NO  RECORDING,  STAMP,  DOCUMENTARY  STAMP OR MORTGAGE  TAXES OR FEES ARE DUE OR
OTHERWISE  TO BE PAID  PURSUANT TO THAT ORDER DATED  FEBRUARY 11, 1999 ISSUED BY
THE UNITED STATES  BANKRUPTCY  COURT FOR THE MIDDLE  DISTRICT OF FLORIDA,  TAMPA
DIVISION,  IN IN RE: JUMBOSPORTS INC., JOINTLY ADMINISTERED  BANKRUPTCY CASE NO.
98-22545-8C1,  INCORPORATING AND MAKING APPLICABLE,  AMONG OTHER THINGS, SECTION
1146(c) OF THE UNITED STATES BANKRUPTCY CODE.



                                  $110,000,000

                         SENIOR SECURED, SUPER-PRIORITY
                              DEBTOR-IN-POSSESSION
                           LOAN AND SECURITY AGREEMENT


                                      among


                                JUMBOSPORTS INC.
                                  as Borrower,


                    THE FINANCIAL INSTITUTIONS NAMED HEREIN,
                                   as Lenders,



                          FOOTHILL CAPITAL CORPORATION,
                                    as Agent


                                       and


                   CONGRESS FINANCIAL CORPORATION (SOUTHERN),
                                   as Co-Agent

                             as of February 12, 1999





<PAGE>
                                TABLE OF CONTENTS

                                                                         Page(s)

1.    DEFINITIONS AND CONSTRUCTION.............................................2
         1.1      Definitions..................................................2
         1.2      Accounting Terms............................................26
         1.3      Code........................................................26
         1.4      Construction...... .........................................26
         1.5      Schedules and Exhibits......................................26

2.    LOAN AND TERMS OF PAYMENT...............................................26
         2.1      Revolving Advances..........................................26
         2.2      Letters of Credit...........................................34
         2.3      Tranche A Term Loans........................................37
         2.4      Tranche B Term Loans........................................38
         2.5      Payments....................................................39
         2.6      Overadvances................................................42
         2.7      Interest and Letter of Credit Fees:
                    Rates, Payments, and Calculations.........................42
         2.8      Collection of Accounts......................................44
         2.9      Crediting Payments; Application of Collections..............44
         2.10     Designated Account..........................................45
         2.11     Maintenance of Loan Account; Statements of Obligations......45
         2.12     Fees........................................................45
         2.13     Eurodollar Rate Loans.......................................47
         2.14     Illegality..................................................48
         2.15     Requirements of Law.........................................49
         2.16     Indemnity...................................................50

3.    CONDITIONS; TERM OF AGREEMENT...........................................52
         3.1      Conditions Precedent to the Initial Advance,
                    Letter of Credit, and the Term Loans......................52
         3.3      Conditions Subsequent.......................................55
         3.4      Term........................................................56
         3.5      Effect of Termination.......................................56
         3.6      Early Termination by Borrower...............................56

4.    CREATION OF SECURITY INTEREST...........................................57
         4.1      Grant of Security Interest..................................57
         4.2      Negotiable Collateral.......................................57
         4.3      Collection of Accounts, General Intangibles,
                    and Negotiable Collateral.................................58
         4.4      Delivery of Additional Documentation Required...............58
         4.5      Power of Attorney...........................................58
         4.6      Right to Inspect............................................59
<PAGE>
5.    REPRESENTATIONS AND WARRANTIES..........................................59
         5.1      No Encumbrances.............................................59
         5.2      Eligible Accounts...........................................60
         5.3      Eligible Inventory..........................................60
         5.4      Equipment...................................................60
         5.5      Location of Inventory and Equipment.........................60
         5.6      Inventory Records...........................................60
         5.7      Location of Chief Executive Office; FEIN....................60
         5.8      Due Organization and Qualification; Subsidiaries............60
         5.9      Due Authorization; No Conflict..............................61
         5.10     Litigation..................................................62
         5.11     No Material Adverse Change. ................................62
         5.12     Solvency....................................................62
         5.13     Employee Benefits...........................................63
         5.14     Environmental Condition.....................................63
         5.15     Intellectual Property.......................................63
         5.16     Year 2000 Compliance........................................63

6.    AFFIRMATIVE COVENANTS...................................................64
         6.1      Accounting System...........................................64
         6.2      Collateral and Financial Reporting..........................64
         6.3      [Intentionally Omitted.]....................................70
         6.4      Tax Returns.................................................70
         6.5      Guarantor Reports...........................................70
         6.6      Returns.....................................................70
         6.7      Title to Equipment..........................................70
         6.8      Maintenance of Equipment....................................70
         6.9      Taxes.......................................................71
         6.10     Insurance...................................................71
         6.11     No Setoffs or Counterclaims.................................73
         6.12     Location of Inventory and Equipment.........................73
         6.13     Compliance with Laws........................................73
         6.14     Employee Benefits...........................................73
         6.15     Leases......................................................74

7.    NEGATIVE COVENANTS......................................................75
         7.1      Indebtedness................................................75
         7.2      Liens.......................................................75
         7.3      Restrictions on Fundamental Changes.........................76
<PAGE>
         7.4      Disposal of Assets..........................................76
         7.5      Change Name.................................................76
         7.6      Guarantee...................................................76
         7.7      Nature of Business..........................................77
         7.8      Prepayments and Amendments..................................77
         7.9      Change of Control...........................................77
         7.10     Consignments................................................78
         7.11     Distributions...............................................78
         7.12     Accounting Methods..........................................78
         7.13     Investments.................................................78
         7.14     Transactions with Affiliates................................78
         7.15     Suspension..................................................79
         7.16     Compensation................................................79
         7.17     Use of Proceeds.............................................79
         7.18     Change in Location of Chief Executive Office; Inventory
                    and Equipment with Bailees................................79
         7.19     No Prohibited Transactions Under ERISA......................79
         7.20     Financial Covenants.........................................80
         7.21     Capital Expenditures........................................81
         7.22     Accounts....................................................81
         7.23     Retail Store Closings.......................................81

8.    EVENTS OF DEFAULT.......................................................82

9.    THE LENDER GROUP'S RIGHTS AND REMEDIES..................................85
         9.1      Rights and Remedies.........................................85
         9.2      Remedies Cumulative.........................................88

10.   TAXES AND EXPENSES......................................................88

11.   WAIVERS; INDEMNIFICATION................................................88
         11.1     Demand; Protest; etc........................................88
         11.2     The Lender Group=s Liability for Collateral.................89
         11.3     Indemnification.............................................89

12.   NOTICES.................................................................89

13.   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................92

14.   DESTRUCTION OF BORROWER'S DOCUMENTS.....................................93

15.   ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................93
         15.1     Assignments and Participations..............................93
         15.2     Successors..................................................96
<PAGE>
16.   AMENDMENTS; WAIVERS.....................................................96
         16.1     Amendments and Waivers......................................96
         16.2     No Waivers; Cumulative Remedies.............................97

17.   AGENT; THE LENDER GROUP.................................................97
         17.1     Appointment and Authorization of Agent......................97
         17.2     Delegation of Duties........................................98
         17.3     Liability of Agent-Related Persons..........................99
         17.4     Reliance by Agent...........................................99
         17.5     Notice of Default or Event of Default.......................99
         17.6     Credit Decision............................................100
         17.7     Costs and Expenses; Indemnification........................101
         17.8     Agent in Individual Capacity...............................101
         17.9     Successor Agent............................................102
         17.10    Withholding Tax............................................102
         17.11    Collateral Matters.........................................104
         17.12    Restrictions on Actions by Lenders;
                    Sharing of Payments......................................105
         17.13    Agency for Perfection......................................105
         17.14    Payments by Agent to the Lenders...........................105
         17.15    Concerning the Collateral and Related Loan Documents.......106
         17.16    Field Audits and Examination Reports; Confidentiality;
                    Disclaimers by Lenders; Other
                  Reports and Information....................................106
         17.17    Several Obligations; No Liability..........................107

18    GENERAL PROVISIONS.....................................................108
         18.1     Effectiveness..............................................108
         18.2     Section Headings...........................................108
         18.3     Interpretation.............................................108
         18.4     Severability of Provisions.................................108
         18.5     Counterparts; Telefacsimile Execution......................108
         18.6     Revival and Reinstatement of Obligations...................108
         18.7     Integration................................................109
         18.8     Time is of the Essence.....................................109



<PAGE>

                             SCHEDULES AND EXHIBITS


Schedule B-1               Business Plan [Confidential - Previously
                            provided to the Lenders and the
                           Committees]
Schedule C-1               Commitments
Schedule E-1               Eligible Inventory Locations
Schedule P-1               Permitted Liens
Schedule P-2               Real Estate Mortgagees
Schedule R-1               Primary Real Estate
Schedule R-2               Secondary Real Estate
Schedule S-1               Senior Claims
Schedule T-1               Real Estate Trusts
Schedule 2.8               Deposit and Investment Accounts
Schedule 5.8               Subsidiaries
Schedule 5.10              Litigation
Schedule 5.13              ERISA Benefit Plans
Schedule 5.15              Intellectual Property
Schedule 6.12              Location of Inventory and Equipment
Schedule 7.1               Indebtedness

Exhibit A-1                Form of Assignment and Acceptance
Exhibit C-1                Form of Compliance Certificate
Exhibit 6.2                Form of Borrowing Base Certificate


<PAGE>

NO  RECORDING,  STAMP,  DOCUMENTARY  STAMP OR MORTGAGE  TAXES OR FEES ARE DUE OR
OTHERWISE  TO BE PAID  PURSUANT TO THAT ORDER DATED  FEBRUARY 11, 1999 ISSUED BY
THE UNITED STATES  BANKRUPTCY  COURT FOR THE MIDDLE  DISTRICT OF FLORIDA,  TAMPA
DIVISION,  IN IN RE: JUMBOSPORTS INC., JOINTLY ADMINISTERED  BANKRUPTCY CASE NO.
98-22545-8C1,  INCORPORATING AND MAKING APPLICABLE,  AMONG OTHER THINGS, SECTION
1146(c) OF THE UNITED STATES BANKRUPTCY CODE.



               SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION
                           LOAN AND SECURITY AGREEMENT

     THIS SENIOR SECURED, SUPER-PRIORITY  DEBTOR-IN-POSSESSION LOAN AND SECURITY
AGREEMENT  (this  AAgreement"),  is entered into as of February 12, 1999,  among
JUMBOSPORTS INC., a Florida corporation  ("Borrower"),  with its chief executive
office located at 4701 W. Hillsborough Avenue,  Tampa, Florida 33614, on the one
hand, and the financial  institutions listed on the signature pages hereof (such
financial  institutions,  together with their respective successors and assigns,
are referred to hereinafter each  individually as a ALender" and collectively as
the  ALenders"),  and  FOOTHILL  CAPITAL  CORPORATION,  as Agent,  and  CONGRESS
FINANCIAL CORPORATION (SOUTHERN), as Co-Agent, on the other hand.

                                   WITNESSETH:

     WHEREAS,  on  December  27,  1998 (the  "Relief  Date"),  Borrower  filed a
petition for relief pursuant to Chapter 11 of the United States  Bankruptcy Code
in the United States Bankruptcy Court for the Middle District of Florida,  Tampa
Division (the  ACourt").  Borrower  continues to operate its business and manage
its properties as a  debtor-in-possession  pursuant to Sections 1107 and 1108 of
the United States Bankruptcy Code and order of the Court; and

     WHEREAS,  prior to the Relief  Date,  the  Lenders  provided  financing  to
Borrower  pursuant to that certain Loan and Security  Agreement dated as of July
24, 1998,  as modified and amended by that certain  First  Amendment to Loan and
Security  Agreement dated as of November 30, 1998 (as modified and amended,  the
APre-Relief Date Loan Agreement"); and

     WHEREAS,  the Lenders=  commitment to provide ongoing financing to Borrower
under the Pre-Relief Date Loan Agreement has been terminated; and

     WHEREAS,  Borrower has requested that the Lenders provide a senior secured,
super-priority  credit  facility up to  $110,000,000 to fund the ongoing working
capital  requirements  of  Borrower  and to  replace  the  Pre-Relief  Date Loan
Agreement.  The Lenders are willing to provide such  financing in the manner and
pursuant to the terms of this Agreement;


<PAGE>

                                   AGREEMENT:

     NOW,  THEREFORE,  in  consideration  of  the  agreements,   provisions  and
covenants  set forth  herein,  and other good and  valuable  consideration,  the
receipt and  sufficiency  of which is hereby  acknowledged,  the parties  hereby
agree as follows:

1. DEFINITIONS AND CONSTRUCTION.. DEFINITIONS AND CONSTRUCTION.

     1.1 As used in this Agreement, the following terms shall have the following
definitions:

     "Account Debtor" means any Person who is or who may become obligated under,
with respect to, or on account of, an Account.

     "Accounts"  means all currently  existing and hereafter  arising  accounts,
contract  rights,  and all other forms of obligations  owing to Borrower arising
out of the sale or lease of goods or the  rendition  of  services  by  Borrower,
irrespective of whether earned by performance, and any and all credit insurance,
guaranties,   or  security   therefor.   For  purposes  of  the   definition  of
ACollateral",  AAccounts"  means all currently  existing and  hereafter  arising
accounts,  contract rights, and all other forms of obligations owing to Borrower
and to its Primary Subsidiaries arising out of the sale or lease of goods or the
rendition of services by Borrower and its Primary Subsidiaries,  irrespective of
whether earned by performance, and any and all credit insurance,  guaranties, or
security therefor.

     "Adjusted  EBITDAR" means, for any period,  the net income (or net loss) of
Borrower, for such period as determined in accordance with GAAP, (a) plus to the
extent  reflected in the changes in the  statement of net income for such period
the sum of,  without  duplication,  the  following  for  Borrower  (i)  interest
expense,   (ii)  taxes,  (iii)  depreciation  and  amortization   expense,  (iv)
extraordinary losses and (v) expenses related to Borrower=s  restructuring,  and
(b) minus to the extent  reflected in the changes in the statement of net income
for such period extraordinary gains.

     "Adjusted  Eurodollar Rate" means, with respect to each Interest Period for
any Eurodollar Rate Loan, the rate per annum (rounded upwards, if necessary,  to
the next 1/16%) determined by dividing (a) the Eurodollar Rate for such Interest
Period by (b) a percentage  equal to (i) one hundred  percent  (100%) minus (ii)
the Reserve Percentage. The Adjusted Eurodollar Rate shall be adjusted on and as
of the effective day of any change in the Reserve Percentage.

     "Advances" has the meaning set forth in Section 2.1(a)).

<PAGE>

     "Affiliate"  means, as applied to any Person, any other Person who directly
or indirectly  controls,  is controlled by, is under common control with or is a
director or officer of such Person.  For purposes of this definition,  Acontrol"
means the possession,  directly or indirectly,  of the power to vote ten percent
(10%) or more of the securities having ordinary voting power for the election of
directors or the direct or indirect  power to direct the management and policies
of a Person.


     "Agent"  means  Foothill,  solely in its capacity as agent for the Lenders,
and shall include any successor agent.

     "Agent's Account" has the meaning set forth in Section 2.8.

     "Agent Advance" has the meaning set forth in Section 2.1(h).

     "Agent's Fee Letter" has the meaning set forth in Section 2.12(a))(iv).

     "Agent Loan" has the meaning set forth in Section 2.1(g).

     "Agent-Related Persons" means Agent, together with its Affiliates,  and the
officers, directors,  employees, counsel, agents, and attorneys-in-fact of Agent
and such Affiliates.

     "Agreement" has the meaning set forth in the preamble hereto.

     "Appraised Value" means with respect to Primary Real Estate,  the appraised
value of each parcel of Real  Property  constituting  Primary Real Estate as set
forth on Schedule R-1.

     "Assignee" has the meaning set forth in Section 15.1(a)).

     "Assignment  and  Acceptance" has the meaning set forth in Section 15.1 (a)
and shall be in the form of Exhibit A-1.

     "Assignment  of Note" means that  certain  Assignment  of Note and Security
Agreement  of even  date  herewith  between  Borrower  and  Agent,  in form  and
substance  satisfactory to the Lender Group,  pursuant to which Borrower assigns
to Agent the Nationwide Team Sales Note.

     "Assignment of Real Estate Trust Interests"  means that certain  Assignment
of Business Trust Interests of even date herewith between Borrower and Agent, in
form and substance  satisfactory to the Lender Group, pursuant to which Borrower
pledges its beneficial interests in the Real Estate Trusts.

<PAGE>

     "Authorized Person" means any officer or other employee of Borrower.


     "Availability" means, as of the date of determination,  the result (so long
as such result is a positive  number) of (a) the lesser of the (i) the Borrowing
Base, or (ii) the Maximum  Revolving  Amount,  less (b) the  Revolving  Facility
Usage.

     "Availability  Reserves"  means  such  reserves  as Agent from time to time
determines  in its  reasonable  discretion as being  appropriate  to reflect the
impediments  to the  Lender  Group's  ability to  realize  upon the  Collateral.
Without  limiting the  generality of the  foregoing,  Availability  Reserves may
include (but are not limited to) reserves based upon the following:

     (a)) post-Relief Date rent --

     (i)  based  upon  Borrower's  or any  Subsidiary  of  Borrower's  past  due
post-Relief Date rent; and

     (ii) based upon two months of rent payments in respect of Borrower's leased
locations in any Landlord  Lien State or One Turn State with respect to which an
acceptable  Collateral Access Agreement has not been obtained or with respect to
which the inclusion of such  findings and decretal  portions in the Final Order,
in Agent=s sole discretion, are not deemed equivalent to, and acceptable in lieu
of,  the  execution  and  delivery  of the  afore-referenced  Collateral  Access
Agreement;

     (b) in-store customer credits and gift certificates; and

     (c)  delinquent  post-Relief  Date  taxes  and other  governmental  charges
including  without  limitation ad valorem,  personal  property,  sales and other
taxes which may have priority over the security interests of the Lender Group in
the Collateral.

     "Average Unused Portion of the Maximum  Revolving  Amount" means, as of any
date of determination, (a) the Maximum Revolving Amount, less (b) the sum of (i)
the  average  Daily  Balance  of  Advances  that  were  outstanding  during  the
immediately  preceding month, plus (ii) the average Daily Balance of the undrawn
Letters of Credit that were outstanding during the immediately preceding month.

<PAGE>

     "Bankruptcy  Code" means the United States Bankruptcy Code (11 U.S.C. ' 101
et seq.), as amended, and any successor statute.


     "Benefit Plan" means a Adefined  benefit plan" (as defined in Section 3(35)
of ERISA) for which Borrower, any Subsidiary of Borrower, or any ERISA Affiliate
has been an "employer" (as defined in Section 3(5) of ERISA) within the past six
years.

     "Blocked  Account" shall mean any deposit account  established by Borrower,
including the  Concentration  Account,  at a Blocked  Account Bank pursuant to a
Blocked Account Agreement.

     "Blocked   Account   Agreements"   means  those  certain   Blocked  Account
Agreements,  in form and substance  reasonably  satisfactory  to Agent,  each of
which is among Borrower, Agent and a Blocked Account Bank, and each such Blocked
Account Agreement shall be referred to herein as a ABlocked Account Agreement".

     "Blocked  Account  Bank"  means any of  Norwest  Bank  Minnesota,  National
Association,  NationsBank,  N.A.,  Hibernia  National Bank and/or any other bank
mutually acceptable to Borrower and Foothill.

     "Borrower" has the meaning set forth in the preamble to this Agreement.

     "Borrower=s  Books" means all of  Borrower's  books and records  including:
ledgers; records indicating, summarizing, or evidencing Borrower's properties or
assets  (including the Collateral) or liabilities;  all information  relating to
Borrower=s  business  operations  or  financial  condition;   and  all  computer
programs,  disk or tape  files,  printouts,  runs,  or other  computer  prepared
information. For purposes of the definition of "Collateral",  "Borrower's Books"
means  all of  Borrower's  and  its  Primary  Subsidiaries'  books  and  records
including:  ledgers; records indicating,  summarizing,  or evidencing Borrower's
and its Primary Subsidiaries  properties or assets (including the Collateral) or
liabilities; all information relating to Borrower's and its Primary Subsidiaries
business operations or financial condition;  and all computer programs,  disk or
tape files, printouts, runs, or other computer prepared information.

     "Borrowing" means a borrowing hereunder  consisting of Advances made on the
same day by the  Tranche A Lenders,  or by Agent in the case of an Agent Loan or
an Agent Advance.

     "Borrowing Base" has the meaning set forth in Section 2.1(a)).

     "Borrowing Base Certificate" has the meaning set forth in Section 6.2(a)).
<PAGE>

     "Business Day" means any day that is not a Saturday,  Sunday,  or other day
on which  national  banks  are  authorized  or  required  to close and Agent and
Co-Agent are open.


     "Business  Plan" means  Borrower's  and its  Subsidiaries'  business  plans
attached  hereto as Schedule  B-1  (confidential  -  previously  provided to the
Lenders  and the  Committees),  together  with any  amendment,  modification  or
revision of such business plan approved by Agent in its reasonable discretion.

     "Butler Shoe" means H. Butler Footwear, Inc., a Florida corporation.

     "Butler Shoe Warehouse" means that certain warehouse of Butler Shoe located
at 4597 15th Street East, Bradenton, Florida 34203.

     "Change  of  Control"  shall be deemed to have  occurred  at such time as a
"person" or "group"  (within the meaning of Sections  13(d) and  14(d)(2) of the
Securities  Exchange Act of 1934) becomes the Abeneficial  owner" (as defined in
Rule 13d-3 under the Securities  Exchange Act of 1934),  directly or indirectly,
of more than thirty  percent  (30%) of the total  voting power of all classes of
stock  then  outstanding  of  Borrower  entitled  to  vote  in the  election  of
directors.

     "Chapter  11 Case"  means the cases  commenced  by virtue of the  voluntary
petitions for relief under Chapter 11 of the  Bankruptcy  Code filed by Borrower
and certain Subsidiaries of Borrower in the Court on the Relief Date and jointly
administered as Chapter 11 Case No. 98-22545-8C1.

     "Closing  Date"  means the date of the first to occur of the  making of the
initial Advance, the issuance of the initial Letter of Credit, or the funding of
the Term Loans.

     "Co-Agent"  means  Congress  Financial  Corporation  (Southern),  a Georgia
corporation.

     "Co-Agent's Fee Letter" has the meaning set forth in Section 2.12(a))(iii).

     "Code"  means  the  Uniform  Commercial  Code as in  effect in the State of
Georgia from time to time.

     "Collateral"  means with respect to Borrower and its Primary  Subsidiaries,
all real and personal property  (exclusive of Bankruptcy  Recoveries (as defined
in the Final  Order)) of  Borrower  and its  Primary  Subsidiaries,  whether now
existing  or  hereafter  arising,  including  without  limitation  each  of  the
following:

     (a)) the Accounts,
<PAGE>

     (b) Borrower=s Books,

     (c) the Equipment,

     (d) the General Intangibles,

     (e) the Inventory,

     (f) the Negotiable Collateral,

     (g) the Investment Property,

     (h) the Real Property Collateral,

     (i) any money,  or other assets of Borrower that now or hereafter come into
the possession, custody, or control of the Lender Group, and

     (j) the proceeds and products,  whether  tangible or intangible,  of any of
the  foregoing,  including  proceeds  of  insurance  covering  any or all of the
Collateral,  and any and all  Accounts,  Borrower=s  Books,  Equipment,  General
Intangibles,  Inventory, Negotiable Collateral, Investment Property, the Primary
Real Estate,  money, deposit accounts,  or other tangible or intangible property
resulting from the sale,  exchange,  collection,  or other disposition of any of
the  foregoing,  or any portion  thereof or interest  therein,  and the proceeds
thereof.

     "Collateral  Access  Agreement" means a landlord waiver,  mortgagee waiver,
bailee  letter,  or  acknowledgment  agreement of any  warehouseman,  processor,
lessor,  consignee,  or other Person in  possession  of,  having a Lien upon, or
having rights or interests in the Equipment or Inventory,  in each case, in form
and substance reasonably satisfactory to Agent.

     "Collections" means all cash, checks, notes,  instruments,  and other items
of payment  (including,  insurance  proceeds,  proceeds  of cash  sales,  rental
proceeds, and tax refunds).

     "Commitment"  means,  at any time with respect to a Lender,  the  principal
amount set forth beside such  Lender's  name under the heading  "Commitment"  on
Schedule C-1 or on Schedule 1 to the Assignment and Acceptance pursuant to which
such Lender  became a Lender  hereunder in  accordance  with the  provisions  of
Section 15.1, as such Commitment may be adjusted from time to time in accordance
with the  provisions  of Section 15.1,  which amount is the aggregate  amount of
such Lender's Tranche A Commitment and Tranche B Commitment,  and  "Commitments"
means, collectively, the aggregate amount of the Commitments of all Lenders.

<PAGE>

     "Committees"  means,  collectively,  the  official  committee  of unsecured
creditors  and the  official  committee  of  bondholders  formed,  appointed  or
approved  by the United  States  Trustee in the Chapter 11 Case and each of such
Committees shall be referred to herein as a ACommittee".


     "Compliance  Certificate" means a certificate  substantially in the form of
Exhibit C-1 and delivered by the chief accounting officer of Borrower to Agent.

     "Concentration   Account"  means  account  number  3753527015  of  Borrower
maintained  at  NationsBank,  N.A.,  or such other  deposit  account of Borrower
(located in the United States).

     "Concentration Account Agreement" means the Blocked Account Agreement among
Borrower,  the  Concentration  Account  Bank and  Agent  in form  and  substance
satisfactory to Agent applicable to the Concentration Account.

     "Concentration  Account Bank" means  NationsBank,  N.A., or such other bank
satisfying the guidelines of the U.S. Trustee and designated in writing by Agent
and Borrower.

     "Convertible  Subordinated  Notes"  means  those  certain  43%  Convertible
Subordinated  Notes due 2000 in the  original  principal  amount of  $74,750,000
issued pursuant to that certain  Indenture  dated as of November 4, 1993,  among
Borrower (as successor to Sports & Recreation, Inc., a Delaware corporation), as
issuer, and Barnett Banks Trust Company,  National  Association,  as trustee, as
supplemented  by that  certain  Supplemental  Indenture  Agreement  dated  as of
February 14, 1997.

     "Cost" means the calculated  cost of Inventory  based on the RSL consistent
with Borrower's  current and historical  accounting  practices.  "Cost" does not
include any inventory  capitalization  costs inclusive of advertising,  but does
include  freight and may include other charges used in Borrower's  determination
of costs of goods sold and  bringing  goods to market,  all within  Agent's sole
discretion and in accordance with GAAP.

     "Court" has the meaning set forth in the first recital paragraph hereto.

     "Credit Card Agreements" means those certain  agreements  between Agent and
the credit  card  processors  of  Borrower  pursuant  to which such  credit card
processors  agree to  transfer  on a daily  basis all credit  card  receipts  of
Borrower into the Concentration Account or other Blocked Account.

     "Daily  Balance"  means the  amount of an  Obligation  owed at the end of a
given day.

<PAGE>

     "deems itself  insecure" as applied to any Person means that such Person in
good  faith  believes  that  the  prospect  of  payment  of the  Obligations  or
performance under the Loan Documents is materially impaired.


     "Default"  means an event,  condition,  or default that, with the giving of
notice, the passage of time, or both, would be an Event of Default.

     "Defaulting Lender" has the meaning set forth in Section 2.1 (f)(ii).

     "Defaulting Lenders Rate" means the Reference Rate for the first three days
from and  after  the date the  relevant  payment  is due and  thereafter  at the
interest rate then applicable to Advances.

     "Deferred Closing Fee" has the meaning set forth in Section 3.6.

     "Deferred Closing Fee Carve-Out Event" has the meaning set forth in Section
3.6.

     "Designated Account" means account number 6355055921 of Borrower maintained
with  Borrower=s  Designated  Account  Bank,  or such other  deposit  account of
Borrower  (located  within  the United  States)  which has been  designated,  in
writing and from time to time, by Borrower to Agent.

     "Designated   Account   Bank"  means  Norwest  Bank   Minnesota,   National
Association,  whose office is located at Minneapolis,  Minnesota,  and whose ABA
number is 091000019, or such other bank as Agent and Borrower may designate from
time to time.

     "Dilution" means, in each case based upon the experience of the immediately
prior  twelve (12) months,  the result of dividing the Dollar  amount of (a) bad
debt write-downs, discounts, advertising, returns, promotions, credits, or other
dilution with respect to the Accounts, by (b) Borrower's  Collections (excluding
extraordinary items) plus the Dollar amount of clause (a)).

     "Dilution  Reserve"  means,  as of any  date of  determination,  an  amount
sufficient to reduce the Lenders= advance rate against Eligible  Accounts by one
percentage  point for each  percentage  point by which  Dilution is in excess of
five percent (5%).

     "Disbursement  Letter" means an instructional letter executed and delivered
by  Borrower  to Agent  regarding  the  extensions  of  credit to be made on the
Closing Date, the form and substance of which shall be satisfactory to Agent.

     "Dollars or $" means United States dollars.

<PAGE>

     "Eligible  Accounts"  means those third party credit card Accounts,  net of
customary reserves created by Borrower in the ordinary course of business,  that
arise out of  Borrower's  sale of goods or rendition of services,  that strictly
comply  with  each  and all of the  representations  and  warranties  respecting
Accounts  made by Borrower to the Lender Group in the Loan  Documents,  and that
are and at all  times  continue  to be  acceptable  to  Agent  in all  respects;
provided,  however,  that standards of eligibility may be fixed and revised from
time to time by Agent in Agent=s reasonable credit judgment.

     "Eligible In-Transit  Inventory" means those items of Inventory that do not
qualify as Eligible Landed  Inventory  solely because they are not in a location
set forth on Schedule E-1 but: (a) such Inventory is currently in-transit from a
location not set forth on Schedule E-1 to a location set forth on Schedule  E-1,
(b) title to such Inventory has passed to Borrower,  (c) documents of title with
respect to such Inventory have been delivered to Agent or its agent if requested
or otherwise  required by the Agent, (d) such Inventory is insured against types
of loss, damage,  hazards,  and risks, and in amounts,  satisfactory to Agent in
its discretion,  and (e) such Inventory has been paid for or, if purchased under
an Inventory  Letter of Credit,  such Inventory Letter of Credit either has been
drawn upon in full and  reimbursed,  or  expired  undrawn;  in each  case,  with
documentation  therefor  in form  and  substance  satisfactory  to  Agent in its
discretion.

     "Eligible  Inventory"  means  the  Eligible  In-Transit  Inventory  and the
Eligible Landed Inventory, less Inventory Reserves.

     "Eligible  Landed  Inventory"  means Inventory  consisting of first quality
finished goods held for sale in the ordinary  course of Borrower's  business and
raw materials for such finished goods, that are located at or in-transit between
Borrower's premises or between Borrower=s premises and the Butler Shoe Warehouse
or its successors, if any, identified on Schedule E-1, that strictly comply with
each and all of the representations and warranties  respecting Inventory made by
Borrower  to the  Lender  Group in the Loan  Documents,  and that are and at all
times  continue to be acceptable to the Lender Group in all respects;  provided,
however,  that  standards of  eligibility  may be fixed and revised from time to
time by Agent in Agent's  reasonable credit judgment.  In determining the amount
to be so included, Inventory shall be valued at the lower of Cost or market on a
basis  consistent with Borrower's  current and historical  accounting  practices
based on the RSL. An item of Inventory  shall not be included in Eligible Landed
Inventory if:

     (a) it is not owned  solely by  Borrower  or  Borrower  does not have good,
valid, and marketable title thereto;

     (b) it is not located at one of the locations set forth on Schedule E-1;

<PAGE>
     (c) it is not  located  on  property  owned or leased by  Borrower  or in a
contract  warehouse,  in each case,  subject to a  Collateral  Access  Agreement
executed by the mortgagee,  lessor,  the warehouseman,  or other third party, as
the case may be, or with  respect to which the  inclusion  of such  findings and
decretal  portions  in the Final  Order in Agent=s  sole  discretion  are deemed
equivalent  to, and  acceptable  in lieu of, the  execution  and delivery of the
afore-referenced  Collateral Access  Agreements,  and in each case segregated or
otherwise  separately  identifiable  from goods of others, if any, stored on the
premises;

     (d) it is not  subject to a valid and  perfected  first  priority  security
interest in favor of the Agent, for itself and the Lender Group;

     (e) it  consists  of goods  returned by  Borrower's  customers  or goods in
transit; and

     (f) it is obsolete or slow moving, a restrictive or custom item,  packaging
and  shipping  materials,  supplies  used or  consumed in  Borrower's  business,
Inventory  subject  to a Lien in favor of any  third  Person,  defective  goods,
Aseconds," or Inventory acquired on consignment.

     "Eligible  Transferee" means (a) a commercial bank organized under the laws
of the United States, or any state thereof, and having total assets in excess of
$5,000,000,000,  or the  asset  based  lending  Affiliate  of such  bank,  (b) a
commercial  bank organized under the laws of any other country which is a member
of the  Organization  for Economic  Cooperation  and  Development or a political
subdivision  of  any  such  country,  and  having  total  assets  in  excess  of
$5,000,000,000 or the asset based lending Affiliate of such bank;  provided that
such bank is acting through a branch or agency located in the United States, (c)
a finance  company,  insurance or other financial  institution,  or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary   course  of  its  business  and  having  total  assets  in  excess  of
$500,000,000,  (d) any Affiliate (other than individuals) of an existing Lender,
and (e) any other  Person  approved by Agent and, so long as no Default or Event
of Default exists, approved by Borrower.

     "Equipment"  means  all  of  Borrower=s   present  and  hereafter  acquired
machinery, machine tools, motors, equipment, furniture,  furnishings,  fixtures,
vehicles  (including motor vehicles and trailers),  tools,  parts,  goods (other
than consumer goods, farm products, or Inventory),  wherever located, including,
(a) any interest of Borrower in any of the foregoing,  and (b) all  attachments,
accessories,   accessions,   replacements,    substitutions,    additions,   and
improvements  to  any of the  foregoing.  For  purposes  of  the  definition  of
"Collateral",  "Equipment" means all of Borrower's and its Primary  Subsidiaries
present and hereafter  acquired  machinery,  machine tools,  motors,  equipment,
furniture,  furnishings,   fixtures,  vehicles  (including  motor  vehicles  and
trailers),  tools,  parts,  goods (other than consumer goods, farm products,  or
Inventory  of  Borrower  and  its  Primary   Subsidiaries),   wherever  located,
including,  (a) any interest of Borrower and its Primary  Subsidiaries in any of
the foregoing, and (b) all attachments,  accessories,  accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
<PAGE>

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  29
U.S.C. " 1000 et seq., amendments thereto,  successor statutes,  and regulations
or guidance promulgated thereunder.


     "ERISA  Affiliate"  means  (a)  any  corporation  subject  to  ERISA  whose
employees  are  treated as employed by the same  employer  as the  employees  of
Borrower under IRC Section  414(b),  (b) any trade or business  subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower  under IRC Section  414(c),  (c) solely for  purposes of Section 302 of
ERISA and Section 412 of the IRC,  any  organization  subject to ERISA that is a
member of an affiliated  service  group of which  Borrower is a member under IRC
Section  414(m),  or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC,  any party  subject to ERISA  that is a party to an  arrangement
with Borrower and whose  employees are aggregated with the employees of Borrower
under IRC Section 414(o).

     "ERISA Event" means (a) a Reportable Event with respect to any Benefit Plan
or Multiemployer  Plan, (b) the withdrawal of Borrower,  any of its Subsidiaries
or ERISA  Affiliates  from a Benefit  Plan  during a plan year in which it was a
Asubstantial  employer"  (as defined in Section  4001(a)(2)  of ERISA),  (c) the
providing  of  notice  of  intent to  terminate  a  Benefit  Plan in a  distress
termination (as described in Section  4041(c) of ERISA),  (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or  Multiemployer  Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1),  (2),
or (3) of ERISA for the  termination  of,  or the  appointment  of a trustee  to
administer,  any Benefit Plan or Multiemployer  Plan, or (ii) that may result in
termination of a Multiemployer  Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete  withdrawal  within the meaning of Sections 4203 and 4205 of
ERISA,  of  Borrower,  any  of  its  Subsidiaries  or  ERISA  Affiliates  from a
Multiemployer  Plan,  or (g)  providing  any security to any Plan under  Section
401(a)(29)  of the IRC by  Borrower  or its  Subsidiaries  or any of their ERISA
Affiliates.

     "Eurodollar  Rate"  means,  with  respect  to  the  Interest  Period  for a
Eurodollar  Rate Loan, the interest rate per annum at which United States dollar
deposits are offered to Norwest Bank  Minnesota,  National  Association by major
banks in the London  interbank  market (or other Eurodollar Rate market selected
by Agent) on or about 2:00 p.m.  (Atlanta,  Georgia  time) two (2) Business Days
prior to the  commencement of such Interest Period in amounts  comparable to the
amount of the  Eurodollar  Rate Loans  requested by and available to Borrower in
accordance  with this Agreement,  with a maturity of comparable  duration to the
Interest Period selected by Borrower.

     "Eurodollar  Rate Loan"  means any Advance or any Term Loan (or any portion
thereof) made or outstanding  hereunder  during any period when interest on such
Advance or the Term Loan (or portion  thereof) is payable  based on the Adjusted
Eurodollar Rate.

     "Event of Default" has the meaning set forth in Section 8.


<PAGE>

     "Existing Lender" means Foothill Capital Corporation,  as agent for a group
of lenders and the co-agent under the Pre-Relief Date Loan Agreement.


     "FEIN" means Federal Employer Identification Number.

     "Final  Order" means the order of the Court  entered in the Chapter 11 Case
after a final hearing under Bankruptcy Rule 4001(c)(2), satisfactory in form and
substance to Agent (specifically including, but not limited to, findings of fact
with respect to extending  credit  hereunder in good faith for  purposes,  among
other  things,  of Section  364(e) of the  Bankruptcy  Code),  together with all
extensions, modifications and amendments thereto, which, among other matters but
not  by  way  of  limitation,   authorizes  Borrower  to  obtain  credit,  incur
indebtedness, and grant Liens under this Agreement and the other Loan Documents,
as the case may be, and provides  for the  super-priority  of Agent's  claims on
behalf of the Lenders, all as set forth in such order.

