan  Documents  in  respect of such
action),  and apply any cash  proceeds  (net of all  expenses  of sale)  derived
therefrom to the Borrowings,  without  necessity of further notice to, or demand
upon,  the Borrower to do so, and without any  liability to the Borrower for the
price  obtained in any such sale or any tax liability of the Borrower  resulting


<PAGE>
from any such sale.  The  Commitments  of the Banks shall also reduce ratably by
the amount of any mandatory  prepayments of Borrowings from Asset Sales or Asset
Recoveries  made  subsequent to the Amendment Date pursuant to Section 2.9.2; it
being understood and agreed in connection  therewith that any such reductions to
the Commitments made from Asset Sales or Asset Recoveries  occurring  subsequent
to the  Amendment  Date shall be  counted  against  the amount of the  quarterly
reductions  in the  Commitments  prescribed  in the table set forth  above.  For
example, and without limitation, if the total amount of Asset Recoveries and Net
Cash Proceeds  from Asset Sales made during the period from the  Amendment  Date
through  September 29, 2000 equals  $9,000,000,  and the  Commitments  have been
reduced accordingly by such amount as of such date, then, on September 30, 2000,
only an additional $1,000,000 of the Commitments shall be required to be reduced
in  order  that  total   reductions  in  Commitments  by  such  date  amount  to
$10,000,000.  The  Commitments,  once reduced  pursuant to the operation of this
Section 2.7.3, shall not be reinstated by the Banks.

     The unused  commitment fees,  payable to each Bank in respect of its Unused
Commitment  shall continue to be due and payable at the times and in the amounts
prescribed in Section  2.6.1,  notwithstanding  implementation  of the foregoing
reductions in Commitments  (however,  in accordance with the definition thereof,
the Unused  Commitments  shall  adjust  consistent  with each  reduction  in the
Commitments  and the  amounts of the unused  commitment  fees shall be  adjusted
accordingly).

     2.4 Asset Sales and Asset Recoveries.  Existing Section 2.9.2 of the Credit
Agreement shall be deleted in its entirety and the following  revised version of
said Section 2.9.2 shall be substituted in its place:

     2.9.2.  Asset  Sales  and Asset  Recoveries.  To th e extent  that,  (i) in
accordance  with the  provisions  of Section  5.11,  the  Borrower or any of its
Subsidiaries  consummates  any Asset Sale on or subsequent to March 31, 2000, or
(ii) the Borrower or any of its  Subsidiaries  collects any loan or advance made
pursuant to clause (xi) of Section 5.20 or  otherwise  makes any  recoveries  in
respect  of any  "investments"  (as that  term is  defined  in the  introductory
paragraph to Section 5.20, and including  particularly,  but without limitation,
the "Real  Receivable,"  as that term is defined in Section 2.2(f) of Waiver No.
3)  (the  foregoing  herein  called,   individually  and  collectively,   "Asset
Recoveries"), on or subsequent to March 31, 2000, then, as soon as received, the
Borrower  shall apply an amount equal to one hundred  percent  (100%) of the Net
Cash  Proceeds  from such Asset Sale,  in the case of clause (i) above,  and one
hundred  percent  (100%) of the  amount of such Asset  Recovery,  in the case of
clause (ii)  above,  to repay (or prepay)  outstanding  Revolving  Loans and, if
Revolving Loans are reduced to zero,  Swing Loans,  plus, in each case,  accrued
interest  thereon to the date of  prepayment  and any  compensation  required by
Section  8.6.  In each such case,  the  Commitments  of the Banks  shall also be
simultaneously reduced as provided in Section 2.7.3.

     2.5 Modifications to Existing Financial  Covenants.  Existing Sections 5.5,
5.6 and 5.7 of the Credit Agreement shall be deleted, each in its entirety,  and
the following revised versions of said Sections 5.5, 5.6 and 5.7,  respectively,
shall be substituted in their place:

     SECTION  5.5  Fixed  Charge  Coverage  Ratio.

