EXHIBIT - 10.43

                                                                 







                              AMENDED AND RESTATED
                                CREDIT AGREEMENT


                          Dated as of October 31, 1996

                                      Among

                         GOODY'S FAMILY CLOTHING, INC.,
                              GOODY'S MS, L.P. and
                                GOODY'S IN, L.P.,
                                  as Borrowers

                                  SYDOOG, INC.,
                             TREBOR OF TN, INC. and
                                 GOFAMCLO, INC.,
                                  as Guarantors

                       the Lenders identified herein, and

                   FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
                             as Administrative Agent



                                  $ 100,000,000







<PAGE>


                                                            #1008662.11


                              AMENDED AND RESTATED
                                CREDIT AGREEMENT


         THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as
of  October  31,  1996,  is made and  entered  into on the terms and  conditions
hereinafter set forth, by and among GOODY'S FAMILY  CLOTHING,  INC., a Tennessee
corporation ("GFC"), GOODY'S MS, L.P., a Tennessee limited partnership ("Goody's
MS"),  GOODY'S IN, L.P., a Tennessee  limited  partnership  ("Goody's  IN"; GFC,
Goody's  MS and  Goody's  IN are  hereinafter  collectively  referred  to as the
"Borrowers"),  SYDOOG,  INC., a Delaware corporation  ("SYDOOG"),  TREBOR of TN,
Inc.,  a  Tennessee  corporation  ("TREBOR"),  and  GOFAMCLO,  INC.,  a Delaware
corporation ("GOFAMCLO"; SYDOOG, TREBOR and GOFAMCLO are hereinafter referred to
collectively  as the  "Guarantors"),  those  several  lenders  who are or become
parties to this  Agreement  (collectively,  the "Lenders" and,  individually,  a
"Lender") and FIRST  TENNESSEE  BANK NATIONAL  ASSOCIATION,  a national  banking
association with principal offices in Memphis, Tennessee ("First Tennessee"), as
administrative  agent for the Lenders  (in such  capacity,  the  "Administrative
Agent").


THE PARTIES HERETO AGREE AS FOLLOWS:


                                    ARTICLE 1

                          DEFINITIONS, ACCOUNTING TERMS
                         AND PRINCIPLES OF CONSTRUCTION

         1.2 Defined Terms. In addition to terms defined elsewhere  herein,  the
following terms, as used in this Agreement,  shall have the respective  meanings
set forth below  (terms  defined in the  singular to have the same  meaning when
used in the plural, and vice versa, unless otherwise expressly indicated):

                  "Administrative   Agent"  shall  mean  First   Tennessee  Bank
National Association or such successor  Administrative Agent as may be appointed
by the Lenders pursuant to Section 12.10 hereof.

                  "Affiliate"  shall mean,  as to any Person,  any other Person,
directly or  indirectly  controlling  (including  all  directors,  officers  and
employees of such Person),  directly or indirectly controlled by or under direct
or indirect common control with such Person.


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71314-1

11/4/96
71314-1
11/4/96
                  "Affiliate Agreements" shall mean the following agreements (a)
License  Agreements,  substantially in the form of Exhibit 4.1B,  between SYDOOG
and GFC,  Goody's MS and Goody's IN  respectively,  each dated October 31, 1996,
(b) Master Supply Agreements, substantially in the form of Exhibit 4.1C, between
Goody's MS and GFC and Goody's IN respectively, each dated October 31, 1996, (c)
Management  Services  Agreements,  substantially  in the form of  Exhibit  4.1D,
between  GFC and  Goody's MS,  TREBOR and  Goody's IN  respectively,  each dated
October 31, 1996, and (d) Tax Sharing  Agreements,  substantially in the form of
Exhibit 4.1E,  between GFC and SYDOOG,  GOFAMCLO and TREBOR  respectively,  each
dated October 31, 1996.

                  "Applicable  Bankruptcy  Law" shall mean,  with respect to any
Guarantor, Title 11 of the United States Code, as amended from time to time, and
any other laws  governing  bankruptcy,  suspension of payments,  reorganization,
arrangement,  adjustment of debts, relief of debtors, dissolution, insolvency or
other similar laws applicable to such Guarantor.

                  "Applicable  Commercial Letter of Credit Fee Percentage" shall
mean the percentage to be used to calculate Letter of Credit Fees for Commercial
Letters of Credit from time to time, as provided in Section 2.13.

                  "Applicable  Standby  Letter of Credit Fee  Percentage"  shall
mean the  percentage  to be used to calculate  Letter of Credit Fees for Standby
Letters of Credit from time to time, as provided in Section 2.13.

                  "Applicable LIBOR Margin" shall mean the margin to be added to
LIBOR for purposes of determining the interest rate(s) applicable to LIBOR Loans
from time to time, as provided in Section 2.13.

                  "Asset  Acquisition"  shall  mean  (a) any  investment  by any
Borrower or Guarantor  in any other  Person  pursuant to which such Person shall
become a  Subsidiary  of such  Borrower or Guarantor or shall be merged with any
Borrower or Guarantor or (b) any acquisition by any Borrower or Guarantor of the
assets of any Person that constitutes  substantially all of an operating unit or
business of such Person.

                  "Assignment  and  Acceptance"  shall  mean an  assignment  and
acceptance,  substantially  in the form of Exhibit  13.2,  between a  transferor
Lender and a proposed transferee,  regarding the sale,  assignment,  transfer or
other disposition  (other than the sale of a participation) of all or any amount
of the Commitments,  Loans and  participations  in the Letters of Credit of such
Lender.

                  "Base LIBOR" shall mean the rate per annum for offered  Dollar
deposits  in the  interbank  Eurodollar  market  appearing  on page  3750 of the
TELERATE  rate  reporting  system at about  11:00  a.m.,  Eastern  time,  on the
Interest  Rate  Determination  Date  immediately  prior to the  beginning of the
Interest  Period  for the  corresponding  LIBOR  Loan,  for the number of months
comprised  therein and in an amount equal to the amount of such LIBOR Loan to be
outstanding  during such Interest  Period.  Without  limiting the  provisions of
Section 2.14.3,  in the event that prior to the Termination Date TELERATE quotes
for Base Libor are discontinued or become  unascertainable,  the  Administrative
Agent shall  designate a comparable  resource for use in determining  Base LIBOR
for purposes hereof.

                  "Base Rate" shall mean, for any period,  the fluctuating  rate
of interest per annum from time to time established by the Administrative  Agent
as its "prime rate", regardless of whether published or publicly announced. Each
change in the Base Rate shall be  effective as of the opening of business on the
day such change occurs. The parties hereto acknowledge that the rate established
by the Administrative  Agent as its "prime rate" is an index or base rate and is
not  necessarily the lowest rate charged to its customers or other banks. In the
event that prior to the Termination Date the  Administrative  Agent discontinues
or abandons the practice of establishing a prime rate, or should the same become
unascertainable, the Administrative Agent shall designate a comparable reference
rate for use in determining the Base Rate for purposes hereof.

                  "Base Rate Loans" shall mean Loans  bearing  interest at rates
determined by reference to the Base Rate.

     "Borrowing"  shall mean a Revolving  Credit Borrowing or a Letter of Credit
Borrowing.

                  "Business Day" shall mean any day on which commercial banks in
Knoxville,  Tennessee,  are neither  authorized nor required by law or executive
order to close and on which the New York Stock Exchange is not closed.

                  "Capital  Expenditures"  shall mean,  as to the  Borrowers and
Guarantors for any period,  the aggregate capital  expenditures  recorded by the
Borrowers and Guarantors in conformity with GAAP,  including  charges in respect
of  Capitalized  Lease  Obligations   exclusive  of  imputed  interest  on  such
Capitalized Lease Obligations.

                  "Capitalized Lease" shall mean, as to any Person, any lease of
property by such Person as lessee that would be  capitalized  on a balance sheet
of such Person prepared in accordance with GAAP.

                  "Capitalized  Lease Obligations" shall mean, as to any Person,
the capitalized  amount of the  obligations of such Person and its  Subsidiaries
under all Capitalized Leases.

                  "Cash Equivalents" shall mean, at any time,

     (a)  Government  Obligations  having a maturity not  exceeding  ninety (90)
days;
                  (b)  commercial  paper rated at least A-1 by Standard & Poor's
         Corporation  or P-1 by  Moody's  Investors  Services,  Inc.,  having  a
         maturity not exceeding ninety (90) days;

                  (c)  certificates  of deposit  or time  deposits  and  bankers
         acceptances  of (i) the  Lenders  or (ii) other  commercial  banks with
         capital  and  undivided  surplus  of  at  least  $300,000,000   issuing
         commercial  paper rated as  described in the  preceding  clause (b) and
         organized and existing under, or chartered or otherwise qualified to do
         business  under,  the laws of the United States of America or any State
         thereof or the  District of Columbia,  having a maturity not  exceeding
         one hundred and eighty (180) days;

                  (d)  repurchase  agreements or investment  contracts  having a
         maturity not  exceeding  ninety (90) days with a financial  institution
         insured by the Federal Deposit Insurance Corporation,  or any broker or
         dealer (as defined in the  Securities  Exchange  Act of 1934) that is a
         dealer in government  bonds and that is recognized  by, trades with and
         reports to, a Federal  Reserve Bank as a primary  dealer in  government
         securities; provided that in any case (i) collateral is pledged for the
         repurchase agreement or investment contract,  which collateral consists
         of  (A)   Government   Obligations   or   evidences   of  ownership  of
         proportionate  interests in future  interest and principal  payments on
         Government  Obligations  held by a bank or trust  company as custodian,
         under which the owner of the  investment  is the real party in interest
         and has the right to proceed  directly  and  individually  against  the
         obligor on such obligations,  and which underlying obligations are held
         in a segregated  account and not  available to satisfy any claim of the
         custodian or any person  claiming  through the custodian or to whom the
         custodian may be obligated or (B) evidences of  indebtedness  issued by
         any of the following:  Bank of Cooperatives,  Export-Import Bank of the
         United States,  Farmers Home  Administration,  Federal  Financing Bank,
         Federal Home Loan Bank System,  Federal Home Loan Mortgage  Corporation
         (including participation certificates), Federal Housing Administration,
         Federal  Farm Credit  Banks,  Federal  National  Mortgage  Association,
         Government National Mortgage  Association,  Inter-American  Development
         Bank,  International  Bank for  Reconstruction  and Development,  Small
         Business  Administration or any other agency or  instrumentality of the
         United  States  of  America  created  by an act  of  Congress  that  is
         substantially similar to the foregoing in its legal relationship to the
         United  States  of  America,  (ii)  the  current  market  value  of the
         collateral securing the repurchase  agreement or investment contract is
         at least equal to the amount of the repurchase  agreement or investment
         contract  and (iii)  the  current  market  value of the  collateral  is
         determined not less frequently than monthly;

     (e)  investments  in money market funds  substantially  all of whose assets
consist of  securities  of the types  described  in the  foregoing  clauses  (a)
through (d);

                  (f)  investments  in  obligations  the return with  respect to
         which is  excludable  from gross income under  Section 103 of the Code,
         having a  maturity  of not more than six (6)  months or  providing  the
         holder the right to put such  obligations  for purchase at par upon not
         more than twenty-eight (28) days' notice,  which are rated at least A-1
         by Standard & Poor's Corporation or P-1 by Moody's Investors  Services,
         Inc.;

     (g) bonds and debentures issued by domestic corporations which are rated at
least A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Services,
Inc. with a maturity of not more than ninety (90) days;

     (h)  investments in tax free money market funds all of whose assets consist
of securities of the types described in the foregoing clause (f); and

                  (i) investments, redeemable upon not more than seven (7) days'
         notice,  in money market preferred  municipal bond funds that are rated
         at least A by  Standard & Poor's  Corporation  or by Moody's  Investors
         Services, Inc.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended from time to time.

     "Collateral Account" shall mean the Collateral Account described in Section
11.3.1.

                  "Commercial  Letter of Credit Support  Obligations" shall mean
obligations of the any Borrower  incurred in the ordinary course of its business
to purchase inventory to be sold by such Borrower.

     "Commercial  Letters of  Credit"  shall  mean  Letters of Credit  issued in
connection with Commercial Letter of Credit Support Obligations.

     "Commission"  shall mean the  Securities  and  Exchange  Commission  or any
successor entity.

     "Commitment Fee" shall mean the fee payable pursuant to Section 2.11.2.

                  "Commitment  Period" shall mean that period  commencing on the
date hereof and continuing to, but not including, the Termination Date.

                  "Commitments"  shall mean the Revolving Credit Commitments and
the Letter of Credit Commitments, which collectively are in the aggregate amount
set  forth in  Section  2.1 and in the case of each  Lender  are in the  initial
amount  set  forth  with  such  Lender's  signature  on  this  Agreement  or the
Assignment and Acceptance pursuant to which such Lender became a party hereto.

                  "Commonly Controlled Entity" shall mean a Person that is under
common  control with any Borrower or Guarantor  within the meaning of subsection
414(b), (c), (m), (n) or (o) of the Code.

                  "Consolidated  Net Income" shall mean the net income (or loss)
after taxes of the Borrowers and  Guarantors  on a  consolidated  basis for such
period taken as a single  accounting  period determined in conformity with GAAP,
subject to customary  exclusions with respect to extraordinary  and nonrecurring
items.

                  "Contingent  Obligations"  shall mean,  as to any Person,  any
contingent obligation calculated in accordance with GAAP, and in any event shall
include (without duplication) all indebtedness, obligations or other liabilities
of such Person guaranteeing or in effect guaranteeing the payment or performance
of any  indebtedness,  obligation or other liability,  whether or not contingent
(collectively,  the "primary  obligations"),  of any other Person (the  "primary
obligor")  in  any  manner,  whether  directly  or  indirectly,   including  any
indebtedness,  obligation or other liability of such Person, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor,  (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary  obligor or  otherwise  to maintain the net worth or solvency of the
primary obligor, (c) to purchase property,  securities or services primarily for
the purpose of assuring the owner of any such primary  obligation of the ability
of the  primary  obligor to make  payment  of such  primary  obligation,  or (d)
otherwise  to  assure or hold  harmless  the  owner of such  primary  obligation
against loss with respect thereto.

                  "Contractual  Obligations"  shall mean, as to any Person,  any
and all  indebtedness,  obligations  or other  liabilities  of such Person,  now
existing or hereafter  arising,  whether due or not due, absolute or contingent,
liquidated or unliquidated, direct or indirect, express or implied, individually
or jointly with others,  pursuant to the  provisions  of any security  issued by
such Person or any  document,  instrument or agreement to which such Person is a
party or by  which  such  Person  or any of its  property  is or may be bound or
affected.

                  "Credit  Fees" shall mean the credit fees  payable as provided
in Section 2.11.

                  "Current  Assets"  shall have the meaning  afforded  such term
under GAAP.

                  "Current  Liabilities"  shall have the meaning  afforded  such
term under GAAP.

                  "Current  Ratio" shall mean the ratio of (a) Current Assets of
the Borrowers and Guarantors to (b) (i) Current Liabilities of the Borrowers and
Guarantors plus (ii) the outstanding amount of Loans.

                  "Default"  shall mean any of the events  specified  in Section
11.1,  regardless of whether any requirement for the giving of notice, the lapse
of time or both has been satisfied.
                  "Default  Rate"  shall mean the  rate(s)  per annum  otherwise
applicable to Loans from time to time plus two percentage points (2.00).

                  "Dividends"  shall mean, as to any Person for any period,  (a)
dividends,  other  distributions  and other  payments  on account of the capital
stock, or any warrants, options or other rights in respect of any capital stock,
of such  Person or its  Subsidiaries  that are  recorded  by such Person and its
Subsidiaries   on  a  consolidated   basis   (excluding   any  such   dividends,
distributions  and other  payments made solely to such Person or a  wholly-owned
Subsidiary of such Person by a Subsidiary  of such Person),  (b) amounts paid to
purchase, redeem, retire or otherwise acquire for value any of the capital stock
or any warrants, options or other rights in respect of the capital stock of such
Person now or hereafter  outstanding  (excluding any such amounts paid solely to
such Person or a wholly-owned  Subsidiary of such Person by a Subsidiary of such
Person)  and (c) any  assets  segregated  or set  apart  by such  Person  or its
Subsidiaries,  if any,  for a  sinking  or  analogous  fund  for  the  purchase,
redemption or  retirement  or other  acquisition  of any capital  stock,  or any
warrants,  options  or other  rights in respect of any  capital  stock,  of such
Person or its Subsidiaries (excluding any assets so segregated or set apart with
respect to any stock,  warrants,  options or other rights held by a wholly-owned
Subsidiary of such Person); all determined in conformity with GAAP.

     "Dollars" and "$" shall mean lawful money of the United States of America.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time.

     "Event of Default" shall mean any of the events specified in Section 11.1.

     "Facilities"  shall mean the  Revolving  Credit  Facility and the Letter of
Credit Facility.

                  "Federal Funds Rate" shall mean, for any period, a fluctuating
interest  rate per annum equal for each day during  such period to the  weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers,  as published for each
day (or,  if such  day is not a  Business  Day,  for the  immediately  preceding
Business Day) by the Federal Reserve Bank of New York.

                  "Fiscal  Quarter"  shall  mean any three (3) month  accounting
period in a Fiscal Year.

                  "Fiscal  Year"  shall mean the period  ending on the  Saturday
nearest the last day of January of each year.

                  "Funding  Date"  shall  mean each of the  respective  dates on
which the funding of a Borrowing made under this Agreement occurs.

                  "GAAP" shall mean generally accepted accounting  principles in
the United States of America in effect from time to time.

                  "Government  Obligations" shall mean direct obligations of the
United States of America or obligations for the full and prompt payment of which
the full faith and credit of the United States of America is pledged.

                  "Governmental  Authority"  shall  mean any  nation,  province,
state or other political  subdivision  thereof and any government or any natural
person or entity exercising executive, legislative, regulatory or administrative
functions of or pertaining to government.

                  "Guaranteed Obligations" shall mean all the obligations of the
Borrowers guaranteed by the Guarantors pursuant to Article 5.

                  "Guarantors"  shall mean those Subsidiaries of GFC that now or
hereafter  execute this Agreement or any amendment hereto and agree to guarantee
the Obligations of the Borrowers.

     "Guaranty"  shall mean the guaranty of the Obligations of the Borrowers set
forth in Article 5.

                  "Hazardous  Materials"  shall  mean  any  hazardous,  toxic or
dangerous materials, substances,  chemicals, wastes or pollutants that from time
to time are  defined by or  pursuant  to or are  regulated  under any  Hazardous
Materials  Laws,  including  asbestos,   polychlorinated  biphenyls,  petroleum,
petroleum derivatives or by-products, other hydrocarbons,  urea formaldehyde and
any material, substance, pollutant or waste that is defined as a hazardous waste
under RCRA or defined as a hazardous substance under CERCLA.

                  "Hazardous  Materials  Laws"  shall mean all  federal,  state,
regional, county or local laws, statutes, rules, regulations or ordinances,  now
or hereafter in effect, relating to the generation, recycling, use, reuse, sale,
storage,  handling,  transport,  treatment or disposal of  Hazardous  Materials,
including the Comprehensive Environmental Response Compensation Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. ss.9601 et seq. ("CERCLA"), the Resource Conservation and Recovery Act of
1976, as amended by the Solid and Hazardous Waste  Amendments of 1984, 42 U.S.C.
ss.6901  et seq.  ("RCRA"),  the Clean  Air Act,  42 U.S.C.  ss.  7401,  et seq.
("CAA"),  the Toxic Substances  Control Act, 15 U.S.C. ss. 2601 et seq. ("TSCA")
and any rules,  regulations  and  guidance  documents  promulgated  or published
thereunder,  and any  state,  regional,  county  or local  statute,  law,  rule,
regulation  or  ordinance  now or  hereafter  in effect  that  relates to public
health, safety or the discharge,  emission or disposal of Hazardous Materials in
or to air, water, land or groundwater,  to the withdrawal or use of groundwater,
to the  use,  handling  or  disposal  of  asbestos,  polychlorinated  biphenyls,
petroleum,  petroleum  derivatives or  by-products,  other  hydrocarbons or urea
formaldehyde,  to the  treatment,  storage,  disposal or management of Hazardous
Materials, to exposure to Hazardous Materials or to the transportation, storage,
disposal,  management  or  release  of  gaseous  or liquid  substances,  and any
regulation, order, injunction,  judgment,  declaration,  notice or demand issued
thereunder.

                  "Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious  interest rate, if any, that at any time or from time to
time may be  contracted  for,  taken,  reserved,  charged or  received  on debts
outstanding  hereunder  or under the Notes,  as the case may be,  under the laws
applicable to such Lender that are presently in effect or, to the extent allowed
by law,  under such  applicable  laws that may  hereafter  be in effect and that
allow a higher maximum nonusurious interest rate than applicable laws now allow.

                  "Indebtedness" shall mean, as to any Person, all items that in
accordance  with GAAP would be material and would be shown on the balance  sheet
of  such  Person  as a  liability  and  in  any  event  shall  include  (without
duplication)  (a)  indebtedness  for borrowed money or for notes,  debentures or
other  debt  securities,  (b) notes  payable  and drafts  accepted  representing
extensions of credit whether or not representing obligations for borrowed money,
(c) liabilities  for all or any part of the deferred  purchase price of property
or services,  (d) liabilities secured by any lien on any property or asset owned
or held by such Person  regardless of whether the  indebtedness  secured thereby
shall  have  been  assumed  by or is a primary  liability  of such  Person,  (e)
Capitalized Lease Obligations and (f) Contingent Obligations.

                  "Interest  Payment  Date" shall mean,  (a) with respect to any
Base  Rate  Loan,  January  1,  April  1,  July 1 and  October  1 of each  year,
commencing on the first such date after the  applicable  Funding Date,  (b) with
respect to any LIBOR Loan,  the last day of the Interest  Period  applicable  to
such  Loan,  and (c) with  respect  to any Base  Rate  Loan or LIBOR  Loan,  the
Termination Date.

                  "Interest Period" shall mean any interest period applicable to
a LIBOR Loan as determined pursuant to Section 2.14.1.

                  "Interest  Rate  Determination  Date" shall mean each date for
calculating LIBOR for purposes of determining the interest rate in respect of an
Interest Period, which in each case shall be the second (2nd) Business Day prior
to the first (1st) day of the corresponding Interest Period.

     "Investment" shall have the meaning given such term in Section 9.4.

                  "Issuing  Bank" shall mean any Lender which issues one or more
Letters  of Credit  pursuant  to a Letter of Credit  Request  made by  Borrowers
pursuant to Section 2.3.

                  "Last Four Fiscal  Quarters"  shall mean, as at any time,  the
Fiscal Quarter most recently ended plus the  immediately  preceding three Fiscal
Quarters.

                  "Lending  Office" shall mean with respect to any Lender or the
Administrative  Agent the office of each such Lender at the address specified on
the signature pages hereto or in the Assignment and Acceptance pursuant to which
it became a Lender,  or such other  office as any such  Lender from time to time
may specify to the Borrowers and the Administrative Agent.

                  "Letter of Credit Borrowing" shall mean a borrowing consisting
of Letter of Credit  Loans made to the  Borrowers on the same day by the Lenders
ratably according to their respective  Commitments pursuant to the provisions of
Section 2.3.3.

                  "Letter of Credit  Commitments"  shall mean, at any time,  (a)
the  commitment  of the  Lenders  to issue  Letters  of Credit  pursuant  to the
provisions of Section 2.3.1 and (b) the aggregate commitments of all the Lenders
to (i) purchase  participations in the Letter of Credit Liabilities  pursuant to
the  provision  of  Section  2.4 and (ii) make  Letter  of  Credit  Loans to the
Borrowers  during the  Commitment  Period  pursuant to the provisions of Section
2.3.4,  and the  "Letter of Credit  Commitment"  of any Lender at any time shall
mean an  amount  equal  to  such  Lender's  Percentage  multiplied  by the  then
effective  aggregate  Letter of Credit  Commitments  under clause (b) above. The
Letter of Credit  Commitments  are in the aggregate  amount set forth in Section
2.1.

                  "Letter  of Credit  Facility"  shall mean the letter of credit
facility provided by the Lenders pursuant to the Letter of Credit Commitments as
more particularly set forth in Section 2.3.

                  "Letter of Credit Fees" shall have the meaning given such term
in Section 2.11.2.

                  "Letter of Credit  Liabilities"  shall mean all liabilities of
the Borrowers to any Issuing Bank in respect of Letters of Credit, regardless of
whether any such liability is contingent,  and shall consist of the sum, without
duplication,  of (a)  the  amount  available  to be  drawn  or that  may  become
available to be drawn under outstanding Letters of Credit (including all amounts
committed  to be paid by the Issuing Bank  thereunder)  and (b) all amounts that
have been paid or made  available by the Issuing Bank  thereunder  if and to the
extent  the  Issuing  Bank has not  received  reimbursement  from the  Borrowers
pursuant to the terms hereof.

                  "Letter  of Credit  Loans"  shall  mean the Loans  made by the
Lenders to the Borrowers pursuant to the provisions of Section 2.3.3.

                  "Letter of Credit Request" shall mean a request  substantially
in the form of  Exhibit  2.3.2  annexed  hereto  with  respect  to the  proposed
issuance of a Letter of Credit hereunder.

     "Letter of Credit Supportable Obligations" shall mean (a) Commercial Letter
of  Credit  Support  Obligations  and  (b)  Standby  Letter  of  Credit  Support
Obligations.

                  "Letters of Credit" shall mean all Letters of Credit issued by
an Issuing Bank pursuant to the provisions of Section 2.3.1.

                  "LIBOR"  shall mean the rate per annum equal to the product of
Base LIBOR times Statutory Reserves.

                  "LIBOR  Loans"  shall mean  Loans  bearing  interest  at rates
determined by reference to LIBOR.

                  "Lien"  shall  mean,  as to any asset,  (a) any lien,  charge,
claim, mortgage, security interest, pledge or other encumbrance of any kind with
respect  to such  asset,  (b) any  interest  of a vendor  or  lessor  under  any
conditional sale agreement, Capitalized Lease or other title retention agreement
relating to such asset, (c) any reservation, exception, encroachment,  easement,
right-of-way,  covenant, condition,  restriction, lease or other title exception
affecting  such  asset,  or (d)  any  preference,  priority  or  other  security
agreement  or  preferential   arrangement  of  any  kind  or  nature  whatsoever
(including  any  conditional  sale  or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing,  and  the  filing  of  any  financing  statement  under  the  Uniform
Commercial Code or comparable law of any jurisdiction);  provided, however, that
the term Lien shall not include (i) the rights of Tishkoff Enterprises,  Inc. in
shoes and related items owned by Tishkoff  Enterprises,  Inc. and located at any
of the Borrowers'  stores pursuant to the License Agreement dated as of June 11,
1993 between GFC and Tishkoff Enterprises,  Inc., and (ii) the interest of other
vendors in any goods placed with Borrowers for sale by Borrowers on consignment,
but only to the extent  that the value of such goods in the  aggregate  does not
exceed $2,500,000 at any time.

                   "Loan  Documents"  shall mean this Agreement,  the Notes, the
Pledge Agreement, the Letters of Credit and all other documents, instruments and
agreements  now  or  hereafter  executed  or  delivered  pursuant  hereto  or in
connection herewith.

     "Loans" shall mean Revolving Credit Loans and Letter of Credit Loans.

                  "Material  Contract"  shall  mean each  contract  to which any
Borrower  or  Guarantor  is a party  (or by which  it is  bound)  that  requires
payments  (either to or for the benefit of, or by or on behalf of such  Borrower
or  Guarantor)  in excess  of  $2,500,000  in any  twelve-month  period  (a) the
cancellation, non-performance or non-renewal of which by any party thereto would
have a  material  adverse  effect on the  condition  (financial  or  otherwise),
operations or properties of such Borrower or Guarantor, or (b) which is a lease,
license,  management or operating  agreement,  or other similar  agreement  that
creates a possessory  interest in real  property,  or (c) pursuant to which such
Borrower or Guarantor may incur  Indebtedness  for borrowed money or Capitalized
Lease Obligations;  provided,  however, that Material Contract shall not include
purchase  orders for the  purchase of  inventory  entered  into in the  ordinary
course of a Borrower's business.

                  "Multi-Employer  Plan" shall mean any multiple  employer plan,
as defined in Section 4001(a)(3) of ERISA, that is maintained by any Borrower or
Guarantor,  or Subsidiary of any Borrower or Guarantor or a Commonly  Controlled
Entity.

                  "Notes" shall mean the  promissory  notes dated as of the date
hereof,  executed by the Borrowers in favor of the Lenders which shall  evidence
the  indebtedness  of the Borrowers to the Lenders in connection  with the Loans
made pursuant to this Agreement.

                  "Notice of Borrowing" shall mean a notice substantially in the
form of Exhibit 2.2.4 annexed hereto with respect to a proposed Revolving Credit
Borrowing.

                  "Notice  of  Conversion/Continuation"   shall  mean  a  notice
substantially  in the form of Exhibit  2.7.2  annexed  hereto with  respect to a
proposed  conversion  or  continuation  of  Loans  bearing  interest  at a  rate
determined  by  reference  to one  basis to  Loans  bearing  interest  at a rate
determined by reference to an alternative basis pursuant to Section 2.7.

                  "Obligations"  shall mean, as to any Person, all Indebtedness,
obligations  and other  liabilities  of such Person of any kind and  description
owing to the Administrative  Agent, an Issuing Bank or the Lenders,  whether now
existing  or  hereafter  arising,  due  or  not  due,  absolute  or  contingent,
liquidated or unliquidated, direct or indirect, express or implied, individually
or jointly  with  others,  howsoever  evidenced  or  acquired,  pursuant  to the
provisions of this Agreement, the Notes and the other Loan Documents.

                  "Operating  Lease" shall have the meaning  afforded  such term
under GAAP.

                  "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation
established pursuant to subtitle A of Title IV of ERISA.

                  "Percentage" shall mean, as to each Lender, the percentage set
forth with such  Lender's  signature  on this  Agreement or the  Assignment  and
Acceptance pursuant to which such Lender became a party hereto.

                  "Permitted  Liens" shall mean Liens permitted  pursuant to the
provisions of Section 9.2.

                  "Person" shall mean an individual,  corporation,  partnership,
limited  liability  company,  trust,  business trust,  association,  joint stock
company,  joint venture,  pool, syndicate,  sole proprietorship,  unincorporated
organization,  Governmental  Authority or other form of entity not  specifically
listed herein.

                  "Plan" shall mean an employee  pension benefit plan covered by
Title IV of ERISA that is  maintained by any Borrower or Guarantor or a Commonly
Controlled   Entity,   and  shall  include  any  Single  Employer  Plan  or  any
Multi-Employer Plan.

                  "Pledge   Agreement"   shall  mean  the  Pledge  and  Security
Agreement,  substantially in the form of Exhibit 4.1A, executed by GFC, granting
in favor of the  Administrative  Agent for the ratable  benefit of the Lenders a
security interest in the Pledged Stock and all proceeds  thereof,  together with
all books and records pertaining thereto.

                  "Pledged  Stock"  shall  mean all of the  outstanding  capital
stock of SYDOOG,  TREBOR and  GOFAMCLO  owned by GFC and pledged in favor of the
Administrative  Agent for the  ratable  benefit of the  Lenders  pursuant to the
Pledge Agreement.

                  "Principal  Obligor"  shall  mean,  with  respect to a certain
indebtedness  or  obligation,  the  Person  creating,   incurring,  assuming  or
suffering to exist such  indebtedness or obligation  without becoming liable for
same as a surety or guarantor.

                  "Purchase  Money  Debt"  shall  mean (a)  Indebtedness  of any
Borrower or Guarantor that, within thirty (30) days of the purchase of equipment
that constitutes Capital Expenditures in which such Borrower or Guarantor at any
time prior to such purchase had no interest,  is incurred to finance part or all
of (but not more than) the purchase price of such assets,  and (b)  Indebtedness
(i) that  constitutes a renewal,  extension or refunding of, but not an increase
in the principal amount of, Purchase Money Debt that is such by virtue of clause
(a),  and (ii) that is  binding  only upon the  obligor  or  obligors  under the
Purchase Money Debt being renewed, extended or refunded.

                  "Replacement Lender" shall have the meaning given such term in
Section 2.16.

     "Reportable  Event"  shall mean any of the events set forth  under  Section
4043(b) of ERISA or the PBGC regulations thereunder.
 
                 "Requirement  of Law"  shall  mean,  as to any  Person (a) the
partnership   agreement,   certificate   of   incorporation,   bylaws  or  other
organizational or governing documents of such Person; (b) any federal,  state or
local law,  treaty,  ordinance,  rule or  regulation;  (c) any order,  decree or
determination of a court,  arbitrator or other Governmental  Authority,  in each
case  applicable  to or binding  upon such  Person or any of its  property or to
which such person or any of its property is subject.

     "Requisite  Lenders"  shall  mean  at any  time  Lenders  having  at  least
sixty-six and two-thirds percent (66 %) of the Commitments.

                  "Responsible Officer" shall mean, as to any Person, either (a)
its  president  or chief  executive  officer,  or (b) with  respect to financial
matters,  its  president  or  chief  executive  officer  or any  vice  president
designated  in writing  by the chief  executive  officer  to the  Administrative
Agent.

                  "Revolving Credit Borrowing" shall mean a borrowing consisting
of Revolving  Credit Loans made to the  Borrowers on the same day by the Lenders
ratably according to their respective  Commitments pursuant to the provisions of
Section 2.2.
                  "Revolving  Credit  Commitments"  shall mean, at any time, the
commitment of all the Lenders,  collectively,  to make Revolving Credit Loans to
the Borrowers during the Commitment Period pursuant to the provisions of Section
2.2, and the "Revolving Credit  Commitment" of any Lender at any time shall mean
an amount equal to such Lender's  Percentage  multiplied  by the then  effective
aggregate Revolving Credit Commitments.  The Revolving Credit Commitments are in
the aggregate amount set forth in Section 2.1.

                  "Revolving  Credit  Facility" shall mean the revolving  credit
facility provided by the Lenders pursuant to the Revolving Credit Commitments as
more particularly set forth in Section 2.2.

                  "Security Documents" shall mean the Pledge Agreement, together
with all documents,  instruments  and  agreements  now or hereafter  executed or
delivered pursuant thereto or in connection therewith.

                  "Revolving  Credit  Loans"  shall  mean the Loans  made by the
Lenders to the Borrowers pursuant to the provisions of Section 2.2.

                  "Shareholders'  Equity"  shall have the meaning  afforded such
term under GAAP,  provided,  however,  that the value of any  intangible  assets
shall be excluded in calculating such amount.

     "Single  Employer  Plan"  shall mean any Plan that is not a  Multi-Employer
Plan.

                  "Solvent"  shall  mean,  with  respect  to any  Person  on any
particular  date,  that on such  date (a) the fair  value of the  assets of such
Person (both at fair  valuation and at present fair  saleable  value) is, on the
date of determination,  greater than the total amount of liabilities,  including
contingent and unliquidated liabilities, of such Person, (b) such Person is able
to pay all  liabilities of such Person as they mature,  and (c) such Person does
not have  unreasonably  small  capital with which to carry on its  business.  In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities  will be computed at the amount that,  in light of all the facts and
circumstances  existing  at  such  time,  represents  the  amount  that  can  be
reasonably expected to become an actual or matured liability.

                  "Standby Letter of Credit Support  Obligations" shall mean (a)
obligations  of any Borrower  incurred in the ordinary  course of business  with
respect to  workers'  compensation,  surety  bonds and other  similar  statutory
obligations and (b) other  contractual  obligations of any Borrower  approved by
the Requisite Lenders.

     "Standby  Letters  of  Credit"  shall  mean  Letters  of  Credit  issued in
connection with Standby Letter of Credit Support Obligations.

                  "Statutory  Reserves"  shall mean a fraction  (expressed  as a
decimal),  the numerator of which is the number one and the denominator of which
is the  number  one minus  the  aggregate  of the  maximum  reserve  percentages
(including any marginal, special, emergency or supplemental reserves), expressed
as a decimal,  established by the Federal Reserve Board and/or any other banking
authority to which any Lender or any member bank of the Federal  Reserve  System
is subject with respect to LIBOR,  for  Eurocurrency  Liabilities (as defined in
Regulation  D of the Federal  Reserve  Board).  Such reserve  percentages  shall
include those  imposed  under such  Regulation D. LIBOR Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets  that may be  available  from time to time to the Lenders  under such
Regulation D. Statutory  Reserves shall be adjusted  automatically  on and as of
the effective date of any change in any reserve percentage.

                  "Subordinated  Indebtedness"  shall mean,  for any Borrower or
Guarantor, all Indebtedness subordinated in right of payment to the Indebtedness
incurred  hereunder on terms  satisfactory  to  Requisite  Lenders in their sole
discretion.

                  "Subsidiaries"  shall mean, as to any Person (a) a corporation
of which shares of stock having  ordinary  voting power (other than stock having
such  power  only by  reason  of the  occurrence  of a  contingency)  to elect a
majority of the board of  directors  or other  managers  thereof are at the time
owned,  or  the  management  of  which  is  otherwise  controlled,  directly  or
indirectly, through one or more intermediaries, or both, by such Person or (b) a
partnership in which such Person is a general partner or the management of which
is  otherwise   controlled,   directly  or  indirectly,   through  one  or  more
intermediaries or both, by such Person.  The term  "Subsidiaries"  herein,  when
used in reference  to any Borrower or Guarantor  shall be deemed to refer to and
include  any and all  Subsidiaries  of the  Subsidiaries  of  such  Borrower  or
Guarantor.

                  "Termination Date" shall mean May 31, 1998.

                  "Total  Liabilities" shall have the meaning afforded such term
under GAAP.

     "UCC" shall mean the Uniform Commercial Code in the State of Tennessee,  as
in effect from time to time.

         1.2.  Accounting and Commercial  Terms. As used in this Agreement,  all
accounting terms used but not otherwise defined herein shall have the respective
meanings  assigned  to them in  conformity  with  GAAP.  All terms  used but not
otherwise  defined herein that are defined or used in Article 9 of the UCC shall
have the respective meanings assigned to them in such Article.

         1.3. General  Construction.  As used in this Agreement,  the masculine,
feminine and neuter genders and the plural and singular  numbers shall be deemed
to include the others in all cases in which they would so apply.  "Includes" and
"including"  are not  limiting,  and shall be deemed to be  followed by "without
limitation"  regardless  of whether  such words or words of like  import in fact
follow  same.  The word "or" is not  intended  and shall not be  construed to be
exclusive.

         1.4  Defined  Terms;  Headings.  The use of  defined  terms in the Loan
Documents is for convenience of reference and shall not be deemed to be limiting
or to have any other substantive effect with respect to the persons or things to
which  reference  is made  through the use of such  defined  terms.  Article and
section  headings and captions in the Loan  Documents  are included in such Loan
Documents for  convenience  of reference and shall not  constitute a part of the
applicable Loan Documents for any other purpose.

         1.5  References to this  Agreement and Parts  Thereof.  As used in this
Agreement,   unless  otherwise   specified  the  words  "hereof,"  "herein"  and
"hereunder" and words of similar import shall refer to this Agreement  including
all  schedules  and  exhibits  hereto,  as a  whole,  and not to any  particular
provision of this Agreement, and the words "Article",  "Section", "Schedule" and
"Exhibit" refer to articles, sections, schedules and exhibits to this Agreement.

         1.6  Documentary  References.  Any reference  herein to any instrument,
document or agreement,  by whatever terminology used, shall be deemed to include
any  and  all  amendments,  modifications,  supplements,  extensions,  renewals,
substitutions and/or replacements thereof as the context may require.


                                   I. ARTICLE

                           LOANS AND LETTERS OF CREDIT

         2.1.        Commitments; Reductions.

 . The aggregate amount of the Commitments is $100,000,000.  The aggregate amount
of the Revolving Credit Commitments at any time is equal to the aggregate amount
of the Commitments in effect at such time less the aggregate amount of Letter of
Credit  Loans and Letter of Credit  Liabilities  outstanding  at such time.  The
aggregate amount of the Letter of Credit Commitments at any time is equal to the
aggregate  amount of the  Commitments  in effect at such time less the aggregate
amount of Revolving  Credit Loans  outstanding  at such time provided that in no
event shall  Letter of Credit  Commitments  with  respect to Standby  Letters of
Credit exceed $5,000,000.

 . The  Borrowers  shall  have the right,  at any time and from time to time,  to
terminate in whole or permanently  reduce in part,  without  premium or penalty,
the  Commitments in an amount up to the amount by which the  Commitments  exceed
the  aggregate  amount  of the then  outstanding  Loans  and  Letter  of  Credit
Liabilities.  The  Borrowers  shall give not less than ten (10)  Business  Days'
prior written notice to the  Administrative  Agent  designating  the date (which
shall be a Business Day) of such  termination or reduction and the amount of any
reduction.  Promptly after receipt of a notice of such termination or reduction,
the  Administrative  Agent  shall  notify  each  Lender  of the  termination  or
reduction.  Such termination or reduction of the Commitments  shall be effective
on the date specified in the  Borrowers'  notice and shall reduce the Commitment
of each Lender in proportion  to its  Percentage  of the  Commitments.  Any such
reduction of the  Commitments  shall be in a minimum amount of $5,000,000 and in
integral multiples of $1,000,000 in excess thereof.

 . In the event the Termination Date is not extended (which extension shall occur
only if  mutually  agreed upon in writing by the  Borrowers  and the Lenders and
which extension  neither the Borrowers nor the Lenders shall have any obligation
to agree  to) as of one year  prior to the  Termination  Date for an  additional
period of time of at least one (1) year,  each Borrower  shall have the right to
cause letters of credit to be issued for such  Borrower's  account by commercial
banks or other  financial  institutions,  including any of the Lenders,  for the
same purposes for which such Borrower is permitted to cause Letters of Credit to
be issued hereunder,  provided,  however,  that (a) such Borrower shall give the
Administrative Agent notice of the issuance of each such letter of credit on the
day of issuance of such letter of credit,  which notice shall include the amount
of the letter of credit and (b) such  letters of credit must have an  expiration
date not sooner than the Termination  Date. The Commitments shall be permanently
and  irrevocably  reduced by the amount of all  letters of credit  issued on any
Borrower's behalf pursuant to this Section 2.1.3.

 .        2.2.       Revolving Credit Loans

 . Subject to all of the terms and  conditions of this  Agreement  (including the
conditions  set  forth  in  Sections  4.1 and  4.2)  and in  reliance  upon  the
representations and warranties of the Borrowers and Guarantors herein set forth,
each  Lender  hereby  severally  agrees to make  Revolving  Credit  Loans to the
Borrowers from time to time during the Commitment  Period,  in amounts up to its
Percentage  of the  aggregate  Revolving  Credit  Commitments,  for the purposes
identified in Section 2.10. In no event shall (a) the aggregate principal amount
of the  Revolving  Credit Loans from any Lender  outstanding  at any time exceed
such Lender's Revolving Credit Commitment or (b) the aggregate  principal amount
of the Revolving  Credit Loans from all Lenders  outstanding  at any time exceed
the Revolving Credit  Commitments.  Each Lender's  Revolving  Credit  Commitment
shall expire upon the  expiration of the  Commitment  Period,  and all Revolving
Credit Loans shall be paid in full no later than the Termination Date.

 . The  obligations of the Lenders to make  Revolving  Credit Loans under Section
2.2.1  shall be several  and not joint  and,  subject  to  Section  2.14.4,  all
Revolving  Credit  Loans  under  this  Agreement  shall  be made by the  Lenders
simultaneously  and  proportionately  to  their  respective  Percentages  of the
Revolving  Credit  Commitments.  It is understood and agreed that the failure of
any Lender to make its  Revolving  Credit Loan as part of any  Revolving  Credit
Borrowing  under  Section  2.2.1  shall  not  relieve  any  other  Lender of its
obligation  to make its  Revolving  Credit Loan as  provided  in Section  2.2.1.
Neither the  Administrative  Agent nor any Lender shall be  responsible  for the
failure of any other Lender to make a Revolving  Credit Loan as provided  herein
nor shall the Revolving Credit Commitment of any Lender be increased as a result
of the default by any other  Lender in such other  Lender's  obligation  to make
Revolving Credit Loans hereunder.

 . Amounts borrowed by the Borrowers under the Revolving  Credit  Commitments may
be prepaid and reborrowed from time to time to during the Commitment Period. The
aggregate  amount of Revolving Credit Loans made on any Funding Date shall be in
the  minimum  amount  of  $5,000,000  and  shall  be in  integral  multiples  of
$1,000,000 in excess thereof.


 .                   2.2.4  Notice of Borrowing

                    a)  Delivery of Notice.  Whenever  the  Borrowers  desire to
         borrow under  Section  2.2,  they shall  deliver to the  Administrative
         Agent a Notice of Borrowing no later than 12:00 noon (Eastern  time) at
         least one (1) Business Day in advance of the proposed Funding Date. The
         Notice of Borrowing shall specify (i) the proposed  Funding Date (which
         shall be a Business  Day),  (ii) the amount of the  proposed  Revolving
         Credit  Borrowing,  (iii) which  Borrower  shall receive the Borrowing,
         (iv) whether the proposed  Revolving  Credit  Borrowing shall be in the
         form of Base Rate  Loans or LIBOR  Loans,  and (v) in the case of LIBOR
         Loans, the requested Interest Period. In lieu of delivering a Notice of
         Borrowing,  the Borrowers may give the Administrative  Agent telephonic
         notice by the required time of notice of any proposed  Borrowing  under
         this  Section  2.2.4;  provided,  however,  that such  notice  shall be
         promptly  confirmed  in writing by delivery of a Notice of Borrowing to
         the  Administrative  Agent  on or  prior  to the  Funding  Date  of the
         requested  Revolving  Credit Loans.  The execution and delivery of each
         Notice of Borrowing  shall be deemed a  representation  and warranty by
         the Borrowers that the requested  Revolving Credit Loans may be made in
         accordance  with,  and will  not  violate  the  requirements  of,  this
         Agreement, including those set forth in Section 2.2.1.

                    (b)  No  Liability  for  Telephonic  Notices.   Neither  the
         Administrative  Agent nor any Lender  shall incur any  liability to the
         Borrowers in acting upon any  telephonic  notice given pursuant to this
         Section 2.2.4 that the  Administrative  Agent believes in good faith to
         have been given by a duly authorized officer or other person authorized
         to borrow on behalf of the  Borrowers or for  otherwise  acting in good
         faith  under this  Section  2.2.4 and,  upon the  funding of  Revolving
         Credit Loans by the Lenders in accordance with this Agreement  pursuant
         to any telephonic notice, the Borrowers shall have effected a Revolving
         Credit Borrowing hereunder.

                    (c)  Notice  Irrevocable.  A Notice of  Borrowing  for LIBOR
         Loans (or a telephonic  notice in lieu thereof) shall be irrevocable on
         and  after  the  related  Interest  Rate  Determination  Date,  and the
         Borrowers  shall be  bound  to make a  Revolving  Credit  Borrowing  in
         accordance therewith.

 . Promptly after receipt of a Notice of Borrowing (or telephonic  notice in lieu
thereof),  the  Administrative  Agent shall  notify each Lender of the  proposed
Revolving Credit  Borrowing in writing,  or by telephone  promptly  confirmed in
writing.  Each  Lender  shall  make the  amount  of its  Revolving  Credit  Loan
available to the  Administrative  Agent,  in  immediately  available  (same day)
funds, at the Lending Office of the  Administrative  Agent, not later than 11:00
a.m. (Eastern time) on the Funding Date. The Administrative Agent shall make the
proceeds of such Revolving  Credit Loans available to the Borrower  specified in
the Notice of Borrowing on such Funding Date by causing an amount of immediately
available  (same day) funds equal to the proceeds of all such  Revolving  Credit
Loans received by the Administrative Agent to be credited to the account of such
Borrower at such office of the Administrative Agent.

 .        2.3.  Letters of Credit

 . The  Borrowers  may request any Lender  (other than  Wachovia Bank of Georgia,
N.A.) at any time and from time to time during the  Commitment  Period to issue,
and  subject  to and upon all of the  terms  and  conditions  of this  Agreement
(including  the  conditions  set forth in Sections  6.1 and 6.2) and in reliance
upon the  representations  and warranties of the Borrowers and Guarantors herein
set forth such  Lender as an Issuing  Bank shall  issue,  for the account of any
Borrower (as  specified in the specific  request of the  Borrowers)  and for the
benefit of the holder(s) (or any trustee,  agent or other representative of such
holder(s)) of Letter of Credit  Supportable  Obligations of such Borrower one or
more irrevocable standby or direct-pay letters of credit in the form customarily
used by such Issuing  Bank,  or in such other form as has been  approved by such
Issuing Bank and the  Administrative  Agent, in support of such Letter of Credit
Supportable  Obligations;  provided,  however, that (a) each Letter of Credit by
its terms shall  terminate no later than one (1) year after the date of issuance
(or the date of the most recent extension,  as the case may be), but in no event
later than thirty (30) days prior to the  Termination  Date, and (b) in no event
shall any Letter of Credit be issued if the  issuance  thereof  would  cause the
aggregate  amount of the then  outstanding  Letter of Credit Loans and Letter of
Credit  Liabilities  to exceed  the  aggregate  amount  of the  Letter of Credit
Commitments then in effect.

