Document:

EXHIBIT 10.2

                                                                       EXECUTION
                                                                     COUNTERPART

                       364-DAY REVOLVING CREDIT AGREEMENT

                            dated as of June 21, 2002

                                      among

                           DOLLAR GENERAL CORPORATION
                                   as Borrower

                  THE LENDERS FROM TIME TO TIME PARTIES HERETO

                           CREDIT SUISSE FIRST BOSTON
                              as Syndication Agent

                          KEYBANK NATIONAL ASSOCIATION
                       and U.S. BANK NATIONAL ASSOCIATION
                           as Co-Documentation Agents
                                       and

                                  SUNTRUST BANK
                             as Administrative Agent

      ====================================================================

                   SUNTRUST ROBINSON HUMPHREY CAPITAL MARKETS,
                  a division of SunTrust Capital Markets, Inc.,
                              as Sole Lead Arranger

<PAGE>

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                                      TABLE OF CONTENTS
                                      -----------------

<S>                                                                                    <C>
CREDIT SUISSE FIRST BOSTON...............................................................i

ARTICLE I    DEFINITIONS; CONSTRUCTION...................................................1
             -------------------------

         Section 1.1.      Definitions...................................................1
         Section 1.2.      Classifications of Loans and Borrowings......................21
         Section 1.3.      Accounting Terms and Determination...........................21
         Section 1.4.      Terms Generally..............................................22

ARTICLE II   AMOUNT AND TERMS OF THE COMMITMENTS........................................22
             -----------------------------------

         Section 2.1.      General Description of Facilities............................22
         Section 2.2.      Loans........................................................22
         Section 2.3.      Procedure for Borrowings.....................................23
         Section 2.4.      Funding of Borrowings........................................23
         Section 2.5.      Interest Elections...........................................24
         Section 2.6.      Optional Reduction and Termination of Commitments............25
         Section 2.7.      Repayment of Loans...........................................25
         Section 2.8.      Evidence of Indebtedness.....................................25
         Section 2.9.      Optional Prepayments.........................................26
         Section 2.10.     Mandatory Prepayments and Commitment Reductions..............26
         Section 2.11.     Interest on Loans............................................28
         Section 2.12.     Fees.........................................................29
         Section 2.13.     Computation of Interest and Fees.............................29
         Section 2.14.     Inability to Determine Interest Rates........................29
         Section 2.15.     Illegality...................................................30
         Section 2.16.     Increased Costs..............................................30
         Section 2.17.     Funding Indemnity............................................31
         Section 2.18.     Taxes........................................................32
         Section 2.19.     Payments Generally; Pro Rata Treatment;
                           Sharing of Set-offs..........................................34
         Section 2.20.     Mitigation of Obligations....................................35
         Section 2.20.     Mitigation of Obligations. TC................................36

ARTICLE III   CONDITIONS PRECEDENT TO LOANS.............................................36
              -----------------------------

         Section 3.1.      Conditions To Effectiveness..................................36
         Section 3.2.      Each Credit Event............................................39
         Section 3.3.      Delivery of Documents........................................40

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ARTICLE IV    REPRESENTATIONS AND WARRANTIES............................................40
              ------------------------------

         <S>                                                                            <C>
         Section 4.1.      Existence; Power.............................................40
         Section 4.2.      Organizational Power; Authorization..........................40
         Section 4.3.      Governmental Approvals; No Conflicts.........................40
         Section 4.4.      Financial Statements.........................................41
         Section 4.5.      Litigation and Environmental Matters.........................41
         Section 4.6.      Compliance with Laws.........................................41
         Section 4.7.      Investment Company Act, Etc..................................42
         Section 4.8.      Taxes........................................................42
         Section 4.9.      Margin Regulations...........................................42
         Section 4.10.     ERISA........................................................43
         Section 4.11.     Ownership of Property........................................44
         Section 4.12.     Insurance....................................................44
         Section 4.13.     Disclosure...................................................44
         Section 4.14.     Labor Relations..............................................45
         Section 4.15.     Status of Certain Agreements and Other Matters...............45
         Section 4.16.     Subsidiaries.................................................46

ARTICLE V    AFFIRMATIVE COVENANTS......................................................46
             ---------------------

         Section 5.1.      Financial Statements and Other Information...................46
         Section 5.2.      Notices of Material Events...................................48
         Section 5.3.      Existence; Conduct of Business...............................49
         Section 5.4.      Compliance with Laws, Etc....................................49
         Section 5.5.      Payment of Taxes and Other Obligations.......................49
         Section 5.6.      Books and Records............................................49
         Section 5.7.      Visitation, Inspection, Etc..................................50
         Section 5.8.      Maintenance of Properties; Insurance.........................50
         Section 5.9.      Use of Proceeds..............................................50
         Section 5.10.     Additional Subsidiaries......................................50
         Section 5.11.     Further Assurances...........................................51

ARTICLE VI   FINANCIAL COVENANTS........................................................51
             -------------------

         Section 6.1.      Funded Debt to EBITDAR Ratio.................................52
         Section 6.2.      EBITR to Interest and Rents Ratio............................52
         Section 6.3.      Asset Coverage Ratio.........................................52
         Section 6.4.      Consolidated Net Worth.......................................52
         Section 6.5.      Capital Expenditures.........................................52

ARTICLE VII  NEGATIVE COVENANTS.........................................................53
             ------------------

         Section 7.1.      Indebtedness.................................................53
         Section 7.2.      Liens........................................................54
         Section 7.3.      Fundamental Changes..........................................55
         Section 7.4.      Investments, Loans, Etc......................................56
         Section 7.5.      Restricted Payments..........................................57
         Section 7.6.      Sale of Assets...............................................57
         Section 7.7.      Transactions with Affiliates.................................58
         Section 7.8.      Restrictive Agreements.......................................58
         Section 7.9.      Sale and Leaseback Transactions..............................58
         Section 7.11.     Hedging Transactions.........................................59
         Section 7.12.     Actions Relating to Indenture and Senior Notes...............59
         Section 7.13.     Accounting Changes...........................................59
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                                       ii

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<S>                                                                                    <C>
ARTICLE VIII   EVENTS OF DEFAULT........................................................60
               -----------------

         Section 8.1.      Events of Default............................................60

ARTICLE IX     THE ADMINISTRATIVE AGENT.................................................63
               ------------------------

         Section 9.1.      Appointment of Administrative Agent..........................63
         Section 9.2.      Nature of Duties of Administrative Agent.....................63
         Section 9.3.      Lack of Reliance on the Administrative Agent.................64
         Section 9.4.      Certain Rights of the Administrative Agent...................64
         Section 9.5.      Reliance by Administrative Agent.............................64
         Section 9.6.      The Administrative Agent in its Individual Capacity..........65
         Section 9.7.      Successor Administrative Agent...............................65

ARTICLE X      MISCELLANEOUS............................................................66
               -------------

         Section 10.1.     Notices......................................................66
         Section 10.2.     Waiver; Amendments...........................................67
         Section 10.3.     Expenses; Indemnification....................................68
         Section 10.4.     Successors and Assigns.......................................69
         Section 10.5.     Governing Law; Jurisdiction; Consent to Service of Process...72
         Section 10.6.     Waiver Of Jury Trial.........................................72
         Section 10.7.     Right of Setoff..............................................73
         Section 10.8.     Counterparts; Integration....................................73
         Section 10.9.     Survival.....................................................73
         Section 10.10.    Severability.................................................73
         Section 10.11.    Confidentiality..............................................74
         Section 10.12.    Interest Rate Limitation.....................................74

EXHIBITS
--------
Exhibit A-1       Form of Revolving Credit Note
Exhibit B         Form of Assignment and Acceptance
Exhibit C         Form of Guaranty Agreement
Exhibit D         Form of Contribution Agreement
Exhibit 2.3       Form of Notice of Borrowing
Exhibit 2.5       Form of Notice of Continuation/Conversion
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                                      iii

<PAGE>

SCHEDULES:
----------

Schedule 1.1-A    Applicable Margins and Applicable Percentages
Schedule 1.1-B    Mortgaged Non-Retail Properties
Schedule 1.1-C    Mortgaged Retail Properties
Schedule 4.1      Subsidiaries Not Qualified or in Good Standing
Schedule 4.5      Litigation and Environmental Matters
Schedule 4.10     ERISA Exceptions
Schedule 4.16     Subsidiaries
Schedule 7.1      Existing Indebtedness
Schedule 7.2      Existing Liens
Schedule 7.4      Existing Investments

                                       iv

<PAGE>

                       364-DAY REVOLVING CREDIT AGREEMENT
                       ----------------------------------

     THIS 364-DAY  REVOLVING  CREDIT  AGREEMENT  (this  "Agreement") is made and
entered into as of June 21, 2002,  by and among DOLLAR  GENERAL  CORPORATION,  a
Tennessee  corporation (the  "Borrower"),  the several banks and other financial
institutions from time to time party hereto (the "Lenders"),  and SUNTRUST BANK,
in its  capacities  as  Administrative  Agent (the  "Administrative  Agent") and
Collateral Agent (the "Collateral  Agent") for the Lenders,  CREDIT SUISSE FIRST
BOSTON,  as Syndication  Agent for the Lenders (the  "Syndication  Agent"),  and
KEYBANK   NATIONAL   ASSOCIATION   and  U.S.  BANK  NATIONAL   ASSOCIATION,   as
Co-Documentation Agents for the Lenders (the "Co-Documentation Agents").

                              W I T N E S S E T H:
                              --------------------

        WHEREAS, the Borrower has requested that the Lenders establish a
$150,000,000 revolving credit facility in favor of the Borrower; and

        WHEREAS,  subject to the terms and  conditions  of this  Agreement,  the
    Lenders severally,  to the extent of their respective Commitments as defined
    herein, are willing to establish the requested  revolving credit facility in
    favor of the Borrower;

        NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
    covenants herein contained, the Borrower, the Lenders and the Administrative
    Agent agree as follows:

                                   ARTICLE I

                            DEFINITIONS; CONSTRUCTION
                            -------------------------

     Section 1.1. Definitions In addition to the other terms defined herein, the
following  terms used herein shall have the  meanings  herein  specified  (to be
equally applicable to both the singular and plural forms of the terms defined):

     "Acquisition"  shall mean the  acquisition  by any of the  Borrower  or its
Subsidiaries  of any of the  following:  (i)  the  controlling  interest  in any
Person, (ii) the capital stock or other equity securities or ownership interests
in any Subsidiary not already owned by the Borrower or any of its  Subsidiaries,
and (iii) all or  substantially  all of the assets of any Person or a  division,
line of business, or business segment of any Person.

     "Adjusted LIBO Rate" shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum obtained by dividing (i) LIBOR for such
Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar  Reserve
Percentage.

     "Administrative  Agent" shall have the meaning assigned to such term in the
opening paragraph hereof.

<PAGE>

    "Administrative  Questionnaire"  shall mean, with respect to each Lender, an
administrative  questionnaire in the form prepared by the  Administrative  Agent
and submitted to the Administrative Agent duly completed by such Lender.

    "Affiliate" shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under  common  Control  with,  such  Person.  For  purposes of this  definition,
"Control" shall mean the power,  directly or indirectly,  either to (i) vote 10%
or more of securities having ordinary voting power for the election of directors
(or persons  performing  similar  functions) of a Person or (ii) direct or cause
the direction of the  management and policies of a Person,  whether  through the
ability  to  exercise  voting  power,  by  contract  or  otherwise.   The  terms
"Controlling",  "Controlled  by", and "under common  Control with" have meanings
correlative thereto.

    "Aggregate  Commitment  Amount"  shall  mean  the  amount  of the  Aggregate
Commitments  in effect from time to time.  On the Closing  Date,  the  Aggregate
Commitment Amount equals $150,000,000.

    "Aggregate   Commitments"  shall  mean  at  any  time,   collectively,   all
Commitments of all Lenders in effect at such time.

    "Agreement" shall mean this 364-Day Revolving Credit Agreement,  as the same
may be amended, restated, and supplemented from time to time.

    "Applicable Lending Office" shall mean, for each Lender and for each Type of
Loan,  the  "Lending  Office" of such Lender (or an  Affiliate  of such  Lender)
designated for such Type of Loan in the Administrative  Questionnaire  submitted
by such  Lender or such other  office of such  Lender (or an  Affiliate  of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the  Borrower as the office  through  which its Loans of such Type are to be
made and maintained.

    "Applicable Margin" shall mean, with respect to all Loans outstanding on any
date, the percentage  per annum  determined by reference to the applicable  Debt
Rating in effect on such date with respect to  Eurodollar  Loans as set forth on
the Pricing Grid.  Notwithstanding  the above, if (i) the Moody's Rating and the
S&P Rating shall fall within  different Levels of the Pricing Grid, the lower of
the two different  Levels will apply,  or (ii) either S&P or Moody's shall cease
to have its  applicable  Debt Rating in effect,  then the remaining  Debt Rating
shall  apply,  or (iii) both S&P and Moody's  shall cease to have an  applicable
Debt Rating in effect,  then the  Borrower  and the  Administrative  Agent shall
negotiate in good faith to amend the Pricing Grid (which amendment shall require
the consent of each of the  Lenders) to reflect the  unavailability  of the Debt
Ratings  from  such  rating  agencies,   provided,  however  that,  pending  the
effectiveness of any such amendment,  the applicable Debt Rating for purposes of
determining the Applicable Margin shall be Level VI.. A change in the Applicable
Margin  resulting from a change in the Debt Rating shall be effective on the day
on which either  Moody's or S&P changes its Debt Rating and shall continue until
the day prior to the day that a further  change by either Moody's or S&P becomes
effective.

                                       2
<PAGE>

    "Applicable  Percentage" shall mean, with respect to the Facility Fee, as of
any date,  the  percentage  per annum  determined by reference to the applicable
Debt Rating as set forth on the Pricing Grid.  Notwithstanding the above, if (i)
the Moody's Rating and the S&P Rating shall fall within  different Levels of the
Pricing Grid, the lower of the two different  Levels will apply,  or (ii) either
S&P or Moody's shall cease to have its  applicable  Debt Rating in effect,  then
the remaining Debt Rating shall apply, or (iii) both S&P and Moody's shall cease
to have  an  applicable  Debt  Rating  in  effect,  then  the  Borrower  and the
Administrative  Agent shall  negotiate  in good faith to amend the Pricing  Grid
(which  amendment  shall  require the consent of each of the Lenders) to reflect
the  unavailability  of the Debt  Ratings from such rating  agencies;  provided,
however,  that, pending the effectiveness of any such amendment,  the applicable
Debt Rating for purposes of determining the Applicable Percentage shall be Level
VI.. A change in the Applicable  Percentage  resulting from a change in the Debt
Rating shall be effective on the day on which either  Moody's or S&P changes its
Debt  Rating  and shall  continue  until the day prior to the day that a further
change by either Moody's or S&P becomes effective.

    "Apportioned Amount" shall mean, with respect to any Net Proceeds, an amount
equal  to the pro  rata  share  of such  Net  Proceeds  based  on the  Aggregate
Commitment  Amount  then in  effect  under  this  Agreement  and the  "Aggregate
Revolving Commitment Amount" then in effect under the 3-Year Credit Agreement.

    "Approved  Fund" means any Person (other than a natural  Person) that is (or
will be)  engaged  in making,  purchasing,  holding or  otherwise  investing  in
commercial loans and similar  extensions of credit in the ordinary course of its
business,  that is administered or managed by (i) a Lender, (ii) an Affiliate of
a Lender or (iii) an entity or an  Affiliate  of an entity that  administers  or
manages a Lender,  and that in any case has been approved by the  Administrative
Agent hereunder.

    "Asset Coverage Ratio" shall mean, as of any date, the ratio of (i) Eligible
Inventory as of such date to (ii) Consolidated Funded Debt as of such date.

    "Assignment and Acceptance" shall mean an assignment and acceptance  entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section  10.4(b)) and accepted by the  Administrative  Agent, in the
form  of  Exhibit  B  attached   hereto  or  any  other  form  approved  by  the
Administrative Agent.

    "Availability  Period"  shall mean the period from the  Closing  Date to the
Commitment Termination Date.

    "Base  Rate"  shall  mean the  higher  of (i) the per annum  rate  which the
Administrative  Agent  publicly  announces  from  time to  time to be its  prime
lending rate,  as in effect from time to time,  and (ii) the Federal Funds Rate,
as in effect from time to time,  plus one-half of one percent (0.50%) per annum.
The  Administrative  Agent's prime lending rate is a reference rate and does not
necessarily  represent  the  lowest  or best  rate  charged  to  customers.  The
Administrative  Agent  may make  commercial  loans  or  other  loans at rates of
interest at, above or below the Administrative  Agent's prime lending rate. Each
change in the Administrative  Agent's prime lending rate shall be effective from
and including the date such change is publicly announced as being effective.

                                       3
<PAGE>

    "Borrower"  shall have the meaning assigned to such term in the introductory
paragraph hereof.

    "Borrowing"  shall mean a  borrowing  consisting  of Loans of the same Type,
made,  converted or continued on the same date and, in case of Eurodollar Loans,
as to which a single Interest Period is in effect.

    "Business Day" shall mean (i) any day other than a Saturday, Sunday or other
day on which commercial banks in Atlanta,  Georgia are authorized or required by
law to close,  and (ii) if such day  relates  to a  Borrowing  of, a payment  or
prepayment  of principal or interest on, a conversion of or into, or an Interest
Period for, a Eurodollar  Loan or a notice with respect to any of the foregoing,
any day on which  dealings  in Dollars  are  carried on in the London  interbank
market.

    "Capital  Expenditures" shall mean, for any period and without  duplication,
(i)  the   additions  to  property,   plant  and  equipment  and  other  capital
expenditures  of the  Borrower and its  Subsidiaries  that are (or would be) set
forth on a consolidated  statement of cash flows of the Borrower for such period
prepared in accordance with GAAP, and (ii) Capital Lease Obligations incurred by
the Borrower and its Subsidiaries during such period.

    "Capital Lease Obligations" of any Person shall mean all obligations of such
Person to pay rent or other  amounts  under  any  lease  (or  other  arrangement
conveying the right to use) real or personal property, or a combination thereof,
which  obligations  are required to be  classified  and accounted for as capital
leases on a balance  sheet of such  Person  under  GAAP,  and the amount of such
obligations  shall be the  capitalized  amount thereof  determined in accordance
with GAAP.

    "Change  in  Control"  shall  mean  the  occurrence  of one or  more  of the
following events:  (i) any sale, lease,  exchange or other transfer (in a single
transaction or a series of related  transactions) of all or substantially all of
the assets of the  Borrower to any Person or "group"  (within the meaning of the
Securities  Exchange  Act of 1934 and the rules of the  Securities  and Exchange
Commission  thereunder in effect on the date hereof),  (ii) the  acquisition  of
ownership,  directly or indirectly,  beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the  Securities and Exchange  Commission  thereunder as in effect on the date
hereof) acting in concert acquiring  beneficial  ownership of 30% or more of the
outstanding shares of the voting stock of the Borrower;  (iii) during any period
of  12  consecutive  calendar  months,   Continuing  Directors  shall  cease  to
constitute  a majority of the board of directors  of the  Borrower,  or (iv) any
event or  condition  shall  occur or exist  which,  pursuant to the terms of any
change of control  provision,  requires or permits the holder(s) of Indebtedness
of any Loan Party which  individually or in the aggregate is equal to or exceeds
$10,000,000  to  require  that  such  Indebtedness  be  redeemed,   repurchased,
defeased,  prepaid  or  repaid,  in whole or in part,  or the  maturity  of such
Indebtedness to be accelerated in any respect.

    "Change in Law" shall mean (i) the adoption of any  applicable  law, rule or
regulation  after the date of this Agreement,  (ii) any change in any applicable
law, rule or  regulation,  or any change in the  interpretation  or  application
thereof, by any Governmental

                                       4
<PAGE>

Authority  after the date of this Agreement,  or (iii)  compliance by any Lender
(or its Applicable Lending Office) (or for purposes of Section 2.16(b),  by such
Lender's  holding  company,  if  applicable)  with  any  request,  guideline  or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.

    "Closing  Date" shall mean the date on which the  conditions  precedent  set
forth in Section 3.1 and Section 3.2 have been satisfied or waived in
         -----------     -----------
accordance with Section 10.2.
                ------------

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

    "Collateral"  shall mean,  collectively,  the Mortgaged  Properties  and all
other collateral described from time to time in the Security Documents.

    "Collateral  Agent" shall mean SunTrust  Bank, in its capacity as collateral
agent for the Lenders under the Security Documents.

    "Collateral  Documents"  shall  mean,   collectively,   the  Mortgages,  the
Environmental  Indemnity Agreement,  the UCC Financing  Statements,  the owners'
affidavits in respect of the Mortgaged  Properties,  and all other  instruments,
agreements  and documents  executed and delivered by any of the Borrower and the
Guarantors  pursuant to the requirements of this Agreement,  or the Mortgages in
respect of the  Collateral,  whether  pursuant  to Section  3.1,  Section  5.10,
Section 5.11 or otherwise.