Borrower's  Fixed Charge Coverage  Ratio,  measured on a rolling four (4) Fiscal
Quarters'  basis,  as of the end of each  Fiscal  Quarter,  commencing  with the
Fiscal Quarter  ending closest to December 31, 1999,  shall be not less than the
ratio  prescribed below for each Fiscal Quarter  prescribed below  corresponding
thereto:



<PAGE>
--------------------------------------------------------------------------------
            Fiscal Quarter Ending:                            Ratio
--------------------------------------------------------------------------------
              December 31, 1999                               1.25:1
--------------------------------------------------------------------------------
              March 31, 2000                                  1.25:1
--------------------------------------------------------------------------------
              June 30, 2000                                   1.25:1
--------------------------------------------------------------------------------
              October 1, 2000                                 1.25:1
--------------------------------------------------------------------------------
              December 31, 2000                               1.25:1
--------------------------------------------------------------------------------
              April 4, 2001                                   1.50:1
--------------------------------------------------------------------------------
              July 1, 2001                                    1.50:1
--------------------------------------------------------------------------------
              September 30, 2001                              1.50:1
--------------------------------------------------------------------------------
              December 30, 2001                               1.50:1
--------------------------------------------------------------------------------
              March 31, 2002                                  1.75:1
              and thereafter
--------------------------------------------------------------------------------


     SECTION 5.6 Total Debt/EBITDA Ratio.

     The ratio  which (i) the Total 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,  1999,  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  (the  "Total
Debt/EBITDA Ratio"), shall be not more than the ratio prescribed below as of the
end of each Fiscal Quarter corresponding thereto:

--------------------------------------------------------------------------------
             Fiscal Quarter Ending:                            Ratio
--------------------------------------------------------------------------------
              December 31, 1999                                5.50:1
--------------------------------------------------------------------------------
              March 31, 2000                                   5.50:1
--------------------------------------------------------------------------------
              June 30, 2000                                    5.50:1
--------------------------------------------------------------------------------
              October 1, 2000                                  5.00:1
--------------------------------------------------------------------------------
              December 31, 2000                                4.50:1
--------------------------------------------------------------------------------
              April 4, 2001                                    4.50:1
--------------------------------------------------------------------------------
              July 1, 2001                                     4.50:1
--------------------------------------------------------------------------------
              September 30, 2001                               4.00:1
--------------------------------------------------------------------------------
              December 30, 2001                                4.00:1
--------------------------------------------------------------------------------
              March 31, 2002                                   3.50:1
              and thereafter
--------------------------------------------------------------------------------


     In  computing  EBITDA in respect of the  foregoing  ratio and the ratio set
forth in Section 5.7 below, (a) any asset or stock  dispositions by the Borrower
consisting  of the sale of a business  line,  segment or other  group of related


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

     In connection with the foregoing amendment to Section 5.6, the Banks hereby
waive the Covenant Default.

     SECTION 5.7. Total Senior Debt/EBITDA Ratio.

     The  ratio  which  (i)  the  Total  Senior  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, 1999,  bears to (ii) 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 (adjusted,  however,
as  reflected  in Section  5.6),  shall be not more than the amounts  prescribed
below for each Fiscal Quarter prescribed below corresponding thereto:

--------------------------------------------------------------------------------
             Fiscal Quarter Ending:                            Ratio
--------------------------------------------------------------------------------
              December 31, 1999                                4.00:1
--------------------------------------------------------------------------------
              March 31, 2000                                   4.00:1
--------------------------------------------------------------------------------
              June 30, 2000                                    4.00:1
--------------------------------------------------------------------------------
              October 1, 2000                                  3.50:1
--------------------------------------------------------------------------------
              December 31, 2000                                3.25:1
--------------------------------------------------------------------------------
              April 4, 2001                                    3.00:1
--------------------------------------------------------------------------------
              July 1, 2001                                     3.00:1
--------------------------------------------------------------------------------
              September 30, 2001                               2.50:1
--------------------------------------------------------------------------------
              December 30, 2001                                2.50:1
--------------------------------------------------------------------------------
              March 31, 2002                                   2.50:1
              and thereafter
--------------------------------------------------------------------------------


     2.6 Asset Sales.  The entire existing second proviso to Section 5.11 of the
Credit Agreement, beginning with the words "provided, further, that the Borrower
may consummate  Asset Sales ..." and ending at the end of existing  Section 5.11
shall be deleted  in its  entirety  and the  following  revised  version of said
second proviso shall be substituted in its place:

     provided, further, that the Borrower may consummate Asset Sales so long as,
unless  otherwise  approved  in  writing  by the  Required  Banks,  each  of the
following  conditions  is met:  (i) the Asset  Sales are to  Persons  other than
Affiliates,  (ii) the Asset Sales are made for cash, (iii) the Net Cash Proceeds