 . At least one (1)  Business  Day  prior to (i) the date on which the  Borrowers
desire that a Letter of Credit be issued hereunder or (ii) the date on which the
Borrowers desire that the expiration date of an outstanding  Letter of Credit be
extended,  as the case may be, the  Borrowers  shall deliver to the Issuing Bank
selected by Borrowers and to the Administrative  Agent (who shall provide a copy
to each Lender) a Letter of Credit Request therefor.  The execution and delivery
of each Letter of Credit Request shall be deemed a  representation  and warranty
by the Borrowers that the requested  Letter of Credit  issuance or extension may
be accomplished in accordance  with, and will not violate the  requirements  of,
this Agreement,  including  those set forth in Section 2.3.1.  Unless an Issuing
Bank has received  notice from the  Administrative  Agent or  Requisite  Lenders
before it issues or extends the requested Letter of Credit that a Default exists
or that the requested  issuance or extension  would violate the  requirements of
this Agreement, including those set forth in Section 2.3.1, then an Issuing Bank
may issue or extend,  as the case may be, the requested Letter of Credit for the
account of the Borrower  specified in the Borrowers'  request in accordance with
the Issuing Bank's usual and customary practices. Upon the issuance or extension
of  any  Letter  of  Credit,   the  Issuing  Bank  shall  promptly   notify  the
Administrative Agent and each Lender of such issuance or extension, which notice
to the  Administrative  Agent  shall be  accompanied  by a copy of the Letter of
Credit  so  issued  or  the   instrument(s)   evidencing   such   extension.   .
Notwithstanding  anything to the  contrary  contained  in Section 2.3 or Section
3.2,  when an Issuing Bank shall make any payment  under any Existing  Letter of
Credit or Letter of Credit and the  conditions set forth in Sections 6.1 and 6.2
shall have been  fulfilled,  the amount of such  payment  by the  Issuing  Bank,
unless  immediately  paid by Borrowers  from their own funds or from a Swingline
Loan  pursuant to Section  2.17.1  below,  shall  constitute  a Letter of Credit
Borrowing  by the  Borrowers  on the date of such  payment,  such  Borrowing  to
consist  of Base Rate  Loans  made by each  Lender  in an  amount  equal to such
Lender's Percentage of the amount of such payment;  provided,  however,  that if
the  conditions of Sections 6.1 and 6.2 have not been  fulfilled,  the amount so
drawn shall be payable by the Borrowers in accordance  with the terms of Section
3.2.  Subject to all of the terms and  conditions  set forth in this  Agreement,
upon receipt of notice of any such payment by the Issuing Bank under an Existing
Letter of Credit or Letter of Credit, the  Administrative  Agent shall establish
the  appropriate  Letter  of  Credit  Borrowing  effective  on the  date  of the
corresponding payment under such Existing Letter of Credit or Letter of Credit.

 . The  obligations  of the Lenders to make Letter of Credit Loans under  Section
2.3.4 shall be several and not joint,  and all Letter of Credit Loans under this
Agreement shall be made by the Lenders  simultaneously  and  proportionately  to
their  respective  Percentages  of  the  Letter  of  Credit  Commitments.  It is
understood  and  agreed  that the  failure  of any  Lender to make its Letter of
Credit Loan as part of any Letter of Credit  Borrowing under Section 2.3.3 shall
not relieve any other Lender of its obligation to make its Letter of Credit Loan
as provided in Section 2.3.3.  Neither the  Administrative  Agent nor any Lender
shall be  responsible  for the  failure of any other  Lender to make a Letter of
Credit Loan as provided herein nor shall the Letter of Credit  Commitment of any
Lender be increased as a result of the default by any other Lender in such other
Lender's obligation to make Letter of Credit Loans hereunder.

 .        2.4.       Participations in Letter of Credit Liabilities

 . Each Lender shall be deemed to have irrevocably and unconditionally  purchased
and received  from each Issuing Bank,  without  recourse or warranty and without
any  further  action  on the  part  of any  party,  an  undivided  interest  and
participation to the extent of such Lender's  Percentage in all Letter of Credit
Liabilities  as to each Letter of Credit and any security  therefor or guarantee
relating thereto.

 . The  Issuing  Bank  shall  notify  the  Administrative  Agent and each  Lender
promptly  after the  presentation  of any draft and  certificate  or  equivalent
documents to the Issuing Bank in  connection  with any drawing under a Letter of
Credit not  reimbursed by or on behalf of the Borrowers on the date such drawing
is made.

 . Each of the Lenders, shall, on or before 11:00 a.m. (Eastern time) on the date
of any drawing under a Letter of Credit  (including any drawing or payment under
an  Existing  Letter  of  Credit  that  results  in a Letter  of  Credit  Loan),
unconditionally  pay  to  the  Administrative  Agent,  for  distribution  by the
Administrative  Agent to the Issuing  Bank,  such  Lender's  Percentage  of such
drawing; provided, however, that, if the Borrowers should pay in full or in part
such drawing on the date  thereof,  the  obligation of each Lender to pay to the
Issuing Bank  pursuant to this Section  2.4.3 such  Lender's  Percentage of such
drawing shall be reduced by the amount equal to such Lender's Percentage of such
payment by the  Borrowers.  Amounts  paid in excess of the net amount so owed by
each Lender to the Issuing  Bank shall  promptly be refunded by the Issuing Bank
to the Administrative  Agent for distribution by the Administrative Agent to the
respective Lenders.

 . If any Lender shall fail to pay its  Percentage  of any drawing under a Letter
of Credit as provided in Section  2.4.3 above,  the Issuing Bank shall be deemed
to have advanced funds on behalf of such Lender. Any advance made by the Issuing
Bank on behalf of a Lender  hereunder and not paid by such Lender to the Issuing
Bank shall  bear  interest  for each day from the day such  payment is due until
such  payment  shall be paid in full at a rate per  annum  equal to the  Federal
Funds Rate or any other rate  customarily  used by banks for the  correction  of
errors among banks, but in no event to exceed the Highest Lawful Rate, and shall
be repaid by  application  by the  Administrative  Agent (for the account of the
Issuing  Bank) of any payment that such Lender  otherwise is entitled to receive
under this Agreement.  Pending repayment,  each such advance shall be secured by
such  Lender's  participation  interest in the Letter of Credit drawn upon,  the
Letter of Credit Liabilities  arising therefrom and any security  therefor,  and
the Issuing  Bank shall be  subrogated  to such  Lender's  rights  hereunder  in
respect thereof.

 . The  obligation  of each Lender to pay to the  Administrative  Agent,  for the
benefit  of the  Issuing  Bank and the other  Lenders,  its  Percentage  of each
drawing under a Letter of Credit not indefeasibly  repaid by the Borrowers shall
be unconditional  and irrevocable,  shall not be subject to any qualification or
exception whatsoever,  shall be made in accordance with the terms and conditions
of this  Agreement  under all  circumstances  and shall be binding in accordance
with the  terms  and  conditions  of this  Agreement  under  all  circumstances,
including the following circumstances:

                    (a)  any  lack  of  validity  or   enforceability   of  this
         Agreement,  or any other instrument,  document or agreement relating to
         the transactions that are the subject thereof;

                    (b) the  existence of any claim,  set-off,  defense or other
         right that the Borrowers or any Lender may have at any time against any
         other,  the  Administrative  Agent, the Issuing Bank, any Lender or any
         other  Person,   whether  in  connection  with  this   Agreement,   the
         transactions   contemplated   herein   or   therein   or  any   related
         transactions;

                    (c) any draft,  statement or other document  presented under
         or in connection with any Letter of Credit, this Agreement or any other
         Loan Document proving to be forged, fraudulent, invalid or insufficient
         in any respect or any  statement  therein being untrue or inaccurate in
         any respect;

     (d) the  surrender or  impairment  of any security for the  performance  or
observance of any of the terms of this Agreement;

     (e) the occurrence or continuance of any Default or Event of Default;

                    (f)  payment  by the  Issuing  Bank under a Letter of Credit
         against  presentation  of a draft or  certificate  that does not comply
         with the terms of the  Letter of Credit,  except  for any such  payment
         resulting  from  the  Issuing   Bank's  gross   negligence  or  willful
         misconduct; or

                    (g)      any other reason.

 . Upon request by the  Administrative  Agent from time to time, the Issuing Bank
shall advise the Administrative  Agent and the Lenders as to the various amounts
of the outstanding  Letter of Credit  Liabilities as shown on the records of the
Issuing Bank.

 .        2.5.       Borrowers' Obligations Absolute

 . The obligations of the Borrowers under this Agreement in respect of any Letter
of Credit and under any other agreement or instrument  relating to any Letter of
Credit shall be  unconditional  and  irrevocable,  and shall be paid strictly in
accordance  with  the  terms  of this  Agreement  and such  other  agreement  or
instrument under all  circumstances,  to the extent permitted by law,  including
the following circumstances:

     (a) any lack of validity or enforceability of any of the Loan Documents, or
any other  instrument,  document or agreement  relating to the transactions that
are the subject thereof;

                    (b) any change in the time,  manner or place of payment  of,
         or in any other term of, all or any of the obligations of the Borrowers
         in respect of the Letters of Credit or any other amendment or waiver of
         or any consent to departure from all or any of the Loan Documents;

                    (c) the  existence of any claim,  set-off,  defense or other
         right that the Borrowers  may have at any time against any  beneficiary
         or any  transferee  of a Letter of Credit (or any  Persons for whom any
         such  beneficiary  or any such  transferee  may be acting),  any of the
         Lenders,  the Issuing  Bank,  the  Administrative  Agent,  or any other
         Person,  whether  in  connection  with  the  Loan  Documents,   or  the
         transactions  contemplated hereby or by the other Loan Documents or any
         unrelated transaction;

                    (d) any draft,  statement or other document  presented under
         or in connection with any Letter of Credit, this Agreement or any other
         Loan Document proving to be forged, fraudulent, invalid or insufficient
         in any respect or any  statement  therein being untrue or inaccurate in
         any respect;

                    (e)  payment  by the  Issuing  Bank under a Letter of Credit
         against  presentation  of a draft or  certificate  that does not comply
         with the terms of the  Letter of Credit,  except  for any such  payment
         resulting  from  the  Issuing   Bank's  gross   negligence  or  willful
         misconduct;

     (f) any consequences  arising from causes beyond the control of the Issuing
Bank; and

                    (g) any other circumstances or happening whatsoever, whether
         or not similar to any of the foregoing, that might otherwise constitute
         a defense available to, or a discharge of, the Borrowers.

 . No action taken or omitted by the Issuing Bank under or in connection with the
Letters of Credit or the related  applications,  agreements or certificates,  if
taken or  omitted  in good  faith  and not as a result  of gross  negligence  or
willful misconduct on the part of the Issuing Bank, shall put the Administrative
Agent,  the Issuing  Bank or any Lender  under any  resulting  liability  to the
Borrowers.

 .        2.6.       Interest

 . Subject to Section  2.6.3,  the unpaid  principal  balances of the Loans shall
bear interest from their respective  Funding Dates through maturity  (whether by
acceleration or otherwise) (including  post-petition  interest in any proceeding
under applicable  bankruptcy laws) at a rate determined by reference to the Base
Rate or LIBOR.  The applicable  basis for  determining  the rate of interest for
Revolving  Credit Loans shall be selected by the  Borrowers at the time a Notice
of  Borrowing  is given  pursuant  to  Section  2.2.4 or at the time a Notice of
Conversion/Continuation  is given  pursuant  to Section  2.7.2.  Each  Letter of
Credit Loan shall be a Base Rate Loan unless and until converted to a LIBOR Loan
as provided in Section 2.7. If on any day any Loan is  outstanding  with respect
to which notice has not been delivered to the Administrative Agent in accordance
with the terms of this Agreement  specifying the basis for  determining the rate
of  interest,  then for that day such Loan shall  bear  interest  determined  by
reference to the Base Rate. The Loans shall bear interest as follows:

                    (a) if a Base  Rate  Loan,  then at a  fluctuating  rate per
         annum equal to the Base Rate, as it varies from time to time; or

                    (b) if a LIBOR  Loan,  then at a rate per annum equal to the
         sum of LIBOR plus the Applicable LIBOR Margin.

 . Upon the  occurrence and during the  continuance  of an Event of Default,  the
unpaid  principal  balances  of the  Loans  and,  to  the  extent  permitted  by
applicable law, any unpaid  interest  accrued in respect of the Loans shall bear
interest at the Default Rate, but in no event to exceed the Highest Lawful Rate;
provided,  however,  that in the case of LIBOR Loans, upon the expiration of the
Interest  Period in effect at the time any such  increase  in  interest  rate is
effective,  such  LIBOR  Loans  shall  thereupon  become  Base  Rate  Loans  and
thereafter bear interest at the  corresponding  Default Rate, but in no event to
exceed the Highest Lawful Rate. Interest accruing pursuant to this Section 2.6.2
shall be payable upon demand.

 . Each determination by the Administrative  Agent of an interest rate under this
Agreement  shall be  conclusive  and binding for all purposes,  absent  manifest
error.

         .          2.7.   Conversion or Continuation

 . Subject to the provisions of Section 2.14, the Borrowers shall have the option
(a) at any time to convert all or any part of any outstanding Base Rate Loans in
an aggregate  minimum amount of $5,000,000 and integral  multiples of $1,000,000
in excess of that  amount  from Base Rate Loans to LIBOR  Loans and (b) upon the
expiration of any Interest  Period  applicable to a specific  Borrowing of LIBOR
Loans,  to  continue  all or any portion of such Loans in an  aggregate  minimum
amount of  $5,000,000  and integral  multiples of  $1,000,000  in excess of that
amount as LIBOR Loans,  and the  succeeding  Interest  Period of such  continued
LIBOR  Loans  shall  commence  on the  expiration  date of the  Interest  Period
previously applicable thereto.

 . The  Borrowers  shall  deliver  a  Notice  of  Conversion/Continuation  to the
Administrative  Agent no later than 12:00 noon  (Eastern  time) at least one (1)
Business Day in advance of the proposed  conversion/continuation  date. A Notice
of     Conversion/Continuation     shall     specify     (a)    the     proposed
conversion/continuation  date (which shall be a Business Day), (b) the aggregate
amount  of Loans  to be  converted/continued,  (c) the  nature  of the  proposed
conversion/continuation,  and  (d) the  requested  Interest  Period.  In lieu of
delivering  a Notice  of  Conversion/Continuation,  the  Borrowers  may give the
Administrative  Agent  telephonic  notice by the  required  time of any proposed
conversion/continuation  under this Section 2.7;  provided,  however,  that such
notice   shall   be   promptly   confirmed   in   writing   by   a   Notice   of
Conversion/Continuation  delivered to the Administrative  Agent on or before the
proposed conversion/continuation date. The execution and delivery of each Notice
of Conversion/Continuation  shall be deemed a representation and warranty by the
Borrowers that the requested  conversion/continuation  may be made in accordance
with, and will not violate the requirements of, this Agreement,  including those
set forth in Sections 2.7.1 and 2.14.1.

 . Promptly after receipt of a Notice of  Conversion/Continuation  (or telephonic
notice in lieu thereof),  the  Administrative  Agent shall notify each Lender of
the proposed  conversion or continuation.  Neither the Administrative  Agent nor
the  Lender  shall  incur any  liability  to the  Borrowers  in acting  upon any
telephonic  notice referred to above that the  Administrative  Agent believes in
good  faith to have been  given by a duly  authorized  officer  or other  person
authorized  to act on behalf of the  Borrowers or for  otherwise  acting in good
faith  under  this  Section  2.7  and,  upon   conversion/continuation   by  the
Administrative   Agent  in  accordance  with  this  Agreement  pursuant  to  any
telephonic notice,  the Borrowers shall have effected a  conversion/continuation
of Loans hereunder.

 . Except as provided in Section 3.4.5, a Notice of Conversion/Continuation shall
be irrevocable on and after the related  Interest Rate  Determination  Date, and
the  Borrowers  shall be bound to convert or  continue  such Loan in  accordance
therewith.

 . In the event any LIBOR  Loan is unpaid  upon the  expiration  of the  Interest
Period applicable thereto and a Notice of  Conversion/Continuation  has not been
given in the manner provided in Section 2.7.2, such LIBOR Loan shall,  effective
as of the last day of such Interest Period, become a Base Rate Loan.

 . Each Loan made by a Lender to the Borrowers  pursuant to this Agreement  shall
be evidenced by a Note of each Borrower in the form  attached  hereto as Exhibit
2.8  payable  to the order of such  Lender in an amount  equal to such  Lender's
Percentage of the  aggregate  amount of the  Commitments.  Each Lender hereby is
authorized to record and endorse the date and principal amount of each Loan made
by it, and the amount of all payments and  prepayments of principal and interest
made to such Lender with  respect to such  Loans,  on a schedule  annexed to and
constituting a part of such Lender's Note from each Borrower,  which recordation
and endorsement  shall constitute prima facie evidence of the Loans made by such
Lender to such  Borrower and payments  made by Borrowers to such Lender,  absent
manifest error;  provided,  however,  that (a) failure by any Lender to make any
such  recordation or endorsement  shall not in any way limit or otherwise affect
the obligations of such Borrower or the rights and remedies of the Lenders under
this  Agreement or the Notes,  and (b) payments of principal and interest on the
Loans to the  Lenders  shall not be  affected  by the  failure  to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  the Lenders hereby are authorized,  at their option, to record the
payments or prepayments on their respective books and records in accordance with
their usual and customary  practice,  which  recordation  shall constitute prima
facie  evidence  of the  Loans  made by the  Lenders  to the  Borrowers  and the
payments and prepayments  made by the Borrowers to the Lenders,  absent manifest
error.

 . The Administrative  Agent may assume that each Lender has made the proceeds of
its Loans available to the  Administrative  Agent on the  corresponding  Funding
Date in the event the applicable  conditions  precedent to funding the requested
Loans set forth in Article 6 have been  satisfied or waived in  accordance  with
Section 12.3, and the  Administrative  Agent, in its sole  discretion,  may, but
shall not be  obligated  to,  advance  all or any  portion  of the amount of any
requested  Borrowing  on such Funding  Date to the  Borrower  designated  by the
Borrowers to receive such requested Borrowing prior to receiving the proceeds of
the  corresponding  Loans  from the  Lenders.  If the  Administrative  Agent has
advanced  proceeds of any Loan to such Borrower on behalf of any Lender and such
Lender fails to make available to the Administrative  Agent its Percentage share
of such Loan as required  by Sections  2.2 or 2.3.4,  the  Administrative  Agent
shall be entitled to recover  such  amount on demand from such  Lender.  If such
Lender does not pay such amount forthwith upon the Administrative Agent's demand
therefor,  the Administrative Agent shall notify the Borrowers and the Borrowers
shall pay such amount to the Administrative Agent. The Administrative Agent also
shall be entitled to recover from such Lender interest at the Federal Funds Rate
or any other rate  customarily  used by banks for the correction of errors among
banks,  but in no event to exceed the  Highest  Lawful  Rate,  on such amount so
advanced  on behalf of a Lender for each day from the date such  amount was made
available by the  Administrative  Agent to the Borrowers to the date such amount
is recovered by the  Administrative  Agent, with interest at the applicable rate
for such Loan.  Nothing  herein  shall be deemed to relieve  any Lender from its
obligation to fulfill such Lender's  Commitments or to prejudice any rights that
the  Administrative  Agent or the  Borrowers  may have  against  any Lender as a
result of any default by such Lender hereunder.

 . The proceeds of the Revolving Credit Loans will be used by the Borrowers,  for
working  capital  purposes  and  for  other  general  corporate  or  partnership
purposes,  and will not be used by the Borrowers  for any purpose  prohibited by
the terms of this  Agreement or by any law. The proceeds of the Letter of Credit
Loans will be used solely to  reimburse  the Issuing Bank for amounts paid by it
in  respect of  drawings  on  Letters  of Credit  incurred  for Letter of Credit
Supportable  Obligations  and will not be used by the  Borrowers for any purpose
prohibited by the terms of this Agreement or by any law.

 . In consideration for the obligations of the Administrative  Agent, the Issuing
Bank and the Lenders set forth  herein,  the  Borrowers  shall pay the following
credit fees:

 . In consideration  of each Lender's  agreement to participate in the Facilities
as provided herein, the Borrowers shall pay to each Lender a per annum fee in an
amount equal to twenty  one-hundredths  of one percent  (0.20%) of such Lender's
Percentage  of  the  Commitments  hereunder.   This  fee  shall  be  payable  in
quarter-annual installments, in advance, on each January 1, April 1, July 1, and
October 1 of each year based upon the amount of  Commitments as of each date and
calculated based upon a 365-day year and the actual number of days elapsed.

 . The  Borrowers  agree to pay to each Issuing Bank annual letter of credit fees
with respect to each Standby Letter of Credit issued by such Issuing Bank on the
date of  issuance  of each such  Standby  Letter of Credit,  equal to the stated
amount  of each such  Standby  Letter of  Credit  multiplied  by the  Applicable
Standby  Letter of Credit Fee  Percentage  and the  fraction of a year that such
Standby  Letter of Credit is to be outstanding  calculated  based upon a 365-day
year and the actual number of days to elapse. The Borrowers further agree to pay
to each  Issuing  Bank  annual  letter  of  credit  fees  with  respect  to each
Commercial  Letter of Credit  issued by such  Issuing Bank on the earlier of (i)
the termination  date of each such Commercial  Letter of Credit or (ii) the date
each such  Commercial  Letter of Credit is drawn upon in an amount  equal to the
stated  amount  of each such  Commercial  Letter  of  Credit  multiplied  by the
Applicable Commercial Letter of Credit Fee Percentage and the fraction of a year
that such Commercial  Letter of Credit was outstanding  (calculated based upon a
365-day  year  and the  actual  number  of days  elapsed).  The  fees to be paid
pursuant to this Section 2.11.2 are  collectively  referred to herein as "Letter
of Credit  Fees".  Each  Issuing Bank shall pay to the  Administrative  Agent no
later than the last day of each quarter and on the  Termination  Date all Letter
of Credit Fees received by such Issuing Bank during such quarter,  together with
a summary of how such fees were calculated,  and the Administrative  Agent shall
distribute  all  Letter of Credit  Fees to each  Lender  in  proportion  to that
Lender's  Percentage  on January 1, April 1, July 1 and  October 1 of each year,
and on the Termination Date.

 . Pursuant to one or more separate  agreements with the Issuing Bank,  Borrowers
shall pay to the  Issuing  Bank its normal  and  customary  fees  charged by the
Issuing Bank upon the establishment of any Letter of Credit,  upon any amendment
or transfer of a Letter of Credit and upon the payment of any drawing  under any
Letter of Credit.

                    2.11.4 Amendment Fee.  Borrowers agree to pay to the Lenders
as of the  effective  date of this  Amended  and  Restated  Credit  Agreement  a
one-time amendment fee in the aggregate amount of $25,000, which amount shall be
divided between the Lenders pro rata in accordance with each Lender's Percentage
of the Commitments hereunder.

 . To the extent  permitted  by  applicable  law,  all  computations  of fees and
interest under this Agreement  payable in respect of any period shall be made by
the  Administrative  Agent (a) with  respect to any LIBOR Loan on the basis of a
360-day year, in each case for the actual  number of days  (including  the first
day but excluding the last day)  occurring in the period for which such interest
is payable  and (b) with  respect to any Base Rate Loan and all Letter of Credit
Fees, on the basis of a 365-day year, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such fees or interest are payable.  In computing interest on any Loan, the
date of the making of such Loan or the first day of an Interest  Period,  as the
case may be, shall be included and the date of payment or the expiration date of
an Interest Period,  as the case may be, shall be excluded;  provided,  however,
that if a Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Loan.

 . For  purposes  of  interest  and  fee  computations  hereunder  involving  the
Applicable  LIBOR  Margin,  the  Applicable  Commercial  Letter  of  Credit  Fee
Percentage and the  Applicable  Standby  Letter of Credit Fee  Percentage,  such
margins and percentages shall be determined as follows:

 .  The Applicable LIBOR Margin shall be one percent (1.00%).

     . The Applicable Commercial Letter of Credit Fee Percentage shall be ninety
one-hundredths of one percent (.90%).

     . The  Applicable  Standby  Letter of Credit  Fee  Percentage  shall be one
percent (1.00%).

 . Notwithstanding  other provisions of this Agreement,  the following provisions
shall govern with respect to LIBOR Loans as to the matters covered:

 . By giving a Notice of Borrowing pursuant to Section 2.2.4, the Borrowers shall
have the option,  subject to the other  provisions  of this Section  2.14.1,  to
specify  whether the Interest  Period  commencing on the date specified  therein
shall be a one, two, three, or six-month period; provided that:

                    (a) in the case of immediately  successive Interest Periods,
         each successive  Interest Period shall commence on the day on which the
         next preceding Interest Period expires;

                    (b) if any Interest  Period  otherwise would expire on a day
         that is not a Business Day,  that Interest  Period shall be extended to
         expire on the next succeeding Business Day; provided,  however, that if
         any such Interest Period would otherwise  expire on a day that is not a
         Business Day but is a day of the month after which no further  Business
         Day occurs in that month,  that  Interest  Period  shall  expire on the
         immediately preceding Business Day;

                    (c) any Interest Period that begins on the last Business Day
         of a  calendar  month  (or on a day for which  there is no  numerically
         corresponding  day in the  calendar  month at the end of such  Interest
         Period) shall, subject to paragraph (d) below, end on the last Business
         Day of a calendar month; and

     (d) no Interest Period shall extend beyond the Termination Date.

 . As soon as is practicable after 11:00 a.m. (Eastern time) on the Interest Rate
Determination   Date,   the   Administrative   Agent  shall   determine   (which
determination  shall,  absent manifest  error, be final,  conclusive and binding
upon all  parties)  the  interest  rate that shall  apply to the LIBOR Loans for
which an interest  rate is then being  determined  for the  applicable  Interest
Period and shall  promptly  give  notice  thereof  (in  writing or by  telephone
confirmed in writing) to the Borrowers and to each Lender.

 .  In  the  event  the   Administrative   Agent  shall  have  determined  (which
determination  shall be conclusive  and binding absent  manifest  error) that by
reason of  circumstances  affecting  the  London  interbank  Eurodollar  market,
adequate and  reasonable  means do not exist for  ascertaining  Base LIBOR,  the
Administrative   Agent   forthwith   shall  give   telephonic   notice  of  such
determination  and of the  comparable  source by which the rate of interest  for
LIBOR Loans shall be determined,  which notice shall be confirmed in writing, to
the Borrowers and to each Lender.

 .  Notwithstanding  any other provisions of this Agreement,  if any law, treaty,
rule or regulation or determination of a court or other governmental  authority,
or any change therein or in the  interpretation  or application  thereof,  shall
make it unlawful for any Lender to make or maintain LIBOR Loans, as contemplated
by this  Agreement,  then,  and in any  such  event,  such  Lender  shall  be an
"Affected  Lender" and shall  promptly  give notice (by  telephone  confirmed in
writing)  to the  Borrowers  and the  Administrative  Agent  (which  notice  the
Administrative  Agent shall promptly  transmit to each Lender in writing,  or by
telephone confirmed in writing) of such determination, and the obligation of the
Affected  Lender to make LIBOR Loans shall be terminated,  and its obligation to
maintain its LIBOR Loans during such period shall be  terminated  at the earlier
to occur of the  termination of the last Interest  Period then in effect or when
required by law.  Thereafter,  and until such notice has been  withdrawn  by the
Affected  Lender,  the Affected  Lender shall have no  obligation  to make LIBOR
Loans,  and any LIBOR Loans of the  Affected  Lender then  outstanding  shall be
converted  into  Base  Rate  Loans as of the end of the  corresponding  Interest
Period for each.

 . Unless all Lenders shall otherwise  agree,  after the occurrence of and during
the continuance of a Default or an Event of Default, the Borrowers may not elect
to have a Loan be made or continued as, or converted to, a LIBOR Loan.

 . The Borrowers shall  reimburse the  Administrative  Agent, on demand,  for all
reasonable  attorneys'  and  paralegals'  fees and  expenses  of  counsel to the
Administrative  Agent,  all fees and expenses  for title,  lien and other public
records searches,  all duplicating  expenses,  corporation  search fees, and all
other  customary  fees  and  expenses   incurred  in  connection  with  (a)  the
negotiation,  documentation and closing of the transactions contemplated hereby,
and (b) the perfection of or the continued  perfection of the security interests
contemplated  hereby.  The obligations  described in this Section 2.15 regarding
the  payment  of  expenses  are  independent  of all  other  obligations  of the
Borrowers  hereunder,  shall  survive  the  expiration  or  termination  of  the
Commitments   and  shall  be  payable   regardless   of  whether  the  financing
transactions contemplated by this Agreement shall be consummated.

 . If the  Administrative  Agent  (with a copy to each  Lender)  receives:  (a) a
notice from the Borrowers  that a Lender has defaulted  under this  Agreement by
failing to fund a Loan when required to do so or, with the exception of Wachovia
Bank of Georgia,  N.A., to issue a Letter of Credit when requested to do so, and
such failure did, in fact,  occur, (b) a notice from an affected Lender pursuant
to Section 3.4.7 claiming  compensation,  reimbursement or indemnity pursuant to
Section 3.4 or Section 3.5, and the aggregate  amount of all such  compensation,
reimbursement or indemnity payments made or required to be made by the Borrowers
pursuant to Section 3.4 or Section 3.5 to the Lender giving notice is materially
greater (as determined by the Borrowers in their  reasonable  judgment) than the
weighted  average  amount of  payments  made or required to be made to the other
Lenders pursuant to Section 3.4 or Section 3.5, or (c) a notice from an Affected
Lender  stating that it is prevented from making  additional  LIBOR Loans due to
the  occurrence  of an event  described in Section  2.14.4,  then, so long as no
Default or Event of Default shall have occurred and be continuing, the Borrowers
may, within sixty (60) days after receipt of any such notice, elect to terminate
such  Lender  as a party  to this  Agreement.  If the  amount  of such  Lender's
Commitment,  together with the amount of any other  Commitments  theretofore  or
concurrently  therewith  to be reduced in  accordance  with this  Section  2.16,
aggregates twenty-five percent (25%) or less of the aggregate  Commitments,  the
Borrowers  may elect  either to  replace  such  Lender  with  another  financial
institution reasonably  satisfactory to the Administrative Agent (a "Replacement
Lender") or to reduce the  Commitments  by the amount of the  Commitment of such
Lender;  provided,  however,  that the right of Borrowers to replace the removed
Lender is  subject to the right of each  remaining  Lender to succeed to its pro
rata portion of the removed Lender's  Commitment  hereunder as determined by the
proportion  that  each  remaining   Lender's   Commitment  bears  to  the  total
Commitments  after  such  removal.  If the amount of such  Lender's  Commitment,
together with the amount of any other  Commitments  theretofore or  concurrently
therewith to be reduced in  accordance  with this Section  2.16,  aggregates  in
excess of twenty-five percent (25%) of the aggregate Commitments,  the Borrowers
may  elect to  terminate  such  Lender  only if,  together  with its  notice  of
termination,  it  provides  to the  Administrative  Agent  a  commitment  from a
Replacement  Lender to replace the  Commitment of the  terminated  Lender on the
terms and  conditions  set forth herein if the other Lenders have not decided to
succeed to the removed  Lender's  obligations as provided above.  The Borrowers'
election to  terminate a Lender  under this Section 2.16 shall be set forth in a
written  notice from the Borrowers to the  Administrative  Agent (with a copy to
such Lender),  setting forth (i) the basis for termination of such Lender,  (ii)
whether the Borrowers  intend to replace such Lender with a  Replacement  Lender
or, if the  Borrowers  are not required to replace  such  Lender,  to reduce the
Commitments by the amount of the  Commitment of such Lender,  and (iii) the date
(not  later  than  thirty  (30) days  after the date of such  notice)  when such
termination  shall  become  effective.  On the  date on which  such  termination
becomes  effective,   (x)  the  Borrowers  and/or  the  Replacement  Lender,  as
applicable,  shall pay the  terminated  Lender an amount equal to all principal,
interest,  fees and other amounts owed to such Lender pursuant to this Agreement
(including  any amounts owed under  Sections 3.4 and 3.5) through such date, and
(y) there  shall have been  received  by the  Administrative  Agent an  executed
Assignment  and  Acceptance  and all other  documents and  supporting  materials
necessary,  in the reasonable judgment of the Administrative  Agent, to evidence
the  substitution of the Replacement  Lender for such terminated  Lender,  or if
there is no Replacement  Lender,  to reflect the adjustment of the  Commitments,
including any necessary or appropriate  adjustments to the Lenders'  Percentages
(adjustments to the  Commitments and Percentages of the remaining  Lenders to be
based upon the relative  proportions of their  respective  Percentages)  and the
correlative pro rata reduction of the amounts set forth in Section 2.1.2.

 .        2.17.      Non-Pro Rata Borrowing; Settlement Procedures

 . Notwithstanding  anything in this Article 2 to the contrary, the Borrowers may
deliver  Notices of Borrowing in the form and in the manner  provided by Section
2.2.4 (provided that the Borrowers cannot elect to have any borrowing  described
herein  to be a LIBOR  Loan)  to the  Administrative  Agent,  in its  individual
capacity as a Lender,  in the minimum amount of $100,000 and integral  multiples
of  $100,000  in excess  thereof.  Provided  all terms  and  conditions  of this
Agreement  (including  the conditions set forth in Sections 6.1 and 6.2 are met)
and provided all  representations  and  warranties of the Borrowers are true and
correct as of the date  hereof,  the  Administrative  Agent,  in its  individual
capacity as a Lender and without participation on the part of the other Lenders,
agrees to make  Revolving  Credit  Loans  pursuant to such  Notices of Borrowing
(each a "Swingline Loan" and  collectively the "Swingline  Loans") and the other
Lenders shall not be required to fund a pro rata share of such Swingline  Loans.
Swingline  Loans shall bear interest at the rate that is mutually agreed upon by
the  Borrowers  and the  Administrative  Agent but in no event  shall  such rate
exceed  the lesser of (i) the Base Rate,  or (ii) LIBOR for a  one-month  period
plus one percentage  point (1.00%).  Swingline Loans shall be made solely by the
Administrative Agent, in its individual capacity as a Lender, provided, however,
that the  Administrative  Agent  shall,  upon the  request of one or more of the
remaining  Lenders,  inform such Lender or Lenders of the current balance of all
outstanding  Swingline  Loans.  The  maximum  amount that may be advanced by the
Administrative  Agent  at any  time  pursuant  to this  Section  2.17  shall  be
$5,000,000,  and the amount loaned to the Borrowers under this Section 2.17 from
time to time shall reduce the amount of the Commitments.

     . Notwithstanding Section 3.1, the Borrowers may prepay any Swingline Loans
in whole or in part in integral multiples of $100,000.

 . Upon any Default by the Borrowers  under this  Agreement,  the  Administrative
Agent  may,  in its  sole  discretion,  give  notice  to the  Lenders  that  its
outstanding Swingline Loans shall be funded with a Borrowing of Revolving Credit
Loans,  in which case a Borrowing of Revolving  Credit Loans  constituting  Base
Rate Loans (each such Borrowing,  a "Mandatory  Borrowing") shall be made by all
Lenders pro rata,  and the  proceeds  thereof  shall be applied  directly to the
Administrative  Agent to repay the  Administrative  Agent  for such  outstanding
Swingline Loans.  Advancement of funds by the remaining Lenders pursuant to this
Section 2.17.3,  shall be made by the close of any Business Day in which written
notice is received from the Administrative  Agent by 12:00 noon,  otherwise such
funding  shall be made by the close of the  Business  Day  following  the day on
which such written notice is received. All Swingline Loans shall begin to accrue
interest  at the Base Rate upon  advancement  by the  remaining  Lenders  to the
Administrative Agent of their pro rata share of the loan amount  notwithstanding
the interest rate initially agreed upon by the Borrowers and the  Administrative
Agent at the commencement of each Swingline Loan. Each Lender hereby irrevocably
agrees to advance funds as described above notwithstanding (i) the amount of the
Mandatory  Borrowing  may not comply  with the  minimum  amount  for  Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Article 6
are then satisfied,  (iii) whether a Default or an Event of Default then exists,
(iv)  the  date of  such  Mandatory  Borrowing  and  (v)  any  reduction  in the
Commitments  after any such  Swingline  Loans were  made.  In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above,  each Lender  hereby  agrees that it shall  forthwith  purchase  from the
Administrative  Agent such participations in the outstanding  Swingline Loans as
shall be necessary to cause the Lenders to share in such Swingline Loans ratably
based upon their respective  Percentages,  provided that all interest payable on
the Swingline Loans shall be for the account of the  Administrative  Agent until
the  date  the  respective   participation  is  purchased,  and  to  the  extent
attributable to the purchased participation, shall be payable to the participant
from and after such date of purchase.  Notwithstanding  anything to the contrary
in this Section 2.17,  the  Administrative  Agent will not make a Swingline Loan
after it has received notice that an Event of Default exists.


                                    ARTICLE 3

                     PAYMENTS, PREPAYMENTS AND COMPUTATIONS

     . Except as  specifically  set forth in  Section  3.2,  the Loans  shall be
repaid as provided in this Section 3.1.

 . The interest  accrued on each Loan shall be payable on each  Interest  Payment
Date  applicable  to such Loan,  upon any  prepayment  of any LIBOR Loan (to the
extent accrued on the amount being prepaid) and at maturity.

 .                   3.1.2.  Prepayments

                    (a) Voluntary Prepayments.  The Borrowers may, upon not less
         than  one  (1)  Business  Day's  prior  written  or  telephonic  notice
         confirmed in writing to the  Administrative  Agent (in the case of Base
         Rate  Loans),  and upon not less  than  two (2)  Business  Days'  prior
         written or telephonic notice confirmed in writing to the Administrative
         Agent  (in the  case  of  LIBOR  Loans)  (each  of  which  notices  the
         Administrative  Agent will promptly transmit to each Lender in writing,
         or by telephone  confirmed  in  writing),  at any time and from time to
         time prepay any Borrowing of Loans (as the Borrowers may specify to the
         Administrative  Agent)  in whole or in part in  integral  multiples  of
         $1,000,000;  provided, however, that LIBOR Loans may only be prepaid in
         part if, after such prepayment,  the unpaid portion of such Loans shall
         have aggregate  minimum  balances of $5,000,000;  and provided  further
         that, in connection  with any prepayment of LIBOR Loans,  the Borrowers
         shall pay to the Administrative Agent, for distribution to the Lenders,
         the  accrued  interest  on such Loan  required  to be paid  pursuant to
         Section  3.1.1 and any amounts  required to be paid pursuant to Section
         3.4.5;

                    (b) Application of Prepayments.  Any prepayment  pursuant to
         this Section 3.1.2 shall be applied to the  Indebtedness  in the manner
         specified by  Borrowers,  provided,  however,  that if  Borrowers  have
         failed to provide funds to pay all amounts  required by Section  3.4.5,
         such prepayments should be applied to any outstanding Base Rate Loans.

 . In all events,  the entire  aggregate  principal  balances of, all accrued and
unpaid interest on and all fees and other sums due and payable in respect of the
Loans  shall be due and  payable in full on the  Termination  Date if not sooner
paid.

 . On each day an Issuing Bank honors a drawing under a Letter of Credit  (unless
a Letter of Credit Loan is made pursuant to Section 2.3.4), the Borrowers shall,
after the Issuing  Bank has honored  such  drawing,  immediately  reimburse  the
Issuing Bank for the account of the Lenders, by 12:00 noon (Eastern time) (or as
soon  thereafter  as the  drawing has been  honored)  in an amount  equal to the
amount of such drawing.

         3.3.  Payments and Computations, Etc.

 . Except as otherwise  expressly  set forth  herein,  all payments of principal,
interest and fees  hereunder and under the Notes shall be in lawful  currency of
the United States of America,  in immediately  available  (same day) funds,  and
delivered to the Administrative Agent at its Lending Office for its account, the
account of the Lenders or the account of the Issuing  Bank,  as the case may be,
not  later  than  12:00  noon  (Eastern  time)  on the date  due.  As soon as is
practicable  thereafter,  the Administrative Agent shall cause to be distributed
like funds  relating to the payment of  principal or interest or fees ratably to
the Lenders in accordance with their respective  Percentages (other than amounts
payable pursuant to Sections 3.4 and 3.5, which are to be distributed other than
ratably). Funds received by the Administrative Agent after the time specified in
the first  sentence of this  paragraph  shall be deemed to have been paid by the
Borrowers on the next succeeding Business Day.

 . Whenever  any payment to be made  hereunder or under the Notes shall be stated
to be due on a day that is not a Business  Day, the payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation  of the payment of interest  hereunder  or under the Notes or of the
fees payable hereunder, as the case may be; provided, however, that in the event
that the day on which payment  relating to a LIBOR Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in that
month, then the due date thereof shall be the next preceding Business Day.

 . Aggregated  principal and interest  payments  shall be  apportioned  among all
outstanding Loans to which such payments relate,  and the aggregated  payment of
the Commitment Fee shall be apportioned  ratably among the Lenders, in each case
proportionately to their respective  Percentages of the corresponding  Loans and
Commitments,  as the  case  may be.  The  Administrative  Agent  shall  promptly
distribute  to each  Lender at its  Lending  Office its  Percentage  of all such
payments received by the  Administrative  Agent.  Notwithstanding  the foregoing
provisions  of this Section  3.3.3,  if,  pursuant to the  provisions of Section
2.14.4, any Notice of Borrowing is withdrawn as to any Affected Lender or if any
Affected  Lender makes Base Rate Loans in lieu of its Percentage of LIBOR Loans,
the  Administrative  Agent shall give effect  thereto in  apportioning  payments
received thereafter.

 . Unless the Administrative  Agent shall have received notice from the Borrowers
prior to the date on which any  payment is due to the  Administrative  Agent for
the  benefit of the  Lenders  hereunder  that the  Borrowers  will not make such
payment in full,  the  Administrative  Agent may assume that the Borrowers  have
made  such  payment  in full to the  Administrative  Agent on such  date and the
Administrative  Agent  may,  in  reliance  upon  such  assumption,  cause  to be
distributed  to each Lender on such due date an amount  equal to the amount then
due such Lender.  If and to the extent the Borrowers shall not have so made such
payment in full to the  Administrative  Agent,  each  Lender  shall repay to the
Administrative  Agent forthwith on demand such amount distributed to such Lender
together  with  interest  thereon,  for each day from the date  such  amount  is
distributed  to such Lender until the date such Lender repays such amount to the
Administrative  Agent,  at the Federal Funds Rate, but in no event to exceed the
Highest Lawful Rate.

 . After the occurrence and during the continuance of an Event of Default, unless
otherwise set forth in this Agreement or the other Loan Documents,  all payments
received by the Administrative  Agent from the enforcement of remedies under the
Loan Documents or otherwise with respect to the Obligations shall be applied (a)
first, to the payment of any fees, expenses,  reimbursements or indemnities then
due from the Borrowers to the  Administrative  Agent; (b) second, to the payment
of any fees, expenses, reimbursements or indemnities then due from the Borrowers
to the Lenders,  or any of them; (c) third,  to the ratable  payment of interest
due from the  Borrowers  with respect to any of the Loans and fees in respect of
the Letters of Credit; (d) fourth, to the ratable payment of principal of any of
the Loans of the Borrowers and all obligations of the Borrowers to reimburse the
Issuing Bank and the Lenders in respect of drawings under Letters of Credit; (e)
fifth, to be held as cash collateral by the Administrative Agent for the ratable
benefit  of  the  Lenders,   as  security  for  outstanding   Letter  of  Credit
Liabilities, and (f) sixth, to pay all other Obligations.

 .        3.4.       Increased Costs, Capital Requirements and Taxes

                    3.4.1.  Increased  Costs.  Except to the  extent  reimbursed
pursuant to other  provisions  of this Section 3.4, in the event that either (i)
the introduction of, or any change in, or in the  interpretation  of, any law or
regulation  or (ii)  compliance  with any  guideline or request from any central
bank or other Governmental  Authority (regardless of whether having the force of
law):

                    (a) does or  shall  subject  any  Lender  to any  additional
         income,  preference,  minimum or excise tax or to any additional tax of
         any kind  whatsoever  with  respect to LIBOR Loans or Letters of Credit
         issued  hereunder  or change the basis of  taxation of payments to such
         Lender of  principal,  commitment  fees,  interest or any other  amount
         payable  in regard to LIBOR  Loans or  Letters  of Credit  (except  for
         changes in the rate of tax on the  overall  gross or net income of that
         Lender or its foreign branch, agency or subsidiary); or

                    (b) does or shall  impose,  modify  or hold  applicable  any
         reserve,  special  deposit,  compulsory loan, FDIC insurance or similar
         requirement against assets held by, or deposits or other liabilities in
         or for the account of,  advances or loans by, or other credit  extended
         by, or any other  acquisition  of funds by, any  office of such  Lender
         (except,  with respect to LIBOR  Loans,  to the extent that the reserve
         requirements are reflected in the definition of "LIBOR"); or

     (c) does or shall impose on that Lender any other condition with respect to
LIBOR Loans or Letters of Credit;  and the result of any of the  foregoing is to
increase the cost to that Lender of issuing or  participating  in the Letters of
Credit or of making,  renewing or maintaining the Loans or the Commitments or to
reduce any amount  receivable  hereunder or thereunder;  then, in any such case,
the Borrowers  shall  promptly pay to such Lender,  upon written  demand made in
accordance  with Section  3.4.7,  such  additional  amounts as are sufficient to
compensate such Lender for any such additional cost or reduced amount received.

 . If either (i) the introduction of, or any change in, or in the  interpretation
by any  governmental  agency or court of applicable  jurisdiction of, any law or
regulation  or (ii)  compliance  with any  guideline,  demand or order  from any
central bank or other Governmental  Authority  (regardless of whether having the
force of law), affects or would affect in any way the amount of capital required
or expected to be maintained with respect to LIBOR Loans or Letters of Credit by
any  Lender  or any  corporation  controlling  such  Lender  with the  effect of
reducing  the rate of return on such capital to a level below the rate that such
Lender or such other corporation could have achieved but for such  introduction,
change or compliance,  and such Lender reasonably determines that such reduction
is based on the  existence  of such  Lender's  Commitments  as to LIBOR Loans or
Letters  of Credit  hereunder  and other  commitments  of this  type,  then upon
written  demand by such Lender,  the Borrowers  shall further pay to such Lender
from time to time as  specified  by such Lender such  additional  amounts as are
sufficient to compensate such Lender or other corporation for such reduction.

 . If any Issuing Bank or any Lender  determines that either (i) the introduction
of, or any change in, or in the  interpretation  by any  governmental  agency or
court of applicable  jurisdiction  of, any law or regulation or (ii)  compliance
with any guideline,  demand or order from any central bank or other Governmental
Authority  (regardless  of whether  having  the force of law),  affects or would
affect in any way the amount of capital required or expected to be maintained by
such Issuing  Bank or such Lender or any  corporation  controlling  such Issuing
Bank or such  Lender  with the  effect  of  reducing  the rate of return on such
capital  below the rate  that such  Issuing  Bank or such  Lender or such  other
corporation could have achieved but for such introduction, change or compliance,
and such Issuing Bank or such Lender  reasonably  determines that such reduction
is based on the  existence of the Letters of Credit  issued  hereunder and other
commitments of this type,  then upon written demand by such Issuing Bank or such
Lender,  the  Borrowers  shall  further pay to such Issuing Bank and such Lender
from  time to time as  specified  by such  Issuing  Bank  and such  Lender  such
additional  amounts as are  sufficient to compensate  such Issuing Bank and such
Lender or other corporation for such reduction.

 . If either (i) the introduction of, or any change in, or in the  interpretation
by any  governmental  agency or court of applicable  jurisdiction of, any law or
regulation  or (ii)  compliance  with any  guideline,  demand or order  from any
central bank or other Governmental  Authority  (regardless of whether having the
force of law),  shall either (a) impose,  modify or deem applicable any reserve,
special  deposit or  similar  requirement  against  letters of credit or similar
instruments  issued by, or assets held by, or deposits in or for the account of,
any Issuing  Bank or any Lender or (b) impose on any Issuing  Bank or any Lender
any other  condition  regarding  this Agreement as it pertains to the Letters of
Credit, or any letter of credit,  and the result of any event referred to in the
preceding clause (a) or (b) shall be to increase the cost to any Issuing Bank or
any Lender of issuing or maintaining  any Letter of Credit or any  participation
therein  (which  increase in cost shall be determined by such Issuing  Bank's or
such Lender's,  as the case may be,  reasonable  allocations of the aggregate of
such cost  increases  resulting from such event),  then,  upon written demand by
such  Issuing  Bank or such  Lender,  as the case may be,  the  Borrowers  shall
forthwith pay to the Issuing Bank or such Lender,  as the case may be, from time
to time as specified  by such  Issuing Bank or such Lender,  as the case may be,
such additional amounts as are sufficient to compensate the Issuing Bank or such
Lender, as the case may be, for such increased cost.

 . The Borrowers  shall indemnify and hold each Lender free and harmless from all
losses,  liabilities  and reasonable  expenses  (including any loss sustained by
that Lender in  connection  with the  re-employment  of such  funds),  that such
Lender may  sustain:  (a) if by reason of any action or inaction by  Borrowers a
Borrowing of LIBOR Loans does not occur on a date specified therefor in a Notice
of Borrowing  or a telephonic  request for  borrowing  or a  continuation  of or
conversion  to LIBOR  Loans  does not occur on a date  specified  therefor  in a
Notice   of   Conversion/Continuation   or   in   a   telephonic   request   for
conversion/continuation,  (b) if any prepayment of any of its LIBOR Loans occurs
on a date  that  is  not  the  last  day of an  Interest  Period,  or (c) if any
prepayment  of any of its  LIBOR  Loans is not made on any date  specified  in a
notice of prepayment given by the Borrowers.

