THIRD AMENDMENT TO CREDIT AGREEMENT


         THIS THIRD  AMENDMENT TO CREDIT  AGREEMENT  (this  "Third  Amendment"),
dated  as of  December  27,  1996,  is  entered  into  among  FRANCHISE  FINANCE
CORPORATION OF AMERICA, a Delaware corporation ("Company"),  the banks listed on
the signature page hereof (the "Lenders"), and NATIONSBANK OF TEXAS, N.A. in its
capacity as administrative agent for the Lenders (the "Administrative Lender").

         A.  Company,  certain  of the  Lenders  and  Administrative  Lender are
parties to that certain  Credit  Agreement,  dated as of December  27, 1995,  as
amended  by that  certain  First  Amendment  to  Credit  Agreement,  dated as of
February 23, 1996, and that certain Second Amendment to Credit Agreement,  dated
as of June 24, 1996 (said Credit Agreement,  as amended, the "Credit Agreement";
the terms defined in the Credit Agreement and not otherwise defined herein shall
be used herein as defined in the Credit Agreement).

         B.  Company,  Lenders  and  Administrative  Lender  desire to amend the
Credit Agreement to (i) decrease the Commitment, (ii) extend the Conversion Date
and the Maturity Date,  (iii) add Union Bank of Switzerland (New York Branch) as
a Lender  thereto,  (iv) delete Texas  Commerce Bank National  Association  as a
Lender thereto ("TCB"), and (v) make certain other amendments thereto.

         NOW,  THEREFORE,  in  consideration  of the  covenants,  conditions and
agreements  hereafter set forth, and for other good and valuable  consideration,
the  receipt  and  adequacy  of which are all hereby  acknowledged,  the parties
hereto covenant and agree as follows:

         1.       AMENDMENTS TO CREDIT AGREEMENT.

         (a) The dollar amount of "$250,000,000" set forth in (i) the BACKGROUND
section,  (ii) the definition of  "Commitment"  in Section 1.1 and (iii) Section
2.3(a) of the Credit Agreement is hereby amended to be "$200,000,000".

         (b) The defined term "Absolute Bid Rate" is hereby added to Section 1.1
of the Credit Agreement in proper alphabetical order to read as follows:

                  "`Absolute  Bid Rate' means an absolute fixed rate of interest
         per annum."

         (c) The  defined  term  "Absolute  Bid Rate  Loan" is  hereby  added to
Section  1.1 of the Credit  Agreement  in proper  alphabetical  order to read as
follows:

                  "`Absolute  Bid Rate Loan'  means a Bid Rate Loan which  bears
         interest at an Absolute Rate."

         (d) The definition of  "Applicable  Margin" set forth in Section 1.1 of
the Credit  Agreement is hereby  deleted in its  entirety  and the  following is
hereby substituted in lieu thereof:
<PAGE>
                  "`Applicable   Margin'   means   the   following   per   annum
         percentages, applicable in the following situations:
<TABLE>
<CAPTION>

                            Applicability                                   Base Rate           LIBOR
                            -------------                                   ---------           -----
<S>                                                                           <C>               <C> 
Category 1 - There is no Index Debt Rating or the Index Debt Rating           0.25              1.50
----------
is the following:  below BBB- by S&P or below Baa3 by Moody's

Category 2 - The Index Debt Rating is the following:  BBB- by S&P or          0.00              1.00
----------
Baa3 by Moody's

Category 3 - The Index Debt Rating is the following:  BBB by S&P or           0.00              0.95
----------
Baa2 by Moody's

Category 4 - The Index Debt Rating is the following:  BBB+ by S&P or          0.00              0.90
----------
Baa1 by Moody's

Category 5 - The Index Debt Rating is the following:  A- or better by         0.00              0.80
----------
S&P or A3 or better by Moody's
</TABLE>
         The Applicable  Margin  payable by Company on the Advances  outstanding
         hereunder  shall be adjusted on each  Adjustment  Date according to the
         most recent determination of the Index Debt Rating;  provided,  that if
         (i) there  exists a Default or (ii) Company does not have an Index Debt
         Rating, the Applicable Margin shall be (A) 0.25% per annum with respect
         to Base Rate  Advances  and (B) 1.50% per annum  with  respect to LIBOR
         Advances.  For  purposes  of the  foregoing,  if the Index Debt  Rating
         established  by S&P or Moody's shall fall within a different  category,
         the  Applicable  Margin shall be  determined  by reference to whichever
         Index Debt Rating shall fall within the inferior (or numerically lower)
         category.  If the rating system of Moody's or S&P shall change prior to
         the Maturity Date, Company and Lenders shall negotiate in good faith to
         amend the references to specific  ratings in this definition to reflect
         such changed rating system."

         (e) The defined  term "Bid Rate Loan" is hereby added to Section 1.1 of
the Credit Agreement in proper alphabetical order to read as follows:

                  "`Bid Rate Loan' means an Advance the  interest  rate on which
         is  determined  by  agreement  between  Company and Lender  making such
         Advance pursuant to Section 2.1(c)."

         (f) The defined  term "Bid Rate Note" is hereby added to Section 1.1 of
the Credit Agreement in proper alphabetical order to read as follows:

                  "`Bid  Rate  Note'  means  each  promissory  note  of  Company
         evidencing  Bid Rate
                                      -2-
<PAGE>
         Loans, in substantially the form of Exhibit J hereto, as each such note
         may be amended, extended,  restated,  renewed,  substituted or replaced
         from time to time."

         (g) The definition of "Conversion Date" set forth in Section 1.1 of the
Credit  Agreement is hereby  deleted in its entirety and the following is hereby
substituted in lieu thereof:

                  "`Conversion Date' means December 27, 1998, or such later date
         as established pursuant to Section 2.15 hereof."

         (h) The definition of "Facility" set forth in Section 1.1 of the Credit
Agreement  is  hereby  deleted  in its  entirety  and the  following  is  hereby
substituted in lieu thereof:

                  "`Facility'  means the Revolving  Loan,  the Term Loan and the
         Bid Rate Loans evidenced by this Agreement and the other Loan Papers."

         (i) The defined term "LIBOR Bid Rate" is hereby added to Section 1.1 of
the Credit Agreement in proper alphabetical order to read as follows:

                  "`LIBOR  Bid Rate'  means a rate per annum  equal to the LIBOR
         Rate  Basis  for the  term in  question  plus a margin  specified  by a
         Lender."

         (j) The defined  term "LIBOR Bid Rate Loan " is hereby added to Section
1.1 of the Credit Agreement in proper alphabetical order to read as follows:

                  "`LIBOR  Bid Rate  Loan'  means a Bid Rate  Loan  which  bears
interest at the LIBOR Bid Rate."

         (k) The  definition  of "Majority  Lenders" set forth in Section 1.1 of
the Credit  Agreement is hereby  deleted in its  entirety  and the  following is
hereby substituted in lieu thereof:

                  "`Majority Lenders' means any combination of Lenders having at
         least 66.67% of the  Advances  under the  Revolving  Loan and under the
         Term Loan; provided,  however,  that if no Advances under the Revolving
         Loan and under the Term Loan are outstanding under this Agreement, such
         term means any  combination  of Lenders  having a Specified  Percentage
         equal to at least 66.67% of the Commitment."