    "Commitment" shall mean, with respect to each Lender, the obligation of such
Lender to make  Loans to the  Borrower  in an  aggregate  principal  amount  not
exceeding the amount set forth with respect to such Lender on its signature page
to this  Agreement,  or in the case of a Person  becoming  a  Lender  after  the
Closing  Date,  the  amount of the  assigned  "Commitment"  as  provided  in the
Assignment and Acceptance  executed by such Person as an assignee,  in each case
as the same may be increased or decreased pursuant to the terms hereof.

    "Commitment  Termination Date" shall mean the earliest of (i) June 20, 2003,
(ii) the date on which the  Commitments  are terminated  pursuant to Section 2.6
and (iii) the date on which all amounts  outstanding  under this  Agreement have
been  declared  or  have  automatically  become  due  and  payable  (whether  by
acceleration or otherwise).

    "Consolidated   Adjusted   Funded  Debt  shall  mean,  as  of  any  date  of
determination for the Borrower and its Subsidiaries on a consolidated basis, the
sum  of  (i)  Consolidated  Funded  Debt  as of  such  date  and,  (ii)  without
duplication,  (A) the present value  (determined based on a discount rate of ten
percent (10%) in accordance with discounted present value analytical technology)
as of such date,  of all  remaining  payments  due under  leases  and  financing
obligations  (excluding  capital leases already  included in the  calculation of
Consolidated  Funded Debt),  whether for retail  stores,  distribution  centers,
administrative office space, furniture,  fixtures,  equipment, or other tangible
assets, and (B) all other Off-Balance Sheet Liabilities, in each case determined
on a consolidated basis in accordance with GAAP.

    "Consolidated EBITDAR" shall mean, for the Borrower and its Subsidiaries for
any  period,  an  amount  equal to the sum of (i)  Consolidated  EBITR  for such
period, and (ii) to the

                                       5
<PAGE>

extent  deducted  in  determining  Consolidated  Net  Income  for  such  period,
depreciation  and  amortization  for such period,  in each case  determined on a
consolidated basis in accordance with GAAP.

    "Consolidated  EBITR" shall mean, for the Borrower and its  Subsidiaries for
any period,  an amount equal to the sum of (i)  Consolidated Net Income for such
period,  plus (ii) to the extent  deducted in determining the  Consolidated  Net
Income  for such  period  (x)  Consolidated  Interest  Expense,  (y)  income tax
expense,  and (z)  Consolidated  Rent  Expense,  in each  case  determined  on a
consolidated basis in accordance with GAAP.

    "Consolidated Funded Debt" shall mean, as of any date of determination,  all
outstanding  Indebtedness of the Borrower and its Subsidiaries on a consolidated
basis (other than in respect of commercial letters of credit and Indebtedness of
the  types  described  in  clauses  (x) and (xi) of the  definition  of the term
Indebtedness),   including   without   limitation,   all   Obligations  and  all
"Obligations" as such term is defined in the 3-Year Credit Agreement.

    "Consolidated  Interest  Expense"  shall  mean,  for  the  Borrower  and its
Subsidiaries  for any period,  determined on a consolidated  basis in accordance
with GAAP,  the sum of (i) total  interest  expense  (net of  interest  income),
including without limitation,  the interest component of any payments in respect
of capital  leases  capitalized or expensed  during such period  (whether or not
actually paid during such period,  and any program costs  incurred in respect of
any accounts  receivable  securitization or other financing  arrangement),  plus
(ii) the net amount payable (or minus the net amount receivable) with respect to
Hedging Obligations during such period (whether or not actually paid or received
during such period).

    "Consolidated Net Income" shall mean, for any period, the net income or loss
of  the  Borrower  and  its  Subsidiaries  for  such  period   determined  on  a
consolidated  basis in  accordance  with  GAAP;  provided  that  there  shall be
excluded  (i) the income of any Person  (other than the  Borrower)  in which any
other Person (other than the Borrower or any Subsidiary) owns an equity interest
in excess of 10%,  except to the  extent  of the  amount of  dividends  or other
distributions  actually paid to the Borrower or any of the  Subsidiaries  during
such period,  (ii) any extraordinary items of gain or loss, and (iii) the income
or loss of any  Person or  business  accrued  prior to the date  such  Person or
business  is  included  in the results of  operations  of the  Borrower  and its
Subsidiaries,  in each case as determined on a consolidated  basis in accordance
with GAAP.

    "Consolidated  Net Worth" shall mean, as of any date of  determination,  the
shareholders'  equity of the  Borrower,  as set forth or  reflected  on the most
recent  consolidated  balance sheet of the Borrower  prepared in accordance with
GAAP, but excluding any redeemable preferred stock.

    "Consolidated   Rent  Expense"   shall  mean,   for  the  Borrower  and  its
Subsidiaries  for any  period,  the  aggregate  amount  of all  rental  payments
(including  both minimum and contingent  rents) during such period in respect of
all lease agreements and financing obligations (excluding any amounts in respect
of capital  leases or  financing  obligations  included  in the  calculation  of
Consolidated Interest Expense for such period), whether for retail stores,

                                       6
<PAGE>

distribution  centers,   administrative  office  space,   furniture,   fixtures,
equipment, or other tangible assets.

    "Contractual  Obligation"  of any  Person  shall mean any  provision  of any
security  issued by such Person or of any  agreement,  instrument or undertaking
under which such Person is  obligated  or by which it or any of the  property in
which it has an interest is bound.

    "Contribution  Agreement"  shall mean that  certain  Contribution  Agreement
dated as of the date of this Agreement executed by the Borrower, the Guarantors,
and the Administrative Agent substantially in the form of Exhibit D, as the same
may be amended, restated or supplemented from time to time.

    "Continuing Directors" shall mean, with respect to any period of twelve (12)
consecutive  calendar  months,  any  member  of the  board of  directors  of the
Borrower  who (a) was a member of such  board of  directors  on the first day of
such  period or (b) was  nominated  for  election  or  elected  to such board of
directors with the approval of a majority of the  Continuing  Directors who were
members of such board of directors at the time of such nomination or election.

    "DGI" shall mean Dollar  General  Investment,  Inc., a Delaware  corporation
that is a direct  wholly owned  Subsidiary  of the  Borrower,  together with its
successors and permitted assigns.

    "DGI Loans" shall mean, collectively,  the intercompany loans made by DGI to
the Mortgagors  (other than the Borrower) from the proceeds of the initial Loans
under the Related Revolving Credit  Facilities in an aggregate  principal amount
not to exceed  $320,000,000  for the purpose of providing  funds for refinancing
and replacing the outstanding  Indebtedness  under the Existing Synthetic Leases
encumbering the Mortgaged  Properties,  which  intercompany loans (i) provide by
their terms that (x) no principal  payments on such intercompany loans are to be
made during any time that any Obligations remain outstanding, or any Commitments
remain in  effect,  under  either of the  Related  Revolving  Credit  Facilities
without the prior  written  consent of the Required  Lenders,  (y) the principal
amounts of such  intercompany  loans  shall be deemed paid and  satisfied,  on a
dollar-for-dollar basis, in an amount equal to any payments of principal amounts
of the  Obligations  outstanding  under either of the Related  Revolving  Credit
Facilities made by the respective Mortgagors pursuant to the requirements of any
Guarantees  given by such  Mortgagors  in respect of such  Obligations,  and (z)
payment of such intercompany loans are subordinated to the prior payment in full
of all Obligations of the Mortgagors under their respective  Guarantees given in
respect of the Obligations  under the Related  Revolving Credit  Facilities,  on
terms and conditions  satisfactory to the  Administrative  Agent, and (ii) shall
otherwise be on terms and conditions satisfactory to the Administrative Agent.

    "Debt  Rating" shall mean the Moody's  Rating and the S&P's  Rating,  as the
case may be.

    "Default"  shall mean any condition or event that, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.

                                       7
<PAGE>

    "Default  Interest" shall have the meaning  assigned to such term in Section
2.11(b).
------
    "Development  Authority" shall mean the Industrial  Development Authority of
Davidson County.

    "Dollar(s)" and the sign "$" shall mean lawful money of the United States of
America.

    "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; (iii)
an  Approved  Fund;  and (iv) any other  Person  (other  than a natural  Person)
approved by the Administrative Agent and unless an Event of Default has occurred
and is  continuing,  the Borrower  (each such  approval  not to be  unreasonably
withheld or  delayed).  If the consent of the  Borrower to an  assignment  to an
Eligible  Assignee is required  hereunder,  the Borrower shall be deemed to have
given its consent five Business Days after the date notice  thereof has actually
been delivered by the assigning Lender (through the Administrative Agent) to the
Borrower, unless such consent is expressly refused by the Borrower prior to such
fifth Business Day.

    "Eligible   Inventory"   shall  mean  inventory  of  the  Borrower  and  its
Subsidiaries  valued at the lower of cost or market,  with cost determined using
the  retail  last-in,  first-out  method,  all  as  properly  reflected  on  the
Borrower's  consolidated  balance sheet and  otherwise  determined in accordance
with GAAP.

    "Environmental  Indemnity  Agreement"  shall  mean the  Hazardous  Materials
Indemnity  Agreement  dated as of June 21,  2002  executed by the  Borrower  and
certain of the Guarantors in favor of the Collateral  Agent and the Lenders,  as
the same may be amended, restated and supplemented from time to time.

    "Environmental  Laws"  shall  mean  all  laws,  rules,  regulations,  codes,
ordinances,  orders,  decrees,  judgments,   injunctions,   notices  or  binding
agreements  issued,  promulgated  or  entered  into by or with any  Governmental
Authority,  relating in any way to the environment,  preservation or reclamation
of natural  resources,  the  management,  Release or  threatened  Release of any
Hazardous Material, or to health and safety matters.

    "Environmental Liability" shall mean any liability,  contingent or otherwise
(including any liability for damages,  costs of environmental  investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties  or  indemnities),  of the  Borrower  or any  Subsidiary  directly  or
indirectly  resulting from or based upon (i) any actual or alleged  violation of
any  Environmental  Law, (ii) the  generation,  use,  handling,  transportation,
storage,  treatment or disposal of any Hazardous Materials,  (iii) any actual or
alleged  exposure to any  Hazardous  Materials,  (iv) the Release or  threatened
Release of any  Hazardous  Materials  or (v) any  contract,  agreement  or other
consensual  arrangement  pursuant to which  liability is assumed or imposed with
respect to any of the foregoing.

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

                                       8
<PAGE>

    "ERISA  Affiliate"  shall  mean  any  trade  or  business  (whether  or  not
incorporated),  which,  together  with  the  Borrower,  is  treated  as a single
employer  under Section 414(b) or (c) of the Code or, solely for the purposes of
Section  302 of ERISA  and  Section  412 of the  Code,  is  treated  as a single
employer under Section 414 of the Code.

    "ERISA Event" shall mean (i) any "reportable  event",  as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived);  (ii) the existence
with respect to any Plan of an "accumulated  funding  deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA),  whether or not waived;  (iii)
the filing  pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding  standard with respect to any
Plan; (iv) the incurrence by the Borrower or any of its ERISA  Affiliates of any
liability  under Title IV of ERISA with respect to the  termination of any Plan;
(v) the receipt by the Borrower or any ERISA  Affiliate  from the PBGC or a plan
administrator  appointed  by the PBGC of any notice  relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi)
the  incurrence by the Borrower or any of its ERISA  Affiliates of any liability
with  respect  to  the  withdrawal  or  partial  withdrawal  from  any  Plan  or
Multiemployer  Plan; or (vii) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

    "Eurodollar"  when  used in  reference  to any Loan or  Borrowing  refers to
whether such Loan, or the Loans  comprising such Borrowing,  bears interest at a
rate determined by reference to the Adjusted LIBO Rate.

    "Eurodollar  Reserve  Percentage"  shall mean the  aggregate  of the maximum
reserve percentages (including, without limitation, any emergency, supplemental,
special or other marginal  reserves)  expressed as a decimal (rounded upwards to
the next 1/100th of 1%) in effect on any day to which the  Administrative  Agent
is subject with respect to the Adjusted LIBO Rate pursuant to regulations issued
by the Board of Governors  of the Federal  Reserve  System (or any  Governmental
Authority  succeeding  to  any of  its  principal  functions)  with  respect  to
eurocurrency funding (currently referred to as "eurocurrency  liabilities" under
Regulation  D).  Eurodollar  Loans  shall be deemed to  constitute  eurocurrency
funding and to be subject to such  reserve  requirements  without  benefit of or
credit for  proration,  exemptions or offsets that may be available from time to
time to any Lender under Regulation D. The Eurodollar  Reserve  Percentage shall
be adjusted  automatically  on and as of the effective date of any change in any
reserve percentage.

    "Event of Default"  shall have the meaning  assigned to such term in Article
                                                                         -------
VIII.
-----

    "Excluded  Taxes" shall mean with respect to the  Administrative  Agent, any
Lender or any other  recipient of any payment to be made by or on account of any
obligation of the Borrower  hereunder,  (i) income or franchise taxes imposed on
(or measured  by) its net income by any United  States  local,  state or federal
governmental  authority,  or by the  jurisdiction  under the laws of which  such
recipient is organized  or in which its  principal  office is located or, in the
case of any Lender,  in which its Applicable  Lending Office is located,  or any
nation within

                                       9
<PAGE>

which such jurisdiction is located, or any political  subdivision thereof,  (ii)
any branch profits taxes imposed by the United States or any similar tax imposed
by any other  jurisdiction  described in the preceding  clause (i), and (iii) in
the case of a  Non-U.S.  Lender,  any  withholding  tax that (x) is  imposed  on
amounts payable to such Non-U.S. Lender at the time such Non-U.S. Lender becomes
a party to this  Agreement,  (y) is imposed on amounts  payable to such Non-U.S.
Lender at any time that such Non-U.S. Lender designates a new Applicable Lending
Office,  other than taxes that have accrued prior to the designation of such new
Applicable  Lending  Office that are  otherwise not Excluded  Taxes,  and (z) is
attributable to such Non-U.S. Lender's failure to comply with Section 2.18(e).
                                                              --------------
    "Existing  Credit  Agreement" shall mean that certain Credit Agreement dated
as of September  2, 1997,  by and among the  Borrower,  the lenders from time to
time  party  thereto  and  SunTrust  Bank,  formerly  known  as  SunTrust  Bank,
Nashville, N.A., as agent, as amended and in effect as of the Closing Date.

    "Existing  Synthetic  Leases"  shall  mean,  collectively,   (i)  the  Lease
Agreement,  dated as of  September  2, 1997,  between the  Borrower and Atlantic
Financial Group, Ltd., a Texas limited liability  partnership  ("AFG"),  and the
Master Lease  Agreement,  dated as of September 2, 1997,  among the Borrower and
certain of its  Subsidiaries,  SunTrust Bank,  (formerly known as SunTrust Bank,
Atlanta)  and AFG,  and (ii) the  Lease  Agreement,  dated as of June 11,  1999,
between the Borrower and AFG, and the Master Lease  Agreement,  dated as of June
11, 1999,  between the Borrower and certain of its Subsidiaries,  SunTrust Bank,
(formerly known as SunTrust Bank), Atlanta and AFG.

    "Facility Fee" shall mean the facility fee described in Section 2.12(b).
                                                            ----------------

    "Federal  Funds Rate" shall mean,  for any day, the rate per annum  (rounded
upwards, if necessary,  to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight  Federal funds  transactions  with member banks of the
Federal  Reserve System  arranged by Federal funds brokers,  as published by the
Federal Reserve Bank of New York on the next succeeding  Business Day or if such
rate is not so published  for any Business  Day, the Federal Funds Rate for such
day shall be the average rounded upwards,  if necessary,  to the next 1/100th of
1% of  the  quotations  for  such  day  on  such  transactions  received  by the
Administrative  Agent from three Federal  funds  brokers of recognized  standing
selected by the Administrative Agent.

    "Fee Letter" shall mean that certain fee letter, dated as of March 11, 2002,
executed by SunTrust Capital Markets, Inc. and SunTrust Bank and accepted by the
Borrower.

    "Fiscal Quarter" shall mean a fiscal quarter of the Borrower.

    "Fiscal Year" shall mean a fiscal year of the Borrower.

    "Foreign   Subsidiary"  shall  mean  any  Subsidiary  that  is  not  a  U.S.
Subsidiary.

    "GAAP" shall mean  generally  accepted  accounting  principles in the United
States applied on a consistent basis and subject to the terms of Section 1.3.
                                                                 -----------

                                       10
<PAGE>

    "Governmental  Authority"  shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local,  and any agency,  authority,  instrumentality,  regulatory  body,  court,
central  bank or  other  entity  exercising  executive,  legislative,  judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government.

    "Guarantee" of or by any Person (the "guarantor") shall mean any obligation,
contingent or otherwise,  of the guarantor  guaranteeing  or having the economic
effect of guaranteeing  any Indebtedness or other obligation of any other Person
(the  "primary  obligor")  in any manner,  whether  directly or  indirectly  and
including any obligation,  direct or indirect,  of the guarantor (i) to purchase
or pay (or  advance  or  supply  funds  for the  purchase  or  payment  of) such
Indebtedness  or other  obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment  thereof,  (ii) to purchase or
lease property,  securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof,  (iii) to maintain
working capital,  equity capital or any other financial  statement  condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation,  or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation;  provided,  that the term "Guarantee" shall not include endorsements
for collection or deposits in the ordinary course of business. The amount of any
Guarantee  shall be deemed to be an amount  equal to the stated or  determinable
amount of the primary  obligation  in respect of which  Guarantee is made or, if
not so stated or determinable,  the maximum reasonably  anticipated liability in
respect  thereof  (assuming  such Person is required to perform  thereunder)  as
determined by such Person in good faith. The term "Guarantee" used as a verb has
a corresponding meaning.

    "Guaranty  Agreement" shall mean that certain Guaranty Agreement dated as of
the date hereof executed by the Guarantors in favor of the Administrative  Agent
for the  benefit  of the  Lenders,  substantially  in the form of  Exhibit C, as
                                                                   ---------
amended, restated, supplemented or otherwise modified from time to time.

    "Guarantors" shall mean each U.S. Subsidiary of the Borrower now existing or
hereafter acquired.

    "Hazardous  Materials"  means all  explosive or  radioactive  substances  or
wastes  and all  hazardous  or toxic  substances,  wastes  or other  pollutants,
including  petroleum or petroleum  distillates,  asbestos or asbestos containing
materials,  polychlorinated  biphenyls,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

    "Headquarters  Property"  shall  mean  the  property  identified  as such on
Schedule 1.1-B attached to this Agreement.
--------------

    "Hedging  Obligations"  of any Person shall mean any and all  obligations of
such  Person,  whether  absolute or  contingent  and  howsoever  and  whensoever
created,  arising,   evidenced  or  acquired  under  (i)  any  and  all  Hedging
Transactions,  (ii) any and all cancellations,  unwinds,  buy backs,  reversals,
terminations or assignments of any Hedging  Transactions,  and

                                       11
<PAGE>

(iii)  any  and  all  renewals,  extensions  and  modifications  of any  Hedging
Transactions  and any and all  substitutions  and  replacements  for any Hedging
Transactions.

    "Hedging Transaction" of any Person shall mean any transaction (including an
agreement with respect  thereto) now existing or hereafter  entered into by such
Person that is a rate swap,  basis swap,  forward  rate  transaction,  commodity
swap, interest rate option, foreign exchange transaction, cap transaction, floor
transaction,   collateral  transaction,   forward  transaction,   currency  swap
transaction,  cross-currency rate swap transaction, currency option or any other
similar  transaction  (including  any  option  with  respect  to  any  of  these
transactions) or any combination thereof, whether linked to one or more interest
rates,  foreign currencies,  commodity prices,  equity prices or other financial
measures.

         "Indebtedness"  of any Person shall mean,  without  duplication (i) all
obligations  of such Person for borrowed  money,  (ii) all  obligations  of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all  obligations  of such Person in respect of the  deferred  purchase  price of
property  or services  (other than trade  payables  and other  accrued  expenses
incurred in the  ordinary  course of business on terms  customary in the trade);
(iv) all  obligations of such Person under any  conditional  sale or other title
retention  agreement(s)  relating to property  acquired by such Person,  (v) all
Capital Lease  Obligations of such Person,  (vi) all obligations,  contingent or
otherwise,  of such Person in respect of standby letters of credit,  acceptances
or similar extensions of credit, (vii) all Guarantees by such Person of any type
of Indebtedness of others described in this definition,  (viii) all Indebtedness
of a third party secured by any Lien on property  owned by such Person,  whether
or not such  Indebtedness  has been  assumed by such Person;  provided  that the
                                                              --------
amount of any  Indebtedness  of others  that  constitutes  Indebtedness  of such
Person  solely by reason of this clause  (viii)  shall not for  purposes of this
Agreement  exceed the greater of the book value or the fair market  value of the
properties or assets subject to such Lien,  (ix) all obligations of such Person,
contingent or otherwise,  to purchase,  redeem,  retire or otherwise acquire for
value any capital stock or partner,  member or other ownership interests of such
Person or any Subsidiary or other  Affiliate of such Person,  in each case where
the holder of such  capital  stock or member or other  ownership  interests  may
require  such  purchase,  redemption,  retirement  or  other  acquisition  to be
effected prior to the Commitment  Termination  Date, (x) all  Off-Balance  Sheet
Liabilities of such Person, and (xi) all Hedging Obligations of such Person.