 . The Borrowers shall indemnify and hold each Lender free and harmless from, and
shall pay, prior to the date on which penalties attach thereto,  all present and
future  income,  stamp and other taxes,  levies or costs and charges  whatsoever
imposed,  assessed,  levied or  collected on or in respect of a Loan solely as a
result of the interest  rate being  determined  by reference to LIBOR and/or the
provisions   of  this   Agreement   related  to  LIBOR  and/or  the   recording,
registration,  notarization  or other  formalization  of any thereof  and/or any
payments of principal, interest or other amounts made on or in respect of a Loan
when the  interest  rate is  determined  by  reference to LIBOR (all such taxes,
levies,  costs and charges  being herein  collectively  called  "LIBOR  Taxes");
provided,  however,  that LIBOR Taxes  shall not  include:  taxes  imposed on or
measured  by the  overall  gross or net  income of such  Lender  or any  foreign
branch,  agency or  subsidiary of such Lender by the United States of America or
any political subdivision or taxing authority thereof or therein, or taxes on or
measured  by the  overall  gross or net  income of that  Lender  or any  foreign
branch,  agency  or  subsidiary  of  that  Lender  by  any  foreign  country  or
subdivision thereof in which that Lender,  branch, agency or subsidiary is doing
business.  The  Borrowers  also shall  indemnify  and hold each  Lender free and
harmless  from,  and shall pay such  additional  amounts equal to,  increases in
taxes  payable  by that  Lender  described  in the  foregoing  proviso  that are
attributable  to payments  made by the  Borrowers  described in the  immediately
preceding sentence or this sentence. Promptly after the date on which payment of
any such LIBOR Tax is due pursuant to applicable law, the Borrowers will, at the
written  request of such Lender,  furnish to such Lender  evidence,  in form and
substance  satisfactory  to such  Lender,  that the  Borrowers  have  met  their
obligation  under this Section  3.4.6;  and the Borrowers  will  indemnify  each
Lender against, and reimburse each Lender on demand for, any LIBOR Taxes payable
by that  Lender.  Such Lender  shall  provide  the  Borrowers  with  appropriate
receipts for any payments or  reimbursements  made by the Borrowers  pursuant to
this Section 3.4.6. If any Lender fails to give the Borrowers notice pursuant to
Section 3.4.7.  so as to avoid the payment of any penalties or late charges with
respect to any  payments  required to be made by  Borrowers to such Lender under
this Section 3.4.6,  the Borrowers  shall not be responsible  for the payment of
any such penalties or late charges.

 . Each Lender and Issuing Bank will  promptly  notify the  Administrative  Agent
(with a copy to the Borrowers) of any event of which it has knowledge, occurring
after  the date  hereof,  that  entitles  such  Lender or such  Issuing  Bank to
compensation, reimbursement or indemnity pursuant to this Section 3.4 or Section
3.5,  and  shall  furnish  to the  Administrative  Agent  (with  a  copy  to the
Borrowers)  a  certificate   of  such  Lender  or  such  Issuing  Bank  claiming
compensation,  reimbursement or indemnity under this Section 3.4 or Section 3.5,
setting forth in reasonable  detail the additional  amount or amounts to be paid
to it hereunder if not theretofore  paid by the Borrowers as provided in Section
3.5 (which  certificate  shall be presumed correct and binding in the absence of
manifest error).  In determining such amount,  such Lender and such Issuing Bank
may use any  reasonable  averaging,  attribution or allocation  methods.  Within
fifteen (15) days following  receipt of such notice,  the Borrowers shall pay to
the  Administrative  Agent, for distribution to such Lender,  or to such Issuing
Bank,  as the case  may be,  the  amount  shown  to be due and  payable  by such
certificate.

 .        3.5.       Taxes

 . Any and all  payments  by the  Borrowers  hereunder  or under the Notes or the
other Loan Documents  shall be made free and clear of and without  deduction for
any and all present or future taxes,  levies,  imposts,  deductions,  charges or
withholdings,  and all  liabilities  with  respect to such  payments  (including
interest,  additions to tax and penalties  thereon),  excluding,  in the case of
each Lender, the  Administrative  Agent and each Issuing Bank, (i) taxes imposed
on or measured by its income,  assets or capital, and franchise taxes imposed on
it,  by the  jurisdiction  of such  Lender's  Lending  Office  or any  political
subdivision or taxing authority thereof, and (ii) withholding taxes that are the
subject of Sections 3.5.2 through 3.5.5.  If the Borrowers  shall be required by
law to deduct any such taxes from or in respect of any sum payable  hereunder or
under any Note or any other Loan  Document  to any Lender or the  Administrative
Agent,  (a) the sum payable shall be increased as may be necessary so that after
making all required deductions  (including  deductions  applicable to additional
sums payable under this Section 3.5) such Lender or the Administrative Agent (as
the case may be) shall receive an amount equal to the sum it would have received
had no such deductions been made and (b) the Borrowers shall pay the full amount
deducted to the relevant  taxation  authority or other  authority in  accordance
with applicable law. If and to the extent that any Lender  subsequently shall be
refunded or otherwise  recover all or any part of any such  deduction,  it shall
refund to the Borrowers the amount so recovered.

 . If any Lender is a "foreign  corporation" within the meaning of the Code, such
Lender shall  deliver to the  Administrative  Agent  either:  (a) if such Lender
qualifies for an exemption from or a reduction of United States  withholding tax
under a tax treaty, a properly  completed and executed  Internal Revenue Service
form 1001 before the payment of any interest is due in the first  calendar  year
and in each third  succeeding  calendar  year during which  interest may be paid
under this  Agreement,  or (b) if such Lender  qualifies  for an  exemption  for
interest paid under this Agreement from United States withholding tax because it
effectively  is connected with a United States trade or business of such Lender,
two properly completed and executed copies of Internal Revenue Service form 4224
before the  payment of any  interest  is due in the first  taxable  year of such
Lender,  and in  each  succeeding  taxable  year of such  Lender,  during  which
interest may be paid under this  Agreement,  and (c) such other form or forms as
may be required or reasonably requested by the Administrative Agent to establish
or substantiate  exemption from, or reduction of, United States  withholding tax
under the Code or other laws of the United  States.  Each such Lender  agrees to
notify the Administrative Agent of any change in circumstances that would modify
or render invalid any claimed exemption or reduction.

 . If any Lender is entitled to a reduction in the  applicable  withholding  tax,
the  Administrative  Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction.  If the forms or other  documentation  required by Section 3.5.2
are not delivered to the Administrative Agent, then the Administrative Agent may
withhold  from any interest  payment to any Lender not  providing  such forms or
other documentation, an amount equivalent to the applicable withholding tax.

 . If the Internal Revenue Service or any authority of the United States or other
jurisdiction  asserts a claim  that the  Administrative  Agent did not  properly
withhold tax from amounts paid to or for the account of any Lender  (because the
appropriate form was not delivered or was not properly executed, or because such
Lender failed to notify the  Administrative  Agent of a change in  circumstances
that rendered the exemption from or reduction of withholding tax ineffective, or
for any other reason) such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as tax
or  otherwise,  including  penalties  and  interest,  together with all expenses
incurred, including legal expenses, allocated staff costs, and any out-of-pocket
expenses.

 . If any Lender sells, assigns,  grants participations in or otherwise transfers
its rights under this Agreement,  the  participant  shall comply and be bound by
the terms of Sections 3.5.2, 3.5.3 and 3.5.4 as though it were such Lender.

 . Any Lender may make, carry or transfer Loans at, to or for the account of, any
of its branch or agency offices,  provided,  however, that in the event that any
Lender  transfers its Loans to another  branch or agency office in a transaction
that does not involve  the  transfer by such Lender of any of its other loans to
such branch or agency office, such Lender shall not be entitled to reimbursement
for additional costs or taxes with respect to such Loans pursuant to Section 3.4
or Section 3.5 if the Borrowers  would be subject to additional  liability under
Section  3.4 or Section  3.5 to which it would not be  subject if such  Lender's
Loans were  maintained  at the office at which such Loans were carried  prior to
such transfer.

         The Borrowers  acknowledge  and agree that (a) each Lender's  method of
funding its Loans hereunder  shall be in the sole discretion of such Lender,  so
long  as  such  funding  complies  with  all  applicable  requirements  of  this
Agreement,  and (b) for  purposes of any  determination  to be made  pursuant to
Sections  2.14.4  or 3.4.5 of this  Agreement,  each  Lender  shall be  presumed
conclusively to have funded its LIBOR Loans with the proceeds of Dollar deposits
obtained by such Lender in the interbank Eurodollar market.


                                    ARTICLE 4

                         SECURITY; AFFILIATE AGREEMENTS

     4.1. Security. The Obligations of the Borrowers shall be secured by:

                           (a)    the Pledge Agreement; and

     (b) the security interest in the Collateral Account herein granted in favor
of the  Administrative  Agent for the ratable  benefit of the  Lenders,  and the
other Liens provided in this Agreement and the other Security Documents.

         4.2. Further  Assurances.  The Borrowers and the Guarantors  shall, and
shall  cause each of their  respective  Subsidiaries  to, at their sole cost and
expense, execute and deliver to the Administrative Agent for the ratable benefit
of the  Lenders all such  further  documents,  instruments  and  agreements  and
perform  all such  other  acts that  reasonably  may be  required  to enable the
Administrative  Agent and the Lenders to exercise and enforce  their  respective
rights as the secured parties under the Security  Documents and to carry out the
provisions  or  effectuate  the  purposes of this  Agreement  and the other Loan
Documents.

         4.3.  Affiliate  Agreements;   Notice  and  Cure.  Notwithstanding  any
provision  in an  Affiliate  Agreement  to  the  contrary,  no  default  in  the
performance  of a Borrower's or  Guarantor's  obligations  under such  Affiliate
Agreement that is of such a nature as to give the other party thereto a right to
terminate such Affiliate Agreement shall entitle such party to exercise any such
right,  power or remedy unless and until written notice of such default is given
to the  Administrative  Agent and unless and until  thirty  (30) days shall have
elapsed following  receipt of such notice by the  Administrative  Agent,  during
which period the Lenders shall have the right, but not the obligation, to remedy
or cure such default.

         4.4.  Lenders'  Obligations.  No Lender who  exercises a right  arising
under this Agreement with regard to an Affiliate  Agreement shall thereby become
obligated to any party,  or successor to a party,  for the performance of any of
the terms,  covenants,  conditions  and  agreements of a Borrower or a Guarantor
under such Affiliate Agreement.

     4.5.  Representations  and Warranties with Regard to Affiliate  Agreements.
Borrowers  and  Guarantors,  in order to  induce  Lenders  to  enter  into  this
Agreement, hereby affirm that:

                           (a) contemporaneously  with or prior to the execution
         of this Agreement, Borrowers delivered or caused to be delivered to the
         Administrative  Agent a full,  true and complete copy of each Affiliate
         Agreement as amended to date;

     (b) each  Affiliate  Agreement is in full force and effect and has not been
modified; and

     (c) no party is in default in the performance of any  obligations  under an
Affiliate Agreement.

     4.6.  Assignment  of Affiliate  Agreements.  No Borrower or  Guarantor  may
assign its interest in any Affiliate  Agreement to any Person other than another
Borrower or Guarantor without the prior written consent of the Lenders.

     4.7. Amendment of Affiliate Agreements.  The Borrowers and Guarantors shall
not effect any material  amendment of an Affiliate  Agreement  without the prior
written consent of the Administrative Agent.

                                    ARTICLE 5

                                    GUARANTY

         5.1.  Guaranty.  Each  of the  Guarantors  hereby  unconditionally  and
irrevocably,  jointly and severally, guarantees to the Administrative Agent, the
Lenders and each Issuing Bank the due and punctual  payment and  performance  of
all of the  Obligations,  in each case as and when the same shall become due and
payable,   whether  at  maturity,  by  acceleration,   mandatory  prepayment  or
otherwise,  according to their terms. In case of failure by Borrowers punctually
to pay or perform such Obligation, each of the Guarantors hereby unconditionally
and  irrevocably  agrees to cause such payment to be made punctually as and when
the same shall  become due and  payable,  whether at  maturity,  by  prepayment,
declaration  or  otherwise,  and  to  cause  such  performance  to  be  rendered
punctually as and when due, in the same manner as if such payment or performance
were made by Borrowers.  This guaranty is and shall be a guaranty of payment and
performance and not merely of collection.

         5.2.       Maximum Guaranty Liability,

                    (a) Each Guarantor's  respective  obligations  hereunder and
under the other Loan Documents shall be in an amount equal to, but not in excess
of,  the  maximum  liability  permitted  under  Applicable  Bankruptcy  Law (the
"Maximum  Guaranty  Liability").  To  that  end,  but  only to the  extent  such
obligations  otherwise would be subject to avoidance under Applicable Bankruptcy
Law if any Guarantor is deemed not to have received valuable consideration, fair
value or reasonably  equivalent value for its obligations hereunder or under the
other Loan Documents, each such Guarantor's respective obligations hereunder and
under the other Loan  Documents  shall be reduced to that  amount  which,  after
giving effect thereto, would not render such Guarantor insolvent,  or leave such
Guarantor with an unreasonably  small capital to conduct its business,  or cause
such Guarantor to have incurred debts (or to be deemed to have intended to incur
debts),  beyond its ability to pay such debts as they  mature,  at the time such
obligations are deemed to have been incurred under Applicable Bankruptcy Law. As
used herein,  the terms  "insolvent"  and  "unreasonably  small  capital"  shall
likewise be  determined  in  accordance  with  Applicable  Bankruptcy  Law. This
Section  5.2 is  intended  solely to  preserve  the rights of the  Lenders,  the
Administrative  Agent and the Issuing  Bank  hereunder  and under the other Loan
Documents to the maximum  extent  permitted by  Applicable  Bankruptcy  Law, and
neither the  Guarantors nor any other Person shall have any right or claim under
this  Section  5.2  that  otherwise  would  not be  available  under  Applicable
Bankruptcy Law.

                    (b) Each Guarantor agrees that the Guaranteed Obligations at
any time and from time to time may exceed the Maximum Guaranty Liability of such
Guarantor,  and may exceed  the  aggregate  Maximum  Guaranty  Liability  of all
Guarantors  hereunder,  without  impairing this Guaranty or affecting the rights
and  remedies of the  Lenders,  the  Administrative  Agent or the  Issuing  Bank
hereunder.

         5.3.  Contribution.  In the event any Guarantor (a "Funding Guarantor")
shall make any payment or payments  under this Guaranty or shall suffer any loss
as a result of any  realization  upon any of its property  granted as Collateral
under any Loan Document, each other Guarantor (each, a "Contributing Guarantor")
shall contribute to such Funding  Guarantor an amount equal to such Contributing
Guarantor's  "Pro Rata  Share"  of such  payment  or  payments  made,  or losses
suffered, by such Funding Guarantor.  For the purposes hereof, each Contributing
Guarantor's Pro Rata Share with respect to any such payment or loss by a Funding
Guarantor  shall be  determined as of the date on which such payment or loss was
made by  reference  to the ratio of (a) such  Contributing  Guarantor's  Maximum
Guaranty  Liability  as of such  date  (without  giving  effect  to any right to
receive, or obligation to make, any contribution hereunder) to (b) the aggregate
Maximum Guaranty Liability of all Guarantors  (including such Funding Guarantor)
as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder). Nothing in this Section 5.3 shall affect each
Guarantor's   several   liability  for  the  entire  amount  of  the  Guaranteed
Obligations (up to such Guarantor's Maximum Guaranty Liability).  Each Guarantor
covenants and agrees that its right to receive any contribution hereunder from a
Contributing  Guarantor  shall be subordinate  and junior in right of payment to
all the Guaranteed Obligations.

     5.4. Guaranty  Unconditional.  The obligations of each Guarantor under this
Article 5 shall be continuing,  unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released,  discharged or otherwise
affected by:

     (a) any extension,  renewal, settlement,  compromise,  waiver or release in
respect of any  Obligation  of the Borrowers  under this  Agreement or any other
Loan Document, by operation of law or otherwise;

     (b) any  modification  or amendment or supplement to this  Agreement or any
other Loan Document;

     (c)  any  modification,   amendment,  waiver,  release,  non-perfection  or
invalidity  of any direct or  indirect  security,  or of any  guaranty  or other
liability of any third party,  for any  Obligation of the  Borrowers  under this
Agreement or any other Loan Document;

     (d) any change in the  corporate  existence,  structure or ownership of any
Borrower or any Guarantor,  or any  insolvency,  bankruptcy,  reorganization  or
other similar case or proceeding  affecting any Borrower or any Guarantor or any
of their  respective  assets,  or any  resulting  release  or  discharge  of any
Obligation of any Borrower under this Agreement or any other Loan Document;

     (e) the  existence of any claim,  set-off or other right that any Guarantor
at any time may have against any Borrower, the Administrative Agent, the Issuing
Bank, any Lender or any other Person,  whether or not arising in connection with
this Agreement or any other Loan Document;

     (f) any invalidity or unenforceability  relating to or against any Borrower
for any reason of the whole or any provision of this Agreement or any other Loan
Document,  or any provision of Applicable  Bankruptcy Law purporting to prohibit
the payment or performance by such Borrower of any Obligation, or the payment by
such  Borrower of any other  amount  payable by it under this  Agreement  or any
other Loan Document; or

     (g) any other act or omission to act or delay of any kind by any  Borrower,
the  Administrative  Agent,  the Issuing Bank, any Lender or any other Person or
any other  circumstance  whatsoever  that might but for the  provisions  of this
Section 5.4 constitute a legal or equitable  discharge of the obligations of any
Guarantor under this Article 5.

         5.5.  Discharge  Only Upon  Payment in Full;  Reinstatement  in Certain
Circumstances. Each Guarantor's obligations under this Article 5 shall remain in
full force and effect so long as any Obligations are unpaid or outstanding,  any
Obligation  under the Loan Documents is not performed or any of the  Commitments
are in effect. If at any time any payment of the Obligations or any other amount
payable by the  Borrowers  under this  Agreement or the other Loan  Documents is
rescinded  or  otherwise  must be  restored  or  returned  upon the  insolvency,
bankruptcy  or  reorganization  of any Borrower or otherwise,  each  Guarantor's
obligations  under  this  Article  5 with  respect  to  such  payment  shall  be
reinstated  at such time as though such payment had become due but not been made
at such time.

         5.6.  Waiver.  Each Guarantor  irrevocably  waives  acceptance  hereof,
presentment,  demand,  protest, notice of any breach or default by the Borrowers
and any other  notice  not  specifically  provided  for  herein,  as well as any
requirement  that at any time any  action  be taken by any  Person  against  the
Borrowers  or any other  Person or any  Collateral  granted as security  for the
Obligations or the Guaranteed  Obligations.  Each Guarantor hereby  specifically
waives any right to require that an action be brought against the Borrowers,  or
any of them, with respect to the  Obligations  under the provisions of Title 47,
Chapter 12,  Tennessee Code  Annotated,  as the same may be amended from time to
time.

         5.7. Waiver of Reimbursement,  Subrogation,  Etc. Each Guarantor hereby
waives to the fullest  extent  possible as against each  Borrower and its assets
any and all rights,  whether at law, in equity,  by agreement or  otherwise,  to
subrogation,  indemnity, reimbursement,  contribution,  exoneration or any other
similar claim,  right,  cause of action or remedy that otherwise would arise out
of such Guarantor's  performance of its obligations to the Administrative  Agent
or any Lender  under this  Article 5. The  preceding  waiver is  intended by the
Guarantors, the Administrative Agent, the Issuing Bank and the Lenders to be for
the benefit of the Borrowers or any of their successors and permitted assigns as
an absolute  defense to any action by any  Guarantor  against the  Borrowers  or
their assets that arises out of such Guarantor's  having made any payment to the
Administrative  Agent, the Issuing Bank or any Lender with respect to any of the
Guaranteed Obligations.

         5.8. Stay of  Acceleration.  If acceleration of the time for payment of
any amount  payable by the  Borrowers  under this  Agreement  is stayed upon the
insolvency,  bankruptcy  or  reorganization  of a  Borrower,  all  such  amounts
otherwise  subject  to  acceleration  under  the terms of this  Agreement  shall
nonetheless  be payable by the Guarantors  hereunder  forthwith on demand by the
Administrative Agent as directed by Requisite Lenders.

         5.9. Subordination of Indebtedness.  Any indebtedness of a Borrower for
borrowed  money now or hereafter  owed to any Guarantor or any other Borrower is
hereby  subordinated  in right of payment to the payment by the Borrowers of the
Obligations,  and if a default  in the  payment  of the  Obligations  shall have
occurred and be continuing,  any such  indebtedness of the Borrowers owed to any
Guarantor or any other  Borrower,  if collected or received by such Guarantor or
other  Borrower,  shall be held in trust by such Guarantor or other Borrower for
the holders of the Obligations and be paid over to the Administrative  Agent for
application in accordance with this Agreement and the other Loan Documents.

                                    ARTICLE 6

                              CONDITIONS PRECEDENT

 . The  obligations  of the Lenders as Issuing  Banks to issue Letters of Credit,
the obligations of the Lenders to purchase  participations  in Letters of Credit
and the  obligations  of the  Lenders  to make the Loans are all  subject to the
satisfaction  by the Borrowers and  Guarantors,  to the extent not waived by the
Lenders, of the following conditions precedent:

 . The Administrative Agent shall have received,  for the ratable benefit of each
Lender  (and  in  such  number  of  original   counterparts  or  copies  as  the
Administrative Agent reasonably may specify), each of the following, in form and
substance  satisfactory  to the  Administrative  Agent,  the  Lenders  and their
respective counsel:

     (a)  Agreement.  Counterpart  originals  of this  Agreement,  each duly and
validly  executed and delivered by or on behalf of all the  appropriate  parties
thereto;

     (b) Notes.  The Notes,  each duly and validly  executed  and  delivered  on
behalf of the Borrowers;

     (c) Pledge  Agreement.  The Pledge  Agreement duly and validly executed and
delivered  on behalf of all  appropriate  parties  thereto;

     (d) Pledged Stock.  Certificates evidencing the Pledged Stock together with
any  appropriate  stock power from each  certificate,  duly executed in blank by
GFC;

     (e) Charters; Certificates of Incorporation.  Copies of the charters of GFC
and TREBOR, and certificates of incorporation of SYDOOG and GOFAMCLO,  certified
by the  Secretary  of  State  or  other  appropriate  public  official  in  each
jurisdiction  of  incorporation  all in form and substance  satisfactory  to the
Lenders;

                    (f)  Bylaws.  Copies  of  the  bylaws,  and  all  amendments
         thereto,   of  GFC,   SYDOOG,   TREBOR  and  GOFAMCLO,   together  with
         certificates  of the Secretary or Assistant  Secretary of such entities
         dated the date hereof, stating that such copy is complete and correct;

     (g) Certificates of Limited Partnership.  Copies of certificates of limited
partnership of Goody's IN and Goody's MS, certified by the Secretary of State or
other  appropriate  public official in each  jurisdiction of organization all in
form and substance satisfactory to the Lenders;

     (h)  Limited  Partnership  Agreements.  Copies of the  limited  partnership
agreements  of Goody's IN and  Goody's MS,  together  with  certificates  of the
General Partner of such partnerships,  dated the date hereof,  stating that such
copies are complete and correct;

     (i) Subscription Agreements; Conveyance and Assignment Documents. Copies of
all subscription  agreements or other agreements  whereby GFC subscribed for the
shares of SYDOOG, GOFAMCLO and TREBOR and whereby GOFAMCLO and TREBOR subscribed
for the partnership  interests in Goody's MS and Goody's IN together with copies
of all deeds, bills of sale and all other documents  evidencing on effecting any
transfers  of assets made in  consideration  for the  aforementioned  shares and
partnership interests.

                    (j)  Good  Standing  and  Authority.   Certificates  of  the
         appropriate   governmental   officials  of  each  jurisdiction  as  the
         Administrative Agent reasonably may request, dated within ten (10) days
         of the date hereof,  stating that the Borrowers and  Guarantors  exist,
         are in good  standing  with  respect to the  payment of  franchise  and
         similar taxes and are duly qualified to transact business therein;

                    (k) Incumbency. Certificates of the Secretaries or Assistant
         Secretaries  or other  officer  or  partner,  as  appropriate,  of each
         Borrower and Guarantor, dated the date hereof, as to the incumbency and
         signature of all officers or partners (as appropriate) of such Borrower
         or Guarantor  authorized  to execute or attest to this  Agreement,  the
         Notes and the other Loan  Documents to which such Borrower or Guarantor
         is a party,  together  with  evidence  of the  incumbency  of each such
         Secretary or Assistant Secretary or other officer of partner;

                    (l) Resolutions. With respect to each Borrower and Guarantor
         (i) copies of the resolution authorizing,  approving and ratifying this
         Agreement, the Notes, and the other Loan Documents and the transactions
         contemplated  herein and therein to which such entity is a party,  duly
         adopted by the board of directors,  with regard to corporate  Borrowers
         and  Guarantors,  and by  the  partners,  with  regard  to  partnership
         Borrowers  and  Guarantors,  together  with  (ii)  certificates  of the
         Secretary  or  Assistant  Secretary  or other  appropriate  officer  or
         partner of each Borrower and Guarantor,  dated the date hereof, stating
         that each  such copy is a true and  correct  copy of  resolutions  duly
         adopted at a meeting,  or by action  taken on written  consent,  of the
         board of  directors or partners (as  appropriate)  of such  Borrower or
         Guarantor and that such  resolutions  have not been modified,  amended,
         rescinded or revoked in any respect and are in full force and effect as
         of the date hereof;

                    (m)  Legal  Opinions  of  the  Borrowers'  and   Guarantors'
         Counsel. The favorable legal opinion of Messrs. Woolf, McClane, Bright,
         Allen & Carpenter,  counsel to the Borrowers and Guarantors,  dated the
         date  hereof,  and  addressed  to the  Administrative  Agent,  and  the
         Lenders,  substantially in the form of Exhibit 6.1.1A,  together with a
         letter from the Borrowers and Guarantors to such counsel, substantially
         in the form of Exhibit  6.1.1B,  requesting such counsel to deliver its
         opinion to the Administrative Agent and the Lenders;

                    (n)   Evidence  of   Indebtedness.   If   requested  by  the
         Administrative  Agent,  (i) a copy of each  indenture,  loan agreement,
         guaranty,  promissory note or other evidence of Indebtedness  (together
         with  all  modifications,   amendments,   restatements  or  supplements
         thereto),  excluding  orders  for  the  purchase  of  inventory  in the
         ordinary  course of GFC's,  Goody's MS and Goody's  IN's  business,  to
         which each  Borrower or Guarantor is a party  constituting  a liability
         (contingent or otherwise) equal to or in excess of $100,000,  the terms
         and  conditions of which shall be  satisfactory  to the  Administrative
         Agent,  and (ii) a report  certified by a  Responsible  Officer of each
         Borrower  and  Guarantor  and  describing  any  default  or  failure of
         performance  or any  event  that with the  giving of notice  of, or the
         lapse of time,  or both,  would  become a default by such  Borrower  or
         Guarantor under any of such documents, instruments or agreements;

                    (o)  February  3,  1996  Financial  Statements.   The  final
         February  3, 1996  balance  sheet of GFC and the related  statement  of
         income  and cash flow for the  Fiscal  Year then  ended,  which GFC has
         already provided to Lenders;

                    (p)  Securities  and  Exchange  Commission  Form  10-K.  The
         Securities and Exchange Commission Form 10-K with regard to GFC for the
         year ending  February 3, 1996 as filed with the Securities and Exchange
         Commission, which GFC has already provided to Lenders;

     (q) Proxy  Statement for 1996 Annual  Meeting.  The proxy statement for the
GFC's 1996 annual meeting, which GFC has already provided to Lenders;

                    (r) Officer's  Certificate.  A certificate  of a Responsible
         Officer of each Borrower and Guarantor,  dated the date hereof, stating
         that  (i)  each of the  representations  and  warranties  contained  in
         Article 9 is true and  correct  at and as of the date  hereof  with the
         same force and effect as if made on such  date,  (ii) all  obligations,
         covenants,  agreements and conditions contained in this Agreement to be
         performed or satisfied by such Borrower or Guarantor on or prior to the
         date hereof have been  performed or satisfied  in all  respects,  (iii)
         with  regard to GFC only,  since  February  3, 1996,  there has been no
         material  adverse  change in the  properties,  businesses or results of
         operations  or in the  financial or other  condition of GFC and (iv) no
         Default  or Event of  Default  has  occurred  or is  occurring,  and in
         addition  setting  forth in such  detail  as shall be  required  by the
         Lenders  calculations  showing  that as of the date  hereof  and  after
         giving  effect to the  transactions  that are the subject  hereof,  the
         Borrowers and Guarantors are in compliance with Article 10;

     (s) No Default  Certificate.  A certificate  duly executed by a Responsible
Officer of each Borrower and Guarantor,  certifying  that no Default or Event of
Default exists as of the date hereof;

                    (t) Consents. Evidence that each Borrower and each Guarantor
         has  obtained  all  requisite  consents  and  approvals  required to be
         obtained  from any Person to permit the  transactions  contemplated  by
         this  Agreement,   the  Notes  and  the  other  Loan  Documents  to  be
         consummated in accordance with their  respective  terms and conditions;
         and

                    (u)  Other  Matters.   All  other  documents,   instruments,
         agreements,  opinions,  certificates,  insurance policies, consents and
         evidences of other legal matters, in form and substance satisfactory to
         the Administrative  Agent and its counsel, as the Administrative  Agent
         reasonably may request.

 . Each  Borrower and  Guarantor  shall not be in violation  of, or have received
notice of any violation of, any  applicable  legal  requirements,  including any
building,  zoning,  occupational  safety  and  health,  pension,   environmental
control,  or  similar  law,  ordinance  or  regulation  relating  to  any of its
properties,  or the operation thereof or of its business, or any applicable fair
employment,  equal opportunity or similar law, ordinance or regulation,  if such
violation  or  non-compliance  could  have  a  material  adverse  effect  on the
properties,  businesses, results of operations, management or financial or other
condition of such Borrower or Guarantor.

 . No material misrepresentation or omission shall have been made by or on behalf
of any Borrower or any Guarantor to the Lenders with respect to such  Borrower's
or Guarantor's business operations or financial or other condition.

 .  Except  as  described  in  Section  7.6,  no  action,  suit,   proceeding  or
investigation shall be pending before or threatened by any court or Governmental
Authority with respect to the transactions  contemplated hereby or that may have
a material  adverse  effect (as determined by the  Administrative  Agent and the
Lenders, in their sole discretion) on any Borrower's or any Guarantor's business
operations or financial or other condition.

 . The obligations of each of the Lenders to make any Loans (including Loans used
to refinance or repay other Loans) on any date (including the date hereof),  and
the  obligations  of the Lenders as Issuing  Banks to issue Letters of Credit on
any date  (including the date hereof),  are subject to the  satisfaction  of the
conditions  set forth below in this Section 6.2. Each request for Loans or for a
Letter of Credit  hereunder shall  constitute a  representation  and warranty by
each Borrower to the  Administrative  Agent and each such Lender, as of the date
of the making of such Loans or the issuance of such  Letter(s)  of Credit,  that
the conditions in this Section 6.2 have been satisfied.

     . The  conditions  precedent  set  forth in  Section  6.1  shall  have been
satisfied as of the date of this Agreement.

 . The  representations  and warranties of the Borrowers and Guarantors set forth
in  this  Agreement,  the  Notes  and  the  other  Loan  Documents  and  in  any
certificate,  opinion or other statement provided at any time by or on behalf of
any Borrower or any Guarantor in connection  herewith  shall be true and correct
on and as of the  date of the  making  of such  Loans  or the  issuance  of such
Letter(s)  of Credit as if made on and as of such date,  except for such changes
in the Schedules in this  Agreement that are permitted to be made on a quarterly
basis pursuant to Section 8.1.2 hereof.

 . No Default or Event of Default  shall have  occurred and be  continuing on the
date of the  requested  Borrowing  or Letter of Credit  issuance or after giving
effect to such Borrowing or Letter of Credit issuance.

 . No law or  regulation  shall  prohibit  the making of a requested  Loan or the
issuance of a requested  Letter of Credit;  no order,  judgment or decree of any
court or Governmental  Authority shall prohibit the making of the requested Loan
or the issuance of the requested  Letter of Credit;  and no litigation  shall be
pending that in the judgment of the  Administrative  Agent or Requisite  Lenders
would, enjoin, prohibit or restrain any Lender or any Issuing Bank from making a
requested Loan or the Issuing Bank from issuing a requested Letter of Credit.

 . All proceedings in connection with the making of any Loan, the issuance of any
Letter of Credit and the other transactions  contemplated by this Agreement, the
Loan Documents and all documents incidental thereto shall be satisfactory to the
Administrative  Agent, and the Administrative Agent shall have received all such
information and such counterpart  originals or certified or other copies of such
documents as the Administrative Agent reasonably may request.

                                    ARTICLE 7

                         REPRESENTATIONS AND WARRANTIES

         In order to induce the Administrative  Agent, each Issuing Bank and the
Lenders to enter into this Agreement, to make the Loans, to issue the Letters of
Credit and to provide the other  financial  accommodations  provided for herein,
each  Borrower and  Guarantor  hereby makes the  following  representations  and
warranties to the Administrative Agent, each Issuing Bank and each Lender:

 . GFC and TREBOR are corporations  duly organized,  validly existing and in good
standing  under the laws of the State of  Tennessee.  SYDOOG  and  GOFAMCLO  are
corporations  duly  organized,  validly  existing and in good standing under the
laws  of  the  State  of  Delaware.  Goody's  MS  and  Goody's  IN  are  limited
partnerships  duly  organized,  validly  existing and in good standing under the
laws of the State of Tennessee. Each Borrower and Guarantor has the corporate or
partnership (as  applicable)  power and authority and the legal right to own and
operate  its  properties  and  assets,  to lease the  properties  and  assets it
operates  under lease and to carry on its business as it is now being  conducted
and intended to be conducted,  and is duly  qualified to transact  business as a
foreign  corporation  or limited  partnership in good standing under the laws of
each jurisdiction in which its ownership,  lease or operation of property or the
conduct of its business requires such  qualification,  except to the extent that
failure to qualify to transact business would not have a material adverse effect
on the  properties,  business,  results  of  operation  or  financial  or  other
condition of such Borrower or Guarantor.

 . Each  Borrower  and  Guarantor  (a)  has  the  corporate  or  partnership  (as
applicable) power and authority and the legal right to enter into this Agreement
and the Loan Documents and to enter into and perform its respective  obligations
hereunder and thereunder,  and (b) has taken all necessary  corporate  action on
its part to authorize the execution and delivery of such documents,  instruments
and agreements and the performance of its respective  obligations  hereunder and
thereunder.  This  Agreement,  the Notes and the other Loan  Documents have been
duly  executed  and  delivered on behalf of each  Borrower and  Guarantor as are
parties  to  such  Loan  Documents  and  constitute  legal,  valid  and  binding
obligations,  enforceable against each Borrower and Guarantor in accordance with
their respective terms.

 . All necessary consents, approvals and authorizations of, filings with and acts
by or with respect to all Governmental Authorities and other Persons required to
be obtained,  made or taken in  connection  with the  transactions  contemplated
hereby or the execution,  delivery,  performance,  validity or enforceability of
this  Agreement,  the Notes and the other Loan Documents (a) have been obtained,
made or taken and (b) remain in effect.

 . The  execution  and delivery of this  Agreement,  the Notes and the other Loan
Documents, the transactions contemplated hereby, the use of the proceeds thereof
and the  performance by each Borrower and Guarantor (to the extent it is a party
to such Loan  Document) of its  obligations  (a) do not conflict with or violate
any  Requirement  of Law or any  Contractual  Obligation  of  such  Borrower  or
Guarantor,  except to the extent that any such  violation or conflict  would not
have a  material  adverse  effect  on the  properties,  businesses,  results  of
operations,  management  or  financial or other  condition  of such  Borrower or
Guarantor,  and (b) do not  conflict  with,  constitute a default or require any
consent under, or result in the creation of any Lien upon any property or assets
of such  Borrower or Guarantor  pursuant to any  Contractual  Obligation of such
Borrower or Guarantor.

 .        7.5.       Financial Statements; Solvency

                    (a) The balance sheet of GFC as of February 3, 1996, and the
         related statement of income, shareholders' equity and cash flow for the
         Fiscal Year then ended,  together with the opinion of Deloitte & Touche
         LLP with respect  thereto,  copies of which have been  furnished to the
         Administrative  Agent,  fairly  present  the  assets,  liabilities  and
         financial  position  of GFC as at  such  date  and the  results  of its
         operations  and its cash flow for the Fiscal Year then ended.  All such
         financial  statements,   including  the  related  schedules  and  notes
         thereto,   have  been   prepared  in   compliance   with  GAAP  applied
         consistently  throughout the periods involved. At February 3, 1996, GFC
         had no material  Indebtedness,  obligation or other unusual  forward or
         long-term  commitment  that is not fairly  reflected in accordance with
         GAAP in the foregoing financial statements or in the notes thereto.

                    (b)  After  giving  effect  to  the   consummation   of  the
         transactions  contemplated  by this  Agreement,  the  making  of  Loans
         hereunder,  the issuance of Letters of Credit hereunder, the incurrence
         by each Borrower of the Obligations and the incurrence by each Borrower
         and  Guarantor  of the  Obligations,  each  Borrower  and  Guarantor is
         Solvent.

                    (c) This  Agreement and the other Loan  Documents  have been
         executed and delivered to the Lenders and the  Administrative  Agent by
         each Borrower and Guarantor in good faith, and the Obligations incurred
         hereunder and under the other Loan Documents and the security interests
         granted  hereunder  or pursuant  thereto  were  incurred and granted in
         exchange for fair consideration and reasonably equivalent value.

                    (d) Each  Borrower and  Guarantor  does not intend to incur,
         nor  believes  it will incur,  debts  beyond its ability to pay as they
         mature or become due.

                    (e)  Substantially  all of each  Borrower's and  Guarantor's
         trade and other  accounts  payable,  if any,  are current and are being
         paid in accordance with their respective terms. The consummation of the
         transactions   contemplated  by  this  Agreement  and  the  other  Loan
         Documents will not impair the ability of each Borrower and Guarantor to
         pay its trade and other accounts  payable,  if any, in accordance  with
         their terms.

                    (f) No Borrower or Guarantor  contemplates filing a petition
         in bankruptcy or for reorganization  under the federal Bankruptcy Code,
         nor does any Borrower or Guarantor have any knowledge of any threatened
         bankruptcy or insolvency proceedings against it.

                    (g)  The  funds  obtained  from  Lenders  are to be  used in
         accordance with the provisions of this Agreement.

 . Except as otherwise set forth in Schedule 7.6 or as otherwise disclosed by GFC
to the  Lenders in writing  subsequent  to May 25,  1995,  there are no actions,
suits,  proceedings or other litigation (including  proceedings by or before any
arbitrator or Governmental Authority) pending or threatened against or affecting
any Borrower or Guarantor  nor to the  knowledge of any Borrower or Guarantor is
there any basis  therefor,  (a) that  challenge the validity or propriety of the
transactions  contemplated  hereby,  (b) that could,  if  adversely  determined,
individually  or in the  aggregate,  have,  in the  reasonable  judgement of the
Lenders,  a  reasonable  likelihood  to have a  material  adverse  effect on the
properties,  businesses, results of operations, management or financial or other
condition  of any  Borrower  or  Guarantor  unless  fully  covered by  insurance
(subject to reasonable  deductibles),  (c) that, if adversely determined,  would
result in a material  damage award against any Borrower or Guarantor which would
not be  reimbursable  by insurance,  or (d) that could affect the ability of any
Borrower or Guarantor to perform its obligations under this Agreement, the Notes
or the other Loan Documents to which it is a party.

 . No Borrower or Guarantor is in default (nor has any event  occurred  that with
notice  or  lapse  of  time  or both  would  constitute  a  default)  under  any
Contractual  Obligation  of any  Borrower or  Guarantor if such default or event
could have a material adverse effect on the properties,  businesses,  results of
operations,  management  or  financial or other  condition  of such  Borrower or
Guarantor  or on the  ability of such  Borrower  or  Guarantor  to  perform  its
obligations under this Agreement, the Notes or the other Loan Documents to which
it is a party. No Default or Event of Default has occurred and is continuing.

 . The capitalization of GFC, TREBOR, SYDOOG and GOFAMCLO consists of such number
of shares, authorized,  issued and outstanding, of such classes and series, with
or  without  such  par  value,  as are set  forth  in  Schedule  7.8A.  All such
outstanding  shares have been duly  authorized  and validly issued and are fully
paid and  nonassessable.  There  are no  outstanding  stock  purchase  warrants,
subscriptions,  options, securities,  instruments or other rights of any type or
nature  whatsoever  that are  convertible  into,  exchangeable  for or otherwise
provide for the  issuance of capital  stock of GFC,  TREBOR,  SYDOOG or GOFAMCLO
except as described in Schedule  7.8A. The partners of Goody's IN and Goody's MS
and such partners'  respective  partnership  interests are set forth in Schedule
7.8B.  Other than the  partnership  agreements  delivered to the  Administrative
Agent pursuant to Section  6.1.1(h) above,  there are no agreements  between any
person  and the  partners  at  Goody's  IN and  Goody's  MS with  regard  to the
disposition of the current  partnership  interests of Goody's IN and Goody's MS,
or the sale or creation of  additional  partnership  interests in Goody's MS and
Goody's IN.

 . Except as disclosed to Lenders in writing,  each  Borrower and  Guarantor  has
filed all tax returns that were required to be filed in any jurisdiction and has
paid all taxes shown  thereon to be due or otherwise  due upon such  Borrower or
Guarantor  or  its  properties,   income  or  franchises,   including  interest,
assessments,  fees and  penalties (or have  provided  adequate  reserves for the
payment thereof),  except to the extent that the failure to file such returns or
pay such amounts  would not result in a liability to such  Borrower or Guarantor
which is equal to or greater than  $200,000 for any one failure or $500,000 when
aggregated with all such other failures of the Borrowers and Guarantors.  To the
knowledge of each Borrower and Guarantor,  and except as previously disclosed in
writing to the Lenders, no claims are threatened, pending or being asserted with
respect to, or in connection  with,  any return  referred to in this Section 7.9
that, if,  adversely  determined,  in the  reasonable  judgement of the Lenders,
would have a reasonable  likelihood of having a material  adverse  effect on the
properties,  businesses, results of operations, management or financial or other
condition of such  Borrower or Guarantor  taken as a whole,  or could affect the
ability of such  Borrower or  Guarantor  to perform its  obligations  under this
Agreement, the Notes and the other Loan Documents to which it is a party.

 . No  Contractual  Obligation of any Borrower or Guarantor and no Requirement of
Law relating to or otherwise  affecting  any Borrower or Guarantor or any of its
properties,  businesses or  operations,  materially  and adversely  affects,  or
insofar as any of them may reasonably  foresee could so affect,  the properties,
businesses, results of operations, management or financial or other condition of
any  Borrower  or  Guarantor  or could  affect the  ability of any  Borrower  or
Guarantor to perform its  obligations  under this  Agreement,  the Notes and the
other Loan Documents to which it is a party.

     . There are no outstanding or unpaid judgments  against any Borrower or any
Guarantor in excess of $500,000.

 . Except for Subsidiaries which become parties to this Agreement,  the Borrowers
and  Guarantors  shall not create any  Subsidiaries  without  the prior  written
consent of the Requisite Lenders.  Such new Subsidiaries shall become parties to
this Agreement as either  Borrowers or Guarantors,  as determined by the Lenders
in their sole discretion.

 . No "prohibited  transaction"  or  "accumulated  funding  deficiency"  (each as
defined in ERISA) or  Reportable  Event has occurred  with respect to any Single
Employer Plan, or to the knowledge of the Borrowers and Guarantors  with respect
to any  Multi-Employer  Plan that would have a  material  adverse  effect on any
Borrower's or Guarantor's financial condition or business. As of the most recent
actuarial  valuation  of any  such  Plan,  the  actuarial  present  value of all
benefits under each Plan (based on those assumptions used to fund the Plan) does
not exceed the fair  market  value of the assets of the Plan  allocable  to such
benefits.  Each  Borrower,  Guarantor  and  Commonly  Controlled  Entity  are in
compliance  in all material  respects  with ERISA and the rules and  regulations
promulgated thereunder.

 . None of the Borrowers or Guarantors is engaged  principally in, nor has as one
of its most  important  activities,  the  business of  extending  credit for the
purpose of  purchasing  or  carrying  "margin  stock" as that term is defined in
Regulation  U  promulgated  by the Board of  Governors  of the  Federal  Reserve
System, as now in effect. No part of the Indebtedness evidenced by the Notes, or
otherwise created in connection with this Agreement or the other Loan Documents,
shall be used,  directly or  indirectly,  for the purpose of purchasing any such
margin stock.  If requested by the  Administrative  Agent or any of the Lenders,
each  Borrower  and  Guarantor  shall  furnish or cause to be  furnished  to the
Administrative  Agent and each such Lender a statement,  in conformity  with the
requirements  of Federal  Reserve Form U-1 referred to in  Regulation  U, to the
foregoing effect.

 . None of the Borrowers or the Guarantors is an investment  company,  or company
controlled by an investment company within the meaning of the Investment Company
Act of 1940, as now in effect.

 . Except as disclosed by GFC to Lenders in writing  subsequent  to May 25, 1995,
set  forth on  Schedule  7.16A  hereto is a  complete  and  correct  list of all
Indebtedness (other than Contingent Obligations, Indebtedness incurred under the
Loan  Documents,  trade debt  incurred in the  ordinary  course of business  and
obligations  under  Operating  Leases) of each  Borrower and  Guarantor  and the
aggregate  principal  amount thereof  outstanding on the date hereof.  Except as
disclosed by GFC to Lenders in writing  subsequent to May 25, 1995, set forth on
Schedule  7.16B is a complete  and correct  list of all  Contingent  Obligations
(other than any Contingent  Obligations created under the Loan Documents of each
Borrower and each Guarantor) and the aggregate amount thereof outstanding on the
date hereof.

 . Set forth on Schedule  7.17A is a complete and correct  list of the  locations
where the Borrowers and Guarantors maintain their chief executive offices, their
principal  places of business,  an office,  or any material  financial  records.
Except as disclosed by GFC to Lenders in writing subsequent to May 25, 1995, set
forth on Schedule  7.17B is a complete and correct list of each name under or by
which each of the Borrowers and  Guarantors  presently  conducts its business or
has conducted its business since 1991.

 . Each  Borrower  and  Guarantor  has  good and  marketable  title  (or,  to the
knowledge  of  such  Borrower  and  Guarantor,  good  and  marketable  leasehold
interests  with  respect  to  leased  property)  to all  its  respective  assets
(including  all assets of GFC  reflected in the balance  sheet as of February 3,
1996), subject to no Liens other than Permitted Liens.

 . There are no  disputes  or  controversies  pending  between  any  Borrower  or
Guarantor and its  employees,  the outcome of which may have a material  adverse
effect on the  properties,  businesses,  results of  operations,  management  or
financial or other condition of such Borrower or Guarantor.

 . Each Borrower and Guarantor (a) to the best of its knowledge, has not been, is
not and will not be in material violation of any Requirement of Law binding upon
such Borrower and Guarantor or its respective  properties and assets,  including
any building,  zoning,  occupational safety, pension,  environmental control, or
similar law, ordinance or regulation relating to its properties or the operation
thereof  or  of  its  businesses,  or  any  applicable  fair  employment,  equal
opportunity  or similar  law,  ordinance or  regulation,  (b) to the best of its
knowledge, has not failed to obtain any material license, permit, certificate or
other  governmental  authorization  necessary for the conduct of its business or
the ownership and operation of its  properties,  (c) has not received any notice
from any Governmental Authority,  and to its knowledge no such notice is pending
or threatened, alleging that such Borrower or Guarantor has violated, or has not
complied with, any  Requirement of Law,  condition or standard  applicable  with
respect  to any of the  foregoing,  and (d) is not a party to any  agreement  or
instrument, or subject to any judgment,  order, writ, rule, regulation,  code or
ordinance,  except  where  any  violation,  noncompliance,  failure,  agreement,
judgment,  etc.  as  described  in this  Section  7.20 would not have a material
adverse effect on the properties,  businesses, results of operations, management
or financial or other condition of such Borrower or Guarantor.

 . To the best of its  knowledge,  each  Borrower and Guarantor has all licenses,
permits,   approvals,    registrations,    contracts,    consents,   franchises,
qualifications, and other authorizations necessary for the lawful conduct of its
business or  operations  wherever now  conducted and as planned to be conducted,
pursuant to all applicable statutes, laws, ordinances,  rules and regulations of
all Governmental  Authorities  having,  asserting or claiming  jurisdiction over
such Borrower or Guarantor or over any part of its respective operations. Copies
of all such licenses, permits, approvals,  registrations,  contracts,  consents,
franchises,  qualifications,  and  other  authorizations  as may  be  reasonably
requested by the Administrative  Agent, shall be provided,  if available to such
Borrower or Guarantor,  upon such request. Each Borrower and Guarantor is not in
default  under  any  of  such  licenses,  permits,   approvals,   registrations,
contracts, consents, franchises,  qualifications,  and other authorizations, and
no event has occurred,  and no condition exists, that with the giving of notice,
the  passage  of time or both would  constitute  a default  thereunder  or would
result in the suspension,  revocation,  impairment, forfeiture or non-renewal of
any thereof. The continuation,  validity and effectiveness of all such licenses,
permits,   approvals,    registrations,    contracts,    consents,   franchises,
qualifications,  and other  authorizations will not be adversely affected by the
transactions  contemplated by this Agreement.  No Borrower or Guarantor knows of
any  reason  why it will  not be able to  maintain  after  the date  hereof  all
licenses, permits, approvals,  registrations,  contracts,  consents, franchises,
qualifications, and other authorizations necessary or appropriate to conduct the
businesses of such Borrower or Guarantor as now conducted and presently proposed
to be conducted.

