FIRST AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT


         THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated as of March __,  1997,  is made and  entered  into by and among  Bank One,
Texas, N.A. and the Debtor Group.

                                    RECITALS

         A. Secured  Party and the Debtor  Group  entered into that certain Loan
and Security Agreement, dated June 7, 1996 (the "Loan Agreement").

         B.  Secured  Party  and the  Debtor  Group  desire  to  amend  the Loan
Agreement as herein set forth.

         NOW,  THEREFORE,  in consideration of the premises herein contained and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

                                    ARTICLE I
                                   Definitions

         Section 1.01. Definitions. Capitalized terms used in this Amendment, to
the  extent  not  otherwise  defined  herein,  shall  have the same  definitions
assigned to such terms in the Loan Agreement, as amended hereby.

                                   ARTICLE II
                        Amendments to the Loan Agreement

         Section 2.01. Amendment to Definitions.  From and after the date hereof
Section 1 of the Loan  Agreement is amended by deleting  Sections 1 (d), (i) and
(gg) in their entirety and, in place thereof, adding new Sections 1 (d), (i) and
(gg) which shall read as follows:

                  "(d)   'Borrowing   Base'  shall  mean,  as  of  any  date  of
         determination, the lesser of (i) $8,000,000, or (ii) the sum of (1) the
         product of (A) the Inventory Advance Rate, and (B) Borrower's  Eligible
         Inventory,  less (2) the  Reserve,  and less (3) the  Letter  of Credit
         Exposure, all determined as of such date of determination.

                  (i) 'Contract  Rate' shall mean a rate calculated on the basis
         of actual days  elapsed but  computed as if each year  consisted of 360
         days,  equal to the sum of (i) the  Base  Rate  (the  "Base  Rate")  of
         interest  as  established  from time to time by Bank as its  commercial
         base rate of interest  publicly  announced from time to time (which may
        


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         not be the lowest,  best or most  favorable rate of interest which Bank
         may charge on loans to its  customers),  plus (ii) one percent  (1.0 %)
         per annum.

                  (gg)     'Revolving Line' means $8,000,000.00."

         Section 2.02 New Definitions. Section 1 of the Loan Agreement is hereby
amended by the addition of a new Section 1 (oo) which shall read as follows:

                  "(oo)    'Intercreditor    Agreement'   means   that   certain
                  Intercreditor Agreement dated the __ day of November, 1996, by
                  and  between   Marshall's   Train   Depot,   Inc.,  a  Florida
                  corporation, Bank and Borrower."

         Section 2.03.  Amendment to Section 11 (s) of the Loan Agreement.  From
and after the date hereof  Section 11(s) of the Loan Agreement is deleted in its
entirety and in place  thereof  shall be a new Section 11(s) which shall read as
follows:

                           "(s)  Company  shall  maintain,  as of each  date set
                  forth  below,  a  consolidated  Tangible Net Worth equal to or
                  greater than the amount set forth opposite such date below:

                           Period                    Tangible Net Worth

                  June 29, 1996                      $  3,600,000.00
                  September 28, 1996                 $  3,400,000.00
                  December 28, 1996                  $10,000,000.00
                  March 29, 1997                     $  8,000,000.00
                  June 28, 1997                      $  7,000,000.00
                  September 27, 1997                 $  6,000,000.00
                  December 27, 1997                  $10,000,000.00 plus the net
                                                     proceeds   for  any   stock
                                                     offering     of     Company
                                                     conducted   after  December
                                                     28,  1996,  and plus 50% of
                                                     Adjusted  Net  Income  (but
                                                     not  losses) of Company for
                                                     Company's    fiscal    year
                                                     ending December 27, 1997

                  March 28, 1998                     75% of  Tangible  Net Worth
                                                     Covenant as of December 27,
                                                     1997"

         Section 2.04.  Amendment to Section 11 (w) (11) of the Loan  Agreement.
From and after the date  hereof  Section  11 (w) (11) of the Loan  Agreement  is
deleted in its entirety and in place  thereof shall be a new Section 11 (w) (11)
which shall read as follows:



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                           "(11) Daily during any periods in which any Revolving
                  Loans or Letters of Credit are outstanding and monthly (within
                  7 days  after the end of each  month) at all other  times,  an
                  activity  report  setting forth (i)  inventory by store,  (ii)
                  inventory  by type,  (iii)  inventory  received in dollars and
                  units by store,  and (iv)  inventory sold in dollars and units
                  by  store.   Such  report  shall  be  in  form  and  substance
                  reasonably acceptable to Secured Party."