         (l) The  definition of "Maturity  Date" set forth in Section 1.1 of the
Credit  Agreement  is  hereby  deleted  in its  entirety  and the  following  is
substituted in lieu thereof:

                  "`Maturity  Date' means  December 27, 2000, or such later date
         as  established  pursuant to Section 2.15 hereof,  or such earlier date
         all of the Obligations become due and payable (whether by acceleration,
         prepayment in full, scheduled reduction or otherwise)."
                                      -3-
<PAGE>
         (m) The definitions  "Note" and "Notes" set forth in Section 1.1 of the
Credit  Agreement  are hereby  deleted in their  entirety  and the  following is
substituted in lieu thereof:

                  "`Note' means each and "Notes"  means all (a)  Revolving  Loan
         Notes, (b) Term Loan Notes, and (c) Bid Rate Loan Notes."

         (n) The defined term "Revolving Loan Note" is hereby  incorporated into
this Third Amendment and added to Section 1.1 of the Credit  Agreement in proper
alphabetical order to read as follows:

                  "`Revolving  Loan Note' means each  promissory note of Company
         evidencing the Advances and obligations  owing hereunder to each Lender
         under  the  Revolving  Loan,  in  substantially  the form of  Exhibit A
         hereto, as each such note may be amended, extended,  restated, renewed,
         substituted or replaced from time to time."

         (o) The defined term "Term Loan Note" is hereby  incorporated into this
Third  Amendment  and added to  Section  1.1 of the Credit  Agreement  in proper
alphabetical order to read as follows:

                  "`Term  Loan  Note'  means  each  promissory  note of  Company
         evidencing the Advances and obligations  owing hereunder to each Lender
         under the Term Loan, in substantially  the form of Exhibit B hereto, as
         each such note may be amended, extended, restated, renewed, substituted
         or replaced from time to time."

         (p) The definition of "Total Unencumbered  Assets" set forth in Section
1.1 of the Credit  Agreement is hereby deleted in its entirety and the following
is hereby substituted in lieu thereof:

                  "`Total Unencumbered Assets' means, at any time, the aggregate
         amount of Total  Assets of Company  and its  Consolidated  Subsidiaries
         determined in accordance  with GAAP on a  consolidated  basis which are
         not subject to a Lien, other than Permitted Liens of the type described
         in clauses (a) through (f) of the definition thereof."

         (q) The  definition  of  "Total  Unsecured  Indebtedness"  set forth in
Section 1.1 of the Credit  Agreement  is hereby  deleted in its entirety and the
following is hereby substituted in lieu thereof:

                  "`Total  Unsecured  Indebtedness'  means,  at  any  time,  the
         aggregate  amount  of  Indebtedness  of  Company  and its  Consolidated
         Subsidiaries  that is not secured by a Lien, other than Permitted Liens
         of the type  described  in clauses (a)  through  (f) of the  definition
         thereof."

         (r) The  definition  of "Type" set forth in  Section  1.1 of the Credit
Agreement  is  hereby  deleted  in its  entirety  and the  following  is  hereby
substituted in lieu thereof:
                                      -4-
<PAGE>
                  "`Type' refers to the  distribution  between  Advances bearing
         interest at the Base Rate,  LIBOR Rate,  Absolute Bid Rate or LIBOR Bid
         Rate."

         (s) The definition of "Unused  Commitment"  set forth in Section 1.1 of
the Credit  Agreement is hereby  deleted in its  entirety  and the  following is
substituted in lieu thereof:

                  "`Unused  Commitment' means, on any date, with respect to each
         Lender,  an amount  equal to the  product  of such  Lender's  Specified
         Percentage  multiplied by the Commitment in effect on such date,  minus
         an amount equal to the sum of (a) all outstanding Advances made by such
         Lender under the Revolving Loan which are  outstanding on such date and
         (b) all Bid Rate Loans made by such  Lender  which are  outstanding  on
         such date."

         (t) Section 2.1(a) of the Credit  Agreement is hereby amended by adding
the following sentence to the end thereof to read as follows:

                  "Notwithstanding  anything in this  Section  2.1(a) or Section
         2.1(c) to the  contrary,  at no time shall the sum of (i) the aggregate
         principal amount of Advances  outstanding  under the Revolving Loan and
         (ii) the  aggregate  principal  amount  of Bid Rate  Loans  outstanding
         exceed the Commitment."

         (u) Section  2.1 of the Credit  Agreement  is hereby  amended by adding
Section 2.1(c) thereto to read as follows:

                  "(c) Bid Rate Loans.  Each Lender may, in its sole  discretion
         and on the terms and conditions set forth in this  Agreement,  make Bid
         Rate Loans to Company from time to time until the Conversion Date in an
         aggregate amount not in excess of the difference between the Commitment
         minus the aggregate  outstanding principal amount of all Advances under
         the Revolving Loan; provided,  however, at no time shall the sum of (i)
         the aggregate  outstanding  principal amount of all Bid Rate Loans made
         by  all  Banks  plus  (ii)  the  aggregate   principal  amount  of  all
         outstanding  Advances under the Revolving  Loan exceed the  Commitment.
         Each Bid Rate Loan  shall be for a term of not less than 7 days and not
         more than six  months.  Bid Rate Loans may not be prepaid  without  the
         prior  written  consent of the Lender  making such Bid Rate Loan.  Each
         Borrowing  of Bid Rate Loans  shall be an  aggregate  principal  amount
         which is at least  $10,000,000  and which is an  integral  multiple  of
         $1,000,000 in excess thereof,  and each Bid Rate Loan by a Lender shall
         be in a principal  amount which is at least  $1,000,000 and which is an
         integral  multiple of  $1,000,000  in excess  thereof.  Notwithstanding
         anything herein to the contrary,  the aggregate principal amount of Bid
         Rate  Loans  outstanding  at any time may not exceed  $100,000,000.  No
         Lender shall have any  obligation  to make Bid Rate Loans,  and Company
         shall have no obligation to accept any offers for Bid Rate Loans."

         (v)  Section  2.2 of the  Credit  Agreement  is hereby  deleted  in its
entirety and the
                                      -5-
<PAGE>
following is hereby substituted in lieu thereof:

                  "2.2.    Making Advances.