 . Except as set  forth on  Schedule  7.22 or as  otherwise  disclosed  by GFC to
Lenders in writing  subsequent to May 25, 1995, since the most recent audited or
unaudited  financial  statements  provided by the  Borrowers  and  Guarantors to
Lenders,   there  has  been  no  material  adverse  change  in  the  properties,
businesses, results of operations, management or financial or other condition of
any Borrower or Guarantor.

 . Except as disclosed to Lenders by GFC subsequent to May 25, 1995, set forth on
Schedule 7.23 is a complete and accurate list, as of the date hereof, of (a) all
employment  agreements  and  executive  compensation  arrangements  to which the
Borrowers  and  Guarantors  are a  party  and  which  provide  for  annual  base
compensation  to any Person  (assuming  compliance  with or  satisfaction of all
contingencies  or  conditions)  of  $250,000  or more  per  year  and (b) to the
Borrowers' and Guarantors'  knowledge,  all agreements relating to the voting or
disposition of any outstanding shares of capital stock of GFC, SYDOOG, TREBOR or
GOFAMCLO or to any votes of the  partners of Goody's MS and Goody's IN or to the
disposition of such partner's  partnership interest or to the sale of additional
partnership interests in Goody's MS and Goody's IN.

 . (a) To the best of each  Borrower's  and  Guarantor's  knowledge,  none of the
Borrowers  or  Guarantors  and any of their  operations  is in  violation of any
applicable   Hazardous  Materials  Law  or  any  restrictive  covenant  or  deed
restriction  relating to  environmental  matters  (recorded or  otherwise),  the
violation  of which  would be likely to have a  material  adverse  effect on the
properties,  businesses, results of operations, management or financial or other
condition of such  Borrower or Guarantor;  (b) without  limitation of clause (a)
above,  to the best of each Borrower's and  Guarantor's  knowledge,  none of the
Borrowers  or  Guarantors,  their  operations,  nor any current or prior  owner,
lessor or operator  (other than such Borrower or Guarantor),  is in violation of
any Hazardous  Materials  Law or subject to any existing,  pending or threatened
investigation, inquiry or proceeding by any Governmental Authority or subject to
any remedial  obligations under any Hazardous  Materials Law; (c) to the best of
each  Borrower's or  Guarantor's  knowledge,  all material  permits and licenses
required of such  Borrower or Guarantor  with  respect to  Hazardous  Materials,
including  past or  present  treatment,  storage,  disposal  or  release  of any
Hazardous  Materials or solid waste into the environment,  have been obtained or
filed;  (d) to the  best of  each  Borrower's  and  Guarantor's  knowledge,  all
Hazardous  Materials or solid waste  generated by such Borrower or Guarantor has
in the past been, and will continue to be, transported,  treated and disposed of
only by  carriers  maintaining  valid  permits  under all  applicable  Hazardous
Materials  Laws  and  only  at  treatment,   storage  and  disposal   facilities
maintaining  valid permits under  applicable  Hazardous  Materials  Laws,  which
carriers and  facilities  have been and are  operating in  compliance  with such
permits;  (e) each  Borrower  and  Guarantor  has  taken  all  reasonable  steps
necessary to determine,  and has determined that no Hazardous Materials or solid
wastes have been  disposed of or otherwise  released by it except in  compliance
with Hazardous  Material Laws that would  materially  affect such  Borrower's or
Guarantor's  financial  condition or business;  and (f) no Borrower or Guarantor
has any  material  contingent  liability in  connection  with any release of any
Hazardous Materials or solid waste into the environment.

 . Neither this Agreement nor any of the other Loan Documents, nor any agreement,
instrument  or  other  document  executed  pursuant  hereto  or  thereto  or  in
connection  herewith  or  therewith,  nor any  certificate,  statement  or other
information  referred to herein or therein or  furnished  to the  Administrative
Agent,  each Issuing Bank or any of the Lenders pursuant hereto or thereto or in
connection  herewith or therewith,  contains any misstatement of a material fact
or omits to state any material fact necessary to make the  statements  contained
herein or therein, in the light of the circumstances under which they were made,
not misleading on the date hereof or on the date furnished,  as the case may be,
except as otherwise disclosed to the Administrative Agent, each Issuing Bank and
the Lenders in writing on or prior to the date hereof.  No Borrower or Guarantor
is aware of any fact that it has not  disclosed to the Lenders  that  materially
and adversely  affects,  or insofar as such Borrower or Guarantor can reasonably
foresee,  could  materially and adversely  affect,  the properties,  businesses,
results of  operations,  management  or  financial  or other  condition  of such
Borrower or Guarantor, or could affect the ability of such Borrower or Guarantor
to perform its obligations  under this Agreement and the other Loan Documents to
which it is a party.

 . Except as disclosed to Lenders by GFC subsequent to May 25, 1995, set forth on
Schedule 7.26 hereto is a complete and accurate  list of all Material  Contracts
of each  Borrower  and  Guarantor.  Other  than as  disclosed  to Lenders by GFC
subsequent to May 25, 1995 and as set forth on Schedule 7.26, each such Material
Contract is in full force and effect in  accordance  with the terms  thereof and
there  are no  material  defaults  by any  Borrower  or  any  Guarantor,  to the
knowledge of any Borrower or any Guarantor,  by any other party,  under any such
Material   Contract.   Each   Borrower  and   Guarantor  has  delivered  to  the
Administrative Agent a true and complete copy of each of its Material Contracts.

         7.27  Acquisition  of  Assets.  Each  Borrower  (other  than  GFC)  and
Guarantor  acknowledges  that (a) the Facilities  pre-existed such Borrower's or
Guarantor's  formation;  (b) the  Lenders  based  their  decision  to extend the
Facilities to GFC based on the value of the assets of GFC and the income derived
therefrom;  (c) such Borrower or Guarantor was  capitalized by the transfer from
GFC of assets subject to the  Facilities;  and (d) such assets now titled in the
name of such  Borrower or Guarantor  remain  subject to the negative  pledge and
other restrictions  imposed by this Agreement to the same extent as prior to the
formation and capitalization of such Borrower or Guarantor.

                                    ARTICLE 8

                              AFFIRMATIVE COVENANTS

         So long as any Obligations  are unpaid or  outstanding,  any Obligation
under the Loan Documents is unperformed or any of the Commitments are in effect,
each Borrower and Guarantor shall:

 .        8.1.       Financial Statements

 . Furnish to the Administrative  Agent and each Lender, as soon as available and
in any event within  ninety-five  (95) days after the end of each Fiscal Year of
the Borrowers and Guarantors,  a consolidated balance sheet of the Borrowers and
Guarantors,  as of the end of such  Fiscal  Year  and the  related  consolidated
statement of income,  shareholders'  equity and consolidated  cash flow for such
Fiscal Year,  audited and reported upon,  without  qualification,  by Deloitte &
Touche,  LLP, or other independent public accountants  reasonably  acceptable to
the Lenders,  together with (a) a certificate  of a Responsible  Officer of such
Borrower or  Guarantor  stating that no Default or Event of Default has occurred
and is continuing  or, if in the opinion of such officer,  a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the  action  that such  Borrower  or  Guarantor  proposes  to take with  respect
thereto,  (b) a  certificate  of a  Responsible  Officer  of  such  Borrower  or
Guarantor  stating  that there has been no  material  change in the  information
contained  in the  Schedules  provided  pursuant  to Article 7, except as may be
attached  to  such  certificate,  (c) a  schedule  in form  satisfactory  to the
Administrative  Agent and the Lenders of the computations  used by the Borrowers
and  Guarantors in  determining,  as of the end of such Fiscal Year,  compliance
with all financial  covenants  contained herein and (d) a written discussion and
analysis  by the  management  of GFC of the  consolidated  financial  statements
furnished in respect of such annual fiscal period.

 . Furnish to the Administrative  Agent and each Lender, as soon as available and
in any event within fifty (50) days after the end of each Fiscal  Quarter of the
Borrowers and Guarantors (other than the last Fiscal Quarter in any Fiscal Year)
an unaudited  consolidated balance sheet of the Borrowers and Guarantors,  as of
the end of such Fiscal Quarter, and the related consolidated statement of income
for the period commencing at the beginning of the current Fiscal Year and ending
with the end of such Fiscal  Quarter and the related  consolidated  statement of
cash flow for the period  commencing at the beginning of the current Fiscal Year
and ending  with the end of such  Fiscal  Quarter,  certified  by a  Responsible
Officer of such Borrower or Guarantor,  together with (a) a certificate  of said
Responsible Officer stating that no Default or Event of Default has occurred and
is  continuing  or, if in the  opinion  of such  officer,  a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the  action  that such  Borrower  or  Guarantor  proposes  to take with  respect
thereto,  (b) a  certificate  of a  Responsible  Officer  of  such  Borrower  or
Guarantor  stating  that there has been no  material  change in the  information
contained  in the  Schedules  provided  pursuant  to Article 7, except as may be
attached  to  such  certificate,  (c) a  schedule  in form  satisfactory  to the
Administrative  Agent and the Lenders of the computations  used by the Borrowers
and Guarantors in determining, as of the end of such period, compliance with all
financial  covenants  contained herein and (d) a written discussion and analysis
by the  management  of GFC of the financial  statements  furnished in respect of
such period.

 . Take all  actions  necessary  to cause  all such  financial  statements  to be
complete and correct in all material  respects and to be prepared in  reasonable
detail and in accordance with GAAP applied  consistently  throughout the periods
reflected  therein (except as may be approved by such accountants or Responsible
Officer,  as the case may be,  and  disclosed  therein  and  except as to normal
year-end adjustments as to unaudited financial statements).

Additional  Reports of Borrowers  and  Guarantors.  Each  Borrower and Guarantor
agrees  to  furnish  to the  Administrative  Agent and each  Lender,  as soon as
available  and in any event within 65 days after the end of each Fiscal  Quarter
of the  Borrowers  and  Guarantors,  and  within  110 days after the end of each
Fiscal Year of the Borrowers and Guarantors,  an unaudited  statement of assets,
liabilities  and  equity  and  related  unaudited  statement  of income for such
Borrower  or  Guarantor  signed by a  Responsible  Officer of such  Borrower  or
Guarantor stating that the statements are prepared from the books and records of
such Borrower or Guarantor but not necessarily in conformity with GAAP.

     . Subject to normal  year-end  adjustments,  furnish to the  Administrative
Agent and each Lender:

 . Promptly  after the same are received by any Borrower or Guarantor,  copies of
management  letters  provided to such  Borrower or Guarantor by its  independent
certified public  accountants that describe or refer to any inadequacy,  defect,
problem,  qualification  or  other  lack  of  satisfactory  accounting  controls
utilized by such Borrower or Guarantor.

 . Together with the other Borrowers and Guarantors, (a) within five (5) Business
Days  after  the  delivery  of same to the  shareholders  of GFC,  copies of all
financial  statements and reports that GFC sends to the shareholders of GFC, and
(b) within five (5) business days of the filing  thereof,  copies of all reports
and  statements  of GFC  (including  final  proxy  and  information  statements,
quarterly, annual and current reports and registration statements, but excluding
those  pertaining  only to employee  benefit plans) that it may make to, or file
with, the Commission.

 . Together with the other Borrowers and Guarantors, as soon as available, and in
any event not later than sixty  (60) days after the end of each  Fiscal  Year of
the Borrowers and Guarantors,  twelve (12) month budgeted consolidated financial
statements  (including  balance  sheet and  statement  of income,  shareholders'
equity and cash flow, all on a consolidated basis) for the following Fiscal Year
of the Borrowers and Guarantors  (including  underlying  assumptions)  in a form
substantially the same as the budget provided the Lenders prior to the execution
of this  Agreement.  Any updates  thereto  shall be provided upon request of the
Administrative Agent.

 . Promptly  upon  request by the  Administrative  Agent,  copies of all material
agreements, instruments and/or documents evidencing or otherwise related to such
Borrower's or Guarantor's Indebtedness.

 .  Promptly,   such   additional   financial  and  other   information   as  the
Administrative Agent or any Lender from time to time may reasonably request.

 . Notify the  Administrative  Agent and each Lender of the  occurrence of any of
the  following  events  not later  than five (5) days  after  such  Borrower  or
Guarantor knows or has reason to know of such event:

 .  Any Default or Event of Default.

 . (a) Any  default  or event of  default  or  concurrent  defaults  or events of
default under one or more  Contractual  Obligations or Operating  Leases of such
Borrower or  Guarantor  that if adversely  determined  could result in liability
equal to or  greater  than  $2,500,000  per  default  or event  of  default  and
$5,000,000 in the aggregate  (together with defaults of the other  Borrowers and
Guarantors) at any time or could otherwise have a material adverse effect on the
properties,  businesses, results of operations, management or financial or other
condition of such Borrower or Guarantor,  (b) any litigation,  investigation  or
proceeding that may exist at any time between such Borrower or Guarantor and any
Governmental  Authority  (excluding,  however,  audits and inquiries made in the
ordinary  course  of  business),  that if  adversely  determined,  would  have a
material  adverse effect on the properties,  businesses,  results of operations,
management or financial or other condition of such Borrower or Guarantor, or (c)
any other litigation that if adversely determined would (i) if the relief sought
does not include  damages,  have a material  adverse  effect on the  properties,
businesses, results of operations, management or financial or other condition of
such Borrower or Guarantor, or (ii) if the relief sought includes damages, would
result in an uninsured  liability  to any  Borrower or Guarantor  equal to or in
excess  of  $2,500,000,  or  when  aggregated  with  other  pending  litigation,
investigations or proceedings against all Borrowers and Guarantors, would result
in an aggregate  uninsured liability to the Borrowers and Guarantors equal to or
in excess of $5,000,000.

 . (a) Any  Reportable  Event with respect to any Plan,  (b) the  institution  of
proceedings  or the taking or expected  taking of any other  action by the PBGC,
any  Borrower or  Guarantor  or any  Commonly  Controlled  Entity to  terminate,
withdraw  or  partially  withdraw  from any Plan  and (c)  with  respect  to any
Multi-Employer  Plan, the  reorganization or insolvency of such Plan;  provided,
however,  that no Borrower or Guarantor  shall be required to provide  notice to
the extent the occurrence of an event or events  described above will not have a
material  adverse  effect on the  properties,  business,  results of operations,
management,  financial,  or other  condition of such Borrower or  Guarantor.  In
addition to such notice,  each Borrower and Guarantor  shall deliver or cause to
be  delivered  to the  Administrative  Agent and each  Lender  whichever  of the
following may be applicable:  (i) a certificate of a Responsible Officer of such
Borrower or Guarantor  setting forth details as to such Reportable Event and the
action that it or the Commonly  Controlled  Entity proposes to take with respect
thereto,  together with the copy of any notice of such Reportable Event that may
be required to be filed with the PBGC, or (ii) any notice  delivered by the PBGC
evidencing  its intent to institute  such  proceedings or any notice to the PBGC
that such Plan is to be terminated, as the case may be.

 . (a) Any event that makes any of the  representations set forth in Section 9.27
inaccurate  in any  material  respect  or (b) the  receipt  by any  Borrower  or
Guarantor  of  any  notice,  order,  directive  or  other  communication  from a
Governmental  Authority  alleging  a  violation  of or  noncompliance  with  any
Hazardous Material Laws.

     . (a) Any material  amendment,  change or modification to, or waiver of any
material  provision of, or any termination of, any Material Contract and (b) any
default or event of default under any Material Contract.

 . Any  casualty  loss or event  not  insured  against  in an amount in excess of
$2,500,000,  or when aggregated with other casualty losses or events not insured
against,  would result in an aggregate  loss equal to or in excess of $5,000,000
with regard to all of the Borrowers and Guarantors.

 .        8.4.       Payment of Obligations and Performance of Covenants

                    (a)  Make  full  and  timely  payment  of  the  Obligations,
         including  the Loans and  Letter of  Credit  Liabilities,  whether  now
         existing or hereafter arising;

                    (b) Duly comply  with all terms,  covenants  and  conditions
         contained in each of the Loan Documents, at the times and places and in
         the manner set forth therein; and

 . Pay or cause to be paid  before the same shall  become  delinquent  and before
penalties have accrued thereon, all taxes,  assessments and governmental charges
or levies imposed on the income, profits, franchises,  property or businesses of
such Borrower or Guarantor  except to the extent and so long as (a) the same are
being  contested  in good  faith by  appropriate  proceedings  and (b)  adequate
reserves with respect  thereto in conformity with GAAP have been provided on the
books of such Borrower or Guarantor.

 . Continue  (a) with regard to GFC,  Goody's MS and Goody's IN, to engage in the
business of selling apparel at retail and, with regard to Goody's MS, to provide
inventory  and  distribution  services to GFC and Goody's IN, (b) with regard to
SYDOOG, to hold,  acquire and license  intellectual  property to GFC, Goody's MS
and  Goody's  IN, (c) with regard to TREBOR and  GOFAMCLO,  to hold  partnership
interests  in Goody's MS and Goody's,  IN, and (d) with regard to each  Borrower
and Guarantor,  except as permitted by Sections 9.3 and 9.4, to preserve,  renew
and keep in full force and effect its existence and present corporate structure.

 . Observe and comply with all present and future Requirements of Law relating to
the conduct of its business or to its properties or assets, except to the extent
and so long as the  nonobservance  thereof or  noncompliance  therewith will not
have  a  material  adverse  effect  on  the  properties,  business,  results  of
operations,  management  or  financial or other  condition  of such  Borrower or
Guarantor,  and will not  materially  impair the  Administrative  Agent's or the
Lenders'  rights or materially  affect the ability of such Borrower or Guarantor
to perform its  obligations  under this  Agreement,  the Notes or the other Loan
Documents to which it is a party.

 . Maintain,  preserve and keep (a) all of its  buildings,  tangible  properties,
equipment  and other  property and assets used and  necessary  in its  business,
whether owned or leased, in good repair, working order and condition,  from time
to time making all necessary and proper repairs and  replacements so that at all
times  the  utility,  efficiency  and  value  thereof  shall  not be  materially
impaired,  and (b) all material rights,  privileges and franchises  necessary or
desirable in the normal conduct of its business.

 .        8.9.       Insurance

                    (a)      Maintain:

                           (i) insurance on substantially all insurable property
                    and assets owned or leased by such  Borrower or Guarantor in
                    the  manner,  to the extent and  against at least such risks
                    (in  any  event  including   general   liability,   workers'
                    compensation, employers' liability, automobile liability and
                    physical  damage  coverage,  "all risk"  property,  business
                    interruption,   fidelity   and  crime   insurance)   usually
                    maintained by owners of similar businesses and properties in
                    similar geographic areas;  provided that the amounts of such
                    physical  damage  insurance  coverage shall not be less than
                    the  replacement  cost of all such  insurable  property  and
                    assets,  except for  coverage  limitations  with  respect to
                    flood,  earthquake and windstorm  perils that are acceptable
                    to the Administrative Agent and Requisite Lenders; and

                           (ii) self-insurance reserves covering those risks for
                    which such Borrower or Guarantor  presently  self-insure  in
                    appropriate  amounts  as  determined  from  time  to time by
                    independent  insurance  claims  auditors  acceptable  to the
                    Administrative Agent and Requisite Lenders.

         All such insurance shall be in such amounts, in such form and with such
         insurance   companies   as   are   reasonably   satisfactory   to   the
         Administrative Agent and Requisite Lenders.

                    (b) Furnish to the Administrative  Agent not less frequently
         than  annually  and  at  any  time  upon  written  request,   (i)  full
         information as to such insurance carried,  including the amounts of all
         self-insurance  reserves  of  each  Borrower  and  Guarantor  and  (ii)
         certificates  of  insurance  from the  insurance  companies  and,  upon
         request,  certified copies of such insurance policies.  All policies of
         insurance  shall  provide  for not less than  fifteen  (15) days' prior
         written cancellation notice to the Administrative Agent.

     . Use the proceeds of the Facilities for the purposes  specified in Section
2.10 and for no other purpose. 

 . Keep and  maintain  full and  accurate  books of record  and  accounts  of its
operations,   dealings  and   transactions  in  relation  to  its  business  and
activities, in conformity with GAAP and all Requirements of Law.

 .  Upon  reasonable  prior  notice,  permit  any  employees,   agents  or  other
representatives  of the  Administrative  Agent or the Lenders and any attorneys,
accountants or other agents or representatives  designated by the Administrative
Agent or the  Lenders  to (a) have  access to and visit and  inspect  any of the
books of account, financial records and properties,  real, personal or mixed, of
such  Borrower or Guarantor (b) examine and make  abstracts  from any such books
and records and (c) discuss the affairs,  finances and accounts of such Borrower
or Guarantor  with its  officers,  employees or agents,  all at such  reasonable
business  times as the  Administrative  Agent or the Lenders  deem  necessary or
advisable to protect their respective interests.

 . Comply with all agreements, covenants, terms, conditions and provisions of all
Material Contracts and of the Affiliate Agreements,  except to the extent and so
long as  noncompliance  therewith will not have a material adverse effect on the
properties,  business,  results of operations,  management or financial or other
condition of such  Borrower or  Guarantor,  and will not  materially  impair the
Administrative  Agent's or the Lenders' rights or materially  affect the ability
of such Borrower or Guarantor to perform its  obligations  under this Agreement,
the Notes or the other Loan Documents to which it is a party.

 . Perform,  make,  execute and deliver  all such  additional  and further  acts,
deeds,  occurrences and instruments as the  Administrative  Agent or the Lenders
reasonably may require to document and consummate the transactions  contemplated
hereby and to vest completely in and to ensure the Administrative  Agent and the
Lenders their  respective  rights under this Agreement,  the Notes and the other
Loan Documents.


                                    ARTICLE 9

                               NEGATIVE COVENANTS

         So long as any Obligations  are unpaid or  outstanding,  any Obligation
under the Loan Documents is unperformed or any of the Commitments are in effect,
each Borrower and Guarantor shall not:

 .  Create, incur, assume or suffer to exist any Indebtedness, except:

     (a)  Indebtedness  of such Borrower or Guarantor  under or pursuant to this
Agreement;

                    (b)  Indebtedness   existing,  or  relating  to  commitments
         existing,  on the date hereof,  all as set forth in Schedules 7.16A and
         7.16B or as  disclosed in writing by GFC to Lenders  subsequent  to May
         25, 1995, and any extensions,  refundings or renewals  thereof on terms
         at least as  favorable  to such  Borrower or  Guarantor  or other terms
         satisfactory to Administrative Agent;

                    (c) Purchase Money Debt and  Capitalized  Lease  Obligations
         provided  the  incurrence  of such  Indebtedness  does  not  cause  the
         Borrowers and  Guarantors,  taken as a whole, to be in default with its
         covenant in Section 10.1.4 hereof;

                    (d)    Subordinated Indebtedness;

                    (e) Indebtedness  constituting  current liabilities incurred
         in the  ordinary  course of business and not  represented  by any note,
         bond,  debenture or other  instrument,  and which is not past due for a
         period of more than sixty (60) days,  or if overdue for more than sixty
         (60) days,  which are being  contested in good faith and by appropriate
         proceedings  and for which  adequate  reserves in accordance  with GAAP
         have been  established on the books of the primary obligor with respect
         thereto;

                    (f) Contingent Obligations consisting of the indemnification
         by  each  Borrower  and  Guarantor  of  (i)  the  officers,  directors,
         employees  and  agents of such  Borrower  or  Guarantor  to the  extent
         permissible under the corporation law of the jurisdiction in which such
         Borrower or Guarantor is organized,  (ii) commercial banks,  investment
         bankers and other  independent  consultants  or  professional  advisors
         pursuant to agreements  relating to the underwriting of such Borrower's
         or Guarantor's  securities or the rendering of banking or  professional
         services to such Borrower or Guarantor and (iii)  landlords,  licensor,
         licensees and other parties pursuant to agreements  entered into in the
         ordinary course of business by such Borrower or Guarantor; and

     (g) Indebtedness with respect to financed insurance premiums not past due;

     (h)  Indebtedness  with respect to letters of credit  issued in  accordance
with Section 2.1.3 hereof;

     (i) Contingent  Obligations  consisting of the  guaranteeing  by GFC of the
Contractual Obligations of the other Borrowers and the Guarantors;

                    (j) Other Indebtedness,  including  Indebtedness that is not
         material for purposes of GAAP, in an amount not to exceed $1,000,000 in
         the aggregate  which may be incurred by the Borrowers and Guarantors as
         they deem necessary in the conduct of their business.

 . Create,  incur,  assume or suffer to exist any Lien upon any real or  personal
property,  fixtures,  revenues or other assets whatsoever,  whether now owned or
hereafter acquired, of such Borrower or Guarantor except:

                    (a)    Liens securing the Obligations;

                    (b) Liens for taxes not yet due or that are being  contested
         in good faith and by  appropriate  proceedings  and for which  adequate
         reserves in accordance with GAAP have been  established on the books of
         such Borrower or Guarantor;

                    (c) carriers',  warehousemen's,  mechanics',  materialmen's,
         repairmen's  or other like  Liens  arising  in the  ordinary  course of
         business  that are not  overdue  for a period of more than  thirty (30)
         days, or if overdue for more than thirty (30) days, (i) which are being
         contested in good faith and by appropriate proceedings,  (ii) for which
         adequate  reserves in accordance with GAAP have been established on the
         books of such Borrower or Guarantor; or (iii) with respect to which the
         obligations secured thereby are not material;

     (d) pledges or deposits in connection with workers' compensation insurance,
unemployment insurance and like matters;

                    (e) Liens  securing  Purchase  Money Debt or  arising  under
         Capitalized Leases; provided, however, that any such Lien attaches only
         to the item or items of property or asset  financed  with such Purchase
         Money Debt or Capitalized Lease;

                    (f)  deposits  to  secure  the  performance  of bids,  trade
         contracts   (other  than  for  borrowed   money),   leases,   statutory
         obligations,  surety  and  appeal  bonds,  performance  bonds and other
         obligations  of a like  nature  incurred  in  the  ordinary  course  of
         business;

                    (g)  easements,  reservations,   exceptions,  rights-of-way,
         covenants,  conditions,  restrictions  and other  similar  encumbrances
         incurred in the ordinary course of business that, in the aggregate, are
         not  substantial  in  amount,  and that do not in any  case  materially
         detract  from the value of the  property  subject  thereto or interfere
         with the ordinary conduct of business by such Borrower or Guarantor;

                    (h) Liens in respect of any writ of  execution,  attachment,
         garnishment,  judgment  or award in an amount less than  $500,000,  the
         time for  appeal or  petition  for  rehearing  of which  shall not have
         expired, or in respect of which an appeal or appropriate proceeding for
         review  is  being  prosecuted  in good  faith  and a stay of  execution
         pending such appeal or proceeding for review has been secured;

                    (i) Liens securing  Indebtedness  permitted under clause (b)
         of  Section  9.1,  but only to the  extent  that such  Indebtedness  is
         presently  secured  as set  forth on  Schedule  7.16A  or as  otherwise
         disclosed by GFC in writing to Lenders; and

                    (j) Other Liens,  other than Liens on real  property in Knox
         County,  Tennessee,  securing  Indebtedness  in an amount not to exceed
         $1,000,000  in the  aggregate  which may be incurred by  Borrowers  and
         Guarantors as they deem necessary in the conduct of their business.

                    9.2.1. Fundamental Changes.  Directly or indirectly (whether
         in one transaction or a series of transactions),  to (a) enter into any
         transaction of merger,  consolidation or  amalgamation;  (b) liquidate,
         wind up or dissolve itself (or suffer any liquidation or  dissolution);
         (c) make any Asset  Acquisition;  (d) make any  material  change in its
         present method of conducting business;  or (e) enter into any agreement
         or transaction to do or permit any of the foregoing.

     . Sell, lease,  assign,  transfer or otherwise dispose of any of its assets
except:

     (a) sales of personal property assets in the ordinary course of business of
such Borrower or Guarantor;

                    (b) the  disposition  of obsolete or worn-out  equipment  or
         other  property  no longer  required  by or useful to such  Borrower or
         Guarantor in connection with the operation of its business;

                    (c)  the  transfer  by  GFC of  (i)  all of its  trademarks,
         tradenames,  service  marks and  other  intellectual  property  and all
         registrations and/or applications for registration associated therewith
         to SYDOOG,  (ii) its office and  distribution  facility  in  Knoxville,
         Tennessee and all inventory located therein to Goody's MS, (iii) all of
         its lease  rights,  fixtures,  inventory  and other  assets used in the
         operation of its retail stores in the state of  Mississippi  to Goody's
         MS, (iv) all of its lease rights, fixtures,  inventory and other assets
         used in the  operation of its retail  stores in the state of Indiana to
         Goody's IN.

                    (d) any sale,  lease,  assignment,  or transfer of assets to
         another  Borrower  or  Guarantor,  provided,  however,  that any  sale,
         assignment or transfer of assets by GFC under this Section 9.3(d) shall
         not exceed in any Fiscal Year an  aggregate  amount of (i)  $30,000,000
         with  regard to all of the other  Borrowers  and  Guarantors  as to the
         sale,  lease,  assignment or transfer of assets of the type used in the
         operation  of a retail  store,  including  lease  rights,  fixtures and
         inventory,   and,  (ii)  with  regard  to  all  other  sales,   leases,
         assignments, or transfers,  $2,500,000 with regard to a single Borrower
         or  Guarantor,  or  $5,000,000  with regard to all of the Borrowers and
         Guarantors.

                    (e) any other  sale(s)  of assets  during any period of four
         consecutive Fiscal Quarters of such Borrower or Guarantor to the extent
         that  such  assets  in the  aggregate  did not  account  for more  than
         $1,000,000.

 . Make,  commit to make or suffer  to exist  any  loan,  extension  of credit or
capital  contribution to, or purchase of any stock, bonds, notes,  debentures or
other  securities  of,  or make any other  investment  in any  Person  (all such
transactions being called "Investments"), except:

                    (a)    Cash Equivalents;

                    (b)    Investments existing on the date hereof; or

     (c) accounts receivable  representing trade credit extended in the ordinary
course of business; and

                    (d) loans  pursuant to employment  agreements  and executive
         compensation arrangements that do not exceed $300,000 to any one Person
         and  $1,000,000  in the  aggregate  including  such  loans by the other
         Borrowers and/or Guarantors.

                    (e)  With  regard  to  GFC,   Goody's  MS  and  Goody's  IN,
         agreements to make advances pursuant to a construction contract for the
         construction  of  building(s)  to be leased to a Borrower or  Guarantor
         provided that (i) at no time shall GFC's  obligations  to advance funds
         hereunder exceed in the aggregate at any one time $2,500,000,  (ii) GFC
         shall be entitled to be  reimbursed by the  landlord/developer  in full
         for the amount  advanced upon the completion of the building  (unless a
         lesser amount is  stipulated  in the lease),  and (iii) the Borrower or
         Guarantor  leasing  such  building  shall  have the  absolute  right to
         set-off  against  all  rental  payments  to be made under the lease the
         amount,  if any, that is not  reimbursed to GFC when  construction  and
         punch list items are completed and appropriate releases are obtained.

 .        9.5.       ERISA

     (a)  Terminate  any Plan so as to result in any  material  liability to the
PBGC;
      
                     (b)  engage  in  any  "prohibited   transaction"  (as
         defined  in  Section  4975 of the Code)  involving  any Plan that would
         result in a material  liability  for an excise tax or civil  penalty in
         connection therewith;

                           (c)   incur  or   suffer   to  exist   any   material
         "accumulated  funding deficiency" (as defined in Section 302 of ERISA),
         regardless of whether waived, involving any Plan; or

                           (d) allow or  suffer to exist any event or  condition
         that presents a material risk of incurring a material  liability to the
         PBGC by reason of the termination of any Plan.

 . (a) Declare,  pay or make any dividends  (other than stock dividends) or other
distributions  with respect to, or any other  payment on account of, the capital
stock or any  warrants,  options or other rights in respect of the capital stock
(or partnership interests, as the case may be) of such Borrower or Guarantor now
or hereafter  outstanding unless such dividend,  distribution or payment is made
to GFC; (b) purchase,  redeem,  retire or otherwise acquire for value any of the
capital stock or any warrants, options or other rights in respect of the capital
stock  (or  partnership  interests,  as the  case  may be) of such  Borrower  or
Guarantor now or hereafter outstanding; or (c) segregate or set apart assets for
a sinking or analogous  fund for the purchase,  redemption,  retirement or other
acquisition of any shares of the capital stock or any warrants, options or other
rights in respect of the capital stock (or  partnership  interests,  as the case
may be) of such Borrower or Guarantor now or hereafter outstanding.

 . Enter into any transaction, including any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate or employee, except
transactions which are (a) described in the Affiliate Agreements;  (b) listed on
Schedule 7.26 or otherwise disclosed to Lenders in writing subsequent to May 25,
1995,  (c)  described  in the  documents  provided to the  Administrative  Agent
pursuant to Section  6.1.1(i) above, (d) loans to another Borrower or Guarantor,
provided, however, that with regard to loans from GFC to the other Borrowers and
Guarantors,  the  aggregate  amount of such loans shall not exceed an  aggregate
amount of  $20,000,000  at any one time,  or (e) in the ordinary  course of such
Borrower's or Guarantor's  business and that are upon fair and reasonable  terms
no less  favorable  to such  Borrower  or  Guarantor  than it would  obtain in a
comparable arm's length transaction with a Person not an Affiliate.

     . Pay or prepay any Subordinated  Indebtedness  prior to the time that same
is due and payable according to its stated terms.

 . Issue any capital stock or permit any  Subsidiary to issue any capital  stock;
provided,  however,  that each Borrower and Guarantor may issue common stock and
preferred  stock to the  extent  such  stock  does not  require  the  payment of
dividends,  and  provided  any  preferred  stock is not  redeemable,  payable or
subject to being required to be purchased or otherwise  retired or  extinguished
(i) at a fixed or determinable  date,  whether by operation of a sinking fund or
otherwise,  (ii) at the  option  of any  Person  other  than  such  Borrower  or
Guarantor  or (iii) upon the  occurrence  of a condition  not solely  within the
control of such Borrower or Guarantor,  such as a redemption required to be made
out of future earnings.

 . Enter into or become a party to any  transactions  the performance of which in
the  future  has any  reasonable  likelihood  of  resulting  in a breach  of any
covenant contained herein or any other Loan Document or give rise to any Default
or Event of Default.
                                   ARTICLE 10

                               FINANCIAL COVENANTS

 . So long as any Obligations are unpaid or outstanding, any Obligation under the
Loan  Documents is  unperformed  or any of the  Commitments  are in effect,  the
Borrowers and Guarantors shall not:

 . Permit on a consolidated basis in accordance with GAAP the Current Ratio as of
the end of any Fiscal Quarter to be less than 1.05 to 1.00 or permit the Current
Ratio as of the end of any Fiscal Year to be less than 1.10 to 1.00.

 .  Permit on a  consolidated  basis in  accordance  with GAAP the ratio of Total
Liabilities  of the  Borrowers  and  Guarantors  to  Shareholders  Equity of the
Borrowers  and  Guarantors  as of the end of any Fiscal  Year to exceed  1.10 to
1.00.

 . Permit on a consolidated basis in accordance with GAAP the Shareholders Equity
of Borrowers  and  Guarantors  (a) to be less than  $104,000,000  as of the date
hereof,  (b) to be less than  $114,000,000  as of February 1, 1997, or (c) to be
less than $124,000,000 as of January 31, 1998.

 . Permit Capital  Expenditures made by Borrowers and Guarantors in the aggregate
to exceed (a) $16,500,000  during the Fiscal Year ended February 3, 1996 and (b)
$35,500,000 in the aggregate during the Fiscal Years ending February 3, 1996 and
February 1, 1997,  and (c)  $27,500,000  for the Fiscal Year ending  January 31,
1998.

 . In  addition  to the  covenant  set  forth in  Section  8.1.3,  Borrowers  and
Guarantors shall cause their consolidated Shareholders Equity to be increased by
(a) the amount of  consolidated  Net Income for Borrowers and Guarantors in each
Fiscal  Year,  plus (b) all of the net  proceeds of the  issuance of any capital
stock permitted to be issued by GFC hereunder,  plus (c) all of the net proceeds
of the issuance of any  Subordinated  Debt permitted to be issued hereunder that
is convertible to capital stock of GFC.


                                   ARTICLE 11

                     EVENTS OF DEFAULT AND LENDERS' REMEDIES

 . Any one or more of the following described events shall constitute an Event of
Default hereunder, whether such occurrence shall be voluntary or involuntary, or
come about or be effected by operation of law or otherwise:

 . The Borrowers shall fail to pay any amount of principal of or interest payable
on or in  respect of the Loans,  the  Letter of Credit  Liabilities,  the Credit
Fees, any other  Obligations  or any other amount payable under this  Agreement,
the Notes,  or the other Loan  Documents  within three (3) Business  Days of the
date notice is given such Borrower or Guarantor of such failure to pay.

 . Any  Borrower  or  Guarantor  shall  fail to  perform  or  observe  any of its
covenants  and  agreements  set  forth  in  Sections  8.6,  8.10 and 8.12 and in
Articles 9 (other than Section 9.5) and 10.

 . Any  Borrower or  Guarantor  shall fail to perform or observe any of its other
covenants and agreements set forth in this Agreement (other than those described
in Sections  11.1.1 and 11.1.2) or the other Loan  Documents,  and such  failure
shall  continue  for more than thirty (30) days after the earlier of (a) written
notice  from  the  Administrative  Agent  to  such  Borrower  or  Guarantor,  as
applicable,  of the  existence of such  Default or (b) the date any  Responsible
Officer of such Borrower or Guarantor, as applicable, first obtains knowledge of
such failure.

 . Any  Borrower  or  Guarantor  (a) shall  commence  a  voluntary  case or other
proceeding seeking dissolution, liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or  hereafter  in effect  or  seeking  the  appointment  of a  receiver,
trustee,  liquidator,  custodian or other similar official with respect to it or
any substantial part of its property, (b) shall consent to any such relief or to
the  appointment  of, or the taking of possession of any of its property by, any
such official in any involuntary case or other proceeding  commenced against it,
(c) shall make a general assignment for the benefit of creditors, (d) shall take
any action to authorize any of the foregoing,  or (e) shall become  insolvent or
fail generally to pay its debts as they become due.

 . Any  involuntary  case or other  proceeding  shall be  commenced  against  any
Borrower or Guarantor seeking dissolution, liquidation,  reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a receiver,
trustee,  liquidator,  custodian or other similar official with respect to it or
any  substantial  part of its  property,  and (a) an order  for  relief  (or the
equivalent) shall be entered in such involuntary case or other proceeding or (b)
such involuntary case or other proceeding shall remain  undismissed and unstayed
for a period of thirty (30) days after the commencement thereof.

 . Any  representation or warranty of any Borrower or Guarantor set forth in this
Agreement,  the Notes,  the other Loan  Documents  or in any other  certificate,
opinion or other  statement at any time  provided by or on behalf of Borrower or
Guarantor  in  connection  herewith  or  therewith  shall  prove  to be false or
misleading in any material respect at the time made or given.

 . Any  judgment  lien  shall be  filed,  or any writ of  execution,  attachment,
garnishment or other legal process shall be issued,  against any of the property
of any  Borrower or  Guarantor  which by itself or together  with all other such
legal  processes  with regard to all of the Borrowers  and  Guarantors is for an
amount in excess of  $500,000,  and which shall  remain  unvacated,  unbonded or
unstayed  for a period of thirty (30) days,  or in any event later than five (5)
days prior to the date of any proposed sale thereunder.

 . All or substantially all of the property of any Borrower or Guarantor shall be
condemned,  seized or  otherwise  appropriated,  and the  condemnation  award is
materially less than the book value of such property at the date hereof (if such
property  was owned by such  Borrower or Guarantor on the date hereof) or at the
time such  property was acquired by such Borrower or Guarantor (if such property
was acquired by such Borrower or Guarantor after the date hereof).

 . GFC, Goody's MS or Goody's IN shall voluntarily suspend the transaction of its
business  for more than five (5)  consecutive  Business  Days in any Fiscal Year
after the date hereof  without the prior  express  written  consent of Requisite
Lenders.

 . Any Borrower or Guarantor shall (a) fail to pay any amount of any Indebtedness
or interest  thereon,  or (b) fail to observe or perform  any term,  covenant or
agreement  contained  in  any  Contractual   Obligation  (including  Contractual
Obligations  evidencing,  securing or relating to any Indebtedness)  executed by
it, which failure (i) would cause or permit the holder or holders or beneficiary
or beneficiaries of such  Indebtedness (or any agent or trustee on their behalf)
to cause such  Indebtedness  to become  due or  otherwise  payable  prior to its
stated  maturity,  so  long  as the  aggregate  principal  amount  of  all  such
Indebtedness  that  would  then  become  due or  payable  would  equal or exceed
$500,000,  or (ii) would impair the Lenders'  rights or the  performance  of the
obligations of such Borrower or Guarantor under this Agreement,  the Notes,  the
other  Loan  Documents  or the  business  or  operations  of  such  Borrower  or
Guarantor;  unless  in the  case  of a  Contractual  Obligation  that is not for
borrowed money,  such failure of performance is being contested by such Borrower
or Guarantor in good faith and adequate  reserves with respect thereto have been
established on the books of such Borrower or Guarantor in conformity with GAAP.

 . (a) Each Borrower or Guarantor or any Commonly  Controlled Entity shall engage
in any  "prohibited  transaction"  (as  defined in ERISA or Section  4975 of the
Code) involving any Plan, (b) any "accumulated  funding  deficiency" (as defined
in ERISA),  whether or not waived,  shall exist with respect to any Plan,  (c) a
Reportable  Event shall occur with respect to, or a proceeding shall commence to
have a trustee appointed,  or a trustee shall be appointed,  to administer or to
terminate,  any Single  Employer  Plan,  which  Reportable  Event or  proceeding
presents a material risk of termination of such Plan for purposes of Title IV of
ERISA, and, in the case of a Reportable Event, shall continue unremedied for ten
(10) days after  notice of such  Reportable  Event is given  pursuant to Section
4043(a), (c) or (d) of ERISA and, in the case of such proceeding, shall continue
for ten (10) days after commencement thereof, (d) any Single Employer Plan shall
terminate  for  purposes  of Title IV of ERISA,  (e) the  withdrawal  or partial
withdrawal by any Borrower or Guarantor or any Commonly  Controlled  Entity from
any  Multi-Employer  Plan, or (f) the  reorganization or insolvency of a Plan or
any other event or condition  shall occur or exist with respect to a Plan and in
each case in clauses  (a) through (f) above,  such event or  condition  together
with all other such events or conditions, if any, could subject such Borrower or
Guarantor  to any tax,  penalty  or other  liability  in excess of  $500,000  or
otherwise would have a material  adverse affect on the  properties,  businesses,
results of  operations,  management  or  financial  or other  condition  of such
Borrower or Guarantor.

 . Any of the Loan Documents or any provision thereof, for any reason whatsoever,
cease to be binding on any  Borrower or  Guarantor  or any Borrower or Guarantor
shall so assert.

 . Any default or event of default shall occur under any Material Contract,  and,
if  subject to a cure  right,  shall  fail to be cured or  corrected  within the
applicable cure period.

 . There shall occur after the date  hereof any  material  adverse  change in the
condition (financial or otherwise), operations or properties of such Borrower or
Guarantor,  and such change  shall have the effect of  impairing  the ability of
such Borrower or Guarantor to satisfy and discharge its  Obligations in a timely
manner;  provided,  however,  that the event  described in this Section  11.1.14
shall  constitute an Event of Default only upon the  unanimous  agreement of all
Lenders.

 . An event or  series of events  by which  (a)  Robert M.  Goodfriend  ceases to
directly own more than fifty percent  (50%) of the combined  voting power of all
securities  of GFC  entitled to vote in the  election of  directors,  other than
securities  having such power only by reason of the  happening of a  contingency
(other  than the  passage  of  time),  (b) the  Borrowers  (other  than GFC) and
Guarantors cease to be direct or indirect  wholly-owned  subsidiaries of GFC, or
(c) any Borrower or Guarantor consolidates with or merges into another Person or
conveys,  transfers  or leases  all or  substantially  all of its  assets to any
Person,  or any  corporation  consolidates  with or merges into any  Borrower or
Guarantor pursuant to a transaction in which the outstanding  securities of such
Borrower or Guarantor  entitled to vote in the election of directors are changed
into or exchanged for cash, securities or other property,  other than mergers or
consolidation between two or more Borrowers and/or Guarantors,  or a transaction
between  the  Borrowers,  Guarantors  and any  Subsidiary  of the  Borrowers  or
Guarantors  provided,  however,  that such transaction does not violate Sections
9.3  and  9.7,  and  provided,  further,  that  any  merger,   consolidation  or
transaction   allowed  under  this  Section  11.1.15  does  not  result  in  the
termination of GFC's corporate existence.

 . Upon the occurrence of an Event of Default or at any time  thereafter,  and in
each and every case,  unless such Event of Default  shall have been  remedied or
waived in writing by Requisite Lenders,  any one or all of the following actions
may be taken:

                    (a)   upon   the   request   of   Requisite   Lenders,   the
         Administrative Agent shall, by notice to the Borrowers terminate any or
         all of the  Commitments,  whereupon  such  Commitments  of the  Lenders
         thereunder  immediately shall terminate;  provided,  however, that upon
         the  occurrence  of any event  specified  in either  Section  11.1.4 or
         Section 11.1.5 the Commitments  shall terminate  automatically  without
         further action by the Administrative Agent or the Lenders;

                    (b) upon request of Requisite  Lenders,  the  Administrative
         Agent shall declare all outstanding Obligations and other amounts owing
         under this Agreement,  the Notes and the other Loan Documents to be due
         and payable  immediately,  and all such  Obligations  and other amounts
         immediately  shall be due and  payable,  without  presentment,  demand,
         protest or notice of any kind, all of which are hereby expressly waived
         to the extent permitted by applicable law; provided, however, that upon
         the  occurrence  of any event  specified  in either  Section  11.1.4 or
         Section 11.1.5 all such Obligations and other amounts immediately shall
         be due and payable in full without declaration or other notice;

                    (c)  the  Administrative  Agent  immediately,   and  without
         expiration  of  any  period  of  grace,  may  enforce  payment  of  all
         Obligations of the Borrowers and Guarantors to the Administrative Agent
         and the  Lenders  under  this  Agreement,  the Notes and the other Loan
         Documents,  and the  Administrative  Agent  shall  be  entitled  to all
         remedies available hereunder or thereunder; and

                    (d) the Administrative  Agent shall be entitled to exercise,
         for the  ratable  benefit of the  Lenders,  all other  rights,  powers,
         privileges,  options and remedies  available  under or by virtue of the
         Loan Documents or otherwise available at law or in equity.

 .        11.3.      Actions in Respect of Letters of Credit

 .  If  an  Event  of  Default  shall  have  occurred  and  be  continuing,   the
Administrative  Agent may,  and upon the  request of  Requisite  Lenders  shall,
whether  in  addition  to the taking by the  Administrative  Agent of any of the
actions  described in Section 11.2 or otherwise,  make demand upon the Borrowers
and Guarantors  to, and forthwith  upon such demand such Person(s)  will, pay to
the Administrative  Agent at its Lending Office, for its benefit and the ratable
benefit of the Lenders, in immediately available (same day) funds for deposit in
a  Collateral  Account to be  maintained  for the benefit of the  Administrative
Agent  and the  ratable  benefit  of the  Lenders  at such  place  as  shall  be
designated  by the  Administrative  Agent,  an amount equal to the amount of the
Letter of Credit Liabilities; provided, however, that in lieu of the creation of
such Collateral  Account,  or the  continuation  of such  Collateral  Account if
already  created,  the Borrowers and  Guarantors  may provide the Lenders with a
letter of credit  issued by a commercial  bank  acceptable  to the Lenders in an
amount equal to the stated amount of the Letters of Credit.

 . The Borrowers and  Guarantors  hereby pledge and assign to the  Administrative
Agent, for its benefit and the ratable benefit of the Lenders,  and grant to the
Administrative  Agent for its benefit and the ratable benefit of the Lenders,  a
lien on and a security  interest in the Collateral  Account,  all cash deposited
therein,  all notes,  certificates  and  instruments,  if any, from time to time
representing  or evidencing  the  Collateral  Account and all interest and other
earnings  thereon,  additions  thereto,   substitutions  therefor  and  proceeds
thereof.  The lien and security  interest  granted hereby secures the payment of
all of the Obligations.

 . The Borrowers and  Guarantors  hereby  authorize the  Administrative  Agent to
apply,  from time to time after funds are deposited in the  Collateral  Account,
funds then held in the Collateral Account to the payment of any amounts, in such
order as the  Administrative  Agent may  elect,  as shall  have  become or shall
become due and payable by the Borrowers and Guarantors to the Lenders in respect
of the Letter of Credit  Liabilities  and thereafter to the  satisfaction of the
other Obligations.