         Section 2.05.  Amendment to Section 12 (a) of the Loan Agreement.  From
and after the date hereof Section 12 (a) of the Loan Agreement is deleted in its
entirety and replaced with a new Section 12 (a) which shall read as follows:

                  "(a)  Borrower  shall  not  permit  any  financing   statement
         regarding  the  Collateral  to be  filed  other  than  (i) a  financing
         statement or statements in favor of Secured Party, (ii) those described
         on Schedule 10 (g), and (iii)  financing  statements  that evidence the
         "Marshall Liens" (as defined in the Intercreditor Agreement)."

         Section 2.06.  Amendment to Section 12 (d) of the Loan Agreement.  From
and after the date hereof Section 12 (d) of the Loan Agreement is deleted in its
entirety and replaced with a new Section 12 (d) which shall read as follows:

                  "(d) Borrower shall not grant, create, incur, assume or permit
         to exist  any  security  interest,  lien or  encumbrance  on any of its
         assets or properties, including the Collateral, except (i) with respect
         to  capital  leases  and  liens  to  secure   indebtedness  for  tenant
         finish-out  of  retail  stores,  not  to  exceed  $2,400,000.00  in the
         aggregate in any fiscal year, and (ii) the Marshall Liens."

         Section 2.07.  Amendment to Section 12 (e) of the Loan Agreement.  From
and after the date hereof Section 12 (e) of the Loan Agreement is deleted in its
entirety and replaced with a new Section 12 (e) which shall read as follows:

                  "(e)   Borrower   shall  not  create,   incur  or  assume  any
         indebtedness  for  borrowed  money or issue or assume  any other  note,
         debenture,  bond or other evidences of indebtedness,  or enter into any
         operating or capital leases, or guarantee any such indebtedness or such
         evidences of  indebtedness  of others,  other than (i)  borrowing  from
         Secured  Party,   (ii)  capital  leases  and  indebtedness  for  tenant
         finish-out  of  retail  stores,  not  to  exceed  $2,400,000.00  in the
         aggregate  in  any  fiscal   year,   (iii)  other   indebtedness   (the
         "Subordinated  Debt")  that has been  subordinated  to the  Obligations
         pursuant to subordination  agreements in form and substance  acceptable
         to Secured Party in its sole discretion, and (iv) the Marshall Debt (as
         defined in the Intercreditor Agreement)."

         Section 2.08.  Amendment to Section 17 (b) of the Loan Agreement.  From
and after the date hereof Section 17 (b) of the Loan Agreement is deleted in its
entirety and replaced with a new Section 17 (b) which shall read as follows:



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                  "(b) If Borrower terminates this Agreement prior to the end of
         the Initial Term, Borrower acknowledges that (i) such termination would
         result in the loss to Secured  Party of the benefits of this  Agreement
         and that the  damages  incurred  by  Secured  Party as a result of such
         termination  are and would be difficult of  ascertainment,  and (ii) no
         such termination  shall be effective until Borrower has paid to Secured
         Party all of the Obligations in immediately  available funds,  together
         with a sum certain as liquidated damages,  being Borrower's and Secured
         Party's best and fairest  estimate of Secured Party's damages caused by
         such  termination,  equal  to one  half of one  percent  (0.5%)  of the
         Revolving Line."

         Section 2.09. Exhibit A to the Loan Agreement.  From and after the date
hereof  (i)  Exhibit A to the Loan  Agreement  is deleted  in its  entirety  and
replaced  with a new Exhibit A in the form of Exhibit A-1 attached  hereto,  and
(ii) all  references  in the Loan  Agreement to Exhibit A shall refer to Exhibit
A-1 attached hereto.

                                   ARTICLE III
                              Conditions Precedent

         Section 3.01. Conditions Precedent. The effectiveness of this Amendment
is subject to the  satisfaction of the following  conditions  precedent,  unless
specifically waived in writing by Investor:

                  (a) The representations and warranties contained herein and in
         each of the other Loan  Documents  shall be true and  correct as of the
         date hereof as if made on the date hereof.

                  (b)  Unless  waived by Bank,  no Event of  Default  shall have
         occurred  and be  continuing  and no  event  or  condition  shall  have
         occurred  that with the giving of notice or lapse of time or both would
         be an Event of Default.