<PAGE>
from all such Asset Sales are applied in the manner  provided in Section  2.9.2,
and for no other purpose,  (iv) no Default has occurred which is then continuing
or otherwise  would result from such sale  occurring,  and (v) if the Asset Sale
concerns  the sale of any  collateral  then held as security  for the  Revolving
Loans and Swing Loans,  the prior written  consent of the Required  Banks or, to
the extent  required  under clause  (vii) of Section  9.6,  all Banks,  shall be
required as a condition  to such sale.  The term "Asset  Sales," as used herein,
shall extend to and include,  without limitation,  sale-leaseback  transactions,
provided that the Administrative  Agent first shall have separately approved the
terms of the "leaseback"  portion of such transaction as a further  condition to
the Borrower or any  Subsidiary  entering into such  transaction.

     In  connection  with the  foregoing,  and with Section  2.9.2 of the Credit
Agreement  (as revised  pursuant to Section 2.3  above),  it is  understood  and
agreed by the Borrower that any provisions of the Waivers  governing Asset Sales
or Asset Recoveries (and applications of the proceeds derived therefrom), to the
extent in conflict  herewith (or with revised Section 2.9.2) shall be superseded
and replaced hereby (and thereby).

     2.7 New Limit on Capital  Expenditures.  Clause (ii) of Section 5.20 of the
Credit  Agreement  shall be deleted in its  entirety and the  following  revised
version of said clause (ii) of Section 5.20 shall be substituted in its place:

     (ii) Capital Expenditures. Make capital expenditures in the ordinary course
of business;  provided,  however, commencing with the Fiscal Year ending closest
to December 31, 2000, capital  expenditures shall be limited as follows: (i) for
the Fiscal Year ending closest to December 31, 2000, the sum of (A) $45,000,000,
plus  (B) an  additional  amount,  equal,  dollar-for-dollar,  to the  Net  Cash
Proceeds  received  by the  Borrower  within such  Fiscal  Year,  not to exceed,
however,  $20,000,000,  from  any  sale-leaseback  transaction  permitted  under
Section 5.11  occurring  during the period from the Fiscal  Quarter ending March
31, 2000 through the Fiscal  Quarter  ending  December 31, 2000,  effective upon
such permitted sale-leaseback  transaction occurring, and provided that Borrower
has complied with Section 2.7.2 in regard thereto, and (ii) $40,000,000, in each
Fiscal Year occurring after the Fiscal Year ending closest to December 31, 2000.
In  addition  to the  foregoing,  to the extent the  Borrower's  actual  capital
expenditures in any such Fiscal Year are less than the maximum amount prescribed
hereinabove  for such Fiscal Year,  the Borrower shall be entitled to carry over
the amount of such  shortfall to the next Fiscal Year,  provided that the amount
of such  shortfall that may be carried over from  year-to-year  shall not exceed
$10,000,000,  per year, and provided,  further, that the aggregate amount of all
such carryovers shall not exceed $15,000,000 during the term of this Agreement.

     2.8 Restaurant Concepts and Acquisitions. Carrying forward the restrictions
thereon imposed under Section 2.2(g) of Waiver No. 3,  concerning  "investments"
by Borrower  which are  described  and covered by existing  Section  5.20 of the
Credit Agreement, the exceptions to the prohibition contained therein,  relative
to "restaurant  concepts," described in and permitted by clause (x) thereof, and
"acquisitions,"  described in and permitted by clause (xii)  thereof,  have been
discontinued,  and no further such "investments" may be made. Without limitation
of the foregoing, neither Borrower nor any Consolidated Subsidiary shall acquire
any equity  interests in Belgo,  PLC,  subsequent  to the Amendment  Date;  but,
notwithstanding  the foregoing,  Borrower or its  Consolidated  Subsidiaries may
continue  to  make  investments  in  any  restaurants   under   construction  in
furtherance of any joint ventures under contract as of the date of Waiver No. 3;
i.e.,  February 29, 2000,  provided  that the total amount of these  investments
shall not exceed, in any event, $3,000,000;