 . Neither the  Borrowers  and  Guarantors  nor any Person  claiming or acting on
behalf of or  through  the  Borrowers  and  Guarantors  shall  have any right to
withdraw any of the funds held in the Collateral Account,  except as provided in
Section 11.3.8;  provided,  however, that with the consent of the Administrative
Agent,  and to the  extent  that  there is an amount in excess of $50,000 in the
Collateral  Account at the end of any  Business  Day after  taking into  account
applications  of funds,  if any,  from the  Collateral  Account made pursuant to
Section  11.3.8,  the  Administrative  Agent may, at the written  request of the
Borrowers  and  Guarantors,  from time to time invest  amounts on deposit in the
Collateral  Account  in Cash  Equivalents;  provided,  further  that in order to
provide the  Administrative  Agent with a perfected  security  interest therein,
each   investment  in  Cash   Equivalents   shall  be  evidenced  by  negotiable
certificates  or  instruments  of which  the  Administrative  Agent  shall  take
physical  possession.  If the Borrowers and  Guarantors  shall have the right to
have  any  amounts  on  deposit  in  the  Collateral  Account  invested  by  the
Administrative  Agent, but shall have failed to request the Administrative Agent
to invest such amounts,  the  Administrative  Agent will endeavor to invest such
amounts in such Cash  Equivalents  as the  Administrative  Agent  shall  select;
provided,  however,  that in order to provide  the  Administrative  Agent with a
perfected  security interest  therein,  each such investment in Cash Equivalents
shall be  evidenced  by  negotiable  certificates  or  instruments  of which the
Administrative  Agent  shall take  physical  possession.  Any  interest or other
proceeds  received by the  Administrative  Agent in respect of Cash  Equivalents
that are not invested or reinvested in Cash  Equivalents as provided above shall
be deposited and held in cash in the Collateral  Account under the sole dominion
and  control of the  Administrative  Agent and shall be applied as  provided  in
Section 11.3.3.

 . The  Borrowers and  Guarantors  agree that they will not (a) sell or otherwise
dispose of any  interest  in the  Collateral  Account or (b) create or permit to
exist any Lien on or with  respect  to the  Collateral  Account  or the funds on
deposit therein except for the security interest created by this Section 11.3.

 .                   11.3.6.Remedies

                    (a) Requisite Lenders may, in their sole discretion, without
         notice to the Borrowers and Guarantors except as required by law and at
         any time and from time to time,  direct any  Lender to charge,  set-off
         and  otherwise  apply  all or any part of first,  the  Letter of Credit
         Liabilities and second, the other  Obligations,  against the Collateral
         Account, or any part thereof, in such order as the Administrative Agent
         shall elect.  The  Administrative  Agent agrees to notify  promptly the
         Borrowers and Guarantors after any such set-off and application made by
         any Lender,  at the direction of Requisite  Lenders,  provided that the
         failure  to give such  notice  shall not affect  the  validity  of such
         set-off and  application.  The rights of the Lenders under this Section
         11.3.6 are in addition to other  rights and remedies  (including  other
         rights of set-off) which any Lender may have.

                    (b) The  Administrative  Agent  may  exercise,  in its  sole
         discretion,  in respect of the Collateral  Account,  in addition to the
         other rights and remedies provided for herein or otherwise available to
         it, all the rights and remedies of a secured  party upon default  under
         the UCC, and the  Administrative  Agent may,  without  notice except as
         specified  below,  sell any assets of Borrowers  and  Guarantors in its
         possession or any part thereof at public or private sale, at any office
         of the  Administrative  Agent or elsewhere,  for cash, on credit or for
         future delivery,  and upon such other terms as the Administrative Agent
         may deem  commercially  reasonable.  The Borrowers and Guarantors agree
         that to the extent  notice of sale shall be  required  by law, at least
         ten (10) days'  notice of the time and place of any public  sale or the
         time  after  which  any  private  sale is to be made  shall  constitute
         reasonable notice.  The Administrative  Agent shall not be obligated to
         make any  sale of any  Borrower's  or  Guarantor's  assets  or any part
         thereof,   regardless  of  notice  of  sale  having  been  given.   The
         Administrative  Agent may adjourn any public or private  sale from time
         to time by announcement at the time and place fixed therefor,  and such
         sale  may,  without  further  notice,  be made at the time and place to
         which it was so adjourned.

                    (c)  Any  cash or  other  property  held  in the  Collateral
         Account,  and all  proceeds  received  by the  Administrative  Agent in
         respect of any sale of,  collection from or other  realization upon all
         or any part of the  Collateral  Account may, in the  discretion  of the
         Administrative  Agent, then or at any time thereafter be applied (after
         payment of any amounts payable  pursuant to this Section 11.3) in whole
         or in part by the  Administrative  Agent for the ratable benefit of the
         Lenders against all or any part of the Obligations in such order as the
         Administrative Agent may elect.

 . The Administrative  Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral Account if the Collateral Account
is accorded treatment substantially equal to that which the Administrative Agent
accords its own property,  it being  understood  that the  Administrative  Agent
shall not have any  responsibility  or liability (a) for  ascertaining or taking
action with respect to calls,  conversions,  exchanges,  maturities,  tenders or
other   matters   relative  to  any  Cash   Equivalents,   whether  or  not  the
Administrative Agent has or is deemed to have knowledge of such matters, (b) for
taking any necessary  steps to preserve  rights against any parties with respect
to the  Collateral  Account,  (c) for the  collection  of any proceeds from Cash
Equivalents,  (d) by reason of any invalidity, lack of value or uncollectability
of any of the payments received by the  Administrative  Agent from obligors with
respect to Cash Equivalents, (e) for any loss resulting from investments made in
compliance with Section 11.3.4,  except to the extent such loss was attributable
to  the  Administrative  Agent's  gross  negligence  or  willful  misconduct  in
complying with Section  11.3.4,  as determined by a final judgment of a court of
competent  jurisdiction,  or (f) in  connection  with  any  investments  made in
compliance  with Section 13.3.4 without a written request from the Borrowers and
Guarantors,  or any  failure  by the  Administrative  Agent  to  make  any  such
investment.

 . Any  surplus  funds held in the  Collateral  Account and  remaining  after the
Obligations are fully satisfied shall be paid to the Borrowers and Guarantors or
such other Person(s) as may be lawfully entitled to receive such surplus.


                                   ARTICLE 12

                            THE ADMINISTRATIVE AGENT

 . Each Lender hereby (a)  irrevocably  appoints  First  Tennessee  Bank National
Association  as the  Administrative  Agent for such Lender and the other Lenders
under  this  Agreement,  the  Notes  and  the  other  Loan  Documents,  and  (b)
irrevocably  authorizes  the  Administrative  Agent to take  such  action on its
behalf  under the  provisions  of this  Agreement,  the Notes and the other Loan
Documents  and to exercise  such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement,  the Notes
and the other Loan Documents,  together with such other powers as are reasonably
incidental  thereto.  The Administrative  Agent shall, among other things,  take
such actions as the Administrative  Agent is authorized to take pursuant to this
Agreement,  the  Notes and the  other  Loan  Documents.  As to any  matters  not
expressly  provided for in this  Agreement,  the  Administrative  Agent may, but
shall not be required to,  exercise any discretion or take any action;  however,
the Administrative Agent shall be required to act or to refrain from acting upon
the written  instructions of Requisite Lenders if the Administrative Agent shall
be indemnified to its  satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of so acting or refraining from
acting.  Notwithstanding  anything to the contrary  herein,  the  Administrative
Agent shall have no duties, responsibilities or fiduciary relationships with any
Lender  except those  expressly set forth in this  Agreement,  the Notes and the
other  Loan  Documents,  and no  implied  covenants,  responsibilities,  duties,
obligations or liabilities  shall be read into this Agreement,  the Notes or the
other Loan Documents or otherwise exist against the Administrative Agent.

 . The Administrative  Agent may exercise any of its powers or execute any of its
duties  under  this  Agreement,  the Notes and the other  Loan  Documents  by or
through one or more agents or attorneys-in-fact and shall be entitled to obtain,
and to rely on,  advice of counsel  concerning  all matters  pertaining  to such
rights and duties.  The  Administrative  Agent may utilize the  services of such
agents and  attorneys-in-fact as the Administrative Agent in its sole discretion
reasonably  determines,  and all reasonable fees and expenses of such agents and
attorneys-in-fact  shall be paid by the Borrowers on demand.  The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent in good faith.

 . Neither  the  Administrative  Agent nor its  respective  officers,  directors,
employees,  agents,  attorneys-in-fact or affiliates shall be (a) liable for any
waiver,  consent or approval given or any action taken or omitted to be taken by
it or by such Person under or in connection with this  Agreement,  the Notes, or
the other Loan Documents,  if authorized or permitted hereunder,  except for its
or such Person's own gross negligence or willful misconduct,  or (b) responsible
for the  consequences of any oversight or error in judgment by it or such Person
whatsoever,  except for its or such  Person's  own gross  negligence  or willful
misconduct.  The  Administrative  Agent  shall  not be  responsible  for (i) the
execution, validity, genuineness,  effectiveness,  sufficiency,  enforceability,
perfection  or  priority  of  this  Agreement,  the  Notes,  or the  other  Loan
Documents,  (ii) the  collectability  of any amounts owing under this Agreement,
the  Notes  or  the  other  Loan  Documents,   (iii)  the  value,   sufficiency,
enforceability,  perfection or  collectability of any assets of the Borrowers or
Guarantors  , (iv) the  failure by any  Borrower  or  Guarantor  to perform  its
obligations  under this  Agreement,  the Notes or the other Loan Documents or to
observe  any  conditions  hereof  or  thereof,  (v)  the  truth,   accuracy  and
completeness of the recitals, statements,  representations or warranties made by
any  Borrower or  Guarantor  or any officer or agent  thereof  contained in this
Agreement,  the  Notes,  or the other  Loan  Documents,  or in any  certificate,
report, statement,  document or other writing referred to or provided for in, or
received by the  Administrative  Agent in connection  with, this Agreement,  the
Notes, or the other Loan Documents  believed by the  Administrative  Agent to be
genuine and correct and to have been signed,  sent or made by the proper  Person
or Persons.

 . The Administrative  Agent shall not have any obligation (a) to ascertain or to
inquire as to the observance or performance of any of the conditions,  covenants
or agreements in this Agreement, the Notes or the other Loan Documents or in any
document, instrument or agreement, (b) to ascertain or inquire as to whether any
notice,  consent,  waiver  or  request  delivered  to it shall  have  been  duly
authorized  or  is  genuine,  accurate  and  complete  or  (c)  to  inspect  the
properties, books or records of the Borrowers and Guarantors. The Administrative
Agent  shall be entitled to rely,  and shall be fully  protected  in relying (i)
upon any note, writing,  resolution,  notice, consent,  certificate,  affidavit,
letter,  cablegram,  telegram,  telecopy, telex or teletype message,  statement,
order or other document, instrument or conversation believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons, and (ii) upon advice and statements of legal counsel (including counsel
to the  Borrowers and  Guarantors),  independent  accountants  and other experts
selected by the  Administrative  Agent.  The  Administrative  Agent may deem and
treat the  payee of any Note as the  owner  thereof  for all  purposes  unless a
written notice of the assignment, negotiation or transfer thereof, in accordance
with  the  provisions  of this  Agreement,  shall  have  been  delivered  to the
Administrative  Agent  identifying  the name of the  subsequent  payee or holder
thereof. The Administrative Agent shall be entitled to fail or refuse, and shall
be fully  protected  in failing or  refusing,  to take any  action  required  or
permitted  by it under this  Agreement,  the Notes or the other  Loan  Documents
unless (A) it first  shall  receive  such  advice or  concurrence  of  Requisite
Lenders as it deems  appropriate,  or (B) it first shall be  indemnified  to its
satisfaction  by the Lenders  against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.  In
all cases the  Administrative  Agent shall be fully  protected in acting,  or in
refraining  from  acting,  under  this  Agreement,  the Notes or the other  Loan
Documents in accordance  with a request of Requisite  Lenders,  and such request
and any action  taken or failure to act pursuant  thereto  shall be binding upon
all the Lenders and all future holders of the Notes.

 . The  Administrative  Agent shall not be deemed to have  knowledge or notice of
the  occurrence  of any  Default or Event of Default  unless the  Administrative
Agent has received  notice from a Lender,  a Borrower or Guarantor  referring to
this  Agreement,  describing  such  Default or Event of Default and stating that
such notice is a "Notice of Default." If the Administrative  Agent receives such
a notice,  the  Administrative  Agent shall give  telephonic  and written notice
thereof to the Lenders as soon as is practicable. The Administrative Agent shall
take such  action with  respect to such  Default or Event of Default as shall be
reasonably  directed by Requisite Lenders;  provided,  however,  that unless and
until  the  Administrative  Agent  shall  have  received  such  directions,  the
Administrative  Agent may (but shall not be obligated  to) take such action,  or
refrain  from  taking  such  action,  with  respect to such  Default or Event of
Default as it deems advisable in the best interests of the Lenders.

 . Each Lender expressly  acknowledges that neither the Administrative  Agent nor
any  of  its  officers,  directors,  employees,  agents,   attorneys-in-fact  or
affiliates  has made any  representations  or  warranties  to such  Lender.  The
Administrative  Agent shall have no obligation,  responsibility  or liability to
any of the Lenders regarding the  creditworthiness or financial condition of the
Borrowers  and  Guarantors  or  for  any  recitals,   statements,   information,
representations  or warranties  herein or in any document,  certificate or other
writing  delivered in connection  herewith or for the execution,  effectiveness,
genuineness, validity, enforceability,  perfection, collectability,  priority or
sufficiency  of  this  Agreement  or  any  other  Loan  Document.  No act by the
Administrative  Agent hereinafter  taken,  including any review of the Borrowers
and Guarantors shall be deemed to constitute any  representation  or warranty by
the  Administrative   Agent  to  any  Lender.  Each  Lender  represents  to  the
Administrative   Agent  that,   independently  and  without  reliance  upon  the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it has deemed  appropriate,  it has made its own appraisal of and
investigation  into the  business,  operations,  property,  financial  and other
condition and  creditworthiness of the Borrowers and Guarantors and has made its
own decision to enter into this  Agreement  and to make its Loans and  otherwise
participate in the  transactions  hereunder.  Each Lender also represents  that,
independently  and without reliance upon the  Administrative  Agent or any other
Lender,  and based on such documents and information as it deems  appropriate at
the time,  it shall  continue to make its own credit  analysis,  appraisals  and
decisions in taking or not taking action under this Agreement, the Notes and the
other Loan  Documents and to make such  investigation  as it deems  necessary to
inform  itself as to the  business,  operations,  property,  financial and other
condition  and   creditworthiness   of  the  Borrowers   and   Guarantors.   The
Administrative  Agent shall not be required to make any inquiry  concerning  the
performance or observance of any of the terms,  provisions or conditions of this
Agreement  or any  other  Loan  Document,  or  the  financial  condition  of the
Borrowers and  Guarantors or the existence or possible  existence of any Default
or Event of Default.  Except for notices,  reports and other documents expressly
required to be furnished to the Lenders by the  Administrative  Agent hereunder,
the  Administrative  Agent shall have no  obligation or liability to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrowers and
Guarantors that may come into the possession of the Administrative  Agent or any
of its respective officers, directors,  employees, agents,  attorneys-in-fact or
affiliates.

 .  Each  of  the  Lenders  shall   indemnify,   defend  and  hold  harmless  the
Administrative  Agent in its capacity as such (to the extent not  reimbursed  by
the Borrowers or Guarantors and without limiting the obligation of the Borrowers
and Guarantors to do so),  ratably  according to their  respective  Percentages,
from and against any and all claims, demands,  lawsuits,  costs, expenses, fees,
liabilities,  obligations,  losses,  damages,  actions,  recoveries,  judgments,
suits,  costs,  expenses  or  disbursements  of any kind  whatsoever,  including
interest, penalties and reasonable attorneys' and paralegals' fees and costs and
amounts paid in settlement of any of the foregoing,  whether  direct,  indirect,
consequential  or incidental,  that at any time (including at any time following
the  satisfaction of the Obligations) may be imposed on, incurred by or asserted
against the  Administrative  Agent in any way  relating  to,  resulting  from or
arising  out of this  Agreement,  the Notes or the  other  Loan  Documents,  the
transactions  contemplated  hereby  or  any  action  taken  or  omitted  by  the
Administrative Agent under or in connection with any of the foregoing; provided,
however,  that no Lender  shall be liable for the payment of any portion of such
claims, demands,  lawsuits,  costs, expenses,  fees,  liabilities,  obligations,
losses,  damages,  actions,  remedies,  judgments,  suits,  costs,  expenses  or
disbursements  to the extent such result  arose  solely from the  Administrative
Agent's gross negligence or willful  misconduct.  The agreements in this Section
12.7 shall survive the repayment of the Loans and the  satisfaction of the other
Obligations  and  shall  be in  addition  to  and  not  in  lieu  of  any  other
indemnification agreements set forth in the Loan Documents.

 . If in the opinion of the Administrative  Agent, the distribution of any amount
received by the Administrative Agent in such capacity under this Agreement,  the
Notes  or  the  other  Loan  Documents  might  involve  it  in  liability,   the
Administrative  Agent may refrain from making the distribution thereof until the
Administrative   Agent's  right  to  make  such  distribution  shall  have  been
adjudicated  by a court  of  competent  jurisdiction.  If a court  of  competent
jurisdiction  shall adjudge that any amount received from and distributed by the
Administrative  Agent in such capacity as Administrative  Agent is to be repaid,
each Person to whom any such distribution  shall have been made either (a) shall
repay to the  Administrative  Agent  its  proportionate  share of the  amount so
adjudged  to be repaid,  or (b) shall  repay the same in such manner and to such
Persons as shall be determined by such court.

 . The Administrative Agent in its individual capacity,  and its Affiliates,  may
unless  otherwise  prohibited by this Agreement,  make loans and other financial
accommodations  to, accept  deposits  from and  generally  engage in any kind of
business with the Borrowers and  Guarantors as though the  Administrative  Agent
were not the  Administrative  Agent  hereunder.  With  respect  to Loans made or
renewed by it,  any Notes  issued to it and its  participation  in the Letter of
Credit  Liabilities,  the Administrative  Agent in its individual capacity shall
have the same benefits,  rights, powers and privileges under this Agreement, the
Notes and the other Loan Documents as any other Lender and may exercise the same
as  though  it were  not the  Administrative  Agent,  and  the  terms  "Lender",
"Lenders" and "Requisite Lenders" shall include the Administrative  Agent in its
individual capacity.

 . The  Administrative  Agent may resign as such upon  thirty  (30)  days'  prior
written notice to the Lenders and Borrowers.  If the Administrative  Agent shall
resign as such under this Agreement,  then Requisite  Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent shall
be reasonably acceptable to Borrowers;  provided, however, that acceptability to
Borrowers  shall not be required  if a Default or Event of Default has  occurred
and is continuing.  Upon acceptance of its appointment as successor  agent,  (a)
such successor agent shall succeed to the rights, powers,  privileges and duties
of the  Administrative  Agent,  (b) the retiring  Administrative  Agent shall be
discharged of all its  obligations  and  liabilities in such capacity under this
Agreement,  the Notes and the other Loan Documents,  (c) the term Administrative
Agent shall mean such successor agent effective upon its appointment and (d) the
retiring  Administrative  Agent's  rights,  powers and duties as  Administrative
Agent shall be terminated,  without any other or further act or deed on the part
of such retiring Administrative Agent or any of the parties to this Agreement or
any holders of the Notes. After any retiring  Administrative Agent's resignation
hereunder  as  Administrative  Agent,  the  provisions  of this Article 10 shall
continue to inure to its benefit as to any actions  taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.


                                   ARTICLE 13

                         ASSIGNMENTS AND PARTICIPATIONS

 . This Agreement, the Notes and the other Loan Documents shall be binding on and
shall inure to the benefit of the Borrowers and Guarantors,  the  Administrative
Agent,  the Lenders  and their  respective  successors  and  assigns,  except as
otherwise  provided  herein or therein.  The  Borrowers and  Guarantors  may not
assign,  transfer,  hypothecate  or otherwise  convey their  respective  rights,
benefits,  obligations  or duties  hereunder  or  thereunder  without  the prior
express  written  consent of the Lenders.  Any purported  assignment,  transfer,
hypothecation  or other  conveyance by the Borrowers and Guarantors  without the
prior  express  written  consent of all the Lenders  shall be void.  Neither the
Administrative Agent nor any of the Lenders may sell, assign,  transfer, grant a
participation  in or otherwise  dispose of all or any portion of its interest in
this  Agreement,  the  Notes or the other  Loan  Documents  except as  expressly
provided herein.

 .        13.2.      Assignments

 . Each  Lender may assign  (other  than the sale of a  participation)  up to one
hundred  percent (100%) of its right,  title and interest under this  Agreement,
the Notes, the Letters of Credit and the other Loan Documents  (including all or
a portion of its Commitments and the same portion of the Loans at the time owing
to it) to one or more banks or other financial institutions;  provided, however,
that the right of each Lender to make such assignment is subject to the right of
each  remaining  Lender to  succeed  to its pro rata  portion  of the  assigning
Lender's Commitment as determined by the proportion that each remaining Lender's
Commitment bears to the total Commitments;  and provided further,  that (a) each
such  assignment  shall be of a constant,  and not a varying,  percentage of all
such Lender's right, title and interest hereunder and thereunder, (b) such share
equals  no less  than  $10,000,000  in the  case of any  one  assignee,  (c) any
assignee shall execute and deliver to the Administrative Agent an Assignment and
Acceptance in the form attached hereto as Exhibit 13.2, and (d) a Lender may not
assign any interest without the prior approval of the  Administrative  Agent and
Borrowers and  Guarantors,  which approval shall not be  unreasonably  withheld.
Notwithstanding  the  foregoing,   any  Lender  may  assign,  as  collateral  or
otherwise,  any of its rights  (including  such  Lender's  rights to payments of
principal  and/or  interest on the Notes)  under this  Agreement  to any Federal
Reserve Bank  without  notice to or consent of the  Administrative  Agent or the
Borrowers and Guarantors.

 . Upon the sale, assignment,  transfer or other disposition (other than the sale
of a  participation)  of any of a Lender's right,  title and interest under this
Agreement,  the Notes, the Letters of Credit and the other Loan Documents to any
assignee in accordance with this Section 13.2, then upon the execution, delivery
and acceptance of the Assignment  and  Acceptance,  from and after the effective
date  specified  therein,  (a) the  transferor  Lender no longer  shall have the
rights, benefits and obligations under this Agreement, the Notes, the Letters of
Credit or the other Loan  Documents  to the extent of the  interest  transferred
(except for such rights,  benefits and obligations that such Lender would retain
under or with respect to this Agreement, the Notes, the Letters of Credit or the
other  Loan  Documents  upon  payment in full of the  Obligations),  and (b) the
assignee  shall  become a Lender,  shall  succeed to the rights and benefits and
assume the obligations of such transferor Lender hereunder and thereunder to the
extent of the interest transferred.

 . Each Borrower and  Guarantor  hereby agrees that it shall execute and deliver,
at the request of the Administrative Agent (a) with regard to each Borrower, one
or more  substitute  Notes to the order of such Lenders to evidence the portions
of the  Loans  retained  and sold  and (b)  with  regard  to each  Borrower  and
Guarantor,  any  amendment  to any  Loan  Document  to  which  it is a party  to
effectuate the provisions of this Section 13.2.

 . Subject to the  provisions  of this Section  13.3,  each Lender shall have the
right at any time to sell undivided  participating  interests in all or any part
of its Commitments,  the Loans and the Letters of Credit to one or more banks or
other financial institutions;  provided, however, that (a) such sale or transfer
shall not relieve such Lender of any obligation or liability hereunder, (b) such
Lender shall make and receive all  payments for the account of its  participants
and shall retain exclusively,  and shall continue to exercise  exclusively,  all
rights of approval and administration  available  hereunder with respect to such
Lender's  Commitments,  the Loans and the Letters of Credit,  even after  giving
effect to the sale of any such  participation  (although  such Lender may at its
option  agree  with its  participants  that it will not  consent  to any  matter
described  in  clauses  (a)  through  (g)  of  Section   14.3.4   without  their
concurrence),  and (c)  such  Lender  shall  make  such  arrangements  with  its
participants  as  may  be  necessary  to  accomplish  the  foregoing.   No  such
participant shall be a Lender for any purpose of this Agreement,  other than for
purposes of Section 14.13, without the consent of the Administrative Agent.

 . Lenders may disclose such  information as to the Borrowers and Guarantors that
is within their  possession  only as is permitted by the next  sentence or as is
required  by  applicable  law  or  by an  appropriate  governmental  agency.  In
connection with any assignments,  participations  or offers therefor pursuant to
this Article 13, each Lender may disclose to only any assignee or participant or
prospective assignee or participant such information pertaining to the Borrowers
and  Guarantors  as  such  Lender  may  deem  appropriate  or such  assignee  or
participant  or  prospective  assignee or  participant  may  request;  provided,
however,  that prior to any such  disclosure  such  assignee or  participant  or
prospective  assignee or participant shall agree to preserve the confidentiality
of any  confidential  information  relating  to  the  Borrowers  and  Guarantors
received by it, except as permitted by this Section.

 . No Lender shall assign or sell any participation in its Commitments, the Loans
or the  Letters of Credit,  except in the form of units  consisting  of pro rata
interests in its Commitments, the Loans and the Letters of Credit.


<PAGE>



                                   ARTICLE 14

                               GENERAL PROVISIONS

 . Any notice, request, demand or other communication required or permitted under
this  Agreement,  the Notes or the other Loan Documents  shall be in writing and
shall be deemed to be properly given (a) when received,  if personally delivered
or sent by overnight  courier with  appropriate  confirmation  of delivery,  (b)
three (3) Business  Days after  deposit in the mail,  if mailed by United States
first  class,  certified  or  registered  mail,  postage  prepaid,  or (c)  when
received,  if given by  telecopy,  with  appropriate  confirmation,  each to the
appropriate address set forth below or to such other address that any such party
or the Administrative Agent may designate by written notice to other parties.

         If to GFC:

                    400 Goody's Lane
                    P.O. Box 22000
                    Knoxville, Tennessee  37923-2000
                    Attn: Edward R. Carlin
                           Regis J. Hebbeler
                    Telecopy No. 423-671-4071

         with a copy to:

                    Dennis R. McClane, Esq.
                    Woolf, McClane, Bright, Allen & Carpenter
                    900 S. Gay Street, Suite 900
                    Knoxville, Tennessee  37902
                    Telecopy No. 423-215-1001

         If to SYDOOG:

                    13 North Market Street, Suite 817
                    Wilmington, Delaware 19801
                    Attn: President

         with a copy to:

                    Gordon Stewart, Esq.
                    Stewart & Associates
                    1201 Market Street, Suite 1700
                    Wilmington, Delaware 19801
                    Telecopy No. 302-652-7211




         If to TREBOR:

                    400 Goody's Lane
                    P.O. Box 22000
                    Knoxville, Tennessee 37923-2000
                    Attn: Edward R. Carlin
                           Regis J. Hebbeler
                    Telecopy No. 423-671-4071

         with a copy to:

                    Dennis R. McClane, Esq.
                    Woolf, McClane, Bright, Allen & Carpenter
                    900 S. Gay Street, Suite 900
                    Knoxville, Tennessee  37902
                    Telecopy No. 423-215-1001

         If to GOFAMCLO:

                    900 Market Street, Suite 200
                    Wilmington, Delaware 19801
                    Attn: President

         with a copy to:

                    Gordon Stewart, Esq.
                    Stewart & Associates
                    1201 Market Street, Suite 1700
                    Wilmington, Delaware 19801
                    Telecopy No. 302-652-7211

         If to Goody's MS:

                    c/o TREBOR of TN, Inc., General Partner
                    400 Goody's Lane
                    P.O. Box 22000
                    Knoxville, Tennessee 37923-2000
                    Attn: Edward R. Carlin
                           Regis J. Hebbeler
                    Telecopy No. 423-671-4071

         with a copy to:

                    Dennis R. McClane, Esq.
                    Woolf, McClane, Bright, Allen & Carpenter
                    900 S. Gay Street, Suite 900
                    Knoxville, Tennessee  37902
                    Telecopy No. 615-215-1001



<PAGE>


         If to Goody's IN:

                    c/o TREBOR of TN, Inc., General Partner
                    400 Goody's Lane
                    P.O. Box 22000
                    Knoxville, Tennessee 37923-2000
                    Attn: Edward R. Carlin
                           Regis J. Hebbeler
                    Telecopy No. 423-671-4071

         with a copy to:

                    Dennis R. McClane, Esq.
                    Woolf, McClane, Bright, Allen & Carpenter
                    900 S. Gay Street, Suite 900
                    Knoxville, Tennessee  37902
                    Telecopy No. 615-215-1001

         If to any of the Lenders:

                    Their   respective   addresses   as  set  forth  with  their
signatures on this Agreement.

        If to First Tennessee Bank National Association as Administrative Agent:

                    First Tennessee Bank National Association
                    Corporate Lending Group
                    Plaza Tower
                    800 S. Gay Street
                    Knoxville, Tennessee  37929
                    Attn:  James H. Atchley
                    Telecopy No. 615-971-2883

 . The  execution  and delivery of this  Agreement  and the other Loan  Documents
supersede  all the  negotiations  or  stipulations  concerning  the matters that
preceded or  accompanied  the execution and delivery  hereof and thereof  (other
than with  respect to fees  payable  pursuant to separate  agreements  among the
Borrowers,  Guarantors,  the  Administrative  Agent and each Issuing Bank). This
Agreement,  the Notes and the other Loan  Documents  also are  intended,  by the
parties hereto and thereto,  as a complete and exclusive  statement of the terms
and conditions hereof and thereof.

 .        14.3.      Amendments, Waivers and Consents

 . Except as otherwise set forth in this  Agreement,  the  provisions of (a) this
Agreement may not be modified,  amended,  restated or supplemented,  except by a
written  instrument  duly  executed and  delivered  on behalf of the  Borrowers,
Guarantors and Requisite Lenders, and (b) the Notes and all Loan Documents other
than this  Agreement  may not be modified,  amended,  restated or  supplemented,
except by a written  instrument  duly  executed and  delivered on behalf of each
Borrower  and  Guarantor,  to the extent that such  Borrower or  Guarantor  is a
signatory  party  to such  Note or such  Loan  Document,  and on  behalf  of the
Administrative   Agent,   with  the  written   consent  of  Requisite   Lenders.
Notwithstanding  anything to the contrary herein, the  Administrative  Agent and
Requisite Lenders may modify, amend, restate,  supplement or waive any provision
of Article 12 without the consent of the Borrowers and Guarantors  provided that
it does not affect the rights of the Borrowers and Guarantors.

 . Except as otherwise set forth in this  Agreement,  any waiver of the terms and
conditions of this Agreement,  the Notes,  or the other Loan  Documents,  or any
waiver of any  Default or Event of Default  and its  consequences  hereunder  or
thereunder, and any consent or approval required or permitted by this Agreement,
the Notes,  or the other Loan Documents to be given by the Lenders,  may be made
or given with, but only with, the written  consent of Requisite  Lenders on such
terms and  conditions  as  specified  in the written  instrument  granting  such
waiver,  consent or approval. A waiver, to be effective,  must be in writing and
signed by the party making the waiver.

 . In the case of any waiver, the Borrowers, the Guarantors,  the Lenders and the
Administrative  Agent  shall be restored to their  former  positions  and rights
under this  Agreement,  the Notes,  or the other Loan Documents to the extent of
such  waiver,  and any Default or Event of Default  waived shall be deemed to be
cured and not continued;  provided, however, that no waiver shall constitute the
waiver of any  subsequent  or other  Default  or Event of  Default or impair any
right consequent  thereon. No failure or delay on the part of the Administrative
Agent or any  Lender to  exercise  or  enforce  any right or remedy  under or in
connection with this Agreement,  the Notes or the other Loan Documents,  whether
by their  respective  terms, at law, in equity or otherwise,  shall operate as a
waiver thereof.  No single or partial exercise of any such right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy.

 .  Without  in  each  instance  the  prior  express   written   consent  of  the
Administrative  Agent  and all the  Lenders,  no such  modification,  amendment,
restatement, supplement, waiver or consent shall:

     (a) increase the aggregate  Commitments,  or increase the Commitment of any
Lender without such Lender's approval;

                    (b) reduce the  amounts or extend the dates for the  payment
         of any Credit  Fees that are  payable  ratably to all of the Lenders in
         accordance with their respective Percentages of the Commitments;

     (c) extend the maturity of the Notes or the date of any scheduled principal
payments or mandatory prepayments hereunder or thereunder;

     (d) reduce the rate or extend the time of payment of interest  hereunder or
under the Notes;

     (e) waive the payment of any  principal,  interest  or Credit Fees  payable
hereunder or under the Notes;

     (f)  extend  the  termination  dates  of  any  of  the  Commitments  or the
Termination Date;

     (g) consent to the  assignment  or transfer by any Borrower or Guarantor of
any of its  Obligations  under  this  Agreement,  the  Notes or the  other  Loan
Documents;

     (h) amend or modify the definitions of "Percentages" or "Requisite Lenders"
contained in this Agreement.

 . Any such modification,  amendment, restatement,  supplement, waiver or consent
shall  apply  equally  to each of the  Lenders  and  shall be  binding  upon the
Borrowers, the Guarantors,  the Lenders, the Administrative Agent and all future
holders of the Notes.

 . All  covenants  hereunder  shall  be  given  independent  effect  so that if a
particular  action or condition is not permitted by any of such  covenants,  the
fact that it would be permitted by an exception to, or otherwise would be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists.

 .  Neither  this  Agreement,  the Notes or the  other  Loan  Documents,  nor any
uncertainty  or  ambiguity  herein or therein,  shall be  construed  or resolved
against the  Administrative  Agent,  the Lenders,  the  Borrowers or  Guarantors
whether under any rule of construction or otherwise.  This Agreement,  the Notes
and the other Loan  Documents  have been reviewed by all the parties  hereto and
thereto and shall be construed and interpreted according to the ordinary meaning
of the words used as to  accomplish  fairly the purposes and  intentions  of all
such parties.

 . In the event there is a conflict or inconsistency between this Agreement,  the
Notes or the other Loan Documents or any prior agreements or summaries of terms,
the terms of this Agreement shall control.

 . If any portion of this Agreement, the Notes or any of the other Loan Documents
shall be judged by a court of competent  jurisdiction to be  unenforceable,  the
remaining  portions  shall be  valid  and  enforceable  to the  extent  that the
remaining  terms  thereof  provide for the creation of the  Obligations  and the
consummation  of the  issuance of the Notes,  the grant of  collateral  security
therefor,  the  guarantee  thereof and the payment of principal  and interest in
respect of the  Obligations  substantially  on the same terms and subject to the
same conditions as set forth herein and therein.

 . THIS  AGREEMENT,  THE NOTES AND THE OTHER  LOAN  DOCUMENTS,  UNLESS  OTHERWISE
EXPRESSLY  SET FORTH  THEREIN,  SHALL BE GOVERNED BY,  CONSTRUED AND ENFORCED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF  TENNESSEE,  WITHOUT  REFERENCE TO THE
CONFLICTS  OR CHOICE OF LAW  PRINCIPLES  THEREOF,  EXCEPT TO THE EXTENT THAT THE
LAWS OF A PARTICULAR JURISDICTION GOVERN THE CREATION, PERFECTION,  PRIORITY AND
ENFORCEMENT   OF   LIENS  ON  AND   SECURITY   INTERESTS   IN  ANY   COLLATERAL.
NOTWITHSTANDING  THE FOREGOING,  IF AT ANY TIME THE LAWS OF THE UNITED STATES OF
AMERICA  PERMIT ANY LENDER TO CONTRACT  FOR,  TAKE,  RESERVE,  CHARGE OR RECEIVE
INTEREST OR LOAN CHARGES IN AMOUNTS GREATER THAN ARE ALLOWED BY THE LAWS OF SUCH
STATE  (WHETHER SUCH FEDERAL LAWS DIRECTLY SO PROVIDE OR REFER TO THE LAW OF THE
STATE WHERE SUCH LENDER IS LOCATED), THEN SUCH FEDERAL LAWS SHALL TO SUCH EXTENT
GOVERN AS TO THE  INTEREST  AND LOAN  CHARGES  THAT SUCH  LENDER IS  ALLOWED  TO
CONTRACT FOR, TAKE, RESERVE,  CHARGE OR RECEIVE UNDER THIS AGREEMENT,  THE NOTES
AND THE OTHER LOAN  DOCUMENTS.  REFERENCES  TO LAWS IN THIS  SECTION ARE TO SUCH
LAWS AS ARE NOW IN EFFECT,  AND, WITH RESPECT TO USURY LAWS, IF ANY,  APPLICABLE
TO ANY LENDER AND TO THE EXTENT ALLOWED  THEREBY,  TO SUCH LAWS AS HEREAFTER MAY
BE IN EFFECT THAT ALLOW A HIGHER  MAXIMUM  NONUSURIOUS  INTEREST  RATE THAN SUCH
LAWS NOW ALLOW.

 . THE ADMINISTRATIVE AGENT, EACH LENDER, AND THE BORROWERS AND GUARANTORS HEREBY
IRREVOCABLY  WAIVE THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION,  CLAIM,  COUNTERCLAIM OR OTHER PROCEEDING  ARISING OUT OF ANY DISPUTE IN
CONNECTION  WITH THIS  AGREEMENT,  THE NOTES OR THE OTHER  LOAN  DOCUMENTS,  ANY
RIGHTS OR OBLIGATIONS  HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND  OBLIGATIONS.  The scope of this waiver is  intended to be  all-encompassing
with  respect  to any and all  disputes  that may be filed in any court and that
relate to the subject matter of this transaction,  including without  limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory  claims.  Each of the parties hereto (i) acknowledges that this waiver
is a material  inducement  for the parties to the Loan Documents to enter into a
business  relationship,  that the  parties to the Loan  Documents  have  already
relied on this waiver in entering  into same and the  transactions  that are the
subject  thereof,  and that they will  continue  to rely on this waiver in their
related future dealings,  and (ii) further warrants and represents that each has
reviewed  this  waiver  with its  legal  counsel  and that  each  knowingly  and
voluntarily  waives  its jury trial  rights  following  consultation  with legal
counsel. This waiver is irrevocable,  meaning that it may not be modified either
orally or in writing, and this waiver shall apply to any subsequent  amendments,
modifications,  supplements,  extensions,  renewals and/or  replacements of this
Agreement. In the event of litigation,  this Agreement may be filed as a written
consent to a trial by the court.

 . All rights and remedies  provided in or contemplated  by this  Agreement,  the
Notes and the other Loan Documents are cumulative and not exclusive of any right
or remedy otherwise provided herein, therein, at law or in equity.

 . The Borrowers and Guarantors  shall pay on demand all  reasonable  expenses of
the  Administrative  Agent in connection with this Agreement,  the Notes and the
other Loan  Documents,  and the  preparation of any  modifications,  amendments,
restatements,  supplements or waivers,  including all attorneys' and paralegals'
fees and  expenses,  all fees and  expenses  for  title,  lien and other  public
records searches,  filing and recordation fees and taxes,  duplicating expenses,
corporation search fees, appraisal fees, escrow agent fees and expenses, and all
other  customary  expenses.  If there shall occur a Default or Event of Default,
all  reasonable   out-of-pocket   expenses  incurred  by  the  Lenders  and  the
Administrative  Agent (including  administrative  expenses of the Administrative
Agent  and the  Lenders  and fees and  disbursements  of  in-house  and  outside
counsel) in connection  with such Default or Event of Default and collection and
other  enforcement  proceedings  (including  bankruptcy  proceedings)  resulting
therefrom  shall  be paid  by the  Borrowers  and  Guarantors,  or any of  them,
regardless of whether suit is actually  commenced to obtain any relief  provided
hereunder. Each Borrower and Guarantor shall indemnify, defend and hold harmless
the  Administrative  Agent,  each  Issuing Bank and each of the Lenders from and
against any and all  documentary or filing taxes,  assessments or charges by any
Governmental  Authority  by  reason  of  the  execution  and  delivery  of  this
Agreement,  the Notes and the other Loan Documents and the  consummation  of the
transactions that are the subject thereof.

 . In  addition  to and not in  limitation  of the  obligations  imposed  on each
Borrower and Guarantor  under  Section 3.4.5 above,  each Borrower and Guarantor
shall  indemnify,  defend and hold  harmless  the  Administrative  Agent and the
Lenders (to the fullest  extent  permitted  by law) from and against any and all
claims, demands,  lawsuits,  costs, expenses,  fees,  obligations,  liabilities,
losses, damages, recoveries and deficiencies,  including interest, penalties and
reasonable  attorneys'  and  paralegals'  fees and  costs  and  amounts  paid in
settlement of any of the foregoing,  whether direct, indirect,  consequential or
incidental,  that the Administrative Agent or the Lenders may incur or suffer or
that may arise out of, result from or relate to (a) this  Agreement,  the Notes,
the  Letters  of  Credit  or  the  other  Loan  Documents  or  the  transactions
contemplated   hereby  or  thereby   (excluding   actions  arising  out  of  the
Administrative Agent's or the Lenders' own gross negligence,  breach of contract
or  willful   misconduct  and  actions   arising  out  of  claims  made  by  the
Administrative  Agent,  each  Issuing  Bank  or any  Lender  against  any of the
others),  or (b) any action  under this  Agreement,  the Notes,  the  Letters of
Credit or the other Loan Documents or the  transactions  contemplated  hereby or
thereby  (excluding  actions  arising out of the  Administrative  Agent's or the
Lenders' own gross  negligence,  breach of contract,  or willful  misconduct and
actions  arising out of claims made by the  Administrative  Agent,  each Issuing
Bank  or  any  Lender  against  any  of  the  others).  In no  event  shall  the
Administrative  Agent or the Lenders be liable to any Borrower or Guarantor  for
any matter or thing in connection with this Agreement, the Notes, the Letters of
Credit or the other Loan  Documents  other than to account  for monies  actually
received by them in accordance  with the terms hereof.  This Section 14.13 shall
survive termination of this Agreement.

 . If any Lender (a "Benefitted Lender") at any time shall receive any payment of
all or  part  of its  Loans  or  its  participation  in  the  Letter  of  Credit
Liabilities or the interest thereon or receive any collateral therefor,  whether
voluntarily or involuntarily,  by set-off or otherwise,  in a greater portion of
any such  payment to and  collateral  received by any other  Lender,  if any, in
respect  of such  other  Lender's  Loans or its  participation  in the Letter of
Credit  Liabilities  or the  interest  thereon,  such  benefitted  Lender  shall
purchase for cash from the other  Lenders such portion of each Lender's Loan and
participation in the Letter of Credit  Obligations,  or shall provide such other
Lenders with the benefits of any such collateral,  or the proceeds  thereof,  as
shall be necessary to cause such  benefitted  Lender to share the excess payment
or benefits of such  collateral  or proceeds  ratably  with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
thereafter is recovered  from such  benefitted  Lender,  such purchase  shall be
rescinded  and the  purchase  price and  benefit  returned to the extent of such
recovery,  but without interest.  Each Lender so purchasing a portion of another
Lenders' Loan and participation in the Letter of Credit Obligations may exercise
all rights of payment  (including rights of setoff) with respect to such portion
as fully as if such Lender were the direct holder of such portion.

 . In addition to any rights and  remedies  of the Lenders  provided by law,  the
Lenders  each shall  have a security  interest  in any and all  deposits  of the
Borrowers and  Guarantors  (general or special,  time or demand,  provisional or
final) at any time held by any Lender or any Affiliate  thereof,  which security
interest  shall  secure  the  Obligations.  Upon the  occurrence  and during the
continuance of any Event of Default subject to any applicable cure period,  with
the consent of the  Administrative  Agent  without prior notice to the Borrowers
and  Guarantors,  any notice  being  specifically  waived by the  Borrowers  and
Guarantors to the fullest  extent  permitted by applicable  law, each Lender may
set off and apply, subject to Section 14.13,  against any indebtedness,  whether
matured or unmatured, of the Borrowers and Guarantors to the Lenders, any amount
owing from any Lender or any Affiliate  thereof to the Borrowers and Guarantors,
or at any time after,  the occurrence of an Event of Default (and each Affiliate
of any Lender is irrevocably  authorized to permit such setoff and application),
and the aforesaid  right of setoff may be exercised by any Lender against any of
the Borrowers and  Guarantors  or against any trustee in  bankruptcy,  debtor in
possession,  assignee  for the  benefit of  creditors,  receiver  or  execution,
judgment,  or  attachment  creditor of any of the  Borrowers or  Guarantors,  or
against  anyone  else  claiming  through  or  against  any of the  Borrowers  or
Guarantors or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of  creditors,  receiver  or  execution,  judgment  or other  attachment
creditor, notwithstanding the fact that such right of setoff shall not have been
exercised by any Lender prior to the making, filing or issuance, or service upon
any Lender of, or of notice of, any such petition, assignment for the benefit of
creditors,  appointment or  application  for the  appointment of a receiver,  or
issuance of execution,  subpoena,  order or warrant.  Each Lender promptly shall
notify the Borrowers and Guarantors and the Administrative  Agent after any such
setoff and application made by any Lender;  provided,  however,  that failure to
give such notice shall not affect the validity of such setoff and application.

     14.15. Other  Accommodations to the Borrowers and Guarantors;  No Rights By
Virtue of Each Lender (including the  Administrative  Agent) may, without notice
to or consent by any other Lender,  unless otherwise  prohibited by the terms of
this  Agreement,  make or  participate  in loans,  extensions of credit or other
financial  accommodations  to or for the benefit of any Borrower or Guarantor on
any terms that it deems desirable, and engage in other business transactions, in
the  same  manner  as if this  Agreement  were  not in  existence,  all  without
limiting,  waiving or otherwise impairing any rights of such Lender or any other
Lender under this Agreement.  Without  limiting the generality of the foregoing,
the Lenders acknowledge and agree that unless otherwise  prohibited by the terms
of this Agreement, so long as a Lender acts in good faith and the other Lenders'
interests in the  Obligations are not impaired  thereby,  (i) such Lender may be
preferred or secured in any manner that it deems  advisable with respect to such
other loans,  extensions of credit,  financial  accommodations and transactions,
(ii) such Lender shall be under no  obligation  to collect or attempt to collect
any payments in respect of the  Obligations  in preference to the  collection or
enforcement of any other borrowings or obligations of such Borrower or Guarantor
to such  Lender,  and (iii)  any  amounts  collected  by such  Lender  from such
Borrower  or  Guarantor  that  are  not  expressly   designated  (or  reasonably
determinable  to be  intended)  as being in  payment of the  Obligations  may be
applied to any of the  obligations  of such  Person to such Lender in any manner
deemed appropriate by such Lender.

 . All representations and warranties of each Borrower and Guarantor set forth in
this  Agreement,  the  Notes  and the  other  Loan  Documents  and in any  other
certificate,  opinion or other statement provided at any time by or on behalf of
each Borrower and Guarantor in connection  herewith  shall survive the execution
of the delivery of this Agreement,  the Notes and the other Loan Documents,  the
purchase and sale of the Notes  hereunder and the payment or other  satisfaction
of the Obligations.

     . None of the Administrative  Agent or the Lenders shall be deemed partners
or joint  venturers  with any Borrower or Guarantor or any Affiliate  thereof in
making this Agreement or by any action taken hereunder. This Section 14.18 shall
survive termination of this Agreement.

 .  Any  documents,   schedules,  invoices  or  other  papers  delivered  to  the
Administrative  Agent  or the  Lenders  at  their  option  may be  destroyed  or
otherwise  disposed  of by them six (6) months  after they are  delivered  to or
received by them, unless the Borrowers and Guarantors request,  in writing,  the
return  of such  documents,  schedules,  invoices  or  other  papers  and  makes
reasonably acceptable  arrangements,  at the Borrowers' and Guarantors' expense,
for their return.

 . This  Agreement  may be  executed in one or more  counterparts,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the  same  document.   This  Agreement  shall  become  effective  when  (a)  the
Administrative Agent shall have received counterparts executed by the Borrowers,
Guarantors,  the Lenders and the Administrative Agent, or (b) in the case of any
Lender, the Administrative Agent shall have received telecopied notice from such
Lender that it has executed a counterpart  thereof and forwarded the same to the
Administrative  Agent by first class,  registered or certified mail as set forth
in Section 14.1. A set of the copies of this Agreement or counterparts signed by
all of the  parties  shall be lodged  with GFC,  on  behalf of  itself,  and the
Administrative Agent.