    "Indemnified Taxes" shall mean Taxes other than Excluded Taxes.

    "Indenture" shall mean,  collectively,  that certain Indenture,  dated as of
June 21,  2001,  by and  among the  Borrower,  as  issuer,  the  Guarantors,  as
Guarantors,  and First Union  National  Bank,  as trustee,  either as originally
executed  or as the  same  may  from  time to time  be  supplemented,  modified,
amended, renewed or extended as permitted herein.

    "Information  Memorandum" shall mean the Confidential Information Memorandum
dated May 2002  relating to the Borrower and the  transactions  contemplated  by
this Agreement and the other Loan Documents.

    "Interest  Period" shall mean with respect to any  Eurodollar  Borrowing,  a
period of one,  two,  three or six months as the Borrower  may elect;  provided,
                                                                       --------
that:

                                       12
<PAGE>

    (i) the initial  Interest  Period for such  Borrowing  shall commence on the
date of such Borrowing (including the date of any conversion from a Borrowing of
another Type), and each Interest Period occurring  thereafter in respect of such
Borrowing shall commence on the day on which the next preceding  Interest Period
expires;

    (ii) if any  Interest  Period  would  otherwise  end on a day  other  than a
Business  Day,  such  Interest  Period shall be extended to the next  succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;

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

    (iv) no Interest Period may extend beyond the Commitment Termination Date.

    "Lenders"  shall  have the  meaning  assigned  to such  term in the  opening
paragraph of this Agreement.

    "Level" shall mean the respective  category assigned to each applicable Debt
Rating of S&P and  Moody's  as set forth on the  Pricing  Grid,  being  Levels I
through VI.

    "LIBOR" shall mean, for any applicable  Interest  Period with respect to any
Eurodollar Loan, the British Bankers'  Association  Interest Settlement Rate per
annum  for  deposits  in  Dollars  for a period  equal to such  Interest  Period
appearing  on the  display  designated  as Page  3750 on the  Dow  Jones  Market
Services (or such other page on that service or such other service designated by
the British Bankers' Association for the display of such Association's  interest
settlement rates for Dollar deposits) as of 11:00 a.m. (London, England time) on
the day that is two Business Days prior to the first day of the Interest  Period
or, if such Page 3750 is unavailable for any reason at such time, the rate which
appears on the Reuters Screen ISDA Page as of such date and such time; provided,
                                                                       ---------
that if the Administrative  Agent determines that the relevant foregoing sources
are unavailable for the relevant  Interest Period,  LIBOR shall mean the rate of
interest  determined  by the  Administrative  Agent to be the  average  (rounded
upward,  if necessary,  to the nearest  1/100th of 1%) of the rates per annum at
which  deposits  in  Dollars  are  offered to the  Administrative  Agent two (2)
Business Days  preceding the first day of such Interest  Period by leading banks
in the London interbank market as of 10:00 a.m. for delivery on the first day of
such Interest Period,  for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Administrative Agent.

    "Lien" shall mean any mortgage,  pledge,  security interest, lien (statutory
or  otherwise),   charge,  encumbrance,   hypothecation,   assignment,   deposit
arrangement,  or other arrangement  having the practical effect of the foregoing
or  any  preference,  priority  or  other  security  agreement  or  preferential
arrangement of any kind or nature whatsoever  (including any conditional sale or
other title  retention  agreement and any capital lease having the same economic
effect as any of the foregoing).

                                       13
<PAGE>

    "Loan Documents"  shall mean,  collectively,  this Agreement,  the Notes (if
any),  the  Security  Documents,  the  Post-Closing  Agreement,  all  Notices of
Borrowing,  all  Notices  of  Conversion/Continuation,  and any  and  all  other
instruments,  agreements, documents and writings executed in connection with any
of the foregoing.

    "Loan Parties" shall mean the Borrower and the Guarantors.

    "Loans"  shall  mean,  collectively,  the loans  made by the  Lenders to the
Borrower  under  the  Commitments,  which  may  either  be Base  Rate  Loans  or
Eurodollar Loans.

    "Material  Adverse  Effect"  shall  mean,  with  respect to any event,  act,
condition or occurrence of whatever nature (including any adverse  determination
in any litigation,  arbitration,  or governmental  investigation or proceeding),
whether  singularly  or in  conjunction  with any other event or events,  act or
acts, condition or conditions, occurrence or occurrences whether or not related,
a material  adverse change in, or a material  adverse effect on, (i) the results
of  operations,   financial   condition  or  assets  of  the  Borrower  and  its
Subsidiaries  taken as a whole,  (ii) the ability of the Loan Parties to perform
their  respective  obligations  under the Loan  Documents,  (iii) the rights and
remedies  of the  Administrative  Agent  or the  Lenders  under  any of the Loan
Documents,  or (iv) the legality,  validity or enforceability of any of the Loan
Documents.

    "Material  Indebtedness"  shall mean Indebtedness  (other than the Loans) of
any one or more of the Borrower and the  Subsidiaries in an aggregate  principal
amount exceeding $20,000,000. For purposes of determining Material Indebtedness,
the  "principal  amount" of any Hedging  Obligation at any time shall be the Net
Mark-to-Market Exposure of such Hedging Obligation at such time.

    "Moody's" shall mean Moody's Investors Service, Inc and its successors.

    "Moody's  Rating" shall mean, at any time, the rating assigned by Moody's to
the Borrower's senior unsecured long-term, non-credit enhanced debt at such time
or, if such  rating is not then  available,  Moody's  long-term  unsecured  debt
issuer rating of the Borrower then in effect.

    "Mortgaged  Properties"  shall  mean,  collectively,  the  Mortgaged  Retail
Properties and the Mortgaged Non-Retail Properties.

    "Mortgaged Non-Retail Properties" shall mean,  collectively,  the properties
described  on Schedule  1.1-B  attached  to this  Agreement,  including  without
              ---------------
limitation,  all buildings,  improvements,  fixtures and equipment  installed or
located thereon.

    "Mortgaged  Retail  Properties"  shall mean,  collectively,  the  properties
described  on Schedule  1.1-C  attached  to this  Agreement,  including  without
              ---------------
limitation,  all buildings,  improvements,  fixtures and equipment  installed or
located thereon.

    "Mortgages" shall mean, collectively, the first-priority mortgages, deeds of
trust,  deeds to secure debt and related security  agreements and assignments of
leases and rents in

                                     14
<PAGE>

respect of the Mortgaged  Properties given by certain of the
Loan Parties in favor of the Collateral Agent to secure the Secured Obligations.

    "Mortgagors"  shall mean,  collectively,  each of the Loan Parties that owns
(or,  in the case of the  Headquarters  Property,  leases  from the  Development
Authority) one or more of the Mortgaged Properties.

    "Multiemployer  Plan" shall have the meaning set forth in Section 4001(a)(3)
of ERISA.

    "Net  Mark-to-Market  Exposure" of any Person shall mean,  as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of all
unrealized  losses over all unrealized  profits of such Person arising from such
Hedging Obligation.  "Unrealized losses" shall mean the fair market value of the
cost to such Person of  replacing  the Hedging  Transaction  giving rise to such
Hedging  Obligation  as of the  date  of  determination  (assuming  the  Hedging
Transaction  was to be terminated  as of that date),  and  "unrealized  profits"
means the fair market value of the gain to such Person of replacing such Hedging
Transaction as of the date of determination  (assuming such Hedging  Transaction
were to be terminated as of such date of determination).

    "Net Proceeds"  means,  with respect to any Prepayment  Event,  (a) the cash
proceeds  received by the Borrower or any of its Subsidiaries in respect of such
Prepayment  Event,  including  (i) any cash  received in respect of any non-cash
proceeds,  but only as and when received,  and (ii) in the case of a casualty or
condemnation event,  proceeds in excess of $250,000, in each case net of (b) the
sum of (A) all reasonable and customary fees and out-of-pocket  expenses paid by
the Borrower and the other Loan Parties to third parties (other than Affiliates)
in  connection  with  such  Prepayment  Event,  and  (B) in the  case of a sale,
transfer or other disposition of any Mortgaged  Property,  (x) the amount of all
taxes  (other  than  income  taxes)  and all income  taxes  paid (or  reasonably
estimated to be payable) by the Borrower and its  Subsidiaries  as a consequence
thereof (y) the amount of all  payments  required to be made by the Borrower and
its Subsidiaries to repay Indebtedness (other than the Loans ) secured by a Lien
thereon  permitted  by Section 7.2 and required to be repaid as a result of such
                       -----------
Prepayment Event, and (z) the amount of any reserves established by the Borrower
and its  Subsidiaries  in accordance  with GAAP to fund  contingent  liabilities
reasonably estimated to be payable,  and that are directly  attributable to such
Prepayment  Event,  provided  that,  at such  time or times  as such  contingent
                    --------
liabilities  cease  to  exist,  in whole or in  part,  or the  Borrower  or such
Subsidiary  is otherwise  required or  permitted,  in  accordance  with GAAP, to
release such reserves, in whole or in part, the amount of such reserves affected
by such  cessation  or  release  (not to  exceed  the  aggregate  cash  proceeds
otherwise  received in respect of such  Prepayment  Event) shall  constitute Net
Proceeds at such time.

    "Non-U.S.  Lender"  shall mean any Lender that is not a United States person
under Section 7701(a)(3) of the Code.

    "Notes"  shall mean,  collectively,  the  promissory  notes of the  Borrower
payable  to the order of the  requesting  Lenders  in the  respective  principal
amounts of such Lenders' Commitments,  each substantially in the form of Exhibit
                                                                         -------
A.
--

                                       15
<PAGE>

    "Notice of Conversion/Continuation"  shall have the meaning assigned to such
term in Section 2.5(b).
        --------------
    "Notice  of  Borrowing"  shall  have the  meaning  assigned  to such term in
Section 2.3.
------------
    "Obligations"   shall  mean  all  amounts  owing  by  the  Borrower  to  the
Administrative  Agent and all  Lenders  pursuant to or in  connection  with this
Agreement,  the Notes or any other Loan Document,  including without limitation,
all principal, interest (including any interest accruing after the filing of any
petition in bankruptcy or the commencement of any insolvency,  reorganization or
like proceeding relating to the Borrower, whether or not a claim for post-filing
or  post-petition  interest is allowed in such  proceeding),  all  reimbursement
obligations,  fees, expenses,  indemnification and reimbursement payments, costs
and expenses  (including all fees and expenses of counsel to the  Administrative
Agent and any  Lender  incurred  pursuant  to this  Agreement  or any other Loan
Document),  whether direct or indirect,  absolute or  contingent,  liquidated or
unliquidated, now existing or hereafter arising hereunder or thereunder, and all
Hedging  Obligations  owing to the  Administrative  Agent,  any Lender or any of
their Affiliates  incurred in respect of any interest accruing on the Loans, and
all  obligations  and  liabilities  incurred in connection  with  collecting and
enforcing the foregoing, together with all renewals,  extensions,  modifications
or refinancings thereof.

    "Off-Balance Sheet Liabilities" of any Person shall mean (i) any obligations
created  through  asset  securitization  financing  programs  arranged  for such
Person,  (ii) any  liabilities  of such  Person  under  any  sale and  leaseback
transactions  which  do not  create a  liability  on the  balance  sheet of such
Person, (iii) any Synthetic Lease Obligations,  and (iv) any obligations arising
with respect to any other transaction  which is the functional  equivalent of or
takes the place of  borrowing  but which does not  constitute a liability on the
balance  sheet of such  Person,  in each case in an amount that would  result if
such  transaction  had  been  treated  as a  borrowing  provided  that  any such
obligation  described in the preceding clause (ii) or this clause (iv) shall not
include any liability pursuant to an obligation classified as an operating lease
for purposes of GAAP.

    "Operating  Lease  Obligations"  of any Person shall mean all obligations of
such Person to pay rent and other amounts under any lease (or other arrangements
conveying the right to use) real or personal property, or a combination thereof,
which  obligations  are required to be classified and accounted for as operating
leases on a balance sheet of such Person under GAAP.

    "OSHA" shall mean the Occupational Safety and Health Act of 1970, as amended
from time to time, and any successor statute.

    "Other Taxes" shall mean any and all present or future stamp or  documentary
taxes or any other excise or property  taxes,  charges or similar levies arising
from any payment made hereunder or from the  execution,  delivery or enforcement
of, or otherwise  with respect to, this  Agreement,  any Note, or any other Loan
Document.

    "Participant"  shall  have the  meaning  assigned  to such  term in  Section
                                                                         -------
10.4(d).
-------

                                       16
<PAGE>

    "Payment Office" shall mean the office of the  Administrative  Agent located
at 303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other location as
to which  the  Administrative  Agent  shall  have  given  written  notice to the
Borrower and the other Lenders.

    "PBGC" shall mean the Pension Benefit Guaranty  Corporation  referred to and
defined in ERISA, and any successor entity performing similar functions.

    "Permitted Encumbrances" shall mean

          (i) Liens imposed by law for taxes or special  assessments not yet due
     or which are being  contested in good faith by appropriate  proceedings and
     with respect to which adequate  reserves are being maintained in accordance
     with GAAP;

          (ii) statutory Liens of landlords and Liens of carriers, warehousemen,
     mechanics,  materialmen  and other  Liens  imposed  by law  created  in the
     ordinary  course of  business  for  amounts  not yet due or which are being
     contested  in good faith by  appropriate  proceedings  and with  respect to
     which adequate reserves are being maintained in accordance with GAAP;

          (iii) pledges and deposits made in the ordinary  course of business in
     compliance  with workers'  compensation,  unemployment  insurance and other
     social  security laws or regulations and deposits  securing  liabilities to
     insurance carriers under insurance or self-insurance arrangements;

          (iv)  deposits to secure the  performance  of bids,  trade  contracts,
     leases,  statutory obligations,  surety and appeal bonds, performance bonds
     and other obligations of a like nature, in each case in the ordinary course
     of business;

          (v)  judgment  and  attachment  Liens not  giving  rise to an Event of
     Default  or Liens  created  by or  existing  from any  litigation  or legal
     proceeding  that are currently being contested in good faith by appropriate
     proceedings  and  with  respect  to  which  adequate   reserves  are  being
     maintained in accordance with GAAP; and

          (vi)  easements,   zoning  restrictions,   rights-of-way  and  similar
     encumbrances  on real  property  imposed by law or arising in the  ordinary
     course of business  that do not  materially  detract  from the value of the
     affected  property or  materially  interfere  with the ordinary  conduct of
     business of the Borrower and its Subsidiaries taken as a whole;

provided,  that the term  "Permitted  Encumbrances"  shall not  include any Lien
---------
securing Indebtedness.

    "Permitted Investments" shall mean:

    (i) direct  obligations  of, or obligations the principal of and interest on
which are  unconditionally  guaranteed  by, the United  States (or by any agency
thereof to the extent such  obligations  are backed by the full faith and credit
of the United  States),  in each case maturing  within one year from the date of
acquisition thereof;

                                       17
<PAGE>

          (ii)  commercial  paper  having  the  highest  rating,  at the time of
     acquisition  thereof,  of S&P or Moody's and in either case maturing within
     six months from the date of acquisition thereof;

          (iii) certificates of deposit,  bankers' acceptances and time deposits
     maturing  within  180 days of the date of  acquisition  thereof  issued  or
     guaranteed by or placed with, and money market deposit  accounts  issued or
     offered by, any domestic  office of any commercial bank organized under the
     laws of the United States or any state thereof which has a combined capital
     and surplus and undivided profits of not less than $500,000,000;

          (iv) fully  collateralized  repurchase  agreements  with a term of not
     more than 30 days for securities  described in clause (i) above and entered
     into with a financial  institution  satisfying  the  criteria  described in
     clause (iii) above; and

          (v) mutual funds investing  solely in any one or more of the Permitted
     Investments described in clauses (i) through (iv) above.

    "Person"  shall  mean  any  individual,   partnership,   firm,  corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.

    "Plan"  shall  mean  any  employee   pension  benefit  plan  (other  than  a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA  Affiliate is (or, if such plan were  terminated,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA.

    "Post-Closing  Agreement"  shall mean the Agreement  Regarding  Post-Closing
Matters dated as of June 21, 2002, among the Loan Parties and the Administrative
Agent, as the same may be amended, restated and supplemented from time to time.

    "Prepayment Event" shall mean (a) any sale, transfer or other disposition of
a Mortgaged Property (including  pursuant to a sale and leaseback  transaction),
(b) any  casualty  or other  insured  damage  to, or any taking  under  power of
eminent  domain or by  condemnation  or similar  proceeding  (or  settlement  in
respect thereof) of, any Mortgaged Property (but only to the extent that the Net
Proceeds  therefrom  have not been  applied to repair,  restore or replace  such
property  within  180  days of the  later of the  date of such  casualty  or the
receipt of such Net Proceeds after such event), (c) any issuance by the Borrower
or any Subsidiary of the Borrower of any equity or debt securities,  and (d) any
making of principal payments to DGI in respect of the DGI Loans.

    "Pricing  Grid"  shall  mean  the  table  of  applicable  Debt  Ratings  and
corresponding  Applicable  Margins  and  Applicable  Percentages  set  forth  as
Schedule 1.1-A attached to this Agreement.
--------------
    "Pro Rata Share" shall mean, with respect to any Commitment of any Lender at
any time, a percentage, the numerator of which shall be such Lender's Commitment
(or if such  Commitments  have been terminated or expired or the Loans have been
declared to be due and payable,  such Lender's  Revolving Credit Exposure),  and
the denominator of which shall be the

                                       18
<PAGE>

sum of such  Commitments  of all  Lenders  (or if  such  Commitments  have  been
terminated or expired or the Loans have been declared to be due and payable, all
Revolving Credit Exposure of all Lenders).

    "Regulation  D" shall mean  Regulation  D of the Board of  Governors  of the
Federal Reserve System,  as the same may be in effect from time to time, and any
successor regulations.

    "Related  Revolving  Credit  Facilities"  shall  mean,   collectively,   the
revolving  credit  facilities  made  available to the Borrower  pursuant to this
Agreement and the 3-Year Credit Agreement.

    "Related  Parties" shall mean,  with respect to any specified  Person,  such
Person's Affiliates and the respective directors,  officers,  employees,  agents
and advisors of such Person and such Person's Affiliates.

    "Release" means any release, spill, emission,  leaking, dumping,  injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater,  land surface or
subsurface strata) or within any building, structure, facility or fixture.

    "Required Lenders" shall mean, at any time, Lenders holding more than 50% of
the aggregate  outstanding  Commitments at such time or, if no  Commitments  are
then  outstanding,  then Lenders  having more than 50% of the  Revolving  Credit
Exposures of all Lenders.

    "Requirement  of Law" for any Person shall mean the articles or  certificate
of  incorporation  and bylaws,  partnership  agreement,  certificate  of limited
partnership,  articles of  organization,  limited  liability  company  operating
and/or management  agreement,  or other organizational or governing documents of
such Person,  and any law,  treaty,  rule or regulations,  or determination of a
Governmental  Authority,  in each case applicable to or binding upon such Person
or any of its  property  or to  which  such  Person  or any of its  property  is
subject.

    "Responsible  Officer" shall mean any of the president,  the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of the Borrower
as may be designated in writing by any one of the foregoing  with the consent of
the Administrative Agent; and, with respect to the financial covenants only, the
chief financial officer or the treasurer of the Borrower.

    "Restricted Payment" shall have the meaning assigned to such term in Section
                                                                         -------
7.5.
---

    "Revolving  Credit  Exposure"  shall mean, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Loans.

    "S&P" shall mean Standard & Poor's and its successors.

                                       19
<PAGE>

    "S&P  Rating"  shall mean,  at any time,  the rating  assigned by S&P to the
Borrower's senior unsecured long-term, non-credit enhanced debt at such time or,
if such rating is not then available, S&P's issuer credit rating of the Borrower
then in effect.

    "SEC  Investigation"  shall mean the  investigation  by the  Securities  and
Exchange  Commission  into  the  circumstances  giving  rise  to the  Borrower's
restatement  of its audited  financial  statements for its Fiscal Years 1998 and
1999 and its unaudited  financial  statements and information  released prior to
April  30,  2001,  for  its  Fiscal  Year  2000,  and all  related  governmental
investigations and regulatory actions and proceedings.

    "Secured Obligations" shall mean, collectively,  the Obligations as provided
in this Agreement,  the "Obligations" as defined in the 3-Year Credit Agreement,
and all other  amounts  described in the  Collateral  Documents as being secured
thereby.

    "Security Documents" shall mean,  collectively,  the Guaranty Agreement, the
Contribution Agreement, and the Collateral Documents.