                  (c) The Debtor Group and each of the other  parties  listed on
         the  signature  pages  to  this  Amendment  shall  have  executed  this
         Amendment.

                  (d) All corporate  proceedings  taken in  connection  with the
         transactions   contemplated   by  this  Amendment  and  all  documents,
         instruments  and  other  legal  matters   incident   thereto  shall  be
         reasonably satisfactory to Secured Party and its legal counsel.

                  (e)  Borrower   shall  have   delivered  to  Secured  Party  a
         certificate signed by the corporate secretary of the general partner of
         Borrower (i)  certifying to Secured Party that  Borrower's  partnership
         agreement has not been amended since Borrower's  certification  thereof
         under Certificate of Corporate  Secretary dated June 7, 1996 previously
         delivered to Secured Party in connection with the Loan  Agreement,  and
         that the officers of the general partner of Borrower  specified therein


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         are duly  elected,  qualified  and  acting  in the  capacities  therein
         stated,  as of the  effective  date  hereof,  and  (ii)  attaching  and
         certifying  resolutions  duly  adopted by the board of directors of the
         general partner of Borrower authorizing and directing one or more named
         officers of the general partner of Borrower to execute and deliver this
         Amendment,  and all related documentation required by Secured Party, on
         behalf of Borrower,  which certificate shall be in form satisfactory to
         Secured Party.

                  (f) All  conditions  precedent set forth in the Loan Agreement
         shall have been satisfied.

                  (g) Borrower has delivered to Bank the  inventory  reports for
         January and February,  1997, and the financial  statements for January,
         1997,  that Borrower is required to deliver in accordance  with Section
         11 (w) of the Loan Agreement.

                                   ARTICLE IV
                 Ratifications, Representations, and Warranties

         Section 4.01. Ratifications by Borrower and Debtor Group. The terms and
provisions  set  forth  in  this  Amendment   shall  modify  and  supersede  all
inconsistent terms and provisions set forth in the Loan Agreement and, except as
expressly modified and superseded by this Amendment, the terms and provisions of
the Loan  Agreement are ratified and confirmed and shall  continue in full force
and effect. The Loan Agreement as amended by this Amendment shall continue to be
legal, valid, binding and enforceable in accordance with its terms.

         Section 4.02.  Renewal and  Extension of Security  Interests and Liens.
Borrower and each  Guarantor  hereby  renews,  affirms and ratifies all security
interests created and granted in the Loan Documents. Borrower and each Guarantor
agrees  that this  Amendment  shall in no manner  affect or impair the liens and
security  interests  securing the Obligations,  and that such liens and security
interests  shall not in any manner be waived,  the  purposes  of this  Amendment
being to modify the Loan Agreement as herein provided,  and to carry forward all
liens and security  interest  securing same,  which are acknowledged by Borrower
and each Guarantor to be valid and subsisting.

         Section  4.03.  Ratification  by  Guarantors.  Each  Guarantor and each
Validity  Guarantor (i)  consents,  acknowledges,  and agrees to the  execution,
delivery,  and performance by Borrower of this Amendment,  (ii) acknowledges and
agrees  that  this  Amendment  does not  affect,  diminish,  waive,  or  release
his/her/its  obligations  under  guaranty  agreement  delivered by him/her/it to
Bank, and (iii) ratifies and confirms  his/her/its  obligations pursuant to such
guaranty agreement. Further, each Guarantor covenants,  acknowledges, and agrees
that such Guarantor guaranties the repayment of the "Guaranteed Indebtedness" as
provided in the guaranty agreement executed by such Guarantor.

         Section  4.04.  Representations  and  Warranties.   Borrower  and  each
Guarantor  represents  and  warrants  to Bank  as  follows:  (i) the  execution,


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delivery  and  performance  of this  Amendment  and any and all  Loan  Documents
executed  and/or  delivered in connection  herewith have been  authorized by all
requisite  corporate  action on the part of Borrower and each Guarantor and will
not violate the partnership  agreement,  articles or bylaws, as appropriate,  of
Borrower or any Guarantor or any agreement to which Borrower or any Guarantor is
a party; (ii) the representations and warranties contained in the Loan Agreement
as amended  hereby and in each of the other Loan  Documents are true and correct
on and as of the date hereof as though made on and as of the date hereof;  (iii)
no Event of Default under the Loan Agreement has occurred and is continuing; and
(iv) Borrower is in full compliance with all covenants and agreements  contained
in the Loan Agreement, as amended hereby.

