Exhibit 10.45


                               AMENDMENT AGREEMENT


         THIS AMENDMENT  AGREEMENT  ("Agreement") is entered into as of the 16th
day of May,  1997 by and between  GOODY'S  FAMILY  CLOTHING,  INC.,  a Tennessee
corporation,  GOODY'S MS, L.P.,  a Tennessee  limited  partnership,  GOODY'S IN,
L.P., a Tennessee limited partnership (collectively, the "Borrowers"), TREBOR of
TN,  INC.,  a  Tennessee  corporation,  SYDOOG,  INC.,  a Delaware  corporation,
GOFAMCLO, INC., a Delaware corporation (collectively,  the "Guarantors"),  those
several  lenders  who  are  or  become  parties  to  the  Credit  Agreement  (as
hereinafter  defined)   (collectively,   the  "Lenders"  and,  individually,   a
"Lender"),  and FIRST TENNESSEE BANK NATIONAL  ASSOCIATION,  a national  banking
association with offices in Knoxville,  Tennessee,  as administrative  agent for
the Lenders (in such capacity, the "Administrative Agent").

                              W I T N E S S E T H:

         WHEREAS,  pursuant to that certain Credit  Agreement dated May 25, 1995
between Goody's Family Clothing, Inc., the Administrative Agent and the Lenders,
as amended and restated by that certain  Amended and Restated  Credit  Agreement
dated as of October 31, 1996 between  Borrowers,  Lenders and the Administrative
Agent  (collectively,  the "Credit  Agreement"),  Lenders have committed to make
loans to  Borrowers  in the  principal  amount  of  $100,000,000  (the  "Loans")
pursuant to the terms and provisions thereof;

         WHEREAS,  pursuant to the Credit Agreement,  each Borrower  delivered a
promissory  note  dated  October  31,  1996 to each  Lender  (collectively,  the
"Notes")  in the amount of such  Lender's  Commitment  (as defined in the Credit
Agreement);

         WHEREAS,  the parties wish to increase  the amount of the  Commitments,
revise and modify  certain  obligations  of the parties  specified in the Credit
Agreement,  and extend the Termination Date of the Credit Agreement from May 31,
1998 until May 31, 1999; and

         WHEREAS,  all terms capitalized  herein and not otherwise defined shall
have the meanings ascribed to them in the Credit Agreement;

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:

     1.  Termination  Date.  The  definition of  Termination  Date in the Credit
Agreement is hereby amended in its entirety to state as follows:
                           "Termination Date"  shall mean May 31, 1999.

                  All  indebtedness  of the Borrowers  incurred under the Credit
Agreement shall be due and payable as of the Termination Date set forth above.

     2.  Commitments.  Section 2.1.1 is hereby amended to increase the aggregate
amount of the Commitments from $100,000,000 to $120,000,000.  The Commitment and
Percentage  of each  Lender as set forth on the  signature  pages to the  Credit
Agreement are hereby amended to be as follows:
           Lender                             Commitment           Percentage

   First Tennessee Bank                        $24,000,000             20.00%
   National Association

   First American                              $18,000,000             15.00%
   National Bank

   AmSouth Bank of                             $21,000,000             17.50%
   Alabama

   Southtrust Bank of                          $21,000,000             17.50%
   Alabama, N.A.

   First Union National                        $21,000,000             17.50%
   Bank of Tennessee

   Wachovia Bank of                            $15,000,000             12.50%
   Georgia, N.A.

     3. Commitment Fee; Interest and Fee Margins.  The following  amendments are
made to the  provisions  of  Sections  2.11.1,  2.13.1  and 2.13.2 of the Credit
Agreement:

a. Commitment Fees. Section 2.11.1 is hereby amended to change the per annum fee
for each  Lender's  agreement  to  participate  in the  Facilities  from  twenty
one-hundredths  of one percent (0.20%) to fifteen  one-hundredths of one percent
(0.15%).

b.  Applicable  LIBOR  Margin.  Section  2.13.1 is hereby  amended to change the
Applicable  LIBOR Margin from one percent (1.0%) to seventy-five  one-hundredths
of one percent (.75%).

c. Applicable Commercial Letter of Credit Fee Percentage.
Section 2.13.2 is hereby amended to change the Applicable  Commercial  Letter of
Credit Fee  Percentage  from  ninety  one-hundredths  of one  percent  (.90%) to
seventy one-hundredths of one percent (.70%).