    "Senior  Notes" shall mean,  collectively,  the  Borrower's 8 5/8% Notes due
June 15,  2010,  in the  aggregate  principal  amount  of  $200,000,000,  issued
pursuant to the Indenture.

    "Shareholder  Settlements"  shall mean the aggregate  amounts required to be
paid by the Borrower  pursuant to any  settlement  arrangement(s),  judgment(s),
decree(s),  and/or order(s) agreed by or entered against the Borrower in respect
of shareholder  litigation and related proceedings arising out of the Borrower's
restatement  of its audited  financial  statements for its Fiscal Years 1998 and
1999 and its unaudited  financial  statements and information  released prior to
April 30, 2001, for its Fiscal Year 2000.

    "Subsidiary"  shall mean,  with  respect to any Person (the  "parent"),  any
corporation,  partnership, joint venture, limited liability company, association
or other  entity the accounts of which would be  consolidated  with those of the
parent in the  parent's  consolidated  financial  statements  if such  financial
statements were prepared in accordance with GAAP as of such date, as well as any
other  corporation,  partnership,  joint  venture,  limited  liability  company,
association or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date,  owned,  controlled or held, or (ii) that is, as
of such date, otherwise controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more  subsidiaries of the parent.  Unless
otherwise  indicated,  all  references to  "Subsidiary"  hereunder  shall mean a
Subsidiary of the Borrower.

    "Synthetic  Lease" means a lease  transaction under which (i) the lease will
be treated  as an  "operating  lease" by the lessee  pursuant  to  Statement  of
Financial  Accounting  Standards  No. 13, as amended and (ii) the lessee will be
entitled to various tax and other  benefits  ordinarily  available to owners (as
opposed to lessees) of like property.

    "Synthetic Lease  Obligations"  shall mean, with respect to any Person,  the
sum of (i) all  remaining  rental  obligations  of such  Person as lessee  under
Synthetic Leases that are

                                       20
<PAGE>

attributable to principal and, without duplication, (ii) all rental and purchase
price payment  obligations of such Person under such Synthetic  Leases  assuming
such Person  exercises  the option to purchase the lease  property at the end of
the lease term.

    "Taxes"  shall mean any and all present or future  taxes,  levies,  imposts,
duties,  deductions,   charges  or  withholdings  imposed  by  any  Governmental
Authority.

    "3-Year Credit  Agreement"  shall mean that certain 3-Year  Revolving Credit
Agreement  dated as of June , 2002, by and among the Borrower,  the lenders from
time to time party thereto and SunTrust Bank, as  administrative  agent,  as the
same may be amended, restated, and supplemented from time to time.

    "Type", when used in reference to a Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans  comprising  such  Borrowing,  is
determined by reference to the Adjusted LIBO Rate or the Base Rate.

    "UCC  Financing   Statements"  shall  mean,   collectively,   the  financing
statements  (including those describing fixtures on the Mortgaged Properties) to
be filed in  respect  of the  Collateral  pursuant  to the  requirements  of the
Uniform Commercial Code of the various states where necessary or advisable under
applicable  law in order to  perfect  a lien on and  security  interest  in such
Collateral  in favor  of the  Collateral  Agent,  together  with all  amendments
thereto and assignments thereof.

    "U.S.  Subsidiary"  shall mean a Subsidiary  that is a United  States person
under Section 7701(a)(3) of the Code.

    "Withdrawal  Liability"  shall mean liability to a  Multiemployer  Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

    Section 1.2.  Classifications of Loans and Borrowings.  For purposes of this
                  ---------------------------------------
Agreement,  Loans may be classified and referred to by Type (e.g., a "Eurodollar
Loan" or "Base Rate Loan"). Borrowings also may be classified and referred to by
Type (e.g., "Eurodollar Borrowing").

    Section 1.3. Accounting Terms and Determination. Unless otherwise defined or
                 ----------------------------------
specified  herein,  all accounting  terms used herein shall be interpreted,  all
accounting  determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time,  applied on a basis consistent with the most recent
audited consolidated  financial statements of the Borrower delivered pursuant to
Section 5.1(a); provided, that if the Borrower notifies the Administrative Agent
-----------     --------
that the Borrower  wishes to amend any  covenant in Article VI to eliminate  the
effect  of any  change  in GAAP on the  operation  of such  covenant  (or if the
Administrative  Agent  notifies the Borrower  that the Required  Lenders wish to
amend Article VI for such  purpose),  then the Borrower's  compliance  with such
covenant shall be determined on the basis of GAAP in effect  immediately  before
the  relevant  change in GAAP  became  effective,  until  either

                                       21
<PAGE>

such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.

    Section 1.4. Terms  Generally.  The  definitions of terms herein shall apply
                 ----------------
equally to the  singular  and plural  forms of the terms  defined.  Whenever the
context may require,  any pronoun  shall  include the  corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed  by the phrase  "without  limitation".  The word "will"
shall be construed to have the same meaning and effect as the word  "shall".  In
the  computation of periods of time from a specified  date to a later  specified
date, the word "from" means "from and including" and the word "to" means "to but
excluding".  Unless the context  requires  otherwise  (i) any  definition  of or
reference  to any  agreement,  instrument  or  other  document  herein  shall be
construed as referring to such agreement, instrument or other document as it was
originally  executed or as it may from time to time be amended,  supplemented or
otherwise modified (subject to any restrictions on such amendments,  supplements
or  modifications  set forth  herein),  (ii) any reference  herein to any Person
shall be construed to include such Person's  successors  and permitted  assigns,
(iii) the words  "hereof",  "herein" and "hereunder" and words of similar import
shall  be  construed  to  refer  to this  Agreement  as a  whole  and not to any
particular provision hereof, (iv) all references to Articles, Sections, Exhibits
and Schedules  shall be construed to refer to Articles,  Sections,  Exhibits and
Schedules to this Agreement,  and (v) all references to a specific time shall be
construed  to refer to the  time in the  city  and  state of the  Administrative
Agent's principal office, unless otherwise indicated.

                                   ARTICLE II

                       AMOUNT AND TERMS OF THE COMMITMENTS

Section 2.1.      General  Description  of  Facilities.
                  ------------------------------------
    Subject to and upon the terms and conditions  set forth herein,  the Lenders
hereby establish in favor of the Borrower a revolving  credit facility  pursuant
to  which  each  Lender  severally  agrees  (to  the  extent  of  such  Lender's
Commitment)  to make Loans to the  Borrower  in  accordance  with  Section  2.2,
provided,  that  in no  event  shall  the  aggregate  principal  amount  of  all
outstanding  Loans exceed at any time the Aggregate  Commitment Amount from time
to time in effect.

Section 2.2.      Loans.
                  -----
    Subject to the terms and conditions set forth herein,  each Lender severally
agrees to make Loans to the Borrower,  from time to time during the Availability
Period, in an aggregate  principal amount  outstanding at any time that will not
result in (i) such Lender's  Revolving  Credit Exposure  exceeding such Lender's
Commitment or (ii) the sum of the aggregate  Revolving  Credit  Exposures of all
Lenders  exceeding  the Aggregate  Commitment  Amount.  During the  Availability
Period,  the Borrower shall be entitled to borrow,  prepay and reborrow Loans in
accordance with the terms and conditions of this Agreement;  provided,  that the
                                                             --------
Borrower  may not borrow or reborrow  any Loans  should there exist a Default or
Event  of  Default  (other  than  a  reborrowing  (x)  consisting  solely  of  a
continuation  of an existing  Eurodollar  Borrowing for a

                                       22
<PAGE>

new Interest  Period of one (1) month at a time when there exists a Default (but
not an Event  of  Default),  or (y)  consisting  solely  of a  conversion  of an
existing Eurodollar Borrowing to a Base Rate Borrowing).

Section 2.3.      Procedure for  Borrowings.
                  -------------------------
    The  Borrower  shall  give  the  Administrative  Agent  written  notice  (or
telephonic notice promptly confirmed in writing) of each Borrowing substantially
in the form of Exhibit 2.3 attached  hereto (a "Notice of Borrowing")  (x) prior
to 12:00 noon  (Atlanta,  Georgia time) on the requested  date of each Base Rate
Borrowing and (y) prior to 12:00 noon (Atlanta, Georgia time) at least three (3)
Business Days prior to the requested  date of each  Eurodollar  Borrowing.  Each
Notice of Borrowing  shall be irrevocable  and shall specify:  (i) the aggregate
principal amount of such Borrowing, (ii) the date of such Borrowing (which shall
be a Business Day),  (iii) the Type of such Loan  comprising  such Borrowing and
(iv) in the case of a Eurodollar Borrowing, the duration of the initial Interest
Period  applicable  thereto  (subject to the  provisions  of the  definition  of
Interest  Period).  Each Borrowing shall consist  entirely of Base Rate Loans or
Eurodollar Loans, as the Borrower may request. The aggregate principal amount of
each such Eurodollar  Borrowing  shall be not less than  $10,000,000 or a larger
multiple of $500,000,  and the aggregate principal amount of each such Base Rate
Borrowing shall not be less than $1,000,000 or a larger multiple of $100,000. At
no time shall the total number of Eurodollar Borrowings  outstanding at any time
exceed  twelve.  Promptly  following  the  receipt of a Notice of  Borrowing  in
accordance  herewith,  the Administrative  Agent shall advise each Lender of the
details  thereof and the amount of such  Lender's Loan to be made as part of the
requested Borrowing.

Section 2.4.      Funding of Borrowings.
                  ---------------------

    (a) Each Lender will make  available each Loan to be made by it hereunder on
the proposed date thereof by wire  transfer in  immediately  available  funds by
1:00  p.m.(Atlanta,  Georgia  time) to the  Administrative  Agent at the Payment
Office. The Administrative  Agent will make such Loans available to the Borrower
by promptly  crediting the amounts that it receives,  in like funds by the close
of business on such proposed date, to an account maintained by the Borrower with
the  Administrative  Agent or at the  Borrower's  option,  by  effecting  a wire
transfer of such amounts to an account  designated in writing by the Borrower to
the Administrative Agent.

    (b) Unless the  Administrative  Agent shall have been notified by any Lender
prior to 5:00 p.m.  one (1)  Business  Day prior to the date of a  Borrowing  in
which such Lender is  participating  that such Lender will not make available to
the   Administrative   Agent  such  Lender's  share  of  such   Borrowing,   the
Administrative  Agent may assume that such Lender has made such amount available
to the  Administrative  Agent on such date,  and the  Administrative  Agent,  in
reliance on such  assumption,  may make available to the Borrower on such date a
corresponding amount. If such corresponding amount is not in fact made available
to the  Administrative  Agent by such Lender on the date of such Borrowing,  the
Administrative  Agent shall be entitled to recover such corresponding  amount on
demand from such Lender  together with interest at the Federal Funds Rate for up
to two (2) days and thereafter at the rate specified for such Borrowing. If such
Lender does not pay such corresponding  amount forthwith upon the Administrative

                                       23
<PAGE>

Agent's demand  therefor,  the  Administrative  Agent shall promptly  notify the
Borrower,  and the Borrower shall immediately pay such  corresponding  amount to
the  Administrative  Agent together with interest at the rate specified for such
Borrowing. Nothing in this subsection shall be deemed to relieve any Lender from
its  obligation  to fund its Pro Rata  Share of any  Borrowing  hereunder  or to
prejudice  any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder.

    (c) All  Borrowings  shall  be made by the  Lenders  on the  basis  of their
respective Pro Rata Shares.  No Lender shall be  responsible  for any default by
any  other  Lender  in its  obligations  hereunder,  and  each  Lender  shall be
obligated to make its Loans  provided to be made by it hereunder,  regardless of
the failure of any other Lender to make its Loans hereunder.

Section 2.5.      Interest Elections.
                  ------------------

    (a)  Each  Borrowing  initially  shall  be of  the  Type  specified  in  the
applicable Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall
have an  initial  Interest  Period as  specified  in such  Notice of  Borrowing.
Thereafter,  the Borrower may elect to convert such  Borrowing  into a different
Type or to continue such Borrowing,  and in the case of a Eurodollar  Borrowing,
may elect  Interest  Periods  therefor,  all as  provided in this  Section.  The
Borrower may elect different  options with respect to different  portions of the
affected  Borrowing,  in which case each such portion shall be allocated ratably
among  the  Lenders  holding  Loans  comprising  such  Borrowing,  and the Loans
comprising each such portion shall be considered a separate Borrowing.

    (b) To make an election  pursuant to this Section,  the Borrower  shall give
the  Administrative  Agent prior written notice (or telephonic  notice  promptly
confirmed in writing) of each Borrowing (a "Notice of  Conversion/Continuation")
that is to be  converted  or  continued,  as the case may be, (x) prior to 12:00
noon (Atlanta,  Georgia time) on the requested date of a conversion  into a Base
Rate  Borrowing,  and (y) prior to 12:00 noon (Atlanta,  Georgia time) three (3)
Business  Days  prior  to a  continuation  of or  conversion  into a  Eurodollar
Borrowing. Each such Notice of Conversion/Continuation  shall be irrevocable and
shall specify (i) the Borrowing to which such Notice of  Continuation/Conversion
applies and if  different  options are being  elected  with respect to different
portions  thereof,  the  portions  thereof  that  are to be  allocated  to  each
resulting  Borrowing (in which case the information to be specified  pursuant to
clauses (iii) and (iv) shall be specified for each  resulting  Borrowing),  (ii)
the   effective   date  of  the  election   made  pursuant  to  such  Notice  of
Continuation/Conversion,  which  shall be a  Business  Day,  (iii)  whether  the
resulting  Borrowing is to be a Base Rate  Borrowing or a Eurodollar  Borrowing,
and  (iv)  if the  resulting  Borrowing  is to be a  Eurodollar  Borrowing,  the
Interest Period applicable  thereto after giving effect to such election,  which
shall be a period  contemplated  by the definition of "Interest  Period." If any
such Notice of Continuation/Conversion  requests a Eurodollar Borrowing but does
not specify an Interest Period, the Borrower shall be deemed to have selected an
Interest Period of one month.  The principal  amount of any resulting  Borrowing
shall satisfy the minimum  borrowing  amount for Eurodollar  Borrowings and Base
Rate Borrowings set forth in Section 2.3.
                             ------------

                                       24
<PAGE>

     (c)  If,  on the  expiration  of any  Interest  Period  in  respect  of any
Eurodollar  Borrowing,  the  Borrower  shall have  failed to deliver a Notice of
Conversion / Continuation,  then,  unless such  Borrowing  is repaid as provided
herein,  the Borrower  shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a
Eurodollar  Borrowing if an Event of Default exists,  unless the  Administrative
Agent and each of the Lenders  shall have  otherwise  consented in writing.  The
Borrower  will pay any amounts due under  Section 2.17 if  Eurodollar  Loans are
converted  on a day  that is not the  last day of an  Interest  Period  for such
Loans.

    (d)  Upon   receipt   of  any   Notice   of   Conversion/Continuation,   the
Administrative  Agent shall promptly  notify each Lender of the details  thereof
and of such Lender's portion of each resulting Borrowing.

Section 2.6.      Optional Reduction and Termination of Commitments.
                  -------------------------------------------------

    (a) Unless  previously  terminated,  all Commitments  shall terminate on the
Commitment Termination Date.

    (b)  Upon at least  three  (3)  Business  Days'  prior  written  notice  (or
telephonic  notice promptly  confirmed in writing) to the  Administrative  Agent
(which  notice shall be  irrevocable),  the  Borrower  may reduce the  Aggregate
Commitments in part or terminate the Aggregate  Commitments in whole;  provided,
                                                                       ---------
that (i) any  partial  reduction  shall  apply  to  reduce  proportionately  and
permanently the Commitment of each Lender,  (ii) any partial reduction  pursuant
to this Section 2.6 shall be in an amount of at least $10,000,000 and any larger
        -----------
multiple of $500,000, and (iii) no such reduction shall be permitted which would
reduce  the  Aggregate  Commitments  to an  amount  less  than  the  outstanding
Revolving Credit Exposures of all Lenders.

    Section 2.7.  Repayment of Loans.
                  ------------------
    The  outstanding  principal  amount  of all Loans  shall be due and  payable
(together  with  accrued  and  unpaid   interest   thereon)  on  the  Commitment
Termination Date.

    Section 2.8. Evidence of Indebtedness.
                 ------------------------
    (a) Each  Lender  shall  maintain  in  accordance  with its  usual  practice
appropriate  records  evidencing the indebtedness of the Borrower to such Lender
resulting  from each Loan made by such Lender from time to time,  including  the
amounts of principal and interest  payable  thereon and paid to such Lender from
time to time under this  Agreement.  The  Administrative  Agent  shall  maintain
appropriate  records  in which  shall be  recorded  (i) the  Commitment  of each
Lender,  (ii) the amount of each Loan made  hereunder by each  Lender,  the Type
thereof  and the  Interest  Period  applicable  thereto,  (iii) the date of each
continuation  thereof  pursuant to Section 2.5, (iv) the date of each conversion
                                   ------------
of all or a portion  thereof to another  Type  pursuant to Section  2.5, (v) the
                                                           -------------
date and amount of any  principal  or interest  due and payable or to become due
and payable from the Borrower to each Lender hereunder in respect of such Loans,
and (vi) both the date and  amount  of any sum  received  by the  Administrative
Agent

                                       25
<PAGE>

hereunder  from the  Borrower  in respect of the Loans and each  Lender's  share
thereof.  The entries made in such records shall be prima facie  evidence of the
existence  and  amounts of the  obligations  of the  Borrower  therein  recorded
subject to manifest error; provided,  that the failure or delay of any Lender or
the  Administrative  Agent in maintaining or making entries into any such record
or any error  therein  shall not in any  manner  affect  the  obligation  of the
Borrower to repay the Loans (both principal and unpaid accrued interest) of such
Lender in accordance with the terms of this Agreement.

    (b) At the request of any Lender at any time,  the  Borrower  agrees that it
will  execute  and  deliver to such  Lender a Note  payable to the order of such
Lender evidencing such Lender's Loans.

    Section 2.9. Optional Prepayments.
                 --------------------
    (a) The  Borrower  shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, without premium or penalty, by giving
irrevocable  written notice (or telephonic notice promptly confirmed in writing)
to the  Administrative  Agent no later than (i) in the case of prepayment of any
Eurodollar Borrowing, 12:00 noon (Atlanta, Georgia time) not less than three (3)
Business Days prior to any such  prepayment,  (ii) in the case of any prepayment
of any Base Rate  Borrowing,  12:00 noon (Atlanta,  Georgia time) on the date of
such  prepayment.  Each such notice shall be  irrevocable  and shall specify the
proposed date of such  prepayment and the principal  amount of each Borrowing or
portion  thereof  to  be  prepaid.   Upon  receipt  of  any  such  notice,   the
Administrative  Agent shall promptly notify each affected Lender of the contents
thereof and of such  Lender's  share of any such  prepayment.  If such notice is
given, the aggregate amount specified in such notice shall be due and payable no
later  than one (1)  Business  Day after  the date  designated  in such  notice,
together  with  accrued  interest  to such  date on the  amount  so  prepaid  in
accordance with Section  2.11(c);  provided,  that if a Eurodollar  Borrowing is
                ----------------   ---------
prepaid  on a date  other  than the last day of an  Interest  Period  applicable
thereto,  the Borrower shall also pay all amounts  required  pursuant to Section
                                                                         -------
2.17.  Each partial  prepayment  of any Loan shall be in an amount that would be
----
permitted in the case of an advance of a Borrowing of the same Type  pursuant to
Section 2.3.  Each  prepayment  of a Borrowing  shall be applied  ratably to the
-----------
Loans comprising such Borrowing.

Section 2.10.     Mandatory Prepayments and Commitment Reductions.
                  -----------------------------------------------
    (a) If at any time the aggregate  Revolving  Credit Exposures of all Lenders
exceed  the  Aggregate  Commitment  Amount  at such  time,  the  Borrower  shall
immediately prepay Loans in an aggregate amount equal to such excess.