 . It is the  intention  of the  Borrowers,  the  Guarantors,  and the Lenders to
conform  strictly to all laws applicable to the Lenders that govern or limit the
interest  and loan  charges  that may be charged in respect of the  Obligations.
Anything in this Agreement,  the Notes or any of the other Loan Documents to the
contrary  notwithstanding,   in  no  event  whatsoever,  whether  by  reason  of
advancement of proceeds of the Loans or the Letters of Credit,  acceleration  of
the maturity of the unpaid balance of any of the Obligations or otherwise, shall
the interest  and loan  charges  agreed to be paid to any of the Lenders for the
use of the money advanced or to be advanced hereunder exceed the maximum amounts
collectible  by such  Lender  pursuant  to  applicable  law.  If for any  reason
whatsoever  the interest or loan charges  paid or  contracted  to be paid by the
Borrowers to any of the Lenders in respect of the Loans shall exceed the maximum
amounts  collectible  under the law  applicable  to such Lender,  then,  in that
event, and notwithstanding anything to the contrary in this Agreement, the Notes
or any  other  Loan  Document:  (a)  the  aggregate  of all  consideration  that
constitutes  interest or loan charges  under the law  applicable  to such Lender
that is  contracted  for,  taken,  reserved,  charged  or  received  under  this
Agreement,  the Notes or any other Loan Document or otherwise in connection with
the Obligations under no circumstances  shall exceed the maximum amounts allowed
by such  applicable  law, and any excess shall be credited by such Lender on the
principal  amount of the  Obligations  (or, to the extent the  principal  amount
outstanding  under this  Agreement,  the Notes and the other Loan  Documents has
been or thereby would be paid in full,  refunded to the  Borrowers);  and (b) in
the event that the maturity of any or all of the  Obligations  is accelerated by
reason of an  election  of the Lenders  resulting  from any  Default  under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such  consideration  that  constitutes  interest or loan charges  under law
applicable to any Lender may never include more than the maximum amounts allowed
by the law  applicable to such Lender,  and any excess  interest or loan charges
provided for in this Agreement or otherwise shall be canceled  automatically  as
of the date of such  acceleration or prepayment and, if theretofore  paid, shall
be credited by such Lender on the principal  amount of the  Obligations  (or, to
the extent the principal  amount of the Obligations has been or thereby would be
paid in full, refunded by such Lender to the Borrowers). All sums paid or agreed
to be paid to the  Lenders for the use,  forbearance  or  detention  of sums due
hereunder  shall,  to the extent  permitted  by  applicable  law,  be  prorated,
allocated and spread  throughout the full term of the Obligations  until payment
in full so that the rate or amount of  interest  and loan  charges on account of
the Obligations  will not exceed any applicable legal  limitation.  The right to
accelerate  the  maturity  of the  Obligations  does not  include  the  right to
accelerate the maturity of any interest or loan charges not otherwise accrued on
the date of such  acceleration,  and the  Lenders  do not  intend  to  charge or
collect  any  unearned  interest  or  loan  charges  in the  event  of any  such
acceleration.

     . THIS WRITTEN AGREEMENT REPRESENTS 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.
<PAGE>


          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.



                                            BORROWERS:


                         GOODY'S FAMILY CLOTHING, INC.,
                             a Tennessee corporation


                                            By:/s/ Harry M. Call
                                                     Name:    Harry M. Call
                                                     Title:   President

                          Attest: /s/Regis J. Hebbeler
                                                   Name:    Regis Hebbeler
                                                   Title:   Assistant Secretary



                                            GOODY'S MS, L.P.

                                        By: TREBOR of TN, Inc., General Partner


                                            By: /s/Harry M. Call
                                                     Name:    Harry M. Call
                                                     Title:   President.


                                            GOODY'S IN, L.P.

                                        By: TREBOR of TN, Inc., General Partner


                                            By: /s/Harry M. Call
                                                     Name:    Harry M. Call
                                                     Title:   President.



<PAGE>


                                            GUARANTORS:

                                            SYDOOG, INC., a Delaware corporation


                           By: /s/Francis B. Jacobs II
                                                 Name:    Francis B. Jacobs II
                                                     Title:   President.



                          Attest: /s/Gordon W. Stewart
                                                    Name:    Gordon W. Stewart
                                                       Title:   Secretary.


                                        GOFAMCLO, INC., a Delaware corporation


                           By: /s/Francis B. Jacobs II
                                                  Name:    Francis B. Jacobs II
                                                     Title:   President.



                          Attest: /s/Gordon W. Stewart
                                                    Name:    Gordon W. Stewart
                                                      Title:   Secretary.

                                   TREBOR OF TN, INC., a Tennessee corporation


                                            By: /s/Harry M. Call
                                                     Name:    Harry M. Call
                                                     Title:   President.



                          Attest: /s/Regis J. Hebbeler
                                                    Name:    Regis J. Hebbeler
                                                       Title:   Secretary.




                               PAGES FOLLOW]ATURE



<PAGE>



                    [Lender's Signature Page to $100,000,000
          Amended and Restated Credit Agreement dated October 31, 1996]



       FIRST  TENNESSEE  BANK  NATIONAL  ASSOCIATION,   as  a  Lender  and  as
       Administrative Agent


                                            By:_/s/JamesA Atchley
                                            Title:   Vice President


                         Address: First Tennessee Bank National Association
                                  Corporate Lending Group
                                  Plaza Tower
                                  800 S. Gay Street
                                  Knoxville, Tennessee  37929
                                  Attn:  James H. Atchley
                                  Telecopy No. 615-971-2883

                                  Initial Commitment:  $ 20,000,000


                                            Percentage:  20.00%



<PAGE>



                    [Lender's Signature Page to $100,000,000
          Amended and Restated Credit Agreement dated October 31, 1996]



                                 FIRST AMERICAN NATIONAL BANK, as a Lender


                                  By:/s/Eric V. Schwarzentraub
                                  Title:    Vice President


                                   Address: 505 S. Gay Street, Mezzanine
                                            Knoxville, Tennessee  37902
                                            Attn: Eric V. Schwarzentraub
                                            Telecopy No. 615-521-5352



                                            Initial Commitment:  $ 15,000,000


                                            Percentage:  15.00%



<PAGE>



                    [Lender's Signature Page to $100,000,000
          Amended and Restated Credit Agreement dated October 31, 1996]



                                        AMSOUTH BANK OF ALABAMA, as a Lender


                               By:      Therese Sheehy
                               Title:    Vice President_______________________


                                  Address: 1900 5th Avenue North, 7th floor
                                           Birmingham, Alabama  35203
                                           Attn: Bob Dehaven
                                           Telecopy No. 205-583-4436



                         Initial Commitment: $17,500,000


                                            Percentage:  17.50%



<PAGE>



                    [Lender's Signature Page to $100,000,000
          Amended and Restated Credit Agreement dated October 31, 1996]



                                   SOUTHTRUST BANK OF ALABAMA, N.A., as a
                                             Lender


                           By:/s/James T. Chester, III
                                            Title:   Commercial Loan Officer

                         Address: 420 North 20th Street
                            Birmingham, Alabama 35203
                           Attn: James T. Chester, III
                            Telecopy No. 205-254-5022



                         Initial Commitment: $17,500,000


                                            Percentage:  17.50%



<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$17,500,000      Knoxville, Tennessee                          November 1, 1996


         FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in
the hereinafter  described Credit  Agreement,  the  undersigned,  GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of FIRST UNION NATIONAL BANK OF TENNESSEE  ("Payee";  Payee,  and any subsequent
holder[s] hereof, being hereinafter  referred to collectively as "Holder"),  the
principal sum of SEVENTEEN  MILLION FIVE HUNDRED THOUSAND AND 00/100THS  DOLLARS
($17,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced  here  against  pursuant to that certain  Amended and  Restated  Credit
Agreement  dated  November 1, 1996,  by and among Maker,  First  Tennessee  Bank
National Association,  a national banking association,  as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith  (together with any amendments  thereto and/or  modifications
thereof,  herein referred to as the "Credit  Agreement";  capitalized terms used
but not otherwise  defined  herein shall have the same meanings as in the Credit
Agreement),  together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event  shall the  interest  and loan  charges  payable  in  respect of the
indebtedness  evidenced  hereby  exceed the  maximum  amounts  from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.
         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note  amends  and  restates  that  certain  Amended  and  Restated
Promissory Note of Maker in favor of Payee dated May 20, 1996 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.



By:

                                            Title:


                                            Attest:

                                            Title:


1017890.02

                    [Lender's Signature Page to $100,000,000
          Amended and Restated Credit Agreement dated October 31, 1996]



                                     FIRST UNION NATIONAL BANK OF TENNESSEE,
                                             as a Lender


                             By:/s/J. Gregory Bowers
                                            Title:   Senior Vice President


                        Address: 150 Fourth Avenue North
                                 First Union Tower, 2nd Floor
                                 Nashville, Tennessee  37219
                                 Attn: Mr. Timothy B. Fouts
                                 Telecopy No. 615-251-0894



                         Initial Commitment: $17,500,000


                                            Percentage:  17.50%



<PAGE>



                    [Lender's Signature Page to $100,000,000
          Amended and Restated Credit Agreement dated October 31, 1996]


                                   WACHOVIA BANK OF GEORGIA, N.A., as a Lender


                                            By:/s/ John B. Tibe
                                            Title:   Assistant Vice President


                                 Address: 191 Peachtree Street, NE, 29th floor
                                          Atlanta, Georgia 30303
                                          Attn: John Tibe
                                          Telecopy No. 404-332-5016



                         Initial Commitment: $12,500,000


                                            Percentage:  12.50%



<PAGE>


                             SCHEDULES AND EXHIBITS



                                    Schedules


Schedule 7.6               Pending Litigation

Schedule 7.8               Capitalization

Schedule 7.16A             Indebtedness

Schedule 7.16B             Contingent Obligations

Schedule 7.17A             Business Locations

Schedule 7.17B             Trade Names

Schedule 7.22              Material Adverse Change

Schedule 7.23              Employment Agreements and Executive Compensation
                           Arrangements

Schedule 7.26              Material Contracts




<PAGE>


                                    Exhibits

Exhibit 2.2.4              Form of Notice of Borrowing

Exhibit 2.3.2              Form of Letter of Credit Request

Exhibit 2.7.2              Form of Notice of Conversion/Continuation

Exhibit 2.8                Form of Note

Exhibit 4.1A               Form of Pledge and Security Agreement

Exhibit 4.1B               Form of License Agreement

Exhibit 4.1C               Form of Master Supply Agreement

Exhibit 4.1D               Form of Management Services Agreement

Exhibit 4.1E               Form of Tax Sharing Agreement

Exhibit 6.1.1A             Form of Opinion of Counsel to the Borrowers and
                           Guarantors

Exhibit 6.1.1B             Form of Borrowers' and Guarantors' Letter to Counsel
                           Requesting Opinion

Exhibit 13.2               Form of Assignment and Acceptance




<PAGE>


                                                             EXHIBIT 2.2.4


                          [FORM OF NOTICE OF BORROWING]





First Tennessee Bank National Association
Corporate Lending Group
Plaza Tower
800 S. Gay Street
Knoxville, Tennessee  37929
Attention:  James H. Atchley

Gentlemen:

         Pursuant to that certain Amended and Restated Credit Agreement dated as
of  November  1,  1996,  among  Goody's  Family  Clothing,   Inc.,  a  Tennessee
corporation,  Goody's MS, L.P., a Tennessee limited partnership, and Goody's IN,
L.P., a Tennessee limited partnership (the "Borrowers"),  the several guarantors
who are or become parties thereto, the several lenders who are or become parties
thereto (the  "Lenders")  and First  Tennessee  Bank  National  Association,  as
administrative agent for the Lenders (the  "Administrative  Agent") (the "Credit
Agreement";  capitalized  terms  used  but not  defined  herein  shall  have the
meanings assigned thereto in the Credit  Agreement),  [notice is hereby given of
the Borrowers'] [the Borrowers hereby confirm their prior telephonic] request to
borrow on  __________________  __,  19__ from the  Lenders  on a pro rata  basis
$____________ as [Base Rate] [LIBOR] Loans (the "Loans").  [The initial Interest
Period for such LIBOR Loans is requested to be a  _____________  month  period.]
The  proceeds  of such Loans are to be  deposited  in or wired to  ___________'s
[specify    Borrower    to   receive    loans]    account    #____________    at
_____________________________________________________ Bank.

         The undersigned  officers of the Borrowers  hereby certify that (1) all
of the conditions to the making of the foregoing  Loans set forth in Section 6.2
of the Credit  Agreement have been  satisfied,  and (2) the foregoing  Loans are
permitted  by and will not violate any  provision or  requirement  of the Credit
Agreement, including those set forth in Section 2.2.1 thereof.

DATED:   __________________ __, 19__.

                                             GOODY'S FAMILY CLOTHING, INC.


                                        By:________________________________
                                        Title: ______________________________


                                        GOODY'S MS, L.P.

                                        BY:      TREBOR of TN, Inc.
                                                 General Partner


                                         By: __________________________
                                         Title:_________________________


                                         GOODY'S IN, L.P.
                                         BY:      TREBOR of TN, Inc.
                                                  General Partner


                                         By:___________________________
                                         Title:__________________________




1009040.03


<PAGE>


                                                            EXHIBIT 2.3.2


                          FORM LETTER OF CREDIT REQUEST



No._________________________1     Dated_____________________2


To:________________________________________3, in its capacity as an Issuing Bank
under the Amended and Restated Credit Agreement dated as of November 1, 1996 (as
amended,  restated,  supplemented,  replaced or otherwise  modified from time to
time,  the  "Agreement";  the terms  defined  therein are used herein as therein
defined),  among Goody's Family Clothing, Inc., Goody's MS, L.P. and Goody's IN,
L.P. (the "Borrowers"),  the Guarantors party thereto, the Lenders party thereto
and First Tennessee Bank National Association, as Administrative Agent


Ladies and Gentlemen:

         We hereby  request that you [issue a [Standby]  [Commercial]  Letter of
Credit      in      favor      of      ________________________________4      on
____________________________5,  which shall have an aggregate  stated  amount of
$___________________6  and a  stated  termination  date  of  _________________7]
[extend the expiration  date of the Issuing Bank's existing Letter of Credit No.
__________8 in the stated amount of $__________ to ________________, ____9.]

         [The text of the Letter of Credit requested hereby is attached hereto.]

         The undersigned  officers of the Borrowers  hereby certify that (1) the
[issuance/extension] of the foregoing Letter of Credit is permitted by, and will
not violate,  the provisions or requirements of the Credit Agreement,  including
those set forth in Section 2.3.1  thereof,  and (2) all of the conditions to the
[issuance/extension]  of the foregoing  Letter of Credit in the Credit Agreement
(including those set forth in Section 6.2 thereof) have been satisfied.

                                           GOODY'S FAMILY CLOTHING, INC.

                                         By:________________________________
                                         Title: ____________________________


                                            GOODY'S MS, L.P.

                                          BY:      TREBOR of TN, Inc.

                                          By: ___________________________
                                          Title:__________________________


                                          GOODY'S IN, L.P.

                                          BY:      TREBOR of TN, Inc.

                                          By: ____________________________
                                          Title:___________________________
1009041.03


<PAGE>



                                                         EXHIBIT 2.7.2


                   [FORM OF NOTICE OF CONVERSION/CONTINUATION]




First Tennessee Bank National Association
Corporate Lending Group
Plaza Tower
800 S. Gay Street
Knoxville, Tennessee  37929
Attention:  James H. Atchley

Gentlemen:

         Pursuant to that certain Amended and Restated Credit Agreement dated as
of November 1, 1996 (the "Credit  Agreement")  among  Goody's  Family  Clothing,
Inc., a Tennessee corporation Goody's MS, L.P., a Tennessee limited partnership,
and Goody's IN, L.P., a Tennessee  limited  partnership (the  "Borrowers"),  the
several  guarantors who are or become parties  thereto,  the several lenders who
are or become parties  thereto (the "Lenders") and First Tennessee Bank National
Association,  as  administrative  agent  for the  Lenders  (the  "Administrative
Agent") [notice is hereby given of the Borrowers'] [the Borrowers hereby confirm
their prior telephonic] request to [convert  $______________ in principal amount
of Base Rate Loans to LIBOR Loans on __________________  __, 19__.] [continue as
LIBOR Loans  $_____________  in principal amount of presently  outstanding LIBOR
Loans with an Interest  Period  expiring on  __________________  __,  19__.] The
Interest Period for such [converted]  [continued] LIBOR Loans is requested to be
a ____________ month period.

         The  undersigned  officers of the  Borrowers  hereby  certify  that the
[conversion] [continuation] set forth above is permitted by and will not violate
the provisions or  requirements  of the Credit  Agreement,  including  those set
forth in Sections 2.7.1 and 2.14.1 thereof.

DATED:   __________________ ___, 19__.


                                          GOODY'S FAMILY CLOTHING, INC.

                                          By:________________________________
                                          Title: ______________________________



<PAGE>


                                           GOODY'S MS, L.P.

                                           BY:      TREBOR of TN, Inc.
                                                    General Partner


                                           By: _________________________
                                           Title:________________________


                                           GOODY'S IN, L.P.

                                           BY:      TREBOR of TN, Inc.
                                                    General Partner


                                            By: _________________________
                                            Title:________________________





<PAGE>


                                  EXHIBIT 4.1A


                          PLEDGE AND SECURITY AGREEMENT


         THIS PLEDGE AND  SECURITY  AGREEMENT  (this  "Agreement"),  dated as of
October 31, 1996, is made and entered into by GOODY'S FAMILY  CLOTHING,  INC., a
Tennessee corporation (the "Pledgor"), in favor of FIRST TENNESSEE BANK NATIONAL
ASSOCIATION,  a national banking  association (the  "Administrative  Agent"), as
administrative  agent for the Lenders under the Credit Agreement (as hereinafter
defined).


                                    RECITALS:

         A.  Pursuant to an Amended and Restated  Credit  Agreement of even date
herewith, among Pledgor, the Lenders listed therein and the Administrative Agent
(as the same may be  amended,  restated,  supplemented,  replaced  or  otherwise
modified from time to time, the "Credit Agreement"), the Lenders will make Loans
to the  Borrowers  and issue (with the  exception  of Wachovia  Bank of Georgia,
N.A.)  Letters  of  Credit  for  the  account  of the  Borrowers,  all  as  more
specifically described in the Credit Agreement.

         B. Capitalized terms used herein and not otherwise defined herein shall
have the respective  meanings assigned to them in the Credit  Agreement,  as the
context may require.

     C. It is a condition  precedent to the  obligations  of the Lenders to make
the Loans and issue (with the exception of Wachovia  Bank of Georgia,  N.A.) the
Letters of Credit under the Credit  Agreement  that Pledgor  execute and deliver
this Agreement to the Administrative Agent.

     D.  Pledgor  desires to execute  this  Agreement  to satisfy the  condition
described in the preceding paragraph.


                                   AGREEMENTS:

         NOW, THEREFORE, in consideration of the premises and in order to insure
the Borrowers'  compliance with and to induce the Lenders to extend credit under
the Credit Agreement,  and in consideration of the benefits accruing to Pledgor,
the receipt and  sufficiency  of all of which are hereby  acknowledged,  Pledgor
hereby makes the following  representations and warranties to the Administrative
Agent and hereby covenants and agrees with the Administrative Agent, all for the
benefit of the  Lenders and the  Administrative  Agent as provided in the Credit
Agreement, as follows:
         SECTION 1. Security for  Obligations,  Etc.  This  Agreement is for the
benefit of the  Administrative  Agent and the  Lenders to secure the payment and
performance  in full when due,  whether  at stated  maturity,  by  acceleration,
mandatory  prepayment,  declaration or otherwise,  of all the Obligations of the
Borrowers  and the  Guaranteed  Obligations  of the  Guarantors as described and
defined in the Credit Agreement (the Obligations and the Guaranteed  Obligations
being collectively  referred to herein as the "Secured  Obligations");  subject,
however,  to the  proviso  that  the  liability  of each  Guarantor  under  this
Agreement,  the Credit  Agreement,  the Notes and the other Loan Documents shall
never exceed its Maximum Guaranty Liability.

         SECTION  2.  Definition  of  Securities.   As  used  herein,  the  term
"Securities"  shall mean all of the issued and outstanding shares of every class
of capital stock of SYDOOG, TREBOR and GOFAMCLO and each corporate Subsidiary of
Pledgor  that is  hereafter  acquired  or formed by Pledgor and  hereafter  made
subject to the pledge and security interest of this Agreement (collectively, the
"Pledged  Stock").  Pledgor  represents and warrants that on the date hereof (a)
the Pledged Stock  consists of the number and type of shares of the common stock
of the Subsidiaries as described in Annex I attached hereto,  and (b) Pledgor is
the holder of record and sole beneficial owner of the Pledged Stock as set forth
on Annex I; and (c)  except as  specifically  set forth in Annex I, the  Pledged
Stock constitutes 100% of the issued and outstanding  capital stock of each such
Subsidiary.

      SECTION 3.   Pledge of Securities, Assignment of Certain Agreements, Etc.

                  SECTION 3.1. Pledge.  To secure the payment and performance of
the Secured  Obligations  and for the  purposes  set forth in Section 1, Pledgor
hereby pledges, assigns, transfers,  hypothecates, sets over and delivers to the
Administrative Agent, and grants to the Administrative Agent a security interest
in, all Pledgor's  right,  title and interest in and to the Securities,  whether
now or  hereafter  acquired,  (including  without  limitation  those  Securities
described  on Annex I, as the same are  amended  or  supplemented  from  time to
time), together with (a) any and all dividends, cash, certificates, instruments,
additional securities or other property from time to time received,  receivable,
distributed or  distributable in respect of, in exchange for, or in substitution
for any and all such  Securities,  and (b) all proceeds of any of the  foregoing
(the foregoing and all such proceeds being  referred to herein  collectively  as
the "Collateral");

         TO HAVE AND TO HOLD the Collateral,  together with all rights,  titles,
interests,  powers, privileges and preferences pertaining or incidental thereto,
unto the Administrative Agent, its successors and assigns;  subject, however, to
the terms, covenants and conditions set forth in this Agreement.

         In  furtherance  of  the  foregoing,  Pledgor  hereby  delivers  to the
Administrative   Agent  the   certificates   representing   the  Pledged  Stock,
accompanied by stock powers and proxies, duly executed in blank by Pledgor.

         SECTION 3.2.  Subsequently-Acquired  Securities. If at any time or from
time to time  after  the  date  hereof  Pledgor  shall  acquire  any  additional
Securities (by purchase,  stock  dividend,  other  distribution or otherwise) or
Pledgor shall possess any additional  Securities by virtue of possessing capital
stock of a Person that becomes a Subsidiary, Pledgor will forthwith deposit such
Securities with the Administrative  Agent in pledge hereunder and deliver to the
Administrative Agent all certificates or instruments therefor, endorsed in blank
by Pledgor and accompanied by stock powers and proxies duly executed in blank by
Pledgor,  and will promptly  thereafter  deliver to the  Administrative  Agent a
certificate  (which  shall be  deemed to  supplement  Annex I  attached  hereto)
executed by an authorized  officer of Pledgor  describing  such  Securities  and
certifying that the same have been duly delivered to the Administrative Agent in
pledge hereunder and that  Administrative  Agent has a first-priority  perfected
security interest therein pursuant to this Agreement.

         SECTION  3.3.   Additional   Subsidiaries.   Simultaneously   with  the
acquisition or creation by Pledgor of any corporate Subsidiary subsequent to the
date hereof,  Pledgor shall pledge and deliver to the  Administrative  Agent and
grant to the  Administrative  Agent, for the benefit of the Lenders,  a security
interest in all of the issued and  outstanding  shares of every class of capital
stock of such  Subsidiary and shall enter into an amendment of this Agreement to
pledge such securities pursuant to the terms of this Agreement.

         SECTION  4.   Appointment   of  Sub-Agents;   Endorsements,   Etc.  The
Administrative  Agent shall upon notice to the Pledgor have the right to appoint
one or more sub-agents for the purpose of retaining  physical  possession of the
Securities,  which  may be held  (if  applicable  and in the  discretion  of the
Administrative  Agent) in the name of Pledgor,  endorsed or assigned in blank or
in  favor  of  the  Administrative  Agent  or any  nominee  or  nominees  of the
Administrative Agent appointed by the Administrative Agent.

         SECTION 5. Voting,  Etc. Unless and until a Default shall have occurred
and be continuing,  Pledgor shall be entitled to vote any and all of its Pledged
Stock  and to give  consents,  waivers  or  ratifications  in  respect  thereof;
provided that no vote shall be cast or any consent, waiver or ratification given
or any action taken that would violate or be inconsistent  with any of the terms
of this Agreement,  the Credit Agreement or the other Loan Documents. All rights
of Pledgor to vote and to give consents,  waivers and ratifications  shall cease
in case a Default  shall occur and be  continuing,  and  Section 7 hereof  shall
become applicable.

     SECTION 6. Dividends and Other  Distributions.  Unless a Default shall have
occurred  and be  continuing,  all cash  dividends  payable  in  respect  of the
Securities shall be paid to Pledgor.  The Administrative Agent shall be entitled
to receive directly, and to retain as part of the Collateral:

         (a) all other or additional  stock or other  securities  and, after the
occurrence  and  during  the  continuance  of  a  Default,  all  other  property
(including  cash) paid or  distributed  in respect of the  Securities  by way of
stock-split,  spin-off,  split-up,  reclassification,  combination  of shares or
similar rearrangement; and

         (b) all other or additional  stock or other  securities  and, after the
occurrence  and  during  the  continuance  of  a  Default,  all  other  property
(including cash) that may be paid or distributed in respect of the Securities by
reason of any consolidation,  merger,  exchange of stock,  conveyance of assets,
liquidation or similar  corporate  reorganization,  or any bankruptcy or similar
reorganization, or any other disposition of Collateral.

         SECTION 7. Remedies in Case of Event of Default. If an Event of Default
shall  have  occurred  and be  continuing,  the  Administrative  Agent  shall be
entitled to exercise all of its rights,  powers and remedies  (whether vested in
it by this  Agreement,  the Credit  Agreement or the other Loan  Documents or by
law, including all rights and remedies of a secured party of a debtor in default
under the  Uniform  Commercial  Code (the  "U.C.C.")  in effect in any  relevant
jurisdiction at that time, for the protection,  preservation  and enforcement of
its  rights  in  respect  of the  Collateral,  and to the  extent  permitted  by
applicable law the Administrative  Agent shall be entitled,  without limitation,
to exercise the following rights, which Pledgor hereby agrees to be commercially
reasonable:

         (a) The  Administrative  Agent shall be entitled to receive all amounts
payable  in respect  of the  Collateral  otherwise  payable  under  Section 6 to
Pledgor.

         (b) The  Administrative  Agent shall be entitled to transfer all or any
part of the Collateral into the  Administrative  Agent's name or the name of its
nominee or nominees.

         (c) The Administrative  Agent shall be entitled to vote all or any part
of  the  Securities   (whether  or  not   transferred   into  the  name  of  the
Administrative  Agent)  and give all  consents,  waivers  and  ratifications  in
respect of the  Securities  and otherwise act with respect  thereto as though it
were the sole beneficial owner thereof.

         (d) The Administrative Agent shall be entitled at any time or from time
to time to sell,  assign and deliver,  or grant options to purchase,  all or any
part of the Collateral or any interest therein, at any public or private sale at
any exchange or broker's board or at any of the  Administrative  Agent's offices
or  elsewhere,  without  demand  for  performance,  advertisement  or  notice of
intention to sell or of the time or place of sale or adjournment thereof (all of
which are hereby  expressly  and  irrevocably  waived by Pledgor),  for cash, on
credit or for other  property,  for  immediate or future  delivery,  without any
assumption of credit risk, and for such price or prices and on such terms as the
Administrative Agent in its reasonable discretion may determine.  Pledgor agrees
that to the extent  that  notice of sale shall be  required by law that at least
ten (10) days' notice to Pledgor of the time and place of any public sale or the
time after  which any  private  sale is to be made shall  constitute  reasonable
notification.  The Administrative  Agent shall not be obligated to make any sale
of  Collateral  regardless  of  whether  notice  of sale  has  been  given.  The
Administrative Agent may adjourn any public or private sale from time to time by
announcement  at the time and  place  fixed  therefor,  and any such  sale  may,
without  further  notice,  be made at the  time  and  place  to  which it was so
adjourned. Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption  with respect to the  Collateral,  whether
before or after sale  hereunder,  and all  rights,  if any, to  marshalling  the
Collateral and any other security for the Secured  Obligations or otherwise.  At
any such sale, unless prohibited by applicable law, the Administrative Agent may
bid for and  purchase  all or any part of the  Collateral  so sold free from any
such right or equity of redemption. The Administrative Agent shall not be liable
for failure to collect or realize upon any or all of the  Collateral  or for any
delay in so doing nor shall the Administrative  Agent or any Lender be under any
obligation to take any action whatsoever with regard thereto.

         (e) The  Administrative  Agent  shall be  entitled  to settle,  adjust,
compromise  and  arrange  all  accounts,  controversies,  questions,  claims and
demands  whatsoever  in  relation to all or any part of the  Collateral,  in its
reasonable discretion.

         (f) The  Administrative  Agent  shall be  entitled,  in  respect of the
Collateral,  to execute all such  contracts,  agreements,  deeds,  documents and
instruments,   to  bring,  defend  and  abandon  all  such  actions,   suits  or
proceedings, and to take all other actions in relation to all or any part of the
Collateral  as  the  Administrative  Agent  in  its  reasonable  discretion  may
determine.

         (g) The  Administrative  Agent shall be  entitled to appoint  managers,
sub-agents,  officers  and  servants  for any of the  purposes  mentioned in the
foregoing  provisions  of this  Section 7 and to  dismiss  the same,  all as the
Administrative Agent in its reasonable discretion may determine.

         (h) The  Administrative  Agent shall be entitled  generally to take all
such other action as the Administrative  Agent in its reasonable  discretion may
determine as incidental  or conducive to any of the matters or powers  mentioned
in the foregoing  provisions of this Section 7 and that the Administrative Agent
may or can do lawfully and to use the name of Pledgor for the purposes aforesaid
and in any proceedings arising therefrom.

         SECTION 8. Remedies,  Etc. Cumulative.  Each right, power and remedy of
the Administrative Agent provided for in this Agreement, the Credit Agreement or
any of the other  Loan  Documents,  or now or  hereafter  existing  at law or in
equity or by statute or otherwise,  shall be cumulative and concurrent and shall
be in addition to every other such right,  power or remedy.  The exercise or the
commencement of the exercise by the  Administrative  Agent of any one or more of
the  rights,  powers or  remedies  provided  for in this  Agreement,  the Credit
Agreement or any of the other Loan  Documents,  or now or hereafter  existing at
law or in equity or by statute or otherwise, shall not preclude the simultaneous
or later exercise by the Administrative  Agent of all such other rights,  powers
or remedies,  and no failure or delay on the part of the Administrative Agent to
exercise any such right, power or remedy shall operate as a waiver thereof.

         SECTION  9.  Application  of  Proceeds.  All  moneys  collected  by the
Administrative  Agent  upon  any sale or other  disposition  of the  Collateral,
together with all other moneys  received by the  Administrative  Agent hereunder
shall be applied as follows:

         (a) first,  to the payment of any and all expenses and fees  (including
reasonable  attorney's and paralegal's fees and expenses)  actually  incurred by
the Administrative Agent in obtaining,  taking possession of, removing,  storing
and  disposing  of the  Collateral  and  any  and all  amounts  incurred  by the
Administrative  Agent in  connection  therewith  or owing to the  Administrative
Agent hereunder;

         (b) next,  any  surplus  then  remaining  to the  payment  of the other
Secured  Obligations  in such  order as  required  or  permitted  by the  Credit
Agreement; and

         (c) if all of the  Commitments  are then  terminated  under the  Credit
Agreement,  all Secured Obligations have been indefeasibly paid and performed in
full and no Obligations remain unpaid,  outstanding or unperformed,  any surplus
then remaining shall be paid to the Pledgor;  subject, however, to the rights of
the  holder  of  any  then   existing  Lien   encumbering   same  of  which  the
Administrative Agent has actual notice (without investigation);

it being understood that Pledgor shall,  subject to Section 1 hereof and Article
5 of the Credit Agreement, remain liable to the extent of any deficiency between
the amount of the proceeds of the  Collateral  and the  aggregate  amount of the
sums referred to in clauses (a) and (b) of this Section 9.

         SECTION  10.  Purchases  of  Collateral.  Upon  any  sale of any of the
Collateral  hereunder (whether by virtue of the power(s) of sale herein granted,
pursuant to judicial  process or otherwise),  the receipt of the  Administrative
Agent or the officer or agent making the sale shall be a sufficient discharge to
the  purchaser or purchasers of the  Collateral so sold,  and such  purchaser or
purchasers  shall not be obligated to see to the  application of any part of the
purchase  money  paid over to the  Administrative  Agent or such  officer  or be
answerable in any way for the misapplication or nonapplication thereof.

         SECTION 11. Further Assurances.  Pledgor agrees to do such further acts
and things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments,  as the Administrative  Agent at any time reasonably
may  request in  connection  with the  administration  and  enforcement  of this
Agreement or relative to the  Collateral or any part  thereof,  or to effectuate
the  purposes  hereof  or in  order  better  to  assure  and  confirm  unto  the
Administrative Agent its rights, powers and remedies hereunder. Without limiting
the foregoing, Pledgor agrees that it will join with the Administrative Agent in
executing  and,  at its own  expense,  file and  refile  under the  U.C.C.  such
financing  statements,  continuation  statements  and  other  documents  in such
offices  as the  Administrative  Agent may deem  necessary  or  appropriate  and
wherever  required  or  permitted  by law in order to perfect and  preserve  the
Administrative  Agent's security interest in the Collateral,  and Pledgor hereby
authorizes the Administrative  Agent to file financing statements and amendments
thereto  relative to all or any part of the Collateral  without the signature of
Pledgor where permitted by law.

         SECTION 12.   Responsibilities of the Administrative Agent.

                  (a) The  Administrative  Agent  will  hold  all  items  of the
Collateral at any time received  under this  Agreement in accordance  with,  and
subject to, the  provisions of this  Agreement.  It is expressly  understood and
agreed  that  the  obligations  of the  Administrative  Agent as  holder  of the
Collateral and interests  therein and with respect to the  disposition  thereof,
and otherwise under this  Agreement,  are only those expressly set forth in this
Agreement  and, to the extent not  specifically  waived  hereunder,  as required
under applicable law.

                  (b) The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and  preservation of Collateral in its possession
if such Collateral is accorded treatment  substantially  equal to that which the
Administrative  Agent accords its own  property,  it being  understood  that the
Administrative Agent shall have no responsibility for (i) ascertaining or taking
action with respect to calls,  conversions,  exchanges,  maturities,  tenders or
other   matters   relative  to  any   Collateral,   regardless  of  whether  the
Administrative Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary  steps to preserve  rights against any parties with respect
to any Collateral.

         SECTION 13.  Transfer by Pledgor.  Pledgor  will not sell or  otherwise
dispose of, grant any option with  respect to, or mortgage,  pledge or otherwise
encumber  any of the  Collateral  or any interest  therein  (except as otherwise
expressly permitted by the Credit Agreement).

         SECTION 14.  Representations and Warranties.  Pledgor hereby represents
and warrants that (a) it is the legal,  record and beneficial  owner of, and has
good and  marketable  title  to,  the  Securities  designated  on Annex I as its
property,  subject to no Lien or  restriction  whatsoever,  except the  pledges,
liens and security  interests  created by this  Agreement  and the  restrictions
noted on the certificates representing the Pledged Stock; (b) it has full power,
authority  and legal  right to pledge  and  assign  its  Collateral,  to grant a
security  interest  in  its  Collateral  and  to  enter  into  and  perform  its
obligations  under this  Agreement;  (c)  Pledgor  has  obtained  all  requisite
consents  required  to be  obtained  from any other  party  (including,  without
limitation,  any stockholder or creditor of Pledgor or any of its  Subsidiaries)
and no order, consent,  license, permit,  approval,  validation or authorization
of,  exemption by, notice to or registration,  recording,  filing or declaration
with, any governmental or public body or authority is required to be obtained by
Pledgor in  connection  with the  execution,  delivery  or  performance  of this
Agreement  or  the  consummation  of  the  transactions   contemplated   hereby,
including,  without limitation,  the exercise by the Administrative Agent of the
voting or other rights provided for in this Agreement or the remedies in respect
of the  Collateral  pursuant  to this  Agreement  (except as may he  required in
connection with the disposition of the Collateral by laws affecting the offering
and sale of  securities  generally);  (d) all shares of Pledged  Stock have been
duly and validly issued, are fully paid and  nonassessable;  and (e) the pledge,
assignment and delivery of the Collateral  pursuant to this Agreement  creates a
valid and perfected first priority security interest in the Collateral including
all proceeds  thereof  superior to and prior to the rights of all other  Persons
therein (as provided in the U.C.C.).

         SECTION 15. Covenants of Pledgor. Pledgor covenants and agrees that (a)
Pledgor  will  defend  the  Administrative  Agent's  right,  title and  security
interest in and to the Collateral  against the claims and demands of all Persons
whomever;  (b)  Pledgor  will have like  title to and right to pledge  any other
property at any time hereafter constituting  Collateral and likewise will defend
the right thereto and security interest therein of the Administrative Agent; and
(c) Pledgor will not, with respect to any Collateral, enter into any shareholder
agreements,  voting agreements,  voting trusts, trust deeds, irrevocable proxies
or any other similar agreements or instruments.

         SECTION 16.  Pledgor's  Obligations  Absolute,  Etc. The obligations of
Pledgor under this Agreement shall be absolute and  unconditional  in accordance
with the terms hereof and shall remain in full force and effect  without  regard
to, and shall not be released,  suspended,  discharged,  terminated or otherwise
affected by, any  circumstance  or  occurrence  whatsoever,  including,  without
limitation: (a) any change in the time, place or manner of payment of, or in any
other term of, all or any of the Secured  Obligations,  any waiver,  indulgence,
renewal,  extension,  amendment  or  modification  of or  addition,  consent  or
supplement  to or  deletion  from or any other  action or  inaction  under or in
respect  of this  Agreement,  the  Credit  Agreement  or any of the  other  Loan
Documents  or any other  instrument  or  agreement  referred  to  therein or any
assignment   or  transfer  of  any   thereof;   (b)  any  lack  of  validity  or
enforceability of this Agreement,  the Credit Agreement or any of the other Loan
Documents or any other documents,  instruments or agreement  referred to therein
or any assignment or transfer of any thereof;  (c) any limitation on any party's
liability  or  obligations  under  any  such  instrument  or  agreement  or  any
invalidity or  unenforceability,  in whole or in part, of any such instrument or
agreement or any term thereof;  (d) any furnishing of any additional security to
the  Administrative  Agent or its  assignees  or any  acceptance  thereof or any
release of any security by the  Administrative  Agent or its assignees;  (e) any
bankruptcy, insolvency,  reorganization,  composition,  adjustment, dissolution,
liquidation or other like  proceeding  relating to Pledgor,  or any action taken
with respect to this Agreement by any trustee or receiver,  or by any court,  in
any such  proceeding,  regardless  of  whether  Pledgor  shall  have  notice  or
knowledge of any of the foregoing; (f) any exchange, release or nonperfection of
any Lien on any other  collateral,  or any release or  amendment or waiver of or
consent to  departure  from any  guarantee  or  security,  for all or any of the
Secured  Obligations;  or  (g)  any  other  circumstance  that  might  otherwise
constitute a defense available to, or a discharge of, Pledgor.

         SECTION 17.  Registration,  Etc. If at any time when the Administrative
Agent  shall  determine  to  exercise  its  right to sell all or any part of the
Securities pursuant to Section 7, such Securities or the part thereof to be sold
shall not,  for any  reason  whatsoever,  be  effectively  registered  under the
Securities Act of 1933, as then in effect, the Administrative  Agent may, in its
reasonable  discretion,  sell such Securities or part thereof by private sale in
such manner and under such  circumstances as the  Administrative  Agent may deem
necessary or  advisable in order that such sale may legally be effected  without
such registration. Without limiting the generality of the foregoing, in any such
event the Administrative  Agent, in its reasonable discretion (a) may proceed to
make such private sale  notwithstanding  that a  registration  statement for the
purpose of registering such Securities or part thereof shall not have been filed
under such Securities Act, (b) may approach and negotiate with a single possible
purchaser to effect such sale, and (c) may restrict such sale to a purchaser who
will  represent and agree that such purchaser is purchasing for its own account,
for  investment  and  not  with a view  to the  distribution  or  sale  of  such
Securities or part thereof.  In the event of any such sale,  the  Administrative
Agent shall incur no  responsibility or liability for selling all or any part of
the Securities at a price the  Administrative  Agent, in its  discretion,  deems
reasonable  under the  circumstances,  notwithstanding  the  possibility  that a
substantially  higher price might have been  realized if the sale were  deferred
until after registration as aforesaid.

     SECTION 18. Notices,  Etc. All notices and other  communications  hereunder
shall be given to Pledgor and the  Administrative  Agent at the addresses and in
the manner specified in the Credit Agreement.

         SECTION  19.  Power  of  Attorney.   Pledgor   hereby   absolutely  and
irrevocably makes,  constitutes and appoints the Administrative  Agent Pledgor's
true and lawful agent and attorney-in-fact,  with full power of substitution, in
the name of Pledgor,  upon the occurrence and during the continuance of an Event
of  Default:  (a) to execute  and do all such  assurances,  acts and things that
Pledgor  should  do but has  failed  to do under the  covenants  and  provisions
contained  in this  Agreement;  (b) to  take  any and  all  such  action  as the
Administrative  Agent or any of its sub-agents or attorneys may, in its or their
discretion, reasonably determine to be necessary or advisable for the purpose of
maintaining, preserving or protecting the security constituted by this Agreement
or any of the rights, remedies, powers or privileges of the Administrative Agent
under this Agreement; and (c) generally, in the name of Pledgor, to exercise all
or any  of the  rights,  powers,  authorities  and  discretion  conferred  on or
reserved  to the  Administrative  Agent by or pursuant  to this  Agreement,  and
(without  prejudice to the  generality  of any of the  foregoing) to execute and
deliver  or  otherwise  perfect  any  deed,  financing   statement,   assurance,
agreement,  instrument or act as the Administrative  Agent may deem proper in or
for the purpose of exercising  any of such powers,  authorities  or  discretion.
Pledgor hereby  ratifies and confirms,  and hereby agrees to ratify and confirm,
whatever  lawful  and  reasonable  acts the  Administrative  Agent or any of the
Administrative  Agent's sub-agents or attorneys shall do or purport to do in the
exercise of this power of  attorney,  which power of  attorney,  being given for
security, is irrevocable for the term of this Agreement.

         SECTION 20.  Termination,  Release.  After all of the Commitments  have
been terminated under the Credit  Agreement,  all Secured  Obligations have been
indefeasibly  paid and  performed  in full  and no  Obligations  remain  unpaid,
outstanding  or   unperformed,   this  Agreement   shall   terminate,   and  the
Administrative  Agent will execute and deliver to Pledgor a proper instrument or
instruments  acknowledging  the  satisfaction and termination of this Agreement,
and will duly  assign,  transfer  and deliver to Pledgor  (without  recourse and
without any  representation or warranty) such of the Collateral as may be in the
possession of the  Administrative  Agent and as has not theretofore been sold or
otherwise  applied or released  pursuant to this  Agreement,  together  with any
proceeds at the time held by the Administrative Agent hereunder.

         SECTION 21. Miscellaneous. Pledgor agrees with the Administrative Agent
that each of the obligations  and  liabilities of Pledgor to the  Administrative
Agent under this Agreement may be enforced against Pledgor without the necessity
of joining any other Person as a party. This Agreement shall create a continuing
security  interest in the  Collateral  and shall be binding upon the  respective
successors and assigns of Pledgor and the Administrative  Agent, and shall inure
to the  benefit  of and be  enforceable  by the  Administrative  Agent  and  its
successors  and  assigns.  Without  limiting  the  generality  of the  foregoing
sentence,  any  Lender  or the  Administrative  Agent may  assign  or  otherwise
transfer any right, title or interest under the Credit Agreement, the Notes, the
Letters of Credit and the other Loan Documents to any other Person in accordance
with the  provisions  of the  Credit  Agreement,  and such  other  Person  shall
thereupon  become vested with all the benefits in respect thereof granted to the
Administrative  Agent herein.  This Agreement may be amended,  changed or waived
only as  provided  in Section  14.3 of each of the Credit  Agreement  and may be
terminated  only as  provided  in Section 20 hereof.  Unless  otherwise  defined
herein or in the Credit  Agreement,  terms defined in Article 9 of the U.C.C. in
the State of Tennessee are used herein as therein defined.  The headings in this
Agreement are for  convenience  of reference  only and shall not limit or define
the meaning of the substantive provisions hereof. This Agreement may be executed
in any number of  counterparts,  each of which shall be an original,  but all of
which shall  constitute one instrument.  In the event that any provision of this
Agreement  shall prove to be invalid or  unenforceable,  such provision shall be
deemed to be severable from the other provisions of this Agreement,  which shall
remain binding on all parties hereto.

         SECTION 22. GOVERNING LAW. UNLESS OTHERWISE EXPRESSLY SET FORTH HEREIN,
THIS  AGREEMENT  SHALL BE GOVERNED BY AND  CONSTRUED  AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TENNESSEE,  WITHOUT  REFERENCE TO THE CONFLICTS OR
CHOICE  OF LAW  PRINCIPLES  THEREOF,  EXCEPT  TO THE  EXTENT  THAT THE LAWS OF A
PARTICULAR JURISDICTION GOVERN THE CREATION, PERFECTION AND ENFORCEMENT OF LIENS
ON AND SECURITY INTERESTS IN THE COLLATERAL.

         SECTION 23. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH LENDER
AND PLEDGOR HEREBY  IRREVOCABLY  WAIVES THEIR RESPECTIVE  RIGHTS TO A JURY TRIAL
WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT,  THE CREDIT AGREEMENT, THE NOTES OR THE OTHER
LOAN  DOCUMENTS,  ANY  RIGHTS OR  OBLIGATIONS  HEREUNDER  OR  THEREUNDER  OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. The scope of this waiver is intended
to be all-encompassing with respect to any and all disputes that may be filed in
any court and that relate to the subject matter of this  transaction,  including
without limitation contract claims,  tort claims,  breach of duty claims and all
other  common  law  and  statutory  claims.  Each  of  the  parties  hereto  (i)
acknowledges  that this waiver is a material  inducement  for the parties to the
Loan  Documents to enter into a business  relationship,  that the parties to the
Loan  Documents have already relied on this waiver in entering into same and the
transactions  that are the subject thereof,  and that they will continue to rely
on this waiver in their related future  dealings,  and (ii) further warrants and
represents  that each has reviewed  this waiver with its legal  counsel and that
each  knowingly  and  voluntarily   waives  its  jury  trial  rights   following
consultation with legal counsel. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing,  and this waiver shall apply to any
subsequent amendments,  modifications,  supplements, extensions, renewals and/or
replacements of this Agreement.  In the event of litigation,  this Agreement may
be filed as a written consent to a trial by the court.

     SECTION  24.  Conflicts.  In the event of any  conflict  between the Credit
Agreement and this Agreement, the Credit Agreement shall control.

         SECTION 25. FINAL  AGREEMENT.  THIS WRITTEN  AGREEMENT  REPRESENTS  THE
FINAL  AGREEMENT  BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT  MATTER HEREOF
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.


<PAGE>


         IN WITNESS WHEREOF,  Pledgor and the  Administrative  Agent have caused
this Agreement to be executed by their duly elected  officers duly authorized as
of the date first above written.

                                 GOODY'S FAMILY CLOTHING, INC.,
                                   as Pledgor

                                   By:_________________________________
                                   Title:______________________________

                                     Attest:
                                   Title:______________________________


                                                     FIRST TENNESSEE BANK
                                                     NATIONAL ASSOCIATION,
                                                     as Administrative Agent

                                       By
                                       Title:______________________________






1021251.02



<PAGE>


                                     ANNEX I


                              (to Pledge Agreement)


                                               Capital
                  Authorized Stock Issued
  Name            Capital Stock    and Outstanding



<PAGE>


                                                           EXHIBIT 13.2



                                     FORM OF
                            ASSIGNMENT AND ACCEPTANCE


         THIS  ASSIGNMENT AND ACCEPTANCE  (this  "Assignment  and  Acceptance"),
dated as of the  date set  forth in Item 1 of  Schedule  I  hereto,  is made and
entered  into  among the  Transferor  Lender  set forth in Item 2 of  Schedule I
hereto (the "Transferor Lender"),  each Purchasing Lender set forth in Item 3 of
Schedule I hereto  (each,  a  "Purchasing  Lender"),  and First  Tennessee  Bank
National  Association  as  administrative  agent for the  several  lenders  (the
"Lenders")  who are or become  parties to the Credit  Agreement (as  hereinafter
defined) (in such capacity, the "Administrative Agent").


                                    RECITALS:

         This  Assignment  and  Acceptance  is being  executed and  delivered in
accordance with Section 13.2 of the Amended and Restated Credit  Agreement dated
as of  November  1, 1996,  among  Goody's  Family  Clothing,  Inc.,  a Tennessee
corporation,  Goody's MS, L.P., a Tennessee limited partnership, and Goody's IN,
L.P., a Tennessee limited  partnership (the  "Borrowers"),  the Guarantors,  the
Administrative  Agent and the  Lenders  (as the same may be  amended,  restated,
supplemented,  replaced or  otherwise  modified  from time to time,  the "Credit
Agreement"; except as otherwise defined herein, terms used herein and defined in
the Credit Agreement shall be used herein as so defined).

         Each  Purchasing  Lender  (if it is not  already a Lender  party to the
Credit Agreement) wishes to become a Lender party to the Credit Agreement.

         The  Transferor  Lender is selling  and  assigning  to each  Purchasing
Lender certain rights,  obligations,  Loans,  and  Commitments  under the Credit
Agreement, the Notes, and the other Loan Documents.


                                   AGREEMENTS:

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         SECTION From and after the Transfer  Effective Date set forth in Item 4
of Schedule I hereto (the "Transfer  Effective  Date"),  each Purchasing  Lender
shall be a Lender party to the Credit Agreement for all purposes thereof.