     4. Financial Covenants.  Sections 10.1.1,  10.1.2, 10.1.3 and 10.1.4 of the
Credit Agreement are hereby amended to state as follows:

10.1.1 Current Ratio. 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
1.15 to 1.00.

10.1.2.  Debt to Worth Ratio.  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 1.25 to 1.00.

10.1.3.  Shareholders Equity.  Permit on a consolidated basis in accordance with
GAAP the Shareholders Equity of Borrowers and Guarantors in the aggregate (a) to
be  less  than  $123,500,000  as of  February  1,  1997,  (b)  to be  less  than
$136,000,000  as of January 31, 1998, or (c) to be less than  $150,000,000 as of
January 30, 1999.

10.1.4. Capital Expenditures.  Permit Capital Expenditures made by Borrowers and
Guarantors in the aggregate to exceed (a)  $35,500,000  in the aggregate  during
the Fiscal Year ending  February 3, 1996 and the Fiscal Year ending  February 1,
1997,  (b)  $27,500,000  for the Fiscal Year ending  January 31,  1998,  and (c)
$32,500,000 for the Fiscal Year ending January 30, 1999.

     5.  Investments.  Section 9.4 of the Credit  Agreement is hereby amended to
add the following as Subsection (f):

                  (f) Any action whereby GFC (a) purchases,  redeems, retires or
                  otherwise  acquires for value any of its capital  stock or any
                  warrants,  options or other  rights in respect of its  capital
                  stock now or hereafter outstanding,  or (b) segregates or sets
                  apart assets for a sinking or analogous fund for the purchase,
                  redemption,  retirement or other  acquisition of any shares of
                  its capital stock or any warrants,  options or other rights in
                  respect of its capital stock now or hereafter outstanding.

     6. Dividends.  Section 9.6 of the Credit Agreement is hereby amended in its
entirety to provide as follows:

                  9.6 Restricted  Payments.  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   Borrowers  or  Guarantors   now  or  hereafter
                  outstanding  unless such dividend,  distribution or payment is
                  made to GFC provided,  however,  that so long as no Default or
                  Event of Default exists or would result therefrom, GFC may pay
                  dividends or make other  distributions  to its shareholders in
                  any Fiscal Year not in excess of twenty  percent  (20%) of the
                  Net Income of GFC for the prior  Fiscal Year as  reflected  on
                  GFC's audited financial statements for the prior Fiscal Year.

     7. Change in Control.  Section  11.1.15 of the Credit  Agreement  is hereby
amended in its entirety to provide as follows:

                  11.1.15  Change  in  Control.  An event or series of events by
                  which  (a)  Robert  M.  Goodfriend  fails to hold  either  the
                  position of Chairman of the Board of  Directors  of GFC or the
                  position of Chief Executive  Officer of GFC, (b) the Borrowers
                  (other than GFC) and Guarantors cease to be direct or indirect
                  wholly-owned  subsidiaries  of GFC, or (c) any of Borrowers or
                  Guarantors  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 of  Borrowers  or  Guarantors  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  consolidations
                  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.

         8. New Notes. The Borrowers shall deliver to each Lender an Amended and
Restated  Promissory  Note  substantially  in the form  attached  to the  Credit
Agreement  as Exhibit 2.8 (the "New Notes")  reflecting  the amount of each such
Lender's  Commitment as set forth above.  Upon the execution and delivery of the
New Notes to the above listed Lenders, those Lenders shall return their original
Notes to the Borrowers marked "canceled".

     9.  Continuing  Effect of  Documents.  Except as  expressly  modified by or
provided for in this Agreement, the terms and provisions of the Credit Agreement
and all other  documents  relating to the Loans  shall  remain in full force and
effect as originally executed.