     "Foothill" means Foothill Capital  Corporation,  a California  corporation,
with an office in Atlanta, Georgia.

     "Foothill  Partners" means Foothill  Partners III, L.P., its successors and
assigns.

     "Foothill  Partners'  Fee  Letter"  has the  meaning  set forth in  Section
2.12(b)(ii).

     "Funding Date" means the date on which a Borrowing occurs.

     "GAAP" means  generally  accepted  accounting  principles as in effect from
time to time in the United States, consistently applied.

     "Genco" means Genco I, Inc., a Delaware corporation.

     "Genco Warehouse" means that certain warehouse of Genco at 1135 Heil Quaker
Street, LaVergne, Tennessee.

<PAGE>

     "General  Intangibles"  means all of Borrower's  present and future general
intangibles  and other personal  property  (including  contract  rights,  rights
arising under common law, statutes, or regulations,  choses or things in action,
goodwill,   patents,   trade  names,   trademarks,   servicemarks,   copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension  funds,  route lists,  rights to payment and other rights under any
royalty  or  licensing  agreements,   infringement  claims,  computer  programs,
information contained on computer disks or tapes, literature, reports, catalogs,
deposit accounts, insurance premium rebates, tax refunds, tax refund claims, its
beneficial  interests in the Real Estate Trusts,  option contracts and contracts
for the sale of Primary Real Estate), other than goods, Accounts, and Negotiable
Collateral.   For  purposes  of  the   definition  of   "Collateral",   AGeneral
Intangibles" means all of Borrower's and its Primary  Subsidiaries'  present and
future general  intangibles  and other  personal  property  (including  contract
rights,  rights arising under common law,  statutes,  or regulations,  choses or
things in action,  goodwill,  patents,  trade names,  trademarks,  servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists,  rights to payment and other rights
under  any  royalty  or  licensing  agreements,  infringement  claims,  computer
programs, information contained on computer disks or tapes, literature, reports,
catalogs,  deposit accounts,  insurance premium rebates, tax refunds, tax refund
claims,  Borrower's  beneficial  interests  in the Real  Estate  Trusts,  option
contracts and contracts for the sale of Primary Real Estate),  other than goods,
Accounts of Borrower and its Primary Subsidiaries,  and Negotiable Collateral of
Borrower and its Primary Subsidiaries.

     "GOB  Appraised  Value"  means the  estimated  net amount,  expressed  as a
percentage of the Cost of Inventory,  projected to be obtainable,  over a finite
period,  for Inventory  sold in a  going-out-of-business  sale,  determined on a
semi-annual basis by an appraiser satisfactory to Agent.

     "GOB Order" means that certain  Order (i)  Authorizing  Debtor to Implement
its Business  Restructuring  Plan by Closing  Certain  Stores,  (ii)  Permitting
Debtor  to  Conduct  Going-Out-of-Business  Sales,  (iii)  Authorizing  Debtor's
Retention  of  Liquidator,  and (iv)  Approving  Procedure  to Reject  Unexpired
Leases, signed by the Court on February 1, 1999.

     "GOB  Store  Proceeds"  means the  Guaranteed  Amount  (as  defined in that
certain  agency  agreement  referred  to as the  "Agreement"  in the GOB  Order)
required to be paid by  Hilco/Great  American  Group to  Borrower  which has not
otherwise  been  paid to  Borrower  prior  to the  Closing  Date,  plus,  if the
Inventory at Borrower's Las Vegas, Nevada retail store is not otherwise included
in the assets sold pursuant to the GOB Order, the net amount payable to Borrower
pursuant  to an  order  by  the  Court  from  a  liquidator  on  account  of any
going-out-of-business  sale of  Borrower's  Inventory  at its Las Vegas,  Nevada
retail store,  plus, the net amount payable to Borrower  pursuant to an order by
the Court from a liquidator on account of any other  going-out-of-business sales
of Borrower's Inventory with respect to any other retail stores of Borrower.

     "Governing  Documents" means the certificate or articles of  incorporation,
by-laws, or other organizational or governing documents of any Person.

<PAGE>

     "Hazardous  Materials"  means (a) substances that are defined or listed in,
or otherwise  classified  pursuant to, any  applicable  laws or  regulations  as
"hazardous   substances,"  "hazardous  materials,"  "hazardous  wastes,"  "toxic
substances,"  or any other  formulation  intended to define,  list,  or classify
substances  by  reason  of   deleterious   properties   such  as   ignitability,
corrosivity,   reactivity,   carcinogenicity,   reproductive  toxicity,  or  AEP
toxicity",  (b) oil, petroleum,  or petroleum derived  substances,  natural gas,
natural gas liquids,  synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any  radioactive  materials,  and (d)  asbestos  in any  form  or  electrical
equipment  that  contains  any oil or  dielectric  fluid  containing  levels  of
polychlorinated biphenyls in excess of 50 parts per million.


     "Indebtedness"  means:  (a) all obligations of Borrower for borrowed money,
(b) all obligations of Borrower evidenced by bonds, debentures,  notes, or other
similar  instruments and all  reimbursement or other  obligations of Borrower in
respect of letters of credit, bankers acceptances, interest rate swaps, or other
financial  products,  (c) all obligations of Borrower under capital leases,  (d)
all  obligations  or  liabilities of others secured by a Lien on any property or
asset of  Borrower,  irrespective  of whether  such  obligation  or liability is
assumed,  and (e)  any  obligation  of  Borrower  guaranteeing  or  intended  to
guarantee  (whether  guaranteed,  endorsed,  co-made,  discounted,  or sold with
recourse to Borrower) any indebtedness,  lease,  dividend,  letter of credit, or
other obligation of any other Person.

     "Initial GOB Store Proceeds" means $27,447,750.

     "Insolvency  Proceeding"  means any proceeding  commenced by or against any
Person under any provision of the Bankruptcy Code or under any other  bankruptcy
or  insolvency  law,  assignments  for the benefit of  creditors,  compositions,
extensions  generally with  creditors,  or proceedings  seeking  reorganization,
arrangement, or other similar relief.

     "Interest  Coverage  Ratio"  means,  for any period,  the ratio of Adjusted
EBITDAR to cash interest expense of Borrower.

     "Interest   Period"  means,  for  any  Eurodollar  Rate  Loan,  the  period
commencing  on the  Business  Day such  Eurodollar  Rate  Loan is  disbursed  or
continued, or on the Business Day on which a Reference Rate Loan is converted to
such Eurodollar Rate Loan, and ending on the date one (1), two (2), or three (3)
months  thereafter,  as selected by Borrower and  notified to Agent  pursuant to
Section 2.13, but in no event ending after the Maturity Date of this Agreement.

     "Inventory"  means all present and future  inventory in which  Borrower has
any interest,  including goods held for sale or lease or to be furnished under a
contract of service and all of Borrower=s present and future raw materials, work
in  process,  finished  goods,  and  packing and  shipping  materials,  wherever
located.  For purposes of the definition of "Collateral",  "Inventory" means all
present and future inventory in which Borrower and its Primary Subsidiaries have
any interest,  including goods held for sale or lease or to be furnished under a
contract of service and all of Borrower's and its Primary  Subsidiaries" present
and future raw  materials,  work in  process,  finished  goods,  and packing and
shipping materials, wherever located.

<PAGE>

     "Inventory Letter of Credit" means a documentary Letter of Credit issued to
support the purchase by Borrower of Inventory prior to transit to a location set
forth on Schedule  E-1, that  provides  that all draws  thereunder  must require
presentation of customary documentation  (including,  if applicable,  commercial
invoices,  packing list,  certificate  of origin,  bill of lading or airwaybill,
customs   clearance   documents,   quota  statement,   inspection   certificate,
beneficiaries  statement,  and bill of exchange, bills of lading, dock warrants,
dock  receipts,  warehouse  receipts,  or other  documents of title) in form and
substance  satisfactory to Agent and reflecting the passage to Borrower of title
to first quality  Inventory  conforming  to Borrower's  contract with the seller
thereof.  Any such Letter of Credit  shall cease to be an  AInventory  Letter of
Credit" at such time, if any, as the goods purchased  thereunder become Eligible
Landed Inventory.

     "Inventory  Reserves"means such reserves as may be established from time to
time by Agent in Agent's reasonable discretion with respect to the determination
of the saleability,  at retail, of the Eligible  Inventory or which reflect such
other  factors  as affect the  current  retail or market  value of the  Eligible
Inventory. Without limiting the generality of the foregoing,  Inventory Reserves
may include (but are not limited to) reserves based upon the following:

     (a) Inventory  held at the Genco  Warehouse to the extent such Inventory is
Eligible Inventory;

     (b) damaged Inventory to the extent such Inventory is included in the RSL;

     (c) variances between the ISL and the RSL to the extent the RSL exceeds the
ISL;

     (d) estimated  reclamation  claims of unpaid  sellers of Inventory  sold to
Borrower  (other than  reclamation  claims asserted in the Chapter 11 Case which
will be paid in cash or allowed as administrative expense claims);

     (e) Inventory,  as of any date of  determination,  in excess of one hundred
twenty percent  (120%) of the level of Inventory  reflected on the balance sheet
contained in the Business Plan as of the month of the date of determination;

     (f)  Inventory,  as of any date of  determination,  at a level  lower  than
eighty  percent  (80%) of the level of Inventory  reflected on the balance sheet
contained in the Business Plan as of the month of the date of determination;

<PAGE>

     (g) actual shrinkage in excess of shrinkage accrual on Borrower=s Books;

     (h) change in Inventory character, composition or mix; and

     (i) trade  discounts  given by  Borrower's  vendors that have not otherwise
reduced Inventory.

     "Investment Property" means all of Borrower's "investment property" as such
term is defined in the Code, now owned or hereafter acquired by Borrower and, in
any event, including without limitation all securities,  whether certificated or
uncertificated,  security entitlements, securities accounts, commodity contracts
and  commodity  accounts.  For  purposes  of  the  definition  of  "Collateral",
"Investment  Property"  means all of  Borrower's  and its Primary  Subsidiaries'
"investment  property"  as such  term is  defined  in the  Code,  now  owned  or
hereafter acquired by Borrower and its Subsidiaries and, in any event, including
without  limitation all  securities,  whether  certificated  or  uncertificated,
security  entitlements,  securities accounts,  commodity contracts and commodity
accounts.

     "IRC"  means  the  Internal  Revenue  Code of  1986,  as  amended,  and the
regulations thereunder.

     "ISL" means the inventory stock ledger of Borrower.

     "L/C" has the meaning set forth in Section 2.2(a)).

     "L/C Guaranty" has the meaning set forth in Section 2.2(a)).

     "Landlord Lien State" means any state or jurisdiction under whose statutory
or common law the rights of a landlord in assets of that landlord's  tenant, for
unpaid rent, may be senior to a perfected security interest in such assets.

     "Lender"  and  "Lenders"  have the  respective  meanings  set  forth in the
preamble to this  Agreement,  and shall include any other Person made a party to
this Agreement in accordance with the provisions of Section 15.1.

     "Lender Group" means, individually and collectively, each of the individual
Lenders and Agent.

<PAGE>

     "Lender Group Expenses" means,  except as limited by Section 2.12(c),  all:
costs or expenses  (including taxes, and insurance premiums) required to be paid
by  Borrower  under any of the Loan  Documents  that are paid or incurred by the
Lender Group; reasonable fees or charges paid or incurred by the Lender Group in
connection with the Lender Group's transactions with Borrower,  including,  fees
or  charges   for   photocopying,   notarization,   couriers   and   messengers,
telecommunication,  public record searches (including tax lien, litigation,  and
UCC searches and including  searches with the patent and trademark  office,  the
copyright  office,  or the  department of motor  vehicles),  filing,  recording,
publication,  appraisal (including periodic Personal Property Collateral or Real
Property Collateral appraisals), real estate surveys, real estate title policies
and endorsements, and environmental audits; costs and expenses incurred by Agent
in the  disbursement  of funds to  Borrower  (by wire  transfer  or  otherwise);
reasonable  charges  paid or incurred by Agent  resulting  from the  dishonor of
checks;  costs and expenses  paid or incurred by Agent to correct any Default or
enforce  any  provision  of the Loan  Documents,  or in gaining  possession  of,
maintaining,  handling,  preserving,  storing, shipping,  selling, preparing for
sale,  or  advertising  to sell the  Personal  Property  Collateral  or the Real
Property Collateral,  or any portion thereof,  irrespective of whether a sale is
consummated;  costs and expenses paid or incurred by the Lender Group (including
any costs and expenses to engage outside parties) in examining  Borrower's Books
and in monitoring  and analyzing the Personal  Property  Collateral and the Real
Property Collateral; reasonable costs and expenses of the Oversight Agent; costs
and  expenses  of third  party  claims or any other suit paid or incurred by the
Lender Group in enforcing or defending the Loan Documents or in connection  with
the  transactions  contemplated  by the Loan  Documents  or the  Lender  Group's
relationship with Borrower or any guarantor;  and the Lender Group's  reasonable
attorneys  fees  and  expenses  incurred  in  advising,  structuring,  drafting,
reviewing, administering,  amending, terminating, enforcing (including attorneys
fees and  expenses  incurred  in  connection  with the Chapter 11 Case or in any
other "workout,"  "restructuring," or any other Insolvency Proceeding concerning
Borrower or any guarantor of the Obligations), defending, or concerning the Loan
Documents,  irrespective  of whether suit is brought;  provided,  however,  that
prior to a Default or Event of Default "Lender Group Expenses" shall not include
any  attorneys  fees and  expenses of any member of the Lender  Group other than
Agent, Co-Agent and Foothill Partners.


     "Letter  of  Credit"  means  an  L/C  or an L/C  Guaranty,  as the  context
requires.

     "Lien" means any interest in property  securing an obligation owed to, or a
claim by, any Person other than the owner of the property, whether such interest
shall be based on the common law,  statute,  or contract,  whether such interest
shall be recorded or perfected,  and whether such  interest  shall be contingent
upon the  occurrence  of some future  event or events or the  existence  of some
future  circumstance or  circumstances,  including the lien or security interest
arising  from a mortgage,  deed of trust,  encumbrance,  pledge,  hypothecation,
assignment,  deposit arrangement,  security agreement,  adverse claim or charge,
conditional sale or trust receipt, or from a lease, consignment, or bailment for
security purposes and also including  reservations,  exceptions,  encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting Real Property.

     "Loan Account" has the meaning set forth in Section 2.11.

<PAGE>

     "Loan  Documents"  means  this  Agreement,  the  Assignment  of  Note,  the
Disbursement  Letter,  the Letters of Credit,  the Credit Card  Agreements,  the
Blocked Account Agreements,  the Oversight Agent Agreement,  the Mortgages,  the
Stock Pledge  Agreement,  the  Subsidiary  Guaranty  Agreement,  the  Subsidiary
Security  Agreement,  the Trademark Security  Agreement,  the Assignment of Real
Estate Trust Interests,  the Agent's Fee Letter,  the Co-Agent's Fee Letter, the
Foothill  Partners=  Fee Letter,  any note or notes  executed  by  Borrower  and
payable to the Lender Group, and any other agreement entered into, now or in the
future, in connection with this Agreement.


     "Margin" has the meaning set forth in Section 2.7(a)).

     "Material  Adverse  Change" means,  except for the filing of the Chapter 11
Case and events  disclosed  to the  Lenders  prior to the  Closing  Date,  (a) a
material  adverse  change in the  business,  prospects,  operations,  results of
operations,  assets,  liabilities  or  condition  (financial  or  otherwise)  of
Borrower  or  any  Subsidiary  of  Borrower,  (b)  the  material  impairment  of
Borrower's or any  Subsidiary of Borrower's  ability to perform its  obligations
under  the Loan  Documents  to which  it is a party  or of the  Lender  Group to
enforce the Obligations or realize upon the Collateral,  (c) a material  adverse
effect on the  value of the  Collateral,  or (d) a  material  impairment  of the
priority of the Lender Group's Liens with respect to the Collateral.

     "Maturity Date" means August 12, 2000.

     "Maximum Amount" means, as of the date of determination, the sum of (a) the
Maximum Revolving Amount, and (b) the then outstanding  principal balance of the
Term Loans.

     "Maximum Revolving Amount" means $85,000,000.

     "Mortgage"  means any  mortgage,  deeds of trust,  or deed to secure  debt,
executed by Borrower or a Subsidiary of Borrower in favor of Agent, the form and
substance of which shall be satisfactory to the Lender Group.

     "Multiemployer  Plan" means a  "multiemployer  plan" (as defined in Section
4001(a)(3) of ERISA) to which Borrower,  any of its  Subsidiaries,  or any ERISA
Affiliate has contributed,  or was obligated to contribute,  within the past six
(6) years.

     "Nationwide  Team  Sales"  means  Nationwide  Team Sales,  Inc.,  a Florida
corporation.

     "Nationwide  Team Sales Note" means that  certain  promissory  note of even
date herewith from  Nationwide  Team Sales to Borrower  which note is secured by
substantially all of the assets of Nationwide Team Sales.

<PAGE>

     "Negotiable  Collateral" means all of Borrower's present and future letters
of  credit,   notes,  drafts,   instruments,   investment   property,   security
entitlements,  securities  (including  the  shares of stock of  Subsidiaries  of
Borrower), documents, personal property leases (wherein Borrower is the lessor),
chattel  paper,  and  Borrower's  Books  relating to any of the  foregoing.  For
purposes of the definition of "Collateral", "Negotiable Collateral" means all of
Borrower's and its Primary  Subsidiaries'  present and future letters of credit,
notes,  drafts,   instruments,   investment  property,   security  entitlements,
securities  (including the shares of stock of  Subsidiaries  of Borrower and its
Primary Subsidiaries), documents, personal property leases (wherein Borrower and
its Primary  Subsidiaries  are the lessor),  chattel paper, and Borrower's Books
(of Borrower and its Primary Subsidiaries) relating to any of the foregoing.

     "Net Proceeds" means (a) with respect to Primary Real Estate,  the net cash
or cash  equivalent  proceeds  from the sale of such  Primary  Real Estate after
payment of reasonable selling costs and expenses not to exceed ten percent (10%)
of the gross  proceeds  from such sale,  and (b) with respect to Secondary  Real
Estate, the net cash or cash equivalent proceeds from the sale of such Secondary
Real Estate after payment of reasonable selling costs and expenses not to exceed
ten percent (10%) of the gross proceeds from such sale and after satisfaction of
any mortgage or other Lien on such Secondary Real Estate.

     "Obligations"  means  all  loans,  Advances,  debts,  principal,   interest
(including any interest  that,  but for the  provisions of the Bankruptcy  Code,
would have accrued),  contingent reimbursement obligations under any outstanding
Letters  of  Credit,  fees  (including   Deferred  Closing  Fees),   liabilities
(including  all amounts  charged to Borrower's  Loan Account  pursuant  hereto),
obligations,  or Lender Group Expenses (including any fees or expenses that, but
for the provisions of the Bankruptcy Code, would have accrued),  lease payments,
guaranties,  covenants,  and duties owing by Borrower to the Lender Group of any
kind and description  (whether pursuant to or evidenced by the Loan Documents or
pursuant to any other  agreement  between  the Lender  Group and  Borrower,  and
irrespective  of whether for the payment of money),  whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including any debt,  liability,  or obligation owing from Borrower to others
that the Lender Group may have obtained by assignment or otherwise,  and further
including  all  interest not paid when due and all Lender  Group  Expenses  that
Borrower is  required  to pay or  reimburse  by the Loan  Documents,  by law, or
otherwise.

     "One  Turn  State"  means  any  state or  other  jurisdiction  under  whose
statutory  or common law the  relative  priority  of the rights of a landlord in
assets of that landlord's  tenant,  for unpaid rent, vis a vis the rights of the
holder of a perfected  security  interest therein is dependent upon whether such
security  interest  arose prior to or subsequent to the subject  asset's  coming
onto the demised premises.

     "Originating Lender" has the meaning set forth in Section 15.1(e).

     "Overadvance" has the meaning set forth in Section 2.6.

<PAGE>

     "Oversight  Agent" means Paragon Capital LLC, a Delaware limited  liability
company, or such other "Oversight Agent" designated by Agent.


     "Oversight Agent Agreement" means that certain Oversight Agent Agreement of
even date herewith among the Oversight Agent and Agent.

     "Participant" has the meaning set forth in Section 15.1(e).

     "PBGC" means the Pension Benefit  Guaranty  Corporation as defined in Title
IV of ERISA, or any successor thereto.

     "Permitted  Liens" means (a) Liens held by the Lender Group,  (b) Liens for
unpaid  taxes (i) that are not yet due and  payable or (ii) that are the subject
of Permitted  Protests or (iii) with respect to which Borrower's  failure to pay
such taxes is  permitted by the  Bankruptcy  Code or an order of the Court after
notice and a hearing or (iv) with  respect  to which  Borrower's  failure to pay
such taxes is  consented  to in  writing  by the  holders of such tax claims and
written  notice  thereof  is  provided  to Agent or (v)  with  respect  to which
Borrower's  failure to pay such taxes is consented to in writing by the Required
Lenders, (c) Liens set forth on Schedule P-1, (d) the interests of lessors under
operating  leases (e) purchase  money  security  interests  and Liens of lessors
under capital leases securing  Indebtedness in an aggregate amount not to exceed
$1,000,000  at any time  and so long as the  Lien  only  attaches  to the  asset
purchased  or acquired and only  secures the  purchase  price of the asset,  (f)
Liens arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen,  laborers, or suppliers, incurred in the ordinary course
of business of Borrower and not in connection  with the borrowing of money,  and
which  Liens  either (i) are for sums not yet due and  payable,  or (ii) are the
subject  of  Permitted  Protests,  (g)  Liens  arising  from  deposits  made  in
connection with obtaining worker's compensation or other unemployment insurance,
(h) Liens or deposits to secure performance of bids,  tenders, or leases (to the
extent  permitted  under this  Agreement),  incurred in the  ordinary  course of
business of Borrower and not in  connection  with the  borrowing  of money,  (i)
Liens  arising by reason of security  for surety or appeal bonds in the ordinary
course of  business of  Borrower,  (j) Liens with  respect to the Real  Property
Collateral that are exceptions to the commitments for title insurance  issued in
connection  with the  Mortgages,  as accepted by Agent,  (k) with respect to any
Real  Property  that is not part of the  Real  Property  Collateral,  easements,
rights of way,  zoning and  similar  covenants  and  restrictions,  and  similar
encumbrances  that customarily exist on properties of Persons engaged in similar
activities  and  similarly  situated  and that in any  event  do not  materially
interfere  with or impair the use or operation of the  Collateral by Borrower or
the value of the Lender Group's Lien thereon or therein, or materially interfere
with the ordinary  conduct of the business of Borrower,  and (l) with respect to
Secondary Real Estate, Liens of mortgagees listed on Schedule P-2.

<PAGE>
     "Permitted  Protest" means the right of Borrower to protest any Lien (other
than any such Lien that secures the Obligations),  tax (other than payroll taxes
or taxes that are the subject of a United  States  federal tax lien),  or rental
payment,  provided  that  (a) a  reserve  with  respect  to such  obligation  is
established   on  the  books  of  Borrower  in  an  amount  that  is  reasonably
satisfactory  to  Agent,  (b) any such  protest  is  instituted  and  diligently
prosecuted by Borrower in good faith, and (c) Agent is satisfied that, while any
such  protest is pending,  there will be no  impairment  of the  enforceability,
validity,  or  priority  of any of the Liens of the  Lender  Group in and to the
Collateral.

     "Person"  means  and  includes  natural  persons,   corporations,   limited
liability  companies,  limited  partnerships,   general  partnerships,   limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other  organizations,  irrespective  of  whether  they are legal  entities,  and
governments and agencies and political subdivisions thereof.

     "Personal  Property  Collateral"  means all Collateral  other than the Real
Property Collateral.

     "Plan" means any employee benefit plan, program, or arrangement  maintained
or contributed to by Borrower or with respect to which it may incur liability.

     "Pre-Relief  Date Loan  Agreement"  has the meaning set forth in the second
recital paragraph hereto.

     "Primary Real Estate" means the Real Property described on Schedule R-1 and
any other Real Property acquired by Borrower or any Subsidiary of Borrower after
the Closing Date.

     "Primary  Subsidiaries"  means,  with  respect  to  Borrower,  all  of  its
Subsidiaries other than Property Holdings, the Real Estate Trusts and Nationwide
Team Sales.

     "Pro-Rata Share" means, with respect to a Lender, a fraction  (expressed as
a percentage),  the numerator of which is the amount of such Lender's Commitment
and the denominator of which is the aggregate amount of the Commitments.

     "Property   Holdings"  means  Property   Holdings   Company  I,  a  Florida
corporation.

     "Real Estate  Indebtedness" means the Indebtedness secured by the Secondary
Real Estate, as described on Schedule 7.1.

     "Real Estate Trusts" means the business trusts listed on Schedule T-1.

     "Real  Property"  means any estates or interests in real property now owned
or hereafter acquired by Borrower or any Subsidiary of Borrower.


<PAGE>

     "Real Property Collateral" means the Primary Real Estate.

     "Reference  Rate" means the  variable  rate of  interest,  per annum,  most
recently  announced  by Norwest Bank  Minnesota,  National  Association,  or any
successor  thereto,  as its Abase rate,"  irrespective of whether such announced
rate is the best rate available from such financial institution.

     "Reference Rate Loan" means any Advance or the Tranche A Term Loans (or any
portion  thereof) made or outstanding  hereunder during any period when interest
on such  Advance or the  Tranche A Term Loans (or  portion  thereof)  is payable
based on the Reference Rate.

     "Release  Price"  means,  with  respect to any of the Primary  Real Estate,
ninety percent (90%) of the Appraised Value of such Primary Real Estate.

     "Relief  Date" has the  meaning  set forth in the first  recital  paragraph
hereto.

     "Reportable  Event" means any of the events described in Section 4043(c) of
ERISA or the regulations  thereunder  other than a Reportable  Event as to which
the provision of thirty (30) days notice to the PBGC is waived under  applicable
regulations.

     "Required  Lenders"  means,  at any time,  Lenders  whose  Pro-Rata  Shares
aggregate sixty-six and two-thirds percent (66b%) or more of the Commitments.

     "Requirement  of Law" means,  as to any Person:  all (a) (i)  statutes  and
regulations  and (ii) court  orders  and  injunctions,  arbitrators'  decisions,
and/or similar rulings, in each instance by any governmental authority, or other
body which has jurisdiction over such Person, or any property of such Person, or
of any other Person whose conduct such Person would be responsible  and (b) that
Person's organizational  documents,  by-laws and/or other instruments which deal
with corporate or similar governance, as applicable.

     "Reserve  Percentage"  means and refers to, as of the date of determination
thereof,  the maximum  percentage  (rounded upward,  if necessary to the nearest
1/100th of one percent  (1%)),  as  determined by Agent (or its  Affiliates)  in
accordance with its (or their ) usual procedures (which  determination  shall be
conclusive in the absence of manifest error),  that is in effect on such date as
prescribed by the Federal Reserve Board for determining the reserve requirements
(including  supplemental,  marginal,  and emergency reserve  requirements)  with
respect  to  eurocurrency   funding  (currently  referred  to  as  "eurocurrency
liabilities") by Norwest Bank Minnesota, National Association or its Affiliates.

<PAGE>

     "Retiree  Health Plan" means an "employee  welfare benefit plan" within the
meaning of Section 3(1) of ERISA that  provides  benefits to  individuals  after
termination of their employment, other than as required by Section 601 of ERISA.


     "Revolving  Facility  Usage" means,  as of any date of  determination,  the
aggregate  amount of  Advances  and  undrawn or  unreimbursed  Letters of Credit
outstanding.

     "RSL" means the retail stock ledger of Borrower.

     "Secondary Real Estate A means the Real Property described on Schedule R-2.

     "Senior  Claims" means those  pre-Relief  Date claims or liens set forth on
Schedule S-1 attached hereto, if any, that have priority over, or are pari passu
with,  the  claims  and Liens of Agent on behalf of the  Lenders,  to the extent
allowed by the Bankruptcy Court or in any plan of reorganization consented to by
the Lenders.

     "Settlement" has the meaning set forth in Section 2.1(i)(i).

     "Settlement Date" has the meaning set forth in Section 2.1(i)(i).

     "Solvent"  means,  with respect to any Person on a particular date, that on
such  date (a) at fair  valuations,  all of the  properties  and  assets of such
Person are greater than the sum of the debts, including contingent  liabilities,
of such Person,  (b) the present fair salable value of the properties and assets
of such  Person is not less than the  amount  that will be  required  to pay the
probable  liability  of such  Person on its debts as they  become  absolute  and
matured,  (c) such Person is able to realize upon its  properties and assets and
pay  its  debts  and  other  liabilities,   contingent   obligations  and  other
commitments  as they mature in the normal  course of  business,  (d) such Person
does not intend to, and does not believe  that it will,  incur debts beyond such
Person's ability to pay as such debts mature, and (e) such Person is not engaged
in  business  or a  transaction,  and is not about to engage  in  business  or a
transaction,  for which such  Person's  properties  and assets would  constitute
unreasonably  small capital  after giving due  consideration  to the  prevailing
practices  in the  industry in which such Person is engaged.  In  computing  the
amount  of  contingent  liabilities  at  any  time,  it is  intended  that  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 reasonably can
be expected to become an actual or matured liability.

     "Stock Pledge  Agreement" means that certain Stock Pledge Agreement of even
date herewith among Borrower and Agent,  in form and substance  satisfactory  to
the Lender Group.

<PAGE>

     "Subsidiary"  of  a  Person  means  a  corporation,   partnership,  limited
liability  company,  or other entity in which that Person directly or indirectly
owns or  controls  the  shares  of  stock or other  ownership  interests  having
ordinary  voting power to elect a majority of the board of directors (or appoint
other comparable managers) of such corporation,  partnership,  limited liability
company,  or other entity and, with respect to Borrower,  (a) shall be deemed to
include without limitation the Real Estate Trusts and, (b) shall include without
limitation  Property  Holdings,  Sports &  Recreation  Holdings of PA,  Inc.,  a
Delaware  corporation,  Guide Series, Inc., a Florida corporation,  Construction
Resolution,  Inc., a Florida corporation,  Sports & Recreation,  Inc., a Florida
corporation,  Retail  Process  Management,  Inc.,  a  Florida  corporation,  and
Nationwide Team Sales.


     "Subsidiary  Guaranty  Agreement" means that certain Subsidiary Guaranty of
even date herewith from Borrower's Primary Subsidiaries and Property Holdings to
Agent, in form and substance satisfactory to the Lender Group.

     "Subsidiary  Security  Agreement"  means that certain  Subsidiary  Security
Agreement of even date herewith among Borrower's Primary Subsidiaries and Agent,
in form and substance satisfactory to the Lender Group.

     "Term Loans" means, collectively,  the Tranche A Term Loans and the Tranche
B Term Loans.

     "Termination Date" has the meaning set forth in Section 3.4.

     "Trademark  Security  Agreement"  means  that  certain  Trademark  Security
Agreement of even date herewith among  Borrower,  Guide Series,  Inc., a Florida
corporation, and Agent, in form and substance satisfactory to the Lender Group.

     "Tranche A  Commitment"  means,  at any time with respect to a Lender,  the
principal  amount set forth beside such Lender's name under the heading "Tranche
A Commitment"  on Schedule C-1 or on Schedule 1 to the Assignment and Acceptance
pursuant to which such Lender became a Lender  hereunder in accordance  with the
provisions of Section  15.1,  as such Tranche A Commitment  may be adjusted from
time to time in  accordance  with the  provisions of Section 15.1 and "Tranche A
Commitments"  means,  collectively,  the  aggregate  amount  of  the  Tranche  A
Commitments of all Lenders.

     "Tranche A Commitment Fee" has the meaning set forth in Section 2.12(a)).

     "Tranche A Commitment Fee Second  Installment" has the meaning set forth in
Section 2.12(a)).

     "Tranche A Lender" means any Lender who has a Tranche A Commitment.

<PAGE>

     "Tranche A Pro-Rata  Share"  means,  with  respect to a Lender,  a fraction
(expressed  as a  percentage),  the  numerator  of which is the  amount  of such
Lender's  Tranche A Commitment  and the  denominator  of which is the  aggregate
amount of the Tranche A Commitments.


     "Tranche A Term Loans" has the meaning set forth in Section 2.3(a)).

     "Tranche B  Commitment"  means,  at any time with respect to a Lender,  the
principal  amount set forth beside such Lender's name under the heading "Tranche
B Commitment"  on Schedule C-1 or on Schedule 1 to the Assignment and Acceptance
pursuant to which such Lender became a Lender  hereunder in accordance  with the
provisions of Section  15.1,  as such Tranche B Commitment  may be adjusted from
time to time in  accordance  with the  provisions of Section 15.1 and "Tranche B
Commitments"  means,  collectively,  the  aggregate  amount  of  the  Tranche  B
Commitments of all Lenders.

     "Tranche B Commitment Fee" has the meaning set forth in Section 2.12(b).

     "Tranche B Lender" means any Lender who has a Tranche B Commitment.

     "Tranche B Pro-Rata  Share"  means,  with  respect to a Lender,  a fraction
(expressed  as a  percentage),  the  numerator  of which is the  amount  of such
Lender's  Tranche B Commitment  and the  denominator  of which is the  aggregate
amount of the Tranche B Commitments.

     "Tranche B Term Loans" has the meaning set forth in Section 2.4(a)).

     "Voidable Transfer" has the meaning set forth in Section 18.6.

     1.2.  All  accounting  terms  not  specifically  defined  herein  shall  be
construed  in  accordance  with  GAAP.  When used  herein,  the term  "financial
statements"  shall  include the notes and schedules  thereto.  Whenever the term
"Borrower" is used in respect of a financial  covenant or a related  definition,
it shall be  understood  to mean  Borrower on a  consolidated  basis  unless the
context clearly requires otherwise.

     1.3. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein.


<PAGE>

     1.4.  Unless the  context of this  Agreement  clearly  requires  otherwise,
references  to the plural  include  the  singular,  references  to the  singular
include the plural, the term "including" is not limiting, and the term "or" has,
except where  otherwise  indicated,  the inclusive  meaning  represented  by the
phrase  "and/or."  The words  "hereof,"  "herein,"  "hereby,"  "hereunder,"  and
similar terms in this  Agreement  refer to this  Agreement as a whole and not to
any particular provision of this Agreement. An Event of Default shall "continue"
or be "continuing" until such Event of Default has been waived in writing by the
requisite  members of the Lender  Group or by Agent  upon the  direction  by the
requisite members of the Lender Group. Section,  subsection,  clause,  schedule,
and exhibit  references are to this Agreement  unless otherwise  specified.  Any
reference in this Agreement or in the Loan Documents to this Agreement or any of
the  Loan  Documents  shall  include  all  alterations,   amendments,   changes,
extensions,   modifications,   renewals,   replacements,    substitutions,   and
supplements, thereto and thereof, as applicable.


     1.5 Schedules and Exhibits.  All of the schedules and exhibits  attached to
this Agreement shall be deemed incorporated herein by reference.

     2. LOAN AND TERMS OF PAYMENT.

     2.1 Revolving Advances

     (a) Subject to the terms and conditions of this  Agreement,  each Tranche A
Lender agrees to make advances  "Advances")  to Borrower in an amount at any one
time  outstanding  not to exceed such  Tranche A Lender's  Pro-Rata  Share of an
amount  equal to the  lesser  of (a)) the  Maximum  Revolving  Amount,  less the
outstanding balance of all undrawn or unreimbursed Letters of Credit, or (B) the
Borrowing  Base,  less (x) the aggregate  amount of all undrawn or  unreimbursed
Letters of Credit (other than Inventory Letters of Credit),  less (y) the sum of
(a)a  twenty-five and one-half of one percent (25.5%) of the aggregate amount of
all undrawn or unreimbursed  Inventory  Letters of Credit,  and (bb) freight and
duty  charges  applicable  thereto,   less  (z)  the  aggregate  amount  of  the
Availability Reserves.  For purposes of this Agreement,  "Borrowing Base", as of
any date of determination, shall mean the result of:

     (I) the lesser of (i)  $2,500,000 or (ii) eighty  percent (80%) of Eligible
Accounts, less the amount, if any, of the Dilution Reserve, plus

     (II) the lesser of (i) the  Maximum  Revolving  Amount,  less the amount of
availability  created under subsection (I) above, (ii) seventy-four and one-half
of one percent (74.5%) of the lower of Cost or market value (determined based on
the RSL) of  Eligible  Inventory,  or  (iii)  ninety  percent  (90%) of the most
recently  determined GOB Appraised  Value of the Cost  (determined  based on the
RSL) of Inventory, minus

     (III) the aggregate amount of reserves,  if any, established by Agent under
Sections 2.1(b), 6.15 and 10.

<PAGE>

     (b) Anything to the contrary in Section 2.1(a) above  notwithstanding,  (i)
Agent may  create  reserves  against  or reduce  its  advance  rates  based upon
Eligible Accounts or Eligible Inventory without declaring an Event of Default if
it determines  that there has occurred a Default or a Material  Adverse  Change,
(ii) Agent may create reserves for the Carve-Out Amount,  (iii) Agent may create
reserves in the amount of any claims  allowed by order of the Court  pursuant to
Section  506(c)  of the  Bankruptcy  Code  which  will be  charged  against  the
Collateral or the Lenders,  (iv) Agent may create  reserves in the amount of any
unpaid post-Relief Date rent or other amounts due under any real property leases
of Borrower except to the extent (a) Borrower's  failure to pay such post-Relief
Date rent or other amounts due is permitted by the  Bankruptcy  Code or by order
of the Court after notice and a hearing,  or (B) Borrower's  failure to pay such
post-Relief  Date rent or other  amounts due is  consented  to in writing by the
applicable  lessors  and  written  notice  thereof is  provided  to Agent or (C)
Borrower's  failure to pay such  post-Relief  Date rent or other  amounts due is
consented  to in  writing  by the  Required  Lenders,  and (v) Agent may  create
reserves  in the amount of any unpaid  post-Relief  Date taxes or other  similar
charges  owed by Borrower  except to the extent (a) such taxes or other  similar
charges are the subject of a Permitted Protest, or (B) Borrower's failure to pay
such taxes or other similar  charges is permitted by the  Bankruptcy  Code or by
order of the Court after notice and a hearing,  or (C) Borrower's failure to pay
such taxes or other similar charges is consented to in writing by the holders of
such claims and written notice  thereof is provided to Agent,  or (D) Borrower's
failure to pay such taxes or other similar charges is consented to in writing by
the Required Lenders.