                  (a) Each  Borrowing of Advances  under the Revolving  Loan and
         the  Term  Loan  shall be made  upon the  written  notice  of  Company,
         received by  Administrative  Lender not later than (i) 12:00 noon three
         Business Days prior to the proposed date of the Borrowing,  in the case
         of LIBOR  Advances  and (ii) not later than  10:00 a.m.  on the date of
         such Borrowing,  in the case of Base Rate Advances. Each such notice of
         a Borrowing  (a  "Borrowing  Notice")  shall be by  telecopy,  promptly
         confirmed  by  letter,  in  substantially  the form of Exhibit F hereto
         specifying therein:

                           (i) the date of such proposed Borrowing,  which shall
                  be a Business Day;

                           (ii) the amount of such proposed Borrowing which, (A)
                  with respect to Advances under the Revolving  Loan,  shall not
                  exceed  the  Commitment  less the sum of  Advances  under  the
                  Revolving Loan plus Bid Rate Loans then outstanding,  (B) with
                  respect  to  Advances  under the Term Loan,  shall  not,  when
                  aggregated together with all other outstanding  Advances under
                  the Term Loan,  exceed the  Reduced  Term Loan  Amount and (C)
                  shall,  for the Revolving  Loan and Term Loan in the case of a
                  Borrowing of LIBOR Advances,  be in an amount of not less than
                  $5,000,000  or an integral  multiple of  $1,000,000  in excess
                  thereof and, in the case of a Borrowing of Base Rate Advances,
                  be in an  amount of not less than  $1,000,000  or an  integral
                  multiple of $500,000 in excess thereof;

                           (iii) the Type of Advances of which the  Borrowing is
                  to be comprised; and

                           (iv) if the  Borrowing  is to be  comprised  of LIBOR
                  Advances,   the  duration  of  the  initial   Interest  Period
                  applicable to such Advances.

                  If the  Borrowing  Notice fails to specify the duration of the
         initial Interest Period for any Borrowing  comprised of LIBOR Advances,
         such Interest  Period shall be one month.  Administrative  Lender shall
         give  prompt  notice  (which may be by telecopy  or  telephonic,  to be
         confirmed  by  telecopy)  of its receipt of a Borrowing  Notice to each
         Lender. Each Lender shall, before 2:00 p.m. on the date of each Advance
         hereunder under the Revolving Loan (other than a Refinancing  Advance),
         make available to

                              Administrative Lender
                                NationsBank Plaza
                                 901 Main Street
                                   13th Floor
                               Dallas, Texas 75202
                               Attn. Theresa Belk
                                      -6-
<PAGE>
         such Lender's Specified  Percentage of the aggregate Advances under the
         Revolving Loan to be made on that day in immediately available funds.

                  (b) Unless any applicable  condition  specified in Article III
         hereof  has not been  satisfied,  Administrative  Lender  will make the
         funds on  Advances  under the  Revolving  Loan  promptly  available  to
         Company  (other than with respect to a  Refinancing  Advance) by wiring
         Norwest Bank  Minneapolis,  N.A.,  ABA  #091000019,  Beneficiary  Bank:
         Norwest Bank  Arizona,  Beneficiary  Account:  8711701002,  Beneficiary
         Name:  FFCA,  or such other  account as shall  have been  specified  by
         Company.

                  (c) After giving effect to any Borrowing,  (i) there shall not
         be more than ten  different  Interest  Periods  in effect  and (ii) the
         aggregate  principal of outstanding  Advances,  shall, (A) prior to the
         Conversion  Date,  not  exceed  the  Commitment,   and  (B)  after  the
         Conversion Date, not exceed the Reduced Term Loan Amount.

                  (d) No  Interest  Period for a  Borrowing  under the  Facility
         shall extend beyond the Maturity Date.

                  (e) Unless a Lender shall have notified  Administrative Lender
         prior to the date of any Advance under the  Revolving  Loan or the Term
         Loan that it will not make  available its  Specified  Percentage of any
         such  Advance,  Administrative  Lender may assume  that such Lender has
         made the  appropriate  amount  available  in  accordance  with  Section
         2.2(a),   and   Administrative   Lender  may,  in  reliance  upon  such
         assumption, make available to Company a corresponding amount. If and to
         the extent  any Lender  shall not have made such  amount  available  to
         Administrative Lender, such Lender and Company severally agree to repay
         to  Administrative  Lender  immediately  on demand  such  corresponding
         amount  together  with interest  thereon,  from the date such amount is
         made  available  to  Company  until the date  such  amount is repaid to
         Administrative  Lender,  at (i) in the case of Company,  the Base Rate,
         and  (ii) in the case of such  Lender,  the  Federal  Funds  Rate.  The
         obligation  of Company  under this  Section  2.2(e) shall not affect or
         impair any right of Company against any Lender for such Lender's breach
         of its obligation to fund Advances under the Revolving Loan or the Term
         Loan.

                  (f) The failure by any Lender to make  available its Specified
         Percentage  of any Advance  under the  Revolving  Loan or the Term Loan
         shall not relieve any other Lender of its  obligation,  if any, to make
         available  its Specified  Percentage of any such Advance.  In no event,
         however,  shall any such Lender be  responsible  for the failure of any
         other Lender to make  available  any portion of any Advance.  No Lender
         shall be relieved of its obligation to fund its Specified Percentage of
         any Advance under the Revolving Loan  notwithstanding  the fact that at
         any time the  aggregate  outstanding  principal  amount of all Bid Rate
         Loans and Advances under the Revolving Loan made by such Lender exceeds
         its Specified Percentage of the Commitment.
                                      -7-
<PAGE>
                  (g)  Company   shall   indemnify   each  Lender   against  any
         Consequential  Loss  incurred  by each  Lender  as a result  of (i) any
         failure to fulfill,  on or before the date  specified in the  Borrowing
         Notice for an Advance  under the Revolving  Loan or the Term Loan,  the
         conditions  to  such  Advance  set  forth  herein  or  (ii)   Company's
         requesting  that an Advance under the  Revolving  Loan or the Term Loan
         not be made on the date specified in the Borrowing Notice.

                  (h) With  respect  to each  Borrowing  consisting  of Bid Rate
         Loans,  Company shall give Administrative  Lender and each Lender prior
         to 10:00 a.m.,  (i) in the case of LIBOR Bid Rate Loans,  at least four
         Business  Days prior to the proposed  Borrowing and (ii) in the case of
         Absolute  Bid Rate  Loans,  at least  two  Business  Days  prior to the
         proposed  Borrowing,  irrevocable  written  notice of its  intention to
         borrow Bid Rate Loans.  Such notice of borrowing  shall specify (i) the
         requested  funding  date,  which  shall  be a  Business  Day,  (ii) the
         aggregate  amount of the  proposed  Borrowing  of Bid Rate Loans (which
         shall be at least  $10,000,000  and which is an  integral  multiple  of
         $1,000,000  in excess  thereof),  (iii) the term of the Bid Rate  Loans
         selected by Company,  provided that such term shall not extend past the
         Conversion Date, (iv) whether the Bid Rate Loans requested are Absolute
         Bid Rate  Loans  or  LIBOR  Bid Rate  Loans,  and (v) any  other  terms
         applicable  thereto.   Company  shall  pay  a  $1,000   non-refundable,
         administrative  fee for the account of  Administrative  Lender for each
         notice of proposed  Borrowing  consisting  of Bid Rate Loans.  Such fee
         shall  be paid to  Administrative  Lender  on the date of  delivery  of
         Company's  notice of intention to borrow Bid Rate Loans,  and shall not
         be refunded  notwithstanding that the proposed Borrowing is canceled by
         Borrower or no Lender offers to make a Bid Rate Loan.