     10.  Representations and Warranties.  The representations and warranties of
the Borrowers and Guarantors in the Credit Agreement are true and correct on and
as of the date hereof as though made on this date.

     11. No Default.  As of the date hereof,  each  Borrower and Guarantor is in
full  compliance  with all of the terms and  provisions  set forth in the Credit
Agreement as amended  hereby,  including  without  limitation  the covenants and
agreements set forth in Articles 8, 9 and 10 of the Credit Agreement, and all of
the instruments and documents executed in connection therewith,  and no Event of
Default, as defined in Article 11 of the Credit Agreement,  nor any event which,
upon notice,  lapse of time or both, would  constitute an Event of Default,  has
occurred or is continuing.

     12.  Completeness and Modification.  This Agreement  constitutes the entire
agreement between the parties hereto as to the transactions  contemplated hereby
and supersedes all prior  discussions,  understandings or agreements between the
parties hereto.

     13. No  Novation.  Except  as set forth  herein,  this  Agreement  does not
constitute a discharge or novation of any promissory note existing prior to this
Agreement or any other documents executed in connection with the Loans, and such
documents  shall  continue  in full force and effect and shall be fully  binding
upon all parties hereto.

     14.  Successors  and Assigns.  This  Agreement  shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.

     15.   Counterparts.   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.

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

                                           BORROWERS:

                                           GOODY'S FAMILY CLOTHING, INC.

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



<PAGE>


                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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


                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GUARANTORS:

                      SYDOOG, INC., a Delaware corporation


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


                     GOFAMCLO, INC., a Delaware corporation


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


                      TREBOR OF TN, INC., a Tennessee corporation


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

                        [LENDERS' SIGNATURE PAGES FOLLOW]


<PAGE>



          [Lender's Signature Page to Amendment Agreement dated May 16, 1997]



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


                                           By:    /s/ James H. 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. 423-971-2883


<PAGE>



           [Lender's Signature Page to Amendment Agreement dated May 16, 1997]



                    FIRST AMERICAN NATIONAL BANK, as a Lender


                                           By:    /s/ Eric V. Schwarzentraub
                                           Title:    SVP


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




<PAGE>



          [Lender's Signature Page to Amendment Agreement dated May 16, 1997]



                      AMSOUTH BANK OF ALABAMA, as a Lender


                                           By:    /s/ Donald M. Sinclair
                                           Title:    Vice President


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



<PAGE>



          [Lender's Signature Page to Amendment Agreement dated May 16, 1997]


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



                                         By:    /s/ James T. Chester, III
                                         Title:    AVP


                         Address: 420 North 20th Street
                            Birmingham, Alabama 35203
                           Attn: James T. Chester, III
                            Telecopy No. 205-254-8270



<PAGE>



         [Lender's Signature Page to Amendment Agreement dated May 16, 1997]



                     FIRST UNION NATIONAL BANK OF TENNESSEE,
                                           as a Lender


                                           By:    /s/ Timothy B. Fouts
                                           Title:    SVP


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




<PAGE>



            [Lender's Signature Page to Amendment Agreement dated May 16, 1997]


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


                                           By:    /s/ John Tibe
                                           Title:    AVP


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

1025716


<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE

$24,000,000       Knoxville, Tennessee      May 16, 1997

         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,  GOODY'S MS, L.P., a Tennessee limited
partnership,   and  GOODY'S  IN,   L.P.,   a   Tennessee   limited   partnership
(collectively,  the  "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-FOUR  MILLION AND 00/100THS  DOLLARS  ($24,000,000.00)  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
$120,000,000 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 Goody's  Family  Clothing,  Inc. and those certain  Promissory  Notes of
Goody's MS, L.P.  and Goody's IN, L.P. in favor of Payee each dated  October 31,
1996 in their entirety.