     2.9 New Limits on Other Advances.  Clause (xi) to existing  Section 5.20 of
the Credit  Agreement,  which  clause was  amended  pursuant to Section 2 of the
Second  Amendment  (which  contained an inadvertent  reference to clause (xi) as
clause " (ix)" (by transposition of letters),  is hereby deleted in its entirety
such that, from and after the Amendment Date, no loans or advances to Affiliates
(excluding therefrom, however, Subsidiaries),  shareholders, directors, officers
or  employees  (in  addition  to those  described  in clause (i)  through (x) of


<PAGE>
Section 5.20; and, in connection with the foregoing, all such loans and advances
shall be repaid  as soon as  practicable  but in any  event  not  later  than as
follows:  (i) as to the $3,000,000  loan made to Tom E. Dupree,  Jr. pursuant to
Section 2 of the Second  Amendment,  by not later than March 31, 2001; as to all
other such loans and advances,  which the Borrower hereby certifies to the Banks
are presently  limited to those set forth on Schedule "2.8" annexed hereto,  not
later than the dates  prescribed on said Schedule  "2.8"  relative  thereto;  it
being  understood  and agreed  that the  foregoing  revision of said clause (xi)
shall  supersede and replace any provision of any Amendment or Waiver  governing
the  subject  matter  thereof  to the  extent  in  conflict  therewith.

     2.10 Further Restrictions on Dividends and Distributions. Clause (A) to the
proviso to Section  5.22 of the Credit  Agreement  is deleted and the  following
revised  version of said  clause  (A) shall be  substituted  in its  place:

     (A) provided  that no Default has occurred  and is  continuing  or would be
caused thereby, the Borrower may pay cash dividends on its Capital Stock in each
Fiscal Year in an aggregate  amount not to exceed (1)  $3,000,000  in the Fiscal
Year ending on or about  December 31, 1999 and (2) $400,000 per Fiscal Year,  in
each Fiscal Year  thereafter;  provided,  however,  that if the Borrower's Total
Debt/EBITDA  Ratio,  measured at the end of any such  subsequent  Fiscal Year is
less than or equal to 3.50:1,  then, the amount of such cash dividends permitted
to be paid by  Borrower  in the Fiscal  Year  following  shall be  increased  to
$3,000,000  subject to the  foregoing  proviso as to the absence of any Default.


     2.11 Further Restrictions on Debt. Clauses (vii), (viii) (limited, however,
to clauses (ix) and (x) Section 5.8) and (ix) of Section  5.21,  permitting  the
incurrence  of Debt  under  certain  conditions  described  therein,  are hereby
eliminated  prospectively as of the Amendment Date such that,  subsequent to the
Amendment Date, no additional Debt may be occurred in reliance upon said clauses
(vii),  (viii)  or (ix).  Furthermore,  henceforth,  no Debt  shall be repaid by
Borrower or any  Subsidiary  prior to its  scheduled  maturity  nor may any such
Person take (or acquiesce in) any action having  substantially  the same effect,
such as, but not limited to, by terminating early any Debt arrangement or making
any settlement or accord and  satisfaction  in regard thereto,  except,  in each
case,  with the prior  written  consent of the  Required  Banks  thereto.

     2.12 Stock  Purchases.  The exceptions set forth in clauses (i) and (ii) of
Section 5.25 of the Credit  Agreement,  relative to  purchases of Capital  Stock
(and  including  the  execution  of  Equity  Forward   Contracts),   are  hereby
eliminated,  effective as of the Amendment Date, such that the actions described
in such exceptions shall no longer be permitted,  on a prospective  basis.