                           (i) Each Lender shall, if, in its sole discretion, it
                  elects  to do so,  irrevocably  offer  to make one or more Bid
                  Rate Loans to Company as part of such proposed  Borrowing at a
                  rate or rates of interest specified by such Lender in its sole
                  discretion,  by delivering a written  quote to  Administrative
                  Lender before 10:00 a.m., (A) three Business Days prior to the
                  proposed date of Borrowing, in the case of a request for LIBOR
                  Bid Rate Loans, and (B) one Business Day prior to the proposed
                  date of  Borrowing,  in the case of a request for Absolute Bid
                  Rate Loans,  setting forth (A) the minimum amount (which shall
                  be $1,000,000 or an integral  multiple in excess  thereof) and
                  maximum  amount of each Bid Rate Loan which such Lender  would
                  be willing to make as part of the  proposed  Borrowing  (which
                  amounts may exceed such Lender's  Specified  Percentage of the
                  Commitment) and (B) the rate or rates of interest therefor. If
                  any Lender shall fail to respond to  Administrative  Lender by
                  such time,  such Lender shall be deemed to have elected not to
                  make an offer.

                           (ii) Not later  than 11:00  a.m.  (A) three  Business
                  Days prior to the  proposed  date of  Borrowing in the case of
                  LIBOR  Bid  Rate  Loans  and (B) on the  date of the  proposed
                  Borrowing  in the case of  Absolute  Bid Rate  Loans,  Company
                                      -8-
<PAGE>
                  shall, in turn, either

                                    (A) cancel such proposed Borrowing by giving
                           Administrative Lender notice to that effect, or

                                    (B) accept one or more of the offers made by
                           any Lender or Lenders  pursuant  to clause (i) above,
                           in  its  sole   discretion,   by  giving   notice  to
                           Administrative  Lender of the amount of each Bid Rate
                           Loan (which  amount shall be equal to or greater than
                           the  minimum  amount,  and  equal to or less than the
                           maximum amount,  for which  notification was given to
                           Company by any Lender for such Bid Rate Loan pursuant
                           to clause  (i)  above)  to be made by each  Lender as
                           part of such  Borrowing,  and  reject  any  remaining
                           offers  made by Lenders  pursuant to clause (i) above
                           by  giving   Administrative  Lender  notice  to  that
                           effect; provided, however, that acceptance by Company
                           of offers may only be made on the basis of  ascending
                           LIBOR Bid Rates and  Absolute  Bid Rates  within each
                           term  with  respect  to  Lenders  whose   outstanding
                           Advances  do not  exceed  or would  not  exceed  as a
                           result  of  such  Bid  Rate   Loans   its   Specified
                           Percentage of the Commitment; and, provided, further,
                           that if offers  are made by two or more such  Lenders
                           with the same LIBOR Bid Rates or  Absolute  Bid Rates
                           for a greater  aggregate  principal  amount  than the
                           amount for which such  offers  are  accepted  for the
                           related term, the principal  amount of Bid Rate Loans
                           accepted  shall be  allocated  by Company  among such
                           Lenders as nearly as possible (in  multiples not less
                           than  $1,000,000)  in  proportion  to  the  aggregate
                           principal amount of such offers.

                           (iii)  Administrative  Lender shall  promptly  notify
                  each bidding  Lender whether or not its Bid Rate Loan has been
                  accepted  (which  notice to those Lenders whose Bid Rate Loans
                  have been accepted will be given within one hour from the time
                  such  bid was  accepted  by  Company).  After  completing  the
                  notifications   referred  to  in  the  immediately   preceding
                  sentence,  Administrative  Lender  shall  notify each  bidding
                  Lender  (A) the  aggregate  amount of Bid Rate  Loans  made in
                  connection  with  such  proposed  Borrowing,  (B) each date on
                  which any Bid Rate Loan shall mature, (C) the principal amount
                  of Bid Rate Loans  which shall  mature on each such date,  (D)
                  the interest rate for each such Bid Rate Loan, (E) the highest
                  and lowest bid  submitted by Lenders in  connection  with each
                  Bid Rate Loan request and (F) Lender making each such Bid Rate
                  Loan.

                           (iv) If Administrative Lender shall at any time elect
                  to  submit  a bid for a Bid  Rate  Loan in its  capacity  as a
                  Lender,  it shall submit such bid directly to Company one-half
                  hour earlier  than the latest time at which other  Lenders are
                  required to submit their bid to Administrative Lender pursuant
                  to Section 2(h)(i) hereof.
                                      -9-
<PAGE>
                           (v) If Company accepts one or more offers made by any
                  Lender or Lenders pursuant to clause (ii)(B) above,  each such
                  Lender shall,  unless any  applicable  condition  specified in
                  Article  III  hereof  has not been  satisfied,  make the funds
                  under the Bid Rate  Loans  promptly  available  to  Company by
                  wiring  Norwest  Bank  Minneapolis,  N.A.,  ABA  #  091000019,
                  Beneficiary Bank: Norwest Bank Arizona,  Beneficiary  Account:
                  8711701002,  Beneficiary  Name: FFCA, or such other account as
                  shall have been specified by Company."

         (w) Section  2.3(a) of the Credit  Agreement  is hereby  deleted in its
entirety and the following is hereby substituted in lieu thereof:

                  "(a) The  obligations  of Company with respect to all Advances
         (i) under the Revolving  Loan made by each Lender shall be evidenced by
         a  Revolving  Loan  Note  in the  amount  of  such  Lender's  Specified
         Percentage  of  $200,000,000  (as the same may be modified  pursuant to
         Section 9.4 hereof), (ii) under the Term Loan made by each Lender shall
         be  evidenced  by a Term  Loan  Note in the  amount  of the sum of such
         Lender's Specified  Percentage of Initial Term Loan Amount (as the same
         may be modified  pursuant to Section 9.4 hereof),  and (iii) in respect
         of Bid Rate Loans made by each Lender  shall be evidenced by a Bid Rate
         Note in the principal amount not to exceed $100,000,000."

         (x) Section  2.4(c) of the Credit  Agreement  is hereby  deleted in its
entirety and the following is hereby substituted in lieu thereof:

                  "(c) Commitment Reductions,  Generally. To the extent that the
         sum of the aggregate  outstanding (i) Advances under the Revolving Loan
         plus (ii) Bid Rate Loans  exceed  the  Commitment  after any  reduction
         thereof,  Company  shall  simultaneously  repay  on the  date  of  such
         reduction,  any such excess  amount and all accrued  interest  thereon,
         together with any amounts  constituting  any  Consequential  Loss. Once
         reduced or terminated  pursuant to this Section 2.4, the Commitment may
         not be increased or reinstated."

         (y) Section  2.6(c) of the Credit  Agreement  is hereby  deleted in its
entirety and the following is hereby substituted in lieu thereof:

                  "(c) Bid Rate  Loans.  Company  shall  repay Bid Rate Loans at
         such time as agreed upon  between  Company  and each Lender  making Bid
         Rate Loans pursuant to Section 2.2(h)."

         (z) Section 2.6 of the Credit  Agreement is hereby  amended by adding a
new clause (d) thereto to read as follows:

                  "(d) Other Obligations. Except if an earlier date is otherwise
         provided in this 
                                      -10-
<PAGE>
         Agreement, all Obligations not otherwise due and payable under Sections
         2.6(a), 2.6(b) and 2.6(c) above shall be due and payable in full on the
         Maturity Date."