    (b) Subject to Section  2.10(f),  in the event and on each occasion that any
Net Proceeds are received by or on behalf of the Borrower or any  Subsidiary  in
respect of any  Prepayment  Event of any type  described in clause (a) or clause
(b) of the definition of the term "Prepayment Event", the Borrower shall, within
five  Business  Days after such Net  Proceeds are  received,  prepay Loans in an
aggregate amount equal to the Apportioned Amount of such

                                       26
<PAGE>

Net Proceeds; provided, however, that (i) in the case of a "Prepayment Event" of
              --------  -------
the type  described  in clause  (a) of the  definition  of the term  "Prepayment
Event" with  respect to  Mortgaged  Retail  Properties,  if the  Borrower  shall
deliver,  within  such  five  Business  Days,  to  the  Administrative  Agent  a
certificate of the Borrower to the effect that the Borrower and its Subsidiaries
intend  to apply the Net  Proceeds  from such  event  (or a portion  thereof  as
specified  in such  certificate)  within  180  days  after  receipt  of such Net
Proceeds,  to purchase a new Mortgaged Retail Property of equal or greater value
to replace such Mortgaged Retail Property in compliance with the requirements of
Section  5.11(c) and certifying that no Default or Event of Default has occurred
---------------
and is then  continuing or (ii) in the case of a "Prepayment  Event" of the type
described in clause (b) of the definition of the term "Prepayment Event," if the
Borrower  shall deliver,  within such five Business Days, to the  Administrative
Agent a  certificate  of the  Borrower to the effect that the  Borrower  and its
Subsidiaries  intend to apply  the Net  Proceeds  from such  event (or a portion
thereof as specified in such certificate), within 180 days after receipt of such
Net Proceeds,  to repair or replace all or a portion of the  Mortgaged  Property
affected thereby and certifying that no Default or Event of Default has occurred
and is then  continuing,  then in each  case no  Prepayment  shall  be  required
pursuant  to this  Section  2.10(b)  in respect  of the Net  Proceeds  from such
                   ----------------
Prepayment  Event  (or  the  portion  of such  Net  Proceeds  specified  in such
certificate,  if applicable),  provided, however, that if by the end of any such
                               --------  -------
180-day period described in the preceding clauses (i) and (ii), (x) any such Net
Proceeds  therefrom  have not been so applied,  prepayment  shall be required at
such time in an amount equal to such Net Proceeds that have not been so applied,
and (y) in the case of any proposed purchase of a new Mortgaged Retail Property,
the Borrower shall have failed to satisfy the requirements of Section 5.11(c) in
                                                              ---------------
respect  of such new  Mortgaged  Retail  Property  within  such 180 day  period,
prepayment  shall be required at such time in an amount equal to the Apportioned
Amount of the Net Proceeds initially received by the Borrower or any Subsidiary.

    (c) Subject to Section  2.10(f),  in the event and on each occasion that any
        ---------------------------
Net Proceeds are received by or on behalf of the Borrower or any  Subsidiary  in
respect  of any  Prepayment  Event of the type  described  in clause  (c) of the
definition  of the term  "Prepayment  Event",  the  Borrower  shall,  within two
Business  Days  after  such Net  Proceeds  are  received,  prepay  Loans)  in an
aggregate amount equal to, fifty percent (50%) of the Apportioned Amount of such
Net  Proceeds;  provided,  however,  the Borrower  shall not be required to make
                --------   -------
aggregate  prepayments  pursuant to this Section 2.10(c) which,  when aggregated
with the maximum amount of all  prepayments  required to be made by the Borrower
pursuant to Section 2.12(c) of the 3-Year Credit Agreement, exceed $100,000,000.
            --------------

    (d) The  Borrower  agrees to pay all  accrued  and  unpaid  interest  on all
amounts prepaid pursuant to the requirements of this Section 2.10, together with
                                                     ------------
any amounts due in respect of such  prepayment  pursuant to Section  2.17.  Each
                                                            -------------
prepayment to be applied under this Agreement  shall be applied ratably first to
the Base Rate Loans to the full extent  thereof,  and  thereafter  to Eurodollar
Loans to the full extent thereof. All payments pursuant to this Section 2.10 and
                                                                ------------
Section 2.12 of the 3-Year Credit Agreement shall be applied on a pro rata basis
between such Related Revolving Credit Facilities.

    (e) The Borrower shall give written notice (or  telephonic  notice  promptly
confirmed  in writing) of any  prepayment  required by this  Section 2.10 to the
                                                             ------------
Administrative  Agent  no  later  than  (i) in the  case  of  prepayment  of any
Eurodollar  Borrowing,  12:00 noon  (Atlanta,  Georgia time) not less than three
Business  Days  prior  to the  date of any  prepayment,  and (ii) in the case of
prepayment of any Base Rate  Borrowing,  12:00 noon

                                       27
<PAGE>

(Atlanta, Georgia time) not less than one Business Day prior to the date of such
prepayment. Each such notice shall be irrevocable and shall specify the proposed
date of such  prepayment  and the principal  amount of each Borrowing or portion
thereof to be prepaid. Upon receipt of any such notice, the Administrative Agent
shall promptly  notify each Lender of the contents  thereof and of such Lender's
share of any such  prepayment.  If such notice is given,  the aggregate  amounts
specified in such notice shall be due and payable on the date designated in such
notice,  together with accrued interest to such date on the amount so prepaid in
accordance with Section 2.11(c);  provided,  that if any Eurodollar Borrowing is
                --------------
prepaid  on a date  other  than the last day of an  Interest  Period  applicable
thereto,  the Borrower shall also pay all amounts  required  pursuant to Section
                                                                         -------
2.17.
----

    (f) Immediately  upon the occurrence of any Prepayment  Event, the Aggregate
Commitments of the Lenders shall  automatically be reduced, on a pro rata basis,
in an amount  equal to the  maximum  aggregate  prepayments  required to be made
pursuant to this Section 2.10 in respect of such Prepayment Event, or that would
be  required  to be made in respect of such  Prepayment  Event  pursuant to this
Section  2.10 if there  were  Loans  outstanding  at such time in excess of such
-------------
maximum  required  amount;  provided that no  prepayment  below the then reduced
                            --------
amount of the  Aggregate  Commitments  shall be  required  to the  extent  that,
immediately  after giving effect to the  reduction of the Aggregate  Commitments
pursuant  to this  Section  2.10(f),  no Default or Event of Default  shall have
                   ----------------
occurred or then be  continuing  and all other  conditions  for Borrowing as set
forth in Section 3.2 shall be  satisfied so as to entitle the Borrower to borrow
         -----------
at such time at least $1 under the Aggregate  Commitments in accordance with the
terms hereof..

Section 2.11.     Interest on Loans.
                  -----------------
    (a) The  Borrower  shall pay interest (i) on each Base Rate Loan at the Base
Rate in  effect  from  time to  time,  and (ii) on each  Eurodollar  Loan at the
Adjusted LIBO Rate for the applicable  Interest  Period in effect for such Loan,
plus,  in each  case,  the  Applicable  Margin in effect  from time to time with
respect to such Base Rate Loan or Eurodollar Loan, as the case may be.

    (b) While an Event of Default exists or after acceleration, unless otherwise
agreed by the  Required  Lenders,  the  Borrower  shall pay  interest  ("Default
Interest") with respect to all Eurodollar Loans at the rate otherwise applicable
hereunder for such Eurodollar Loans for the then-current  Interest Period,  plus
an  additional  2% per annum  until the last day of such  Interest  Period,  and
thereafter,  and with  respect to all Base Rate Loans and all other  Obligations
hereunder  (other than Loans),  at the rate otherwise  applicable  hereunder for
Base Rate Loans, plus an additional 2% per annum.

    (c)  Interest on the  principal  amount of all Loans  shall  accrue from and
including  the  date  such  Loans  are  made to but  excluding  the  date of any
repayment thereof.  Interest on all outstanding Base Rate Loans shall be payable
quarterly in arrears on the last day of each March, June, September and December
and on the Commitment  Termination Date. Interest on all outstanding  Eurodollar
Loans  shall  be  payable  on the last day of each  Interest  Period

                                       28
<PAGE>

applicable thereto,  and, in the case of any Eurodollar Loans having an Interest
Period in excess of three  months,  on each day which occurs every three months,
after  the  initial  date  of  such  Interest  Period,  and  on  the  Commitment
Termination Date. Interest on any Loan which is converted into a Loan of another
Type or  which  is  repaid  or  prepaid  shall  be  payable  on the date of such
conversion  or on the date of any such  repayment or  prepayment  (on the amount
repaid or prepaid) thereof. All Default Interest shall be payable on demand.

    (d) The  Administrative  Agent shall determine each interest rate applicable
to the Loans hereunder and shall promptly notify the Borrower and the Lenders of
such rate in writing (or by telephone,  promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes,  absent manifest
error.

Section 2.12.       Fees.
                    ----
    (a) The Borrower shall pay to the  Administrative  Agent for its own account
fees in the amounts and at the times previously  agreed upon by the Borrower and
the Administrative Agent.

    (b) The Borrower agrees to pay to the  Administrative  Agent for the account
of each Lender a facility  fee (the  "Facility  Fee") which shall  accrue at the
Applicable Percentage  (determined daily in accordance with the Pricing Grid) on
the daily amount of the total Commitment (whether used or unused) of such Lender
during the Availability Period;  provided, that if any Revolving Credit Exposure
remains outstanding after the Commitment Termination Date, then the Facility Fee
shall continue to accrue on the daily amount of such Revolving  Credit  Exposure
from and after the  Commitment  Termination  Date to the date that all Revolving
Credit Exposure has been paid in full.

    (c) Accrued  fees shall be payable  quarterly  in arrears on the last day of
each March, June, September and December, commencing on June 30, 2002 and on the
Commitment Termination Date (and if later, the date the Loans shall be repaid in
their entirety);  provided, that any Facility Fees accruing after the Commitment
Termination Date shall be payable on demand.

    Section 2.13. Computation of Interest and Fees.
                  --------------------------------
    All  computations  of interest and fees hereunder shall be made on the basis
of a year of 360 days for the actual number of days (including the first day but
excluding the last day)  occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed),  except that,
with  respect  to Base Rate  Loans,  interest  based on the prime  lending  rate
hereunder shall be computed on the basis of a year of 365 days (or 366 days in a
leap year) and paid for the actual number of days elapsed  (including  the first
day but excluding the last day). Each determination by the Administrative  Agent
of an interest  amount or fee hereunder  shall be made in good faith and, except
for manifest error, shall be final, conclusive and binding for all purposes.

Section 2.14.       Inability to Determine  Interest  Rates.
                    ---------------------------------------
    If prior to the  commencement  of any  Interest  Period  for any  Eurodollar
Borrowing,

                                       29
<PAGE>

    (a) the  Administrative  Agent shall have  determined  (which  determination
shall  be made in good  faith  and,  absent  manifest  error,  shall  be  final,
conclusive  and  binding  upon all  parties)  that,  by reason of  circumstances
affecting  the  relevant  interbank  market,  adequate  means do not  exist  for
ascertaining LIBOR for such Interest Period, or

    (b) the  Administrative  Agent shall have received  notice from the Required
Lenders that the Adjusted LIBO Rate does not  adequately  and fairly reflect the
cost to such  Lenders  (or  Lender,  as the case may be) of  making,  funding or
maintaining  their  (or  its,  as the  case may be)  Eurodollar  Loans  for such
Interest Period,

the  Administrative  Agent  shall give  written  notice (or  telephonic  notice,
promptly confirmed in writing) and a summary of the basis for such determination
to the Borrower and to the Lenders as soon as practicable thereafter.  Until the
Administrative  Agent  shall  notify  the  Borrower  and the  Lenders  that  the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans
as or into  Eurodollar  Loans  shall be  suspended,  and (ii) all such  affected
Eurodollar  Loans shall be converted into Base Rate Loans on the last day of the
then current Interest Period applicable thereto unless the Borrower prepays such
Loans in  accordance  with this  Agreement.  Unless the  Borrower  notifies  the
Administrative Agent at least one Business Day before the date of any Eurodollar
Borrowing  for which a Notice of  Borrowing  has  previously  been given that it
elects not to borrow on such date,  then such Borrowing  shall be made as a Base
Rate Borrowing.

    Section  2.15.  Illegality.
                    ----------
    If any Change in Law shall make it unlawful or impossible  for any Lender to
make,  maintain or fund any Eurodollar  Loan and such Lender shall so notify the
Administrative  Agent,  the  Administrative  Agent  shall  promptly  give notice
thereof to the  Borrower  and the other  Lenders,  whereupon  until such  Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such  suspension no longer exist,  the obligation of such Lender to make
Eurodollar  Loans,  or to  continue  or  convert  outstanding  Loans  as or into
Eurodollar Loans, shall be suspended.  In the case of the making of a Eurodollar
Borrowing,  such  Lender's Loan shall be made as a Base Rate Loan as part of the
same Borrowing for the same Interest Period and if the affected  Eurodollar Loan
is then  outstanding,  such Loan shall be  converted  to a Base Rate Loan on the
last day of the then current Interest Period  applicable to such Eurodollar Loan
if such  Lender may  lawfully  continue  to  maintain  such Loan to such date or
within such earlier  period as required by law.  Notwithstanding  the foregoing,
the affected  Lender  shall,  prior to giving such notice to the  Administrative
Agent, designate a different Applicable Lending Office if such designation would
avoid  the need  for  giving  such  notice  and if such  designation  would  not
otherwise be  disadvantageous  to such Lender in the good faith  exercise of its
discretion.

Section 2.16.      Increased Costs.
                   ---------------
    (a) If any Change in Law shall:

    (i)  impose,  modify or deem  applicable  any  reserve,  special  deposit or
similar  requirement that is not otherwise  included in the determination of the
Adjusted LIBO

                                       30
<PAGE>

Rate hereunder against assets of, deposits with or for the account of, or credit
extended by, any Lender; or

    (ii)  impose on any  Lender or the  eurodollar  interbank  market  any other
condition affecting this Agreement or any Eurodollar Loans made by such Lender;

and the  result  of the  foregoing  is to  increase  the cost to such  Lender of
making,  converting  into,  continuing or  maintaining  a Eurodollar  Loan or to
reduce the amount  received or receivable by such Lender  hereunder  (whether of
principal,  interest or any other amount), then the Borrower shall promptly pay,
upon written  notice from and demand by such Lender on the Borrower (with a copy
of such notice and demand to the  Administrative  Agent), to the  Administrative
Agent for the account of such Lender,  within five  Business Days after the date
of such notice and demand, additional amount or amounts sufficient to compensate
such Lender for such additional costs incurred or reduction suffered.

    (b) If any Lender  shall have  determined  that on or after the date of this
Agreement any Change in Law regarding capital requirements has or would have the
effect  of  reducing  the rate of  return on such  Lender's  capital  (or on the
capital of such Lender's  holding  company) as a consequence of its  obligations
hereunder  to a level  below  that which such  Lender or such  Lender's  holding
company   could  have   achieved  but  for  such  Change  in  Law  (taking  into
consideration  such Lender's  policies or the policies of such Lender's  holding
company with respect to capital  adequacy) then, from time to time,  within five
(5) Business Days after receipt by the Borrower of written demand by such Lender
(with a copy thereof to the  Administrative  Agent),  the Borrower  shall pay to
such  Lender  such  additional  amounts as will  compensate  such Lender or such
Lender's holding company for any such reduction suffered.

    (c) A certificate of a Lender setting forth the amount or amounts  necessary
to compensate such Lender or such Lender's holding company,  as the case may be,
specified in paragraph  (a) or (b) of this  Section,  prepared in good faith and
accompanied  by a statement  describing in  reasonable  detail the basis for and
calculation of such increased  cost,  shall be delivered to the Borrower (with a
copy to the  Administrative  Agent) at the time of such Lender's demand therefor
and shall be conclusive, absent manifest error.

    (d) Subject to Section  2.19(f),  failure or delay on the part of any Lender
                   ----------------
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation.

    Section  2.17.  Funding  Indemnity.
                    ------------------
    In the event of (i) the payment of any principal of a Eurodollar  Loan other
than on the last day of the Interest Period applicable  thereto  (including as a
result  of an Event  of  Default),  (ii) the  conversion  or  continuation  of a
Eurodollar  Loan other than on the last day of the  Interest  Period  applicable
thereto,  or (iii) the  failure by the  Borrower to borrow,  prepay,  convert or
continue any  Eurodollar  Loan on the date  specified in any  applicable  notice
(regardless  of whether such notice is withdrawn or revoked)  then,  in any such
event, the Borrower shall compensate each Lender,  within five (5) Business Days
after  written  demand  from  such  Lender,   for  any  loss,  cost  or  expense
attributable to such event. Such  compensation  shall not include the Applicable
Margin, but without limiting the foregoing, shall include an amount equal to the

                                       31
<PAGE>

excess,  if any, of (x) the amount of interest that would have otherwise accrued
on the principal  amount of such  Eurodollar Loan if such event had not occurred
at the Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from
the date of such  event to the last  day of the  then  current  Interest  Period
therefor (or in the case of a failure to borrow,  convert or  continue,  for the
period that would have been the Interest  Period for such Loan)  (excluding  any
Applicable Margin) less (y) the amount of interest (as reasonably  determined by
such Lender) that would accrue on the principal amount of such Loan for the same
period if the  Adjusted  LIBO Rate were set on the date such Loan was prepaid or
converted  or the date on which  the  Borrower  failed  to  borrow,  convert  or
continue  such Loan,  provided  that such  Lender  shall have  delivered  to the
                      --------
Borrower a certificate  setting forth in reasonable detail its calculation as to
any additional  amount payable under this Section 2.17 submitted to the Borrower
                                          ------------
by any Lender (with a copy to the  Administrative  Agent)  shall be  conclusive,
absent manifest error.

Section 2.18.       Taxes.
                    -----
    (a) Any and all payments by or on account of any  obligation of the Borrower
hereunder  shall  be made  free  and  clear  of and  without  deduction  for any
Indemnified  Taxes or  Other  Taxes;  provided,  that if the  Borrower  shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable  shall be  increased  as  necessary so that after making all
required  deductions   (including   deductions  applicable  or  attributable  to
additional  sums payable  under this  Section) the  Administrative  Agent or any
Lender (as the case may be) shall  receive  an amount  equal to the sum it would
have received had no such  deductions  been made,  (ii) the Borrower  shall make
such  deductions,  and (iii) the Borrower shall pay the full amount  deducted to
the relevant Governmental Authority in accordance with applicable law.

    (b) The  Borrower  shall pay any Other  Taxes to the  relevant  Governmental
Authority in accordance with applicable law.

    (c) The Borrower shall indemnify the  Administrative  Agent and each Lender,
within ten (10) Business Days after written demand therefor, for the full amount
of any Indemnified  Taxes or Other Taxes imposed or asserted by any Governmental
Authority paid where due by the Administrative Agent or such Lender, as the case
may be, on or with respect to any payment by or on account of any  obligation of
the Borrower  hereunder  (including  Indemnified Taxes or Other Taxes imposed or
asserted on or  attributable  to amounts  payable  under this  Section)  and any
penalties,  interest and reasonable  expenses arising  therefrom or with respect
thereto,  whether or not such Indemnified Taxes or Other Taxes were correctly or
legally  imposed  or  asserted  by  the  relevant  Governmental   Authority.   A
certificate  as to the amount of such  payment  or  liability  delivered  to the
Borrower  by a Lender,  or by the  Administrative  Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

    (d) As soon as practicable  after any payment of Indemnified  Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such  Governmental  Authority  evidencing  such  payment,  a copy of the  return
reporting  such  payment,   or  other   evidence  of  such  payment   reasonably
satisfactory to the Administrative Agent.

                                       32
<PAGE>

    (e) Any Non-U.S.  Lender that is entitled to an exemption  from or reduction
of withholding  tax under the Code or any treaty to which the United States is a
party,  with  respect to  payments  under this  Agreement  shall  deliver to the
Borrower  (with a copy  to the  Administrative  Agent),  at the  time  or  times
prescribed by applicable law, such properly completed and executed documentation
prescribed  by applicable  law or  reasonably  requested by the Borrower as will
permit  such  payments  to be made  without  withholding  or at a reduced  rate.
Without  limiting the generality of the foregoing,  each Non-U.S.  Lender agrees
that it will  deliver to the  Administrative  Agent and the  Borrower (or in the
case of a Participant,  to the Lender from which the related participation shall
have been  purchased),  as  appropriate,  two (2) duly  completed  copies of (i)
Internal Revenue Service Form W-8 ECI, or any successor form thereto, certifying
that the payments received from the Borrower hereunder are effectively connected
with such Non-U.S. Lender's conduct of a trade or business in the United States,
(ii)  Internal  Revenue  Service Form W-8 BEN, or any  successor  form  thereto,
certifying that such Non-U.S. Lender is entitled to benefits under an income tax
treaty  to  which  the  United  States  is a party  which  reduces  the  rate of
withholding tax on payments of interest, (iii) Internal Revenue Service Form W-8
BEN, or any successor form prescribed by the Internal Revenue Service,  together
with a  certificate  (A)  establishing  that the payment to the Non-U.S.  Lender
qualifies as "portfolio  interest"  exempt from U.S.  withholding tax under Code
section 871(h) or 881(c), and (B) stating that (1) the Non-U.S.  Lender is not a
bank  for  purposes  of Code  section  881(c)(3)(A),  or the  obligation  of the
Borrower  hereunder  is not,  with  respect  to  such  Non-U.S.  Lender,  a loan
agreement  entered into in the ordinary course of its trade or business,  within
the meaning of that section, (2) the Non-U.S. Lender is not a 10% shareholder of
the Borrower within the meaning of Code section  871(h)(3) or 881(c)(3)(B),  and
(3) the Non-U.S.  Lender is not a controlled foreign corporation that is related
to the Borrower  within the meaning of Code section  881(c)(3)(C),  or (iv) such
other  Internal  Revenue  Service  forms as may be  applicable  to the  Non-U.S.
Lender,  including  Forms W-8 IMY or W-8 EXP.  Each such  Non-U.S.  Lender shall
deliver to the Borrower and the Administrative Agent such forms on or before the
date that it becomes a party to this Agreement (or in the case of a Participant,
on or before the date such Participant purchases the related participation).  In
addition,  each such Non-U.S.  Lender shall deliver such forms promptly upon the
obsolescence  or  invalidity of any form  previously  delivered by such Non-U.S.
Lender.  Each such Non-U.S.  Lender shall  promptly  notify the Borrower and the
Administrative  Agent at any time that it  determines  that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of  certification  adopted by the Internal  Revenue  Service for such
purpose).