     2.13 Other or Stepped Up Reports.  In  furtherance  of Section 5.1.9 of the
Credit Agreement,  concerning the delivery of additional  information  regarding
the financial position or business of the Borrower and its Subsidiaries,  and in
addition  to the  reports  required  under  Section  2.2(i) of Waiver No. 3, the
Borrower  agrees to  deliver  the  following  to each of the  Banks:

     (a) on the Amendment  Date, a draft copy of the  Borrower's SEC 10-K report
for its 1999  fiscal  year,  in  draft  form;

     (b) on the  Amendment  Date,  if then  available,  but otherwise as soon as
available  after the  Amendment  Date,  a listing  of all  Properties  which the
Borrower intends to be part of the currently proposed sale-leaseback transaction
mentioned in Section 2.6 hereof,  the projected  transaction date, the projected
amount thereof, and the projected Net Cash Proceeds to be derived therefrom;

     (c) on the  Amendment  Date,  a listing of all other  Properties  which the
Borrower intends to sell during the remaining term of the Credit Agreement,  the
projected date of sale thereof, the projected amounts thereof, and the projected
Net Cash Proceeds to be derived  therefrom;



<PAGE>
     (d) on the  Amendment  Date,  a listing of all Asset  Recoveries  which the
Borrower  anticipates   receiving  during  the  remaining  term  of  the  Credit
Agreement, and the projected date of their recovery;

     (e) monthly,  subsequent to the Amendment Date, an update in respect of all
actual and projected Asset Sales  (including  sale-leaseback  transactions)  and
Asset  Recoveries,  including  reconciliations  to  date.

     In  addition to the  foregoing,  beginning  with the  Amendment  Date,  the
interim financial statements and corresponding compliance certificates presently
required to be delivered  quarterly under Sections 5.12 and 5.13,  respectively,
of the Credit  Agreement,  henceforth  shall be  delivered  monthly by  Borrower
within  twenty-five  (25) days after the end of each Fiscal Month  (except that,
until further notice,  compliance with financial  covenants shall continue to be
certified  on  a  quarterly  basis  only).

     2.14  Collateral.  The  "Second  Mortgage  Condition"  and "Third  Mortgage
Condition,"  as each such term is defined in Waiver No. 3,  which,  pursuant  to
said Waiver No. 3, were required to be completed by not later than May 31, 2000,
henceforth,  shall be required to be completed by not later than April 28, 2000;
and all mortgages executed in furtherance of the "Interim Mortgages  Condition,"
as such term is likewise  defined in Waiver No. 3, shall be  perfected  on March
31, 2000 or as soon as practicable thereafter,  but not later than April 7, 2000
in any event. In addition  thereto,  Borrower hereby certifies to the Banks that
the  taking of such  collateral  by the Banks,  together  with the taking of all
other  collateral  by the Banks prior  hereto  pursuant to the Waiver,  does not
require  that,  and shall not result in any  requirement  that,  Borrower or any
Subsidiary  cause to be granted to the holders of  Borrower's  senior  notes due
2006 ($150,000,000), or any other Person, a Lien on such collateral or any other
property of Borrower.  To that end, henceforth,  and notwithstanding any term of
any Amendment or Waiver to the contrary (including, particularly, Section 2.2(b)
of Waiver  No.  1),  the Banks  shall be under no  obligation  to consent to any
other,  additional Lien on such collateral favoring the holders of the aforesaid
senior notes or any other such Person.

     2.15  Morgan  Guaranty  Default.  Heretofore,  the  Borrower  notified  the
Administrative  Agent and the Bank that, by letter dated March 27, 2000,  Morgan
Guaranty  Trust Company of New York  ("Morgan")  had declared a default to exist
(the "Morgan  Default")  under its Master  Agreement,  dated as of June 3, 1996,
with the Borrower  concerning certain interest rate "swap," "hedge," "collar" or
similar  arrangements  (as  modified  or  amended  to date or from  time to time
hereafter,  and  including  all  schedules,  supplements,  riders and  additions
thereto, the "Morgan Agreement"), based on the Borrower's failure to comply with
certain covenants incorporated by reference therein pursuant to Section 5(a)(ix)
thereof (the "Morgan  Covenants").  The existence and continuation of the Morgan
Default  constitutes an Event of Default under the Credit Agreement  pursuant to
Section  6.1.5  thereof  (the  "Cross-Default").  The Banks have  agreed,  as an
accommodation to Borrower,  to waive the Cross-Default,  and the Banks do hereby
waive  the  Cross-Default,   subject,   however,  to  the  following  terms  and
conditions:

     (a) so long as the Morgan Default is continuing,  then, notwithstanding any
term hereof or of the Credit  Agreement  to the  contrary,  the total  amount of
Revolving  Loans and Swing Loans  outstanding  at any one time cannot exceed One
Hundred Fifteen Million  Dollars  ($115,000,000)  or such lesser amount as shall
equal  the  outstanding  Commitments  from  time to  time;  and

     (b) if, at any time  hereafter,  whether  as a result of the  existence  or
continuation  of the Morgan Default or otherwise,  any of the following  (herein
called a "Reinstitution Event") shall occur: (i) Morgan designates any day as an
"Early  Termination  Date" (as that term is defined in the Morgan  Agreement) in
respect of all outstanding "Transactions" (as that term is defined in the Morgan
Agreement);  or (ii) any "Automatic Early  Termination" (as that term is defined
in the Morgan  Agreement)  occurs;  (iii) any  acceleration  of, or demand  for,
payment occurs with respect to any Debts arising under the Morgan Agreement;  or


<PAGE>
(iv)  Borrower  enters into any  settlement,  accord and  satisfaction  or other
arrangement with Morgan,  or Morgan otherwise  exercises any rights or remedies,
in each instance, having substantially the same effect as if either clauses (i),
(ii) or (iii)  above had  occurred;  then,  automatically,  upon any one of such
conditions  being met,  and without the  necessity of any further act or deed on
the part of the Banks,  the Morgan Default shall  constitute an Event of Default
under the Credit  Agreement;  i.e.,  the Cross Default  shall be  re-instituted,
effective  immediately;  and

     (c) the  waiver of the  Cross-Default  contained  herein  shall be  limited
solely to  Section  6.1.5 of the  Credit  Agreement  as it relates to the Morgan
Default and,  then,  only with respect to the Morgan  Covenants,  and not to any
other Event of Default,  and nothing  contained herein is intended,  or shall be
construed,  to suggest that the Banks have waived, or would be willing to waive,
any other  Event of Default,  whether  related or  unrelated,  or whether now or
hereafter  existing.

     In addition to the  foregoing,  Borrower  acknowledges  and agrees that any
waiver of the  Morgan  Default  or other  arrangement  substantially  similar in
effect thereto (herein, a "Morgan Waiver"), shall require the separate,  written
consent  of the  Required  Banks,  if and to the extent  any term,  covenant  or
condition of the Morgan Waiver  conflicts  with,  contravenes or contradicts any
term,  covenant or condition of the Credit  Agreement or any Loan  Document.  To
facilitate  the  foregoing,  Borrower  agrees to keep the  Administrative  Agent
informed as to the status of its ongoing  discussions with Morgan concerning the
Morgan Default;  to notify the  Administrative  Agent promptly in writing if any
Reinstitution  Event occurs;  and to provide  Administrative  Agent with a copy,
prior to its becoming effective,  of any Morgan Waiver proposed for execution or
acceptance by Borrower or Morgan. Further to facilitate the foregoing,  Borrower
hereby  certifies to the Banks that attached hereto as Schedule 2.15A is a true,
correct and complete copy of the Morgan  Agreement as in effect on the Amendment
Date, and Borrower agrees not to enter into any amendment or other  modification
to the Morgan Agreement  hereafter which has, or could reasonably be expected to
have,  the effect of increasing  the amount or frequency of payment of any Debts
thereunder  except with the prior  written  consent of the  Required  Banks.  At
Borrower  's  further  request,  and  without  in any  way  limiting  any of the
foregoing provisions,  the Banks are willing to consent to the granting of Liens
to Morgan in support of the Debts to Morgan  under the Morgan  Agreement  on the
four (4)  parcels  of real  property  owned or  operated  by  Borrower's  "Hops"
Subsidiary described on Schedule 2.15B attached hereto, provided,  however, that
such Liens are granted only in conjunction with, and as an integral part of, the
issuance of a Morgan Waiver which is otherwise  granted on terms and  conditions
acceptable  to the  Required  Banks.  If such Liens are granted to Morgan on the
foregoing conditions, then, to the extent in conflict therewith, the Banks shall
waive any requirement under Waiver No. 3 that Liens on those four (4) parcels be
granted,  instead,  to the Banks.