         Section  4.05.  Ratification  by  Subordinated  Lenders.   Company  (i)
consents,  acknowledges,  and agrees to the execution, delivery, and performance
by Borrower of this Amendment,  (ii) acknowledges and agrees that this Amendment
does not affect, diminish, waive, or release its obligations under Subordination
Agreement  dated June 7, 1996,  executed and delivered by it to Bank,  and (iii)
ratifies  and  confirms  the  Subordination  Agreement  executed  by it and  its
obligations pursuant to such Subordination Agreement.

                                    ARTICLE V
                                  Miscellaneous

         Section  5.01.   Survival  of  Representations   and  Warranties.   All
representations  and  warranties  made in the Loan  Agreement  or any other Loan
Document,   including  without  limitation,   any  Loan  Document  furnished  in
connection with this Amendment, shall survive the execution and delivery of this
Amendment and the other Loan Document,  and no investigation by Secured Party or
any closing  shall affect such  representations  and  warranties or the right of
Secured Party to rely thereon.

         Section 5.02.  Reference to Loan Agreement.  Each of the Loan Documents
and  the  Loan  Agreement  and  any  and  all  other  agreements,  documents  or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Loan  Agreement  as amended  hereby,  are hereby
amended so that any reference in such Loan Documents to the Loan Agreement shall
mean a reference to the Loan Agreement as amended hereby.

         Section  5.03.  Expenses of Secured  Party.  Borrower  agrees to pay on
demand all reasonable  costs and expenses  incurred by Secured Party directly in
connection with the preparation, negotiation and execution of this Amendment and
the other Loan Documents  executed  pursuant  hereto and any and all amendments,
modifications, and supplements thereto, including, without limitation, the costs
and fees of Secured Party's legal counsel,  and all costs and expenses  incurred
by Secured Party in  connection  with the  enforcement  or  preservation  of any
rights under the Loan Agreement,  as amended hereby, or any other Loan Document,
including,  without limitation, the reasonable costs and fees of Secured Party's
legal counsel.



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         Section 5.04.  Severability.  Any provision of this Amendment held by a
court of competent  jurisdiction to be invalid or unenforceable shall not impair
or invalidate  the remainder of this  Amendment and the effect  thereof shall be
confined to the provision so held to be invalid or unenforceable.

         SECTION 5.05.  APPLICABLE  LAW. THIS AMENDMENT  SHALL BE DEEMED TO HAVE
BEEN MADE AND TO BE  PERFORMABLE  IN AND SHALL BE GOVERNED BY AND  CONSTRUED  IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

         Section 5.06.  Successors  and Assigns.  This Amendment is binding upon
and shall  inure to the  benefit  of the  parties  hereto  and their  respective
successors,  assigns, heirs, executors,  and legal representatives,  except that
none of the parties  hereto other than Secured  Party may assign or transfer any
of its rights or  obligations  hereunder  without the prior  written  consent of
Secured Party.

         Section 5.07.  Counterparts.  This  Amendment may be executed in one or
more  counterparts,  each of which  when so  executed  shall be  deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.

         Section  5.08.  Effect of Waiver.  No  consent  or  waiver,  express or
implied,  by  Bank to or for any  breach  of or  deviation  from  any  covenant,
condition  or duty by  Borrower,  shall be deemed a consent  to or waiver of any
other breach of the same or any other covenant, condition or duty.

         Section 5.09. Headings.  The headings,  captions, and arrangements used
in  this  Amendment  are  for   convenience   only  and  shall  not  affect  the
interpretation of this Amendment.

         Section  5.10.  Conflicting  Provisions.  If any  provision of the Loan
Agreement  as amended  hereby  conflicts  with any  provision  of any other Loan
Document, the provision in the Loan Agreement shall control.