    (f) If the  Administrative  Agent or any Lender receives a refund in respect
of Taxes for which the Borrower has made  additional  payments  pursuant to this
Section  2.18,  the  Administrative  Agent or Lender,  as the case may be, shall
-------------
promptly  pay such refund  (together  with any  interest  with  respect  thereto
received from the relevant Governmental  Authority) to the Borrower (but only to
the extent of additional payments actually made by the Borrower pursuant to this
Section 2.18 with respect to the Indemnified Taxes or Other Taxes giving rise to
------------
such refund),  net of all out-of-pocket  expenses of the Administrative Agent or
applicable Lender, as the case may be, with respect thereto,  provided, that the
                                                              --------
Borrower agrees  promptly to return such refund  (together with any interest and
penalties (other than penalties  imposed on the  Administrative  Agent,  Issuing
Bank,  or  Applicable  Lender,  as the  case  may be,  in  respect  of a  filing
determined  by the  relevant  Governmental  Authority  to have been made by such
Person in bad faith and without the  consent or approval of the  Borrower)  with
respect  thereto  due to  the

                                       33
<PAGE>

relevant Governmental  Authority) (free of all Indemnified Taxes or Other Taxes)
to the  Administrative  Agent or the applicable Lender, as the case may be, upon
receipt of a notice that such  refund is  required to be repaid to the  relevant
Governmental  Authority.  Notwithstanding  anything to the contrary contained in
this Section 2.18(f), none of the Administrative Agent or the Lenders shall have
     --------------
any obligation to disclose to the Borrower any of such Person's books,  records,
tax  filings  or any  other  information  relating  to its  Taxes  that it deems
confidential.

Section 2.19.       Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
                    ------------------------------------------------------------
    (a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal,  interest, fees or of amounts payable under Section 2.16,
                                                                   -------------
2.17 or 2.18, or otherwise) prior to 1:00 p.m.  (Atlanta,  Georgia time), on the
------------
date when due, in immediately  available funds,  free and clear of any defenses,
rights of set-off,  counterclaim,  or  withholding  or deduction  of taxes.  Any
amounts  received  after  such time on any date may,  in the  discretion  of the
Administrative  Agent,  be deemed to have been  received on the next  succeeding
Business Day for purposes of  calculating  interest  thereon.  All such payments
shall be made to the  Administrative  Agent at the Payment  Office,  except that
payments  pursuant  to  Sections  2.16,  2.17 and  2.18  and 10.3  shall be made
                        -------------------------------      ----
directly  to the  Persons  entitled  thereto.  The  Administrative  Agent  shall
distribute any such payments  received by it for the account of any other Person
to the appropriate  recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next  succeeding  Business Day, and, in the case of any
payment accruing interest, interest thereon shall be made payable for the period
of such extension. All payments hereunder shall be made in Dollars.

    (b) If at any time  insufficient  funds are received by and available to the
Administrative  Agent to pay fully all amounts of  principal,  interest and fees
then due hereunder,  such funds shall be applied (i) first,  towards  payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in  accordance  with the amounts of interest and fees then due to such  parties,
and (ii) second, towards payment of principal then due hereunder,  ratably among
the parties  entitled  thereto in accordance  with the amounts of principal then
due to such parties.

    (c) If any Lender shall,  by exercising any right of set-off or counterclaim
or otherwise,  obtain  payment in respect of any principal of or interest on any
of its Loans that would  result in such  Lender  receiving  payment of a greater
proportion of the  aggregate  amount of its Loans and accrued  interest  thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans of other  Lenders to the extent  necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans; provided,
                                                                       ---------
that (i) if any such  participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and  the  purchase  price  restored  to the  extent  of such  recovery,  without
interest,  and (ii) the provisions of this  paragraph  shall not be construed to
apply to any payment made by the Borrower pursuant to and in accordance with the
express  terms  of  this

                                       34
<PAGE>

Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment of or sale of a participation  in any of its Loans to any assignee or
participant,  other than to the Borrower or any Subsidiary or Affiliate  thereof
(as to which  the  provisions  of this  paragraph  shall  apply).  The  Borrower
consents to the foregoing  and agrees,  to the extent it may  effectively  do so
under applicable law, that any Lender acquiring a participation  pursuant to the
foregoing  arrangements  may exercise against the Borrower rights of set-off and
counterclaim with respect to such  participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

    (d) Unless the  Administrative  Agent  shall have  received  notice from the
Borrower  prior to the date on which any  payment  is due to the  Administrative
Agent for the account of the Lenders  hereunder  that the Borrower will not make
such  payment,  the  Administrative  Agent may assume that the Borrower has made
such payment on such date in accordance  herewith and may, in reliance upon such
assumption,  distribute to the Lenders the amount or amounts due. In such event,
if the  Borrower  has not in fact made such  payment,  then each of the  Lenders
severally  agrees to repay to the  Administrative  Agent forthwith on demand the
amount so  distributed to such Lender with interest  thereon,  for each day from
and  including  the date such amount is  distributed  to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate  and a rate  determined  by the  Administrative  Agent in  accordance  with
then-current banking industry practices on interbank compensation.

    (e) If any Lender  shall fail to make any payment  required to be made by it
pursuant to Section 2.4(b),  2.19(d), or 10.3(d),  then the Administrative Agent
            --------------   -------     -------
may, in its discretion  (notwithstanding  any contrary provision hereof),  apply
any amounts thereafter  received by the Administrative  Agent for the account of
such Lender to satisfy such Lender's  obligations  under such Sections until all
such unsatisfied obligations are fully paid.

    (f) The Borrower  shall not be required to  compensate or indemnify a Lender
pursuant to Sections 2.16,  2.17 or 2.18 for any increased  costs loss,  cost or
any other expense incurred more than one year prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such  increased  costs
loss,  cost  or any  other  expense  and of such  Lender's  intention  to  claim
compensation therefore; provided further that, if a Change in Law giving rise to
                        -------- ------
such increased costs loss,  cost or any other expense is  retroactive,  then the
one year  period  referred  to above  shall be extended to include the period of
retroactive effect thereof.

    Section 2.20. Mitigation of Obligations.
                  -------------------------
    If any Lender requests  compensation  under Section 2.16, or if the Borrower
                                                ------------
is  required  to pay any  additional  amount to any  Lender or any  Governmental
Authority  for the  account of any Lender  pursuant to Section  2.18,  then such
                                                       -------------
Lender shall use reasonable  efforts to designate a different lending office for
funding or booking its Loans  hereunder or to assign its rights and  obligations
hereunder to another of its  offices,  branches or  affiliates,  if, in the good
faith  judgment  of such  Lender,  such  designation  or  assignment  (i)  would
eliminate or reduce  amounts  payable under Section 2.16 or Section 2.18, as the
                                            ------------    ------------
case may be, in the  future,  and (ii)  would  not  subject  such  Lender to any
unreimbursed cost or expense and would not otherwise be  disadvantageous to such
Lender. The Borrower hereby agrees to pay all costs and expenses incurred by any
Lender in connection with such designation or assignment.

                                       35
<PAGE>

                                  ARTICLE III

                          CONDITIONS PRECEDENT TO LOANS
                          -----------------------------

Section 3.1.      Conditions To  Effectiveness.
                  ----------------------------
    The  obligations  of the  Lenders to make Loans  hereunder  shall not become
effective until the date on which each of the following  conditions is satisfied
(or waived in accordance with Section 10.2).

    (a) The Administrative  Agent shall have received all fees and other amounts
due and payable to the  Administrative  Agent and the Lenders on or prior to the
Closing Date, including  reimbursement or payment of all out-of-pocket  expenses
(including  reasonable  fees,  charges  and  disbursements  of  counsel  to  the
Administrative  Agent)  required  to be  reimbursed  or  paid  by  the  Borrower
hereunder,  under any other  Loan  Document  and  under any  agreement  with the
Administrative  Agent or SunTrust Robinson Humphrey Capital Markets,  a division
of SunTrust Capital  Markets,  Inc., as Sole Lead Arranger.  The  Administrative
Agent shall  provide  the  Borrower  with an estimate of all such fees  incurred
through the Closing  Date and other  amounts due and payable at closing no later
than 2 Business  Days  prior to the  Closing  Date;  provided  however  that the
failure of any  additional  reasonable  fees or other  reasonable  amounts to be
included in such estimate  shall not relieve the Borrower of its  obligations to
pay all such amounts  after the Closing  Date upon  presentation  of  applicable
statements or invoices therefor.

    (b) The  Administrative  Agent shall have received the following  (except to
the extent otherwise expressly provided in the Post-Closing Agreement):

          (i) a  counterpart  of this  Agreement  signed by or on behalf of each
     party hereto or written evidence  satisfactory to the Administrative  Agent
     (which may include telecopy transmission of a signed signature page of this
     Agreement) that such party has signed a counterpart of this Agreement;

          (ii) a duly executed Note payable to each Lender requesting such Note;

          (iii) the duly executed Guaranty Agreement and Contribution Agreement;

          (iv)  evidence  that the  Borrower's  Existing  Credit  Agreement  and
     Existing  Synthetic Leases and related financing  agreements and collateral
     instruments  are being  terminated and released,  that all interest,  fees,
     principal,  rents,  and other  amounts  owing under the Existing  Synthetic
     Leases and related  financing  agreements  through the Closing Date will be
     paid in full  from  the  initial  Loans,  and  that  title  to all real and
     personal  property  subject  to the  Existing  Synthetic  Leases  has  been
     conveyed  to  the  Mortgagors   executing  and  delivering  the  respective
     Mortgages to the Collateral  Agent, all such conveyances and releases to be
     in form satisfactory to the  Administrative  Agent,  together with evidence
     reasonably satisfactory to the Administrative Agent that

                                       36
<PAGE>

     arrangements  have  been made for the  recording  of such  conveyances  and
     releases and payment of all filing and recording fees, costs, and expenses,
     including all transfer taxes and other amounts payable in respect thereof;

          (v) the duly  executed  Collateral  Documents,  together with evidence
     satisfactory to the  Administrative  Agent that arrangements have been made
     for the recording of such Collateral Documents as applicable and payment of
     all filing and recording fees, costs, and expenses, including all mortgage,
     documentary  stamp,  intangibles  and other  taxes and  amounts  in respect
     thereof;

          (vi) with respect to each of the Mortgaged  Non-Retail  Properties,  a
     current  ALTA ACSM  as-built  survey of such  property  which  includes the
     Minimum  Standard  Detail  Requirements  adopted  by ALTA and ACSM in 1999,
     prepared by a land surveyor  registered and licensed in the State where the
     applicable  Mortgaged  Non-Retail  Property is located,  together  with the
     certificate of such land surveyor,  in form and substance  satisfactory  to
     the Administrative  Agent; and with respect to each of the Mortgaged Retail
     Properties, the existing boundary survey of such property;

          (vii) fully paid ALTA mortgagee title  insurance  policies in form and
     substance  acceptable to the  Administrative  Agent (in each case including
     such  endorsements and affirmative  coverages as the  Administrative  Agent
     shall specify) in respect of each of the Mortgaged Properties,  issued by a
     title insurance company reasonably  acceptable to the Administrative  Agent
     and insuring  the  Collateral  Agent's  lien on and  security  title to the
     Mortgaged  Property  as a valid  first  priority  lien and  security  title
     therein,  subject  only  to  such  encumbrances  and  exceptions  as may be
     approved by the Administrative  Agent;  provided that the mortgagee's title
     insurance  policy may be delivered after the Closing Date if on the Closing
     Date the title  insurance  company  delivers  to the  Administrative  Agent
     currently  effective duly executed "marked up" title insurance  commitments
     and irrevocably commits in writing to issue the mortgagee's title insurance
     policies  in the  form  of the  "marked  up"  title  insurance  commitments
     promptly after the Closing Date;

          (viii) copies of the zoning letters and/or  certificates  of occupancy
     issued in respect of each of the Mortgaged Properties;

          (ix) with respect to each of the Mortgaged  Properties,  copies of the
     Phase I and, if applicable,  Phase II Environmental  Site Assessment Report
     obtained at the time such  property  was acquired for lease to the Borrower
     or its Subsidiaries  pursuant to the Existing Synthetic Leases, all in form
     and substance reasonably satisfactory to the Administrative Agent;

          (x)  certificates of insurance,  all in form and detail  acceptable to
     the  Administrative  Agent,  describing  the types and amounts of insurance
     (property and  liability)  covering the  properties of the Borrower and its
     Subsidiaries,  and in each case with respect to  insurance  relating to the
     Mortgaged  Properties,  naming the Collateral Agent as mortgagee/loss payee
     or additional  insured,  as the case may be,  together with a lender's loss
     payable   endorsement   in  form   and   substance   satisfactory   to  the
     Administrative Agent;

                                       37
<PAGE>

          (xi)  the  duly  executed  agreement  of  the  Development   Authority
     consenting  to the  Mortgage  on the  leasehold  title and  interest in the
     Headquarters  Property  and  joining  in the  grant  of such  Mortgage  for
     purposes of subordinating and subjecting the Development  Authority's title
     therein to the Mortgage;

          (xii) a certificate  of the  Secretary or Assistant  Secretary of each
     Loan  Party,  attaching  and  certifying  copies of its  bylaws  and of the
     resolutions  of its  board  of  directors,  or other  comparable  governing
     documents  and  authorizations,  authorizing  the  execution,  delivery and
     performance of the Loan Documents to which it is a party and certifying the
     name, title and true signature of each officer of such Loan Party executing
     the Loan Documents to which it is a party;

          (xiii)  certified  copies of the  articles of  incorporation  or other
     organizational  documents of each Loan Party, together with certificates of
     good standing or existence, as may be available from the Secretary of State
     of the  jurisdiction of  incorporation  or formation of such Loan Party and
     each other  jurisdiction  where such Loan Party is required to be qualified
     to do business as a foreign corporation;

          (xiv) the  favorable  written  opinions of (i) Paul,  Frank & Collins,
     (ii) Bass,  Berry & Sims,  (iii)  Frost Brown  Todd,  and (iv)  Debevoise &
     Plimpton,   each  as  counsel  to  the  Loan  Parties,   addressed  to  the
     Administrative  Agent,  the  Issuing  Bank,  and each of the  Lenders,  and
     covering such matters relating to the Loan Parties,  the Loan Documents and
     the transactions  contemplated  therein as the Administrative  Agent or the
     Required Lenders shall reasonably request;

          (xv) the favorable  written  opinions of local counsel for the Lenders
     engaged by the Administrative  Agent in each of the jurisdictions where the
     Mortgaged Properties are located, addressed to the Administrative Agent and
     each of the Lenders,  and covering such matters  relating to the Collateral
     Documents and other matters  relating to the Mortgaged  Properties  and the
     transactions contemplated in the Loan Documents as the Administrative Agent
     or the Required Lenders shall reasonably request;

          (xvi)  a  certificate,   dated  the  Closing  Date  and  signed  by  a
     Responsible Officer, confirming compliance with the conditions set forth in
     paragraphs (a), (b) and (c) of Section 3.2;
                                    -----------
          (xvii)  evidence  satisfactory  to the  Administrative  Agent  that no
     withdrawal  of the  Borrower's  Moody's  Rating or S&P Rating has  occurred
     after March 11, 2002;

          (xviii)  evidence  satisfactory to the  Administrative  Agent that the
     Borrower's actual Consolidated  EBITDAR for the Fiscal Year ending February
     1, 2002, as reflected in Borrower's audited year-end financial  statements,
     was not less than $669,000,000;

          (xix) a certified  copy of the  Indenture  and all  modifications  and
     amendments thereto;

          (xx) a duly executed Notice of Borrowing;

                                       38
<PAGE>

          (xxi) a duly executed funds disbursement agreement;

          (xxii)  certified copies of all consents,  approvals,  authorizations,
     registrations  and filings and orders  required or  advisable to be made or
     obtained under any Requirement of Law, or by any Contractual  Obligation of
     each Loan Party, in connection with the execution,  delivery,  performance,
     validity  and   enforceability   of  the  Loan  Documents  or  any  of  the
     transactions   contemplated   thereby,   and  such   consents,   approvals,
     authorizations,  registrations,  filings and orders  shall be in full force
     and effect and all applicable waiting periods shall have expired;

          (xxiii) copies of the  consolidated  financial  statements of Borrower
     and its Subsidiaries for the 2000 and 2001 Fiscal Years,  including balance
     sheets,  income  and cash flow  statements  audited by  independent  public
     accountants of recognized national standing and prepared in conformity with
     GAAP and such other financial  information as the Administrative  Agent may
     reasonably request; and

    (xxiv) the duly executed Post-Closing Agreement.

    (c) The  Borrower  and all other  parties  thereto  shall have  executed and
delivered  the 3-Year  Credit  Agreement,  which shall be in form and  substance
satisfactory  to the  Administrative  Agent and the  Required  Lenders,  and the
Administrative  Agent and the Required  Lenders  shall have  received  certified
copies  thereof,  together with evidence  that all  conditions  precedent to the
effectiveness  thereof have been satisfied and all transactions  contemplated by
the 3-Year Credit Agreement have been consummated.

Section 3.2.      Each  Credit  Event.
                  -------------------
    The  obligation  of  each  Lender  to  make a Loan  on the  occasion  of any
Borrowing  (other  than a Borrowing  consisting  solely of a  continuation  or a
conversion  of  a  Borrowing   already  then  outstanding)  is  subject  to  the
satisfaction of the following conditions:

    (a) at the time of and immediately  after giving effect to such Borrowing no
Default or Event of Default shall exist; and

    (b) all  representations  and warranties of each Loan Party set forth in the
Loan Documents  shall be true and correct in all material  respects on and as of
the date of such Borrowing, before and after giving effect thereto;

    (c) since  the date of the  audited  financial  statements  of the  Borrower
described  in Section  4.4,  there shall have been no change which has had or is
              ------------
reasonably likely to have a Material Adverse Effect; and

    (d) the  Administrative  Agent  shall have  received  such other  documents,
certificates,  information or legal opinions as the Administrative  Agent or the
Required Lenders may reasonably  request,  all in form and substance  reasonably
satisfactory to the Administrative Agent.

Each Borrowing  shall be deemed to constitute a  representation  and warranty by
the Borrower on the date thereof as to the matters  specified in paragraphs (a),
(b) and (c) of this Section 3.2.
                    -----------

                                       39
<PAGE>

    Section 3.3. Delivery of Documents.
                 ---------------------
    All of the Loan Documents, certificates,
legal opinions and other  documents and papers  referred to in this Article III,
unless otherwise  specified,  shall be delivered to the Administrative Agent for
the  account of each of the Lenders  and,  except for the Notes,  in  sufficient
counterparts  or  copies  for  each of the  Lenders  and  shall  be in form  and
substance satisfactory in all respects to the Administrative Agent.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

    The Borrower  represents and warrants to the  Administrative  Agent and each
Lender as follows:

    Section 4.1.  Existence;  Power.
                  -----------------
    Except  as  described  on  Schedule  4.1,  the  Borrower  and  each  of  its
Subsidiaries (i) is duly organized,  validly existing and in good standing under
the  laws of the  jurisdiction  of its  organization,  (ii)  has  all  requisite
corporate or other  organizational  power and authority to carry on its business
as now  conducted,  and (iii) is duly  qualified to do business,  and is in good
standing,  in each  jurisdiction  where such  qualification is required,  except
where a  failure  to be so  qualified  is not  reasonably  likely to result in a
Material Adverse Effect.

    Section 4.2. Organizational Power;  Authorization.
                 ------------------------------------
    The  execution,  delivery  and  performance  by each Loan  Party of the Loan
Documents  to which it is a party are within  such Loan  Party's  organizational
powers and have been duly  authorized  by all necessary  organizational  action,
including if required, action of its stockholders,  partners,  members, or other
owners,  as the case may be. This  Agreement  and each other Loan  Document have
been duly executed and delivered by the Borrower and the other Loan Parties,  as
the case may be, and constitute valid and binding obligations of the Borrower or
such Loan Party (as the case may be),  enforceable against it in accordance with
their  respective  terms,  except as may be  limited by  applicable  bankruptcy,
insolvency,   reorganization,   moratorium,   or  similar  laws   affecting  the
enforcement of creditors' rights generally and by general principles of equity.