         (aa) Section 2.7 of the Credit  Agreement is hereby amended by adding a
new clause (d) thereto to read as follows:

                  "(d) Bid Rate Loans. Bid Rate Loans shall bear interest at the
         rate per annum  agreed to by Company  and each  Lender  making Bid Rate
         Loans pursuant to Section 2.2(h).  Interest on each Bid Rate Loan shall
         be computed  and shall be payable at such times as agreed upon  between
         Company  and each  Lender  making  Bid Rate Loans  pursuant  to Section
         2.2(h)."

         (ab) Section  2.10(a) of the Credit  Agreement is hereby deleted in its
entirety and the following is hereby substituted in lieu thereof:

                  "2.10 Fees. (a) Subject to Section 9.8 hereof,  Company agrees
         to pay to  Administrative  Lender,  for the account of each  Lender,  a
         Commitment  Fee on the average  daily  amount of each  Lender's  Unused
         Commitment,  from the Closing Date through the Conversion Date, payable
         quarterly in arrears on each Quarterly Date occurring after the Closing
         Date,  with the last such payment due and owing on the Conversion  Date
         at the  following  per annum  percentage  applicable  in the  following
         situations:
<TABLE>
<CAPTION>

                                      Applicability                                          Percentage
                                      -------------                                          ----------
<S>                                                                                            <C>   
Category  1 - There is no Index  Debt  Rating  or the Index  Debt  Rating is the               0.375%
-----------
following: below BBB- by S&P or below Baa3 by Moody's

Category 2 - The Index Debt Rating is the  following:  BBB-,  BBB or                           0.200%
-----------
BBB+ by S&P or Baa3, Baa2 or Baa1 by Moody's

Category 3 - The Index Debt Rating is the following:  A- or better by                          0.150%
-----------
S&P or A3 or better by Moody's
</TABLE>
         The Commitment Fee shall be (i) fully earned when due and nonrefundable
         when paid and (ii) adjusted on each  Adjustment  Date  according to the
         most recent determination of the Index Debt Rating. For purposes of the
         foregoing, if the Index Debt Rating established by S&P or Moody's shall
         fall  within  a  different  category,   the  Commitment  Fee  shall  be
         determined  by  reference  to  whichever  Index Debt Rating  shall fall
         within the inferior (or numerically lower) category."

         (ac) Section  2.12(a) of the Credit  Agreement is hereby deleted in its
entirety and the following is hereby substituted in lieu thereof:
                                      -11-
<PAGE>
                  "(a) Company  shall make each payment not later than 1:00 p.m.
         on the day when due in immediately  available  funds to  Administrative
         Lender, (i) in respect of the Revolving Loan and the Term Loan, for the
         Ratable  account  of Lenders  unless  otherwise  specifically  provided
         herein,  and (ii) in respect of the Bid Rate Loans,  for the account of
         each Lender making Bid Rate Loans, at

                              Administrative Lender
                                NationsBank Plaza
                                 901 Main Street
                                   13th Floor
                               Dallas, Texas 75202
                               Attn. Theresa Belk

         for the further credit to the account of Franchise Finance  Corporation
         of  America.  No  later  than the end of each  day  when  each  payment
         hereunder is made,  Company shall notify Theresa Belk,  telephone (214)
         508-2158,   facsimile   (214)   508-2118,   or  such  other  Person  as
         Administrative  Lender may from time to time  specify.  Notwithstanding
         anything  in  this  Section  2.16(a)  or any  other  provision  of this
         Agreement  or any other  Loan  Paper to the  contrary,  any  payment by
         Company in respect of any Advances after  acceleration  of the Advances
         pursuant to Section 7.2 or any monies received by Administrative Lender
         or any Lender as a result of the  exercise of  remedies  under any Loan
         Paper after  acceleration of Advances  pursuant to Section 7.2 shall be
         distributed  pro rata to each Lender based on the  percentage  that the
         outstanding  Advances  owed  to  such  Lender  bears  to the  aggregate
         Advances owed to all Lenders."

         (ad)  Section  2.15 of the Credit  Agreement  is hereby  deleted in its
entirety and the following is hereby substituted in lieu thereof:

                  "2.15.  Extension of Conversion Date.  During each of 1997 and
         1998, Company may notify  Administrative  Lender in writing by no later
         than October 1 of each such year of its desire to extend the Conversion
         Date  (and,  consequently,  the  Maturity  Date) for an  additional  12
         months. If such notice is given,  Administrative  Lender, no later than
         November  15 of each such  year,  will  notify  Company  in  writing of
         Lenders'   decision   whether  to  extend  the  Conversion  Date  (and,
         consequently,  the Maturity  Date).  Extensions of the Conversion  Date
         (and,  consequently,  the Maturity  Date) shall be at the option and in
         the  sole  discretion  of  Lenders,  and the  decision  to  extend  the
         Conversion  Date shall  require the consent of all  Lenders.  If either
         Company or  Administrative  Lender fail to give notice  within the time
         prescribed above, the Conversion Date (and, consequently,  the Maturity
         Date) shall be the then present Conversion Date (and, consequently, the
         then present Maturity Date),  unless otherwise  extended by the parties
         hereto.  Any extension of the Conversion Date (and,  consequently,  the
         Maturity  Date) pursuant to this Section 2.15 shall not (i) require any
         renewal Note unless otherwise  requested by  Administrative  Lender and
         (ii) be effective until and unless Company shall pay to  Administrative
         Lender,  for the account of Lenders in accordance  with their
                                      -12-
<PAGE>
         Specified  Percentages,  a Revolving  Loan  Extension  Fee based on the
         amount of the  Commitment  and the Index  Debt  Rating in effect on the
         date of extension of the  Conversion  Date at the  following  per annum
         percentages, applicable in the following situations:
<TABLE>
<CAPTION>
                                      Applicability                                          Percentage
                                      -------------                                          ----------
<S>                                                                                            <C>   
Category 1 - There is no Index Debt Rating or the Index Debt Rating is the following:          0.250%
----------
below BBB- by S&P or below Baa3 by Moody's

Category 2 - The Index Debt Rating is the following:  BBB- by S&P or Baa3 by Moody's           0.150%
----------

Category 3 - The Index Debt Rating is the following:  BBB by S&P or Baa2 by Moody's            0.125%
----------

Category 4 - The Index Debt Rating is the following:  BBB+ by S&P or Baa1 by Moody's           0.100%
----------

Category 5 - The Index Debt Rating is the following:  A- or better by S&P or A3 or             0.080%
----------
better by Moody's
</TABLE>

         For purposes of the foregoing,  if the Index Debt Rating established by
         S&P or Moody's  shall fall within a different  category,  the Revolving
         Loan Extension Fee shall be determined by reference to whichever  Index
         Debt  Rating  shall fall within the  inferior  (or  numerically  lower)
         category."