     (c)  Amounts  borrowed  pursuant  to this  Section  2.1 may be repaid  and,
subject to the terms and  conditions of this  Agreement,  reborrowed at any time
during the term of this Agreement.

     (d) Procedure for Borrowing.  Each Borrowing  shall be made upon Borrower's
irrevocable  request therefor  delivered to Agent (which notice must be received
by Agent no later than 1:00 p.m. (Atlanta,  Georgia time) on the Funding Date if
such  advance is for  $5,000,000  or less or no later than 1:00 p.m.  (Atlanta,
Georgia time) on the Business Day  immediately  preceding the requested  Funding
Date if such advance is for more than  $5,000,000)  specifying (i) the amount of
the Borrowing;  and (ii) the requested  Funding Date,  which shall be a Business
Day.

     (e) Agent's  Election.  Promptly after receipt of a request for a Borrowing
pursuant to Section  2.1(d) in excess of $5,000,000,  Agent shall elect,  in its
discretion,  (i) to have the terms of  Section  2.1(f)  apply to such  requested
Borrowing, or (ii) to make an Agent Loan pursuant to the terms of Section 2.1(g)
in the amount of the requested Borrowing.  Any requested Borrowing of $5,000,000
or less shall be made as an Agent Loan pursuant to the terms of Section 2.1(g).

     (f) Making of Advances.

<PAGE>

     (i) In the event that Agent shall  elect to have the terms of this  Section
2.1(f) apply to a requested  Borrowing in excess of  $5,000,000  as described in
Section  2.1(e),  then  promptly  after  receipt  of a request  for a  Borrowing
pursuant to Section 2.1(d),  Agent shall notify the Lenders, not later than 4:00
p.m.  (Atlanta,  Georgia  time) on the Business Day  immediately  preceding  the
Funding Date applicable thereto, by telephone and promptly followed by telecopy,
or other similar form of transmission,  of the requested Borrowing. Each Tranche
A Lender shall make the amount of such Tranche A Lender's  Pro-Rata Share of the
requested  Borrowing  available  to Agent in same day funds,  to such account of
Agent as Agent may designate, not later than 3:00 p.m. (Atlanta,  Georgia time)
on the Funding Date applicable thereto. After Agent's receipt of the proceeds of
such Advances,  upon  satisfaction  of the applicable  conditions  precedent set
forth in Sections 3.1 (with respect to the initial  funding on the Closing Date)
and 3.2, Agent shall make the proceeds of such Advances available to Borrower on
the applicable Funding Date by transferring same day funds equal to the proceeds
of such Advances received by Agent to the Designated Account; provided, however,
that,  subject to the provisions of Section 2.1(l),  Agent shall not request any
Tranche A Lender to make,  and no Tranche A Lender shall have the  obligation to
make,  any Advance if Agent shall have received  written notice from any Lender,
or otherwise has actual knowledge, that one or more of the applicable conditions
precedent set forth in Sections 3.1 (with respect to the initial  funding on the
Closing Date) or 3.2 will not be satisfied on the requested Funding Date for the
applicable Borrowing; provided further, however, that, subject to the provisions
of Section 2.1(l),  Agent shall not request any Tranche A Lender to make, and no
Tranche A Lender shall have the  obligation to make,  any Advance if Agent shall
have received  written  notice from any Lender,  or otherwise has knowledge that
the requested  Advance would result in the  outstanding  Advances and Letters of
Credit exceeding the Availability on such Funding Date.


<PAGE>

     (ii) Unless Agent  receives  notice from a Tranche A Lender with respect to
any  Borrowing  after the Closing  Date,  at least one Business Day prior to the
date of such  Borrowing,  that such Tranche A Lender will not make  available as
and when  required  hereunder to Agent for the account of Borrower the amount of
that Tranche A Lender's  Pro-Rata  Share of the  Borrowing as to  Borrowings  to
which this Section 2.1(f)  applies,  Agent may assume that each Tranche A Lender
has made or will make such amount  available to Agent in  immediately  available
funds on the  Funding  Date and Agent may (but  shall  not be so  required),  in
reliance  upon  such  assumption,  make  available  to  Borrower  on such date a
corresponding  amount.  If and to the extent any Tranche A Lender shall not have
made its full amount available to Agent in immediately available funds and Agent
in such circumstances has made available to Borrower such amount, that Tranche A
Lender shall on the Business  Day  following  such Funding Date make such amount
available to Agent,  together with interest at the  Defaulting  Lenders Rate for
each day during  such  period.  A notice from Agent  submitted  to any Tranche A
Lender with respect to amounts owing under this subsection  shall be conclusive,
absent  manifest  error.  If such amount is paid to Agent such  payment to Agent
shall  constitute  such Tranche A Lender's  Advance on the date of Borrowing for
all  purposes  of this  Agreement.  If such  amount  is not paid to Agent on the
Business Day  following  the Funding  Date,  Agent will notify  Borrower of such
failure to fund and,  upon  demand by Agent,  Borrower  shall pay such amount to
Agent for Agent's  account,  together with interest thereon for each day elapsed
since the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such Borrowing.  The failure of
any Tranche A Lender to make any  Advance on any Funding  Date shall not relieve
any other  Tranche A Lender of any  obligation  hereunder  to make an Advance on
such Funding Date, but no Tranche A Lender shall be responsible  for the failure
of any  other  Tranche  A Lender to make the  Advance  to be made by such  other
Tranche A Lender on any  Funding  Date.  Any Tranche A Lender that fails to make
any Advance  that it is required to make  hereunder on any Funding Date and that
has not cured such failure by making such Advance  within one Business Day after
written demand upon it by Agent to do so, shall constitute a "Defaulting Lender"
for purposes of this Agreement until such Advance is made.


     (iii) Agent shall not be obligated  to transfer to a Defaulting  Lender any
payments  made by Borrower to Agent for the  Defaulting  Lender's  benefit;  nor
shall a Defaulting Lender be entitled to the sharing of any payments  hereunder.
Amounts  payable to a Defaulting  Lender shall instead be paid to or retained by
Agent. Agent may hold and, in its discretion,  re-lend to Borrower the amount of
all such payments  received or retained by it for the account of such Defaulting
Lender.  Solely for the purposes of voting or consenting to matters with respect
to the Loan Documents and determining  Pro-Rata Shares,  such Defaulting  Lender
shall be deemed not to be a "Lender"  and such  Defaulting  Lender's  Commitment
shall be deemed to be zero. This section shall remain  effective with respect to
such  Defaulting  Lender until (a)) the  Obligations  under this Agreement shall
have been declared or shall have become  immediately  due and payable or (B) the
requisite  non-Defaulting  Lenders,  Agent,  and Borrower shall have waived such
Defaulting Lender's default in writing.  The operation of this section shall not
be   construed  to  increase  or  otherwise   affect  the   Commitment   of  any
non-Defaulting  Lender,  or relieve or excuse the performance by Borrower or its
Subsidiaries or any guarantor of the Obligations or their duties and obligations
hereunder.

     (g) Making of Agent Loans.

<PAGE>

     (i) In the event Agent shall elect to have the terms of this Section 2.1(g)
apply to a requested  Borrowing in excess of  $5,000,000 as described in Section
2.1(e) or in the event of any requested  Borrowing of $5,000,000 or less,  Agent
shall make an Advance in the amount of such  Borrowing  (any such  Advance made
solely by Agent  pursuant to this Section  2.1(g) being referred to as an "Agent
Loan" and such  Advances  being  referred  to  collectively  as  "Agent  Loans")
available to Borrower on the Funding  Date  applicable  thereto by  transferring
same day funds to Borrower's  Designated Account.  Each Agent Loan is an Advance
hereunder  and shall be subject to all the terms and  conditions  applicable  to
other  Advances,  except  that all  payments  thereon  shall be payable to Agent
solely  for  its  own  account  (and  for  the  account  of the  holder  of any
participation interest with respect to such Advance).  Subject to the provisions
of  Section  2.1(l),  Agent  shall not make any Agent  Loan if Agent  shall have
received  written  notice  from any Lender (a) copy of which will be provided to
Borrower),  or  otherwise  has  actual  knowledge,  that  (i) one or more of the
applicable  conditions  precedent  set forth in Section 3.1 (with respect to the
initial  funding  on the  Closing  Date)  or 3.2 will  not be  satisfied  on the
requested  Funding  Date for the  applicable  Borrowing,  or (ii) the  requested
Borrowing  would result in the Advances and the Letters of Credit  exceeding the
Availability  on such  Funding  Date.  Agent shall not  otherwise be required to
determine whether the applicable  conditions  precedent set forth in Section 3.1
or 3.2 have been  satisfied  on the Funding  Date  applicable  thereto  prior to
making, in its sole discretion, any Agent Loan.


     (ii)  The  Agent  Loans  shall  be  secured  by the  Collateral  and  shall
constitute  Advances and Obligations  hereunder,  and shall bear interest at the
rate applicable from time to time to Advances pursuant to Section 2.7.

     (h) Agent Advances.

     (i) Agent hereby is  authorized  by Borrower and the Lenders,  from time to
time in Agent's sole  discretion,  (1) after the  occurrence  of a Default or an
Event of Default (but without  constituting a waiver of such Default or Event of
Default),  or (2) at any  time  that  any  of the  other  applicable  conditions
precedent set forth in Section 3.1 or 3.2 have not been satisfied, or (3) at any
time there is no  Availability,  to make  Advances  to Borrower on behalf of the
Lenders which Agent,  in its reasonable  business  judgment,  deems necessary or
desirable (a) to preserve or protect the Collateral, or any portion thereof, (B)
to enhance  the  likelihood  of, or  maximize  the amount of,  repayment  of the
Obligations,  or (C) to pay any other amount  chargeable to Borrower pursuant to
the terms of this  Agreement,  including  Lender  Group  Expenses and the costs,
fees,  and expenses  described  in Section 10 (any of the Advances  described in
this  Section  2.1(h)  being  hereinafter  referred  to  as  "Agent  Advances");
provided,  that Agent shall not make any Agent Advances to Borrower  without the
consent of the Required Lenders if the amount thereof would exceed $3,000,000 in
the aggregate at any one time.

     (ii)  Agent  Advances  shall be  repayable  on demand  and  secured  by the
Collateral,  shall constitute Advances and Obligations hereunder, and shall bear
interest at the rate applicable from time to time to the Obligations pursuant to
Section 2.7.

     (i) Settlement. It is agreed that each Tranche A Lender's funded portion of
the  Advances  is  intended by the Tranche A Lenders to be equal at all times to
such Tranche A Lender's  Tranche A Pro-Rata Share of the  outstanding  Advances.
Such  agreement  notwithstanding,  Agent and the Lenders agree (which  agreement
shall not be for the benefit of or  enforceable  by  Borrower)  that in order to
facilitate the  administration  of this Agreement and the other Loan  Documents,
settlement  among  them as to the  Advances,  the  Agent  Loans,  and the  Agent
Advances shall take place on a periodic  basis in accordance  with the following
provisions:

<PAGE>

     (i) Agent shall  request  settlement  ("Settlement")  with the Lenders on a
weekly  basis,  or on a more frequent  basis if so determined by Agent,  (1) for
itself, with respect to each Agent Loan and Agent Advance,  and (2) with respect
to  Collections  received,  as to each by notifying the Lenders by telephone and
promptly  followed by telecopy,  or other similar form of transmission,  of such
requested  Settlement,  no later than 4:00 p.m.  (Atlanta,  Georgia time) on the
Business Date immediately  preceding the date of such requested  Settlement (the
"Settlement  Date").  Such notice of a Settlement  Date shall  include a summary
statement of the amount of outstanding  Advances,  Term Loans,  Agent Loans, and
Agent  Advances for the period since the prior  Settlement  Date,  the amount of
repayments  received in such period, and the amounts allocated to each Lender of
the principal, interest, fees, and other charges for such period. Subject to the
terms and conditions contained herein (including Section 2.1(i)(ii)): (y) if (a)
a Tranche A  Lender's  balance  of the  Advances,  Tranche A Term  Loans,  Agent
Advances and Agent Loans is less than such Lender's  Tranche A Pro-Rata Share of
the Advances,  Tranche A Term Loans,  Agent  Advances and Agent Loans,  or (B) a
Tranche  B  Lender's  balance  of the  Tranche  B Term  Loans is less  than such
Lender's Tranche B Pro-Rata Share of the Tranche B Term Loans,  then such Lender
shall by no later than 3:00 p.m. (Atlanta, Georgia time) on the Settlement Date
transfer  in same day funds to the account of Agent as Agent may  designate,  an
amount such that each Lender shall, upon receipt of such amount,  have as of the
Settlement  Date, its Tranche A Pro-Rata  Share of all Advances,  Tranche A Term
Loans,  Agent Advances and Agent Loans,  and its Tranche B Pro-Rata Share of all
Tranche  B Term  Loans;  and (z) if (a) a  Tranche  A  Lender's  balance  of the
Advances,  Tranche A Term Loans,  Agent  Advances  and Agent Loans  exceeds such
Lender's Tranche A Pro-Rata Share of the Advances,  Tranche A Term Loans,  Agent
Advances and Agent Loans,  or (B) a Tranche B Lender's  balance of the Tranche B
Term Loans exceeds such Lender's  Tranche B Pro-Rata Share of the Tranche B Term
Loans,  then Agent shall by no later than 4:00 p.m.  (Atlanta,  Georgia time) on
the Settlement  Date transfer in same day funds to the account of such Lender as
such Lender may designate,  an amount such that each Lender shall,  upon receipt
of such amount,  have as of the Settlement Date, its Tranche A Pro-Rata Share of
all  Advances,  Tranche A Term Loans,  Agent  Advances and Agent Loans,  and its
Tranche B Pro-Rata Share of all Tranche B Term Loans;  provided,  however,  that
notwithstanding  the  foregoing  or  anything  in this  Agreement  which  may be
construed to the contrary,  all Agent Advances made at any time when the Tranche
A Commitment  has not been  terminated or there remain  outstanding  Advances or
Tranche A Term Loans  shall be  allocated  to and  reimbursed  by the  Tranche A
Lenders  in  accordance  with  their  Tranche  A Pro Rata  Shares  and all Agent
Advances made at any time thereafter shall be allocated to and reimbursed by the
Tranche B Lenders in accordance with their respective Tranche B Pro-Rata Shares.
Amounts made  available to Agent under clause (y) of the  immediately  preceding
sentence shall be applied  against the amounts of the  applicable  Agent Loan or
Agent Advance and, together with the portion of such Agent Loan or Agent Advance
representing  Foothill's  Pro-Rata Share,  Tranche A Pro-Rata Share or Tranche B
Pro-Rata Share, as the case may be, thereof,  shall constitute  Advances of such
Lenders.  If any such amount is not made available to Agent by any Lender on the
Settlement Date  applicable  thereto to the extent required by the terms hereof,
Agent shall be  entitled  to recover for its account  such amount on demand from
such Lender together with interest thereon at the Defaulting Lenders Rate.

<PAGE>

     (ii) In determining whether a Lender's balance of the Advances, Term Loans,
Agent  Loans,  and Agent  Advances is less than,  equal to, or greater than such
Lender's  Tranche A Pro-Rata Share or Tranche B Pro-Rata  Share, as the case may
be, of the  Advances,  Term  Loans,  Agent  Loans,  and Agent  Advances  as of a
Settlement Date, Agent shall, as part of the relevant Settlement,  apply to such
balance  the  portion of payments  actually  received  by Agent with  respect to
principal,  interest,  fees  payable by Borrower  and  allocable  to the Lenders
hereunder,  and proceeds of Collateral.  To the extent that a net amount is owed
to any such Lender after such application,  such net amount shall be distributed
by Agent to that Lender as part of such Settlement;  provided, however, that the
commitment fee payable by Borrower under Section 2.12(a) shall be distributed to
the Lenders within three Business Days following the Closing Date without regard
to the  netting  of  amounts  owing  to or  owed  by any  Lender  as  part  of a
Settlement.


     (iii) Between  Settlement Dates,  Agent, to the extent no Agent Advances or
Agent Loans are outstanding,  may pay over to Foothill any payments  received by
Agent,  which in accordance  with the terms of the Agreement would be applied to
the reduction of the Advances,  for application to Foothill's Tranche A Pro-Rata
Share of the Advances. If, as of any Settlement Date, Collections received since
the then immediately  preceding  Settlement Date have been applied to Foothill's
Tranche A Pro-Rata  Share of the  Advances  other  than to Agent  Loans or Agent
Advances, as provided for in the previous sentence,  Foothill shall pay to Agent
for the  accounts  of the  Lenders,  and Agent shall pay to the  Lenders,  to be
applied to the  outstanding  Advances of such Lenders,  an amount such that each
Lender shall, upon receipt of such amount, have, as of such Settlement Date, its
Tranche A Pro-Rata Share of the Advances.  During the period between  Settlement
Dates,  Agent with  respect to Agent Loans and Agent  Advances,  and each Lender
with  respect to the Term Loans,  and each  Tranche A Lender with respect to the
Advances  other  than  Agent  Loans and Agent  Advances,  shall be  entitled  to
interest at the  applicable  rate or rates payable  under this  Agreement on the
daily amount of funds employed by Agent or the Lenders, as applicable.

     (j) Notation.  Agent shall record on its books the principal  amount of the
Term Loans, and the Advances owing to each Lender, including the Agent Loans and
Agent Advances owing to Agent,  and the interests  therein of each Lender,  from
time to time. In addition,  each Lender is authorized,  at such Lender's option,
to note the date and amount of each payment or  prepayment  of principal of such
Lender's Term Loan,  and Advances in its books and records,  including  computer
records,  such books and records constituting  rebuttably  presumptive evidence,
absent manifest error, of the accuracy of the information contained therein.

<PAGE>

     (k) Lenders'  Failure to Perform.  All Advances (other than Agent Loans and
Agent  Advances)  shall be made by the Tranche A Lenders  simultaneously  and in
accordance  with their Tranche A Pro-Rata  Shares.  It is understood that (i) no
Lender shall be  responsible  for any failure by any other Lender to perform its
obligation  to make any  Advances  hereunder,  nor shall any  Commitment  of any
Lender be  increased or decreased as a result of any failure by any other Lender
to perform its obligation to make any Advances hereunder, and (ii) no failure by
any Lender to perform its obligation to make any Advances hereunder shall excuse
any other Lender from its obligation to make any Advances hereunder.


     (l)  Overadvances.  (i) Agent may make voluntary  Overadvances  without the
written  consent of the Required  Lenders for amounts  charged to the applicable
Loan Account for principal payments on the Term Loans, interest,  fees or Lender
Group  Expenses  pursuant  to Section  2.1(h)(i)(3)(C).  If the  conditions  for
borrowing  under  Section 3.2 cannot be  fulfilled,  Agent may not knowingly and
intentionally  continue to make  Advances  (including  Agent Loans but excluding
Agent  Advances  pursuant  to  Section  2.1(h))  unless  each  of the  following
conditions  is  satisfied:  (1) after giving  effect to any such  Advances,  the
Advances  outstanding would not exceed the Borrowing Base by more than an amount
proposed  by Agent and  agreed to by the  Lenders,  (2) such  Advances  are made
pursuant  to a plan  (proposed  by Agent and agreed to by the  Lenders)  for the
elimination of the Advances outstanding in excess of the Borrowing Base, (3) the
outstanding  Revolving  Facility Usage (except for and excluding amounts charged
to the applicable  Loan Account for interest,  fees, or Lender Group  Expenses),
does not exceed the  Maximum  Revolving  Amount and (4) Agent shall not make any
such voluntary Overadvance more than sixty (60) days after the date of the first
Overadvance each time Agent shall make or provide the same,  provided,  that, if
at any time within any such sixty (60) day period  commencing on the date of the
first such  Overadvance,  the Advances and the outstanding  Letters of Credit do
not exceed the Borrowing Base for thirty (30) consecutive  days, then such sixty
(60) day period  shall  cease and  recommence  upon the next time that Agent may
make such Overadvance.  The foregoing  provisions are for the sole and exclusive
benefit of Agent and the Lenders and are not intended to benefit Borrower in any
way. The Agent Advances and Agent Loans,  as applicable,  that are made pursuant
to this Section  2.1(l) shall be subject to the same terms and conditions as any
other  Agent  Advance or Agent  Loan,  as  applicable,  except  that the rate of
interest  applicable  thereto shall be the rates set forth in Section  2.7(c)(i)
without  regard to the  presence  or absence  of a Default or Event of  Default;
provided,   that  the  Required  Lenders  may,  at  any  time,   revoke  Agent's
authorization  contained in this Section 2.1(l) to make Overadvances (except for
and excluding amounts charged to the applicable Loan Account for interest, fees,
or Lender Group  Expenses),  any such  revocation to be in writing and to become
effective upon Agent's receipt  thereof;  provided  further,  however,  that the
making of such  Overadvances  shall  not  constitute  a waiver of such  Event of
Default arising therefrom.

<PAGE>
     (ii) In the event Agent obtains actual  knowledge  that Revolving  Facility
Usage exceeds the amount permitted by the preceding paragraph, regardless of the
amount of or reason  for such  excess,  Agent  shall  notify  Lenders as soon as
practicable (and prior to making any (or any further)  intentional  Overadvances
(except for and excluding  amounts  charged to the  applicable  Loan Account for
interest,  fees, or Lender Group  Expenses)  unless Agent  determines that prior
notice  would  result in imminent  harm to the  Collateral  or its  value),  and
Lenders  thereupon shall,  together with Agent,  jointly  determine the terms of
arrangements that shall be implemented with Borrower intended to reduce,  within
a reasonable time, the outstanding  principal amount of the Advances to Borrower
to an amount  permitted  by the  preceding  paragraph.  In the event any  Lender
disagrees over the terms of reduction and/or  repayment of any Overadvance,  the
terms of reduction  and/or repayment  thereof shall be implemented  according to
the determination of the Required Lenders.


     (iii) Each Lender  shall be  obligated  to settle with Agent as provided in
Section 2.1(i) and Section  2.1(l)(ii) for the amount of such Lender's  Pro-Rata
Share, Tranche A Pro-Rata Share or Tranche B Pro-Rata Share, as the case may be,
of any  unintentional  Overadvances  by  Agent  reported  to  such  Lender,  any
intentional  Overadvances  made as permitted under this Section 2.1(l),  and any
Overadvances  resulting  from the  charging to the  applicable  Loan  Account of
interest, fees, or Lender Group Expenses.

     2.2 Letters of Credit.

     (a) Agreement to Cause Issuance;  Amounts; Outside Expiration Date. Subject
to the terms and conditions of this Agreement,  Agent agrees to issue letters of
credit for the account of Borrower  (each,  an "L/C") or to issue  guarantees of
payment  (each such  guaranty,  an "L/C  Guaranty")  with  respect to letters of
credit  issued by an issuing bank for the account of Borrower.  Agent shall have
no obligation to issue a Letter of Credit if any of the following would result:

     (i) the sum of  twenty-five  and  one-half  of one  percent  (25.5%) of the
aggregate  amount of all undrawn and unreimbursed  Inventory  Letters of Credit,
plus  freight and duty  charges  applicable  thereto,  plus one hundred  percent
(100%) of the  aggregate  amount of all other types of undrawn and  unreimbursed
Letters  of  Credit,  would  exceed  the  Borrowing  Base  less  the  amount  of
outstanding  Advances  (including  any Agent  Advances and Agent Loans) less the
aggregate amount of Availability Reserves and reserves established under Section
2.1(b); or

     (ii) the aggregate amount of all undrawn or unreimbursed  Letters of Credit
(including  Inventory  Letters  of  Credit)  would  exceed the lower of: (x) the
Maximum Revolving Amount less the amount of outstanding  Advances (including any
Agent  Advances  and Agent  Loans)  less the  aggregate  amount of  Availability
Reserves and reserves established under Section 2.1(b); or (y) $10,000,000; or

     (iii) the outstanding  Obligations  (other than under the Term Loans) would
exceed the Maximum Revolving Amount.

<PAGE>

     Borrower  expressly  understands  and  agrees  that  Agent  shall  have  no
obligation to arrange for the issuance by issuing banks of the letters of credit
that are to be the  subject of L/C  Guarantees.  Borrower  and the Lender  Group
acknowledge  and agree that  certain of the letters of credit that are to be the
subject of L/C Guarantees may be outstanding on the Closing Date. Each Letter of
Credit shall have an expiry date no later than the date on which this  Agreement
is scheduled to terminate  under  Section 3.4 (without  regard to any  potential
renewal  term) and all such  Letters  of Credit  shall be in form and  substance
acceptable  to  Agent in its sole  discretion.  If the  Tranche  A  Lenders  are
obligated to advance funds under a Letter of Credit,  Borrower immediately shall
reimburse  such amount to Agent and, in the absence of such  reimbursement,  the
amount so advanced immediately and automatically shall be deemed to be a Advance
hereunder and,  thereafter,  shall bear interest at the rate then  applicable to
Advances under Section 2.7.

     (b) Indemnification. Borrower hereby agrees to indemnify, save, defend, and
hold the Tranche A Lenders harmless from any loss, cost,  expense, or liability,
including  payments  made by the  Tranche A Lenders,  expenses,  and  reasonable
attorneys fees incurred by the Tranche A Lenders arising out of or in connection
with any Letter of Credit.  Borrower  agrees to be bound by the  issuing  bank's
regulations  and  interpretations  of any  letters of credit  guarantied  by the
Tranche  A  Lenders  and  opened  to or for  Borrower's  account  or by  Agent's
interpretations  of any  Letter of Credit  issued by Agent to or for  Borrower's
account,  even though this  interpretation may be different from Borrower's own,
and  Borrower  understands  and agrees that the  Tranche A Lenders  shall not be
liable for any error, negligence, or mistake, whether of omission or commission,
in following Borrower's  instructions or those contained in the Letter of Credit
or any modifications,  amendments,  or supplements thereto. Borrower understands
that the L/C  Guarantees  may  require the  Tranche A Lenders to  indemnify  the
issuing bank for certain costs or liabilities  arising out of claims by Borrower
against such issuing bank.  Borrower hereby agrees to indemnify,  save,  defend,
and hold the Tranche A Lenders harmless with respect to any loss, cost,  expense
(including  reasonable  attorneys fees), or liability  incurred by the Tranche A
Lenders  under  any  L/C  Guaranty  as  a  result  of  the  Tranche  A  Lenders'
indemnification of any such issuing bank.

     (c) Supporting  Materials.  Borrower hereby authorizes and directs any bank
that issues a letter of credit guaranteed by an L/C Guaranty to deliver to Agent
all  instruments,  documents,  and other  writings and property  received by the
issuing  bank  pursuant  to such  letter of credit,  and to accept and rely upon
Agent's  instructions  and  agreements  with  respect to all matters  arising in
connection with such letter of credit and the related application.  Borrower may
or may not be the  "applicant" or "account party" with respect to such letter of
credit.

     (d) Costs of Letters of Credit. Any and all charges, commissions, fees, and
costs incurred by Agent  relating to the letters of credit  guaranteed by an L/C
Guaranty  shall  be  considered  Lender  Group  Expenses  for  purposes  of this
Agreement and immediately shall be reimbursable by Borrower to Agent.

<PAGE>

     (e) Cash  Collateral.  Immediately  upon the termination of this Agreement,
Borrower  agrees to either (i) provide cash collateral to be held by Agent in an
amount equal to 102% of the maximum amount of the Tranche A Lenders' obligations
under Letters of Credit,  or (ii) cause to be delivered to Agent releases of all
of the Tranche A Lenders'  obligations under  outstanding  Letters of Credit. At
Agent's  discretion,  any  proceeds  of  Collateral  received by Agent after the
occurrence and during the continuation of an Event of Default may be held as the
cash collateral required by this Section 2.2(e).


     (f) Increased  Costs. If by reason of (i) any change in any applicable law,
treaty,  rule, or regulation or any change in the  interpretation or application
by any  governmental  authority of any such  applicable  law,  treaty,  rule, or
regulation, or (ii) compliance by the issuing bank or the Tranche A Lenders with
any direction, request, or requirement (irrespective of whether having the force
of law) of any governmental  authority or monetary authority including,  without
limitation, Regulation D of the Board of Governors of the Federal Reserve System
as from time to time in effect (and any successor thereto):

     (i) any reserve,  deposit, or similar requirement is or shall be imposed or
modified in respect of any Letters of Credit issued hereunder, or

     (ii) there  shall be imposed on the  issuing  bank or the Tranche A Lenders
any other  condition  regarding  any letter of credit,  or Letter of Credit,  as
applicable, issued pursuant hereto;

     and the result of the foregoing is to increase, directly or indirectly, the
cost  to  the  issuing  bank  or the  Tranche  A  Lenders  of  issuing,  making,
guaranteeing,  or  maintaining  any  letter of credit,  or Letter of Credit,  as
applicable,  or to reduce  the  amount  receivable  in  respect  thereof by such
issuing bank or the Tranche A Lenders, then, and in any such case, Agent may, at
any time within a reasonable period after the additional cost is incurred or the
amount received is reduced,  notify  Borrower,  and Borrower shall pay on demand
such  amounts  as the  issuing  bank or Agent may  specify  to be  necessary  to
compensate  the  issuing  bank or Agent  for  such  additional  cost or  reduced
receipt,  together  with  interest  on such  amount from the date of such demand
until  payment  in full  thereof  at the rate set forth in  Section  2.7(a))  or
(c)(i),  as applicable.  The  determination by the issuing bank or Agent, as the
case may be, of any amount due pursuant to this Section 2.2(f),  as set forth in
a certificate  setting forth the calculation  thereof in reasonable  detail, and
delivered to Borrower upon completion thereof, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.

     (g) Participations.

     (i) Purchase of Participations.  Immediately upon issuance of any Letter of
Credit in  accordance  with this  Section  2.2,  each  Tranche A Lender shall be
deemed to have  irrevocably and  unconditionally  purchased and received without
recourse or warranty,  an undivided  interest  and  participation  in the credit
support or enhancement  provided through Agent to such issuer in connection with
the issuance of such Letter of Credit,  equal to such Tranche A Lenders' Tranche
A Pro-Rata Share of the face amount of such Letter of Credit (including, without
limitation,  all obligations of Borrower with respect thereto,  and any security
therefor or guaranty pertaining thereto).


<PAGE>

     (ii) Documentation.  Upon the request of any Tranche A Lender,  Agent shall
furnish to such Lender copies of any Letter of Credit,  reimbursement agreements
executed  in  connection  therewith,  application  for any  Letter of Credit and
credit  support or  enhancement  provided  through Agent in connection  with the
issuance of any Letter of Credit, and such other documentation as may reasonably
be requested by such Lender.


     (iii) Obligations Irrevocable.  The obligations of each Tranche A Lender to
make  payments to Agent with  respect to any Letter of Credit or with respect to
any credit  support or  enhancement  provided  through  Agent with  respect to a
Letter of Credit, and the obligations of Borrower to make payments to Agent, for
the account of the Tranche A Lenders,  shall be irrevocable,  not subject to any
qualification or exception whatsoever, including, without limitation, any of the
following circumstances:

     (A) any lack of validity or  enforceability of this Agreement or any of the
other Loan Documents;

     (B) the existence of any claim,  setoff,  defense, or other right which any
Borrower may have at any time against a beneficiary  named in a Letter of Credit
or any  transferee  of any  Letter of Credit  (or any  Person  for whom any such
transferee  may be  acting),  any  Lender,  Agent,  the issuer of such Letter of
Credit,  or any other Person,  whether in connection  with this  Agreement,  any
Letter  of  Credit,  the  transactions  contemplated  herein  or  any  unrelated
transactions (including any underlying transactions between such Borrower or any
other Person and the beneficiary named in any Letter of Credit);

     (C) any  draft,  certificate,  or any other  document  presented  under the
Letter of Credit 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 any of the Loan Documents; or

     (E) the occurrence of any Default or Event of Default.

     2.3 Tranche A Term Loans

<PAGE>

     (a) Several  Tranche A Term Loans.  Subject to the terms and  conditions of
this Agreement, each Tranche A Lender severally agrees to make a term loan (each
a "Tranche A Term Loan" and collectively the "Tranche A Term Loans") to Borrower
in an amount equal to each such Tranche A Lender's  Tranche A Pro-Rata  Share of
$10,000,000.  The Tranche A Term Loans shall be made as follows:  (i) $9,715,000
shall be made on the Closing  Date and (ii)  $285,000  shall be made on the date
the Tranche A Commitment Fee Second Installment is due and payable. Each Tranche
A Lender  shall make the amount of such  Tranche A Lender's  Tranche A Term Loan
(except for the portion of the  Tranche A Term Loan  representing  the Tranche A
Commitment  Fee  attributable  to such  Lender)  available  to Agent in same day
funds,  not later than 12:00 noon (Atlanta,  Georgia time), on the Closing Date.
The portion of the Tranche A Term Loans  representing  each  installment  of the
Tranche A  Commitment  Fee shall be deemed to be  advanced  to  Borrower  on the
respective  due dates  therefor.  After Agent's  receipt of the proceeds of such
Tranche A Term Loans, upon satisfaction of the applicable  conditions  precedent
set forth in Sections 3.1 and 3.2, Agent shall make the proceeds of such Tranche
A Term Loans available to Borrower on the Closing Date by transferring  same day
funds equal to the  proceeds of such  Tranche A Term Loans  received by Agent to
the Designated  Account.  All amounts outstanding under the Tranche A Term Loans
shall constitute Obligations.


     (b) Amortization. The Tranche A Term Loan of each Lender shall be repaid in
monthly  installments  of  principal  in the  amount of such  Tranche A Lender's
Tranche A Pro-Rata  Share of $166,667.  Each such  installment  shall be due and
payable  on the  first  day of each  month  commencing  on  August  1,  1999 and
continuing on the first day of each succeeding month. The outstanding  principal
balance  of the  Tranche A Term  Loans,  together  with all  accrued  and unpaid
interest  and fees  thereon,  shall be due and  payable  on the  earlier  of the
Maturity  Date or the date of  termination  of this  Agreement,  whether  by its
terms, by prepayment, by acceleration, or otherwise.

     (c) Mandatory and Optional  Prepayments  of Tranche A Term Loans.  Borrower
shall prepay the Tranche A Term Loans, without premium or penalty,  from the GOB
Store  Proceeds  and from the Net  Proceeds  from the sale of the Real  Property
Collateral and the Secondary Real Estate  pursuant to the allocation of such GOB
Store  Proceeds and Net  Proceeds  provided  for in Section  2.5(b).  The unpaid
principal balance of the Tranche A Term Loans may be prepaid in whole or in part
without  penalty or premium  (except as  provided  in Section  2.16) at any time
during the term of this  Agreement upon thirty (30) days prior written notice by
Borrower to Agent.  All partial  prepayments  of principal on the Tranche A Term
Loans will be applied  ratably to  installments  due on each such Tranche A Term
Loan in the inverse order of their maturity.

     2.4 Tranche B Term Loans.

<PAGE>

     (a) Several  Tranche B Term Loans.  Subject to the terms and  conditions of
this Agreement, each Tranche B Lender severally agrees to make a term loan (each
a "Tranche B Term Loan" and collectively the "Tranche B Term Loans") to Borrower
on the Closing Date, in an amount equal to each such Tranche B Lender's  Tranche
B Pro-Rata Share of $15,000,000.  Each Tranche B Lender shall make the amount of
such  Tranche B  Lender's  Tranche B Term Loan  (except  for the  portion of the
Tranche B Term Loan  representing  the Tranche B Commitment Fee  attributable to
such  Lender)  available  to Agent in same day funds,  not later than 12:00 Noon
(Atlanta,  Georgia time), on the Closing Date. The portion of the Tranche B Term
Loans  representing  the Tranche B Commitment Fee shall be deemed to be advanced
to Borrower on the Closing Date.  After Agent's  receipt of the proceeds of such
Tranche B Term Loans, upon satisfaction of the applicable  conditions  precedent
set forth in Sections 3.1 and 3.2, Agent shall make the proceeds of such Tranche
B Term Loans available to Borrower on the Closing Date by transferring  same day
funds equal to the  proceeds of such  Tranche B Term Loans  received by Agent to
the Designated  Account.  All amounts outstanding under the Tranche B Term Loans
shall constitute Obligations.


     (b) Amortization. The Tranche B Term Loan of each Lender shall be repaid in
monthly  installments  of  principal  in the  amount of such  Tranche B Lender's
Tranche B Pro-Rata  Share of $250,000.  Each such  installment  shall be due and
payable  on the  first  day of each  month  commencing  on  August  1,  1999 and
continuing on the first day of each succeeding month. The outstanding  principal
balance  of the  Tranche B Term  Loans,  together  with all  accrued  and unpaid
interest  and fees  thereon,  shall be due and  payable  on the  earlier  of the
Maturity  Date or the date of  termination  of this  Agreement,  whether  by its
terms, by prepayment, by acceleration, or otherwise.

     (c) Mandatory and Optional  Prepayments  of Tranche B Term Loans.  Borrower
shall prepay the Tranche B Term Loans, without premium or penalty,  from the Net
Proceeds from the sale of the Real Property  Collateral  and the Secondary  Real
Estate  pursuant to the allocation of such Net Proceeds  provided for in Section
2.5(b). So long as the Tranche A Term Loans have been repaid in full, the unpaid
principal balance of the Tranche B Term Loans may be prepaid in whole or in part
without  penalty or premium  (except as  provided  in Section  2.16) at any time
during the term of this  Agreement upon thirty (30) days prior written notice by
Borrower to Agent.  All partial  prepayments  of principal on the Tranche B Term
Loans will be applied  ratably to  installments  due on each such Tranche B Term
Loan in the inverse order of their maturity.