3. Miscellaneous.

     3.1 Effect and Effective  Date of  Amendments.  The  effective  date of the
amendments to the Credit Agreement set forth  hereinabove shall be the Amendment
Date.  Except as set forth expressly  herein,  all terms of the Credit Agreement
shall remain unchanged.  Without limitation of the foregoing,  the provisions of
each of the Waivers,  including,  particularly,  but without  limitation,  those
relating  to the  provision  of  collateral,  shall  continue  in full force and
effect.  It is not intended by the Parties that this Amendment  constitute,  and
this  Amendment,  shall not  constitute a novation.

     3.2 Georgia Law. This Amendment  shall be construed in accordance  with and
governed by the law of the State of Georgia.

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



<PAGE>
     3.4 Entire Agreement.  This Amendment shall constitute the entire agreement
among the parties with respect to the subject matter hereof, and shall supersede
and replace any  agreements or  commitments  to agree,  whether oral or written,
heretofore  existing  in regard  thereto.

     3.5  Restatement of  Representations  and  Warranties.  To induce all other
Parties to enter into this  Amendment  (A) Borrower  hereby  restates and renews
each and every  representation  and warranty  heretofore made by it under, or in
connection  with,  the  execution  and  delivery of, the Credit  Agreement;  (B)
Borrower  hereby  restates,  ratifies  and  reaffirms  each and  every  term and
condition set forth in the Credit Agreement,  as amended hereby, and in the Loan
Documents, as amended hereby,  effective as of the date hereof; and (C) Borrower
hereby  certifies that,  after giving effect to this  Amendment,  no Default has
occurred which is continuing,  other than the Morgan Default,  which, subject to
Section 2.15 hereof, the Banks have waived.

     3.6 Borrower as Agent. In executing this Amendment,  Borrower is acting for
itself  individually and as agent for each Subsidiary which is party to any Loan
Document,  and, in the latter regard,  binding each such Subsidiary to the terms
hereof  without  necessity of giving further notice to, or obtaining any further
consent from, any such  Subsidiary.

4. Conditions Precedent.

     The  following  shall  constitute  express  conditions   precedent  to  any
obligations  of the Banks  hereunder:  (i) the  Administrative  Agent shall have
received  from  the  Borrower  a duly  executed  counterpart  of this  Amendment
together with each other document, instrument, certificate or agreement required
to be  delivered  by  March  31,  2000  under  any  of  the  Waivers;  (ii)  the
Administrative  Agent  shall have  received  from the  Secretary  (or  Assistant
Secretary) of the Borrower,  an incumbency and authority  certificate in respect
of the officer(s)  executing  this Amendment on behalf of the Borrower,  in form
and substance satisfactory to the Administrative Agent, (iii) the Administrative
Agent  shall  have  received  from the  Borrower's  legal  counsel an opinion of
counsel as to the transactions  contemplated hereby, and (iv) the Administrative
Agent shall have  received  from the  Borrower (A) an  amendment  fee,  equal to
one-fourth of one percent  (1/4%) of the  Commitments  of those Banks  executing
this  Amendment by not later than noon  (Atlanta  time) on April 3, 2000,  to be
shared pro rata among them, and (B) the separate  structuring fee payable to the
Arranger in connection  herewith,  as provided in the fee letter executed by the
Borrower with the Arranger on or prior to the date hereof.

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

"BORROWER"

AVADO BRANDS, INC.                          (SEAL)


By:_________________________________
     Name:
     Title:


Attest:
Name:
Title:


<PAGE>
                                            "BANKS"

WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Administrative Agent and as
a Bank                                               (SEAL)


By:________________________________
     W. Tompkins Rison, Vice President




FLEET NATIONAL BANK, as successor
to BANKBOSTON, N.A., as Syndication Agent
and as a Bank                                        (SEAL)


By:________________________________
      Name:__________________________
      Title:___________________________


SUNTRUST BANK, as a Bank


By:________________________________
     Name:___________________________
     Title:____________________________


COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL,"
NEW YORK BRANCH, as a Bank


By:________________________________
     Name:___________________________
     Title:____________________________


By:________________________________
     Name:___________________________
     Title:____________________________


COMERICA BANK, as a Bank            (SEAL)


By:________________________________
      Name:___________________________
      Title:____________________________



SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Bank                      (SEAL)


By:________________________________
      Name:___________________________
      Title:____________________________