         (ae)  Section  3.3 of the  Credit  Agreement  is hereby  deleted in its
entirety and the following is hereby substituted in lieu thereof:

                  "3.3. Conditions Precedent to the Making of the Term Loan. The
         obligation of each Lender to make the Term Loan shall be subject to the
         further condition  precedent that on the date of the making of the Term
         Loan (a) the following statements shall be true:

                           (i) The representations  and warranties  contained in
                  Article IV hereof are true and correct on such date, as though
                  made on and as of such date;

                           (ii) No event  has  occurred  and is  continuing,  or
                  would  result from the making of Advances  under the Term Loan
                  that does or could constitute a Default or Event of Default;

                           (iii) There shall have  occurred no Material  Adverse
                  Change,   and  the  making  of  the  Term  Loan  and  Advances
                  thereunder  shall not cause or  result in a  Material  Adverse
                  Change;
                                      -13-
<PAGE>
                           (iv)  Company  shall have  delivered to each Lender a
                  Note,  duly  completed and executed,  in the form of Exhibit B
                  hereto, evidencing Advances under the Term Loan;

                           (v) Company shall have paid to Administrative Lender,
                  for the account of Lenders in accordance  with their Specified
                  Percentages, a Term Loan Conversion Fee based on the amount of
                  the  Term  Loan  at  the  following  per  annum   percentages,
                  applicable in the following situations:
<TABLE>
<CAPTION>
                                  Applicability                                       Percentage
                                  -------------                                       ----------
<S>                                                                                     <C>   
Category 1 - There is no Index Debt Rating or the Index Debt Rating is the              1.000%
----------
following:  below BBB- by S&P or below Baa3 by Moody's

Category 2 - The Index Debt Rating is the following:  BBB- by S&P or Baa3 by            0.750%
----------
Moody's

Category 3 - The Index Debt Rating is the following:  BBB by S&P or Baa2 by             0.500%
----------
Moody's

Category 4 - The Index Debt Rating is the following:  BBB+ by S&P or Baa1 by            0.375%
----------
Moody's

Category 5 - The Index Debt Rating is the following:  A- or better by S&P or A3         0.250%
----------
or better by Moody's
</TABLE>
         For purposes of the foregoing,  if the Index Debt Rating established by
         S&P or Moody's  shall fall within a different  category,  the Term Loan
         Conversion Fee shall be determined by reference to whichever Index Debt
         Rating shall fall within the inferior (or numerically  lower) category,
         and  (b)  Administrative  Lender  shall  have  received,  in  form  and
         substance   acceptable   to  it,  such  other   approvals,   documents,
         certificates,  opinions,  and  information  as it may deem necessary or
         appropriate."

         (af) The  Specified  Percentage  of each Lender shall be the  Specified
Percentage set forth  opposite each Lender on the signatory  pages to this Third
Amendment.

         (ag) Each Bid Rate Note shall be in the form of  Exhibit J attached  to
this Third Amendment.

         2.  REPRESENTATIONS  AND WARRANTIES  TRUE; NO EVENT OF DEFAULT.  By its
execution and delivery hereof,  Company  represents and warrants that, as of the
date hereof and after giving effect to the amendments  provided in the foregoing
Section 1:
                                      -14-
<PAGE>
         (a)  the  representations  and  warranties   contained  in  the  Credit
Agreement are true and correct on and as of the date hereof as if made on and as
of such date;

         (b) no event has occurred and is continuing which constitutes a Default
or an Event of Default;

         (c)  Company  has full power and  authority  to  execute,  deliver  and
perform this Third Amendment,  the Revolving Loan Notes, the Bid Rate Notes, and
the  Credit  Agreement,  as  amended by this  Third  Amendment,  the  execution,
delivery and performance of this Third  Amendment,  the Revolving Notes, the Bid
Rate Notes, and the Credit Agreement,  as amended by this Third Amendment,  have
been  duly  authorized  by all  corporate  action  of  Company,  and this  Third
Amendment, the Revolving Notes, the Bid Rate Notes, and the Credit Agreement, as
amended  hereby,  constitute  the legal,  valid and binding  obligations  of the
Company,  enforceable  in  accordance  with their  respective  terms,  except as
enforceability  may be limited by  applicable  debtor relief laws and by general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding in equity or at law) and except as rights to indemnity may be limited
by federal or state securities laws;

         (d) neither  the  execution,  delivery  and  performance  of this Third
Amendment,  the Revolving Notes, the Bid Rate Notes, or the Credit Agreement, as
amended by this Third Amendment, nor the consummation of any transactions herein
or therein,  will contravene or conflict with any Law to which Company or any of
its  Subsidiaries is subject or any indenture,  agreement or other instrument to
which Company or any of its Subsidiaries or any of their respective  property is
subject; and

         (e) no authorization,  approval, consent or other action by, notice to,
or filing with,  any  governmental  authority  or other  Person (not  previously
obtained), is required for the (i) execution, delivery or performance by Company
of this Third Amendment, the Revolving Notes, the Bid Rate Notes, and the Credit
Agreement,  as amended by this Third Amendment,  or (ii) acknowledgement of this
Third Amendment by any Guarantor.

         3. CONDITIONS OF EFFECTIVENESS. This Third Amendment shall be effective
as of December 27, 1996, subject to the following:

         (a)  Administrative  Lender shall have  received  counterparts  of this
Third Amendment executed by the Lenders;

         (b)  Administrative  Lender shall have  received  counterparts  of this
Third Amendment executed by Company and acknowledged by each Guarantor;

         (c) the  representations  and warranties set forth in Section 2 of this
Third Amendment shall be true and correct;

         (d)  Administrative  Lender shall have received duly executed Revolving
Loan  Notes,
                                      -15-
<PAGE>
payable  to the  order  of each  Lender  in an  amount  equal  to such  Lender's
Specified Percentage, as established hereby;

         (e)  Administrative  Lender shall have  received duly executed Bid Rate
Notes, payable to the order of each Lender in the principal amount not to exceed
$100,000,000;

         (f) Administrative  Lender shall have received an opinion of counsel of
Company and its Subsidiaries, dated the date of this Third Amendment, acceptable
to Lenders  and  otherwise  in form and  substance  satisfactory  to Lenders and
Special Counsel, with respect to this Third Amendment and otherwise,  including,
without  limitations  opinions (i) to the valid legal and binding nature of this
Third  Amendment,  the Revolving Loan Notes,  the Bid Rate Notes, and the Credit
Agreement as amended  hereby,  (ii) to the power,  authorization  and  corporate
matters  of  Company  and its  Subsidiaries  taken  with  respect  to this Third
Amendment, the Revolving Notes, the Bid Rate Notes, and the Credit Agreement, as
amended  hereby,  (iii) that the execution,  delivery and performance by Company
and its Subsidiaries of this Third Amendment,  the Revolving Notes, the Bid Rate
Notes, and the Credit Agreement,  as amended hereby,  does not violate any terms
of the  certificate of  incorporation,  bylaws or agreement of Company or any of
its Subsidiaries,  and (iv) to such other matters as are reasonably requested by
Special Counsel;

         (g)  Administrative  Lender  shall have  received  certified  corporate
resolutions of Company and each Guarantor  authorizing  the execution,  delivery
and  performance of this Third  Amendment,  the Revolving Loan Notes and the Bid
Rate Notes;

         (h)  Administrative  Lender  shall have  received an opinion of Special
Counsel,  dated as of the date of this Third  Amendment,  acceptable to Lenders,
with respect to the  enforceability of this Third Amendment,  the Revolving Loan
Notes and the Credit Agreement, as amended hereby, and the other Loan Papers;