<PAGE>



         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:    /s/ Harry M. Call
                                           Title:    President

                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner

                                           By:    /s/ Harry M. Call
                                           Title:    President
1026145.01



<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE

$18,000,000       Knoxville, Tennessee      May 16, 1997

         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,  GOODY'S MS, L.P., a Tennessee limited
partnership,   and  GOODY'S  IN,   L.P.,   a   Tennessee   limited   partnership
(collectively,  the  "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 EIGHTEEN
MILLION AND 00/100THS DOLLARS ($18,000,000.00) 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
$120,000,000 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 Goody's  Family  Clothing,  Inc. and those certain  Promissory  Notes of
Goody's MS, L.P.  and Goody's IN, L.P. in favor of Payee each dated  October 31,
1996 in their entirety.

<PAGE>



         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:    /s/ Harry M. Call
                                           Title:    President

                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner

                                           By:    /s/ Harry M. Call
                                           Title:    President
1026146.01




<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE

$21,000,000       Knoxville, Tennessee      May 16, 1997

         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,  GOODY'S MS, L.P., a Tennessee limited
partnership,   and  GOODY'S  IN,   L.P.,   a   Tennessee   limited   partnership
(collectively,  the  "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 TWENTY-ONE  MILLION
AND  00/100THS  DOLLARS  ($21,000,000.00)  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
$120,000,000 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 Goody's  Family  Clothing,  Inc. and those certain  Promissory  Notes of
Goody's MS, L.P.  and Goody's IN, L.P. in favor of Payee each dated  October 31,
1996 in their entirety.

<PAGE>


         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:    /s/ Harry M. Call
                                           Title:    President

                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner

                                           By:    /s/ Harry M. Call
                                           Title:    President
1026516.01



<PAGE>






                      AMENDED AND RESTATED PROMISSORY NOTE

$21,000,000       Knoxville, Tennessee      May 16, 1997

         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,  GOODY'S MS, L.P., a Tennessee limited
partnership,   and  GOODY'S  IN,   L.P.,   a   Tennessee   limited   partnership
(collectively,  the "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
TWENTY-ONE  MILLION AND  00/100THS  DOLLARS  ($21,000,000.00)  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
$120,000,000 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 Goody's  Family  Clothing,  Inc. and those certain  Promissory  Notes of
Goody's MS, L.P.  and Goody's IN, L.P. in favor of Payee each dated  October 31,
1996 in their entirety.

<PAGE>



         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:    /s/ Harry M. Call
                                           Title:    President

                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner

                                           By:    /s/ Harry M. Call
                                           Title:    President
1026143.01



<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE

$21,000,000       Knoxville, Tennessee      May 16, 1997

         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,  GOODY'S MS, L.P., a Tennessee limited
partnership,   and  GOODY'S  IN,   L.P.,   a   Tennessee   limited   partnership
(collectively,  the  "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
TWENTY-ONE  MILLION AND  00/100THS  DOLLARS  ($21,000,000.00)  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
$120,000,000 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 Goody's  Family  Clothing,  Inc. and those certain  Promissory  Notes of
Goody's MS, L.P.  and Goody's IN, L.P. in favor of Payee each dated  October 31,
1996 in their entirety.

<PAGE>



         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:    /s/ Harry M. Call
                                           Title:    President

                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner

                                           By:    /s/ Harry M. Call
                                           Title:    President
1026144.01





<PAGE>





                      AMENDED AND RESTATED PROMISSORY NOTE

$15,000,000       Knoxville, Tennessee      May 16, 1997

         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,  GOODY'S MS, L.P., a Tennessee limited
partnership,   and  GOODY'S  IN,   L.P.,   a   Tennessee   limited   partnership
(collectively,  the  "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 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
$120,000,000 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 Goody's  Family  Clothing,  Inc. and those certain  Promissory  Notes of
Goody's MS, L.P.  and Goody's IN, L.P. in favor of Payee each dated  October 31,
1996 in their entirety.
<PAGE>



         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:    /s/ Harry M. Call
                                           Title:    President

                                           GOODY'S MS, L.P.

                     By: TREBOR of TN, Inc., General Partner


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

                                           GOODY'S IN, L.P.

                     By: TREBOR of TN, Inc., General Partner

                                           By:    /s/ Harry M. Call
                                           Title:    President
1026147.01




<PAGE>