     2.5 Payments

     (a) Payments by Borrower.

     (i) All  payments to be made by  Borrower  shall be made  without  set-off,
recoupment,  deduction,  or counterclaim,  except as otherwise  required by law.
Except as otherwise expressly provided herein, all payments by Borrower shall be
made to Agent for the  account of the  Lenders or Agent,  as the case may be, at
Agent's  address  set forth in  Section  12,  and  shall be made in  immediately
available  funds,  no later than 2:00 p.m.  (Atlanta,  Georgia time) on the date
specified herein.  Any payment received by Agent later than 2:00 p.m.  (Atlanta,
Georgia time), at the option of Agent,  shall be deemed to have been received on
the following Business Day and any applicable  interest or fee shall continue to
accrue until such following Business Day.

     (ii)  Whenever any payment is due on a day other than a Business  Day, such
payment shall be made on the following  Business Day, and such extension of time
shall in such case be included in the  computation  of interest or fees,  as the
case may be.

<PAGE>
     (iii) Unless Agent receives notice from Borrower prior to the date on which
any payment is due to the Lenders  that  Borrower  will not make such payment in
full as and when required,  Agent may assume that Borrower has made such payment
in full to Agent on such date in immediately  available funds and Agent may (but
shall not be so required), in reliance upon such assumption,  distribute to each
Lender on such due date an amount equal to the amount then due such  Lender.  If
and to the extent  Borrower  has not made such  payment  in full to Agent,  each
Lender  shall repay to Agent on demand such amount  distributed  to such Lender,
together with interest  thereon at the Reference Rate for each day from the date
such amount is distributed to such Lender until the date repaid.


     (b Apportionment and Application of Payments.

     (i)  Except as  otherwise  provided  with  respect to  Defaulting  Lenders,
aggregate principal and interest payments shall be apportioned ratably among the
Lenders  (according  to the unpaid  principal  balance of the  Advances or Term
Loans to which such  payments  relate held by each Lender) and,  payments of the
fees (other than fees  designated  for  Agent's  separate  account and except as
specifically  provided in Section 2.12) shall,  as  applicable,  be  apportioned
ratably among the Lenders. All payments shall be remitted to Agent.

     (ii) Except upon the occurrence  and during the  continuance of an Event of
Default, all payments (other than payments specifically relating to principal or
interest on the Term Loans or specific Advances and payments of specific fees to
be applied to specific Term Loans or Advances,  and other than payments from the
GOB Store  Proceeds and the Net  Proceeds of Primary  Real Estate and  Secondary
Real Estate which shall be applied to the  Obligations as set forth below) shall
be applied,  first, to pay any fees or expense  reimbursements then due to Agent
from Borrower; second, to pay any fees or expense reimbursements then due to the
Lenders from  Borrower;  third,  to pay interest due in respect of all Advances,
including Agent Loans and Agent Advances;  fourth, to pay or prepay principal of
Agent Loans and Agent Advances;  fifth, ratably to pay principal of Advances and
unreimbursed  obligations  in  respect of  Letters  of  Credit;  sixth,  to cash
collateralize any issued and outstanding Letters of Credit; seventh,  ratably to
pay  principal  and  accrued  and unpaid  interest  in respect of Tranche A Term
Loans,  and  eighth,  ratably to pay any other  Obligations  due to Agent or any
Lender by Borrower.

     (iii) Except upon the occurrence and during the  continuance of an Event of
Default, GOB Store Proceeds shall be applied as follows: first, to pay or prepay
principal and accrued  interest on the Agent Loans and Agent  Advances;  second,
ratably to pay principal and accrued  interest on the Advances and  unreimbursed
obligations in respect of Letters of Credit;  third, to cash  collateralize  any
issued and outstanding Letters of Credit;  fourth,  ratably to pay principal and
accrued interest in respect of the Tranche A Term Loans; and fifth, in the order
set forth in Section 2.5(b)(ii) above.


<PAGE>

     (iv) Except upon the occurrence  and during the  continuance of an Event of
Default, Net Proceeds of the Primary Real Estate and Secondary Real Estate shall
be applied as follows:  first,  to the principal and accrued and unpaid interest
and fees on the Tranche A Term Loans;  second,  to the principal and accrued and
unpaid  interest and fees on the Tranche B Term Loans;  third,  until the actual
advance rate with respect to Inventory is equal to eighty-five  percent (85%) of
the most recently  determined GOB Appraisal Value of the Cost (determined  based
on the RSL) of Inventory,  to the principal and accrued interest and fees on the
Agent  Loans and Agent  Advances,  then  ratably to pay  principal  and  accrued
interest  and fees on the Advances and  unreimbursed  obligations  in respect of
Letters of Credit  and then to cash  collateralize  any  issued and  outstanding
Letters of Credit;  and  fourth,  to  Borrower  to be applied by Borrower to the
remaining Advances  outstanding  pursuant to Section 2.9 (but not as a permanent
reduction of the Commitments).

     (v) Upon the occurrence and during the  continuance of an Event of Default,
all payments  (except for payments  from the Net Proceeds of Primary Real Estate
and Secondary Real Estate which shall be applied to the Obligations as set forth
in Section 2.5(b)(vi) below) shall be applied, first, to pay any fees or expense
reimbursements  then due to Agent from Borrower;  second, to pay any fees (other
than fees set forth in Section  2.12(b)) or expense  reimbursements  then due to
the  Lenders  from  Borrower;  third,  to pay  interest  due in  respect  of all
Advances,  including Agent Loans and Agent Advances; fourth, to pay interest due
in respect of all Tranche A Term Loans; fifth, to cash collateralize  issued and
outstanding Letters of Credit;  sixth, to pay or prepay principal of Agent Loans
and Agent Advances;  seventh, ratably to pay principal of the Advances;  eighth,
ratably to pay  principal  of the Tranche A Term Loans;  ninth,  to pay fees set
forth in Section 2.12(b); tenth, to pay interest due in respect of all Tranche B
Term Loans;  eleventh,  ratably to pay  principal  of Tranche B Term Loans;  and
twelfth,  ratably  to pay any other  Obligations  due to Agent or any  Lender by
Borrower.

     (vi) Upon the occurrence and during the continuance of an Event of Default,
Net  Proceeds of the  Primary  Real Estate and  Secondary  Real Estate  shall be
applied as follows:  first, to the principal and accrued and unpaid interest and
fees on the  Tranche A Term  Loans;  second,  to the  principal  and accrued and
unpaid  interest  and fees of the  Advances,  including  Agent  Loans  and Agent
Advances;  third,  to pay the principal and accrued and unpaid interest and fees
on the  Tranche B Term  Loans;  and  fourth,  in the order set forth in  Section
2.5(b)(v) above.

     (vii) Agent  shall  promptly  distribute  to each  Lender,  pursuant to the
applicable wire transfer instructions received from each Lender in writing, such
funds  as it may be  entitled  to  receive,  subject  to a  Settlement  delay as
provided for in Section 2.1(i).

<PAGE>

     (c)  Promise  to Pay.  Borrower  hereby  promises  to pay in United  States
Dollars in full to Agent,  for the benefit of the Lender Group, the Obligations,
including,  without  limitation,  the principal  amount of all Advances and Term
Loans,  and all accrued and unpaid interest and fees thereon,  all in accordance
with the terms of this Agreement.

     Overadvances. Subject to the other terms and conditions hereof, the Lenders
may, in their sole discretion,  make Advances  hereunder in excess of the amount
set forth in Section 2.1 hereof.  If, at any time or for any reason,  the amount
of Obligations owed by Borrower to the Lender Group pursuant to Sections 2.1 and
2.2 is greater  than either the Dollar or  percentage  limitations  set forth in
Sections  2.1 or 2.2 (an  "Overadvance"),  Borrower  immediately  shall  pay on
demand  to Agent,  in cash,  the  amount  of such  excess to be used by Agent to
reduce the Obligations pursuant to the terms of Section 2.5(b).  Notwithstanding
the foregoing, no Overadvances shall be outstanding for greater than a sixty-day
(60) period at any one time.

     2.7   Interest   and  Letter  of  Credit   Fees:   Rates,   Payments,   and
Calculations.

     (a)  Interest  Rate.  Except as  provided  in  clause  (c)  below,  (i) all
Eurodollar  Rate  Loans  shall  bear  interest  at a per annum rate equal to the
Adjusted  Eurodollar Rate plus the applicable margin (as calculated below) (the
"Margin")  in effect  with  respect to  Eurodollar  Rate Loans from time to time
outstanding,  (ii)  Reference Rate Loans shall bear interest at a per annum rate
equal to the  Reference  Rate plus the Margin in effect with respect to the type
(i.e.  Advance or Tranche A Term Loan) of Reference Rate Loans from time to time
outstanding,  (iii)  Tranche B Term Loans  shall bear  interest at the per annum
rate of twelve and three  quarters of one percent  (12.75%),  and (iv) all other
Obligations  shall bear  interest  at the per annum rate equal to the  Reference
Rate plus the Margin in effect with respect to Advances that are Reference  Rate
Loans.  As of the Closing Date and through and including the date of termination
of this  Agreement,  the Margin shall be the applicable per annum rate set forth
in the table below:


<TABLE>
<CAPTION>

                                  Margin                   Margin
                                   for                      for
Type of Obligation:        Reference Rate Loans:    Eurodollar Rate Loans:
--------------------       ---------------------    ----------------------
<S>                        <C>                      <C>
Advances                          0.50%                     2.75%
--------------------       ---------------------    ----------------------
Tranche A Term Loans              1.75%                 Not Available
--------------------       ---------------------    ----------------------
</TABLE>


     (b) Letter of Credit Fee. Borrower shall pay Agent, for the ratable benefit
of the  Tranche  A Lenders  based on the  Tranche A  Pro-Rata  Share,  a fee (in
addition  to the  charges,  commissions,  fees,  and costs set forth in  Section
2.2(d)) equal to one and one-half  percent  (1.5%) per annum times the aggregate
undrawn amount of all outstanding Letters of Credit.


<PAGE>

     (c) Default Rate.  Upon the  occurrence and during the  continuation  of an
Event of Default,  (i) all  Obligations  (except for undrawn  Letters of Credit)
shall bear  interest at a per annum rate equal to three  percentage  points (3%)
above the rate otherwise applicable to such Obligations,  and (ii) the Letter of
Credit fee  provided in Section  2.7(b)  shall be increased to four and one-half
percent (4.5%) per annum times the amount of the aggregate undrawn amount of all
outstanding Letters of Credit.


     (d) [Intentionally Omitted.]

     (e) Payments. Interest and Letter of Credit fees payable hereunder shall be
due and  payable,  in  arrears,  on the first day of each month  during the term
hereof. Borrower hereby authorizes Agent, at its option, without prior notice to
Borrower,  to charge such  interest and Letter of Credit fees,  all Lender Group
Expenses (as and when  incurred),  the charges,  commissions,  fees,  and costs
provided for in Section  2.2(d) (as and when accrued or incurred),  the fees and
charges  provided  for in Section  2.12,  2.15 and 2.16 (as and when  accrued or
incurred),  and all  installments or other payments due under the Term Loans, or
any Loan Document to the applicable Loan Account, which amounts thereafter shall
accrue interest at the rate then applicable to Advances hereunder.  Any interest
not paid when due shall be compounded and shall  thereafter  accrue  interest at
the rate then applicable to Advances hereunder.

     (f)  Computation.  The Reference  Rate as of the date of this  Agreement is
seven and  three-quarters  percent (7.75%) per annum. In the event the Reference
Rate is changed from time to time  hereafter,  the  applicable  rate of interest
hereunder  automatically  and immediately  shall be increased or decreased by an
amount  equal to such  change  in the  Reference  Rate.  All  interest  and fees
chargeable  under the Loan Documents shall be computed on the basis of a 360 day
year for the actual number of days elapsed.

     (g) Intent to Limit  Charges to Maximum  Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court  of  competent   jurisdiction  shall,  in  a  final  determination,   deem
applicable.  Borrower and the Lender  Group,  in executing and  delivering  this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided,  however, that, anything contained herein
to the contrary notwithstanding,  if said rate or rates of interest or manner of
payment exceeds the maximum  allowable under applicable law, then, ipso facto as
of the date of this  Agreement,  Borrower  is and shall be  liable  only for the
payment of such maximum as allowed by law, and payment received from Borrower in
excess of such legal maximum,  whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.



<PAGE>

     2.8 Collection of Accounts


     (a)  Borrower  shall,  immediately  after the Closing  Date,  instruct  all
Account Debtors to remit all Collections  directly to the Concentration  Account
via electronic funds transfer  (including,  but not limited to ACH transfers) on
each  Business  Day.  Borrower  shall cause all cash received by Borrower at any
retail store location to be deposited on a daily basis into any Blocked  Account
or, at Agent's  option,  any other bank  account to be  deposited  to or sent by
electronic funds transfer (including, but not limited to, ACH transfers) on each
Business Day to the Concentration Account. In addition, Borrower agrees that all
other  Collections  and other  amounts  received  directly by Borrower  from any
Account Debtor or any other source  immediately  upon receipt shall be deposited
into any Blocked  Account.  With respect to such bank  accounts that are Blocked
Accounts, Borrower, Agent and the Blocked Account Banks shall enter into Blocked
Account  Agreements,  which,  among other  things,  with  respect to all Blocked
Accounts  (other  than the  Concentration  Account)  will  provide  for all cash
deposited  into a  Blocked  Account  to be sent  by  electronic  funds  transfer
(including,  but  not  limited  to,  ACH  transfers)  each  Business  Day to the
Concentration Account;  provided,  however, that all cash deposited into Blocked
Accounts at Hibernia  National Bank and Norwest Bank  Minnesota,  N.A.  shall be
wired each  Business Day into an account (the "Agent's  Account")  maintained by
Agent at a depository  selected by Agent.  With  respect to each account  (other
than Blocked  Accounts) into which  Collections  are  deposited,  Borrower shall
irrevocably authorize and direct in writing, in form and substance  satisfactory
to Agent, each such bank to send via wire transfer  (including,  but not limited
to, ACH transfers)  each Business Day all funds deposited into each such account
to the Concentration Account and each such bank shall agree to do so. No Blocked
Account  Agreement or other  arrangement  contemplated  in this Section  2.8(a))
shall be modified by Borrower  without the prior written consent of Agent.  Upon
the  terms and  subject  to the  conditions  set  forth in the  Blocked  Account
Agreement  applicable to the Concentration  Account, all amounts received in the
Concentration Account shall be wired each Business Day into the Agent's Account.

     (b) Borrower  shall not, and shall not permit any of its  Subsidiaries  to,
open or maintain  any deposit  account or  investment  account  with any bank or
other  financial  institution  other than the  Designated  Account,  the Blocked
Accounts and the other accounts listed on Schedule 2.8. All deposit accounts and
investment accounts of Borrower and its Subsidiaries are listed on Schedule 2.8.



<PAGE>

     2.9 Crediting  Payments;  Application  of  Collections.  The receipt of any
Collections  by Agent  (whether  from  transfers  to Agent by the  Concentration
Account Bank  pursuant to the  Concentration  Account  Agreement  or  otherwise)
immediately shall be applied provisionally to reduce the Obligations outstanding
under Section 2.1, but shall not be considered a payment on account  unless such
Collection item is a wire transfer of immediately available federal funds and is
made to the Agent's  Account or unless and until such Collection item is honored
when presented for payment. From and after the Closing Date, Agent (for its sole
account)  shall be  entitled to charge  Borrower  for one (1)  Business  Days of
"clearance"  or Afloat" at the rate set forth in Section  2.7(a)(ii)  or Section
2.7(c)(i),  as  applicable,  on all  Collections  that  are  received  by  Agent
(regardless  of whether  forwarded by the  Concentration  Account Bank to Agent,
whether  provisionally  applied to reduce the Obligations  under Section 2.1, or
otherwise). This across-the-board one (1) Business Day clearance or float charge
on all  Collections  is  acknowledged  by the parties to  constitute an integral
aspect of the pricing of the financing of Borrower, and shall apply irrespective
of the  characterization of whether receipts are owned by Borrower or Agent, and
whether or not there are any outstanding Advances,  the effect of such clearance
or float  charge  being the  equivalent  of  charging  one (1)  Business  Day of
interest on such  Collections.  Should any  Collection  item not be honored when
presented  for  payment,  then  Borrower  shall be deemed  not to have made such
payment,  and  interest  shall  be  recalculated  accordingly.  Anything  to the
contrary contained herein  notwithstanding,  any Collection item shall be deemed
received by Agent only if it is received into the Agent's  Account on a Business
Day on or before 2:00 p.m.  (Atlanta,  Georgia time).  If any Collection item is
received  into the  Agent's  Account  on a  non-Business  Day or after 2:00 p.m.
(Atlanta,  Georgia  time) on a  Business  Day,  it shall be deemed to have been
received by Agent as of the opening of  business  on the  immediately  following
Business Day.


     2.10 Designated Account.  Agent and the Lender Group are authorized to make
the  Advances,  the Letters of Credit,  and the Term Loans under this  Agreement
based upon telephonic or other  instructions  received from anyone purporting to
be an Authorized Person, or without  instructions if pursuant to Section 2.7(e).
Borrower  agrees to  establish  and  maintain  the  Designated  Account with the
Designated  Account  Bank for the  purpose  of  receiving  the  proceeds  of the
Advances  requested by Borrower and made by the Lender Group  hereunder.  Unless
otherwise  agreed by Agent and Borrower,  any Advance  requested by Borrower and
made by the Lender Group hereunder shall be made to the Designated Account.

     2.11  Maintenance of Loan Account;  Statements of Obligations.  Agent shall
maintain an account on its books in the name of Borrower (the "Loan Account") on
which Borrower will be charged with all Advances, and the Term Loans made by the
Lender Group to Borrower or for Borrower's account, including, accrued interest,
Lender  Group  Expenses,  and any other  payment  Obligations  of  Borrower.  In
accordance with Section 2.9, the Loan Account will be credited with all payments
received by Agent from Borrower or for Borrower's account, including all amounts
received in the Agent's Account from the Concentration Account Bank. Agent shall
render statements  regarding the Loan Account to Borrower,  including principal,
interest,  fees,  and  including  an  itemization  of all charges  and  expenses
constituting  the Lender Group  Expenses  owing,  and such  statements  shall be
conclusively  presumed  to be correct and  accurate  and  constitute  an account
stated  between  Borrower and the Lender Group  unless,  within thirty (30) days
after  receipt  thereof by Borrower,  Borrower  shall  deliver to Agent  written
objection  thereto  describing  the  error  or  errors  contained  in  any  such
statements.

     2.12 Fees.  Borrower shall pay to Agent (except where otherwise  indicated)
for the ratable benefit of the Lender Group (except where  otherwise  indicated)
the following fees:


<PAGE>

     (a) Tranche A Fees.


     (i) Tranche A Commitment  Fee. A  commitment  fee in the amount of $855,000
(the :Tranche A Commitment  Fee") which fee shall be fully earned on the Closing
Date. Sixty-six and two-thirds percent (66.67%) of the Tranche A Commitment Fee,
in the amount of $570,000  shall be due and payable on the Closing Date to Agent
for the ratable  benefit of the Lenders  under the Tranche A Commitment  and the
remaining  portion of the Tranche A Commitment  Fee,  $285,000,  (the "Tranche A
Commitment Fee Second  Installment")  shall be payable on the earlier of (x) the
date 120 days  following the Closing Date,  (y) payment in full of the Tranche A
Term Loan, and (z) the  Termination  Date. The Tranche A Commitment Fee shall be
payable from the proceeds of the Tranche A Term Loans.

     (ii) Unused  Line Fee.  On the first day of each month for the  immediately
preceding  month  during the term of this  Agreement,  an unused  line fee in an
amount equal to one-quarter  of one percent  (0.25%) per annum times the Average
Unused Portion of the Maximum  Revolving Amount payable to Agent for the ratable
benefit of the Tranche A Lenders.

     (iii) Co-Agent's Fee Letter.  The fees set forth in that certain fee letter
of even date  herewith  between  Borrower  and  Co-Agent  (the  "Co-Agent's  Fee
Letter"), payable to Co-Agent for its own account; and

     (iv)  Agent's Fee Letter.  The fees set forth in that certain fee letter of
even date  herewith  between  Borrower  and Agent (the  "Agent's  Fee  Letter"),
payable to Agent for its own account;

     (b) Tranche B Fees.

     (i) Tranche B Commitment  Fee. A commitment fee of $300,000 (the "Tranche B
Commitment  Fee")  payable to Agent for the  ratable  benefit  of the  Tranche B
Lenders, which fee shall be fully earned and due and payable on the Closing Date
from a portion of the proceeds of the Tranche B Term Loans;

     (ii) Foothill  Partners' Fee Letter. The fees set forth in that certain fee
letter of even  date  herewith  between  Borrower  and  Foothill  Partners  (the
"Foothill  Partners'  Fee  Letter"),  payable to Foothill  Partners  for its own
account; and

<PAGE>

     (c) Financial Examination,  Documentation, and Appraisal Fees. For the sole
accounts of Agent:  (i) a fee of $650 per day per examiner,  plus  out-of-pocket
expenses for each financial analysis and examination (i.e.,  audits) of Borrower
performed by personnel  employed by Agent;  (ii) an appraisal  fee of $1,500 per
day per  appraiser,  plus  out-of-pocket  expenses  for  each  appraisal  of the
Collateral  performed  by  personnel  employed  by Agent;  (iii) the  reasonable
charges  actually  paid or incurred by Agent if it elects to employ the services
of one or more third Persons to perform such financial analyses and examinations
(i.e.,  audits) of Borrower;  and (iv) the reasonable  charges  actually paid or
incurred  by Agent if it elects  to employ  the  services  of one or more  third
Persons  to  appraise  the  Collateral;  provided,  however,  that so long as no
Default or Event of Default has occurred,  the fees owed by Borrower pursuant to
Section   2.12(c)(i)  and  (iii)  shall  not  exceed  $35,000  per  annum,  plus
out-of-pocket expenses as otherwise provided for in Section 2.12(c)(i).

     (d)  Miscellaneous.  Except as specifically  provided herein,  the fees set
forth herein shall be fully  earned when due,  non-refundable  when paid and, if
applicable,  computed  on the basis of a 360 day year for the  actual  number of
days elapsed.

     2.13 Eurodollar  Rate Loans.  Any other  provisions  herein to the contrary
notwithstanding,   the  following   provisions  shall  govern  with  respect  to
Eurodollar Rate Loans as to the matters covered:

     (a) Borrowing; Conversion; Continuation. Borrower may from time to time, on
or after the  Closing  Date,  request  in  writing  to Agent:  (i)  Advances  to
constitute  Eurodollar  Rate  Loans;  (ii) that  Reference  Rate  Loans that are
Advances  be  converted  into  Eurodollar  Rate  Loans;  or (iii) that  existing
Eurodollar  Rate Loans  continue for an  additional  Interest  Period.  Any such
request  shall specify the aggregate  amount of the  requested  Eurodollar  Rate
Loans,  the proposed  funding date therefor  (which shall be a Business Day, and
with  respect to  continued  Eurodollar  Rate Loans shall be the last day of the
Interest Period of the existing Eurodollar Rate Loans being continued),  and the
proposed  Interest  Period,  in each case subject to the  limitations  set forth
below.  Eurodollar Rate Loans may only be made, continued, or extended if, as of
the  proposed  funding  date  therefor  each  of  the  following  conditions  is
satisfied:

     (v) no Event of Default exists;

     (w) no more than five (5) Eurodollar Rate Loans may be in effect at any one
time;

     (x) the  amount  of each  Eurodollar  Rate  Loan  borrowed,  converted,  or
continued must be in an amount not less than  $1,000,000 and integral  multiples
of $500,000 in excess thereof;

     (y) Agent  shall  have  determined  that the  Interest  Period or  Adjusted
Eurodollar  Rate is  available  to the  Tranche  A  Lenders  and can be  readily
determined  as of the date of the  request  for  such  Eurodollar  Rate  Loan by
Borrower; and

<PAGE>

     (z) Agent shall have  received  such request at least two (2) Business Days
prior to the proposed funding date therefor.


Any request by Borrower to borrow  Eurodollar Rate Loans,  to convert  Reference
Rate Loans to Eurodollar Rate Loans, or to continue any existing Eurodollar Rate
Loans shall be  irrevocable,  except to the extent  that Agent  shall  determine
under Sections  2.13(a),  2.14 or 2.15 that such Eurodollar Rate Loans cannot be
made or continued.

     (b)  Determination  of Interest  Period.  By giving  notice as set forth in
Section 2.13(a), Borrower shall have the option of selecting a one (1), two (2),
or  three  (3)  month  Interest  Period  for  such  Eurodollar  Rate  Loan.  The
determination of Interest Periods shall be subject to the following provisions:

     (i) 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;

     (ii) if any Interest Period would otherwise  expire on a day which is not a
Business  Day,  the  Interest  Period  shall be  extended  to expire on the next
succeeding Business Day; provided, however, that if the next succeeding Business
Day occurs in the following  calendar month, then such Interest Period shall end
on the last  Business  Day of the  calendar  month  at the end of such  Interest
Period;

     (iii) if any Interest  Period begins on the last Business Day of a month or
on a day for which there is no  numerically  corresponding  day in the  calendar
month at the end of such Interest Period,  then the Interest Period shall end on
the last Business Day of the calendar month at the end of such Interest  Period;
and

     (iv)  Borrower may not select an Interest  Period which  expires later than
the Maturity Date.

<PAGE>

     (c) Automatic Conversion: Optional Conversion by Agent. Any Eurodollar Rate
Loan shall  automatically  convert to a Reference Rate Loan upon the last day of
the applicable Interest Period,  unless Agent has received a request to continue
such  Eurodollar  Rate Loan at least two (2)  Business  Days prior to the end of
such  Interest  Period in  accordance  with the terms of Section  2.13 (a).  Any
Eurodollar  Rate Loan  shall,  at the  Lender  Group's  option,  upon  notice to
Borrower,  convert  to a  Reference  Rate Loan in the event that (i) an Event of
Default shall have occurred and be continuing as of the last day of the Interest
Period for such Eurodollar Rate Loan, or (ii) this Agreement is terminated,  and
Borrower shall pay to Agent for the benefit of the Tranche A Lenders any amounts
required by Section 2.16 as a result thereof.


     2.14   Illegality.   Any   other   provision   herein   to   the   contrary
notwithstanding,  if the adoption of or any change in any  Requirement of Law or
in the  interpretation  or  application  thereof  shall make it unlawful for any
Tranche A Lender to make or maintain  Eurodollar  Rate Loans as  contemplated by
this Agreement,  (a)) the obligation of the Tranche A Lenders  hereunder to make
Eurodollar  Rate  Loans,  continue  Eurodollar  Rate Loans as such,  and convert
Reference Rate Loans to Eurodollar  Rate Loans shall  forthwith be suspended and
(b) the then  outstanding  Eurodollar  Rate Loans,  if any,  shall be  converted
automatically  to Reference Rate Loans on the  respective  last days of the then
current  Interest  Periods with respect thereto or within such earlier period as
required by law;  provided,  however,  that before making any such demand,  each
Tranche A Lender agrees to use reasonable efforts  (consistent with its internal
policy and legal and regulatory  restrictions  and so long as such efforts would
not be  disadvantageous  to it,  in its  reasonable  discretion,  in any  legal,
economic,  or regulatory  manner) to designate a different lending office if the
making of such a  designation  would allow such  Tranche A Lender or its lending
office to continue to perform its  obligations to make Eurodollar Rate Loans. If
any such  conversion of a Eurodollar  Rate Loan occurs on a day which is not the
last day of the then  current  Interest  Period with respect  thereto,  Borrower
shall pay to Agent for the benefit of the  Tranche A Lenders  such  amounts,  if
any, as may be required pursuant to Section 2.16. If circumstances  subsequently
change so that the Tranche A Lenders shall  determine that they are no longer so
affected,  the  Tranche A Lenders  promptly  will  notify  Agent and Agent  will
promptly notify  Borrower,  and upon receipt of such notice,  the obligations of
the  Tranche A Lenders to make or continue  Eurodollar  Rate Loans or to convert
Reference Rate Loans into Eurodollar Rate Loans shall be reinstated.

     2.15 Requirements of Law

     (a) If the  adoption of or any change in any  Requirement  of Law or in the
interpretation  or  application  thereof or  compliance by the Tranche A Lenders
with any request or directive  (whether or not having the force of law) from any
central bank or other Governmental authority made subsequent to the date hereof:

     (i) shall  subject  any  Tranche A Lender to any tax,  levy,  charge,  fee,
reduction,  or withholding of any kind whatsoever with respect to this Agreement
or any  Advance,  or change the basis of  taxation  of payments to any Tranche A
Lender in respect  thereof (except for the  establishment  of a tax based on the
net  income of such  Tranche A Lender or  changes  in the rate of tax on the net
income of such Tranche A Lender);

<PAGE>

     (ii) shall impose, modify or hold applicable any reserve,  special deposit,
compulsory  loan, or similar  requirement  against  assets held by,  deposits or
other  liabilities in or for the account of, loans or other extensions of credit
by, or any other acquisition of funds by, any office of any Tranche A Lender; or


     (iii) shall impose on any Tranche A Lender any other condition with respect
to this Agreement or any Advance;

and the result of any of the  foregoing is to increase the cost to any Tranche A
Lender of making,  converting into,  continuing,  or maintaining Eurodollar Rate
Loans or to reduce any amount receivable hereunder in respect of Eurodollar Rate
Loans,  or to forego any other sum  payable  thereunder  or make any  payment on
account  thereof,  then,  in any such case,  Borrower  shall  promptly  pay such
Tranche  A  Lender,  upon  its  demand,  any  additional  amounts  necessary  to
compensate  such  Tranche A Lender for such  increased  cost or  reduced  amount
receivable;  provided, however, that before making any such demand, each Tranche
A Lender agrees to use reasonable  efforts  (consistent with its internal policy
and legal and regulatory  restrictions  and so long as such efforts would not be
disadvantageous to it, in its reasonable discretion,  in any legal, economic, or
regulatory  manner) to designate a different  Eurodollar  lending  office if the
making of such  designation  would allow such Tranche A Lender or its Eurodollar
lending office to continue to perform its  obligations to make  Eurodollar  Rate
Loans or to  continue to fund or  maintain  Eurodollar  Rate Loans and avoid the
need for, or materially  reduce the amount of, such increased cost. If a Tranche
A Lender  becomes  entitled  to claim any  additional  amounts  pursuant to this
Section 2.15, such Tranche A Lender shall notify Agent and Borrower of the event
by reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section 2.15 submitted by a Tranche A Lender to
Agent and Borrower  shall be  conclusive  in the absence of manifest  error.  If
Borrower so notifies  any such Tranche A Lender  within five (5)  Business  Days
after such Tranche A Lender notifies  Borrower of any increased cost pursuant to
the foregoing  provisions of this Section 2.15 and reimburses  such for any cost
in accordance with Section 2.16.,  Borrower may convert all affected  Eurodollar
Rate Loans then outstanding into Reference Rate Loans in accordance with Section
2.13.

<PAGE>

     (b) If any Tranche A Lender shall have  determined  that the adoption of or
any  change in any  Requirement  of Law  regarding  capital  adequacy  or in the
interpretation or application  thereof or compliance by such Tranche A Lender or
any Person  controlling  such  Tranche A Lender  with any  request or  directive
regarding  capital  adequacy  (whether  or not having the force of law) from any
governmental authority made subsequent to the date hereof does or shall have the
effect of increasing the amount of capital required to be maintained or reducing
the rate of return on such  Tranche A  Lender's  or such  Person's  capital as a
consequence  of its  obligations  hereunder  to a level  below  that  which such
Tranche A Lender or such  Person  could  have  achieved  but for such  change or
compliance  (taking into  consideration such Tranche A Lender's or such Person's
policies with respect to capital adequacy) by an amount deemed by such Tranche A
Lender to be material,  then from time to time, after submission by such Tranche
A Lender to Agent and Borrower of a prompt written  request  therefor,  Borrower
shall pay to such  Tranche A Lender  such  additional  amount or amounts as will
compensate  such  Tranche  A Lender  or such  Person  for such  reduction.  This
covenant shall survive the  termination of this Agreement and the payment of the
Obligations.

     2.16 Indeminity.  Borrower agrees to indemnify each Tranche A Lender and to
hold each Tranche A Lender  harmless from any loss or expense which such Tranche
A Lender may sustain or incur as a  consequence  of (a) a default by Borrower in
payment when due of the principal  amount of or interest on any Eurodollar  Rate
Loan,  (b) a default by Borrower in making a borrowing of,  conversion  into, or
continuation  of  Eurodollar  Rate  Loans  after  Borrower  has  given a  notice
requesting the same in accordance with the provisions of this  Agreement,  (c) a
default by Borrower in making any  prepayment  after Borrower has given a notice
thereof in accordance with the provisions of this  Agreement,  or (d) the making
of a prepayment of  Eurodollar  Rate Loans on a day which is not the last day of
an Interest Period with respect thereto  (whether due to the termination of this
Agreement upon an Event of Default or otherwise),  including,  in each case, any
such loss or expenses arising from the  re-employment of funds obtained by it or
from fees payable to terminate the deposits from which such funds were obtained.
Calculation  of all amounts  payable to the Tranche A Lenders under this Section
2.16  shall be made as though  the  Tranche A Lenders  had  actually  funded the
relevant Eurodollar Rate Loan through the purchase of a deposit bearing interest
at the  Adjusted  Eurodollar  Rate in an  amount  equal  to the  amount  of such
Eurodollar Rate Loan and having a maturity  comparable to the relevant  Interest
Period;  provided,  however,  that any  Tranche  A Lender  may fund  each of the
Eurodollar  Rate  Loans in a manner it sees fit,  and the  foregoing  assumption
shall be utilized only for the calculation of amounts payable under this Section
2.16.  This covenant  shall survive the  termination  of this  Agreement and the
payment of the Obligations.

<PAGE>

     2.17 Super-Priority  Nature of Obligations.  All Obligations under the Loan
Documents shall constitute administrative expenses of Borrower in the Chapter 11
Case with priority under Section  364(c)(1) of the Bankruptcy  Code over any and
all other  administrative  expenses of the kind  specified in Sections 105, 326,
330, 331, 503, 507 and 726 of the Bankruptcy  Code, and shall also have priority
over any claims arising under Section 506(c) of the Bankruptcy Code, (a) subject
and subordinate only to the following (hereinafter referred to as the "Carve-Out
Expenses"):  (i) fees and disbursements incurred on and after the Relief Date by
professionals  retained  pursuant to Court order in the Chapter 11 Case pursuant
to Sections 327 or 1103 of the  Bankruptcy  Code by Borrower or any Committee or
an examiner  appointed to which Agent  consents  pursuant to Section 1104 of the
Bankruptcy Code (the "Bankruptcy Professionals"),  and any costs and expenses of
members of the  Committees,  up to a maximum  aggregate  amount  outstanding and
unpaid not to exceed  $1,000,000 (such dollar amount being referred to herein as
the "Carve-Out  Amount")  (determined  without regard to fees and expenses which
may be awarded and paid on an interim basis and exclusive of any pre-Relief Date
retainers paid or subsequently transferred to any Bankruptcy Professionals), and
(ii) any  statutorily  mandated  costs and fees of the United States  Trustee or
clerk of the Court with respect to the Chapter 11 Case; provided,  however, that
the Carve-Out Expenses shall not include (x) any other claims that are or may be
senior to or pari passu with any of the  Carve-Out  Expenses  or (y) any fees or
expenses  of the  Bankruptcy  Professionals  incurred  in  connection  with  the
commencement  or continuation of any suit,  motion,  action or other  proceeding
challenging the extent, validity, perfection,  enforceability or priority of the
Agent's or Lenders=  claims or liens  arising  under or in  connection  with the
Pre-Relief Date Loan Agreement,  provided further,  however,  that the Carve-Out
Amount  shall be decreased to $750,000 if, and at such time as, the Court enters
an order  providing  for the  payment of  professional  fees and  expenses on an
interim  monthly basis in an amount of at least eighty percent (80%) of the fees
for  professional  services  rendered  and one  hundred  percent  (100%)  of the
expenses  incurred  during a particular  month,  and (b) pari passu with allowed
administrative  expense claims of the kind specified in Section 503(b)(1)(a)) of
the Bankruptcy  Code of trade creditors for Inventory sold to Borrower after the
Relief Date  pursuant to trade  credit  terms.  No other claim having a priority
superior  or pari passu to that  granted  to Agent and the  Lenders by the Final
Order shall be granted or approved  while any  Obligations  under this Agreement
remain outstanding.