         (i) simultaneously  herewith, TCB shall be paid in full all amounts due
and owing to it pursuant to the Loan Papers, and TCB shall (i) execute a release
of  Company  with  respect to all  obligations  of Company to TCB under the Loan
Papers and (ii) return its Revolving Loan Note to  Administrative  Lender marked
"Paid In Full" or words of similar import;

         (j) Administrative Lender shall have received,  for the account of each
Lender,  a fee  equal to  0.15% of each  Lender's  Specified  Percentage  of the
Commitment, as established hereby;

         (k) simultaneously herewith,  Administrative Lender shall have received
payment of all fees due and payable thereto  pursuant to that certain fee letter
from Administrative Lender and its Affiliate to Company, dated November 7, 1996;
and

         (l)  Administrative  Lender and Lenders shall have received in form and
substance   satisfactory  to  Administrative  Lender  and  Lenders,  such  other
documents, certificates and instruments as Lenders shall require.
                                      -16-
<PAGE>
         4. FUNDING.  Simultaneously  with the satisfaction of the Conditions of
Effectiveness set forth in Section 3 hereof, each Lender shall be deemed to have
purchased or sold, as the case may be, without  recourse an amount of each other
Lender's Advances under the Revolving Loan such that after giving effect to this
Third  Amendment,  the portion of outstanding  Advances under the Revolving Loan
owed to each Lender shall be equal to its Specified  Percentage,  as established
hereby, of the outstanding Advances under the Revolving Loan.

         5. PRIOR NOTES.  Simultaneously with the satisfaction of the Conditions
of Effectiveness set forth in Section 3 hereof, each Lender which was a party to
the Credit Agreement prior to this Third Amendment (other than TCB) shall return
its prior Revolving Loan Note to Administrative Lender marked "Renewed" or words
of similar import.

         6. GUARANTOR'S  ACKNOWLEDGEMENT.  By signing below,  each Guarantor (i)
acknowledges,  consents and agrees to the execution, delivery and performance by
Company  of  this  Third  Amendment,  (ii)  acknowledges  and  agrees  that  its
obligations in respect of its Guaranty Agreement and Subordination Agreement are
not released,  diminished,  waived, modified, impaired or affected in any manner
by this Third  Amendment or any of the  provisions  contemplated  herein,  (iii)
ratifies  and  confirms  its  obligations  under  its  Guaranty   Agreement  and
Subordination  Agreement,  and (iv) acknowledges and agrees that it has no claim
or offsets against,  or defenses or counterclaims to, its Guaranty Agreement and
Subordination Agreement.

         7.       REFERENCE TO THE CREDIT AGREEMENT.

         (a) Upon the  effectiveness of this Third Amendment,  each reference in
the Credit Agreement to "this Agreement",  "hereunder",  or words of like import
shall mean and be a reference to the Credit Agreement,  as amended by this Third
Amendment.

         (b) The Credit Agreement,  as amended by this Third Amendment,  and all
other Loan Papers shall remain in full force and effect and are hereby  ratified
and confirmed.

         8. COSTS, EXPENSES AND TAXES. Company agrees to pay on demand all costs
and  expenses  of  Administrative  Lender in  connection  with the  preparation,
reproduction,  execution  and  delivery  of the  Third  Amendment  and the other
instruments  and documents to be delivered  hereunder  (including the reasonable
fees and out-of-pocket expenses of Special Counsel).

         9. EXECUTION IN  COUNTERPARTS.  This Third Amendment may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which when taken  together  shall  constitute but one and
the same instrument.

         10.  GOVERNING  LAW;  BINDING  EFFECT.  This Third  Amendment  shall be
governed  by and  construed  in  accordance  with the laws of the State of Texas
(without  giving
                                      -17-
<PAGE>
effect to  conflict  of laws) and the  United  States of  America,  and shall be
binding  upon  Company,  each  Guarantor  and each  Lender and their  respective
successors and assigns.

         11.  HEADINGS.  Section  headings in this Third  Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Third Amendment for any other purpose.

         12. ENTIRE AGREEMENT.  THE CREDIT  AGREEMENT,  AS AMENDED BY THIS THIRD
AMENDMENT,  AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT  BETWEEN THE
PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE  CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.

================================================================================
                   REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
================================================================================
                                      -18-
<PAGE>
         IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  this Third
Amendment as of the date first above written.

                                     FRANCHISE FINANCE CORPORATION OF
                                     AMERICA



                                     By:      /s/ John R. Barravecchia
                                              ----------------------------------
                                              John R. Barravecchia
                                              Executive Vice President and Chief
                                              Financial Officer
                                      -19-
<PAGE>
                                     NATIONSBANK  OF TEXAS,  N.A.,  as
                                     Administrative  Lender  and Lender
Specified Percentage:
         15.250%

                                     By:      /s/  Frank M. Johnson
                                              ----------------------------------
                                              Name:  Frank M. Johnson
                                                     ---------------------------
                                              Title:  Senior Vice President
                                                      --------------------------
                                      -20-
<PAGE>
                                     AMSOUTH BANK OF ALABAMA
Specified Percentage:
         10.750%

                                     By:      /s/  Steven R. Chester
                                              ----------------------------------
                                              Name:  Steven R. Chester
                                                     ---------------------------
                                              Title:  Real Estate Loan Officer
                                                      --------------------------
                                      -21-
<PAGE>
                                     BANK OF MONTREAL, CHICAGO BRANCH
Specified Percentage:
         10.750%

                                     By:      /s/  Jeffery G. Hoppen
                                              ----------------------------------
                                              Name:  Jeffery G. Hoppen
                                                     ---------------------------
                                              Title:  Director
                                                      --------------------------
                                      -22-
<PAGE>
                                     THE LONG-TERM CREDIT BANK OF JAPAN,
                                     LTD.
Specified Percentage:
         10.750%

                                     By:      /s/  Koh Takemoto
                                              ----------------------------------
                                              Name:  Koh Takemoto
                                                     ---------------------------
                                              Title:  Joint General Manager
                                                      --------------------------


                                     By:      /s/  John Korthuis
                                              ----------------------------------
                                              Name:  John Korthuis
                                                     ---------------------------
                                              Title:  Vice President
                                                      --------------------------
                                      -23-
<PAGE>
                                     DRESDNER BANK AG
Specified Percentage:           NEW YORK AND GRAND CAYMAN BRANCHES
         7.500%

                                    By:       /s/  Thomas J. Nadramia
                                              ----------------------------------
                                             Name:  Thomas J. Nadramia
                                                    ----------------------------
                                             Title:  Vice President
                                                     ---------------------------


                                    By:       /s/  John W. Sweeney
                                              ----------------------------------
                                             Name:  John W. Sweeney
                                                    ----------------------------
                                             Title: Assistant Vice President
                                                    ----------------------------
                                      -24-
<PAGE>
                                     COOPERATIEVE    CENTRALE    RAIFFEISEN-
                                     BOERENLEENBANK    B.A., "RABOBANK
                                     NEDERLAND", NEW YORK BRANCH
Specified Percentage:
         7.500%