         SECTION 5.11. RELEASE.  BORROWER AND EACH GUARANTOR HEREBY ACKNOWLEDGES
THAT NEITHER BORROWER NOR ANY GUARANTOR HAS ANY DEFENSE,  COUNTERCLAIM,  OFFSET,
CROSS-COMPLAINT,  CLAIM OR DEMAND OF ANY KIND OR NATURE  WHATSOEVER  THAT CAN BE
ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF BORROWER'S OR ANY GUARANTOR'S
LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK  AFFIRMATIVE  RELIEF OR DAMAGES OF
ANY KIND OR NATURE  FROM  SECURED  PARTY.  BORROWER  AND EACH  GUARANTOR  HEREBY
VOLUNTARILY AND KNOWINGLY  RELEASES AND FOREVER  DISCHARGES  SECURED PARTY,  ITS
PREDECESSORS,  AGENTS,  EMPLOYEES,  SUCCESSORS  AND  ASSIGNS,  FROM ALL POSSIBLE
CLAIMS,  DEMANDS,  ACTIONS,  CAUSES OF ACTION,  DAMAGES,  COSTS,  EXPENSES,  AND


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LIABILITIES  WHATSOEVER,   KNOWN  OR  UNKNOWN,   ANTICIPATED  OR  UNANTICIPATED,
SUSPECTED  OR  UNSUSPECTED,  FIXED,  CONTINGENT,  OR  CONDITIONAL,  AT LAW OR IN
EQUITY,  ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED,  WHICH  BORROWER OR ANY  GUARANTOR  MAY NOW OR HEREAFTER  HAVE AGAINST
SECURED PARTY, ITS PREDECESSORS,  AGENTS, EMPLOYEES,  SUCCESSORS AND ASSIGNS, IF
ANY, AND  IRRESPECTIVE  OR WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT,  TORT,
VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE OR ARISE FROM ANY LOAN, INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING
OR RECEIVING  INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE, THE EXERCISE OF ANY
RIGHTS AND REMEDIES UNDER THE LOAN  DOCUMENTS,  AND NEGOTIATION AND EXECUTION OF
THIS AMENDMENT.

         SECTION 5.12. ENTIRE AGREEMENT.  THIS AMENDMENT, THE LOAN AGREEMENT AND
ALL OTHER LOAN DOCUMENTS  EXECUTED AND DELIVERED IN CONNECTION WITH AND PURSUANT
TO THIS AMENDMENT AND THE LOAN AGREEMENT  REPRESENT THE FINAL AGREEMENT  BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED  BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,
OR  SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO  UNWRITTEN  ORAL
AGREEMENTS BETWEEN THE PARTIES.

         Section 5.13.  Waivers.  Borrower  failed to provide to Bank certain of
the monthly and weekly reports  required by Section 11 (w) of the Loan Agreement
to be  delivered  by Borrower to Bank during  November  and  December,  1996 and
January, 1997. Borrower has requested that Bank waive such failure and any Event
of Default caused  thereby.  Bank hereby  consents to the failure of Borrower to
deliver such reports and waives any Event of Default caused thereby. Such waiver
and consent is  expressly  limited to as set forth in this Section 5.13 and does
not, and shall not,  constitute a consent or waiver to any other,  additional or
future breach of Section 11(w) or any other  provision of the Loan  Agreement or
any other Loan Document.  Except as set forth in this Section 5.13,  Bank is not
aware of the occurrence and continuation of any Events of Default under the Loan
Agreement.



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         EXECUTED as of the date first written above.

                              BANK:

                              Bank One, Texas, N.A.


                              By:__________________________________
                                 Kathleen S. Robertson, Vice President

                              BORROWER:

                              The Great Train Store Partners, L.P.
 
                              By: GTS Partner, Inc.


                              By:____________________________
                                 Cheryl Taylor, Vice President

                              ADDITIONAL MEMBERS OF THE DEBTOR GROUP
                              and GUARANTORS:

                              The Great Train Store Company


                              By:_________________________________
                                 Cheryl Taylor, Vice President


                              GTS Partner, Inc.


                              By:__________________________________
                                 Cheryl Taylor, Vice President


                              GTS Limited Partner, Inc.


                              By:__________________________________
                                 Cheryl Taylor, Vice President



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                              VALIDITY GUARANTORS: The undersigned have executed
                              this  Amendment  for the  purpose  of  consenting,
                              acknowledging and agreeing to the terms of Section
                              4.03 hereof



                              ------------------------------------
                              James H. Levi



                              -------------------------------------
                              Cheryl Taylor

                              SUBORDINATED  LENDER: The undersigned haS executed
                              this  Amendment  for the  purpose  of  consenting,
                              acknowledging and agreeing to the terms of Section
                              4.05 hereof


                              The Great Train Store Company


                              By:_________________________________
                                 Cheryl Taylor, Vice President



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