     3. CONDITIONS; TERM OF AGREEMENT

     3.1 Conditions Precedent to the Initial Advance,  Letter of Credit, and the
Term Loans. The obligation of the Lender Group to make the initial  Advance,  to
issue the initial Letter of Credit,  or to make the Term Loans is subject to the
fulfillment,  to the  satisfaction  of  Agent  and its  counsel,  of each of the
following conditions on or before the Closing Date:

     (a)  Agent  shall  have  received  each of the  following  documents,  duly
executed, and each such document shall be in full force and effect:

     a. the Oversight Agent Agreement;

     b. the Disbursement Letter;

     c. the Mortgages;

     d. the Stock Pledge Agreement;

     e. the Subsidiary Guaranty Agreement;

     f. the Subsidiary Security Agreement;

     g. the Trademark Security Agreement;

     h. the Assignment of Real Estate Trust Interests;

<PAGE>

     i. the Assignment of Note;


     j. the Co-Agent's Fee Letter;

     k. the Agent's Fee Letter;

     l. the Foothill Partners= Fee Letter; and

     m. financing  statements and fixture  filings  necessary to perfect Agent's
security interest in the Personal Property Collateral;

     (b) Agent shall have received a certificate  from the Secretary of Borrower
attesting to the  resolutions of Borrower's  Board of Directors  authorizing its
execution,  delivery,  and  performance  of this  Agreement  and the other  Loan
Documents  to which  Borrower is a party and  authorizing  specific  officers of
Borrower to execute the same;

     (c) Agent  shall  have  received  copies of any  amendments  to  Borrower's
Governing  Documents,  from the  Pre-Relief  Date Loan  Agreement to the Closing
Date, certified by the Secretary of Borrower;

     (d) Agent  shall have  received a  certificate  of status  with  respect to
Borrower, dated within ten (10) days of the Closing Date, such certificate to be
issued  by the  appropriate  officer  of the  jurisdiction  of  organization  of
Borrower,  which certificate shall indicate that Borrower is in good standing in
such jurisdiction;

     (e) Agent  shall  have  received  certificates  of status  with  respect to
Borrower,  each  dated  within  fifteen  (15)  days of the  Closing  Date,  such
certificates to be issued by the  appropriate  officer of the  jurisdictions  in
which its failure to be duly qualified or licensed  would  constitute a Material
Adverse  Change,  which  certificates  shall  indicate  that Borrower is in good
standing in such jurisdictions;

     (f) Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 6.10, the form and substance of
which shall be satisfactory to Agent and its counsel;

     (g) Agent shall have received a Collateral  Access Agreement from H. Butler
Footwear,  Inc., together with precautionary UCC-1 financing statements covering
Inventory stored on the premises of H. Butler  Footwear,  Inc., each in form and
substance satisfactory to Agent;

<PAGE>

     (h) Agent shall have  received  opinions of Borrower's  corporate  counsel,
Fowler,  White,  Gillen,  Boggs,  Villareal  and Banker,  P.A.,  and  Borrower's
bankruptcy counsel,  Stichter,  Riedel, Blain & Prosser,  P.A., each in form and
substance satisfactory to Agent in its sole discretion;


     (i) Agent shall have  received  satisfactory  evidence that all tax returns
required  to be filed by  Borrower  have been  timely  filed and all taxes  upon
Borrower or its  properties,  assets,  income,  and franchises  (including  real
property  taxes and payroll taxes) have been paid prior to  delinquency,  except
such taxes (i) that are the subject of a Permitted Protest, (ii) with respect to
which the  Borrower's  failure to pay such taxes is permitted by the  Bankruptcy
Code or by an order of the Court after notice and a hearing,  (iii) with respect
to which  Borrower's  failure to pay such taxes has been consented to in writing
by the holder of such tax claims and written notice thereof has been provided to
Agent,  and (iv) that are disclosed to Agent and with respect to which Agent has
consented to Borrower's failure to pay such taxes;

     (j) Agent shall have received the financial  projections  and Business Plan
of Borrower for the  succeeding  twelve (12) month period  following the Closing
Date, in form and substance satisfactory to Agent and in its sole discretion;

     (k) Agent shall have received  evidence  satisfactory to it that (i) before
giving effect to the borrowings on the Closing Date,  Borrower has  unrestricted
cash on hand in an amount  equal to or greater than of at least  $8,000,000  and
(ii) all cash being held by Borrower (excluding cash in disbursement accounts to
cover checks issued) has been deposited into the  Concentration  Account or wire
transferred to the Agent's Account;

     (l) the Final  Order,  in form and  substance  reasonably  satisfactory  to
Agent,  approving  the  transactions  contemplated  hereby and  granting a first
priority  perfected  security interest in the Collateral  subject only to Senior
Claims  shall  have been  entered by the Court and Agent  shall have  received a
certified copy of such Final Order;

     (m) the automatic  stay shall have been modified to permit the creation and
perfection of Agent's Liens and security  interests on behalf of the Lenders and
shall have been  modified  to permit  enforcement  of Agent's  and the  Lenders=
rights  and  remedies  under  the  Loan  Documents  subject  to  satisfying  the
requirements of Section 9.1 and paragraph 17 of the Final Order;

     (n) Agent shall have received the Initial GOB Store  Proceeds from Borrower
for  application  to the  Obligations  (as defined in the  Pre-Relief  Date Loan
Agreement) which Agent acknowledges have been received and so applied; and

     (o)  all  other   documents  and  legal  matters  in  connection  with  the
transactions  contemplated  by this  Agreement  shall  have been  delivered  and
executed  and  shall  be in form and  substance  satisfactory  to Agent  and its
counsel.

<PAGE>

     3.2  Conditions  Precedent to all  Advances,  all Letters of Credit and the
Term Loans.  The following  shall be conditions  precedent to all Advances,  all
Letters      of      Credit      and     the     Term      Loans      hereunder:


     (a) the representations and warranties  contained in this Agreement and the
other Loan Documents  shall be true and correct in all respects on and as of the
date of such extension of credit,  as though made on and as of such date (except
to the extent  that such  representations  and  warranties  relate  solely to an
earlier date);

     (b) if requested by Agent, Borrower shall provide to Agent a Borrowing Base
Certificate dated as of the day of the requested Advance;

     (c) no Default or Event of Default shall have occurred and be continuing on
the date of such  extension of credit,  nor shall either  result from the making
thereof; and

     (d) no injunction,  writ,  restraining  order, or other order of any nature
prohibiting,  directly or  indirectly,  the  extending of such credit shall have
been issued and remain in force by any governmental  authority against Borrower,
the Lender Group or any of their Affiliates.

     3.3  Conditions  Subsequent.  As conditions  subsequent to initial  closing
hereunder,  Borrower  shall perform or cause to be performed the following  (the
failure by Borrower to so perform or cause to be performed constituting an Event
of Default):

     (a) on or before February 16, 1999, Borrower shall file an application with
the Court seeking to engage, subject to Court approval, an outside consultant or
financial advisor reasonably acceptable to Agent;

     (b) on or before the date fifteen  (15) days  following  the Closing  Date,
Borrower shall have delivered to Agent (i) Blocked Account  Agreements from each
of Norwest Bank Minnesota,  N.A., NationsBank,  N.A. and Hibernia National Bank,
and Credit Card  Agreements from each of Paymentech,  Novus  Services,  Inc. and
American Express Travel Related Services Co., Inc.;

     (c) on or before the date fifteen  (15) days  following  the Closing  Date,
Agent shall have received appraisals of the Inventory satisfactory to Agent;

     (d) on or before the date thirty  (30) days  following  the  Closing  Date,
Agent shall have received evidence  reasonably  satisfactory to it that Borrower
has closed the bank  accounts  designated as "in process of closing" on Schedule
2.8;

<PAGE>

     (e) on or before the date thirty  (30) days  following  the  Closing  Date,
Borrower shall have delivered to Agent a report in form reasonably  satisfactory
to Agent  scheduling all  reclamation  claims  asserted by creditors of Borrower
with respect to Inventory shipped prior to the Relief Date;

     (f) on or before the date sixty (60) days following the Closing Date, Agent
shall  have   received  such   Collateral   Access   Agreements   from  lessors,
warehousemen,  bailees,  and other third persons as Agent may reasonably require
or the  inclusion of such  findings and decretal  portions in the Final Order as
Agent,  in its sole  discretion,  may deem equivalent to, and acceptable in lieu
of,  the  execution  and  delivery  of the  afore-referenced  Collateral  Access
Agreements;

     (g) on or before the date sixty (60) days following the Closing Date, Agent
shall have  received  a  mortgagee  waiver  agreement  with  respect to all real
property  securing  loans to  financial  or other  institutions  as set forth on
Schedule P-2 on which  Inventory is located,  in form and  substance  reasonably
satisfactory to Agent or the inclusion of such findings and decretal portions in
the Final Order as Agent,  in its sole  discretion,  may deem equivalent to, and
acceptable  in lieu of,  the  execution  and  delivery  of the  afore-referenced
mortgagee waiver agreements; and

     (h) on or before  April 1, 1999,  Borrower  shall have  delivered  to Agent
Borrower's plan to resolve any "year 2000 problem" (as defined in Section 5.16),
in form and substance reasonably satisfactory to Agent.

     3.4 Term.  This  Agreement  shall become  effective  upon the execution and
delivery  hereof by  Borrower  and the Lender  Group and shall  continue in full
force and effect for a term ending on the date the  earlier of (a) the  Maturity
Date,   (b)  the  earlier  of  the  effective   date  of  a  confirmed  plan  of
reorganization  or the date thirty (30) days  following the date of the entry of
an  order  confirming  a  plan  of  reorganization,   (c)  acceleration  of  the
Obligations  following the occurrence of an Event of Default, or (d) the date of
the  closing  of the  sale of all or  substantially  all of  Borrower's  assets,
including  without  limitation a sale of all or substantially  all of Borrower's
assets  pursuant  to Section 363 of the  Bankruptcy  Code,  a confirmed  plan of
reorganization  or a liquidation in either a Chapter 11 or a Chapter 7 case (but
specifically  excluding  the  liquidation  contemplated  by the GOB Order)  (the
earliest of such dates  referred to in  subsections  (a),  (b), (c) and (d), the
"Termination Date").  Notwithstanding the foregoing,  the Required Lenders shall
have the right to terminate this Agreement  immediately  upon the occurrence and
during the continuation of an Event of Default.

<PAGE>

     3.5  Effect  of  Termination.  On the  Termination  Date,  all  Obligations
(including contingent reimbursement  obligations of Borrower with respect to any
outstanding  Letters of Credit) immediately shall become due and payable without
notice or demand.  No termination of this Agreement,  however,  shall relieve or
discharge Borrower of Borrower's duties,  Obligations,  or covenants  hereunder,
and the Lender Group's  continuing  security  interests in the Collateral  shall
remain in effect until all  Obligations  have been fully and finally  discharged
and the Lender  Group's  obligation to provide  additional  credit  hereunder is
terminated.

     3.6 Early  Termination  by Borrower.  Borrower has the option,  at any time
upon ten (10) days prior written  notice to Agent,  to terminate  this Agreement
prior to the  Maturity  Date by paying to Agent (for the ratable  benefit of the
Lender Group),  in cash, the  Obligations  (including an amount equal to 102% of
the undrawn amount of the Letters of Credit),  in full, together with a fee (the
"Deferred Closing Fee") equal to 1% of the Maximum Amount if terminated prior to
the Maturity Date;  provided,  however,  that the Deferred  Closing Fee shall be
equal to 0.50% of the Maximum Amount if the Commitments are being terminated and
the  Obligations  are  being  paid  in  connection  with  the  sale  of  all  or
substantially  all of the assets of  Borrower  pursuant  to  Section  363 of the
Bankruptcy  Code so long as all  Obligations  are repaid on or before August 16,
1999;  provided further,  however,  that no Deferred Closing Fee shall be due if
(a)) the Obligations are being refinanced by "exit financing" provided by any or
all of the Lenders (but specifically  including  Foothill) whether in connection
with  Borrower's  reorganization  and  emergence  from  bankruptcy  or a sale of
Borrower or all or substantially  all of Borrower's assets to a third party, (b)
Agent on behalf  of the  Lenders  fails to  deliver  to  Borrower  a good  faith
proposal  for "exit  financing"  within the time  period set forth below in this
Section  3.6,  (c) Agent on behalf of the  Lenders  fails to match a  reasonably
competitive  offer for "exit  financing"  received  in writing by  Borrower  and
forwarded to Agent, or (d) Borrower conducts an orderly liquidation,  with Court
approval,  and the  Obligations  are repaid in full on or before August 16, 1999
(each of the foregoing  events  described in clauses (a), (b), (c) and (d) shall
hereafter be referred to as a "Deferred Closing Fee Carve-Out  Event").  If this
Agreement is terminated prior to the Maturity Date (including without limitation
upon any of the  events  described  above  in  subsections  (b),  (c) and (d) of
Section 3.4) and no Deferred  Closing Fee Carve-Out Event has occurred,  in view
of the  impracticability  and extreme difficulty of ascertaining  actual damages
and by mutual  agreement  of the parties as to a reasonable  calculation  of the
Lender  Group's lost profits as a result  thereof,  Borrower  shall pay to Agent
(for the ratable  benefit of the Lender Group) upon the  effective  date of such
termination,  a fee in an amount equal to the Deferred Closing Fee. The Deferred
Closing  Fee shall be  presumed  to be the  amount of damages  sustained  by the
Lender Group as the result of the early  termination and Borrower agrees that it
is reasonable under the circumstances  currently existing.  The Deferred Closing
Fee  provided  for  in  this  Section  3.6  shall  be  deemed  included  in  the
Obligations. Agent on behalf of the Lenders shall make a good faith proposal for
"exit financing" for Borrower within fifteen (15) days of receipt of (I) a draft
of a proposed plan of reorganization of Borrower,  and (II) a  post-confirmation
business  plan of  Borrower;  provided,  however,  that such plans  described in
clauses  (I) and (II)  above,  first shall have been  reviewed  and  approved by
Borrower's consultant or financial advisor reasonably acceptable to Agent.

<PAGE>

     4. CREATION OF SECURITY INTEREST.


     4.1 Grant of Security  Interest.  Borrower  hereby  grants to Agent for the
benefit  of the  Lender  Group  a  continuing  security  interest  in all of its
currently   existing  and  hereafter   acquired  or  arising  Personal  Property
Collateral in order to secure prompt repayment of any and all Obligations and in
order to secure  prompt  performance  by Borrower of each of its  covenants  and
duties under the Loan Documents. The security interests of Agent for the benefit
of the Lender Group in Borrower's  Personal Property  Collateral shall attach to
all of Borrower's  Personal Property  Collateral without further act on the part
of the Lender Group or  Borrower.  Anything  contained in this  Agreement or any
other Loan  Document to the  contrary  notwithstanding,  except as  permitted by
Section 7.4,  Borrower has no authority,  express or implied,  to dispose of any
item  or  portion  of  the  Personal  Property  Collateral,  the  Real  Property
Collateral, or the Secondary Real Estate.

     4.2  Negotiable  Collateral.  In the event that any  Collateral,  including
proceeds,  is  evidenced  by or consists  of  Negotiable  Collateral,  Borrower,
immediately  upon the  request of Agent,  shall  endorse  and  deliver  physical
possession of such Negotiable Collateral to Agent.

     4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.
At any time,  Agent or  Agent's  designee  may (a) notify  customers  or Account
Debtors of  Borrower  that the  Accounts,  General  Intangibles,  or  Negotiable
Collateral  have been  assigned to Agent for the benefit of the Lender  Group or
that Agent for the benefit of the Lender Group has a security  interest therein,
and (b) upon a Default or Event of Default or if the Lender  Group deems  itself
insecure, collect the Accounts,  General Intangibles,  and Negotiable Collateral
directly  and charge the  collection  costs and  expenses  to the Loan  Account.
Borrower  agrees that it will hold in trust for the Lender Group,  as the Lender
Group's  trustee,  any Collections that it receives and immediately will deliver
said Collections to Agent in their original form as received by Borrower.
<PAGE>

     4.4 Delivery of  Additional  Documentation  Required.  At any time upon the
request of Agent,  Borrower  shall  execute and  deliver to Agent all  financing
statements,   continuation  financing  statements,   fixture  filings,  security
agreements,  pledges,  assignments,   endorsements  of  certificates  of  title,
applications for title,  affidavits,  reports,  notices,  schedules of accounts,
letters of authority, and all other documents that Agent reasonably may request,
in form  satisfactory to Agent,  to perfect and continue  perfected the Liens of
the Lender Group in the  Collateral  pledged by Borrower,  and in order to fully
consummate all of the transactions  contemplated hereby and under the other Loan
Documents. Without limiting the generality of the foregoing, (a) at such time as
legal title to the Secondary Real Estate (other than Secondary Real Estate owned
by Property  Holdings as of the Closing  Date) is vested in  Borrower,  Borrower
shall  contemporaneously (i) execute such mortgages and other documents required
by Agent in its  reasonable  discretion  to  provide  Agent  with a lien on such
Secondary Real Estate,  and (ii) deliver such other  documents,  instruments and
opinions,  including title insurance policies,  consistent with those documents,
instruments and opinions  required with respect to the Primary Real Estate,  and
(b) at such time as Borrower  obtains  consent  from the  applicable  holders of
Senior Claims with respect thereto, Borrower shall contemporaneously (i) execute
such mortgages, security agreements and other documents required by Agent in its
reasonable  discretion to provide Agent with a lien on the Secondary Real Estate
and  personal  property  of  Property  Holdings,  and (ii)  deliver  such  other
documents,  instruments,  financing  statements  and opinions,  including  title
insurance  policies,  consistent with those  documents,  instruments,  financing
statements and opinions required with respect to the Primary Real Estate.


     4.5 Power of Attorney. Borrower hereby irrevocably makes, constitutes,  and
appoints Agent (and any of Agent's officers,  employees, or agents designated by
Agent) as  Borrower's  true and lawful  attorney,  with power to (a) if Borrower
refuses  to,  or fails  timely  to  execute  and  deliver  any of the  documents
described  in Section  4.4,  sign the name of Borrower  on any of the  documents
described  in Section 4.4, (b) at any time that an Event of Default has occurred
and is continuing  or the Lender Group deems itself  insecure,  sign  Borrower's
name on any invoice or bill of lading  relating to any Account,  drafts  against
Account  Debtors,  schedules  and  assignments  of  Accounts,  verifications  of
Accounts,  and notices to Account Debtors, (c) send requests for verification of
Accounts,  (d) endorse Borrower's name on any Collection item that may come into
the Lender Group's possession,  (e) at any time that (x) an Event of Default has
occurred and is continuing or the Lender Group deems itself insecure and (y) the
Lender Group has asserted or implemented  any rights or remedies under Article 9
hereof, notify the post office authorities to change the address for delivery of
Borrower's mail to an address  designated by Agent, to receive and open all mail
addressed to Borrower, and to retain all mail relating to the Collateral pledged
by Borrower and immediately  return all other mail to Borrower,  (f) at any time
that an Event of Default has  occurred  and is  continuing  or the Lender  Group
deems itself  insecure,  make,  settle,  and adjust all claims under  Borrower's
policies of insurance and make all  determinations and decisions with respect to
such  policies  of  insurance,  and (g) at any time that an Event of Default has
occurred and is  continuing  or Agent deems itself  insecure,  settle and adjust
disputes and claims respecting the Accounts  directly with Account Debtors,  for
amounts and upon terms that Agent  determines  to be  reasonable,  and Agent may
cause to be  executed  and  delivered  any  documents  and  releases  that Agent
determines to be necessary. The appointment of Agent as Borrower's attorney, and
each and every one of Agent's rights and powers, being coupled with an interest,
is irrevocable  until all of the Obligations  have been fully and finally repaid
and performed and the Lender  Group's  obligation to extend credit  hereunder is
terminated.

<PAGE>


     Agent  (through any of its officers,  employees,  or agents),  and together
with any  Lender  that so  elects,  shall  have  the  right,  from  time to time
hereafter  (and,  so long as no Default or Event of Default has occurred and is
continuing,  during regular  business hours) to inspect  Borrower's Books and to
check, test, and appraise the Collateral in order to verify Borrower's financial
condition  or the amount,  quality,  value,  condition  of, or any other  matter
relating  to,  the  Collateral.  Unless  and until a Default or Event of Default
occurs, Agent intends to conduct (a) on site financial analyses and examinations
of  Borrower  no more  frequently  than  quarterly,  and (b)  appraisals  on the
Personal Property  Collateral no more frequently than  semi-annually;  provided,
however,  that, at all times,  Agent shall be entitled to conduct  appraisals of
the Collateral in its sole discretion.  Agent, from time to time (in all events,
at Borrower's expense),  may undertake "mystery shopping"  (so-called) visits to
all or any of Borrower's business premises.  Agent shall provide Borrower with a
copy of any  non-company  confidential  results of such  mystery  shopping  upon
completion thereof.


     5. REPRESENTATIONS AND WARRANTIES.

     In order to induce the Lender Group to enter into this Agreement,  Borrower
makes the following representations and warranties which shall be true, correct,
and complete in all respects as of the date hereof, and shall be true,  correct,
and complete in all respects as of the Closing  Date,  and at and as of the date
of the  making  of each  Advance  and the  issuance  of each  Letter  of  Credit
thereafter,  as though made on and as of the date of such Advance or issuance of
such  Letter of Credit  (except  to the  extent  that such  representations  and
warranties  relate  solely  to an  earlier  date) and such  representations  and
warranties shall survive the execution and delivery of this Agreement:

     5.1  No  Encumbrances.   Borrower  and  its  Subsidiaries   have  good  and
indefeasible  title to the  Collateral,  free and  clear  of  Liens  except  for
Permitted Liens.

     5.2  Eligible  Accounts.  The  Eligible  Accounts  are bona  fide  existing
obligations  created by the sale and delivery of  Inventory or the  rendition of
services  to Account  Debtors in the  ordinary  course of  Borrower's  business,
unconditionally   owed  to  Borrower  without   defenses,   disputes,   offsets,
counterclaims,  or rights of return or cancellation. The property giving rise to
such  Eligible  Accounts  has been  delivered to the Account  Debtor,  or to the
Account Debtor's agent for immediate shipment to and unconditional acceptance by
the  Account  Debtor.  Eligible  Accounts do not  consist of any  Accounts  with
respect  to which  goods are placed on  consignment,  guaranteed  sale,  sale or
return,  sale on approval,  bill and hold, or other terms by reason of which the
payment by the  Account  Debtor may be  conditional.  Eligible  Accounts  do not
consist of Accounts with respect to which the goods giving rise to such Accounts
have not been shipped and billed to the Account Debtor, the services giving rise
to such Accounts have not been performed and accepted by the Account Debtor,  or
Accounts that otherwise do not represent final sales.  Eligible  Accounts do not
consist of Accounts that represent  progress  payments or other advance billings
that are due prior to the  completion of  performance by Borrower of the subject
contract for goods or services.  Borrower has not received notice of bankruptcy,
insolvency,  or material  impairment of the  financial  condition of any Account
Debtor regarding any Eligible Account.

     5.3 Eligible Inventory.  All Eligible Inventory is of good and merchantable
quality, free from defects.


<PAGE>

     5.4  Equipment.  All of the Equipment is used or held for use in Borrower's
business and is fit for such purposes.

     5.5 Location of Inventory and  Equipment.  Except with respect to Inventory
stored at the Butler Shoe Warehouse and at the Genco Warehouse,  the Inventory
and  Equipment  are not stored  with a bailee,  warehouseman,  or similar  party
(without  Agent's prior  written  consent) and are located only at the locations
identified on Schedule 6.12 or otherwise permitted by Section 6.12.

     5.5  Inventory  Records.   Borrower  keeps  correct  and  accurate  records
itemizing and describing the kind, type, quality, and quantity of the Inventory,
and Borrower's Cost therefor.

     5.7 Location of Chief Executive Office; FEIN. The chief executive office of
Borrower is located at the address  indicated in the preamble to this  Agreement
and Borrower's FEIN is 52-1643157.

     5.8 Due Organization and Qualification;  Subsidiaries.

     (a) Each of Borrower and each  Subsidiary of Borrower is duly organized and
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
incorporation and qualified and licensed to do business in, and in good standing
in, any state where the failure to be so licensed or qualified  reasonably could
be expected to have a Material Adverse Change.

     (b)  Set  forth  on  Schedule  5.8,  is a  complete  and  accurate  list of
Borrower's direct and indirect  Subsidiaries,  showing:  (i) the jurisdiction of
their  incorporation;  (ii) the  number of shares  of each  class of common  and
preferred stock authorized for each of such  Subsidiaries;  and (iii) the number
and the percentage of the  outstanding  shares of each such class owned directly
or indirectly  by Borrower.  All of the  outstanding  capital stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.

     (c)  Except  as set  forth  on  Schedule  5.8,  no  capital  stock  (or any
securities,  instruments,  warrants,  options,  purchase  rights,  conversion or
exchange rights, calls,  commitments or claims of any character convertible into
or  exercisable  for  capital  stock) of any direct or  indirect  Subsidiary  of
Borrower  is subject  to the  issuance  of any  security,  instrument,  warrant,
option,  purchase right, conversion or exchange right, call, commitment or claim
of any right, title, or interest therein or thereto.

     5.9 Due Authorization; No Conflict.

<PAGE>

     (a)  The  execution,   delivery,  and  performance  by  Borrower  and  each
Subsidiary of Borrower, as applicable,  of this Agreement and the Loan Documents
to which Borrower or any such Subsidiary is a party have been duly authorized by
all necessary corporate action.

     (b)  The  execution,   delivery,  and  performance  by  Borrower  and  each
Subsidiary of Borrower, as applicable,  of this Agreement and the Loan Documents
to  which  Borrower  or any such  Subsidiary  is a party do not and will not (i)
violate any provision of federal,  state, or local law or regulation  (including
Regulations T, U, and X of the Federal Reserve Board)  applicable to Borrower or
any such Subsidiary,  as applicable,  the Governing Documents of Borrower or any
such Subsidiary,  as applicable,  or any order, judgment, or decree of any court
or other governmental  authority binding on Borrower or any such Subsidiary,  as
applicable,  (ii) result in a breach of, or constitute (with due notice or lapse
of time or both) a default under any material contractual obligation or material
lease of Borrower or any such  Subsidiary,  as  applicable,  (iii)  result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of Borrower or any such  Subsidiary of Borrower  other than
Permitted Liens, or (iv) require any approval of stockholders or any approval or
consent of any Person under any material  contractual  obligation of Borrower or
any such Subsidiary of Borrower.

     (c) Other than the entry of the Final  Order and the filing of  appropriate
financing statements,  fixture filings and mortgages,  the execution,  delivery,
and  performance  by Borrower and each  Subsidiary of Borrower of this Agreement
and the Loan Documents to which Borrower or any Subsidiary,  as applicable, is a
party do not and will not require any registration  with,  consent,  or approval
of, or notice to, or other action with or by, any federal,  state,  foreign,  or
other governmental authority or other Person.

     (d) This  Agreement  and the Loan  Documents  to  which  Borrower  and each
Subsidiary of Borrower is a party, and all other documents  contemplated  hereby
and thereby, when executed and delivered by Borrower or any such Subsidiary,  as
applicable,  will be the legally  valid and binding  obligations  of Borrower or
such Subsidiary, as applicable, enforceable against Borrower or such Subsidiary,
as applicable,  in accordance with their respective terms, except as enforcement
may be limited by equitable  principles and, with respect to Subsidiaries  other
than Property  Holdings and Guide Series,  Inc.,  except as  enforcement  may be
limited by bankruptcy, insolvency,  reorganization,  moratorium, or similar laws
relating to or limiting creditors= rights generally.

     (e) The Liens granted by Borrower and each  Subsidiary of Borrower to Agent
(for the benefit of the Lender Group) in and to Borrower's and its Subsidiaries=
properties  and assets  pursuant to this  Agreement and the other Loan Documents
are validly  created,  perfected,  and first  priority  Liens,  subject  only to
Permitted Liens.

<PAGE>

     5.10 Litigation.  There are no actions or proceedings pending by or against
Borrower or any Subsidiary of Borrower before any court or administrative agency
and Borrower does not have  knowledge or belief of any pending,  threatened,  or
imminent  litigation,   governmental  investigations,   or  claims,  complaints,
actions, or prosecutions  involving Borrower, any Subsidiary of Borrower, or any
guarantor of the  Obligations,  except for: (a) the Chapter 11 Case, (b) ongoing
collection matters in which Borrower is the plaintiff;  (c) matters disclosed on
Schedule  5.10;  and (d) matters  arising after the date hereof that, if decided
adversely  to  Borrower or any  Subsidiary  of  Borrower,  would not result in a
Material Adverse Change.


     5.11 No Material  Adverse  Change.  All  financial  statements  relating to
Borrower,  any Subsidiary of Borrower or any guarantor of the  Obligations  that
have been  delivered  by  Borrower  to the Lender  Group have been  prepared  in
accordance with GAAP (except, in the case of unaudited financial statements, for
the lack of  footnotes  and being  subject to year-end  audit  adjustments)  and
fairly present  Borrower's (or such Subsidiary's or guarantor's,  as applicable)
financial  condition as of the date thereof and Borrower's (or such Subsidiary's
or guarantor's,  as applicable) results of operations for the period then ended.
There has not been a Material  Adverse  Change with respect to Borrower (or such
Subsidiary or guarantor,  as applicable)  since the date of the latest financial
statements submitted to the Lender Group on or before the Closing Date.

     5.12  Solvency.  No  transfer  of property is being made by Borrower or any
Subsidiary of Borrower and no  obligation  is being  incurred by Borrower or any
Subsidiary of Borrower in connection with the transactions  contemplated by this
Agreement  or the other Loan  Documents  with the intent to  hinder,  delay,  or
defraud  either  present or future  creditors of Borrower or any  Subsidiary  of
Borrower.

     5.13 Employee Benefits.  None of Borrower,  any Subsidiary of Borrower,  or
any of their ERISA  Affiliates  maintains or  contributes  to any Benefit  Plan,
other than those listed on Schedule 5.13. Borrower,  each Subsidiary of Borrower
and each ERISA Affiliate have satisfied the minimum  funding  standards of ERISA
and the IRC with  respect  to each  Benefit  Plan to which  it is  obligated  to
contribute.  No ERISA Event has occurred nor has any other event  occurred  that
may result in an ERISA  Event that  reasonably  could be expected to result in a
Material  Adverse  Change.  None of Borrower or any Subsidiary of Borrower,  any
ERISA  Affiliate,  or any  fiduciary  of any Plan is  subject  to any  direct or
indirect  liability with respect to any Plan under any applicable  law,  treaty,
rule,  regulation,  or agreement except for liability for contributions incurred
in the  normal  operation  and  administration  of the  Plan or  Plans.  None of
Borrower or any  Subsidiary  of Borrower or any ERISA  Affiliate  is required to
provide security to any Plan under Section 401(a))(29) of the IRC.



<PAGE>

     5.14  Environmental   Condition.   To  the  best  of  Borrower's  and  each
Subsidiary's knowledge,  after due and reasonable inquiry, none of Borrower's or
any Subsidiary of Borrower's properties or assets has ever been used by Borrower
or any  Subsidiary  of  Borrower  or, to the best of  Borrower's  knowledge,  by
previous owners or operators in the disposal of, or to produce,  store,  handle,
treat, release, or transport, any Hazardous Materials, except in compliance with
all  applicable  laws.  None  of  Borrower's  or any  Subsidiary  of  Borrower's
properties  or assets  has ever been  designated  or  identified  in any  manner
pursuant  to any  environmental  protection  statute  as a  Hazardous  Materials
disposal  site,  or a  candidate  for  closure  pursuant  to  any  environmental
protection statute.  No Lien arising under any environmental  protection statute
has  attached  to any  revenues  or to any real or  personal  property  owned or
operated by Borrower or any Subsidiary of Borrower.  Borrower has not received a
summons, citation, notice, or directive from the Environmental Protection Agency
or any other  federal  or state  governmental  agency  concerning  any action or
omission by Borrower  resulting  in the  releasing  or  disposing  of  Hazardous
Materials into the environment.


     5.15 Intellectual Property. Neither Borrower nor any Subsidiary of Borrower
owns,  licenses or has any rights to or interest in any  patents,  trade  names,
trademarks,  servicemarks,  registered  copyrights,  or any  application for the
registration of any of the foregoing, except as set forth on Schedule 5.15.

     5.16 Year 2000 Compliance. Borrower and its Subsidiaries are in the process
of implementing a comprehensive program to address the "year 2000 problem" (that
is, the risk that  computer  applications  may not be able to  properly  perform
date-sensitive functions after December 31, 1999) and shall resolve on or before
July 31,  1999  any  material  "year  2000  problem."  Borrower  has  also  made
reasonable  inquiry of its major  suppliers  and vendors that, if unable to sell
Inventory or provide services to Borrower, as the case may be, would result in a
Material  Adverse Change,  with respect to the "year 2000 problem." On the basis
of the inquiry,  Borrower  has no reason to believe that each such  supplier and
vendor of Borrower will not resolve any material "year 2000 problem" on a timely
basis.

     6. AFFIRMATIVE COVENANTS.

     Borrower  covenants and agrees that, so long as any credit  hereunder shall
be available and until full and final payment of the Obligations, Borrower shall
do all of the following:

     6.1 Accounting System.  Maintain a standard and modern system of accounting
that  enables  Borrower  and each  Subsidiary  of Borrower to produce  financial
statements  in  accordance  with GAAP,  and maintain  records  pertaining to the
Collateral  that  contain  information  as from time to time may be requested by
Agent.  Borrower also shall keep a modern inventory  reporting system that shows
all  additions,  sales,  claims,  returns,  and  allowances  with respect to the
Inventory.

     6.2 Collateral and Financial Reporting.  Provide Agent, or such other party
as Agent shall  designate  (including,  without any  limitation,  the  Oversight
Agent),  with copies to the financial  advisor(s) for the  Committees,  with the
following documents at the following times in form satisfactory to Agent:



<PAGE>

     (a) Borrowing Base  Certificate.  Borrower  shall provide to Agent,  weekly
and,  upon  request  by Agent,  on each day  Borrower  requests  an  Advance,  a
borrowing base certificate (in the form of Exhibit 6.2 hereto,  as such form may
be revised from time to time by Agent) (each a  "Borrowing  Base  Certificate").
Such Borrowing Base Certificate may be sent to Agent by facsimile  transmission,
provided that, upon request by Agent, the original thereof is forwarded to Agent
on  the  date  of  such  transmission.  No  adjustments  to the  Borrowing  Base
Certificate  may  be  made  without  supporting  documentation  and  such  other
documentation as may be requested by Agent from time to time.


     (b) Weekly  Reports.  Weekly,  not later than Wednesday for the immediately
preceding fiscal week:

     (i) sales audit  report  (Borrower's  format in use on the Closing  Date is
acceptable);

     (ii) collateral  activity  summary (the so-called  "roll forward  inventory
report"); and

     (iii) "flash sales" by geographical market (Borrower's format in use on the
Closing Date is acceptable).

     (c) Monthly Reports.

     (i) Monthly, Borrower shall provide to Agent original counterparts of (each
in such form as Agent from time to time may specify):

     (a))  Within  twenty-five  (25) days  after the end of each  month for such
month:

     (1) RSL total company inventory report by department;

     (2) RSL total company inventory report for Borrower;

     (3) ISL report;

     (4) purchase and accounts payable aging report;

     (5) rent, tax and insurance compliance certificate; and

<PAGE>

     (6) a report in form satisfactory to Agent setting forth all rent and other
amounts due with  respect to real and  personal  property  of Borrower  and each
Subsidiary of Borrower and taxes and other similar  charges of Borrower and each
Subsidiary of Borrower that are due but remain unpaid.


     (B) Within thirty (30) days after the end of each month for such month:

     (1)  reconciliation  of gross  margin and cost of sales from RSL to general
ledger;

     (2) RSL inventory report reconciliation to Availability and to ISL;

     (3)  financial   statements   including  balance  sheet,  income  statement
(consolidated  and by  store),  cash flow  report and  comparison  of same store
sales;

     (4) gift certificates/merchandise credits report at month-end; and

     (5) officer's compliance certificate.

     (C) Promptly upon receipt thereof:

     (1) an  Inventory  Valuation/capacity  analysis  prepared by the  Oversight
Agent or such other retail  specialist  acceptable to Agent in the form provided
to Agent under the Pre-Relief Date Loan Agreement; and

     (2) any report prepared by Borrower's consultant or financial advisor.

<PAGE>


     (D) Within thirty (30) days following the end of each month, Borrower shall
provide  to Agent an  original  counterpart  of  management  prepared  financial
statements of Borrower and its Subsidiaries, on a consolidated and consolidating
basis,  for the period from the  beginning of Borrower's  and its  Subsidiaries=
then current fiscal year through the end of the subject month,  with comparative
information  for the same period of the previous  fiscal year,  which  statement
shall  include,  at a minimum,  a balance  sheet,  income  statement (on a store
specific and on a "consolidated"  basis),  statement of changes in shareholders=
equity, and cash flow report and comparisons for the corresponding  month of the
then immediately previous year, as well as to the Business Plan.


     (ii) For  purposes of Section  6.2(c)(i)(a),  above,  the first  "month" in
respect of which the items  required by that Section shall be provided  shall be
January,  1999 and for purposes of Section 6.2(c)(i)(B) above, the first "month"
in respect of which the items  required by that Section shall be provided  shall
be January, 1999.

     (d) Quarterly Reports. Quarterly, within forty five (45) days following the
end of each of Borrower's  fiscal  quarters,  Borrower shall provide to Agent an
original counterpart of management prepared financial statements of Borrower and
its Subsidiaries, on a consolidated and consolidating basis, for the period from
the  beginning of  Borrower's  and its  Subsidiaries'  then current  fiscal year
through the end of the subject  quarter,  with  comparative  information for the
same period of the previous fiscal year,  which  statement  shall include,  at a
minimum,  a  balance  sheet,  income  statement  (on a store  specific  and on a
"consolidated"  basis),  statement of changes in shareholders=  equity, and cash
flow  report  and  comparisons  for  the  corresponding   quarter  of  the  then
immediately previous year, as well as to the Business Plan.

     (e) Annual Reports.