    Section 4.3. Governmental Approvals; No Conflicts.
                 ------------------------------------
    The execution,  delivery and  performance by the Borrower of this Agreement,
and by each Loan Party of the other Loan Documents to which it is a party (i) do
not require any consent or approval  of,  registration  or filing  with,  or any
action by, any  Governmental  Authority,  except those as have been  obtained or
made and are in full force and effect (ii) will not violate any applicable  law,
rule or regulation or the charter,  by-laws or other organizational documents of
the Borrower or any of its Subsidiaries or any judgment,  order or ruling of any
Governmental Authority,  (iii) will not violate or result in a default under the
Indenture or any other indenture,  mortgage, loan or credit agreement,  lease or
financing  agreement,  or other material  agreement or instrument binding on the
Borrower or any of its Subsidiaries or any of its assets or give rise to a right
thereunder  to  require  any  payment to be made by the  Borrower  or any of its
Subsidiaries, and

                                       40
<PAGE>

(iv) will not result in the creation or  imposition  of any Lien on any asset of
the Borrower or any of its Subsidiaries, except Liens (if any) created under the
Loan Documents.

    Section 4.4. Financial Statements.
                 --------------------
    The  Borrower  has  furnished  to each Lender (i) the  audited  consolidated
balance  sheet of the Borrower and its  Subsidiaries  as of February 1, 2002 and
the related  consolidated  statements of income,  shareholders'  equity and cash
flows for the Fiscal Year then ended prepared by Ernst & Young LLP ,and (ii) the
unaudited  consolidated balance sheet of the Borrower and its Subsidiaries as at
May 3, 2002,  and the related  unaudited  consolidated  statements of income and
cash flows for the Fiscal Quarter and year-to-date period then ending, certified
by a  Responsible  Officer.  Such  financial  statements  fairly  present in all
material respects the consolidated  financial  condition of the Borrower and its
Subsidiaries  as of such dates and the  consolidated  results of operations  for
such periods in conformity with GAAP consistently  applied,  subject to year-end
audit  adjustments  and the  absence  of  notes  in the  case of the  statements
referred to in clause  (ii).  None of the Borrower or its  Subsidiaries  has any
material  contingent  obligations or  liabilities,  or material  liabilities for
known  taxes,  long-term  leases or  unusual  forward or  long-term  commitments
required by GAAP to be reflected in the  foregoing  financial  statements or the
notes  thereto  that are not so  reflected.  Since  February 1, 2002 through the
Closing  Date,  there have been no changes  with respect to the Borrower and its
Subsidiaries which have had or are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect.

    Section 4.5. Litigation and Environmental Matters.
                 ------------------------------------
    (a) Except as may be disclosed on Schedule 4.5, no litigation, investigation
                                      ------------
or  proceeding  of or  before  any  arbitrators,  courts  or other  Governmental
Authorities is pending against or, to the knowledge of the Borrower,  threatened
against or  affecting  the Borrower or any of its  Subsidiaries  (i) as to which
there is a reasonable possibility of an adverse determination that is reasonably
likely to  materially  impair the value of any  Mortgaged  Property or otherwise
have,  either  individually or in the aggregate,  a Material Adverse Effect,  or
(ii) that in any manner draws into  question the validity or  enforceability  of
this Agreement or any other Loan Document.

    (b)  Neither  the  Borrower  nor any of its  Subsidiaries  (i) has failed to
comply  with any  Environmental  Law or to obtain,  maintain  or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become the subject of any Environmental Liability,  (iii) has received notice of
any claim with respect to any Environmental Liability or (iv) knows of any basis
for any Environmental  Liability,  which in the case of any Mortgaged Non-Retail
Property is reasonably  likely to materially  impair the value of such property,
or in the case of any  Mortgaged  Retail  Properties  is  reasonably  likely to,
individually or in the aggregate, result in a Material Adverse Effect.

    Section 4.6.  Compliance  with Laws.
                  ---------------------
    The Borrower and each Subsidiary is in compliance with all applicable  laws,
rules,  regulations,  judgments and orders of any Governmental  Authority except
where non-

                                       41
<PAGE>

compliance, either individually or in the aggregate, is not reasonably likely to
result in a Material Adverse Effect.

Section 4.7.      Investment  Company  Act,  Etc.
                  ------------------------------
    Neither  the  Borrower  nor any of its  Subsidiaries  is (i) an  "investment
company"  or is  "controlled"  by an  "investment  company",  as such  terms are
defined in, or subject to regulation under, the Investment  Company Act of 1940,
as amended,  or (ii) a "holding company" as defined in, or subject to regulation
under,  the Public  Utility  Holding  Company  Act of 1935,  as  amended,  which
prohibits  its  ability to incur or  consummate  the  transactions  contemplated
hereby,  and neither the Borrower nor any Subsidiary is otherwise subject to any
other regulatory limitations of any Governmental Authority affecting its ability
to incur or guarantee debt as contemplated hereby or by any other Loan Document.

Section 4.8.      Taxes.
                  -----
    (a) The Borrower and its  Subsidiaries and each other Person for whose taxes
the Borrower or any  Subsidiary  could become liable have timely filed or caused
to be filed all Federal and state tax  returns  except as noted in this  Section
                                                                         -------
4.8 and all other  material  tax returns  that are required to be filed by them,
---
and have paid all taxes (other than local and municipal taxes and assessments in
an  aggregate  amount not to exceed  $1,000,000)  shown to be due and payable on
such returns or on any assessments made against it or its property and all other
taxes,  fees  or  other  charges  imposed  on it or any of its  property  by any
Governmental  Authority,  except where the same are currently being contested in
good  faith by  appropriate  proceedings  and for  which  the  Borrower  or such
Subsidiary,  as the case may be, has set aside on its books adequate reserves in
accordance with GAAP. As of the Closing Date, the charges, accruals and reserves
on the books of the Borrower and its  Subsidiaries  in respect of such taxes are
adequate,  and no tax  liabilities  that  could be  materially  in excess of the
amount so provided are anticipated.

    (b) The Borrower and its  Subsidiaries  have not filed their federal,  state
and local  income,  franchise  and excise tax  returns for the Fiscal Year ended
February 2, 2001. Based on their preliminary analysis of their tax liability for
such year, the Borrower and its Subsidiaries reasonably believe that no material
amounts will be owed with the filing of those returns,  and the Borrower and its
Subsidiaries  have paid all estimated  taxes for such year. The Borrower and its
Subsidiaries  have  properly  extended the time for filing and have made or will
make arrangements for filing in a timely manner, their federal,  state and local
income,  franchise and excise tax returns for the Fiscal Year ended  February 1,
2002 and have paid all estimated taxes for such year.

..

    Section 4.9.  Margin  Regulations.
                  -------------------
    None of the  proceeds of any of the Loans will be used for  "purchasing"  or
"carrying" any "margin stock" with the respective meanings of each of such terms
under  Regulation U of the Board of Governors of the Federal Reserve System,  as
the same may be in effect from time to time and any successor regulation, or for
any purpose that would result in a violation of the  provisions of Regulation U.
If  requested  by the  Administrative  Agent or any

                                       42
<PAGE>

Lender,  the  Borrower  will  furnish the  requesting  party a statement  to the
foregoing effect in conformity with the requirements of Regulation U.

Section 4.10.     ERISA.  Except as may be disclosed on Schedule 4.10:
                  -----                                 -------------

    (a) None of the  Borrower  or its  Subsidiaries  or their  respective  ERISA
Affiliates  maintains or  contributes  to, or has during the past five (5) years
maintained or contributed to, any Plan that is subject to Title IV of ERISA;

    (b) Each Plan maintained by the Borrower or any of its Subsidiaries or their
respective ERISA Affiliates has at all times been maintained, by their terms and
in operation,  in compliance with all applicable  laws, and none of such Persons
are subject to tax or penalty with respect to any such Plan,  including  without
limitation,  any tax or  penalty  under  Title I or  Title  IV of ERISA or under
Chapter 43 of the Code, or any tax or penalty resulting from a loss of deduction
under  Sections 162,  401, or 419 of the Code,  where the failure to comply with
such  laws,  and such  taxes  and  penalties,  taken as a whole  with all  other
liabilities  referred to in this Section 4.10,  is in the  aggregate  reasonably
                                 ------------
likely to have a Material Adverse Effect;

    (c)  Neither  the  Borrower  nor  any  of its  Subsidiaries  is  subject  to
liabilities (including Withdrawal  Liabilities) with respect to any of its Plans
or the Plans of any of its ERISA Affiliates,  including without limitation,  any
liabilities arising from Title I or Title IV of ERISA, other than obligations to
fund benefits under an on-going Plan and to pay current contributions,  expenses
and premiums  with  respect to such Plans,  where such  liabilities,  taken as a
whole with all other  liabilities  referred to in this Section  4.10,  is in the
                                                       -------------
aggregate reasonably likely to have a Material Adverse Effect;

    (d) The Borrower and its Subsidiaries  and, with respect to any Plan that is
subject to Title IV of ERISA,  each of their respective ERISA  Affiliates,  have
made full and timely payment of all amounts (i) required to be contributed under
the terms of each  Plan and  applicable  law,  and (ii)  required  to be paid as
expenses of each Plan,  where the failure to pay such  amounts  (when taken as a
whole,  including  any  penalties  attributable  to such  amounts) is reasonably
likely to have a Material  Adverse Effect.  No Plan subject to Title IV of ERISA
has  an  "amount  of  unfunded  benefit  liabilities"  (as  defined  in  Section
4001(a)(18)  of ERISA),  determined  as if such Plan  terminated  on any date on
which this  representation  and  warranty is deemed made,  in any amount  which,
taken as a whole with all other liabilities referred to in this Section 4.10, is
                                                                ------------
reasonably likely to have a Material Adverse Effect if such amount were then due
and  payable.  Neither the Borrower  nor any of its  Subsidiaries  is subject to
liabilities  with  respect to  post-retirement  medical  benefits in any amounts
which,  taken as a whole with all other liabilities  referred to in this Section
                                                                         -------
4.10,  could have a Material  Adverse  Effect if such  amounts were then due and
----
payable; and

    (e) No ERISA  Event has  occurred or is  reasonably  expected to occur that,
when taken  together  with all other such ERISA  Events for which  liability  is
reasonably  expected  to occur,  is  reasonably  likely to result in a  Material
Adverse Effect. The present value of all accumulated  benefit  obligations under
each Plan (based on the assumptions  used for purposes of Statement of Financial
Standards  No.  87)  did  not,  as of the  date  of the  most  recent  financial
statements  reflecting such amounts,  exceed the fair market value of the assets
of such Plan, and the present value of all  accumulated  benefit  obligations of
all underfunded  Plans (based on the assumptions  used for purposes of Statement
of  Financial  Standards  No.  87) did not,  as of the  date of the most  recent
financial

                                       43
<PAGE>

statements  reflecting such amounts,  exceed the fair market value of the assets
of all such underfunded Plans.

Section 4.11.     Ownership of Property.
                  ---------------------
    (a) Each of the Borrower and its  Subsidiaries  has good and  marketable fee
simple title to, or a valid leasehold interest in, all of its real property, and
good title to or valid  leasehold  interest in all of its personal  property and
other assets, all as such real and personal property and assets are reflected in
the  consolidated  balance  sheet of the  Borrower  described  in clause (ii) of
Section 4.4,  except for properties or assets disposed of in the ordinary course
-----------
of  business  since  such date or as  otherwise  permitted  by the terms of this
Agreement  and where the failure to hold such title,  leasehold or possession is
not reasonably  likely to have a Material  Adverse Effect,  and the Borrower and
its  Subsidiaries  enjoy peaceful and undisturbed  possession under all of their
respective  leases of real and  personal  property,  except where the failure to
enjoy peaceful and  undisturbed  possession is not  reasonably  likely to have a
Material Adverse Effect.  None of such real or personal property or other assets
is  subject  to any  Liens  which  secure  obligations  in  excess  of  $250,000
individually  or  $5,000,000  in the  aggregate as of the Closing Date except as
described on Schedule 7.2 or other Permitted Encumbrances.
             ------------

    (b) Each of the  Borrower and its  Subsidiaries  owns,  or is  licensed,  or
otherwise  has the  right,  to use,  all  patents,  trademarks,  service  marks,
tradenames,  copyrights,  franchises,  licenses, and other intellectual property
material  to its  business,  and  the  use  thereof  by  the  Borrower  and  its
Subsidiaries does not infringe on the rights of any other Person, except for any
such  infringements  that,  individually or in the aggregate,  is not reasonably
likely to have a Material Adverse Effect.

    Section  4.12.  Insurance.
                    ---------
    The Borrower and its Subsidiaries currently maintain, and have maintained at
all times during the previous five years,  such  insurance with respect to their
properties and business with financially sound and reputable  insurers,  in such
amounts and having such coverages  against losses and damages which the Borrower
in the exercise of its reasonable prudent business judgment has determined to be
necessary to prevent the Borrower and its Subsidiaries  from experiencing a loss
that is reasonably  likely to have a Material  Adverse Effect.  The Borrower and
its  Subsidiaries  have paid all material  insurance  premiums now due and owing
with respect to such  insurance  policies and  coverages,  and such policies and
coverages are in full force and effect.

Section 4.13.     Disclosure.
                  ----------

    As of the  Closing  Date,  the  Borrower  has  identified  in a  certificate
delivered to the  Administrative  Agent on the Closing Date (i) all  agreements,
instruments, and corporate or other restrictions to which the Borrower or any of
its   Subsidiaries  is  subject  where  the  breach  of  any  such   agreements,
instruments,  and corporate or other restrictions is reasonably likely to result
in a Material Adverse Effect, (ii) all agreements,  instruments and corporate or
other  restrictions to which the Borrower or any of its  Subsidiaries is subject
when performed by their  respective

                                       44
<PAGE>

terms are reasonably  likely to result in a Material  Adverse Effect,  (iii) and
all other matters known to any of them, that,  individually or in the aggregate,
is  reasonably  likely to result  in a  Material  Adverse  Effect.  Neither  the
information   furnished  by  the  Borrower  for  inclusion  in  the  Information
Memorandum nor any of the reports (including without limitation all reports that
the Borrower is required to file with the Securities  and Exchange  Commission),
financial  statements,  certificates  or other  information  furnished  by or on
behalf of the Borrower to the  Administrative  Agent or any Lender in connection
with the negotiation or syndication of this Agreement or any other Loan Document
(including without  limitation,  all information  furnished or made available in
respect of the Shareholder  Settlements and the SEC  Investigation) or otherwise
delivered  hereunder or  thereunder  (as modified or  supplemented  by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact  necessary to make the  statements  therein,  taken as a
whole, in light of the circumstances under which they were made, not misleading.
It is  understood  that no  representation  or warranty is made  concerning  any
forecasts,  estimates,  pro forma information,  projections and statements as to
anticipated  future  performance  or conditions  contained in any such financial
statements, certificates or documents except that as of the date such forecasts,
estimates, pro forma information, projections and statements were generated, (i)
such forecasts,  estimates,  pro forma  information,  projections and statements
were based on the good faith  assumptions  of the management of the Borrower and
(ii) such  assumptions  were believed by such management to be reasonable.  Such
forecasts,  estimates, pro forma information and statements, and the assumptions
on which they were based, may or may not prove to be correct.

    Section  4.14.  Labor  Relations.
                    ----------------
    There  are  no  strikes,  lockouts  or  other  material  labor  disputes  or
grievances  against  the  Borrower  or  any  of  its  Subsidiaries,  or,  to the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries,  and no significant  unfair labor practice,  charges or grievances
are  pending  against  the  Borrower  or  any  of  its  Subsidiaries,  or to the
Borrower's  knowledge,  threatened  against any of them before any  Governmental
Authority  that are reasonably  likely to have a Material  Adverse  Effect.  All
payments  due from  the  Borrower  or any of its  Subsidiaries  pursuant  to the
provisions of any collective bargaining agreement have been paid or accrued as a
liability on the books of the Borrower or any such Subsidiary,  except where the
failure to do so is not reasonably likely to have a Material Adverse Effect.

    Section 4.15. Status of Certain Agreements and Other Matters.
                  -----------------------------------------------
    (a)  None  of the  Borrower  or its  Subsidiaries  is in  default  which  is
continuing  under or with  respect  to any  Contractual  Obligation,  including,
without  limitation,  the  Indenture,  or any  Requirement of Law in any respect
which has had or is reasonably likely to have a Material Adverse Effect. Without
limiting  the  foregoing,  as of the Closing  Date,  none of the Borrower or its
Subsidiaries  has received any notice or claim as to the existence or occurrence
of any  unwaived  default or breach by the  Borrower or any of its  Subsidiaries
under the provisions of the Indenture or any other indenture,  mortgage, loan or
credit agreement,  lease or financing agreement,  or other material agreement or
instrument  binding on the Borrower or any of its  Subsidiaries  or any of their
respective properties.

                                       45
<PAGE>

    (b) None of the  Subsidiaries  is party to or  subject to any  agreement  or
arrangement  restricting  or  limiting  the  payment of any  dividends  or other
distributions  by such Subsidiary to the Borrower or any other  Subsidiary,  the
repayment of any loans or advances  made to such  Subsidiary  by the Borrower or
any other Subsidiary, or the sale or transfer by the Subsidiary of any assets to
the Borrower or any other Subsidiary.

    (c) The Borrower has  furnished  to the  Administrative  Agent a correct and
complete copy of each  agreement or instrument  evidencing  Indebtedness  of the
Borrower or any Subsidiary in each case in an amount  greater than  $10,000,000,
including all amendments,  modifications,  and  supplements  that have been made
with respect thereto, in each case as of the Closing Date.

Section 4.16.     Subsidiaries.
                  ------------

    (a)  Schedule  4.16 sets forth the name of, the  ownership  interest  of the
         --------------
Borrower  in,  the  jurisdiction  of  organization  of,  and the type  of,  each
Subsidiary, as of the Closing Date.

    (b)  On the  Closing  Date  and  after  giving  effect  to the  transactions
contemplated by this Agreement and the other Loan  Documents,  (i) the assets of
each Subsidiary at fair valuation and based on their present fair saleable value
will  exceed  such  Subsidiary's  debts  including  contingent  liabilities  but
excluding  intercompany debt among the Loan Parties,  (ii) the remaining capital
of such Subsidiary will not be unreasonably  small to conduct such  Subsidiary's
business,  and (iii)  such  Subsidiary  will not have  incurred  debts,  or have
intended to incur debts,  beyond the  Subsidiary's  ability to pay such debts as
they mature.  For purposes of this Section 4.16, "debt" means any liability on a
                                   ------------
claim, and "claim" means (x) the right to payment,  whether or not such right is
reduced to  judgment,  liquidated,  unliquidated,  fixed,  contingent,  matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (y)
the right to an equitable  remedy for breach of performance if such breach gives
rise to a right to payment,  whether or not such right to an equitable remedy is
reduced  to  judgment,   fixed,  contingent,   matured,   unmatured,   disputed,
undisputed, secured or unsecured.

                                   ARTICLE V

                              AFFIRMATIVE COVENANTS
                              ---------------------

    The  Borrower  covenants  and  agrees  that  so  long  as any  Lender  has a
Commitment  in effect  hereunder or the principal of and interest on any Loan or
any fee remains unpaid:

    Section 5.1. Financial  Statements and Other Information.
                 -------------------------------------------
    The Borrower will deliver to the Administrative Agent and each Lender:

    (a) as soon as  reasonably  available and in any event within 100 days after
the end of each Fiscal Year, a copy of the annual audited  financial  statements
for such  Fiscal  Year  for the  Borrower  and its  Subsidiaries,  containing  a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such   Fiscal  Year  and  the  related   consolidated   statements   of  income,
stockholders'  equity and cash flows  (together  with all notes  thereto) of the
Borrower and

                                       46
<PAGE>

its Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the figures for the previous  Fiscal  Year,  all in  reasonable  detail and
reported  on by Ernst & Young LLP or other  independent  public  accountants  of
nationally recognized standing (without a "going concern" or like qualification,
exception or explanation  and without any  qualification  or exception as to the
scope of such audit) to the effect that such financial statements present fairly
in all material  respects the financial  condition and the results of operations
of the  Borrower  and its  Subsidiaries  for such Fiscal Year on a  consolidated
basis in accordance  with GAAP and that the  examination by such  accountants in
connection  with  such  consolidated  financial  statements  has  been  made  in
accordance with generally accepted auditing standards;

    (b) as soon as  reasonably  available  and in any event within 50 days after
the end of each of the first  three  Fiscal  Quarters of each  Fiscal  Year,  an
unaudited  consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such Fiscal Quarter and the related unaudited consolidated statements
of income and cash flows of the  Borrower and its  Subsidiaries  for such Fiscal
Quarter and the then elapsed portion of such Fiscal Year,  setting forth in each
case in comparative  form the figures for the  corresponding  Fiscal Quarter and
the corresponding  portion of Borrower's  previous Fiscal Year, all certified by
the chief financial officer of the Borrower as presenting fairly in all material
respects the  financial  condition and results of operations of the Borrower and
its  Subsidiaries on a consolidated  basis in accordance  with GAAP,  subject to
normal year-end audit adjustments and the absence of notes;

    (c) concurrently with the delivery of the financial  statements  referred to
in clauses (a) and (b) above,  a certificate of the chief  financial  officer of
the  Borrower,  (i)  certifying as to whether there exists a Default or Event of
Default on the date of such certificate, and if a Default or an Event of Default
then exists,  specifying  the details  thereof and the action which the Borrower
has taken or  proposes  to take with  respect  thereto,  (ii)  setting  forth in
reasonable  detail  calculations  demonstrating  compliance with Article VI, and
                                                                 ----------
(iii) stating  whether any material  change in GAAP or the  application  thereof
affecting such financial  statements or calculations has occurred since the date
of the Borrower's audited financial  statements  referred to in Section 4.4 and,
if any  change  has  occurred,  specifying  the  effect  of such  change  on the
financial statements accompanying such certificate or the calculations set forth
therein;

    (d) concurrently with the delivery of the financial  statements  referred to
in clause (a) above, any comment or management letter or report submitted by the
accounting firm that reported on such financial statements, and a certificate of
such  accounting  firm stating  whether they obtained any  knowledge  during the
course of their examination of such financial statements of any Default or Event
of  Default  (which  certificate  may be  limited  to  the  extent  required  by
accounting rules or guidelines);

    (e) as soon as  available  and in any event  within 15 days after the end of
each fiscal month during which the  financial  covenant set forth in Section 6.3
                                                                     -----------
remains in effect a certificate of the chief  financial  officer of the Borrower
setting  forth in  reasonable  detail (i) the  Eligible  Inventory  owned by the
Borrower  and a  categorical  breakdown  (based on the  definitions  of Eligible
Inventory) of all Eligible  Inventory as of such date, (ii) Consolidated  Funded
Debt as of such  date,  and (iii)  calculations  demonstrating  compliance  with
Section 6.3 for such fiscal month;
-----------

                                       47
<PAGE>

    (f)  promptly  (and in no event later than 5 Business  Days)  provide to the
Administrative Agent upon the written request of the Administrative Agent or any
Lender,  copies of any specified  periodic and other reports  (including without
limitation,  all reports filed on Forms 8-K, 10-Q, and 10-K),  proxy  statements
and other  materials  filed by the  Borrower  with the  Securities  and Exchange
Commission,  or any Governmental Authority succeeding to any or all functions of
said Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and

    (g)  promptly  following  any  request  therefor,   such  other  information
regarding the results of operations, business affairs and financial condition of
the Borrower or any  Subsidiary  as the  Administrative  Agent or any Lender may
reasonably request.