         SECTION On the Transfer  Effective Date,  each Purchasing  Lender shall
pay to the Transferor Lender, in immediately available funds, an amount equal to
the purchase price, as agreed between the Transferor  Lender and such Purchasing
Lender  (the  "Purchase  Price"),  for the  percentage  set  forth  in Item 5 of
Schedule I hereto (such Purchasing Lender's  "Purchased  Percentage") of (i) the
Transferor Lender's Commitment and (ii) the outstanding  principal amount of the
Loans  and  other  amounts  owing to the  Transferor  Lender  under  the  Credit
Agreement, the Notes or the other Loan Documents.

         On the Transfer Effective Date, each Purchasing Lender shall assume all
liability with respect to outstanding Letters of Credit issued by the Transferor
Lender under the Credit Agreement.

         (c) As of the Transfer  Effective  Date, the  Transferor  Lender hereby
irrevocably  sells,  assigns and transfers to each  Purchasing  Lender,  without
recourse,   representation  or  warranty,  and  each  Purchasing  Lender  hereby
irrevocably  purchases,  takes  and  assumes  from the  Transferor  Lender  such
Purchasing  Lender's  Purchased   Percentage  of  (i)  the  Transferor  Lender's
Commitment, (ii) the Loans outstanding as of the Transfer Effective Date held by
the  Transferor  Lender,  and (iii) any other  amounts  owing as of the Transfer
Effective Date to the Transferor Lender under the Credit Agreement, the Notes or
the other Loan Documents.

         SECTION  From  and  after  the  Transfer  Effective  Date,   principal,
interest,  Credit Fees,  other fees and other  amounts that  otherwise  would be
payable to or for the account of the  Transferor  Lender  pursuant to the Credit
Agreement,  the Notes,  and the other Loan Documents shall instead be payable to
or for the account of the Transferor Lender and the Purchasing  Lenders,  as the
case may be, in accordance  with their  respective  percentages  as set forth on
Schedule II hereto,  whether such  amounts  have  accrued  prior to the Transfer
Effective  Date  or  accrue  subsequent  to the  Transfer  Effective  Date.  The
Transferor Lender and the Purchasing Lenders shall make appropriate  adjustments
in payments under, or with respect to, the Credit Agreement for periods prior to
the Transfer Effective Date directly between themselves.

         SECTION  The  Note  of  each  Borrower  payable  to  the  order  of the
Transferor Lender (an "Exchanged Note") is being delivered to the Administrative
Agent  concurrently  with this  Assignment  and  Acceptance.  On or prior to the
Transfer  Effective  Date,  each  Borrower  shall  execute  and  deliver  to the
Administrative Agent, in exchange for (but not in payment of) the Exchanged Note
(a) a new Note payable to the order of each Purchasing Lender in an amount equal
to its Percentage,  as set forth on Schedule II hereto, of the Commitments,  and
(b) if the Transferor  Lender has retained a portion of the  Commitments,  a new
Note to the order of the  Transferor  Lender in an amount  equal to its retained
Percentage  of the  Commitments,  as set forth on Schedule  II hereto.  Such new
Notes shall be dated as of the date of the Credit  Agreement and otherwise shall
be substantially in the form of the respective  Note(s) replaced  thereby.  Each
Exchanged  Note shall be returned by the  Administrative  Agent to such Borrower
marked "exchanged".

         SECTION  Concurrently  with the  execution  and  delivery  hereof,  the
Administrative  Agent will, at the request of any  Purchasing  Lender but at the
expense of the Transferor  Lender,  provide to such Purchasing  Lender (if it is
not already a Lender  party to the Credit  Agreement)  photocopies  or conformed
copies of all documents delivered to the Administrative Agent on the date of the
initial  Loans under the Credit  Agreement  in  satisfaction  of the  conditions
precedent set forth in the Credit Agreement.

         SECTION Each of the parties to this  Assignment and  Acceptance  agrees
that at any time and from time to time upon written  request of any other party,
it will execute and deliver such further  documents and do such further acts and
things as such  other  party  reasonably  may  request  in order to  effect  the
purposes of this Assignment and Acceptance.

         SECTION By executing and delivering this Assignment and Acceptance, the
Transferor  Lender  and each  Purchasing  Lender  confirm to and agree with each
other and with the  Administrative  Agent and the Lenders as follows:  (a) other
than the  representation  and warranty that it is the legal and beneficial owner
of the interest being assigned  hereby free and clear of any adverse claim,  the
Transferor   Lender  makes  no   representation   or  warranty  and  assumes  no
responsibility  with respect to any  statements,  warranties or  representations
made in or in connection with the Credit  Agreement or the execution,  legality,
validity,  enforceability,  genuineness,  sufficiency  or  value  of the  Credit
Agreement,  the Notes,  or any other Loan  Document or any other  instrument  or
document  furnished  pursuant  thereto;  (b)  the  Transferor  Lender  makes  no
representation  or warranty  and assumes no  responsibility  with respect to the
financial  condition of the Borrowers or the  performance  or observance  by, or
enforceability  against  the  Borrowers  of any of their  obligations  under the
Credit Agreement,  the Notes, or any other Loan Document or any other instrument
or document furnished pursuant thereto; (c) each Purchasing Lender confirms that
it has  received a copy of the Credit  Agreement,  together  with  copies of the
financial statements referred to in Section 7.5 of the Credit Agreement and such
other  documents and  information  as it has deemed  appropriate to make its own
credit analysis and decision to enter into this  Assignment and Acceptance;  (d)
each  Purchasing  Lender  will,  independently  and  without  reliance  upon the
Administrative  Agent,  the  Transferor  Lender or any other Lender and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
the Credit  Agreement;  (e) each  Purchasing  Lender appoints and authorizes the
Administrative  Agent to take such action as agent on its behalf and to exercise
such  powers  under the Credit  Agreement  and the other Loan  Documents  as are
delegated to the Administrative  Agent by the terms thereof,  together with such
powers as are reasonably  incidental thereto,  all in accordance with Article 12
of the Credit  Agreement;  and (f) each  Purchasing  Lender  agrees that it will
perform in accordance with their terms all of the obligations  that by the terms
of the  Credit  Agreement  and the  other  Loan  Documents  are  required  to be
performed  by  it as a  Lender,  and  (g)  following  the  consummation  of  the
transactions  contemplated  by this  Assignment and  Acceptance,  the Transferor
Lender and each  Purchasing  Lender shall be in compliance  with Section 13.2 of
the Credit Agreement.

         SECTION  Schedule II hereto sets forth the revised  Percentages  of the
Transferor   Lender  and  each  Purchasing  Lender  as  well  as  administrative
information with respect to each Purchasing Lender.

         SECTION  This  Assignment  and  Acceptance  shall  be  governed  by and
construed  and enforced in  accordance  with the laws of the State of Tennessee,
without reference to the conflicts or choice of law principles thereof.

         IN WITNESS WHEREOF,  the parties hereto have caused this Assignment and
Acceptance  to be  executed  by their  respective  duly  authorized  officers on
Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.


                           [SCHEDULES I AND II FOLLOW]



<PAGE>


                                   SCHEDULE I TO
                            ASSIGNMENT AND ACCEPTANCE
                          COMPLETION OF INFORMATION AND
                    SIGNATURES FOR ASSIGNMENT AND ACCEPTANCE


Item 1          Date of Assignment                       [Insert date of
                and Acceptance:                          Assignment and
                                                         Acceptance]

Item 2          Transferor Lender:                       [Insert name of
                                                         Transferor Lender)

Item 3          Purchasing Lender(s):                    [Insert name(s) of
                                                         Purchasing Lender(s)]

Item 4          Transfer Effective                   (Insert Transfer Effective
                Date:                                 Date) [To be a date not
                                                      less than five business
                                                      days after date of Assign-
                                                      ment and Acceptance]

Item 5          Purchased                                [Insert Percentage of
                Percentage:                              Transferor Lender's
                                                         Commitments to be sold)

Item 6          Signatures of Parties
                to Assignment and
                Acceptance:                 ___________________________,
                                             as Transferor Lender

                                            By:_________________________
                                            Title:______________________

                                            ---------------------------,
                                            as a Purchasing Lender

                                            By:_________________________
                                            Title:___________________


<PAGE>


CONSENTED TO AND ACKNOWLEDGED:

FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
as Administrative Agent


By:____________________________
   Title:______________________



ACCEPTED FOR RECORDATION
  IN REGISTER:

GOODY'S FAMILY CLOTHING, INC.


By:____________________________
   Title:______________________


GOODY'S MS, L.P.

By:      TREBOR of TN, Inc.
         General Partner


         By:____________________________
         Title:______________________


GOODY'S IN, L.P.

By:      TREBOR of TN, Inc.
         General Partner


         By:____________________________
            Title:______________________






<PAGE>


                                  SCHEDULE II
                                      TO
                                  ASSIGNMENT AND ACCEPTANCE
                                  LIST OF ADDRESSES
                           FOR NOTICES AND PERCENTAGES


[Name of Transferor Lender]         Revised Percentage:             ____%




[Name(s) of
  Purchasing Lender(s)]             New Percentage:                 ____%




Address(es) of Purchasing
Lender(s) for Notices
under Section 14.1 of
Credit Agreement:

=================================
---------------------------------
Attn:____________________________
Telecopy No.:____________________





1009177.03



<PAGE>


                                  SCHEDULE 7.6

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Actions, suits, proceedings or other litigation described in Section 7.6:

1.       The Internal  Revenue  Service audited  Goody's Family  Clothing,  Inc.
         ("GFC") for the period  February  1, 1990  through  January  31,  1993.
         Following  the  audit,  the  Service  sent to GFC a notice  of  certain
         adjustments   resulting  in  additional   taxes  due  of  approximately
         $200,000. GFC took exception to two of the adjustments--legal  fees and
         expenses for preparing  operating  leases and  depreciation  on certain
         equipment.  GFC has filed a formal protest as to those two adjustments.
         GFC compromised  this matter with the IRS and a closure letter has been
         executed.

     2. On  November  24,  1993,  a lawsuit  was filed  against  GFC and certain
executive  officers of GFC in the United States  District  Court for the Eastern
District of  Tennessee,  Northern  Division,  at  Knoxville.  The case is styled
Deborah  Landes,  on behalf of herself and all others  similarly  situated,  vs.
Robert M.Goodfriend,  Robert L. Jenkins, Donald A. VandenBerg, Harry M. Call,
and Goody's Family Clothing, Inc.

---------------------------------------------------------------------------
The class  action  complaint  alleges  that the price of common stock of GFC was
artificially  inflated as a result of false and misleading statements concerning
GFC  s  liquidity  and  financial  condition.   The  allegations  related  to  a
transaction  in which Mr.  Goodfriend  purchased  from GFC at GFC s cost of $6.6
million an  investment  that GFC held in its  portfolio,  which had  declined in
value and with respect to which GFC would incur a loss. Mr. Goodfriend  tendered
a $6.6  million  check to GFC as  payment  for the  investments,  which was held
uncashed by GFC for a number of months.  The check was  subsequently  covered by
the proceeds of a personal loan to Mr.  Goodfriend from a commercial  bank. Upon
maturity  of such  personal  loan,  GFC paid the loan s $6.6  million  principal
balance, together with interest in the amount of $69,869, and took another check
from Mr.  Goodfriend in the amount of $6.6  million.  This check was held by GFC
and remained  uncashed and recorded in GFC s cash on hand accounts until October
1993. In October 1993, Mr.  Goodfriend  repaid the $6.6 million loan and related
interest of $447,000 calculated at a market rate of interest.
         GFC and  counsel  for the  plaintiffs  have  reached  an  agreement  in
         principle   to  settle  this  case.   The   proposed   settlement   was
         preliminarily  approved by the Court on April 6, 1995,  and,  under the
         terms  of the  proposed  settlement,  GFC  paid  into  escrow  a sum of
         $3,200,000 in full and final  settlement of the  plaintiffs  claims for
         damages.  GFC s insurer reimbursed a sum of $1,300,000 to GFC under its
         Directors and Officers Indemnification and Liability coverage. GFC has,
         therefore,  expensed  the net amount of  $1,900,000  as  unusual  items
         relating to this lawsuit in fiscal 1994. This settlement was subject to
         final court and class approval and certain other contingencies, and has
         now been approved and effected.

     3. GFC has filed an application  with the U.S. Patent and Trademark  Office
for  registration of the trademark IVY CREW. The manufacturer of J.CREW clothing
has filed an opposition to the registration.

4.       The Securities  Exchange  Commission has concluded an informal  inquiry
         regarding GFC s accounting treatment of the acquisition and sale of the
         investment  described  in  paragraph  2  above.  GFC  settled  with the
         Commission by agreeing to comply with Commission filing requirements.




<PAGE>



71314-1

71314-1
                                  SCHEDULE 7.8

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Capitalization of Goody's Family Clothing, Inc. ("GFC") at May 3, 1995:

Authorized  shares,  50,000,000  shares of common  stock  without  par value and
2,000,000 shares of preferred stock $1.00 par value.  Issued,  16,324,012 shares
of common stock,  200,000 shares of which are held in treasury.  Series A Junior
Participating  Preferred Stock was authorized by the former  directors of GFC on
October  25,  1994;  none was ever  issued.  The  Series A  Preferred  Stock was
issuable in connection  with the exercise of certain  preferred  stock  purchase
rights  distributed to the  Shareholders on October 16, 1994 pursuant to a Share
Purchase  Rights Plan. On March 28, 1995, the Board of Directors  authorized the
redemption of such rights, prior to exercise, at a redemption price of $0.01 per
right  payable on June 6, 1995 to  Shareholders  of record as of the Record Date
(May 3, 1995),  and therefore  under the terms of the plan no more rights may be
issued. The aggregate  redemption price payable to Shareholders is approximately
$162,000.  Stock  options  outstanding  under  various  stock option plans which
provide for the issuance of common  shares in  accordance  with the terms of the
plans, 1,079,421 shares.

At the annual meeting of GFC held on Wednesday,  June 21, 1995, the shareholders
authorized the amendment of the charter of GFC to authorize 50,000,000 shares of
a new class of common stock  designated as Class B Common Stock , increasing the
authorized shares of capital stock of GFC to 102,000,000  (100,000,000 shares of
common stock and 2,000,000 shares of preferred stock).




<PAGE>



71314-1

71314-1
                                 SCHEDULE 7.16A

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Indebtedness of Goody's Family Clothing, Inc. described in Section 7.16:

Promissory  Note dated  January  23,  1991 to M.D.  Goodfriend  in the  original
principal amount of $2,151,000.



<PAGE>



71314-1

71314-1
                                 SCHEDULE 7.16B

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Contingent Obligations of Borrowers and Guarantors:


                                      None





<PAGE>



71314-1

71314-1
                                 SCHEDULE 7.17A

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Locations where Borrowers and Guarantors maintain their chief executive offices,
their  principal  places of  business,  an  office,  or any  material  financial
records:

                                    Goody's Family Clothing, Inc.
                                    400 Goody s Lane
                                    Knoxville, Tennessee 37933-2000

                                    Goody's MS, L.P.
                                    400 Goody s Lane
                                    Knoxville, Tennessee 37933-2000

                                    Goody's IN, L.P.
                                    400 Goody s Lane
                                    Knoxville, Tennessee 37933-2000

                                    TREBOR of TN, Inc.
                                    400 Goody s Lane
                                    Knoxville, Tennessee 37933-2000

                                    SYDOOG, Inc.
                                    913 North Market Street, Suite 817
                                    Wilmington, Delaware  19801

                                    GOFAMCLO, Inc.
                                    913 North Market Street, Suite 817
                                    Wilmington, Delaware  19801




<PAGE>



71314-1

71314-1
                                 SCHEDULE 7.17B

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Each name under or by which  Borrowers and  Guarantors  presently  conduct their
business or has conducted its business since 1991:


                                     Goody s
                             Goody s Family Clothing
                          Goody s Family Clothing, Inc.
                                Goody's MS, L.P.
                                Goody's IN, L.P.
                               TREBOR of TN, Inc.
                                  SYDOOG, Inc.
                                 GOFAMCLO, Inc.




<PAGE>



71314-1

71314-1
                                  SCHEDULE 7.22

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


Material  adverse  changes  in  properties  business,   results  of  operations,
management or financial  condition of Borrowers and Guarantors since most recent
audited or unaudited financial statements provided to Lenders:

On  January  5,  1995,  GFC s  Chairman,  Robert  M.  Goodfriend,  and  Wendy E.
Goodfriend  (his  wife)  reached  an  agreement  with GFC s Board  of  Directors
concerning  disputes  as to the  validity  of Article  XIII of GFC s Charter and
other  management  issues  of GFC for which  they  filed a suit  against  GFC on
November 22, 1994 in the Chancery Court for Knox County in Knoxville, Tennessee.
As part of the settlement,  GFC s Board of Directors adopted amendments to GFC s
Bylaws  codifying  and  supplementing  certain  of  GFC s  corporate  governance
practices.  The settlement also placed certain  restrictions on Mr. Goodfriend s
ability to purchase  or sell GFC s Common  Stock,  or to initiate  any action to
repeal,  alter or amend GFC s Bylaws until the year 2000.  The  settlement  also
provided that Mrs.  Goodfriend  could reinstate her individual  complaint solely
for the purpose of obtaining  declaratory relief with respect to the validity of
Article XIII (b), (c), (d) and (e) of GFC s Charter; this suit does not assert a
claim for monetary  damages.  On April 10, 1995, the court,  with GFC's consent,
declared that subsections (b), (d) and (e) of Article XIII of GFC s Charter (but
not subsection (c)) violate Tennessee law and are therefore void.


There have been some changes in management  of GFC which have been  disclosed to
Lenders, but which GFC does not believe were material and adverse.





<PAGE>



12


13
3-1399

3-1399
                                  SCHEDULE 7.23

                                       to

                              AMENDED and RESTATED
                                CREDIT AGREEMENT


List of employment agreements and executive compensation  arrangements described
in Section 7.23:

                                            Robert M. Goodfriend
                                            Carmen Monaco
                                            David R. Mullins
                                            Thomas R. Kelly, Jr.
                                            Harry M. Call
                                            Marcus H. Smith, Jr.
                                            Edward R. Carlin
                                            John Sullivan
                                            Bob Whaley
                                            John Payne


List of agreements regarding stock described in Section 7.23:

                                      None


Goody s Family Clothing,  Inc. ("GFC") Benefit  Protection Trust Agreement.  GFC
entered into such trust agreement with Bank South, N.A., as trustee, on November
15, 1994.  Pursuant to this trust  agreement,  GFC  established  an  irrevocable
grantor trust to, among other things,  assist it in meeting its  obligations  to
pay certain  severance  payments to certain  executives  of GFC upon a Change of
Control  (as  defined in the trust  agreement)  in  accordance  with  employment
agreements between GFC and each such executive.  Upon establishment of the trust
in November 1994, GFC made an initial  contribution  to the trust of $10,000 and
provided an irrevocable letter of credit in the amount of $500,000.  On or prior
to a Change of Control,  GFC is obligated to  contribute  an amount equal to all
severance  payments that are or may become due to covered executives as a result
of such Change of Control. Under the trust agreement, the Trustee shall hold and
invest any  contribution  by GFC as a single trust but shall  maintain  separate
accounts for each covered executive.  Subject to certain notice requirements and
other conditions (in each case as more fully described in the trust  agreement),
a covered  executive shall become  entitled to a distribution  from the trust at
any time such executive is entitled to receive certain  severance  payments from
GFC as a  result  of a Change  of  Control  in  accordance  with the  employment
agreement  between such  executive and GFC. As a result of the Change of Control
that occurred on January 5, 1995, GFC  contributed  an additional  $1,272,800 in
investment securities to the trust.


<PAGE>




                                  SCHEDULE 7.26

                                       to

                      AMENDED and RESTATEDCREDIT AGREEMENT


List of Material Contracts described in Section 7.26:

     License Agreement dated June 14, 1993 between Goody's Family Clothing, Inc.
("GFC") and Tishkoff  Enterprises,  Inc./JBI,  Inc.  d/b/a Shoe  Corporation  of
America, as amended.

On  January  5,  1995,  GFC s  Chairman,  Robert  M.  Goodfriend,  and  Wendy E.
Goodfriend  (his  wife)  reached  an  agreement  with GFC s Board  of  Directors
concerning  disputes  as to the  validity  of Article  XIII of GFC s Charter and
other  management  issues  of GFC for which  they  filed a suit  against  GFC on
November 22, 1994 in the Chancery Court for Knox County in Knoxville, Tennessee.
As part of the settlement,  GFC s Board of Directors adopted amendments to GFC s
Bylaws  codifying  and  supplementing  certain  of  GFC s  corporate  governance
practices.  The settlement also placed certain  restrictions on Mr. Goodfriend s
ability to purchase  or sell GFC s Common  Stock,  or to initiate  any action to
repeal,  alter or amend GFC s Bylaws until the year 2000.  The  settlement  also
provided that Mrs.  Goodfriend  could reinstate her individual  complaint solely
for the purpose of obtaining  declaratory relief with respect to the validity of
Article XIII (b), (c), (d) and (e) of GFC s Charter; this suit does not assert a
claim for monetary damages.  On April 10, 1995, the court, with Goody s consent,
declared that subsections (b), (d) and (e) of Article XIII of GFC s Charter (but
not subsection (c)) violate Tennessee law and are therefore void.

Construction  contract  between  GFC and  Centex  Forcum  Lannom,  Inc.  for the
expansion  of  GFC  s  facility  in  Knoxville,   Tennessee  in  the  amount  of
approximately $6,300,000, which has been substantially performed by both parties
(including payment by GFC to the contractor of approximately $6,000,000).

Master Service Agreement (for security and  surveillance)  between GFC and Knogo
North America, Inc., dated April 9, 1996.

Master  Service  Agreement  (for  energy  management  services)  between GFC and
Entergy Integrated Solutions, Inc. dated as of April 9, 1996.



<PAGE>


                                  Exhibit 4.1B
                                LICENSE AGREEMENT
                  This  License  Agreement  (this  "Agreement")  is  dated as of
October 31, 1996, by and between SYDOOG, INC., a Delaware corporation having its
only place of business at 913 Market  Street,  Suite 817,  Wilmington,  Delaware
19801  (the  "Licensor"),   and  GOODY'S  FAMILY  CLOTHING,  INC.,  a  Tennessee
corporation having a place of business at 400 Goody's Lane, Knoxville, Tennessee
37933 (the "Licensee").
                                   BACKGROUND
                  The background of this Agreement is as follows:
                  1. Licensor is the  proprietor of the  tradenames,  trademarks
and service  marks,  together with all  registrations  and/or  applications  for
registration associated therewith,  identified on Exhibit A hereto, which may be
amended from time to time by consent of the parties hereto (all such tradenames,
trademarks  and service marks are  hereinafter  collectively  referred to as the
"Trademarks").
                  2. It is the desire and intention of the parties that Licensee
be permitted to use the Trademarks on a non-exclusive basis in the United States
in a manner  reasonably  related to the  conduct of its retail and  distribution
operations.
     3.  Licensor  and Licensee  have agreed to the terms of such  non-exclusive
license of the Trademarks on the terms provided in this Agreement.
                  
NOW,  THEREFORE,  in  consideration  of  the  mutual  promises
contained  herein and for other good and valuable  consideration  received,  the
receipt  and   sufficiency  of  which  is  hereby   acknowledged,   and  of  the
representations and covenants hereinafter set forth, the parties hereby agree as
follows:
         1.       GRANT OF LICENSE.

     A. License of Trademarks for Use in Corporate Name and Business. Subject to
the  provisions  of this  Agreement,  Licensor  hereby  grants to  Licensee  the
non-exclusive  right to make use of the Trademarks  and all goodwill  associated
therewith in its corporate name and its business throughout the United States.
       
           B.       Identification of Status and Ownership of the Trademarks.
     (i) Licensee  acknowledges  that  Licensor owns the  Trademarks  and agrees
never to impugn or  challenge,  or to assist in any challenge of the validity of
the Trademarks,  the registration of the Trademarks,  or Licensor's ownership of
the Trademarks.
           
     (ii) The  Trademarks  shall be  clearly  denoted  as  being  trademarks  by
utilizing  the  appropriate  symbol  of an  encircled  R "(R)"  (for  registered
trademarks) or the designation  "(TM)" (for common law trademarks) or such other
symbol or legend as Licensor may designate from time to time.

     (iii) As requested by Licensor in writing,  Licensee shall also incorporate
an  asterisk by each use of the  Trademarks  and shall  incorporate  a statement
which reads:
                                            *Trademark of SYDOOG, Inc.

                  C.  Rights of  Licensee.  Subject  to the  provisions  of this
Agreement, Licensor hereby grants to Licensee the non-exclusive right to utilize
the  Trademarks  and all goodwill  associated  therewith in connection  with the
manufacture, distribution and sale of such products and services as are approved
by Licensor (such approved products and services are collectively referred to as
"Approved  Products").  It is expressly  understood  that the Approved  Products
shall  include all  products  and services  which were  provided,  manufactured,
distributed  or  sold  by  Licensee  in  conjunction  with  one or  more  of the
Trademarks prior to the date of this Agreement and shall also include such other
products  and  services  which  fall  within  the  description  of  goods of the
corresponding  registrations  or common law usages of the  Trademarks,  provided
that such products and services comply with the standards determined by Licensor
as set forth herein and/or issued pursuant to this  Agreement.  The standards to
be determined by Licensor shall include, without limitation,  the quality of the
goods or services, the labeling and advertising uses of the Trademarks,  and the
performance  requirements  of new  products or services  intended to be provided
under the  Trademarks.  Licensor  acknowledges  that the  standards and policies
currently  followed by Licensee  are  satisfactory  to  Licensor,  but  Licensor
reserves the right to withdraw its approval or amend its standards at any time.
         2.       QUALITY CONTROLS.
                  A.  In  General.   Licensee  and  Licensor   acknowledge  that
maintaining  the high quality of the Approved  Products  provided in conjunction
with  the  Trademarks,  in  order  to  enhance  goodwill  as  symbolized  by the
Trademarks,  is the essence of this Agreement.  Notwithstanding anything in this
Agreement to the contrary,  Licensee agrees that its services and products shall
be of such high  standards  and  quality  as to be  adequate  and  suited to the
utilization to their best advantage and to the protection and enhancement of the
Trademarks,  that such services  shall be performed  and such products  shall be
completed and delivered in accordance  with all  applicable  federal,  state and
local laws and regulations,  and that the policy of performance of such services
and of  completion  and  delivery  of such  products  by  Licensee  shall be one
requiring high standards and shall in no manner reflect  adversely upon the good
name of Licensor or upon the reputation or value of the Trademarks.
                  B.  Advertising.  Licensor  reserves  the right to approve all
advertising  in  connection  with  the  Approved  Products  and  the  use of the
Trademarks,  including  the type,  color,  size and  design of signs or  symbols
depicting the  Trademarks.  Accordingly,  the quality and style of  advertising,
promotional  and other  materials  bearing  the  Trademarks,  at the  request of
Licensor,  shall be subject to the prior written approval of Licensor, which may
be granted or withheld in Licensor's sole  discretion.  Licensor agrees that the
format used presently is  satisfactory  to Licensor,  but Licensor  reserves the
right to withdraw  such  approval or to amend its  requirements  with respect to
advertising at any time. All advertising, promotional or other materials bearing
the  Trademarks  to be used by Licensee and differing  substantially  from those
approved herein shall be submitted to Licensor or its authorized  representative
for its prior  written  approval.  Any such  advertising,  promotional  or other
materials  submitted  to and  not  disapproved  by  Licensor  or its  authorized
representative within ten (10) days after receipt by Licensor shall be deemed to
be  approved.  The entire cost of  advertising  and  promoting  the products and
services  undertaken by Licensee shall be the sole  obligation of Licensee,  and
Licensor assumes no financial or other responsibility  therefor.  In advertising
and promoting the Approved  Products,  Licensee shall comply with all applicable
laws, rules and regulations.
                  C.  Consumer  Complaints.  Licensee  agrees  to cause a prompt
response  to be made to  consumer  complaints  received  by Licensee or Licensor
(upon prompt  notice to Licensee)  pertaining to Approved  Products  bearing the
Trademarks.  Licensee shall promptly permit  Licensor to inspect,  upon request,
any written product liability claims and government reports in respect of any of
the products covered by this Agreement.
     D.  Quality  Control  Standards.  With  respect  to any  provision  in this
Agreement referring to quality control standards,  Licensor shall have the right
at all times and in good faith to issue  standards  in addition to, in amendment
of, or in  replacement  of,  the  standards  set  forth  herein,  together  with
accompanying  quality  control  policies and  procedures,  all of which shall be
attached hereto as Exhibit B (as it may be amended or supplemented  from time to
time) and made a part hereof upon  written  consent of Licensee (to be evidenced
by its execution of such  amendments or  supplements to this  Agreement),  which
consent will not be unreasonably withheld.
         
         E.  Personnel  Training.  Both parties agree that high quality
personnel training programs covering quality control, customer relations policy,
sales and marketing  techniques,  and other  matters are of prime  importance to
this Agreement and are essential to the success of the sale of Approved Products
bearing the Trademarks. To accomplish this, the Licensee shall be responsible at
its cost for implementing and maintaining such programs and policies,  including
providing a sufficient  number of training  sessions for  Licensee's  employees,
which  training  sessions  shall be in  accordance  with the standards set forth
herein and issued pursuant to the terms of this Agreement.  Licensor agrees that
the current  practices  with respect to training  sessions are  satisfactory  to
Licensor,  but Licensor  reserves the right to withdraw its approval or to amend
the programs and policies at any time.
                  F. Compliance Reports. From time to time, and upon the written
request of  Licensor,  Licensee  shall  furnish to  Licensor  or its  authorized
representative,   free  of  cost,   for  its  written   approval  as  aforesaid,
descriptions  of all activities  currently  performed  and/or being completed by
Licensee  relating to the Approved  Products and of the manner of performing the
same,  in order that  Licensor  may  determine  whether the high  standards  and
quality  control  measures are being  maintained  by Licensee.  Licensor (or its
authorized  representative) shall be the sole judge of whether the activities of
Licensee have complied or are complying  with the aforesaid  high  standards and
quality control measures.
                  G. Records. Licensee shall keep accurate records in sufficient
detail to enable  Licensor (or its authorized  representative)  to determine the
extent and the manner in which  Licensee  has used the  Trademarks  and Licensee
shall permit  Licensor (or its  authorized  representative)  to examine and make
copies of such records at all reasonable times.  Licensee shall provide Licensor
(or  its  authorized  representative)  with  access  to  the  business  offices,
factories,  sales  locations  and other  premises of Licensee at all  reasonable
times,  in order that  Licensor may  determine  whether  Licensee's  uses of the
Trademarks  conform  with the quality  control  standards  set forth  herein and
issued in  accordance  herewith,  and  Licensee  shall abide by the  decision of
Licensor (or its authorized  representative)  in this respect.  Upon  Licensor's
request (or upon the request of Licensor's authorized representative),  Licensee
shall deliver to Licensor (or its authorized  representative)  such reports,  in
the form  requested,  which  confirm  for  Licensor  that such  quality  control
standards are being satisfied.
                  H. Change of Business Practices. In the event that Licensee at
any time makes any material  changes in its business  procedures  that may alter
the  performance  of any of the services or the delivery of products  upon or in
relation to which Licensee uses or intends to use the Trademarks, Licensee shall
promptly  give  notice  in  writing   thereof  to  Licensor  or  its  authorized
representative,  so that Licensor or its authorized representative may determine
through  supplemental  investigation,  if  necessary,  in  the  Licensor's  sole
judgment,  whether  Licensee is  conforming  to the high  standards  and quality
control  measures which have been set forth herein,  and Licensee shall abide by
the decision of Licensor or its authorized representative in this respect.

     I. Right to Obtain  Samples.  At the request of  Licensor,  Licensee  shall
submit to Licensor representative samples from Licensee's production of Approved
Products and of raw  materials  used in the  Approved  Products for such quality
testing and review as Licensor in its sole discretion shall deem appropriate.

     J. Right to Inspect Premises. Licensor, upon reasonable notice to Licensee,
shall  have  the  right to  inspect  the  equipment,  materials  and  production
facilities of Licensee to ensure compliance with Licensor's standards of quality
for the Approved Products.

         3.       FEES.
                  A. Privilege Fee. For the privilege of having the right to use
the Trademarks under the terms and conditions of this Agreement, Licensee agrees
to pay to Licensor  annually  during the term of this  Agreement a privilege fee
(the "Privilege  Fee") equal to $4,227,000 per fiscal year without regard to the
level of  Licensee's  sales  volume  during such fiscal  year.  The first annual
Privilege  Fee shall be due and payable on the  execution  and  delivery of this
Agreement,  and,  thereafter,  the annual Privilege Fee shall be due and payable
annually  on the first  (1st) day of the  fourth  (4th)  fiscal  quarter of each
fiscal year (based upon a fiscal year which ends on the Saturday  nearest to the
last day of January of each year).  The  Privilege Fee shall not be pro-rated or
refunded to Licensee.
                  B. Royalty Fees.  During the term of this Agreement,  Licensee
agrees to pay Licensor for the license of the Trademarks for each fiscal quarter
(based upon a fiscal year which ends on the Saturday  nearest to the last day of
January of each year)  royalty  fees  ("Royalty  Fees") equal to one-half of one
percent  (0.5%) of  Licensee's  Royalty  Base,  as defined in Section 3C of this
Agreement. Royalty Fees shall be payable quarterly as set forth in Section 3E of
this Agreement.
     C. Royalty Base. For purposes of this Agreement,  "Royalty Base" shall mean
the Licensee's net sales during the applicable fiscal quarter less:

     (i) Allowances for returns,  discounts or rebates as actually  granted to a
customer  on  account of  quantity  purchased  (but not  discounts  granted  for
promptness of payment); and

     (ii) All taxes  levied,  directly  or  indirectly,  on the sale of Approved
Products by any government or governmental agency.

                  D.  Report  Requirements.  On or before  Forty-Five  (45) days
after the last day of each fiscal period (based upon a fiscal year which ends on
the Saturday  nearest to the last day of January of each year)  through the date
of expiration  or  termination  of this  Agreement,  Licensee  shall produce and
forward to Licensor  an  itemized  statement  setting  forth an sales  report in
sufficient  detail to show the basis  upon  which  Royalty  Fees are  payable to
Licensor for such fiscal  period.  Licensor has the right to appoint a Certified
Public Accountant to audit Licensee's books and records,  at Licensee's expense,
at any time.
     E. Payment  Requirements.  On or before  thirty (30) days after  invoice to
Licensee sent by Licensor,  Licensee shall pay to Licensor the amount of Royalty
Fees due to Licensor  under  Section 3B hereof on account of the  activities  of
Licensee under this Agreement during the period covered by the invoice.

         4.       TRADEMARK  PROTECTION.

                  A. Notice of Infringement. Licensee shall promptly give notice
to Licensor of any  infringement  of the  Trademarks  in the United States which
shall come to Licensee's  attention during the term of this Agreement.  Licensee
agrees, at Licensor's  expense, to cooperate with Licensor,  when requested,  in
stopping such  infringement,  but Licensee  shall not take any action against an
infringer  in its own name or on behalf of  Licensor  without  Licensor's  prior
written approval.
                  B.  Maintenance  of  Trademarks.  Licensor  agrees  to pay all
governmental and legal fees involved in maintaining the continuing  validity and
enforceability  of the  Trademarks  within  the  United  States,  including  the
maintenance  and renewal of all  registrations  therefor  in the United  States,
provided, however, that Licensor shall determine at its sole option which of the
Trademarks  shall be renewed.  Without  limiting the provisions of the preceding
sentence,  Licensee  acknowledges  the  validity  of  and  Licensor's  exclusive
ownership of all right, title and interest,  in and to the Trademarks and agrees
that any use by Licensee of the Trademarks  shall inure solely to the benefit of
Licensor. Licensee shall not at any time (either during or after the termination
of this Agreement) directly or indirectly take any action which might impair the
validity of or the rights of Licensor in the  Trademarks,  but Licensor makes no
representation  or warranty that the Trademarks are valid or validly  registered
in the United States or any other country. Licensee shall not at any time during
the term of this  Agreement use any mark which shall be identical or confusingly
similar  to any  of the  Trademarks,  except  as  expressly  permitted  by  this
Agreement.  The termination of this Agreement shall not affect the obligation of
Licensee under this Section 4B.
                  C.  Infringement  of Other Marks by Licensee.  Licensee  shall
promptly notify  Licensor in the event that Licensee shall acquire  knowledge of
any claim that use of the Trademarks by Licensee  infringes the rights of others
or of the institution of any action or proceeding  against Licensee or otherwise
arising out of the use of the  Trademarks  by  Licensee.  Licensor  and its duly
authorized  representative  shall have the right (but not the obligation),  upon
written notification to Licensee within sixty (60) days of receipt of Licensee's
notification  to  Licensor  of such  infringement  claim,  to take charge of the
defense of any such claim, action or proceeding (and of any negotiations for the
settlement thereof). If Licensor declines, or fails to respond within sixty (60)
days after  receipt of  notification  from  Licensee,  to defend any such claim,
action or proceeding,  Licensee may do so.  Licensor and Licensee each shall pay
their own expenses  and retain any costs or damages  awarded to each in any such
claim, action or proceeding.  Licensor shall not make any settlement of any such
claim,  action or  proceeding,  brought  against  Licensee  involving a monetary
payment by Licensee  without the consent in writing of Licensee.  Licensor shall
not be liable in any event to  Licensee  in respect of any  damages  assessed or
asserted  against  Licensee  in, or any  liability  incurred by or imposed  upon
Licensee in connection with, any such claim, action or proceeding.  Licensor and
Licensee  agree to cooperate  with each other in all respects in any such claim,
action or proceeding.
                  D. Infringement of the Trademarks.  In the event that Licensee
shall acquire  knowledge of any use by a third party (other than any party known
to have a license agreement with Licensor) of the Trademarks,  it shall not take
any action  whatsoever,  unless  otherwise  authorized  by  Licensor,  but shall
promptly  notify  Licensor  in  writing  of such  use.  Licensor  (and  its duly
authorized representative) shall have the right (but not the obligation) to take
whatever action it deems appropriate, including the institution of any action or
proceeding against such third party or otherwise,  to obtain a discontinuance of
such use.  Licensor's  (or its authorized  representative's)  right to take such
action,  however,  shall expire if Licensor (or its  authorized  representative)
does not notify  Licensee in writing  within  thirty (30) days of receipt of the
aforementioned  notice  from  Licensee  of such  third  party use.  If  Licensor
exercises its right to take such action, Licensor shall pay its own expenses and
retain any costs or damages awarded to it therein. If Licensor does not exercise
its right to take such action,  or such right  expires,  then  Licensee may take
whatever  action  Licensee,  in its  sole  opinion,  deems to be  necessary  and
appropriate and Licensor shall reimburse  Licensee for all costs,  including but
not limited to attorneys'  fees incurred by Licensee with respect to such action
in the form of a credit  against fees due or to become due under this  Agreement
or in such other form as mutually agreed between Licensor and Licensee. Licensee
and Licensor  agree to cooperate  with each other in all respects and to provide
each other with all  assistance  requested by the other with respect to all such
actions.
         5.  INDEMNIFICATION BY LICENSEE.  Licensee shall indemnify,  defend and
hold Licensor harmless against and from all claims, demands,  actions and rights
of action  that shall or may arise by virtue of  anything  done or omitted to be
done  by the  Licensee  or by any  of  Licensee's  agents,  employees  or  other
representatives  unless the claim, demand, action or right arises solely from an
act  or  omission  of  Licensor  or  any  of  its  agents,  employees  or  other
representatives.  The rights and  obligations  of the parties  hereto under this
Section 5 shall survive the termination of this Agreement.
         6. TAXES.  Licensee  Responsible for Payment of Taxes.  All payments or
reimbursements under this Agreement shall be made without setoff or counterclaim
and free and clear of and without  deduction  for any and all present and future
taxes,  levies,  imposts,  duties  or any  other  charges  of a  similar  nature
("Taxes").  Licensee  agrees to cause all Taxes imposed in  connection  with the
purchase  and  sale  of  the  Approved  Products  to be  paid  directly  to  the
appropriate governmental authority.
         7.       TERM, TERMINATION AND DEFAULT.
                  A. Term.  This Agreement shall continue in effect for a period
of one (1) year  from the  date of this  Agreement  and,  unless  terminated  as
hereinafter  provided,  shall  automatically  renew for an  additional  one-year
period on each  anniversary  date of the date of this Agreement.  This Agreement
may be terminated by either party upon Thirty (30) days prior written  notice of
termination.  This Agreement may be terminated at any time by written consent of
the parties.
                  B. Default and Termination.  This Agreement shall terminate at
the  election  of  either  party  to this  Agreement  if the  other  party  (the
"Defaulting  Party")  shall breach or default in the  performance  of any of its
obligations  under this Agreement or any other  agreement  between  Licensor and
Licensee,  and such  breach or  default  is not cured  after  notice is given as
provided in Section 7C of this Agreement or as provided in such other agreement.
Regardless of the foregoing provisions, the Licensor may terminate the Agreement
at any time if any of the following circumstances occur:

               (i)      Declaration of bankruptcy by Licensee.

     (ii) Failure of the Licensee to pay royalties  over a term in excess of six
(6) months following the due date.

     (iii) In case of a  transfer  of rights  by  Licensee  to a third  party in
violation of Section 11 of this Agreement.

     (iv) In case of any material breach of any provision of this Agreement,  or
an intentional  violation of the Licensor's rights in any Trademarks  covered by
this Agreement.
  
C. Notice of Default.  If either  party  desires to  terminate
this  Agreement  in the event of a breach or  default,  such  party  shall  give
written  notice  to  the  Defaulting  Party  of the  breach  or  default  by the
Defaulting  Party and allow the  Defaulting  Party  thirty (30) days  thereafter
within  which to cure  such  breach  or  default.  Failure  by  either  party to
terminate this Agreement for any one or more acts or omissions of the Defaulting
Party which constitute a breach or default  hereunder shall in no way whatsoever
be construed as a waiver, express or implied, of that party's right to terminate
the  Agreement for any other breach or default or for the same breach or default
at a later time.

     D.  Rights on  Termination.  Upon  termination  of this  Agreement  for any
reason,  the rights,  privileges  and  obligations  of the  parties  shall be as
follows:
     (i) Such  termination  shall be without  prejudice to Licensor's  rights to
recover  royalties  or other  sums due from  Licensee  under  the  terms of this
Agreement.

     (ii) Any remedy for any breach or  default  which has not  previously  been
cured shall be preserved.

     (iii)  Licensee shall  immediately  cease to use the Trademarks for any and
all purposes,  and thereafter  shall not adopt or use any similar  trademarks or
combinations  thereof which so resemble the  Trademarks as to be likely to cause
confusion or mistake or to deceive, in connection with any products or services.

     E. Survival.  Without  limiting any other provision of this Agreement,  the
provisions of this Section 7 shall survive the termination of this Agreement.

         8.  SERVICES  PERFORMED BY AUTHORIZED  REPRESENTATIVE.  Notwithstanding
anything in this Agreement to the contrary,  Licensor may engage the services of
an authorized  representative  to act for and on behalf of Licensor for any part
of or all aspects of this Agreement.  Accordingly,  Licensee agrees to deal with
such  representative  upon  written  notice from  Licensor,  which  notice shall
describe the scope of such representative's responsibilities.

     9.  AMENDMENT.  This  Agreement  may be amended  only by written  amendment
executed  by an  authorized  officer  or  agent of  Licensee  and  Licensor.  No
approval, permission or consent by either party to this Agreement shall have any
effect  unless it is made in writing  by an  authorized  representative  of such
party.

     10. PROHIBITION ON ASSIGNMENT. Nothing in this Agreement shall be deemed to
constitute  or result in an  assignment  of the  Trademarks  to  Licensee or the
creation of an equitable or any other interest in the Trademarks in Licensee.

         11. TRANSFERABILITY OF RIGHTS.  Licensor's rights and obligations under
this  Agreement  shall be freely  transferable  and such rights and  obligations
shall inure to the benefit of and be binding upon its respective  successors and
assigns.  Licensee's  rights and  obligations  under this  Agreement  shall not,
without the prior  written  consent of Licensor,  be  transferred,  sublicensed,
assigned or alienated in any manner, except as expressly provided hereunder.

     12.   GOVERNING   LAW  AND   JURISDICTION;   ARBITRATION.   The   validity,
interpretation  and  enforceability  of this  Agreement  shall be  determined in
accordance  with the laws of the State of Delaware.  All  disputes  arising from
this Agreement shall be finally  decided by arbitration  consisting of three (3)
arbitrators  according to the Delaware  Arbitration Act, 10 Del. C. ss. 5701, et
seq. All legal costs  incurred to enforce the terms of this  Agreement  shall be
borne by the  party  responsible  in  accordance  with the  applicable  laws and
customs.

     13. SEVERABILITY.  If any provision or any portion of any provision of this
Agreement shall be held to be void or unenforceable, the remaining provisions of
this  Agreement  and  the  remaining  portion  of any  provision  held  void  or
unenforceable in part are to continue in full force and effect.

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement to be effective as of the day and year first above written.
[SEAL]                                               LICENSEE:
Attest:                                         GOODY'S FAMILY CLOTHING, INC.


By:___________________________            By:________________________________
     Name:                                      Name:
     Title:                                     Title:


 [SEAL]                                              LICENSOR:
Attest:                                                       SYDOOG, INC.


By:___________________________           By:_________________________________
     Name:                                      Name:
      Title:                                    Title:


<PAGE>



                                    EXHIBIT A


                              TO LICENSE AGREEMENT
                               LICENSED TRADEMARKS

Mark                      Registration No.                    Issuance Date

Goody's Family Clothing       1,606,015                        July 10, 1990

Goody's Family Clothing, Inc.
         & Design             1,949,198                       January 16, 1996


<PAGE>



                                                        36


                                                        20


                                    EXHIBIT B

                              TO LICENSE AGREEMENT

                            QUALITY CONTROL STANDARDS



                    [See attached Quality Control Standards]


<PAGE>


                                  Exhibit 4.1C
                             MASTER SUPPLY AGREEMENT
                                      (GFC)

         This MASTER SUPPLY  AGREEMENT  (this  "Agreement")  is made and entered
into this 1st day of November,  1996, to be effective as of November 3, 1996, by
and between  GOODY'S MS, L.P., a Tennessee  limited  partnership  ("Seller") and
GOODY'S FAMILY CLOTHING, INC., a Tennessee corporation ("Purchaser").
         WHEREAS,  Purchaser operates one or more Goody's Family Clothing retail
locations,  and in  connection  therewith,  Purchaser  desires to  purchase on a
continuing  basis,  and Seller  desires to sell on a continuing  basis,  various
items of inventory to be offered for sale in such locations,  as well as various
supplies and other products (hereinafter, collectively, the "Products") that may
be used in  connection  with such retail  operations,  all as may be selected by
Purchaser and communicated to Seller from time to time; and
         WHEREAS, to avoid repetitive negotiations,  the parties desire to enter
into this Agreement  establishing  the terms and conditions of purchase and sale
which will be applicable to the Products.
         NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereby agree as follows:
         1.       Scope of Agreement.
                  a. Unless  otherwise agreed in writing by both parties hereto,
this Agreement shall apply to all purchase  orders,  electronic  communications,
and other purchase documents or communications (hereinafter,  collectively,  the
"Orders")  relating to the purchase of Products  which may be placed with Seller
by or on behalf of Purchaser on and after the effective date of this  Agreement.
The terms and conditions of this Agreement shall apply to any Order,  whether or
not this Agreement or its terms and conditions are expressly  referred to in the
Order.
                  b. Unless  otherwise  agreed in writing by both parties hereto
with respect to a specific purchase  transaction,  no inconsistent or additional
term or condition in any Order shall be applicable  to a transaction  within the
scope of this Agreement.  Both parties hereto  specifically agree that any terms
and   conditions  on  any  of  their   purchase  or  sale   documents  or  other
communications  utilized as Orders  hereunder which are in any way  inconsistent
with this  Agreement  shall not be  applicable,  and the terms of this Agreement
shall govern.
         2.       Duration and Termination.
                  a. Unless  earlier  terminated  according to the provisions of
paragraph 2.b below, this Agreement shall be in force and effect for a period of
one (1) year from the  effective  date of this  Agreement  set forth above,  and
shall thereafter be  automatically  renewed for successive terms of one (1) year
each.
                  b. Either  party  hereto may  terminate  this  Agreement  upon
thirty (30) days advance  written  notice to the other party of such election to
terminate;  provided, however, that the parties hereto may agree in writing to a
shorter or longer notice period.
     c. The  termination  of this  Agreement will not affect any Order which has
been communicated and acknowledged prior to the date of termination.
   