<PAGE>

     (i) In addition to the monthly  reports  required  under this  Section 6.2,
annually,  within one hundred  twenty (120) days following the end of Borrower's
and its Subsidiaries'  fiscal year,  Borrower shall deliver to Agent an original
signed  counterpart  of  Borrower's  and  its  Subsidiaries'   annual  financial
statements, on a consolidated basis, which statement shall have been audited by,
and bear the  unqualified  opinion of Borrower's  independent  certified  public
accountants  reasonably  acceptable  to  Agent  (i.e.  said  statement  shall be
"certified"  by such  accountants)  certifying  that such  statements  have been
prepared in accordance  with GAAP and, except with respect to any explanatory or
qualifying  paragraph  regarding the filing of the Chapter 11 Case,  without any
explanatory  paragraphs  or other  qualifying  paragraphs,  together  with (x) a
certificate of such accountants addressed to Agent stating that such accountants
do not have  knowledge of the existence of any Default or Event of Default,  and
(y) a copy of such  accountant's  letter to management.  Such annual  statements
shall  include,  at a minium (with  comparative  information  for the then prior
fiscal  year) a balance  sheet,  profit and loss  statement,  income  statement,
statement of changes in  shareholders'  equity,  and cash flows.  Borrower shall
provide an interim  draft of such  financial  statements  within sixty (60) days
after year-end,  inclusive of subsequent periods,  until the year-end statements
are  finalized.  Together  with the above,  Borrower also shall deliver to Agent
Borrower's Form 10-Q Quarterly Reports,  Form 10-K Annual Reports,  and Form 8-K
Current Reports,  and any other filings made by Borrower with the Securities and
Exchange  Commission,  if any, as soon as the same are filed, any press releases
of  Borrower,  and any other  information  that is  provided  by Borrower to its
shareholders, and any other report reasonably requested by Agent relating to the
financial condition of Borrower and its Subsidiaries. Prior to the Closing Date,
Borrower shall have issued written  instructions  to its  independent  certified
public accountants  authorizing them to communicate with Agent and to release to
Agent whatever financial information concerning Borrower that Agent may request.
Borrower hereby irrevocably authorizes and directs all auditors, accountants, or
other  third  parties to  deliver to Agent,  at  Borrower's  expense,  copies of
Borrower's and its Subsidiaries'  financial statements,  papers related thereto,
and other  accounting  records of any nature in their possession and to disclose
to  Agent  any   information   they  may  have  regarding   Borrower's  and  its
Subsidiaries' business affairs and financial condition.


     (ii)  Each  annual  statement  shall be  accompanied  by such  accountant's
certificate  indicating that to the best knowledge of such accountant,  no event
has occurred which is or which, solely with the passage of time or the giving of
notice (or both) would be, an Event of Default.

     (iii)  Borrower  hereby  acknowledges  that the Lender  Group  relied  upon
Borrower's  audited  financial  statements for the fiscal year ended January 30,
1998 in extending credit to Borrower.

     (f) Officers' Certificates. Borrower shall cause Borrower's chief financial
officer to provide such Person's certificate with those monthly,  quarterly, and
annual statements to be furnished pursuant to this Agreement,  which certificate
shall:

     (i) Indicate that the subject  statement  was prepared in  accordance  with
GAAP  consistently  applied,  and  presents  fairly the  financial  condition of
Borrower and its Subsidiaries at the close of, and the results of Borrower's and
its Subsidiaries= operations and cash flows for, the period(s) covered, subject,
however (with the exception of the  certificate  which  accompanies  such annual
statement) to usual year end adjustments;

     (ii)  Indicate  either that (i) no Default or Event of Default has occurred
or (ii) if such an event has occurred, its nature (in reasonable detail) and the
steps (if any) being  taken or  contemplated  by Borrower to be taken on account
thereof;

<PAGE>


     (iii) Include calculations concerning Borrower's compliance ( or failure to
comply) at the date of the  subject  statement  with the  covenants  included in
Sections 7.20 and 7.21 below;


     (iv) Indicate  that,  except as provided in the report  required by Section
6.2(c)(i)(a))(6), all taxes have been paid;

     (v) Indicate that all rent and additional  rent,  except as provided in the
report required by Section 6.2(c)(i)(a)(6), has been paid; and

     (vi)  Indicate  that  premiums for  insurance  required  under Section 6.10
hereof have or have not been paid.

     (g) Inventories, Appraisals and Audits.

     (i) Agent,  at the expense of Borrower,  may  participate in and/or observe
each physical count and/or inventory of so much of the Collateral as consists of
Inventory which is undertaken on behalf of Borrower.

     (ii) Upon Agent's  request from time to time,  Borrower  shall  obtain,  or
shall  permit  Agent to obtain  financial or SKU based  physical  counts  and/or
inventories  of the  Collateral,  conducted  by  such  inventory  takers  as are
satisfactory  to Agent and  following  such  methodology  as may be  required by
Agent,  each of which physical counts and/or financial or SKU based  inventories
shall be observed by Borrower's accountants.  For each fiscal year in which this
Agreement  is in effect,  Borrower  shall  perform (at its expense) one (1) full
physical  inventory  as of fiscal  year end for all  locations.  Borrower  shall
engage a third party  acceptable  to Agent to conduct each month a full physical
inventory of at least one (1) retail store  location  per  geographic  region of
Borrower's retail store locations;  provided,  however, that no such inventories
are required to be done in  February,  November or December for any given fiscal
year  of  Borrower;  provided  further,  however,  that,  with  respect  to such
inventories  required  in the months of March and April of any year,  so long as
the final  results of  Borrower's  full  physical  inventory as of the preceding
fiscal year end of Borrower are delivered within the time period required below,
no such  inventories  are  required  to be done in March  or April of any  given
fiscal year of Borrower.  The results of each such physical  inventory  shall be
provided  to Agent no later than the  fifteenth  day of each month for the prior
month when an inventory  is  completed.  The draft or  unaudited  results of all
inventories  or counts shall be furnished to Lender within fifteen (15) business
days of the taking of such  inventories or counts and, with respect to the final
results of the full  physical  inventory as of each fiscal year end of Borrower,
the results of each such inventory shall be delivered to Agent no later than the
date forty-five (45) days following the date of Borrower's fiscal year end.



<PAGE>

     (h) Additional Financial Information.


     (i) In addition to all other  information  required to be provided pursuant
to this Section 6.2,  Borrower  promptly  shall  provide to Agent such other and
additional  information concerning Borrower, any Subsidiary of Borrower, and any
guarantor of the  Obligations,  the Collateral  (and other  collateral  securing
repayment of the Obligations), the operation of Borrower's and its Subsidiaries'
business,  and Borrower's and its Subsidiaries'  financial condition,  including
original counterparts of financial reports and statements,  as Agent or Co-Agent
may from time to time reasonably request from Borrower.

     (ii) Borrower may provide Agent, from time to time hereafter,  with updated
Business Plans. In all events, Borrower, not later than sixty (60) days prior to
the end of each of Borrower's  fiscal  years,  shall deliver to Agent an updated
and extended  Business  Plan which shall go out at least  through the end of the
then next fiscal year and the final  Business  Plan within  fifteen (15) days of
the end of  Borrower's  fiscal  year.  In each event,  such updated and extended
Business  Plans  shall be  provided  in the same  form as that  provided  to and
approved by Borrower's Board of Directors and reasonably satisfactory to Agent.

     (iii)  Promptly when filed with the Court or delivered to the United States
Trustee  for the Chapter 11 Case or any  Committee,  Borrower  shall  provide to
Agent  all  monthly  reports,   projections  or  other  information   respecting
Borrower's  business or financial condition or prospects filed with the Court or
delivered to the United States Trustee for the Chapter 11 Case or any Committee.

     (i) Financial Performance Covenants. Borrower shall observe and comply with
the covenants  set forth in Sections 7.20 and 7.21 which  covenants are based on
the Business Plan set forth on Schedule B-1 hereto.


     (j) Electronic  Reporting.  At Agent's option,  all information and reports
required  to  be   submitted   to  Agent  by  Borrower   shall  be   transmitted
electronically pursuant to an electronic transmitting reporting system and shall
be in a record layout format designated by Agent from time to time.

     (k) Reporting to Committees.  Agent shall cause, and Borrower permits Agent
to cause,  the  Oversight  Agent to  distribute  to the  Committees  all reports
provided  to Agent by the  Oversight  Agent  that the  Agent  determines  in its
discretion  are  non-proprietary  and  non-privileged  as between  Agent and the
Oversight Agent.

     6.3 [Intentionally Omitted.].3[Intentionally Omitted.]

<PAGE>

     6.4 Tax Returns.  Deliver to Agent, with copies to the financial advisor(s)
for the  Committees,  copies  of each  of  Borrower's  and  each  Subsidiary  of
Borrower's future federal income tax returns, and any amendments thereto, within
thirty (30) days of the filing thereof with the Internal Revenue Service.


     6.5 Guarantor  Reports.  Cause any guarantor of any of the  Obligations  to
deliver its annual financial  statements at the time when Borrower  provides its
audited  financial  statements  to Agent and  copies of all  federal  income tax
returns as soon as the same are  available and in any event no later than thirty
(30) days after the filing thereof with the Internal Revenue Service.

     6.6 Returns. Cause returns and allowances,  if any, as between Borrower and
its Account Debtors to be on the same basis and in accordance with the usual and
customary practices of Borrower,  as they exist at the time of the execution and
delivery of this Agreement.  If, at a time when no Event of Default has occurred
and is  continuing,  any Account  Debtor  returns  any  Inventory  to  Borrower,
Borrower  promptly  shall  determine the reason for such return and, if Borrower
accepts such return, issue a credit memorandum (with a copy to be sent to Agent)
in the appropriate amount to such Account Debtor. If, at a time when an Event of
Default has occurred and is continuing, any Account Debtor returns any Inventory
to Borrower,  Borrower  promptly shall determine the reason for such return and,
if Agent consents  (which consent shall not be unreasonably  withheld),  issue a
credit memorandum (with a copy to be sent to Agent) in the appropriate amount to
such Account Debtor.

     6.7 Title to Equipment.  Upon Agent's request,  Borrower  immediately shall
deliver to Agent,  properly  endorsed,  any and all  evidences of ownership  of,
certificates of title, or applications for title to any items of Equipment.

     6.8  Maintenance  of Equipment.  Maintain the  Equipment in good  operating
condition and repair  (ordinary wear and tear and damage by casualty  excepted),
and make all  necessary  replacements  thereto  so that the value and  operating
efficiency  thereof shall at all times be maintained and  preserved.  Other than
those items of Equipment that constitute  fixtures on the Closing Date, Borrower
shall not permit any item of  Equipment to become a fixture to real estate or an
accession  to other  property,  and such  Equipment  shall at all  times  remain
personal property.

<PAGE>

     Except  as  permitted  by the  Bankruptcy  Code or by an order of the Court
after  notice  and a hearing  or with  respect  to which the  failure  to pay is
consented  to in writing by the holder of the  applicable  tax claim and written
notice  thereof is provided to Agent or with respect to which the failure to pay
is consented to in writing by the Required  Lenders,  cause all  assessments and
taxes,  whether real,  personal,  or  otherwise,  due or payable by, or imposed,
levied, or assessed against Borrower, any Subsidiary of Borrower or any of their
respective  properties  to be paid in full,  before  delinquency  or before  the
expiration  of any extension  period,  except to the extent that the validity of
such  assessment or tax shall be the subject of a Permitted  Protest.  Except as
permitted by the Bankruptcy  Code or by an order of the Court after notice and a
hearing or with  respect to which the failure to pay is  consented to in writing
by the holder of the applicable tax claim and written notice thereof is provided
to Agent or with  respect to which the failure to pay is consented to in writing
by the Required  Lenders,  Borrower shall,  and shall cause its Subsidiaries to,
make due and timely  payment or deposit of all such  federal,  state,  and local
taxes, assessments, or contributions required of it by law, and will execute and
deliver to Agent, on demand,  appropriate  certificates attesting to the payment
thereof or deposit with respect  thereto.  Except as permitted by the Bankruptcy
Code or by an order of the Court after  notice and a hearing or with  respect to
which  the  failure  to pay is  consented  to in  writing  by the  holder of the
applicable  tax claim and  written  notice  thereof is provided to Agent or with
respect to which the failure to pay is  consented  to in writing by the Required
Lenders,  Borrower will, and will cause each of its Subsidiaries to, make timely
payment or deposit of all tax payments and withholding taxes required of them by
applicable  laws,  including those laws  concerning  F.I.C.A.,  F.U.T.A.,  state
disability,  and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that Borrower and each
Subsidiary of Borrower has made such payments or deposits.


     6.10 Insurance.

     (a) At its expense,  keep the Personal Property  Collateral insured against
loss or damage by fire, theft, explosion,  sprinklers, and all other hazards and
risks, and in such amounts, as are ordinarily insured against by other owners in
similar businesses.  Borrower also shall maintain business interruption,  public
liability,   product  liability,  and  property  damage  insurance  relating  to
Borrower's  ownership and use of the Personal  Property  Collateral,  as well as
insurance against larceny, embezzlement, and criminal misappropriation.

     (b) At its expense, obtain and maintain (i) insurance of the type necessary
to insure the Improvements  (as such term is defined in the Mortgages),  for the
full replacement cost thereof,  against any loss by fire, lightning,  windstorm,
hail, explosion,  aircraft, smoke damage, vehicle damage, earthquakes,  elevator
collision,  and other risks from time to time included under "extended coverage"
policies,  in such  amounts  as Agent may  require,  but in any event in amounts
sufficient  to prevent  Borrower or any  Subsidiary  of Borrower from becoming a
co-insurer  under such policies,  (ii) combined single limit bodily injury,  and
property damage insurance against any loss, liability,  or damages on, about, or
relating to each parcel of Real  Property  Collateral,  in such amounts as Agent
shall  reasonably  require;  (iii) business  rental  insurance  covering  annual
receipts  for a twelve  (12)  month  period  for each  parcel  of Real  Property
Collateral;  and (iv)  insurance  for such  other  risks as Agent  may  require.
Replacement  costs,  at Agent's  option,  may be  redetermined  by an  insurance
appraiser,  satisfactory  to Agent,  not more  frequently than once every twelve
(12) months at Borrower's cost.

     (c) [Intentionally Omitted.]

<PAGE>

     (d) All such  policies  of  insurance  shall  be in such  form,  with  such
companies,  and in such amounts as may be reasonably  satisfactory to Agent. All
insurance  required herein shall be written by companies which are authorized to
do insurance business in the State of California.  All hazard insurance and such
other  insurance as Agent shall specify,  shall contain a California Form 438BFU
(NS) mortgagee endorsement,  or an equivalent endorsement satisfactory to Agent,
showing  Agent  (for the  ratable  benefit  of the  Lenders)  as sole loss payee
thereof,  and shall  contain a waiver of  warranties.  Every policy of insurance
referred to in this Section 6.10 shall  contain an agreement by the insurer that
it will not cancel  such policy  except  after  thirty  (30) days prior  written
notice to Agent  (for the  ratable  benefit  of the  Lenders)  and that any loss
payable  thereunder  shall be payable  notwithstanding  any act or negligence of
Borrower or the Lender Group which  might,  absent such  agreement,  result in a
forfeiture of all or a part of such insurance  payment and  notwithstanding  (i)
occupancy or use of the Real Property  Collateral  for purposes  more  hazardous
than permitted by the terms of such policy, (ii) any foreclosure or other action
or  proceeding  taken by the Lender  Group  pursuant to the  Mortgages  upon the
happening  of an Event of Default,  or (iii) any change in title or ownership of
the Real  Property  Collateral.  Borrower  shall deliver to Agent copies of such
policies of insurance and evidence of the payment of all premiums therefor.


     (e)  Original  policies  or  certificates  thereof  satisfactory  to  Agent
evidencing  such insurance shall be delivered to Agent at least thirty (30) days
prior to the  expiration of the existing or preceding  policies.  Borrower shall
give Agent prompt notice of any loss covered by such  insurance,  and, except to
the extent  prohibited  by any  mortgagee  with  respect to the  Secondary  Real
Estate,  Agent  shall  have the right to adjust  any loss.  Except to the extent
prohibited by any mortgagee  with respect to the  Secondary  Real Estate,  Agent
shall  have the  exclusive  right to adjust all  losses  payable  under any such
insurance  policies  without any  liability  to Borrower  or any  Subsidiary  of
Borrower whatsoever in respect of such adjustments.  Unless the Required Lenders
otherwise  consent,  any  monies  received  as  payment  for any loss  under any
insurance policy including the insurance policies mentioned above, shall be paid
over to Agent (for the  ratable  benefit of Lenders) to be applied at the option
of Agent either to the prepayment of the Obligations  without  premium,  in such
order or manner as Agent may elect,  or shall be  disbursed  to  Borrower or any
Subsidiary of Borrower, as applicable, under stage payment terms satisfactory to
Agent for application to the cost of repairs, replacements, or restorations. All
repairs,  replacements,  or  restorations  shall  be  effected  with  reasonable
promptness  and shall be of a value at least  equal to the value of the items or
property  destroyed prior to such damage or destruction.  Upon the occurrence of
an Event of Default, Agent shall have the right to apply all prepaid premiums to
the payment of the Obligations in such order or form as Agent shall determine.

     (f) Borrower  shall not, and shall not permit any  Subsidiary  to, take out
separate insurance  concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 6.10, unless Agent is included
thereon as named insured with the loss payable to Agent (for the ratable benefit
of Lenders) under a standard  California 438BFU (NS) Mortgagee  endorsement,  or
its local  equivalent.  Borrower  immediately  shall notify Agent  whenever such
separate  insurance is taken out,  specifying  the insurer  thereunder  and full
particulars  as to the  policies  evidencing  the same,  and  originals  of such
policies immediately shall be provided to Agent.

<PAGE>

     6.11 No setoffs or  Counterclaims.  Make  payments  hereunder and under the
other Loan Documents by or on behalf of Borrower  without setoff or counterclaim
and free and clear of, and without  deduction or  withholding  for or on account
of, any federal, state, or local taxes.


     Except for Eligible In-Transit Inventory,  keep the Inventory and Equipment
only at the  locations  identified on Schedule  6.12;  provided,  however,  that
Borrower may amend  Schedule  6.12 so long as such  amendment  occurs by written
notice to Agent not less than  thirty  (30) days  prior to the date on which the
Inventory  or  Equipment  is  moved to such  new  location,  so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, Borrower provides any financing statements or fixture
filings  necessary to perfect and continue  perfected (the Lien of Agent for the
benefit  of the  Lender  Group),  security  interests  in such  assets  and also
provides to Agent a  Collateral  Access  Agreement;  provided,  however,  that a
Collateral  Access  Agreement  shall not be required if the Final Order contains
such findings and decretal  portions as Agent, in its sole discretion,  may deem
equivalent  to, and  acceptable  in lieu of, the  execution  and delivery of any
Collateral Access Agreement.

     6.13 Compliance with Laws.  Comply,  and cause each of its  Subsidiaries to
comply, in all material respects,  with the requirements of all applicable laws,
rules, regulations, and orders of any governmental authority, including the Fair
Labor  Standards Act and the Americans With  Disabilities  Act, other than laws,
rules, regulations, and orders the non-compliance with which, individually or in
the  aggregate,  would not have and could not  reasonably be expected to cause a
Material Adverse Change.

     6.14 Employee Benefits.

     (a)  Deliver to Agent,  with  copies to the  financial  advisor(s)  for the
Committees:  (i) Promptly,  and in any event within ten (10) Business Days after
Borrower  or any of its  Subsidiaries  knows or has reason to know that an ERISA
Event has  occurred  that  reasonably  could be expected to result in a Material
Adverse Change, a written  statement of the chief financial  officer of Borrower
describing  such ERISA  Event and any action that is being  taking with  respect
thereto by Borrower,  any such  Subsidiary  or ERISA  Affiliate,  and any action
taken or threatened by the IRS,  Department of Labor, or PBGC.  Borrower or such
Subsidiary,  as  applicable,  shall be  deemed  to know all  facts  known by the
administrator  of any  Benefit  Plan  of  which  it is the  plan  sponsor,  (ii)
promptly,  and in any event  within  three (3)  Business  Days  after the filing
thereof with the IRS, a copy of each funding  waiver  request filed with respect
to any Benefit  Plan and all  communications  received by  Borrower,  any of its
Subsidiaries or, to the knowledge of Borrower,  any ERISA Affiliate with respect
to such request, and (iii) promptly,  and in any event within three (3) Business
Days after receipt by Borrower,  any of its Subsidiaries or, to the knowledge of
Borrower,  any ERISA  Affiliate,  of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice.


<PAGE>

     (b) Cause to be delivered to Agent,  upon Agent's  request,  with copies to
the financial advisor(s) for the Committees,  each of the following:  (i) a copy
of each Plan (or,  where any such plan is not in writing,  complete  description
thereof)  (and  if  applicable,   related  trust  agreements  or  other  funding
instruments) and all amendments thereto, all written interpretations thereof and
written  descriptions  thereof that have been distributed to employees or former
employees of Borrower or its  Subsidiaries;  (ii) the most recent  determination
letter issued by the IRS with respect to each Benefit Plan;  (iii) for the three
(3) most recent plan years,  annual  reports on Form 5500 Series  required to be
filed with any  governmental  agency for each Benefit  Plan;  (iv) all actuarial
reports  prepared for the last three (3) plan years for each Benefit Plan; (v) a
listing of all Multiemployer Plans, with the aggregate amount of the most recent
annual  contributions  required to be made by Borrower or any ERISA Affiliate to
each such plan and copies of the collective bargaining agreements requiring such
contributions;  (vi) any  information  that has been provided to Borrower or any
ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan; and
(vii) the  aggregate  amount of the most recent  annual  payments made to former
employees of Borrower or its Subsidiaries under any Retiree Health Plan.

     6.15 Leases.  Except as permitted by the Bankruptcy  Code or by an order of
the Court after notice and a hearing or with respect to which the failure to pay
is consented to in writing by the  applicable  lessor and written notice thereof
is provided to Agent or with respect which the failure to pay is consented to in
writing by the Required Lenders, pay, and cause each Subsidiary to pay, when due
all  post-Relief  Date rents and other  amounts  payable under any real property
leases to which  Borrower or any  Subsidiary  of Borrower is a party or by which
Borrower's  or any  Subsidiary of  Borrower's  properties  and assets are bound,
unless such payments are the subject of a Permitted Protest.  To the extent that
Borrower or any  Subsidiary of Borrower fails timely on or before the expiration
of any applicable  cure periods to make payment of such  post-Relief  Date rents
and other amounts payable when due under its real property  leases,  Agent shall
be entitled,  in its discretion,  to create such reserves  against the Borrowing
Base as are otherwise permitted herein.  Borrower shall promptly notify Agent of
the  assumption or rejection of any such leases by Borrower under the Bankruptcy
Code.

     6.16 GOB Sales. Promptly upon receipt thereof, remit the GOB Store Proceeds
to Agent to be  applied  to the  Obligations  in the manner set forth in Section
2.5.

     6.17  Mortgages  on  Real  Estate.  Unless  otherwise  consented  to by the
Required Lenders,  make all regularly  scheduled principal and interest payments
due in respect of all indebtedness secured by senior liens on the Secondary Real
Estate.  Borrower  shall  promptly  notify  Agent  of  the  commencement  of any
foreclosure action with respect to any Secondary Real Estate.

<PAGE>

     7. NEGATIVE COVENANTS.


     Borrower  covenants and agrees that, so long as any credit  hereunder shall
be available and until full and final payment of the Obligations,  Borrower will
not, and will not permit any Subsidiary to, do any of the following:

     7.1 Indebtedness.  Create, incur, assume, permit,  guarantee,  or otherwise
become  or  remain,   directly  or  indirectly,   liable  with  respect  to  any
Indebtedness, except:

     (a) Indebtedness evidenced by this Agreement, together with Indebtedness to
issuers of letters of credit that are the subject of L/C Guarantees;

     (b)  Indebtedness  set  forth on  Schedule  7.1  (other  than  Real  Estate
Indebtedness);

     (c) Indebtedness (other than Real Estate Indebtedness) secured by Permitted
Liens;

     (d) refinancings,  renewals, or extensions of Indebtedness  permitted under
clauses  (b) and (c) of this  Section  7.1 (and  continuance  or  renewal of any
Permitted Liens  associated  therewith) so long as: (i) the terms and conditions
of such  refinancings,  renewals,  or  extensions do not  materially  impair the
prospects  of  repayment  of the  Obligations  by  Borrower,  (ii)  the net cash
proceeds  of such  refinancings,  renewals,  or  extensions  do not result in an
increase in the aggregate  principal  amount of the  Indebtedness so refinanced,
renewed,  or  extended,  (iii)  such  refinancings,   renewals,  refundings,  or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced,  renewed,  or extended,  and (iv) to the extent that
Indebtedness  that is  refinanced  was  subordinated  in right of payment to the
Obligations,  then the  subordination  terms and  conditions of the  refinancing
Indebtedness  must be at  least  as  favorable  to the  Lender  Group  as  those
applicable to the refinanced Indebtedness;

     (e) Indebtedness evidenced by the Convertible Subordinated Notes; and

     (f) the Real Estate Indebtedness.

     7.2  Liens.  Create,  incur,  assume,  or  permit  to  exist,  directly  or
indirectly, any Lien on or with respect to any of its property or assets, of any
kind,  whether  now  owned or  hereafter  acquired,  or any  income  or  profits
therefrom,  except for Permitted  Liens.  The  prohibition  provided for in this
Section 7.2 specifically includes, without limitation, any effort by Borrower or
any  Committee  to "prime" or create  pari passu to any claims or  interests  of
Agent on behalf of the Lenders any Lien  irrespective  of whether such claims or
interests may be "adequately protected."


<PAGE>

     7.3  Restrictions  on  Fundamental  Changes.  Subject to  Required  Lenders
consenting to otherwise or except as permitted by Section . 7.4,  enter into any
merger, consolidation,  reorganization,  or recapitalization,  or reclassify its
capital  stock,  or  liquidate,  wind up, or  dissolve  itself  (or  suffer  any
liquidation or  dissolution),  or convey,  sell,  assign,  lease,  transfer,  or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its property or assets; provided,  however, that any Primary
Subsidiary may merge into any other Primary  Subsidiary or Borrower and Borrower
may liquidate or otherwise dissolve Sports & Recreation  Holdings of PA, Inc., a
Delaware corporation,  Construction Resolution,  Inc., a Florida corporation and
Sports & Recreation, Inc., a Florida corporation.


     7.4 Disposal of Assets.  Except as permitted by Section 7.23, sell,  lease,
assign, transfer, or otherwise dispose of any of Borrower's properties or assets
other than (a) sales of Inventory to buyers in the ordinary course of Borrower's
business  as  currently  conducted,  (b) the sale of any parcel of Primary  Real
Estate  listed on  Schedule  R-1 so long as (i) no  Default  or Event of Default
exists,  (ii) the gross cash proceeds  (inclusive of selling costs and expenses)
from such sale are equal to or exceed the Release  Price for such  parcel  sold,
and (iii) the Net Proceeds are paid to Agent to be applied to the Obligations as
set forth in Section 2.5(b), (c) the sale of any parcel of Secondary Real Estate
at a price acceptable to Agent and so long as (i) no Default or Event of Default
exists,  (ii) the Net Proceeds from such sale are  distributed to Borrower,  and
(iii)  the Net  Proceeds  are  paid to Agent to be  applied  to the  Obligations
pursuant to the terms of Section 2.5(b), and (d) the going-out-of-business sales
contemplated   by  the  GOB   Order  and  any  order   entered   approving   the
going-out-of-business-sale of Borrower's Inventory at any other retail stores so
long as (i) the GOB  Store  Proceeds  are  paid to Agent  to be  applied  to the
Obligations pursuant to the terms of Section 2.5(b) and (ii) with respect to any
such sale with  respect to  Borrower's  Inventory  at any other retail store not
otherwise  included in the GOB Order, the sales price therefor (net of any costs
and expenses of such  liquidation) is not less than the portion of the Borrowing
Base  attributable  to  Inventory  at such  retail  store  or such  other  price
acceptable to the Required Lenders.

     7.5 Change Name.  Change  Borrower's or any Subsidiary of Borrower's  name,
FEIN,  corporate structure (within the meaning of Section 9-402(7) of the Code),
or identity, or add any new fictitious name; provided,  however, that so long as
Borrower provides Agent with thirty (30) days prior written notice thereof,  any
Subsidiary of Borrower may change its name.

     7.6 Guarantee. Guarantee or otherwise become in any way liable with respect
to the  obligations  of any third Person except by endorsement of instruments or
items of payment for deposit to the account of Borrower or which are transmitted
or turned over to Agent; provided, however, that each Subsidiary of Borrower may
guarantee  payment of the  Obligations as set forth in the  Subsidiary  Guaranty
Agreement.

     7.7  Nature  of  Business.  Make any  change  in the  principal  nature  of
Borrower's or any Subsidiary of Borrower's business.


<PAGE>

     7.8 Prepayments and Amendments.


     (a) Except in connection  with a refinancing  permitted by Section  7.1(d),
prepay, redeem, retire, decease, purchase, or otherwise acquire any Indebtedness
owing to any third Person,  other than the  Obligations in accordance  with this
Agreement;  provided,  however,  that Borrower or any Subsidiary of Borrower may
prepay Real Estate  Indebtedness  secured by any parcel of Secondary Real Estate
sold pursuant to Section 7.4(c) solely from the proceeds of such sale; or

     (b) Directly or indirectly,  amend, modify, alter,  increase, or change any
of the terms or conditions of any agreement, instrument, document, indenture, or
other writing  evidencing or concerning  Indebtedness  permitted  under Sections
7.1(b), (c), or (d); or

     (c) change its fiscal year from the Friday closest to January 31; or

     (d) without the prior written consent of the Required Lenders,  directly or
indirectly amend, modify,  alter, or change in any manner adverse to Borrower or
the Lenders (i) the articles of incorporation  or by-laws of Property  Holdings,
(ii) any document  evidencing or securing any Indebtedness of Property Holdings,
or (iii) any trust agreement with respect to the Real Estate Trusts; or

     (e) Except as specifically  permitted under the Final Order or consented to
by the Required Lenders (which consent shall not be unreasonably withheld), make
any  payment  or  transfer  with  respect  to  any   pre-Relief   Date  Lien  or
Indebtedness,  whether by way of "adequate protection" under the Bankruptcy Code
or otherwise in an aggregate amount in excess of the greater of $250,000 and the
amount of "adequate  protection"  payments  contemplated  by the Business  Plan.
Notwithstanding  anything  contained herein to the contrary,  and subject to the
entry of an order of the Court after appropriate  notice and hearing required by
the Federal Rules of Bankruptcy Procedure,  the Borrower may enter into adequate
protection arrangements with Intermedia  Communications,  Inc. on account of its
pre-Relief  Date  executory  contract to provide  frame relay  services and with
Paymentech on account of its pre-Relief Date merchant processing agreement.

     7.9 Change of Control.  Cause,  permit, or suffer,  directly or indirectly,
any Change of Control.

     7.10 Consignments.  Consign any Inventory or sell any Inventory on bill and
hold, sale or return, sale on approval, or other conditional terms of sale.

<PAGE>

     7.11  Distributions.  Make any distribution or declare or pay any dividends
(in cash or other property, other than capital stock) on, or purchase,  acquire,
redeem, or retire any of Borrower's capital stock, of any class,  whether now or
hereafter  outstanding;  provided,  however, that any Subsidiary of Borrower may
make any distribution or declare or pay any dividend to Borrower. Borrower shall
not permit any Subsidiary of Borrower to enter into any agreement with any third
party restricting such Subsidiary's ability to make distributions to Borrower.

     7.12 Accounting Methods. Modify or change its method of accounting or enter
into,  modify,  or terminate any agreement  currently  existing,  or at any time
hereafter  entered into with any third party  accounting  firm or service bureau
for the  preparation  or storage of Borrower's  or any  Subsidiary of Borrower's
accounting  records  without said  accounting firm or service bureau agreeing to
provide  Agent  information  regarding  the  Collateral  or  Borrower's  or  any
Subsidiary of Borrower's  financial  condition.  Borrower waives, and will cause
each  of  its  Subsidiaries  to  waive,  the  right  to  assert  a  confidential
relationship,  if any, it may have with any accounting firm or service bureau in
connection with any information  requested by Agent pursuant to or in accordance
with this  Agreement,  and  agrees  that  Agent may  contact  directly  any such
accounting firm or service bureau in order to obtain such information.

     7.13  Investments.  Except to the extent permitted by Section 7.4, directly
or indirectly  make,  acquire,  or incur any liabilities  (including  contingent
obligations)  for or in connection  with (a) the  acquisition  of the securities
(whether  debt or  equity)  of,  or other  interests  in, a Person,  (b)  loans,
advances,  capital  contributions,  or transfers of property to a Person, or (c)
the  acquisition  of all or  substantially  all of the properties or assets of a
Person; provided,  however, that Borrower may make loans to employees to finance
such employees=  relocation  expenses in an amount not to exceed $500,000 in the
aggregate  and  $150,000  per  employee;   provided   further,   however,   that
notwithstanding  anything herein which may be construed to the contrary Borrower
shall not permit  Property  Holdings (i) to acquire any assets after the Closing
Date,  or (ii) to hold any assets other than the  Secondary  Real Estate and the
improvements  thereon that are owned by Property  Holdings on the Closing  Date;
provided further, however, that Borrower may make loans to Nationwide Team Sales
in an  aggregate  amount  not to exceed  $1,250,000  at any time so long as such
loans are evidenced by the Nationwide Team Sales Note, are secured by a security
interest in  substantially  all of the assets of Nationwide  Team Sales and such
Nationwide  Team Sales Note and the  security  therefor  are  assigned  to Agent
pursuant  to the  Assignment  of Note and such other  documentation  required by
Agent in its reasonable discretion.

     7.14  Transactions  with  Affliates.  Directly or indirectly  enter into or
permit to exist any material  transaction  with any Affiliate of Borrower except
for transactions  that are in the ordinary course of Borrower's  business,  upon
fair and reasonable  terms,  that are fully disclosed to Agent,  and that are no
less favorable to Borrower than would be obtained in an arm's length transaction
with a non-Affiliate.

     7.15 Suspension. Except as permitted by Section 7.4, suspend or go out of a
substantial portion of its business.

<PAGE>

     7.16  Compensation.  Increase  the annual fee or  per-meeting  fees paid to
directors  during any year by more than 15% over the prior  year;  pay or accrue
total cash  compensation,  during any year,  to officers  and senior  management
employees  in an  aggregate  amount in excess of 115% of that paid or accrued in
the prior year; provided, however, that notwithstanding the foregoing,  Borrower
may make payments  under that certain  JumboSports  Inc.  Performance  Incentive
Bonus Program as it exists on the date hereof; provided,  further, however, that
notwithstanding  the foregoing,  Borrower may make payments  permitted under any
compensation plan approved by the Court.


     7.17 Use of  Proceeds.  Use the proceeds of the Advances and the Term Loans
for any purpose  other than (a)) on the Closing  Date,  (i) to repay in full the
outstanding principal,  accrued interest, and accrued fees and expenses owing to
Existing  Lender  under  the  Pre-Relief  Date Loan  Agreement,  and (ii) to pay
transactional costs and expenses incurred in connection with this Agreement, and
(b) thereafter,  consistent with the terms and conditions hereof, for its lawful
and  permitted  corporate  purposes  consistent  with the  Business  Plan and as
otherwise allowed by the Final Order.

     7.18 Change in Location of Chief Executive Office;  Inventory and Equipment
with  Bailees.  Relocate its chief  executive  office to a new location  without
providing  thirty (30) days prior written  notification  thereof to Agent and so
long  as,  at the  time of such  written  notification,  Borrower  provides  any
financing  statements  or fixture  filings  necessary  to perfect  and  continue
perfected  the Lien of Agent  (for the  benefit  of the  Lender  Group) and also
provides  to  Agent a  Collateral  Access  Agreement  with  respect  to such new
location;  provided,  however,  that a Collateral  Access Agreement shall not be
required if the Final Order  contains  such  findings and  decretal  portions as
Agent,  in its sole  discretion,  may deem equivalent to, and acceptable in lieu
of, the execution and delivery of any Collateral Access Agreement. The Inventory
and  Equipment  shall not at any time now or  hereafter be stored with a bailee,
warehouseman,  or similar  party  other  than  Butler  Shoes at the Butler  Shoe
Warehouse  and,  Genco at the Genco  Warehouse  without  Agent's  prior  written
consent.

     7.19 No Prohibited  Transactions Under ERISA. Directly or indirectly:ctions
Under ERISA

     (a)  engage,  or permit  any  Subsidiary  of  Borrower  to  engage,  in any
prohibited  transaction  which is reasonably likely to result in a civil penalty
or excise tax  described in Sections 406 of ERISA or 4975 of the IRC for which a
statutory or class  exemption is not  available or a private  exemption  has not
been previously obtained from the Department of Labor;

     (b)  permit to exist  with  respect  to any  Benefit  Plan any  accumulated
funding  deficiency  (as defined in  Sections  302 of ERISA and 412 of the IRC),
whether or not waived;

<PAGE>

     (c) fail,  or permit any  Subsidiary  of  Borrower  to fail,  to pay timely
required  contributions  or annual  installments  due with respect to any waived
funding deficiency to any Benefit Plan;


     (d)  terminate,  or permit any  Subsidiary  of Borrower to  terminate,  any
Benefit Plan where such event would result in any liability of Borrower,  any of
its Subsidiaries or any ERISA Affiliate under Title IV of ERISA;

     (e)  fail,  or permit  any  Subsidiary  of  Borrower  to fail,  to make any
required contribution or payment to any Multiemployer Plan;

     (f) fail, or permit any Subsidiary of Borrower to fail, to pay any required
installment  or any other  payment  required  under Section 412 of the IRC on or
before the due date for such installment or other payment;

     (g) amend,  or permit any Subsidiary of Borrower to amend, a Plan resulting
in an  increase  in  current  liability  for the plan year  such that  either of
Borrower,  any  Subsidiary  of  Borrower or any ERISA  Affiliate  is required to
provide security to such Plan under Section 401(a)(29) of the IRC; or

     (h) withdraw,  or permit any  Subsidiary of Borrower to withdraw,  from any
Multiemployer  Plan where such withdrawal is reasonably  likely to result in any
liability of any such entity under Title IV of ERISA;

which,  individually  or in the  aggregate,  results in or  reasonably  would be
expected  to result in a claim  against or  liability  of  Borrower,  any of its
Subsidiaries or any ERISA Affiliate in excess of $100,000.

     7.20 Financial Covenants. (a) Suffer a variance from the Business Plan with
respect  to the line  items  indicated  below in excess of the  amount set forth
opposite  each such line item  measured on a monthly  basis on the  twenty-fifth
(25th) day of each month for the  immediately  preceding  month,  commencing  on
March 25, 1999 (for the month of February 1999);

  Business Plan Line Item:      Variance:
  Inventory Level               Shall not be greater than 120% of Business Plan
  Inventory Level               Shall not be less than 80% of Business Plan

     (b) Gross  Margin.  Fail to achieve a gross margin on  Inventory  (computed
using  the  RSL)for  any  month,  commencing  with  February  1999,  of at least
thirty-two and one quarter of one percent (32.25%).