                                     By:      /s/  Robert S. Bucklin
                                              ----------------------------------
                                              Name:  Robert S. Bucklin
                                                     ---------------------------
                                              Title:  Deputy General Manager
                                                      --------------------------


                                     By:      /s/  Ellen M. Tackling
                                              ----------------------------------
                                              Name: Ellen M. Tackling
                                                    ----------------------------
                                              Title:  Vice President
                                                      --------------------------
                                      -25-
<PAGE>
                                     BANK HAPOALIM, B.M.
Specified Percentage:
         6.500%

                                     By:      /s/  David Cohen
                                              ----------------------------------
                                              Name:  David Cohen
                                                     ---------------------------
                                              Title: First Vice President & 
                                                     Manager
                                                     ---------------------------


                                     By:      /s/  Bruce E. Wetter
                                              ----------------------------------
                                              Name:  Bruce E. Wetter
                                                     ---------------------------
                                              Title: Vice President
                                                     ---------------------------
                                      -26-
<PAGE>
                                     COMMERZBANK AKTIENGESELLSCHAFT,
                                     LOS ANGELES BRANCH
Specified Percentage:
         6.500%

                                     By:      /s/  Christian Jagenberg
                                              ----------------------------------
                                              Christian Jagenberg
                                              Senior Vice President



                                     By:      /s/  Wolter Mehring
                                              ----------------------------------
                                              Wolter Mehring
                                              Vice President
                                      -27-
<PAGE>
                                     THE INDUSTRIAL BANK OF JAPAN,
                                     LIMITED, LOS ANGELES AGENCY
Specified Percentage:
         6.500%

                                     By:      /s/  Toshinari Iyoda
                                              ----------------------------------
                                              Name:  Toshinari Iyoda
                                                     ---------------------------
                                              Title: SVP & Senior Manager
                                                     ---------------------------
                                      -28-
<PAGE>
                                     NORWEST BANK ARIZONA, NATIONAL
                                     ASSOCIATION
Specified Percentage:
         6.500%

                                     By:      /s/  J. Daniel McKirgan
                                              ----------------------------------
                                              Name:  J. Daniel McKirgan
                                                     ---------------------------
                                              Title: Vice President
                                                     ---------------------------
                                      -29-
<PAGE>
                                     SIGNET BANK
Specified Percentage:
         6.500%

                                     By:      /s/ John A. Schissel
                                              ----------------------------------
                                              Name:  John A. Schissel
                                                     ---------------------------
                                              Title: Vice President
                                                     ---------------------------
                                      -30-
<PAGE>
                                     UNION BANK OF SWITZERLAND (NEW
                                     YORK BRANCH)
Specified Percentage:
         5.000%

                                     By:      /s/  Howard T. Margolis
                                              ----------------------------------
                                              Name:  Howard T. Margolis
                                                     ---------------------------
                                              Title: Assistant Vice President
                                                     ---------------------------


                                     By:      /s/  Albert Rabil, III
                                              ----------------------------------
                                              Name:  Albert Rabil, III
                                                     ---------------------------
                                              Title: Managing Director
                                                     ---------------------------
                                      -31-
<PAGE>
ACKNOWLEDGED AND AGREED:

FFCA ACQUISITION CORPORATION
FFCA INSTITUTIONAL ADVISORS, INC.
FFCA MORTGAGE CORPORATION



By:       /s/  John R. Barravecchia
          ----------------------------------
         John R. Barravecchia
         Executive Vice President and
         Chief Financial Officer
                                      -32-
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                                    EXHIBIT J
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                                  BID RATE NOTE

$100,000,000                      Dallas, Texas                December 27, 1996


         FOR VALUE RECEIVED,  the undersigned,  FRANCHISE FINANCE CORPORATION OF
AMERICA,  a Delaware  corporation  ("Borrower"),  HEREBY  PROMISES TO PAY to the
order of  NationsBank,  N.A.  ("Lender")  the lesser of ONE HUNDRED  MILLION AND
NO/100 DOLLARS ($100,000,000.00) and the unpaid principal amount of the Bid Rate
Loans (as defined in the Credit Agreement hereinafter defined) made by Lender to
Borrower,  pursuant to the Credit Agreement,  payable at such times, and in such
amounts,  as are agreed to by Lender and Borrower  pursuant to Section 2.2(h) of
the Credit Agreement.  The books and records of  Administrative  Lender shall be
prima facie evidence of all sums due Lender.

         Borrower promises to pay interest on the unpaid principal amount of the
Bid Rate Loans from the date made until such  principal  amount is paid in full,
at such interest  rates,  and payable at such times,  as are agreed to by Lender
and Borrower pursuant to Section 2.2(h) of the Credit Agreement.

         Both  principal  and interest are payable in lawful money of the United
States of America to Administrative  Lender (as defined in the Credit Agreement)
(for the account of Lender) at its principal banking house at NationsBank Plaza,
901 Main  Street,  Dallas,  Texas 75202,  or such other place as  Administrative
Lender may direct, in immediately available funds.

         This Bid Rate  Note is one of the Bid Rate  Notes  evidencing  Bid Rate
Loans  referred to in, and is entitled to the benefits of, the Credit  Agreement
dated as of December 27, 1995 among  Borrower,  NationsBank  of Texas,  N.A., as
Administrative  Lender,  Lender and certain  other lenders (as from time to time
amended,  modified  or  supplemented,   the  "Credit  Agreement").   The  Credit
Agreement,  among other things,  contains  provisions  for  acceleration  of the
maturity  hereof  upon the  happening  of an Event of Default (as defined in the
Credit  Agreement) and also for prepayments on account of principal hereof prior
to the maturity hereof upon the terms and conditions therein specified.

         Borrower  and  each  guarantor,  surety  and  endorser  waives  demand,
presentment,  notice of dishonor,  protest and diligence in collecting  sums due
hereunder;  agrees to application  of any debt of Lender to the payment  hereof;
agrees that  extensions and renewals  without limit as to number,  acceptance of
any  number of  partial  payments,  releases  of any party  liable  hereon,  and
releases or  substitutions  of collateral,  before or after maturity,  shall not
release or discharge its obligation  under this Bid Rate Note; and agrees to pay
in addition to all other sums due hereunder  reasonable  attorney's fees if this
Bid Rate Note is placed in the hands of an attorney for  collection  or if it is
collected through bankruptcy or other judicial proceeding.  Borrower agrees that
during the full term hereof the maximum  lawful  interest rate for this Bid Rate
Note
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determined  under Texas law shall be the indicated  rate ceiling as specified in
Article 5069-1.04 of V.A.T.S.  Further, to the extent that any other lawful rate
ceiling  exceeds the rate  ceiling so  determined,  then the higher rate ceiling
shall apply. Chapter 15 of the Texas Credit Code does not apply to this Bid Rate
Note.

         This Bid Rate Note shall be governed  by and  construed  in  accordance
with the laws of the State of Texas.

                                     FRANCHISE FINANCE CORPORATION
                                     OF AMERICA, a Delaware corporation



                                     By:      /s/  John R. Barravecchia
                                              ----------------------------------
                                              John R. Barravecchia
                                              Executive Vice President and
                                              Chief Financial Officer
                                      -2-