3.       General Terms and Conditions.
                  a.       Orders.
     i.  Orders  will  generally  be limited to the  Products  constituting  the
saleable inventory,  or otherwise utilized in the operations,  of Goody's Family
Clothing retail locations.  Orders may, however,  be issued for products handled
by Seller which are not so utilized. In such event, the presumption will be that
the terms and conditions of this Agreement apply to any such Order unless Seller
shall notify  Purchaser of its  objection to having such product  covered  under
this Agreement.
          
     ii.  Orders  may be made in any form,  including  typewritten,  telephonic,
electronic and telex. An Order may be unpriced or pre-priced.

     iii.  Purchaser  shall be entitled  to engage one or more other  parties to
place Orders with Seller on Purchaser's behalf;  provided,  however, that Seller
shall not fulfill  any Order  placed by any party  other than  Purchaser  unless
Purchaser has previously  communicated written authorization to Seller to accept
Orders from such party. In such event,  Purchaser  shall remain  responsible for
payment of any such Order.
                  
     iv.  Purchaser  shall be entitled to  establish  dollar  limits above which
individual  unpriced  Orders are not to be accepted by Seller  without  specific
approval by a designated  officer or  representative  of Purchaser.  Such dollar
limits shall be set forth in a writing  signed by both parties  hereto.  In such
event,  when an  unpriced  Order  exceeds  the  established  dollar  limit,  not
including  freight,  Seller shall return the Order to Purchaser  properly priced
within ten (10) days, with an estimated delivery date. Purchaser shall then have
the option of either  accepting or rejecting  the prices and delivery  dates set
forth by Seller.
      
     v.  Pre-priced  Orders,  and  unpriced  Orders whose amount falls below any
limit that may be established  pursuant to the preceding paragraph 2.b.iv, shall
be considered  as Orders by Seller,  and Seller may accept  such Orders and
fulfill the same without any further approvals of Purchaser.

                  b.       Acknowledgments.
        
     i. Within ten (10) days following  Seller's  receipt of any Order placed by
or on behalf of Purchaser,  Seller shall respond  either by accepting such Order
as submitted (subject to the above provisions regarding pricing) or by notifying
Purchaser or Purchaser's  authorized  representative of proposed  modifications.
When an  acknowledgment  contains  additions or  modifications to the Order, the
acknowledged   Order  shall  not  become  effective  until  Seller  is  notified
electronically  or in writing  by or on behalf of  Purchaser  that the  proposed
additions or modifications are acceptable.

     ii.  Seller  agrees to make every  reasonable  effort to meet the  delivery
dates  specified on any Order.  Each Order  acknowledgment  shall contain either
Seller's  confirmation  of the  delivery  dates as  requested by or on behalf of
Purchaser, or Seller's own estimated delivery dates.

                  c.       Follow-Up.
     i. Seller agrees to provide follow-up with Seller's  distribution  facility
or its  third-party  suppliers  on each  acknowledged  Order to ensure  that the
delivery dates given are met, or that Purchaser is notified of any rescheduling.
Such notification of any possible rescheduling shall be provided to Purchaser as
soon as possible, and in any event before the confirmed delivery dates contained
in the acknowledged Order.
                       
     ii.  Seller  agrees to give special  attention  and  frequent  follow-up on
acknowledged  Orders  designated  as "rush,"  since  these  represent  emergency
requirements on the part of Purchaser.

     iii.  Purchaser or  Purchaser's  representative  will contact Seller on all
"rush" Orders to establish the earliest  delivery dates Seller can meet.  Seller
agrees to give top priority to all "rush" Orders.

                  d.       Shipping and Invoicing.

     i.  Seller  and  Purchaser  will  mutually  agree  upon  detailed  delivery
invoicing  instructions.  Since this  Agreement  and such delivery and invoicing
instructions  will not be furnished with each Order,  Seller shall undertake all
such actions as are  reasonably  necessary or  appropriate to ensure that all of
Seller's personnel in charge of fulfilling  Purchaser's Orders are aware of such
delivery and invoicing  instructions.  Seller shall be entitled to have Products
purchased by Seller hereunder delivered directly from third-party vendors.

     ii. Unless  otherwise  agreed  between Seller and Purchaser with respect to
the  fulfillment  of an Order,  ownership,  legal  title and all risk of loss or
damage with respect to Products  shipped from Seller's  facilities shall pass to
Purchaser  at the time the  Products are placed into  transit,  F.O.B.  Seller's
place of shipment.

                  e.       Payment.

     i. Unless otherwise agreed between  Purchaser and Seller with respect to an
Order, Purchaser or Purchaser's authorized representative shall render to Seller
any and all  payments  required to be made with respect to a filled Order within
thirty (30) days  following  Seller's  notice to  Purchaser  of all charges with
respect  to the  Order.  Payments  may  be  made  by  check,  electronically  by
inter-bank  or  intra  bank  transfer,   or  (where  Purchaser  and  Seller  are
affiliates) by inter-company transfer.

     ii. Seller may from time to time advise  Purchaser of any deposit  required
to be made by Purchaser  prior to or at the time of Seller's  acceptance  of any
Order.

     iii.  Unless  otherwise  agreed between  Purchaser and Seller,  at any time
before,  during or after  termination of this  Agreement,  Seller shall have the
absolute right to set-off any and all amounts owed to it hereunder by Purchaser,
its subsidiaries and affiliates  against any and all amounts then owed by Seller
to Purchaser.

         4.       Standard Terms and Conditions.

                  a.       Modification and Assignment.

     i. Any  modification of this Agreement must be in writing and signed by the
authorized representatives of both Purchaser and Seller. Neither this Agreement,
nor any of the rights or  interests  of  Purchaser  or Seller  hereunder  may be
assigned,  transferred or conveyed by operation of law or otherwise  without the
prior  written  consent  of the other  party,  except to a parent or  subsidiary
thereof,  or an entity wholly  controlled  thereby,  in which event the party so
assigning shall remain  obligated and liable to the other party for the full and
complete  performance  of this  Agreement by the parent or  subsidiary or wholly
controlled entity to which this Agreement is assigned.

                  b.       Delays or Non-Delivery.

     i. If after  acknowledgment  of an Order,  Seller  finds that the  Products
cannot be  delivered  within  the time  specified  in the  Order,  Seller  shall
promptly  notify  Purchaser and advise  Purchaser of the revised  delivery date.
Purchaser shall then have the option of terminating the Order without obligation
for payment or of accepting the revised delivery date.

     ii.  In the  event of delays in  delivery  due to a cause  beyond  Seller's
reasonable control,  including acts of God, acts of Purchaser,  acts of civil or
military  authorities  or  governmental  priorities,  strikes,  or  other  labor
disturbances,   floods,   epidemics,  war,  riot,  delay  in  transportation  or
transportation  problems,  the date of delivery  shall be extended  for a period
equal  to the  time  lost by  reason  of  such  occurrence,  provided,  however,
Purchaser may, at its option, cancel the acknowledged Order, and any appropriate
cancellation charges will be negotiated between the parties.

     c. Taxes. In addition to any price specified in any Order,  Purchaser shall
pay the gross amount of any present or future sales,  use, excise,  value-added,
or other  similar  tax,  applicable  to the  purchase  sale,  or delivery of any
Product or its use by Purchaser,  unless Purchaser has furnished Seller evidence
of exemption acceptable to the taxing authorities.

     d.  Applicable  Law.  All  aspects of any Order,  this  Agreement,  and the
contract embodied herein including,  but not limited to, its essential validity,
formation,   content,  performance  or  nonperformance,   breach,  damages,  and
construction, shall be governed by the laws of the State of Tennessee.

                  e. Entire  Agreement.  This Agreement  constitutes  the entire
Agreement  between the parties  hereto and it may not be  released,  discharged,
changed,  or  modified  except  by an  instrument  in  writing  signed  by  duly
authorized  representative  of the  parties.  Any  representation,  promise,  or
condition not contained  herein shall not be binding upon Seller nor  Purchaser.
Acceptance  of this  Agreement is expressly  limited to the terms hereof and, in
the event of any conflict, the terms and conditions of this Agreement shall take
precedence  over any terms or conditions  appearing in any Order placed by or on
behalf of Purchaser with Seller.

         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement by
authorized representatives as of the date first set forth above.

                                                          SELLER:

                                                   GOODY'S MS, L.P.

                                                  By:   TREBOR of TN, Inc.
                                                        General Partner

                                                     By:___________________
                                                          Harry M. Call
                                                          President

                                                 PURCHASER:
                                                 GOODY'S FAMILY CLOTHING, INC.

                                         By:________________________________
                                                     Harry M. Call
                                                     President




<PAGE>


                                  Exhibit 4.1E

                              TAX SHARING AGREEMENT


         This Tax Sharing  Agreement  (this  "Agreement") is made as of the 31st
day of  October,  1996 by and  between  SYDOOG,  Inc.,  a  Delaware  corporation
("Subsidiary"), with its only place of business at 913 Market Street, Suite 817,
Wilmington,  Delaware  19801,  and Goody's  Family  Clothing,  Inc., a Tennessee
corporation  ("Parent"),  with its  principal  place of  business at 400 Goody's
Lane, P.O. Box 22000, Knoxville, Tennessee 37933.
                                   BACKGROUND
         The background of this Agreement is as follows:
                  A. Subsidiary is a member of an "affiliated group", as defined
in ss. 1504 of the Internal  Revenue Code of 1986, as amended from time to time,
and the  regulations  thereunder  (the  "Code"),  of which  Parent is the common
parent corporation.

     B.  Parent  and  Subsidiary  desire  that  Subsidiary  be  included  in the
consolidated Federal income tax return of Parent.

                  C. A purpose of this Agreement is to set forth the obligations
to be fulfilled by  Subsidiary  under the  consolidated  reporting  rules of the
Code, as directed by Parent,  including  without  limitation  the  provisions of
Treas.  Regs. ss.  1.1502-33(d)(2)  and ss.  1.1552-1(b)(2),  and to provide for
payment by Subsidiary to Parent of all such tax liability  properly allocated to
Subsidiary.  An  additional  purpose  of  this  Agreement  is to set  forth  the
obligation of Subsidiary to bear the full burden of its state tax liability,  if
any,  to the  extent  that  Parent  is  required  to pay  state  taxes  based on
Subsidiary's income.


                                    AGREEMENT

                  For valuable consideration,  the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
                  1. This  Agreement is to be effective  beginning  with the tax
year ending the Saturday nearest to the last day of January 1997, or February 1,
1997. The term of this Agreement  shall continue until  terminated in accordance
with the terms hereof.
     2.  Subsidiary  agrees to comply with all requests of Parent in  connection
with this Agreement and pursuant to the consolidated  reporting  requirements of
the Code.
                  3. Subsidiary  agrees to execute or cause the execution of any
further documentation,  including returns or elections, necessary or appropriate
in connection with or pursuant to the terms of this Agreement.
                  4.  Subsidiary  agrees  to pay to  Parent  within  45  days of
receipt  of  written  request  therefor  all  amounts   sufficient  to  pay  for
Subsidiary's  allocable  share of federal  income tax  liabilities as calculated
pursuant to Treas. Reg.  ss.1.1552-1(a),  under such method consistent therewith
as adopted by Parent from time to time, including,  without limitation,  amounts
satisfying   quarterly  estimated  tax  liabilities,   as  well  as  annual  tax
liabilities.
                  5. Any federal income tax liability of Subsidiary which arises
by reason of the  provisions of this Agreement will be reported by Subsidiary in
accordance with generally accepted accounting principles.
                  6. If adjustments  are made to a  consolidated  federal income
tax return in which Parent and  Subsidiary  are included  that result in a final
deficiency or overpayment  that would have required a larger or smaller  payment
by Subsidiary  to Parent,  or by Parent to  Subsidiary,  if made on the original
return in accordance with the method of computations  described  herein,  Parent
shall pay to  Subsidiary  or  Subsidiary  shall pay to Parent  within 45 days of
receipt of written  request  therefor,  an  appropriate  amount to reflect  such
deficiency or overpayment, as the case may be.
                  7. If Parent is found  liable to pay any state  corporate  tax
with respect to income earned by Subsidiary,  Subsidiary agrees to pay to Parent
the  entire  amount of such  state  corporate  tax  liability  within 45 days of
written  request  therefor,  under such method as shall be adopted by Parent and
Subsidiary from time to time.
                  8. This  Agreement  shall be  applicable  only with respect to
periods for which Subsidiary and Parent are members of the same affiliated group
filing a consolidated  federal income tax return.  No adjustments  shall be made
with respect to periods for which either  Subsidiary  or Parent filed or files a
separate return or is a member of another affiliated group filing a consolidated
return.
                  9.  This   Agreement  may  be  terminated  by  mutual  written
agreement,  or if either  party  ceases  to be a member  of the same  affiliated
group, or if the affiliated  group to which Parent and Subsidiary  belong elects
not to file a  consolidated  federal  return  for  any  taxable  year.  However,
notwithstanding termination,  this Agreement shall continue to be effective with
respect to any  period  during the tax year in which  termination  occurred  for
which the  income of  Subsidiary  is  includable  in such  consolidated  return.
Notwithstanding  any such  termination,  if upon audit by the  Internal  Revenue
Service of the  consolidated  return for a period  during which  Subsidiary  and
Parent  were  members  of an  affiliated  group,  or as a  result  of any  final
administrative  or  judicial  proceedings  for any  such  period,  there  is any
adjustment to federal taxable income,  special deductions or credits,  then such
resulting change in the affiliated group's consolidated return will be allocated
to Subsidiary in accordance with the provisions of this Agreement.
     This  Agreement  may not be  assigned  by either  party  without  the prior
written consent of the other.




                  The parties hereto have executed this Agreement as of the date
set forth above.

                                                        SYDOOG, INC.



                                                   By:
                                                        Name:
                                                        Title:



                                                GOODY'S FAMILY CLOTHING, INC.



                                                   By:
                                                        Name:
                                                        Title:




<PAGE>


                                 Exhibit 6.1.1.A










                                October 31, 1996



First Tennessee Bank National Association

First American National Bank

AmSouth Bank of Alabama

SouthTrust Bank of Alabama, N.A.

First Union National Bank of Tennessee

Wachovia Bank of Georgia, N.A.


         Re:      $100,000,000 Credit Facility for Goody s Family Clothing, Inc.

Ladies and Gentlemen:

We have acted as special counsel to Goody s Family  Clothing,  Inc., a Tennessee
corporation ("GFC"), Goody's MS, L.P., a Tennessee limited partnership ("Goody's
MS"),  Goody's IN, L.P., a Tennessee  limited  partnership  ("Goody's IN") (GFC,
Goody's MS, and Goody's IN are sometimes referred to herein as the "Borrowers"),
SYDOOG, INC., a Delaware corporation ("SYDOOG"), TREBOR of TN, Inc., a Tennessee
corporation ("TREBOR") and GOFAMCLO,  Inc., a Delaware corporation  ("GOFAMCLO")
(SYDOOG,   TREBOR  and  GOFAMCLO  are  sometimes   referred  to  herein  as  the
"Guarantors"),  in connection with the execution and delivery of the Amended and
Restated  Credit  Agreement  dated as of  October  31,  1996,  by and  among the
Borrowers,  the  Guarantors,  First Tennessee Bank National  Association,  First
American  National Bank,  AmSouth Bank of Alabama,  SouthTrust  Bank of Alabama,
N.A., First Union National Bank of Tennessee and Wachovia Bank of Georgia,  N. A
(the Lenders ), and First Tennessee Bank National  Association as Administrative
Agent (the Credit  Agreement ). We have been  requested by the Borrowers and the
Guarantors  to render  this  opinion  pursuant  to  Section  6.1.1 of the Credit
Agreement. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Credit Agreement, as the context may require.

In  connection  with this opinion,  we have  reviewed,  among other things,  the
following  agreements and instruments  (individually a Transaction  Document and
individually and collectively the Transaction Documents ):

         1.       the Credit Agreement;

         2.       the Notes delivered pursuant to the Credit Agreement; and

         3.       the Pledge Agreement.

We have also reviewed such  corporate and  partnership  documents and records of
the Borrowers and the Guarantors,  such  certificates of public  officials,  and
such other matters as we have deemed  necessary or  appropriate  for purposes of
this opinion.

As to  various  issues of fact,  we have  relied  upon the  representations  and
warranties  of the  Borrowers and the  Guarantors  contained in the  Transaction
Documents and upon statements and  certificates of officers of the Borrowers and
the Guarantors, without independent verification or investigation.  For purposes
of the opinions on the good standing of the Borrowers and TREBOR, we have relied
solely upon good  standing  certificates  of recent date from the  Secretary  of
State of Tennessee,  copies of which have been  delivered to the  Administrative
Agent.  For puposes of the opinions on the good standing of, corporate power and
authority of,  execution  and delivery,  and  authorization  of the  Transaction
Documents  by,  SYDOOG and  GOFAMCLO,  we have relied solely upon the opinion of
Stewart & Associates, a copy of which is attached hereto.

We have  assumed,  regarding  documents  executed  by  parties  other  than  the
Borrowers  and the  Guarantors,  that such  documents  are the valid and binding
obligations  of,  and  enforceable  against,  such other  parties.  We have also
assumed the  authenticity  of all documents  submitted to us as  originals,  the
genuineness of all signatures  (other than signatures on behalf of the Borrowers
and the  Guarantors),  the  conformity  to authentic  original  documents of all
documents submitted to us as certified, conformed or photostatic copies, and the
legal capacity of all natural persons.

Based  on the  foregoing,  and  subject  to  the  assumptions,  limitations  and
qualifications set forth herein, we are of the opinion that:

1.       Each of GFC and TREBOR is a  corporation  duly  organized  and  validly
         existing and in good standing under the laws of the State of Tennessee;
         has  the  requisite  corporate  power  and  corporate  authority  under
         Tennessee law to own,  lease,  license and use its properties and carry
         on its business as presently conducted; and has the requisite corporate
         power and corporate authority to enter into and perform its obligations
         under each of the Transaction Documents.

2.       Each  of  Goody's  MS and  Goody's  IN is a  limited  partnership  duly
         organized and validly  existing and in good standing  under the laws of
         the State of  Tennessee;  has the requisite  power and authority  under
         Tennessee law to own,  lease,  license and use its properties and carry
         on its business as presently conducted; and has the requisite power and
         authority to enter into and perform its  obligations  under each of the
         Transaction Documents.

3.       Each of SYDOOG and GOFAMCLO is a corporation duly organized and validly
         existing and in good standing  under the laws of the State of Delaware;
         has  the  requisite  corporate  power  and  corporate  authority  under
         Delaware law to own, lease, license and use its properties and carry on
         its business as presently  conducted;  and has the requisite  corporate
         power and corporate authority to enter into and perform its obligations
         under each of the Transaction Documents.

4.       The execution and delivery by the Borrowers and the  Guarantors of, and
         the   performance   by  the  Borrowers  and  the  Guarantors  of  their
         obligations  under, the Transaction  Documents to which each is a party
         have been duly authorized by all necessary corporate action on the part
         of the Borrowers and the Guarantors. Each such Transaction Document has
         been duly executed and delivered by the Borrowers and the Guarantors.

     5. Each Transaction Document to which a Borrower or Guarantor is a party is
a valid and binding  obligation of such Borrower or the  Guarantor,  enforceable
against such Borrower and Guarantor in accordance with its terms, subject to (a)
the effect of bankruptcy, insolvency, reorganization, receivership, arrangement,
moratorium,  fraudulent  conveyance,  fraudulent transfer and other similar laws
relating to or affecting the rights of  creditors,  and (b) the  application  of
general  principles  of  equity  (including,  without  limitation,  concepts  of
materiality,  reasonableness,  good  faith  and fair  dealing  and the  possible
unavailability  of specific  performance,  injunctive relief and other equitable
remedies), regardless of whether considered in a proceeding at law or in equity.

     6. The execution  and delivery by each of the Borrowers and the  Guarantors
of the Transaction  Documents and the performance of its obligations  thereunder
do not (a) contravene the charter or articles of  incorporation,  as applicable,
or  bylaws  of GFC,  TREBOR,  SYDOOG  or  GOFAMCLO  or the  limited  partnership
agreement  of Goody's MS or Goody's IN or any  judgment,  order or decree of any
court or arbitrator  known to us  specifically  directed to the Borrowers or the
Guarantors or their property, or (b) constitute a default under or breach of the
terms  or, or an event  that  with the lapse of time or the  giving of notice or
both would  constitute  a default  under or a breach of the terms of, or require
any consent  (that has not been  obtained)  of any person under the terms of, or
result in the creation or imposition of (or the  obligation to create or impose)
a Lien upon any property of the Borrowers or the Guarantors  under, any Material
Contract identified on Schedule 7.26 to the Credit Agreement.

         The opinion of Stewart &  Associates  as counsel to SYDOOG and GOFAMCLO
         attached  hereto  includes a  qualification  or limitation as to clause
         (ii) of Article Tenth of the  Certificates of  Incorporation of each of
         SYDOOG and GOFAMCLO.  In our opinion,  if presented  with the issue,  a
         Tennessee court of proper  jurisdiction  should hold that the execution
         and performance of their obligations under the Credit Agreement, in and
         of themselves, do not subject SYDOOG and GOFAMCLO to tax in Tennessee.

7.       To the best of our knowledge,  no approval,  order,  consent,  license,
         authorization  or  other  action  by or  filing  with  any  federal  or
         Tennessee  governmental  authority,  commission,  agency  or  board  is
         required  for  the  execution  and  delivery  by the  Borrowers  or the
         Guarantors of the  Transaction  Documents to which it is a party or the
         consummation  by the Borrowers or the  Guarantors  of the  transactions
         that are the subject of the Transaction Documents.

8.       None of the Borrowers or the  Guarantors is an investment  company or a
         company  controlled by an investment  company within the meaning of the
         Investment Company Act of 1940, as amended.

9.       None of the  Borrowers or the  Guarantors  is a holding  company , or a
         subsidiary  company of a holding company , or an affiliate of a holding
         company  or of a  subsidiary  company of a holding  company  within the
         meaning of the Public Utility Holding Company Act of 1935, as amended.

     10. Assuming that (a) the Transaction  Documents are executed and delivered
to the  Administrative  Agent in the State of  Tennessee,  (b) the subject Loans
will be disbursed and repaid in the State of Tennessee,  (c) the  Administrative
Agent has its principal place of business in the State of Tennessee,  and (d) as
to GFC and Goody's MS, such parties own or lease  property and conduct  business
in the State of Tennessee,  and as to Goody's IN,  SYDOOG,  TREBOR and GOFAMCLO,
that this transaction otherwise bears a reasonable  relationship to the State of
Tennessee,   a  Tennessee  court  of  proper  jurisdiction  applying  applicable
Tennessee  choice of law principles  should enforce the choice of law provisions
contained in the Transaction Documents that expressly provide that the terms and
provisions thereof (including,  without limitation,  those provisions subject to
usury limitations) will be governed by and construed in accordance with the laws
of the State of Tennessee.

11.      To our knowledge, and except as set forth on Schedule 7.6 to the Credit
         Agreement,  there is no  litigation or other legal  proceeding  pending
         before  any  court,  governmental  agency  or  arbitrator,  or  overtly
         threatened in writing,  against any of the Borrowers or the  Guarantors
         or any of their properties,  that seeks to affect the enforceability of
         any Transaction  Document or that if adversely  determined could affect
         the ability of such  Borrower or Guarantor  to perform its  obligations
         under any Transaction Document.

The opinions expressed herein are qualified and limited as follows:

     a.  Our  opinion  in  numbered  Paragraph  5  is  subject  to  the  further
qualification that certain waivers, procedures, remedies and other provisions of
the Transaction  Documents may be  unenforceable  under or limited by applicable
law;  however,  the  inclusion of such waivers,  procedures,  remedies and other
provisions  does not render the  Transaction  Documents  invalid as a whole and,
subject to the other  qualifications  and  limitations  set forth herein,  there
exist,  in the  Transaction  Documents or pursuant to  applicable  law,  legally
adequate  remedies  for the  practical  realization  of the  principal  benefits
reasonably intended to be provided by the Transaction Documents,  subject to the
consequences of any delay that may result from limitations imposed by applicable
law;

     b. We  express  no opinion  herein as to  compliance,  or the effect of any
noncompliance,  with  applicable  laws governing  interest and usury,  except as
specifically set forth in numbered Paragraph 10 above;

c.       We  express  no  opinion  herein as to  provisions  of the  Transaction
         Documents  releasing a party from,  or  indemnifying  a party  against,
         liability  for  its own  wrongful  or  negligent  acts  and/or  waiving
         defenses  arising  as a result of such  acts  which  provisions  may be
         unenforceable  if such  release,  indemnification  or waiver  contained
         therein is contrary to law or the public policy underlying such law;

     d. We express no opinion  regarding the application of federal or state tax
laws or securities  laws to the  transactions  contemplated  in the  Transaction
Documents;

e.       We express no  opinion  as to the  effect of or the  compliance  by the
         Lenders,  the Agent or the Issuing  Bank with any state or federal laws
         that are  applicable to this  transaction  because of the nature of the
         business or capacity of the Lenders, the Agent or the Issuing Bank;

     f. We express no opinion as to the effect of the constitutional exercise of
sovereign police powers of the United States and other governmental bodies;

     g. We express no opinion as to the enforceability of any waiver of trial by
jury, or agreement for acceptance of process by mail;

     h. We express no opinion as to the  enforceability  of any waiver of rights
afforded under Tennessee Code Annotated, Section 47-12-101, et seq.;

i.       We  express  no  opinion  as to the  enforceability  of  any  provision
         specifying  that  provisions of the  Transaction  Documents may only be
         waived in writing,  to the extent that an oral  agreement or an implied
         agreement  by  trade  practice  or  course  of  dealing  or  course  of
         performance has been created;

     j. We express no opinion as to the  enforceability of any appointment of an
attorney in fact; and

k.       We express no opinion as to the effect of laws  governing and affording
         judicial   discretion   regarding  the  determination  of  damages  and
         entitlement to attorneys fees and other costs.

We express no opinion  herein other than as to the law of the State of Tennessee
and the  federal law of the United  States of  America.  We do not purport to be
experts in matters of law of jurisdictions other than the State of Tennessee and
the federal law of the United States of America.

Our opinions are rendered as of the date hereof and we assume no  obligation  to
advise  you of changes  in law or fact (or the  effect  thereof on the  opinions
expressed herein) that hereafter may come to our attention.

As used herein,  known to us, to our  knowledge  and any similar  phrase  refers
solely to the  current,  actual  knowledge,  acquired  during  the course of the
representation  described in the introductory paragraph of this letter, of those
attorneys in this firm who have rendered legal services in connection  with such
representation  (excluding  any lawyers  whose  involvement  has been limited to
reviewing this opinion as part of our firm s opinion review  procedure).  We are
not general counsel to the Borrower. We presently represent the Borrower only in
connection  with this matter and certain other  specific  matters as to which we
have been consulted by the Borrower.

The opinions  expressed  herein  represent our best legal judgment and are based
upon the facts and assumptions set forth herein and upon existing  Tennessee law
and currently applicable Tennessee rules, regulations and court decisions, which
are subject to change either prospectively or retrospectively.  Our opinions are
in no way binding on any jurisdiction, court, government or agency. Our opinions
are  limited to the matters  expressly  stated  herein,  and no opinion is to be
inferred or may be implied beyond the matters expressly stated.

This opinion is rendered solely for the benefit of the addressees (including any
Persons who may  subsequently  become Lenders,  participants of any Lender,  any
successors  to the  Administrative  Agent or Issuing  Bank and their  respective
counsel) in connection with the  above-referenced  transactions,  and may not be
delivered or quoted to any other  person  (other than to any  regulatory  agency
having jurisdiction over any Lender or any participant or any prospective Lender
or  participant)  or relied upon for any other purpose without our prior written
consent.

                                                          Very truly yours,

                                                      WOOLF, MCCLANE, BRIGHT,
                                                      ALLEN & CARPENTER, PLLC



                                            By:_____________________________
                                                      Dennis R. McClane



<PAGE>


                                  Exhibit 6.11B







                             As of October 31, 1996

Woolf, McClane, Bright, Allen
   & Carpenter, PLLC
900 Riverview Tower
900 South Gay Street
Knoxville, Tennessee  37902-1810

         Re:      $100,000,000 Credit Facility for Goody's Family Clothing, Inc.

Ladies and Gentlemen:

         We  have  acted  as  special  counsel  to  SYDOOG,   Inc.,  a  Delaware
corporation ("SYDOOG") and GOFAMCLO,  Inc., a Delaware corporation  ("GOFAMCLO")
in connection with the execution and delivery of the Amended and Restated Credit
Agreement  (the  "Credit  Agreement")  dated as of October 31, 1996 by and among
Goody's Family  Clothing,  Inc., a Tennessee  corporation  ("GFC"),  Goody's MS,
L.P., a Tennessee  limited  partnership  ("Goody's  MS") and Goody's IN, L.P., a
Tennessee limited partnership ("Goody's IN"), as Borrowers (GFC, Goody's MS, and
Goody's IN are hereinafter collectively referred to as the "Borrowers"), SYDOOG,
GOFAMCLO  and  TREBOR  of TN,  Inc.,  a  Tennessee  corporation  ("TREBOR"),  as
Guarantors (SYDOOG, GOFAMCLO and TREBOR are hereinafter collectively referred to
as the "Guarantors"),  First Tennessee Bank National Association, First American
National Bank, AmSouth Bank of Alabama,  SouthTrust Bank of Alabama, N.A., First
Union National Bank of Tennessee and Wachovia Bank of Georgia,  N.A., as Lenders
(hereinafter  collectively  referred to as the  "Lenders"),  and First Tennessee
Bank  National  Association,  as  administrative  agent  for  the  Lenders  (the
"Administrative Agent"). We have been requested by SYDOOG and GOFAMCLO to render
this  opinion  pursuant to Section  6.1.1 of the Credit  Agreement.  Capitalized
terms used but not defined  herein shall have the  meanings  ascribed to them in
the Credit Agreement, as the context may require.

         In connection with this opinion, we have reviewed,  among other things,
unexecuted drafts the following  agreements and instruments (each a "Transaction
Document" and collectively the "Transaction Documents"):



<PAGE>


         1.       the Credit Agreement (without Exhibits and Schedules); and

         2.       the Notes delivered pursuant to the Credit Agreement.

         We also have  reviewed such  corporate  documents and records of SYDOOG
and GOFAMCLO,  such certificates of public officials,  and such other matters as
we have deemed necessary or appropriate for purposes of this opinion.

         As to various  issues of fact, we have relied upon the  representations
and warranties of SYDOOG and GOFAMCLO contained in the Transaction Documents and
upon  statements and  certificates  of officers of SYDOOG and GOFAMCLO,  without
independent  verification or investigation.  For purposes of the opinions on the
good standing of SYDOOG and GOFAMCLO, we have relied solely upon a good standing
certificate  of recent date from the  Secretary of State of Delaware,  a copy of
which has been delivered to you.

         We have  assumed,  regarding  documents  executed by parties other than
SYDOOG and GOFAMCLO,  that such documents are the valid and binding  obligations
of, and  enforceable  against,  such other  parties.  We have also  assumed  the
authenticity of all documents  submitted to us as originals,  the genuineness of
all signatures  (other than  signatures on behalf of SYDOOG and  GOFAMCLO),  the
conformity to authentic original  documents of all documents  submitted to us as
certified,  conformed,  photostatic  or unexecuted  draft copies,  and the legal
capacity of all natural persons.

         Based on the foregoing, and subject to the assumptions, limitations and
qualifications set forth herein, we are of the opinion that:

         1.       Each  of  SYDOOG  and  GOFAMCLO:  (i)  is a  corporation  duly
                  organized,  validly  existing and in good  standing  under the
                  laws  of  the  State  of  Delaware,  (ii)  has  the  requisite
                  corporate power and corporate  authority under Delaware law to
                  own, lease, license and use its properties and to carry on its
                  business as presently  conducted  and (iii) has the  requisite
                  corporate  power and  corporate  authority  to enter  into and
                  perform its obligations under the Credit Agreement.

         2.       The  execution and delivery by SYDOOG and GOFAMCLO of, and the
                  performance  by  SYDOOG  and  GOFAMCLO  of  their   respective
                  obligations   under,  the  Credit  Agreement  have  been  duly
                  authorized  by all necessary  corporate  action on the part of
                  SYDOOG  and  GOFAMCLO.  The  Credit  Agreement  has been  duly
                  executed and delivered by each SYDOOG and GOFAMCLO.

         3.       The  execution  and  delivery  by SYDOOG and  GOFAMCLO  of the
                  Credit  Agreement  and the  performance  of  their  respective
                  obligations  thereunder do not contravene  the  Certificate of
                  Incorporation or bylaws of SYDOOG and GOFAMCLO, respectively.

         The opinions expressed herein are qualified and limited as follows:

         (a) We express no opinion  herein other than as to the law of the State
of Delaware. We do not purport to be experts in matters of laws of jurisdictions
other than the State of Delaware.

         (b) Our opinions  are rendered as of the date hereof,  and we assume no
obligation to advise you of changes in law or fact (or the effect thereof on the
opinions expressed herein) that hereafter may come to our attention.

         (c) The opinions expressed herein represent our best legal judgment and
are based upon the facts and  assumptions  set forth  herein  and upon  existing
Delaware law and currently  applicable  Delaware  rules,  regulations  and court
decisions,  which are subject to change either prospectively or retrospectively.
Our opinions are in no way binding on any  jurisdiction,  court,  government  or
agency.  Our opinions are limited to the matters expressly stated herein, and no
opinion is to be inferred or may be implied beyond the matters expressly stated.

         (d) We call your  attention  to  Article  Tenth of the  Certificate  of
Incorporation for both SYDOOG and GOFAMCLO, which provides as follows:

                  The corporation  shall have no power and may not be authorized
         by its  stockholders  or directors (i) to perform or omit to do any act
         that would prevent or inhibit the corporation from qualifying, or cause
         the  corporation to lose its status,  as a corporation  exempt from the
         Delaware Corporation Income Tax under Section 1902(b)(8) of Title 30 of
         the  Delaware  Code,  or  under  the  corresponding  provision  of  any
         subsequent  law, or (ii) to conduct any activities  outside of Delaware
         which could result in the  corporation  being subject to tax outside of
         Delaware.

We express no opinion herein with respect to clause (ii), since the scope of the
foregoing opinions is limited to matters of Delaware law.

         This  opinion  letter is rendered  solely for your benefit in rendering
your  opinion  to the  Lenders  and the  Administrative  Agent as counsel to the
Borrowers  and the  Guarantors  in connection  with the  transactions  described
herein and may be relied upon by the addressees  thereof  (including any Persons
who may subsequently become Lenders,  participants of any Lender, any successors
to the  Administrative  Agent or Issuing Bank and their  respective  counsel) in
connection with the above-referenced  transactions,  and may not be delivered or
quoted  to any  other  person  (other  than  to  any  regulatory  agency  having
jurisdiction  over any Lender or any  participant or any  prospective  Lender or
participant)  or relied upon for any other  purpose  without  our prior  written
consent.

 any Lender or any  participant or any  prospective  Lender or  participant)  or
relied upon for any other purpose without our prior written consent.


                                                     Very truly yours,

                                                    STEWART & ASSOCIATES,
                                         A Professional Law Association


                                         By: ______________________
                                             Gordon W. Stewart
                                             President


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$17,500,000            Knoxville, Tennessee                November 1, 1996


     FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in the
hereinafter  described  Credit  Agreement,   the  undersigned,   GOODY'S  FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of FIRST UNION NATIONAL BANK OF TENNESSEE  ("Payee";  Payee,  and any subsequent
holder[s] hereof, being hereinafter  referred to collectively as "Holder"),  the
principal sum of SEVENTEEN  MILLION FIVE HUNDRED THOUSAND AND 00/100THS  DOLLARS
($17,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced  here  against  pursuant to that certain  Amended and  Restated  Credit
Agreement  dated  November 1, 1996,  by and among Maker,  First  Tennessee  Bank
National Association,  a national banking association,  as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith  (together with any amendments  thereto and/or  modifications
thereof,  herein referred to as the "Credit  Agreement";  capitalized terms used
but not otherwise  defined  herein shall have the same meanings as in the Credit
Agreement),  together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event  shall the  interest  and loan  charges  payable  in  respect of the
indebtedness  evidenced  hereby  exceed the  maximum  amounts  from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.
         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note  amends  and  restates  that  certain  Amended  and  Restated
Promissory Note of Maker in favor of Payee dated May 20, 1996 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.



By:

                                            Title:


                                            Attest:

                                            Title:


1017890.02


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$12,500,000     Knoxville, Tennessee                       November 1, 1996


         FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in
the hereinafter  described Credit  Agreement,  the  undersigned,  GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of WACHOVIA BANK OF GEORGIA, N.A. ("Payee";  Payee, and any subsequent holder[s]
hereof, being hereinafter  referred to collectively as "Holder"),  the principal
sum  of  TWELVE   MILLION  FIVE   HUNDRED   THOUSAND   AND   00/100THS   DOLLARS
($12,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced  here  against  pursuant to that certain  Amended and  Restated  Credit
Agreement  dated  November 1, 1996,  by and among Maker,  First  Tennessee  Bank
National Association,  a national banking association,  as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith  (together with any amendments  thereto and/or  modifications
thereof,  herein referred to as the "Credit  Agreement";  capitalized terms used
but not otherwise  defined  herein shall have the same meanings as in the Credit
Agreement),  together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event  shall the  interest  and loan  charges  payable  in  respect of the
indebtedness  evidenced  hereby  exceed the  maximum  amounts  from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.
         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note  amends  and  restates  that  certain  Amended  and  Restated
Promissory Note in favor of Maker dated May 20, 1996 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.


                                            By:

                                            Title:


                                            Attest:

                                            Title:

1017891.02


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$20,000,000       Knoxville, Tennessee                        October 31, 1996


         FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in
the hereinafter  described Credit  Agreement,  the  undersigned,  GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of FIRST TENNESSEE BANK NATIONAL ASSOCIATION ("Payee"; Payee, and any subsequent
holder[s] hereof, being hereinafter  referred to collectively as "Holder"),  the
principal sum of TWENTY MILLION AND 00/100THS  DOLLARS  ($20,000,000.00)  or, if
less, the aggregate  unpaid  principal amount of all Loans advanced here against
pursuant to that certain Amended and Restated Credit Agreement dated October 31,
1996, by and among Maker, First Tennessee Bank National Association,  a national
banking association,  as Administrative Agent, and the Lenders party thereto, as
amended by that certain Amendment Agreement of even date herewith (together with
any amendments thereto and/or modifications  thereof,  herein referred to as the
"Credit  Agreement";  capitalized  terms used but not otherwise  defined  herein
shall have the same meanings as in the Credit Agreement), together with interest
on the unpaid  principal  balance of the Loans  evidenced  hereby at the rate(s)
specified in the Credit Agreement;  provided that in no event shall the interest
and loan charges payable in respect of the indebtedness  evidenced hereby exceed
the maximum amounts from time to time allowed to be collected  under  applicable
law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.

         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

     This Note amends and  restates  that  certain  Promissory  Note of Maker in
favor of Payee dated May 25, 1995 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.


                                            By:

                                            Title:


                                            Attest:

                                            Title:

1021806.01


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$15,000,000        Knoxville, Tennessee                       October 31, 1996


         FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in
the hereinafter  described Credit  Agreement,  the  undersigned,  GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of FIRST AMERICAN  NATIONAL BANK ("Payee";  Payee, and any subsequent  holder[s]
hereof, being hereinafter  referred to collectively as "Holder"),  the principal
sum of FIFTEEN MILLION AND 00/100THS DOLLARS  ($15,000,000.00)  or, if less, the
aggregate unpaid principal amount of all Loans advanced here against pursuant to
that certain  Amended and Restated  Credit  Agreement dated October 31, 1996, by
and among Maker, First Tennessee Bank National  Association,  a national banking
association,  as Administrative Agent, and the Lenders party thereto, as amended
by that certain  Amendment  Agreement of even date herewith  (together  with any
amendments  thereto  and/or  modifications  thereof,  herein  referred to as the
"Credit  Agreement";  capitalized  terms used but not otherwise  defined  herein
shall have the same meanings as in the Credit Agreement), together with interest
on the unpaid  principal  balance of the Loans  evidenced  hereby at the rate(s)
specified in the Credit Agreement;  provided that in no event shall the interest
and loan charges payable in respect of the indebtedness  evidenced hereby exceed
the maximum amounts from time to time allowed to be collected  under  applicable
law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.

         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

     This Note amends and  restates  that  certain  Promissory  Note of Maker in
favor of Payee dated May 25, 1995 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.


                                            By:

                                            Title:


                                            Attest:

                                            Title:

1021807.01


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$17,500,000       Knoxville, Tennessee                      October 31, 1996


         FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in
the hereinafter  described Credit  Agreement,  the  undersigned,  GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of AMSOUTH BANK OF ALABAMA ("Payee"; Payee, and any subsequent holder[s] hereof,
being  hereinafter  referred to collectively as "Holder"),  the principal sum of
SEVENTEEN MILLION FIVE HUNDRED THOUSAND AND 00/100THS  DOLLARS  ($17,500,000.00)
or, if less, the aggregate  unpaid  principal  amount of all Loans advanced here
against  pursuant to that certain  Amended and Restated  Credit  Agreement dated
October 31, 1996, by and among Maker, First Tennessee Bank National Association,
a national banking association,  as Administrative  Agent, and the Lenders party
thereto,  as amended by that certain  Amendment  Agreement of even date herewith
(together  with any  amendments  thereto and/or  modifications  thereof,  herein
referred to as the "Credit Agreement";  capitalized terms used but not otherwise
defined  herein  shall  have  the same  meanings  as in the  Credit  Agreement),
together with interest on the unpaid  principal  balance of the Loans  evidenced
hereby at the rate(s)  specified in the Credit  Agreement;  provided  that in no
event shall the interest and loan charges payable in respect of the indebtedness
evidenced  hereby  exceed the maximum  amounts  from time to time  allowed to be
collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.

         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

     This Note amends and  restates  that  certain  Promissory  Note of Maker in
favor of Payee dated May 25, 1995 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.


                                            By:

                                            Title:




Attest:

                                            Title:

1017888.02


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE


$17,500,000                          Knoxville, Tennessee     November 1, 1996


         FOR VALUE RECEIVED,  on or before the  Termination  Date, as defined in
the hereinafter  described Credit  Agreement,  the  undersigned,  GOODY'S FAMILY
CLOTHING, INC., a Tennessee corporation ("Maker"),  promises to pay to the order
of  SOUTHTRUST  BANK OF  ALABAMA,  N.A.  ("Payee";  Payee,  and  any  subsequent
holder[s] hereof, being hereinafter  referred to collectively as "Holder"),  the
principal sum of SEVENTEEN  MILLION FIVE HUNDRED THOUSAND AND 00/100THS  DOLLARS
($17,500,000.00) or, if less, the aggregate unpaid principal amount of all Loans
advanced  here  against  pursuant to that certain  Amended and  Restated  Credit
Agreement  dated  November 1, 1996,  by and among Maker,  First  Tennessee  Bank
National Association,  a national banking association,  as Administrative Agent,
and the Lenders party thereto, as amended by that certain Amendment Agreement of
even date herewith  (together with any amendments  thereto and/or  modifications
thereof,  herein referred to as the "Credit  Agreement";  capitalized terms used
but not otherwise  defined  herein shall have the same meanings as in the Credit
Agreement),  together with interest on the unpaid principal balance of the Loans
evidenced hereby at the rate(s) specified in the Credit Agreement; provided that
in no event  shall the  interest  and loan  charges  payable  in  respect of the
indebtedness  evidenced  hereby  exceed the  maximum  amounts  from time to time
allowed to be collected under applicable law.

         Principal and interest payable in respect of the indebtedness evidenced
by this Note shall be due and  payable at the times and in the manner  specified
in the Credit Agreement.

         Holder  hereby  is  authorized  to  record  and  endorse  the  date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and  interest  made to such Holder with  respect to such Loans,  on a
schedule annexed to and constituting a part of this Note, which  recordation and
endorsement  shall  constitute prima facie evidence of the respective Loans made
by Holder to Maker and payments made by Maker to Holder,  absent manifest error;
provided,  however,  that (a) Holder's  failure to make any such  recordation or
endorsement  shall not in any way limit or otherwise  affect the  obligations of
Maker or the  rights  and  remedies  of Holder  under  this  Note or the  Credit
Agreement  and (b)  payments to Holder of the  principal  of and interest on the
Loans  evidenced  hereby  shall not be  affected by the failure to make any such
recordation  or  endorsement   thereof.   In  lieu  of  making   recordation  or
endorsement,  Holder hereby is authorized, at its option, to record the date and
principal  amount of each Loan made by it,  and the  amount of each  payment  of
principal  and interest  made to such Holder with respect to such Loans,  on its
books and records in  accordance  with its usual and customary  practice,  which
recordation shall constitute prima facie evidence of the Loans made by Holder to
Maker and payments in respect  thereof made by Maker to Holder,  absent manifest
error.
         Upon the  occurrence  of an Event of  Default,  the entire  outstanding
principal  balance  of the  indebtedness  evidenced  hereby,  together  with all
accrued and unpaid interest  thereon,  may be declared,  and  immediately  shall
become,  due and  payable in full,  all as  provided  in the  Credit  Agreement,
subject to applicable notice and cure provisions in the said Credit Agreement.

         Presentment for payment,  demand, protest and notice of demand, protest
and nonpayment are hereby waived by Maker and all other parties  hereto,  except
as provided in the Credit Agreement.

         This Note is one of the "Notes" in the  aggregate  principal  amount of
$100,000,000 issued by Maker pursuant to the Credit Agreement,  and this Note is
entitled to the benefits of the Credit Agreement and the other Loan Documents.

         It is the intention of Maker and Holder to conform strictly to all laws
applicable to the Holder that govern or limit the interest and loan charges that
may be charged in respect of the indebtedness evidenced hereby. Anything in this
Note,  the Credit  Agreement or any of the other Loan  Documents to the contrary
notwithstanding,  in no event  whatsoever,  whether by reason of  advancement of
proceeds of the Loans or the Letters of Credit,  acceleration of the maturity of
the unpaid balance of any of the  Obligations  or otherwise,  shall the interest
and loan  charges  agreed  to be paid to any of the  Lenders  for the use of the
money advanced or to be advanced under the Credit  Agreement  exceed the maximum
amounts  collectible   pursuant  to  applicable  law.  Pursuant  to  the  Credit
Agreement, Maker and the Lenders have agreed that:

                  (a) if for any reason  whatsoever the interest or loan charges
         paid or contracted to be paid by Maker to any of the Lenders in respect
         of the Loans shall exceed the maximum amount  collectible under the law
         applicable  to such Lender,  then, in that event,  and  notwithstanding
         anything  to the  contrary  in the Credit  Agreement,  the Notes or any
         other  Loan  Document  (i)  the  aggregate  of all  consideration  that
         constitutes  interest or loan charges under the law  applicable to such
         Lender that is contracted  for,  taken,  reserved,  charged or received
         under the Credit  Agreement,  the Notes or any other Loan  Document  or
         otherwise in connection  with the  Obligations  under no  circumstances
         shall exceed the maximum  amounts  allowed by such  applicable law, and
         any excess  paid to any Lender  shall be credited by such Lender on the
         principal  amount of the  Obligations  (or, to the extent the principal
         amount outstanding under the Credit Agreement,  the Notes and the other
         Loan  Documents has been or thereby would be paid in full,  refunded to
         Maker),  and (ii) in the event that the  maturity  of any or all of the
         Obligations  is  accelerated  by reason of an  election  of the Lenders
         resulting from any Default under the Credit Agreement or otherwise,  or
         in the  event  of any  required  or  permitted  prepayment,  then  such
         consideration  that constitutes  interest or loan charges under the law
         applicable  to any  Lender  may never  include  more  than the  maximum
         amounts  allowed by the law  applicable to such Lender,  and any excess
         interest  or loan  charges  provided  for in the  Credit  Agreement  or
         otherwise  shall  be  canceled  automatically  as of the  date  of such
         acceleration or prepayment and, if theretofore  paid, shall be credited
         by such Lender on the principal  amount of the Obligations  (or, to the
         extent  the  principal  amount of the  Obligations  has been or thereby
         would be paid in full, refunded by such Lender to Maker);

                  (b) all sums paid or agreed to be paid to the  Lenders for the
         use,  forbearance  or detention of sums due under the Credit  Agreement
         shall,  to  the  extent  permitted  by  applicable  law,  be  prorated,
         allocated and spread  throughout the full term of the Obligations until
         payment in full so that the rate or amount of interest and loan charges
         on account of the  Obligations  will not  exceed any  applicable  legal
         limitation; and

                  (c) the right to  accelerate  the maturity of the  Obligations
         does not include the right to  accelerate  the maturity of any interest
         or loan charges not otherwise accrued on the date of such acceleration,
         and the  Lenders  do not  intend  to  charge or  collect  any  unearned
         interest or loan charges in the event of any such acceleration.

         This Note has been  negotiated,  executed and delivered in the State of
Tennessee,  and is  intended  as a  contract  under and shall be  construed  and
enforceable in accordance with the laws of said state,  without reference to the
conflicts or choice of law principles thereof, except to the extent that Federal
law may be applicable to determining  the maximum amount of interest that may be
charged by Holder in respect of the indebtedness evidenced hereby.

         This Note  amends  and  restates  that  certain  Amended  and  Restated
Promissory Note of Maker in favor of Payee dated May 20, 1996 in its entirety.

         IN WITNESS  WHEREOF,  the undersigned  Maker has caused this Note to be
executed by its duly authorized officers as of the date first above written.


                                            MAKER:

                          GOODY'S FAMILY CLOTHING, INC.



By:

                                            Title:



Attest:
                                            Title:

1017889.02



--------
1      Letter of Credit Request Number.

2      Date of Letter of Credit Request (at least one Business Day prior to the
       Date of Issuance).

3      Name of Issuing Bank.

4      Name of Beneficiary.

5      Date of Issuance.

6      Aggregate initial stated amount of Letter of Credit.

7      Insert last date upon which drafts may be presented.

8      Existing letter of credit number.

9