<PAGE>

     (c)  Minimum  EBITDAR.  Fail to  maintain  as of the last day of the fiscal
quarter  ending closest to April 30, 1999, and as of the last day of each fiscal
quarter  thereafter,  Adjusted  EBITDAR  of at least the amount set forth in the
table  below for such  period  (i) with  respect to the  fiscal  quarter  ending
closest to April 30, 1999,  for the  immediately  preceding  quarter,  (ii) with
respect  to the  fiscal  quarter  ending  closest  to  July  31,  1999,  for the
immediately  preceding  two quarters,  (iii) with respect to the fiscal  quarter
ending  closest  to  October  31,  1999,  for the  immediately  preceding  three
quarters,  and (iv) with respect to each fiscal quarter ending  thereafter,  for
the immediately preceding four quarters:

<TABLE>
<CAPTION>
 For the Fiscal Quarter period ending closest to: Adjusted  EBITDAR shall not be
less than:
-------------------------------------------------      ----------------------------------------
<S>                                                    <C>
April 30, 1999                                                ($ 2,500,000)
 July 31, 1999                                                  $   300,000
 October 31, 1999                                               $ 4,200,000
 January 31, 2000                                               $ 9,625,000
 April 30, 2000                                                 $14,125,000
 July 31, 2000                                                  $14,125,000

</TABLE>

     7.21  Capital  Expenditures.  Make cash capital  expenditures  in excess of
$250,000 during any month;  provided,  however,  that if capital expenditures in
any month are less than the aggregate amount permitted in such month, the excess
permitted  amount for such month may be carried  forward to the next  succeeding
month.

     7.22  Accounts.  Create or permit to be created any Account other than (a))
third  party  credit card  Accounts  and (b)  Accounts  that are not credit card
Accounts in an aggregate amount not to exceed $5,000,000 at any time.

     7.23 Retail Store  Closings.  Commit to close,  or close,  any retail store
location  at which  Borrower  maintains,  offers for sale,  or stores any of the
Personal  Property  Collateral  other  than the  retail  stores  closed  and the
Personal Property Collateral  liquidated pursuant to the GOB Order and the other
Personal  Property  Collateral  located at retail  stores  identified in the GOB
Order liquidated  pursuant to an order of the Court, and if not otherwise closed
and liquidated  pursuant to the GOB Order, any other retail store of Borrower to
the extent closed and liquidated pursuant to an order by the Court and otherwise
permitted by Section 7.4.

<PAGE>

     8. EVENTS OF DEFAULT.


     Any one or more of the  following  events  shall  constitute  an  event  of
default (each, an "Event of Default") under this Agreement:

     8.1 If Borrower  fails to pay when due and payable or when declared due and
payable,  any portion of the Obligations (whether of principal,  interest,  fees
and charges due the Lender Group,  reimbursement  of Lender Group  Expenses,  or
other amounts constituting Obligations);

     8.2 (a) If Borrower  fails or neglects  to  perform,  keep,  or observe any
term,  provision,  condition,  covenant,  or agreement contained in Sections 6.2
(Collateral  and  Financial  Reporting),   6.4  (Tax  Returns),  6.7  (Title  to
Equipment),  6.12 (Location of Inventory and Equipment),  6.13  (Compliance with
Laws),  6.14  (Employee  Benefits),  or 6.15 (Leases) of this Agreement and such
failure  continues for a period of five (5) Business Days; (b) if Borrower fails
or  neglects  to  perform,  keep,  or observe  any term,  provision,  condition,
covenant,  or agreement  contained in Sections 6.1  (accounting  System) or 6.8
(Maintenance  of Equipment) of this  Agreement and such failure  continues for a
period of fifteen (15) Business  Days;  or (c) if Borrower or any  Subsidiary of
Borrower  fails or  neglects  to  perform,  keep,  or  observe  any other  term,
provision,  condition, covenant, or agreement contained in this Agreement, or in
any of the other Loan Documents  (giving  effect to any grace  periods,  if any,
expressly  provided for in such Loan  Documents);  in each case,  other than any
such term, provision,  condition,  covenant, or agreement that is the subject of
another  provision  of this  Section 8, (in which event such other  provision of
this Section 8 shall govern);  provided that, during any period of time that any
such failure or neglect of Borrower or any Subsidiary of Borrower referred to in
this  paragraph  exists,  even if such failure or neglect is not yet an Event of
Default by virtue of the existence of a grace period,  if any, Lenders shall not
be required during such period to make Advances to Borrower;

     8.3 If there is a Material Adverse Change;

     8.4 If  Borrower  or any  Committee  brings a motion,  or files any plan of
reorganization or disclosure statement attendant thereto in the Chapter 11 Case:
(i) to obtain additional financing under Section 364(c) or (d) of the Bankruptcy
Code; (ii) to grant any Lien upon or affecting any  Collateral;  (iii) except as
provided in the Final  Order,  to use cash  collateral  of Agent and the Lenders
under Section  363(c) of the  Bankruptcy  Code without  Agent's and the Lenders=
consent;  or (iv) which  commences any other action or actions adverse to any of
Agent or any Lender or its rights and remedies  hereunder or its interest in the
Collateral that would,  individually  or in the aggregate,  result in a Material
Adverse Change;

     8.5 If Borrower or any Subsidiary of Borrower is enjoined,  restrained,  or
in any way  prevented  by court  order from  continuing  to  conduct  all or any
material part of its business affairs;

<PAGE>

     8.6 If a notice  of Lien,  levy,  or  assessment  is filed of  record  with
respect to any of  Borrower's  or any  Subsidiary  of  Borrower's  properties or
assets  by  the  United  States  Government,  or  any  department,   agency,  or
instrumentality  thereof, or by any state,  county,  municipal,  or governmental
agency,  or if any taxes or debts owing at any time hereafter to any one or more
of such  entities  becomes  a Lien,  whether  choate or  otherwise,  upon any of
Borrower's or any Subsidiary of Borrower's  properties or assets and the same is
not paid on the payment  date  thereof or a bond for the full amount  thereof is
not obtained by Borrower,  and the aggregate  amount of such Liens or notices of
Liens, levies or assessments exceeds $100,000;


     8.7 If a  judgment  or other  claim  in an  amount  equal  to or  exceeding
$100,000  becomes a Lien or encumbrance  upon any material portion of Borrower=s
or any Subsidiary of Borrower's properties or assets;

     8.8 (i) Any claim or claims of any Person  other than any  Committee  under
Section  506(c) of the  Bankruptcy  Code  against or with  respect to any of the
Collateral in an aggregate  amount equal to or exceeding  $250,000 is allowed by
an order of the  Court,  or (ii) any  claim or  claims  of any  Committee  under
Section  506(c) of the  Bankruptcy  Code  against or with  respect to any of the
Collateral is allowed;

     8.9 If there is a default under the Real Estate  Indebtedness (other than a
default in respect of a payment  obligation that is not otherwise required to be
made under Section 6.17);

     8.10 If any of the  following  occur (i) a  post-Relief  Date  judgment  is
entered or liability  incurred in excess of $250,000,  or (ii) general liability
and workers  compensation  costs  (inclusive of insurance  premiums with respect
thereto)  during  any fiscal  year in the  aggregate  exceed  such costs for the
preceding  fiscal  year by more than  $100,000,  or (iii) any  post-Relief  Date
judgments are entered or liabilities are incurred,  including but not limited to
any  occurrences  specified in subparts (i) and (ii) of this Section 8.10,  that
would individually or in the aggregate result in a Material Adverse Change;

     8.11  If any  material  misstatement  or  misrepresentation  exists  now or
hereafter  in any  warranty,  representation,  statement,  or report made to the
Lender Group by Borrower or any Subsidiary of Borrower or any officer, employee,
agent,  or director of Borrower or any  Subsidiary  of Borrower,  or if any such
warranty or representation is withdrawn;

     8.12 If the  obligation of any guarantor  under its guaranty or other third
Person under any Loan  Document is limited or  terminated by operation of law or
by the  guarantor or other third  Person  thereunder,  or any such  guarantor or
other third Person becomes the subject of an Insolvency Proceeding;

<PAGE>

     8.13 The entry of an order  approving a disclosure  statement  and allowing
distribution of a plan of reorganization and such approved disclosure  statement
attendant  thereto by Borrower  or any other  Person to which the Lenders do not
consent or otherwise agree to the treatment of their claims;


     8.14 The entry of an order  confirming a plan of  reorganization  that does
not require  repayment in full of all of the Borrower's  Obligations  under this
Agreement on the earlier of the effective date of such plan of reorganization or
the date thirty (30) days following  entry of the order  confirming such plan of
reorganization,   unless  the  Lenders,   or  a  subset  thereof  but  otherwise
specifically  including  Foothill,  are providing "exit financing" in connection
with such plan of reorganization;

     8.15 The entry of an order amending,  supplementing,  staying,  vacating or
otherwise  modifying  the Loan  Documents or the Final Order without the written
consent of the Lenders;

     8.16 The payment of, or  application  for  authority  to pay,  any material
pre-petition claim, other than those of trade creditors  (including  reclamation
claims),  employees (or paid for their benefit),  taxing authorities,  creditors
under leases or executory contracts, Senior Claims and other than those required
to be paid with the initial  Advance  pursuant  to the terms of this  Agreement,
without the Required  Lenders' prior written  consent or pursuant to an order of
the Court after notice and hearing;

     8.17 The sale without the Lenders= consent,  of all or substantially all of
Borrower's  assets  either  through a sale under  Section 363 of the  Bankruptcy
Code,  through a confirmed  plan of  reorganization  in the Chapter 11 Case,  or
otherwise,  that does not  provide for  payment in full of the  Obligations  and
termination of the Commitments;

     8.18 The dismissal of the Chapter 11 Case, or the conversion of the Chapter
11 Case from one under Chapter 11 to one under Chapter 7 of the Bankruptcy Code;

     8.19 Except for the investigation and other activities  expressly permitted
in  paragraph  9 of the  Final  Order,  the  commencement  of a suit  or  action
(including  the  commencement  of  any  suit  or  action  as  a  result  of  any
investigation  permitted  under  paragraph 9 of the Final Order)  against any of
Agent or any Lender  and, as to any suit or action  brought by any Person  other
than Borrower or an officer or employee of Borrower,  the  continuation  thereof
without  dismissal for thirty (30) days after service thereof on any of Agent or
any Lender,  that assert,  by or on behalf of Borrower,  or any  Committee,  any
claim or legal or  equitable  remedy which seeks  subordination  of the claim or
Lien of any of Agent or any Lender;

     8.20 If, without the Lenders=  consent,  an interim or permanent trustee is
appointed in the Chapter 11 Case, or an examiner with expanded powers to operate
or manage the financial affairs, the business, or reorganization of the Borrower
is appointed in the Chapter 11 Case; or

<PAGE>

     8.21 If,  without the  Lenders'  consent,  an order by the Court is entered
granting  relief  from or  modifying  the  automatic  stay of Section 362 of the
Bankruptcy  Code (i) to allow any  creditor to execute upon or enforce a lien on
any Collateral,  or (ii) with respect to any Lien or the granting of any Lien on
any  Collateral  to any state or local  environmental  or  regulatory  agency or
authority,  or (iii) with respect to any retail  display  racks or point of sale
equipment leased to Borrower.


     9. THE LENDER GROUP'S RIGHTS AND REMEDIES.

     9.1 Rights and Remedies. Upon the occurrence,  and during the continuation,
of an Event of Default Agent may,  pursuant to Sections 17.4 and 17.5, and shall
upon the direction of the Required  Lenders,  without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:

     (a) Declare all Obligations, whether evidenced by this Agreement, by any of
the  other  Loan  Documents,  or  otherwise,  immediately  due and  payable  and
terminate the Commitments;

     (b) Cease  advancing  money or  extending  credit to or for the  benefit of
Borrower under this  Agreement,  under any of the Loan  Documents,  or under any
other agreement between Borrower and the Lender Group;

     (c) Terminate  this Agreement and any of the other Loan Documents as to any
future  liability or obligation of the Lender Group,  but without  affecting the
Lender Group's rights and security interests in the Personal Property Collateral
or the Real Property Collateral and without affecting the Obligations;

     (d) Settle or adjust  disputes and claims directly with Account Debtors for
amounts and upon terms which Agent considers advisable, and in such cases, Agent
will credit  Borrower's Loan Account with only the net amounts received by Agent
in payment of such disputed  Accounts after  deducting all Lender Group Expenses
incurred or expended in connection therewith;

     (e) Cause  Borrower to hold all returned  Inventory in trust for the Lender
Group,  segregate all returned  Inventory from all other property of Borrower or
in Borrower's  possession and conspicuously label said returned Inventory as the
property of the Lender Group;

<PAGE>

     (f) Without notice to or demand upon Borrower or any  guarantor,  make such
payments and do such acts as Agent considers  necessary or reasonable to protect
its  security  interests  in the  Collateral.  Borrower  agrees to assemble  the
Personal  Property  Collateral  if Agent so  requires,  and to make the Personal
Property  Collateral  available  to  Agent  as  Agent  may  designate.  Borrower
authorizes Agent to enter the premises where the Personal Property Collateral is
located, to take and maintain possession of the Personal Property Collateral, or
any part of it, and to pay,  purchase,  contest,  or compromise any encumbrance,
charge, or Lien that in Agent's determination appears to conflict with the Liens
of Agent (for the benefit of the Lender Group) in the  Collateral and to pay all
expenses  incurred in  connection  therewith.  With respect to any of Borrower's
owned or leased  premises,  Borrower hereby grants Agent a license to enter into
possession of such premises and to occupy the same,  without  charge,  for up to
120 days in order to  exercise  any of the  Lender  Group's  rights or  remedies
provided herein, at law, in equity, or otherwise;


     (g) Without notice to Borrower (such notice being  expressly  waived),  and
without  constituting  a  retention  of any  collateral  in  satisfaction  of an
obligation  (within the meaning of Section 9-505 of the Code), set off and apply
to the Obligations any and all (i) balances and deposits of Borrower held by the
Lender Group (including any amounts received in the Blocked  Accounts),  or (ii)
indebtedness  at any time owing to or for the credit or the  account of Borrower
held by the Lender Group;

     (h) Hold, as cash collateral, any and all balances and deposits of Borrower
held by the Lender Group, and any amounts received in the Blocked  Accounts,  to
secure the full and final repayment of all of the Obligations;

     (i) Seek the  appointment of a receiver or keeper to take possession of the
Collateral  and  to  enforce  any of  Agent's  remedies  with  respect  to  such
appointment without prior notice or hearing;

     (j) Ship, reclaim,  recover, store, finish,  maintain,  repair, prepare for
sale,  advertise  for sale,  and sell (in the manner  provided  for  herein) the
Personal Property  Collateral.  Agent is hereby granted a license or other right
to use, without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks, service marks, and advertising
matter,  or any  property of a similar  nature,  as it pertains to the  Personal
Property  Collateral,  in completing  production of,  advertising  for sale, and
selling  any  Personal  Property  Collateral  and  Borrower's  rights  under all
licenses and all franchise agreements shall inure to the Lender Group's benefit;

     (k) Sell the  Personal  Property  Collateral  at either a public or private
sale, or both, by way of one or more contracts or  transactions,  for cash or on
terms,  in such manner and at such places  (including  Borrower's  premises)  as
Agent  determines  is  commercially  reasonable.  It is not  necessary  that the
Personal Property Collateral be present at any such sale;

     (l) Agent shall give notice of the  disposition  of the  Personal  Property
Collateral as follows:

<PAGE>

     (a) Agent shall give Borrower and each holder of a security interest in the
Personal  Property  Collateral  who has filed with Agent a written  request  for
notice,  a notice in  writing of the time and place of public  sale,  or, if the
sale is a private sale or some other  disposition other than a public sale is to
be made of the Personal Property Collateral, then the time on or after which the
private sale or other disposition is to be made;

     (B) The  notice  shall be  hand-delivered  to an officer  of  Borrower,  or
mailed,  postage  prepaid,  to Borrower as provided in Section 12, at least five
(5) days  before the date fixed for the sale,  or at least five (5) days  before
the date on or after which the private sale or other  disposition is to be made;
no notice  needs to be given  prior to the  disposition  of any  portion  of the
Personal Property Collateral that is perishable or threatens to decline speedily
in value or that is of a type customarily sold on a recognized market. Notice to
Persons  other than  Borrower  claiming  an interest  in the  Personal  Property
Collateral shall be sent to such addresses as they have furnished to Agent;

     (C) If the sale is to be a public sale, Agent also shall give notice of the
time and place by publishing a notice one time at least five (5) days before the
date of the sale in a newspaper  of general  circulation  in the county in which
the sale is to be held;

     (m) Agent may credit bid and purchase at any public sale;

     (n) Any deficiency that exists after  disposition of the Personal  Property
Collateral as provided above will be paid  immediately  by Borrower.  Any excess
will be returned,  without  interest and subject to the rights of third Persons,
by Agent to Borrower; and

     (o)  Borrower  hereby  acknowledges  that the  Obligations  arose  out of a
commercial  transaction,  and agrees  that if an Event of Default  shall  occur,
Agent shall have the right to an immediate writ of possession  without notice of
a hearing;

<PAGE>

provided, however, that without prejudicing any rights of Agent and the Lenders,
Agent and the  Lenders  acknowledge  Borrower's  right to seek an  expedited  or
emergency  hearing  contesting the occurrence of an Event of Default and seeking
the continuation of funding hereunder  pursuant to paragraph 17(ii) of the Final
Order; provided further,  however, that notwithstanding the foregoing,  prior to
exercising the foregoing remedies under Sections 9.1(c) through (o), pursuant to
paragraph  17(ii) of the Final Order Agent shall file a motion in the Chapter 11
Case seeking a final order granting  relief from the automatic stay which motion
shall be verified or have  attached  thereto a supporting  affidavit,  and which
verified motion or supporting  affidavit shall recite the facts establishing the
Event of  Default  under this  Agreement.  Borrower  and,  if  appropriate,  the
Committees  shall have ten (10)  business  days after  service of such motion to
respond.  If  no  objection,   contravening  affidavit  or  sworn  response,  as
appropriate or required,  is timely filed, pursuant to the Final Order the Court
will enter a final order granting  relief from the automatic stay allowing Agent
to pursue all rights and remedies available to it. If, however, an objection,  a
contravening  affidavit or a sworn  response,  as  appropriate  or required,  is
filed,  pursuant to the Final Order the Court will set down for hearing  Agent's
motion for final order seeking  relief from the  automatic  stay on an expedited
basis at the next  available  time  (generally  with  twenty-four or forty-eight
hours notice,  if possible) at which hearing the Court will determine whether an
Event of Default has occurred and whether the relief  sought  should be granted,
and dispose of the motion  accordingly.  Pursuant to the Final  Order,  the sole
issue to be considered at any such hearing will be whether and to what extent an
Event of Default has  occurred  which would allow for the entry of a final order
granting  relief  from  the  automatic  stay to  allow  Agent  to  proceed  with
enforcement of its rights and remedies available hereunder.

     9.2 Remedies Cumulative.  The Lender Group's rights and remedies under this
Agreement,  the Loan Documents,  the Final Order, and all other agreements shall
be  cumulative.  The Lender  Group shall have all other  rights and remedies not
inconsistent  herewith as  provided  under the Code,  by law,  or in equity.  No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the  Lender  Group of any  Event of  Default  shall be deemed a
continuing  waiver.  No delay by the Lender  Group  shall  constitute  a waiver,
election, or acquiescence by it.

     10. TAXES AND EXPENSES.

     If  Borrower  fails to pay any  post-Relief  Date  monies  (whether  taxes,
assessments,  insurance  premiums,  or, in the case of leased  real  properties,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required  under the terms of this  Agreement,  then,  to the  extent  that Agent
determines  that such  failure by Borrower  could  result in a Material  Adverse
Change and such failure (i) is not deemed to be a Permitted Protest or permitted
by the  Bankruptcy  Code or an order of the Court after  notice and a hearing or
(ii) with respect to which the failure to pay is not  consented to in writing by
the holder of the applicable  claim or written notice thereof is not provided to
Agent or (iii) with  respect to which the failure to pay is not  consented to in
writing by the Required  Lenders,  in its discretion and without prior notice to
Borrower, Agent may do any or all of the following: (a) make payment of the same
or any part  thereof;  (b) set up such  reserves in  Borrower's  Loan Account as
Agent deems  necessary to protect the Lender Group from the exposure  created by
such  failure;  provided,  however,  that any  reserves  with  respect to unpaid
post-Relief  Date taxes and  similar  charges and unpaid  post-Relief  Date real
property leases and similar charges shall be determined as otherwise provided in
this  Agreement;  or (c)  obtain and  maintain  insurance  policies  of the type
described in Section 6.10,  and take any action with respect to such policies as
Agent deems  prudent.  Any such  amounts paid by Agent shall  constitute  Lender
Group  Expenses.  Any  such  payments  made by Agent  shall  not  constitute  an
agreement by the Lender Group to make similar payments in the future or a waiver
by the Lender Group of any Event of Default under this Agreement. Agent need not
inquire as to, or contest the  validity of, any such  expense,  tax, or Lien and
the  receipt of the usual  official  notice  for the  payment  thereof  shall be
conclusive evidence that the same was validly due and owing.

<PAGE>

     11. WAIVERS; INDEMNIFICATION.


     11.1 Demand;  Protest;  etc.  Borrower  waives demand,  protest,  notice of
protest,  notice of  default or  dishonor,  notice of  payment  and  nonpayment,
nonpayment at maturity, release, compromise,  settlement,  extension, or renewal
of accounts, documents,  instruments,  chattel paper, and guarantees at any time
held by the Lender Group on which Borrower may in any way be liable.

     11.2 The Lender  Group's  Liability for  Collateral.  So long as the Lender
Group  complies with its  obligations,  if any, under Section 9-207 of the Code,
the Lender  Group shall not in any way or manner be liable or  responsible  for:
(a) the safekeeping of the Collateral;  (b) any loss or damage thereto occurring
or arising in any manner or fashion from any cause;  (c) any  diminution  in the
value thereof; or (d) any act or default of any carrier,  warehouseman,  bailee,
forwarding  agency, or other Person. All risk of loss, damage, or destruction of
the Collateral shall be borne by Borrower.

     11.3  Indemnification.  Borrower  shall pay,  indemnify,  defend,  and hold
Agent, each Agent-Related  Person, the Co-Agent,  each Lender, each Participant,
and each of their respective officers,  directors,  employees,  counsel, agents,
and  attorneys-in-fact  (each, an "Indemnified Person") harmless (to the fullest
extent  permitted by law) from and against any and all claims,  demands,  suits,
actions, investigations,  proceedings, and damages, and all reasonable attorneys
fees and  disbursements  and  other  costs and  expenses  actually  incurred  in
connection  therewith (as and when they are incurred and irrespective of whether
suit is brought), at any time asserted against, imposed upon, or incurred by any
of them in  connection  with or as a  result  of or  related  to the  execution,
delivery, enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions  contemplated  herein, and with respect
to any investigation,  litigation,  or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission,  event  or  circumstance  in  any  manner  related  thereto  (all  the
foregoing, collectively, the "Indemnified Liabilities").  Borrower shall have no
obligation to any Indemnified Person under this Section 11.3 with respect to any
Indemnified Liability that a court of competent  jurisdiction finally determines
to have  resulted  from the  gross  negligence  or  willful  misconduct  of such
Indemnified  Person.  This  provision  shall  survive  the  termination  of this
Agreement and the repayment of the Obligations.

     12. NOTICES.

<PAGE>

     Unless otherwise provided in this Agreement,  all notices or demands by any
party  relating to this Agreement or any other Loan Document shall be in writing
and (except for financial statements and other informational documents which may
be sent by first-class mail, postage prepaid) shall be hand-delivered (with hand
deliveries to Borrower,  Agent,  the Co-Agent and Foothill  Partners to be to an
officer  thereof) or sent by  registered  or certified  mail  (postage  prepaid,
return receipt requested),  overnight courier, or telefacsimile to Borrower,  to
Agent, to Co-Agent or to Foothill  Partners,  as the case may be, at its address
set forth below:


         If to Borrower:           JUMBOSPORTS INC.
                                   4701 W. Hillsborough Avenue
                                   Tampa, Florida 33614
                                   Attn: Chief Financial Officer
                                   Fax No. (813) 885-8642

         with copies to:           STICHTER, RIEDEL, BLAIN & PROSSER, PA
                                   110 E. Madison St., Suite 200
                                   Tampa, Florida 33602
                                   Attn:  Harley E. Riedel, Esq.
                                   Fax No. (813) 229-1811

         with copies to:           FOWLER, WHITE, GILLEN, BOGGS,
                                   VILLAREAL AND BANKER, P.A.
                                   Suite 1700
                                   501 East Kennedy Boulevard
                                   Tampa, Florida 33602
                                   Attn: Jeffrey C. Shannon, Esq.
                                   Fax No. (813) 229-8313

         with copies to:           STROOCK & STROOCK & LAVAN LLP
                                   200 South Biscayne Boulevard
                                   Suite 3300
                                   First Union Financial Center
                                   Miami, Florida 33131-2385
                                   Attn: Scott L. Baena, Esq.
                                   Fax. No.    (302) 789-9302

         with copies to:           KRONISH LIEB WEINER & HELLMAN LLP
                                   1114 Avenue of the Americas
                                   46th Floor
                                   New York, New York 10036
                                   Attn: Robert A. Boghosian, Esq.
                                   Fax: (212) 479-6273


<PAGE>

        If to Agent or the         FOOTHILL CAPITAL CORPORATION
        Lender Group in care       11111 Santa Monica Blvd.
        of Agent:                  Suite 1500
                                   Los Angeles, California 90025-3333
                                   Attn:  Business Finance Division Manager
                                   Fax No. (310) 478-9788

        with copies to:            FOOTHILL CAPITAL CORPORATION
                                   60 State Street, Suite 1150
                                   Boston, Massachusetts 02109
                                   Attn: Account Executive
                                   Fax No. (617) 722-9493

        with copies to:            PAUL, HASTINGS, JANOFSKY & WALKER LLP
                                   600 Peachtree Street, N.E., Suite 2400
                                   Atlanta, Georgia 30308
                                   Attn:  Jesse H. Austin, III, Esq.
                                   Fax No. (404) 815-2424

        with copies to:            HILL, WARD & HENDERSON, P.A.
                                   101 East Kennedy Boulevard, Suite 3700
                                   P.O. Box 2231
                                   Tampa, Florida 33601
                                   Attn:  Douglas P. McClurg, Esq.
                                   Fax No. (813) 221-2900

        with copies to:            STROOCK & STROOCK & LAVAN LLP
                                   200 South Biscayne Boulevard
                                   Suite 3300
                                   First Union Financial Center
                                   Miami, Florida 33131-2385
                                   Attn: Scott L. Baena, Esq.
                                   Fax. No.    (302) 789-9302

        with copies to:            KRONISH LIEB WEINER & HELLMAN LLP
                                   1114 Avenue of the Americas
                                   46th Floor
                                   New York, New York 10036
                                   Attn: Robert A. Boghosian, Esq.
                                   Fax: (212) 479-6273



<PAGE>

        If to Co-Agent:            CONGRESS FINANCIAL CORPORATION (SOUTHERN)
                                   200 Galleria Parkway, Suite 1500
                                   Atlanta, Georgia 30339
                                   Attn: Mr. Drew Stawin
                                   Fax No. (770) 956-8120

        If to Foothill Partners:   FOOTHILL PARTNERS III, L.P.
                                   c/o Foothill Capital Corporation
                                   11111 Santa Monica Blvd.
                                   Suite 1500
                                   Los Angeles, California
                                   Attn: Mr. Michael Bohannon
                                   Fax No. (310) 479-0461

        with copies to:            BUCHALTER, NEMER, FIELDS & YOUNGER
                                   24th Floor
                                   601 South Figueroa Street
                                   Los Angeles, California 90017
                                   Attn:  Robert C. Colton, Esq.
                                   Fax No. (213) 896-0400

     The  parties  hereto may  change  the  address at which they are to receive
notices  hereunder,  by notice in writing in the  foregoing  manner given to the
other.  All notices or demands  sent in  accordance  with this Section 12, other
than notices by Agent in connection  with  Sections  9-504 or 9-505 of the Code,
shall be deemed  received on the earlier of the date of actual  receipt or three
(3) days after the deposit thereof in the mail. Borrower acknowledges and agrees
that notices sent by Agent in  connection  with  Sections  9-504 or 9-505 of the
Code shall be deemed  sent when  deposited  in the mail or  hand-delivered,  or,
where permitted by law,  transmitted  telefacsimile  or other similar method set
forth above.

<PAGE>

     13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

     THE  VALIDITY  OF THIS  AGREEMENT  AND THE  OTHER  LOAN  DOCUMENTS  (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT),  THE CONSTRUCTION,
INTERPRETATION,  AND  ENFORCEMENT  HEREOF  AND  THEREOF,  AND THE  RIGHTS OF THE
PARTIES  HERETO AND THERETO  WITH  RESPECT TO ALL MATTERS  ARISING  HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER,  GOVERNED BY,
AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF GEORGIA.  THE PARTIES
AGREE THAT ALL ACTIONS OR PROCEEDINGS  ARISING IN CONNECTION WITH THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF FULTON,  STATE OF GEORGIA OR, AT THE SOLE OPTION
OF THE LENDER GROUP, IN ANY OTHER COURT IN WHICH THE LENDER GROUP SHALL INITIATE
LEGAL OR EQUITABLE  PROCEEDINGS AND WHICH HAS SUBJECT MATTER  JURISDICTION  OVER
THE MATTER IN CONTROVERSY.  NOTWITHSTANDING THE FOREGOING,  NOTHING HEREIN SHALL
INTERFERE  WITH THE  COURT'S  JURISDICTION  OVER THE  CHAPTER  11 CASE.  EACH OF
BORROWER AND EACH MEMBER OF THE LENDER  GROUP  WAIVES,  TO THE EXTENT  PERMITTED
UNDER  APPLICABLE  LAW,  ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON  CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE  WITH THIS SECTION 13. EACH OF BORROWER AND EACH MEMBER OF THE LENDER
GROUP  HEREBY  WAIVES  THEIR  RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF
THE TRANSACTIONS  CONTEMPLATED THEREIN,  INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS,  AND ALL OTHER COMMON LAW OR  STATUTORY  CLAIMS.  EACH OF
BORROWER  AND EACH MEMBER OF THE LENDER  GROUP  REPRESENTS  THAT IT HAS REVIEWED
THIS WAIVER AND EACH  KNOWINGLY  AND  VOLUNTARILY  WAIVES ITS JURY TRIAL  RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


     14. DESTRUCTION OF BORROWER'S DOCUMENTS

     All documents,  schedules,  invoices,  agings, or other papers delivered to
Agent may be destroyed  or otherwise  disposed of by Agent four (4) months after
they are  delivered  to or  received  by Agent,  unless  Borrower  requests,  in
writing,  the return of said  documents,  schedules,  or other  papers and makes
arrangements, at Borrower's expense, for their return.

     15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.


<PAGE>
    15.1 Assignments and Participations.

     (a) Any Lender may, with the written consent of Agent,  assign and delegate
to one or more Eligible  Transferees  (each an  "Assignee")  all, or any ratable
part, of the Obligations,  the Commitments, and the other rights and obligations
of such Lender hereunder and under the other Loan Documents, in a minimum amount
of $5,000,000;  provided,  however, that Borrower and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an  Assignee  until (i)  written  notice of such  assignment,  together  with
payment  instructions,  addresses,  and related  information with respect to the
Assignee,  shall have been given to  Borrower  and Agent by such  Lender and the
Assignee; (ii) such Lender and its Assignee shall have delivered to Borrower and
Agent a fully executed Assignment and Acceptance  ("Assignment and Acceptance")
in the form of Exhibit A-1;  and (iii) the assignor  Lender or Assignee has paid
to Agent for Agent's sole and separate account a processing fee in the amount of
$2,500  (other  than  assignments  by the  members of the  Lender  Group who are
signatories  hereto to other  members  of the Lender  Group who are  signatories
hereto). Anything contained herein to the contrary notwithstanding,  the consent
of Agent shall not be required  (and payment of any fees shall not be required)
if such  assignment  is in  connection  with any  merger,  consolidation,  sale,
transfer, or other disposition of all or any substantial portion of the business
or loan portfolio of such Lender or is to an Affiliate of a Lender.


     (b) From and after the date that Agent notifies the assignor Lender that it
has  received a fully  executed  Assignment  and  Acceptance  and payment of the
above-referenced  processing fee, (i) the Assignee  thereunder  shall be a party
hereto  and,  to the extent  that  rights and  obligations  hereunder  have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and  obligations  of a Lender  under the Loan  Documents,  and (ii) the assignor
Lender shall, to the extent that rights and obligations  hereunder and under the
other Loan  Documents  have been assigned by it pursuant to such  Assignment and
Acceptance,  relinquish  its rights and be released from its  obligations  under
this Agreement (and in the case of an Assignment and Acceptance  covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement  and the other Loan  Documents,  such Lender shall cease to be a party
hereto  and  thereto),  and such  assignment  shall  effect a  novation  between
Borrower and the Assignee.


<PAGE>

     (c) By executing and delivering an Assignment and Acceptance, the assigning
Lender  thereunder  and the Assignee  thereunder  confirm to and agree with each
other and the other  parties  hereto as  follows:  (1) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty  and  assumes  no  responsibility   with  respect  to  any  statements,
warranties,  or representations  made in or in connection with this Agreement or
the execution, legality, validity, enforceability,  genuineness, sufficiency, or
value of this Agreement or any other Loan Document  furnished  pursuant  hereto;
(2) such  assigning  Lender makes no  representation  or warranty and assumes no
responsibility  with  respect to the  financial  condition  of  Borrower  or any
guarantor or the  performance  or observance by Borrower or any guarantor of any
of its  obligations  under this  Agreement or any other Loan Document  furnished
pursuant hereto;  (3) such Assignee confirms that it has received a copy of this
Agreement,  together with such other  documents and information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and  Acceptance;  (4) such Assignee will,  independently  and without
reliance upon Agent, such assigning  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
this  Agreement;  (5) such Assignee  appoints and authorizes  Agent to take such
action as agent on its behalf and to exercise  such powers under this  Agreement
as are delegated to Agent by the terms hereof,  together with such powers as are
reasonably incidental thereto; and (6) such Assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.


     (d)  Immediately  upon each  Assignee's  making its  processing fee payment
under  the  Assignment  and  Acceptance,  this  Agreement  shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting  adjustment of the Commitments of the Assignor
and Assignee arising therefrom.  The Commitment allocated to each Assignee shall
reduce such Commitment of the assigning Lender pro tanto.

<PAGE>

     (e) Any Lender may at any time,  with the written  consent of Agent,  which
consent  shall not be  unreasonably  withheld,  sell to one or more  Persons (a)
"Participant")  participating interests in the Obligations,  the Commitment, and
the other  rights  and  interests  of that  Lender  (the  "Originating  Lender")
hereunder and under the other Loan Documents;  provided,  however,  that (i) the
Originating  Lender's  obligations  under this Agreement shall remain unchanged,
(ii) the Originating  Lender shall remain solely responsible for the performance
of such obligations,  (iii) Borrower and Agent shall continue to deal solely and
directly with the Originating Lender in connection with the Originating Lender's
rights and obligations  under this Agreement and the other Loan Documents,  (iv)
no Originating  Lender shall transfer or grant any participating  interest under
which the  Participant has the sole and exclusive right to approve any amendment
to, or any consent or waiver with  respect to, this  Agreement or any other Loan
Document,  except to the extent  such  amendment  to, or consent or waiver  with
respect to this  Agreement  or of any other Loan  Document  would (a) extend the
final maturity date of the  Obligations  hereunder in which such  participant is
participating;  (B) reduce  the  interest  rate  applicable  to the  Obligations
hereunder  in which such  Participant  is  participating;  (C)  release all or a
material  portion of the  Collateral  (except to the extent  expressly  provided
herein or in any of the Loan Documents)  supporting the Obligations hereunder in
which such Participant is participating;  (D) postpone the payment of, or reduce
the amount of, the  interest  or fees  hereunder  in which such  Participant  is
participating;  or (E)  change the  amount or due dates of  scheduled  principal
repayments or prepayments or premiums in respect of the Obligations hereunder in
which such Participant is participating; and (v) all amounts payable by Borrower
hereunder  shall be determined as if such  Originating  Lender had not sold such
participation;  except that, if amounts outstanding under this Agreement are due
and  unpaid,  or shall have been  declared  or shall have become due and payable
upon the occurrence of an Event of Default,  each Participant shall be deemed to
have the right of set-off in respect of its  participating  interest  in amounts
owing  under  this  Agreement  to  the  same  extent  as if  the  amount  of its
participating  interest  were  owing  directly  to it  as a  Lender  under  this
Agreement; provided, however, that no Participant may exercise any such right of
setoff without the notice to and consent of Agent. The rights of any Participant
shall  only  be  derivative  through  the  Originating  Lender  with  whom  such
Participant  participates and no Participant  shall have any direct rights as to
the  other  Lenders,  Agent,  Borrower,  the  Collections,  the  Collateral,  or
otherwise in respect of the  Advances,  the Letters of Credit or the Term Loans.
No  Participant  shall have the right to  participate  directly in the making of
decisions  by the Lenders  among  themselves.  The  provisions  of this  Section
15.1(e) are solely for the benefit of the Lender Group,  and Borrower shall have
no rights as a third party beneficiary of any of such provisions.


     (f) In connection  with any such  assignment or  participation  or proposed
assignment  or  participation,  a  Lender  may  disclose  to a third  party  all
documents  and  information  which  it now or  hereafter  may have  relating  to
Borrower or Borrower's business.

     (g) Notwithstanding  any other provision in this Agreement,  any Lender may
at any time create a security interest in, or pledge,  all or any portion of its
rights under and interest in this Agreement in favor of any Federal Reserve Bank
in accordance  with Regulation A of the FRB or U.S.  Treasury  Regulation 31 CFR
'203.14,  and such  Federal  Reserve  Bank may  enforce  such pledge or security
interest in any manner permitted under applicable law.

     15.2 Successors.  This Agreement shall bind and inure to the benefit of the
respective  successors  and  assigns  of each of the  parties,  including,  with
respect to  Borrower,  the estate of  Borrower,  any  trustee  or  successor  in
interest of Borrower in the  Chapter 11 Case or any  subsequent  case  commenced
under Chapter 7 of the Bankruptcy Code; provided, however, that Borrower may not
assign this  Agreement  or any rights or duties  hereunder  without the Lenders=
prior written consent and any prohibited assignment shall be absolutely void. No
consent  to  assignment   by  the  Lenders  shall  release   Borrower  from  its
Obligations.  A Lender  may  assign  this  Agreement  and its  rights and duties
hereunder pursuant to Section 15.1 and, except as expressly required pursuant to
Section 15.1, no consent or approval by Borrower is required in connection  with
any such assignment.

     16. AMENDMENTS; WAIVERS.

     No amendment or waiver of any provision of this Agreement or any other Loan
Document,  and no consent  or  forbearance  with  respect  to any  departure  by
Borrower  therefrom,  shall be effective unless the same shall be in writing and
signed  by the  Required  Lenders  (or by Agent at the  written  request  of the
Required  Lenders)  and  Borrower  and then any such waiver or consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given;  provided,  however,  that no such waiver,  amendment,  or consent shall,
unless in writing and signed by all the Lenders and Borrower and acknowledged by
Agent, do any of the following:

     (a) increase or extend the Commitment of any Lender;

     (b)  postpone or delay any date fixed by this  Agreement  or any other Loan
Document for any payment of principal,  interest,  fees, or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document;

<PAGE>

     (c) reduce, forgive,  compromise,  cancel or waive payment of the principal
of, or the rate of interest  specified  herein on, any Advance or Term Loan,  or
any fees or other amounts payable hereunder or under any other Loan Document;


     (d) change the  percentage of the  Commitments  or of the aggregate  unpaid
principal  amount of the  Advances  and Term Loans,  which is  required  for the
Lenders or any of them to take any action hereunder;

     (e)  increase  the advance  rate with  respect to Advances  (except for the
restoration  of an advance rate after the prior  reduction  thereof),  or change
Section 2.1(b);

     (f) amend or modify in any manner Section 2.1(l);

     (g) amend or modify in any manner Section 2.5(b);

     (h) amend this Section or any  provision  of the  Agreement  providing  for
consent or other action by all Lenders;

     (i) release Collateral other than as permitted by Section 17.11;

     (j)  subordinate  the lien of Agent in any of the  Collateral or any of the
Obligations (except to the extent permitted herein);

     (k) change the definition of "Required Lenders";

     (l) release Borrower from any Obligation for the payment of money; or

     (m) amend any of the provisions of Article 17.

     and, provided further,  that no amendment,  waiver or consent shall, unless
in writing and signed by Agent,  affect the rights or duties of Agent under this
Agreement or any other Loan Document; and, provided further, that the limitation
contained  in clause (e) above shall not be deemed to limit the ability of Agent
to make  Advances  or  Agent  Loans,  as  applicable,  in  accordance  with  the
provisions of Sections 2.1(g), (h), or (l). The foregoing  notwithstanding,  any
amendment,  modification,  waiver, consent,  termination,  or release of or with
respect to any  provision  of this  Agreement  or any other Loan  Document  that
relates only to the relationship of the Lender Group among themselves,  and that
does not affect the rights or obligations of Borrower, shall not require consent
by or the agreement of Borrower.

<PAGE>

     No failure by Agent or any Lender to exercise any right,  remedy, or option
under  this  Agreement,  any  other  Loan  Document,  or any  present  or future
supplement  hereto  or  thereto,  or in any  other  agreement  between  or among
Borrower  and  Agent  and/or  any  Lender,  or delay by Agent or any  Lender  in
exercising the same, will operate as a waiver thereof. No waiver by Agent or any
Lender will be  effective  unless it is in writing,  and then only to the extent
specifically  stated.  No waiver by Agent or the Lenders on any  occasion  shall
affect or diminish Agent's and each Lender's rights thereafter to require strict
performance  by Borrower of any  provision of this  Agreement.  Agent's and each
Lender's  rights  under  this  Agreement  and the other Loan  Documents  will be
cumulative  and not  exclusive  of any other right or remedy  which Agent or any
Lender may have.


<PAGE>

     17. AGENT; THE LENDER GROUP.

     17.1 Appointment and  Authorization of Agent. Each Lender hereby designates
and  appoints  Foothill  as its Agent  under this  Agreement  and the other Loan
Documents  and each  Lender  hereby  irrevocably  authorizes  Agent to take such
action on its behalf under the  provisions of this Agreement and each other Loan
Document and to exercise  such powers and perform  such duties as are  expressly
delegated  to it by the  terms of this  Agreement  or any other  Loan  Document,
together with such powers as are reasonably incidental thereto.  Agent agrees to
act as  such  on the  express  conditions  contained  in this  Article  17.  The
provisions  of this  Article  17 are  solely  for the  benefit  of Agent and the
Lenders,  and Borrower shall not have any rights as a third party beneficiary of
any of the provisions contained herein;  provided,  however, that the provisions
of  Sections  17.10,  17.11,  and  17.16(d)  also  shall be for the  benefit  of
Borrower. Any provision to the contrary contained elsewhere in this Agreement or
in any other Loan Document  notwithstanding,  Agent shall not have any duties or
responsibilities,  except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary  relationship with any Lender, and no implied
covenants,  functions,  responsibilities,  duties,  obligations,  or liabilities
shall be read into this Agreement or any other Loan Document or otherwise  exist
against Agent. Except as expressly  otherwise provided in this Agreement,  Agent
shall  have  and may use its sole  discretion  with  respect  to  exercising  or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions which Agent is expressly  entitled to take or assert under or
pursuant to this Agreement and the other Loan  Documents,  including  making the
determinations  contemplated by Section 2.1(b).  The  identification of Congress
Financial Corporation as Co-Agent hereunder shall not create any rights in favor
of it, nor subject it to any duties or  obligations  in such capacity  except as
otherwise  expressly  provided  herein.  Without  limiting the generality of the
foregoing,  or of any other provision of the Loan Documents that provides rights
or powers to Agent,  Lenders  agree that Agent  shall have the right to exercise
the following powers as long as this Agreement remains in effect:  (a) maintain,
in  accordance  with its  customary  business  practices,  ledgers  and  records
reflecting  the status of the  Advances,  the Term Loans,  the  Collateral,  the
Collections,  and related matters; (b) execute and/or file any and all financing
or similar statements or notices, amendments, renewals, supplements,  documents,
instruments,  proofs of claim for Lenders,  notices and other written agreements
with respect to the Loan Documents; (c) make Advances for itself or on behalf of
Lenders as provided in the Loan Documents;  (d) exclusively receive,  apply, and
distribute  the  Collections  as  provided in the Loan  Documents;  (e) open and
maintain  such  bank  accounts  and  lock  boxes as Agent  deems  necessary  and
appropriate  in accordance  with the Loan  Documents for the foregoing  purposes
with respect to the Collateral and the Collections;  (f) perform,  exercise, and
enforce any and all other  rights and  remedies of the Lender Group with respect
to Borrower, the Advances, the Term Loans, the Collateral,  the Collections,  or
otherwise  related to any of same as  provided  in the Loan  Documents;  and (g)
incur  and pay such  Lender  Group  Expenses  as Agent  may  deem  necessary  or
appropriate  for the  performance  and  fulfillment  of its functions and powers
pursuant to the Loan Documents.

     17.2  Delegation of Duties.  Except as otherwise  provided in this Section,
Agent may  execute  any of its  duties  under this  Agreement  or any other Loan
Document by or through  agents,  employees,  or  attorneys-in-fact  and shall be
entitled to advice of counsel  concerning all matters pertaining to such duties.
Agent shall not be responsible  for the negligence or misconduct of any agent or
attorney-in-fact  that  it  selects  as  long  as  such  selection  was  made in
compliance with this Section and without gross negligence or willful misconduct.
The foregoing  notwithstanding,  Agent shall not make any material delegation of
duties to subagents or non-employee  delegees  without the prior written consent
of  Required  Lenders  (it being  understood  that  routine  delegation  of such
administrative matters as filing financing statements,  or conducting appraisals
or audits,  is not viewed as a material  delegation that requires prior Required
Lender approval).  Notwithstanding anything herein which may be construed to the
contrary,  the Lenders and Borrower  acknowledge and agree that Agent may engage
the Oversight  Agent  pursuant to the Oversight  Agent  Agreement,  as it may be
modified and amended from time to time and the Oversight Agent may carry out its
duties as set forth in such agreement.

     17.3 Liability of Agent-Related  Persons. None of the Agent-Related Persons
shall (i) be liable for any  action  taken or omitted to be taken by any of them
under or in  connection  with this  Agreement or any other Loan  Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or, (ii) be responsible in any manner to any of the Lenders for any
recital,  statement,  representation  or  warranty  made  by  Borrower,  or  any
Subsidiary  or  Affiliate  of  Borrower,  or any  officer or  director  thereof,
contained  in  this  Agreement  or  in  any  other  Loan  Document,  or  in  any
certificate,  report,  statement,  or other document referred to or provided for
in, or received by Agent under or in  connection  with,  this  Agreement  or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document,  or for any failure
of Borrower or any other party to any Loan  Document to perform its  obligations
hereunder or thereunder.  No Agent-Related  Person shall be under any obligation
to any Lender to ascertain or to inquire as to the  observance or performance of
any of the  agreements  contained  in, or conditions  of, this  Agreement or any
other  Loan  Document,  or to  inspect  the  properties,  books,  or  records of
Borrower, or any of Borrower's Subsidiaries or Affiliates.

<PAGE>

     17.4  Relliance  by Agent.  Agent shall be  entitled to rely,  and shall be
fully  protected in relying,  upon any  writing,  resolution,  notice,  consent,
certificate,   affidavit,  letter,  telegram,  facsimile,  telex,  or  telephone
message,  statement  or other  document  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 upon advice and statements of legal counsel  (including counsel
to  Borrower  or  counsel to any  Lender),  independent  accountants,  and other
experts selected by Agent. Agent shall be fully justified in failing or refusing
to take any action  under this  Agreement or any other Loan  Document  unless it
shall first receive such advice or  concurrence  of the Required  Lenders or all
Lenders,  as applicable,  and until such instructions are received,  Agent shall
act, or refrain from acting,  as it deems advisable so long as it is not grossly
negligent or guilty of wilful misconduct.  If Agent so requests,  it shall first
be  indemnified to its reasonable  satisfaction  by Lenders  against any and all
liability  and  expense  which  may be  incurred  by it by  reason  of taking or
continuing to take any such action.  Agent shall in all cases be fully protected
in acting, or in refraining from acting,  under this Agreement or any other Loan
Document in accordance with a request or consent of the Required  Lenders or all
Lenders, as applicable,  and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.


     17.5  Notice of Default or Event of  Default.  Agent shall not be deemed to
have  knowledge or notice of the  occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of Agent or the Lenders or
the delivery of  information to Agent  hereunder,  except with respect to actual
knowledge  of the  existence  of an  Overadvance,  and  except  with  respect to
Defaults and Events of Default of which Agent has actual knowledge, unless Agent
shall have received  written notice from a Lender or Borrower  referring to this
Agreement,  describing  such Default or Event of Default,  and stating that such
notice is a "notice of default."  Agent  promptly will notify the Lenders of its
receipt of any such  notice or of any Event of Default of which Agent has, or is
deemed to have, actual knowledge.  If any Lender obtains actual knowledge of any
Event of Default,  such Lender promptly shall notify the other Lenders and Agent
of such Event of Default. Each Lender shall be solely responsible for giving any
notices to its  Participants,  if any.  Copies of any such notices shall also be
provided by Borrower.  Subject to Section 17.4, Agent shall take such action, or
refrain from taking any action, with respect to such Default or Event of Default
as may be requested by the Required Lenders; provided, however, that:

     (a) At all times,  Agent may  propose  and,  with the  consent of  Required
Lenders (which shall not be  unreasonably  withheld and which shall be deemed to
have  been  given by a Lender  unless  such  Lender  has  notified  Agent to the
contrary in writing within three days of notification  of such proposed  actions
by Agent) exercise, any remedies on behalf of the Lender Group; and

     (b) At all times, once Required Lenders or all Lenders, as the case may be,
have  approved  the  exercise of a  particular  remedy or pursuit of a course of
action,  Agent  may,  but shall not be  obligated  to,  make all  administrative
decisions  in  connection   therewith  or  take  all  other  actions  reasonably
incidental thereto (for example, if the Required Lenders approve the foreclosure
of certain  Collateral,  Agent  shall not be  required  to seek  consent for the
administrative aspects of conducting such sale or handling of such Collateral).

<PAGE>

     17.6  Credit  Decision.   Each  Lender   acknowledges   that  none  of  the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken,  including any review of the affairs of Borrower
and  its  Subsidiaries  or  Affiliates,   shall  be  deemed  to  constitute  any
representation  or warranty  by any  Agent-Related  Person to any  Lender.  Each
Lender represents to Agent that it has,  independently and without reliance upon
any  Agent-Related  Person and based on such documents and information as it has
deemed  appropriate,  made  its own  appraisal  of and  investigation  into  the
business,  prospects,  operations,  property, financial and other condition, and
creditworthiness  of Borrower and any other Person (other than the Lender Group)
party to a Loan Document,  and all applicable  bank  regulatory laws relating to
the transactions  contemplated  hereby,  and made its own decision to enter into
this  Agreement  and to extend credit to Borrower.  Each Lender also  represents
that it will,  independently and without reliance upon any Agent-Related  Person
and based on such documents and information as it shall deem  appropriate at the
time,  continue to make its own credit  analysis,  appraisals,  and decisions in
taking or not taking action under this  Agreement and the other Loan  Documents,
and to make such investigations as it deems necessary to inform itself as to the
business,  prospects,  operations,  property, financial and other condition, and
creditworthiness of Borrower, and any other Person (other than the Lender Group)
party to a Loan  Document.  Except for  notices,  reports,  and other  documents
expressly  herein required to be furnished to the Lenders by Agent,  Agent shall
not have any duty or  responsibility  to provide  any Lender  with any credit or
other  information  concerning the business,  prospects,  operations,  property,
financial and other condition,  or creditworthiness  of Borrower,  and any other
Person party to a Loan Document that may come into the  possession of any of the
Agent-Related Persons.

<PAGE>

     17.7 Costs and  Expenses;  Indemnification.  Agent may incur and pay Lender
Group  Expenses  to  the  extent  Agent  deems  reasonably  ion.   necessary  or
appropriate for the performance  and fulfillment of its functions,  powers,  and
obligations  pursuant to the Loan  Documents,  including  without  limiting  the
generality  of the  foregoing,  but  subject  to any  requirements  of the  Loan
Documents  that it obtain  any  applicable  consents  or engage in any  required
consultation,  court costs,  reasonable  attorneys  fees and expenses,  costs of
collection  by outside  collection  agencies  and  auctioneer  fees and costs of
security guards or insurance  premiums paid to maintain the Collateral,  whether
or not Borrower are  obligated to reimburse  Agent or Lenders for such  expenses
pursuant to the Loan Agreement or otherwise. Agent is authorized and directed to
deduct and retain  sufficient  amounts from  Collections to reimburse  Agent for
such  out-of-pocket  costs and expenses prior to the distribution of any amounts
to Lenders.  In the event Agent is not  reimbursed  for such costs and  expenses
from Collections, each Lender hereby agrees that it is and shall be obligated to
pay to or  reimburse  Agent  for the  amount  of such  Lender's  Pro-Rata  Share
thereof.  Whether or not the transactions  contemplated  hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not  reimbursed by or on behalf of Borrower and without  limiting the obligation
of Borrower to do so), according to their Pro-Rata Shares,  from and against any
and all  Indemnified  Liabilities;  provided,  however,  that no Lender shall be
liable for the  payment  to the  Agent-Related  Persons  of any  portion of such
Indemnified  Liabilities  resulting solely from such Person's gross  negligence,
bad faith,  or willful  misconduct.  Without  limitation of the foregoing,  each
Lender shall  reimburse  Agent upon demand for its ratable share of any costs or
out-of-pocket  expenses (including attorney fees and expenses) incurred by Agent
in  connection  with  the  preparation,   execution,  delivery,  administration,
modification,  amendment,  or enforcement (whether through  negotiations,  legal
proceedings  or  otherwise)  of,  or  legal  advice  in  respect  of  rights  or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated  by or  referred  to  herein,  to  the  extent  that  Agent  is not
reimbursed  for such expenses by or on behalf of Borrower.  The  undertaking  in
this Section 17.7 shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.


     17.8 Agent in Individual  Capacity.  Foothill and its  Affiliates  may make
loans to,  issue  letters of credit for the account of,  accept  deposits  from,
acquire equity interests, in and generally engage in any kind of banking, trust,
financial  advisory,  underwriting,  or other  business  with  Borrower  and its
Subsidiaries  and Affiliates and any other Person party to any Loan Documents as
though  Foothill were not Agent  hereunder  without  notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Foothill and
its Affiliates may receive  information  regarding  Borrower or their Affiliates
and  any  other  Person  party  to  any  Loan   Documents  that  is  subject  to
confidentiality  obligations  in favor of Borrower or such other Person and that
prohibit the  disclosure  of such  information  to the Lenders,  and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality  obligations,  which waiver Agent will use its  reasonable  best
efforts  to  obtain),  Agent  shall be  under  no  obligation  to  provide  such
information  to them.  With  respect  to the Agent  Loans  and  Agent  Advances,
Foothill shall have the same rights and powers under this Agreement as any other
Lender  and may  exercise  the same as though it were not  Agent,  and the terms
"Lender" and "Lenders" include Foothill in its individual capacity.

<PAGE>

     17.9 Successor Agent.  Agent may resign as Agent upon forty-five (45) days=
notice to the Lenders  and  Borrower.  If Agent  resigns  under this  Agreement,
Co-Agent shall have the option to become the successor Agent. If Co-Agent elects
not to exercise its option to become a successor  Agent,  the  Required  Lenders
shall  appoint  any Lender or Eligible  Transferee  as  successor  Agent for the
Lenders.  If no successor  Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint a successor Agent, after consulting with
the  Lenders  and  Borrower.  Agent may be removed  and  replaced by Co-Agent as
successor Agent upon Agent's breach or failure to perform any material provision
of this  Agreement or as provided  under  applicable  law. In the event Co-Agent
does not exercise the foregoing right to remove and replace Agent,  and if Agent
has breached or failed to perform any material provision of this Agreement or of
applicable law, the Required  Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term  "Agent"  shall  mean  such  successor  Agent  and  the  retiring   Agent's
appointment,  powers and duties as Agent shall be terminated. After any retiring
Agent's resignation  hereunder as Agent, the provisions of this Section 17 shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it  was  Agent  under  this  Agreement.  If  no  successor  Agent  has  accepted
appointment  as Agent by the date  which is  forty-five  (45) days  following  a
retiring Agent's notice of resignation,  the retiring Agent's  resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent  hereunder  until such time,  if any, as the  Lenders  appoint a
successor Agent as provided for above.


     17.10 Withholding Tax.

     (a) If any Lender is a "foreign  corporation,  partnership or trust" within
the meaning of the IRC and such Lender claims exemption from, or a reduction of,
U.S.  withholding tax under Sections 1441 or 1442 of the IRC, such Lender agrees
with and in favor of Agent and Borrower, to deliver to Agent and Borrower:

     (i) if such Lender claims an exemption from, or a reduction of, withholding
tax under a United States tax treaty,  properly completed IRS Forms 1001 and W-8
before the  payment of any  interest in the first  calendar  year and before the
payment of any  interest in each third  succeeding  calendar  year during  which
interest may be paid under this Agreement;

     (ii) if such  Lender  claims that  interest  paid under this  Agreement  is
exempt from United States  withholding  tax because it is effectively  connected
with a United  States trade or business of such Lender,  two properly  completed
and  executed  copies of IRS 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 IRS Form
W-9; and

     (iii) such other  form or forms as may be  required  under the IRC or other
laws of the United  States as a condition to exemption  from,  or reduction  of,
United States withholding tax.

Such  Lender  agrees to  promptly  notify  Agent and  Borrower  of any change in
circumstances  which would  modify or render  invalid any claimed  exemption  or
reduction.

     (b) If any Lender claims  exemption from, or reduction of,  withholding tax
under a United  States tax  treaty by  providing  IRS Form 1001 and such  Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of Borrower,  such Lender agrees to notify Agent and Borrower of
the  percentage  amount  in  which  it is no  longer  the  beneficial  owner  of
Obligations of Borrower to such Lender. To the extent of such percentage amount,
Agent and Borrower will treat such Lender's IRS Form 1001 as no longer valid.

<PAGE>

     (c) If any Lender claiming  exemption from United States withholding tax by
filing IRS Form 4224 with Agent sells,  assigns,  grants a participation  in, or
otherwise  transfers all or part of the  Obligations of Borrower to such Lender,
such Lender  agrees to undertake  sole  responsibility  for  complying  with the
withholding tax requirements imposed by Sections 1441 and 1442 of the IRC.


     (d) If any Lender is entitled to a reduction in the applicable  withholding
tax,  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 subsection (a)) of
this  Section  are not  delivered  to Agent,  then Agent may  withhold  from any
interest payment to such Lender not providing such forms or other  documentation
an amount equivalent to the applicable withholding tax.

     (e) If the IRS or any other Governmental  Authority of the United States or
other  jurisdiction  asserts a claim that  Agent or  Borrower  did not  properly
withhold tax from amounts paid to or for the account of any Lender  (because the
appropriate form was not delivered,  was not properly executed,  or because such
Lender  failed to notify Agent and Borrower of a change in  circumstances  which
rendered the exemption from, or reduction of,  withholding tax  ineffective,  or
for any other reason) such Lender shall  indemnify  Agent and Borrower fully for
all  amounts  paid,  directly  or  indirectly,  by Agent or  Borrower  as tax or
otherwise,  including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent or Borrower under this Section,
together with all costs and expenses  (including  attorneys  fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation of Agent.

     17.11 Collateral Matters.

<PAGE>

     (a) The Lenders hereby irrevocably  authorize Agent, to release any Lien on
any  Collateral,  (i) upon the  termination of the  Commitments  and payment and
satisfaction in full by Borrower of all  Obligations;  and upon such termination
and  payment  Agent  shall  deliver to  Borrower,  at  Borrower's  sole cost and
expense,  all UCC termination  statements and any other  documents  necessary to
terminate  the  Loan  Documents  and  release  the  Liens  with  respect  to the
Collateral; (ii) constituting property being sold or disposed of if a release is
required or desirable in connection therewith and if Borrower certifies to Agent
that the sale or disposition is permitted under Section 7.4 of this Agreement or
the  other  Loan  Documents  (and  Agent  may  rely  conclusively  on any  such
certificate,  without further  inquiry);  (iii)  constituting  property in which
neither  Borrower nor any  Subsidiary of Borrower  owned an interest at the time
the Lien was granted or at any time thereafter;  or (iv)  constituting  property
leased to Borrower or any  Subsidiary of Borrower under a lease that has expired
or been terminated in a transaction  permitted  under this Agreement.  Except as
provided  above,  Agent will not release any Lien on any Collateral  without the
prior written authorization of the Lenders. Upon request by Agent or Borrower at
any time, the Lenders will confirm in writing  Agent's  authority to release any
such Liens on particular  types or items of Collateral  pursuant to this Section
17.11;  provided,  however,  that (i) Agent shall not be required to execute any
document  necessary to evidence such release on terms that, in Agent's  opinion,
would  expose  Agent to  liability  or  create  any  obligation  or  entail  any
consequence   other   than  the   release   of  such  Lien   without   recourse,
representation,  or  warranty,  and (ii) such  release  shall not in any  manner
discharge,  affect or impair  the  Obligations  or any Liens  (other  than those
expressly being  released),  upon (or obligations of Borrower in respect of) all
interests  retained by Borrower or any  Subsidiary of Borrower,  including,  the
proceeds of any sale,  all of which shall  continue  to  constitute  part of the
Collateral.


     (b) Agent  shall have no  obligation  whatsoever  to any of the  Lenders to
assure that the  Collateral  exists or is owned by Borrower or a  Subsidiary  of
Borrower,  as the case may be, is cared for,  protected,  or insured or has been
encumbered,  or that the Liens of Agent (for the  benefit  of the Lender  Group)
have been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure,  or fidelity, or to
continue  exercising,  any of the  rights,  authorities  and  powers  granted or
available to Agent pursuant to any of the Loan  Documents,  it being  understood
and agreed  that in  respect of the  Collateral  or any act,  omission  or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate,  in its sole discretion given Agent's
own interest in such  Collateral  in its capacity as one of the Lenders and that
Agent shall have no other duty or liability  whatsoever  to any Lender as to any
of the foregoing, except as otherwise provided herein.

     17.12   Restrictions  on  Actions  by  Lenders;   Sharing  of  Payments..12
Restrictions on Actions by Lenders; Sharing of Payments.

     (a) Each of the  Lenders  agrees  that it shall not,  without  the  express
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the request of Agent, set off against the Obligations any amounts owing
by such  Lender  to  Borrower  or any  accounts  of  Borrower  now or  hereafter
maintained  with such Lender.  Each of the Lenders  further agrees that it shall
not, unless specifically  requested to do so by Agent, take or cause to be taken
any action, including the commencement of any legal or equitable proceedings, to
foreclose any Lien on, or otherwise enforce any security interest in, any of the
Collateral  the  purpose  of which is, or could  be,  to give  such  Lender  any
preference or priority against the other Lenders with respect to the Collateral.

<PAGE>

     (b)  Subject to  Section  17.8,  if, at any time or times any Lender  shall
receive (i) by payment,  foreclosure,  setoff,  or  otherwise,  any  proceeds of
Collateral or any payments with respect to the  Obligations  of Borrower to such
Lender  arising  under,  or  relating  to,  this  Agreement  or the  other  Loan
Documents, except for any such proceeds or payments received by such Lender from
Agent  pursuant to the terms of this  Agreement,  or (ii) payments from Agent in
excess of such Lender's  Pro-Rata  Share,  Tranche A Pro-Rata Share or Tranche B
Pro-Rata Share,  as the case may be, of all such  distributions  by Agent,  such
Lender shall  promptly (1) turn the same over to Agent,  in kind,  and with such
endorsements  as may be required to negotiate the same to Agent,  or in same day
funds, as applicable,  for the account of all of the Lenders and for application
to the  Obligations  in  accordance  with  the  applicable  provisions  of  this
Agreement, or (2) purchase,  without recourse or warranty, an undivided interest
and  participation  in the  Obligations  owed to the other  Lenders so that such
excess  payment  received  shall be  applied  ratably  as among the  Lenders  in
accordance  with their Pro- Rata Shares,  Tranche A Pro-Rata Shares or Tranche B
Pro-Rata Shares, as the case may be; provided,  however,  that if all or part of
such excess  payment  received by the purchasing  party is thereafter  recovered
from it,  those  purchases of  participations  shall be rescinded in whole or in
part,  as  applicable,  and the  applicable  portion of the purchase  price paid
therefor shall be returned to such purchasing party, but without interest except
to the  extent  that  such  purchasing  party is  required  to pay  interest  in
connection with the recovery of the excess payment.


     17.13 Agency for  Perfection.  Agent and each Lender  hereby  appoints each
other  Lender as agent for the  purpose  of  perfecting  the Liens of the Lender
Group in assets which,  in accordance with Article 9 of the UCC can be perfected
only by possession.  Should any Lender obtain possession of any such Collateral,
such Lender shall notify  Agent  thereof,  and,  promptly  upon Agent's  request
therefor  shall deliver such  Collateral to Agent or in accordance  with Agent's
instructions.

     17.14 Payments by Agent to the Lenders. All payments to be made by Agent to
the  Lenders  shall  be made by bank  wire  transfer  or  internal  transfer  of
immediately  available funds pursuant to the  instructions set forth on Schedule
C-1,  or  pursuant to such other wire  transfer  instructions  as each party may
designate  for itself by written  notice to Agent.  Concurrently  with each such
payment,  Agent shall  identify  whether such  payment (or any portion  thereof)
represents principal, premium or interest on revolving advances or otherwise.

     17.15 Concerning the Collateral and Related Loan  Documents..15  Concerning
the  Collateral  and Rel Each member of the Lender Group  authorizes and directs
Agent to enter into this Agreement and the other Loan Documents  relating to the
Collateral, for the benefit of the Lender Group. Each member of the Lender Group
agrees that any action taken by Agent,  Required  Lenders,  or all  Lenders,  as
applicable,  in  accordance  with the terms of this  Agreement or the other Loan
Documents  relating  to the  Collateral  and the  exercise  by  Agent,  Required
Lenders,  or all Lenders,  as applicable,  of their respective  powers set forth
therein  or  herein,  together  with  such  other  powers  that  are  reasonably
incidental thereto, shall be binding upon all of the Lenders.

     17.16 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By signing this Agreement, each Lender;

     (a) is deemed to have  requested  that Agent furnish such Lender,  promptly
after it becomes  available,  a copy of each field audit or  examination  report
(each a "Report" and collectively, "Reports") prepared by Agent, and Agent shall
so furnish each Lender with such Reports;



<PAGE>

     (b)  expressly  agrees  and  acknowledges  that Agent (i) does not make any
representation or warranty as to the accuracy of any Report,  and (ii) shall not
be liable for any information contained in any Report;


     (c)   expressly   agrees  and   acknowledges   that  the  Reports  are  not
comprehensive  audits or examinations,  that Agent or other party performing any
audit or examination will inspect only specific  information  regarding Borrower
and will rely  significantly  upon Borrower's  books and records,  as well as on
representations of Borrower's personnel;

     (d) agrees to keep all Reports and other material  information  obtained by
it  pursuant  to the  requirements  of this  Agreement  in  accordance  with its
reasonable customary procedures for handling confidential information;  it being
understood  and  agreed by  Borrower  that in any  event  such  Lender  may make
disclosures  (i)  reasonably  required  by any bona  fide  potential  or  actual
Assignee,  transferee,  or Participant in connection  with any  contemplated  or
actual  assignment  or  transfer  by such  Lender of an  interest  herein or any
participation  interest in such Lender's rights  hereunder,  (ii) of information
that has become  public by  disclosures  made by Persons other than such Lender,
its Affiliates, assignees, transferees, or participants, or (iii) as required or
requested by any court,  governmental or administrative agency,  pursuant to any
subpoena or other legal process,  or by any law, statute,  regulation,  or court
order;  provided,  however,  that, unless prohibited by applicable law, statute,
regulation,  or court order, such Lender shall notify Borrower of any request by
any court, governmental or administrative agency, or pursuant to any subpoena or
other legal process for disclosure of any such non-public  material  information
concurrent with, or where practicable, prior to the disclosure thereof; and

     (e) without limiting the generality of any other indemnification  provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying  Lender may take or
conclusion  the  indemnifying  Lender  may  reach  or draw  from any  Report  in
connection with any loans or other credit  accommodations  that the indemnifying
Lender  has  made  or  may  make  to  Borrower,  or  the  indemnifying  Lender's
participation  in, or the indemnifying  Lender's purchase of, a loan or loans of
Borrower; and (ii) to pay and protect, and indemnify, defend, and hold Agent and
any such other Lender preparing a Report harmless from and against,  the claims,
actions,  proceedings,  damages,  costs,  expenses and other amounts (including,
attorney costs)  incurred by Agent and any such other Lender  preparing a Report
as the direct or indirect  result of any third  parties who might  obtain all or
part of any Report through the indemnifying Lender.

<PAGE>

In addition to the  foregoing:  (x) any Lender may from time to time  request of
Agent in  writing  that  Agent  provide  to such  Lender a copy of any report or
document provided by Borrower to Agent, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender promptly upon receipt  thereof;  (y)
to the extent that Agent is entitled, under any provision of the Loan Documents,
to request additional reports or information from Borrower, any Lender may, from
time to time,  reasonably  request  Agent to exercise such right as specified in
such  Lender's  notice to Agent,  whereupon  Agent  promptly  shall  request  of
Borrower the additional  reports or information  specified by such Lender,  and,
upon  receipt  thereof,  Agent  promptly  shall  provide  a copy of same to such
Lender;  and (z) any time that Agent  renders to Borrower a statement  regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.


     17.17 Several  Obligations;  No Liability.  Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in  favor  of  Agent  in its  capacity  as  such,  and not by or in favor of the
Lenders,  any and all  obligations  on the  part of  Agent  (if any) to make any
Advances  shall  constitute  the  several  (and not  joint)  obligations  of the
respective   Lenders  on  a  ratable  basis,   according  to  their   respective
Commitments,  to make an amount of such  Advances  not to exceed,  in  principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing  contained  herein  shall  confer  upon any Lender any  interest  in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its  Participants of any matters  relating to the Loan
Documents  to the extent any such notice may be  required,  and no Lender  shall
have any obligation,  duty, or liability to any Participant of any other Lender.
Except as provided in Section 17.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group.  No Lender shall
be  responsible  to  Borrower  or any other  Person for any failure by any other
Lender to fulfill its obligations to make Advances,  nor to advance for it or on
its behalf in connection  with its  Commitment,  nor to take any other action on
its behalf hereunder or in connection with the financing contemplated herein.

     18. GENERAL PROVISIONS.

     18.1  Effectiveness.  This Agreement shall be binding and deemed  effective
when executed by Borrower and the Lender Group.

     18.2 Section Headings.  Headings and numbers have been set forth herein for
convenience  only.  Unless the contrary is compelled by the context,  everything
contained in each section applies equally to this entire Agreement.

     18.3  Interpretation.   Neither  this  Agreement  nor  any  uncertainty  or
ambiguity  herein  shall be  construed  or resolved  against the Lender Group or
Borrower,  whether under any rule of construction or otherwise. On the contrary,
this  Agreement  has been  reviewed by all parties  and shall be  construed  and
interpreted  according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.

     18.4 Severability of Provisions.  Each provision of this Agreement shall be
severable  from every  other  provision  of this  Agreement  for the  purpose of
determining the legal enforceability of any specific provision.



<PAGE>

     18.5 Conterparts;  Telefacsimile Execution.  This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which,  when executed and delivered,  shall be deemed to be an original,
and all of which,  when taken  together,  shall  constitute but one and the same
Agreement.   Delivery  of  an  executed   counterpart   of  this   Agreement  by
telefacsimile  shall be equally as effective as delivery of an original executed
counterpart of this Agreement.  Any party delivering an executed  counterpart of
this  Agreement  by  telefacsimile  also  shall  deliver  an  original  executed
counterpart  of this  Agreement but the failure to deliver an original  executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.


     18.6 Revival and Reinstatement of Obligations..6  Revival and Reinstatement
of  Obligations.  If the incurrence or payment of the Obligations by Borrower or
any guarantor of the  Obligations  or the transfer by any or all of such parties
to the Lender Group of any property of either or both of such parties should for
any reason  subsequently  be declared to be void or voidable  under any state or
federal  law  relating  to  creditors'  rights,   including  provisions  of  the
Bankruptcy  Code  relating to  fraudulent  conveyances,  preferences,  and other
voidable   or   recoverable   payments  of  money  or   transfers   of  property
(collectively,  a "Voidable  Transfer"),  and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer,  or elects to
do so upon the reasonable  advice of its counsel,  then, as to any such Voidable
Transfer,  or the amount  thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs,  expenses,  and attorneys fees
of the Lender Group related thereto, the liability of Borrower or such guarantor
automatically  shall be revived,  reinstated,  and  restored  and shall exist as
though such Voidable Transfer had never been made.

     18.7 Integration.  This Agreement,  together with the other Loan Documents,
reflects  the  entire   understanding   of  the  parties  with  respect  to  the
transactions  contemplated  hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

     18.8 Time if of the Essence. Time is of the essence of this Agreement. Time
is of the Essence.

     18.9  Secondary  Real  Estate.  Notwithstanding  anything  to the  contrary
contained in this  Agreement,  Borrower  has advised  Agent and the Lenders that
Borrower  asserts or may assert legal and  beneficial  ownership of or rights in
and to the Secondary Real Estate,  including (but not limited to) rights related
to substantive consolidation and rights to recover transferred property pursuant
to 11 U.S.C.  Sections  544, et seq. Any  descriptions  of or references in this
Agreement to the Real Estate Trusts  and/or the  Secondary  Real Estate shall be
without prejudice to all of Borrower's  ownership interests,  rights,  defenses,
and causes of action with respect  thereto as against  third  Persons,  provided
Borrower's ownership interests,  rights,  defenses and causes of action shall be
subject to the claims and security interests of Agent and the Lenders under this
Agreement.



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<PAGE>


SENIOR SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION LOAN AND SECURITY AGREEMENT

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

                                        JUMBOSPORTS INC.,
                                        a Florida corporation
                                        By:  /s/ R. P. Springer
                                        Title: EVP
    

                                        FOOTHILL    CAPITAL    CORPORATION,    a
                                        California corporation with an office in
                                        Atlanta,  Georgia,  as  Agent  and  as a
                                        Tranche A Lender

                                        By: /s/ Todd Colpitts
                                        Title: VP


                                        CONGRESS      FINANCIAL      CORPORATION
                                        (SOUTHERN),  a Georgia  corporation with
                                        an  office  in  Atlanta,   Georgia,   as
                                        Co-Agent and as a Tranche A Lender

                                        By: /s/ Drew Stawin
                                        Title: VP


                                        FOOTHILL PARTNERS III, L.P., a Delaware
                                        limited partnership, as
                                        a Tranche B Lender

                                        By: /s/ Jeff Nikora
                                        Title:  MGP