    Section 5.2.  Notices of Material  Events.
                  ---------------------------
    The  Borrower  will  furnish  to the  Administrative  Agent and each  Lender
reasonably  prompt written notice (given in no event later than 5 Business Days)
of the following:

    (a)  after  a  Responsible  Officer  of  the  Borrower  knows  thereof,  the
occurrence of any Default or Event of Default;

    (b) after a Responsible Officer of the Borrower knows thereof, the filing or
commencement  of any action,  suit or  proceeding  by or before any  arbitrator,
court or other  Governmental  Authority  against  or,  to the  knowledge  of the
Borrower,   affecting  the  Borrower  or  any  Subsidiary  which,  if  adversely
determined  (but excluding any action,  suit or proceeding  where the Borrower's
management  has  determined  in good faith  after  reasonable  inquiry  that the
likelihood of any adverse  determination  is remote),  is  reasonably  likely to
result in a Material Adverse Effect;

    (c)  after  a  Responsible  Officer  of  the  Borrower  knows  thereof,  the
occurrence of any event or any other development by which the Borrower or any of
its  Subsidiaries (i) fails to comply with any  Environmental  Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental  Law, (ii) becomes subject to any Environmental  Liability,  (iii)
receives  notice of any claim with respect to any  Environmental  Liability,  or
(iv) becomes aware of any basis for any Environmental  Liability, and in each of
the  preceding  clauses,  which  individually  or in the aggregate is reasonably
likely to result in a Material Adverse Effect;

    (d) the occurrence of any ERISA Event that alone, or together with any other
ERISA Events that have occurred,  is reasonably likely to result in liability of
the Borrower and its Subsidiaries in an aggregate amount exceeding $10,000,000;

    (e) the effectiveness of any material amendment,  modification or supplement
to the Indenture;

    (f) the receipt by the Borrower or any of its  Subsidiaries of any notice or
claim  asserting  the existence or  occurrence  of (i) any default,  breach,  or
violation of the terms of the Indenture or any other indenture,  mortgage,  loan
or credit agreement, lease or financing arrangement, or other material agreement
or  instrument,  in any case  where the  Indebtedness

                                       48
<PAGE>

associated with any such agreement or instrument  exceeds  $10,000,000,  or (ii)
any  event  or  condition  that  would  require  or  permit  the  holder  of any
Indebtedness  of the Borrower or any of its  Subsidiaries  in an amount  greater
than $10,000,000 to exercise its rights to require the repayment,  redemption or
repurchase,  or other acquisition of such Indebtedness by the Borrower or any of
its Subsidiaries prior to the scheduled maturity thereof; and

    (g) any other development that results in, or is reasonably likely to result
in, a Material Adverse Effect.

Each notice  delivered  under this  Section  shall be  accompanied  by a written
statement of a  Responsible  Officer  setting  forth the details of the event or
development  requiring  such notice and any action taken or proposed to be taken
with respect thereto.

    Section 5.3.  Existence;  Conduct of Business.
                  -------------------------------
    The Borrower will, and will cause each of its Subsidiaries to, (i) preserve,
renew and  maintain  in full force and effect  its legal  existence,  (ii) do or
cause to be done all things reasonably necessary to preserve, renew and maintain
in full force and effect its respective rights, licenses,  permits,  privileges,
franchises,  patents,  copyrights,  trademarks  and trade names  material to the
conduct of its  business  and (iii)  continue to engage in the same  business as
presently  conducted  or such  other  businesses  that  are  reasonably  related
thereto;  provided,  that  nothing in this  Section  shall  prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.3.

    Section 5.4.  Compliance  with Laws,  Etc.
                  ---------------------------
    The Borrower will, and will cause each of its  Subsidiaries  to, comply with
all laws,  rules,  regulations and  requirements of any  Governmental  Authority
applicable  to  its  properties  and  business  operations  (including,  without
limitation, all Environmental Laws and all licenses,  permits, approvals, orders
and directives issued by Governmental Authorities pursuant to such Environmental
Laws, and all ERISA laws,  regulations and orders),  except where the failure to
do so, either  individually  or in the aggregate,  is not  reasonably  likely to
result in a Material Adverse Effect.

    Section 5.5.  Payment of Taxes and Other  Obligations.
                  ---------------------------------------
    Prior to October 15,  2002,  the Borrower  and its  Subsidiaries  shall file
their  federal,  state and local  income tax returns for the Fiscal  Years ended
February 2, 2001 and February 1, 2002. The Borrower will, and will cause each of
its  Subsidiaries  to,  pay and  discharge  at or  before  maturity,  all of its
obligations and liabilities  (including  without  limitation all tax liabilities
and claims that could  result in a statutory  Lien) before the same shall become
delinquent  or in default,  except where (i) the  validity or amount  thereof is
being contested in good faith by appropriate proceedings,  and (ii) the Borrower
or such  Subsidiary  has set aside on its books  adequate  reserves with respect
thereto in accordance with GAAP.

    Section 5.6.  Books and Records.
                  -----------------
    The Borrower will, and will cause each of its  Subsidiaries  to, keep proper
books of record and account in which full,  true and  correct  entries  shall be
made of all dealings and

                                       49
<PAGE>

transactions in relation to its business and activities to the extent  necessary
to prepare the consolidated  financial statements of Borrower in conformity with
GAAP.

    Section 5.7. Visitation,  Inspection, Etc.
                 ----------------------------
    The Borrower  will, and will cause each of its  Subsidiaries  to, permit any
representative  of the  Administrative  Agent or any Lender to visit and inspect
its properties,  and to discuss its affairs,  finances with any of its officers,
all at such  reasonable  times during normal  business hours and as often as the
Administrative Agent or any Lender may reasonably request after reasonable prior
notice to the Borrower;  provided,  however, if an Event of Default has occurred
and is continuing,  the Borrower  will, and will cause each of its  Subsidiaries
to, permit any representative of the Administrative Agent or any Lender to visit
and inspect its properties, to examine its books and records, and to make copies
and take extracts therefrom,  and to discuss its affairs,  finances and accounts
with any of its officers and with its independent  certified public accountants,
all at such  reasonable  times during normal  business hours and as often as the
Administrative  Agent or any Lender  may  reasonably  request  and with no prior
notice.

Section 5.8.      Maintenance  of  Properties;   Insurance.
                  -----------------------------------------
    The Borrower will, and will cause each of its  Subsidiaries to, (i) keep and
maintain  all  property  material to the conduct of its business in good working
order and condition, subject to ordinary wear and tear, except where the failure
to do so, either  individually or it the aggregate,  is not reasonably likely to
result in a Material Adverse Effect,  and (ii) maintain with  financially  sound
and reputable insurance companies,  insurance with respect to its properties and
business,  and the properties and business of its Subsidiaries,  against loss or
damage of the kinds  customarily  insured  against by  companies  in the same or
similar businesses operating in the same or similar locations.

Section 5.9.      Use of Proceeds
                  ---------------
    The Borrower will use a portion of the proceeds of the Loans advanced on the
Closing Date in an aggregate  principal amount of $95,000,000 to fund,  directly
or through  capital  contributions  made by the Borrower to DGI and DGI's use of
such  capital   contributions  to  fund  the  DGI  Loans,  the  refinancing  and
replacement  of a  portion  of the  existing  Indebtedness  under  the  Existing
Synthetic  Leases.  Thereafter,  proceeds  of any other  Loans  shall be used to
finance  working  capital needs and capital  expenditures  and for other general
corporate  purposes of the Borrower and its Subsidiaries  (including  funding of
draws under trade  letters of credit  issued for the account of the  Borrower or
its  Subsidiaries).  No part of the proceeds of any Loan, will be used,  whether
directly or indirectly,  for any purpose that would result in a violation of any
rule or  regulation  of the Board of  Governors of the Federal  Reserve  System,
including Regulations T, U or X.

Section 5.10.     Additional  Subsidiaries.
                  ------------------------
    (a) If any  additional  U.S.  Subsidiary  is  acquired  or formed  after the
Closing Date, the Borrower  will,  within ten (10) Business Days after such U.S.
Subsidiary  is  acquired  or  formed,  notify the  Administrative  Agent and the
Lenders  thereof and cause such  Subsidiary to become a Guarantor by joining the
Guaranty Agreement and the Contribution Agreement pursuant to joinder agreements
in  substantially  the form of Annex A to the Guaranty  Agreement and Annex A to
the   Contribution   Agreement  and  will  cause  such   Subsidiary  to

                                       50
<PAGE>

deliver simultaneously therewith similar documents applicable to such Subsidiary
required under Section 3.1 as requested by the Administrative Agent.

    (b) If any Foreign  Subsidiary is acquired or formed after the Closing Date,
the Borrower will,  within ten (10) Business Days after such Foreign  Subsidiary
is acquired or formed,  notify the Administrative  Agent and the Lenders thereof
and, unless  otherwise  agreed by the Required  Lenders,  the Borrower shall, or
shall cause its U.S. Subsidiary owning such Person, to pledge sixty-five percent
(65%) of each  class of voting  shares or  comparable  equity  interest  and one
hundred  percent (100%) of each class of nonvoting  shares or comparable  equity
interest  (or if such pledge of 100%  thereof  would have an adverse  income tax
consequence to the Borrower, sixty five percent (65%) of each class of nonvoting
shares  or  comparable  equity  interest)  owned by the  Borrower  or such  U.S.
Subsidiary to the Administrative  Agent as security for the Obligations pursuant
to a pledge agreement in form and substance  satisfactory to the  Administrative
Agent and the Required Lenders,  and to deliver the original stock  certificates
evidencing  such shares or  comparable  equity  interest  to the  Administrative
Agent,  together with appropriate  transfer powers executed in blank and Uniform
Commercial Code financing statements.

Section 5.11.     Further Assurances.
                  ------------------
    (a) The Borrower will, and will cause each Guarantor to, execute any and all
further documents,  agreements,  instruments,  Uniform Commercial Code financing
statements,  and  take  all such  further  actions  (including  the  filing  and
recording of any such financing statements, fixture filings, mortgages, deeds of
trust, deeds to secure debt,  landlord consents and other documents) that may be
required  under any  applicable  law, or which the  Administrative  Agent or the
Required  Lenders may reasonably  request,  to further  evidence,  perfect,  and
protect the priority of the Collateral  Agent's first priority lien on, security
title to, and security  interest in all portions of the  Collateral,  all at the
expense of the Borrower.

    (b) The Borrower  will,  and will cause each  Guarantor  to, comply with the
requirements of the Post-Closing Agreement.

    (c) If any  Mortgaged  Retail  Property  is  replaced  pursuant  to  Section
                                                                         -------
2.10(b)(ii),  the Borrower shall, and shall cause each applicable  Guarantor to,
-----------
execute  and  deliver  to the  Administrative  Agent  a  Mortgage  on  such  new
replacement  Mortgaged Retail  Property,  together with all agreements and other
documents in respect of such Mortgage and the new replacement  Mortgaged  Retail
Property of the types  described in clauses (v) through  (xv) of Section  3.1(b)
                                                                 ---------------
(but excluding  clause (xi) thereof) and provide all other documents and take or
cause to be taken all other  actions  required for Mortgaged  Retail  Properties
pursuant to Section 3.1 as if such new  replacement  Mortgaged  Retail  Property
            -----------
existed on the Closing  Date,  and take all such  further  actions in respect of
such new replacement  Mortgaged Retail Property that may be required as provided
in Section 5.11(a).
   ---------------

                                       51
<PAGE>

                                   ARTICLE VI

                               FINANCIAL COVENANTS

    The  Borrower  covenants  and  agrees  that  so  long  as any  Lender  has a
Commitment  hereunder,  or the  principal  of or  interest  on any Loan  remains
unpaid, or any fee remains unpaid:

    Section 6.1. Funded Debt to EBITDAR Ratio.
                 ----------------------------
    The Borrower and its Subsidiaries shall maintain on a consolidated basis, as
of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending May
3, 2002, a ratio of (i) Consolidated Adjusted Funded Debt (as of the end of such
Fiscal Quarter) to (ii) Consolidated EBITDAR, of less than 2.00:1.00 (calculated
for the Fiscal  Quarter  then  ending and the  immediately  preceding  three (3)
Fiscal Quarters).

    Section  6.2.  EBITR to  Interest  and Rents  Ratio.
                   ------------------------------------
    The Borrower and its Subsidiaries shall maintain on a consolidated basis, as
of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending May
3, 2002, a ratio of (i) Consolidated EBITR to (ii) Consolidated Interest Expense
plus without  duplication  Consolidated Rent Expense,  of greater than 2.00:1.00
(all such amounts to be  calculated  for the Fiscal  Quarter then ending and the
immediately preceding three (3) Fiscal Quarters).

    Section 6.3. Asset Coverage Ratio.
                 --------------------
    The Borrower and its Subsidiaries shall maintain on a consolidated basis, as
of the end of each fiscal month, commencing with the fiscal month ending July 5,
2002, an Asset Coverage Ratio of not less than 1.25:1.00; provided, however, the
                                                          --------  -------
foregoing  covenant  shall not be deemed to be in effect or be  applicable as of
the end of any fiscal month where the Borrower has  maintained  as of such time,
for a period of at least 90  consecutive  days  ending as of such  time,  a Debt
Rating  from  Moody's  of Baa3 or higher and a Debt  Rating  from S&P of BBB- or
higher.

    Section  6.4.  Consolidated  Net  Worth
                   ------------------------
    The Borrower  will not permit its  Consolidated  Net Worth at any time to be
less than  $950,000,000,  plus 50% of  Consolidated  Net Income on a  cumulative
basis for all preceding  Fiscal  Quarters,  commencing  with the Fiscal  Quarter
ending May 3, 2002; provided, that if Consolidated Net Income is negative in any
                    --------
Fiscal  Quarter the amount added for such Fiscal  Quarter shall be zero and such
negative Consolidated Net Income shall not reduce the amount of Consolidated Net
Income added from any previous  Fiscal Quarter.  The minimum  required amount of
Consolidated  Net Worth set forth above shall be increased by 100% of the amount
by which the Borrower's total  shareholders'  equity is increased as a result of
any issuance or sale of capital  stock of the Borrower  after the Closing  Date.
Promptly  upon the  consummation  of such issuance or sale,  the Borrower  shall
notify the  Administrative  Agent in writing of the amount of such  increase  in
"total shareholders' equity".

    Section 6.5. Capital  Expenditures.
                 ----------------------
    The Borrower and its Subsidiaries  will not, on a consolidated  basis,  make
Capital Expenditures in excess of $200,000,000 during any Fiscal Year, provided,
                                                                       ---------
however,  the  foregoing  covenants  set forth in this  Section 6.5 shall not be
                                                        -----------
deemed to be in effect or be applicable at such times as the Borrower shall have
maintained at such time, for a period of at least 90 consecutive  days ending as
of such  time,  a Moody's  Rating of Baa3 or higher  and a S&P Rating of BBB- or
higher.

                                       52
<PAGE>

                                  ARTICLE VII

                               NEGATIVE COVENANTS
                               ------------------

    The  Borrower  covenants  and  agrees  that  so  long  as any  Lender  has a
Commitment  hereunder,  or the  principal  of or  interest  on any Loan  remains
unpaid, or any fee remains unpaid:

    Section 7.1. Indebtedness. The Borrower will not, and will not permit any of
                 -------------
its Subsidiaries to, create,  incur, assume or suffer to exist any Indebtedness,
except:

    (a) Indebtedness created pursuant to the Loan Documents;

    (b)  Indebtedness of the Borrower owing to any  Subsidiary,  Indebtedness of
any Subsidiary owing to the Borrower,  and Indebtedness of any Subsidiary (other
than DGI) owing to any other  Subsidiary  (other than DGI);  provided,  that the
                                                             ---------
aggregate amount of Indebtedness of the Borrower to any Subsidiary that is not a
Guarantor (including all such Indebtedness  existing on the Closing Date), shall
be subordinated to the Obligations on terms  satisfactory to the  Administrative
Agent and shall not exceed $5,000,000 at any time outstanding;

    (c)  Indebtedness  existing on the date hereof and set forth on Schedule 7.1
                                                                    ------------
and extensions,  renewals and replacements of any such  Indebtedness that do not
increase the outstanding  principal amount thereof  (immediately prior to giving
effect to such extension, renewal or replacement) or shorten the maturity or the
weighted average life thereof;

    (d)  Indebtedness  of a Person  which  becomes a  Subsidiary  after the date
hereof,  provided  that (i) such  Indebtedness  existed at the time such  Person
became  a  Subsidiary  and was not  created  in  anticipation  thereof  and (ii)
immediately  after  giving  effect  to the  acquisition  of such  Person  by the
Borrower no Default or Event of Default shall have occurred and be continuing;

    (e) Indebtedness of the Borrower or any Subsidiary (other than DGI) incurred
to finance the acquisition,  construction or improvement of any fixed or capital
assets,  including Capital Lease  Obligations,  and any Indebtedness  assumed in
connection  with the  acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof;  provided,  that such Indebtedness
                                               ---------
is incurred prior to or within 120 days after such acquisition or the completion
of  such  construction  or  improvements,  and  all  extensions,  renewals,  and
replacements  of any such  Indebtedness  that do not  increase  the  outstanding
principal amount thereof  (immediately prior to giving effect to such extension,
renewal or  replacement)  or shorten the maturity or the  weighted  average life
thereof;

    (f) Guarantees by the Borrower of Indebtedness  of any Subsidiary  otherwise
permitted  to be  incurred  or exist  under  the  terms of this  Agreement,  and
Guarantees by any Subsidiary (other than DGI) of Indebtedness of the Borrower or
any other  Subsidiary that is otherwise  permitted to be incurred or exist under
the terms of this Agreement;

                                       53
<PAGE>

    (g)  Indebtedness of the Borrower  arising under the 3-Year Credit Agreement
and Guarantees by Subsidiaries of Borrower of such Indebtedness;

    (h) Hedging Obligations permitted by Section 7.11;
                                         -------------
    (i)  Indebtedness  of the Borrower or any Subsidiary  incurred in connection
with sale leaseback transactions permitted by Section 7.9;
                                              ------------
    (j)  Unsecured  Indebtedness  of any  Subsidiaries  (other  than DGI) of the
Borrower not otherwise  permitted by this Section 7.1, in an aggregate principal
                                          ------------
amount outstanding at any time not to exceed $10,000,000;

    (k) Unsecured  Indebtedness of the Borrower not otherwise  permitted by this
Section 7.1, in an aggregate  principal  amount  outstanding  at any time not to
exceed $35,000,000; and

    (l) the DGI Loans.

    Section 7.2.  Liens.  The Borrower  will not, and will not permit any of its
                  ------
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its
assets or property now owned or hereafter acquired or, except:

    (a)  Liens  created  in  favor  of the  Administrative  Agent  securing  the
Obligations under this Agreement and the  "Obligations"  under the 3-Year Credit
Agreement;

    (b) Permitted Encumbrances;

    (c) any Liens on any  property or asset of the  Borrower  or any  Subsidiary
existing on the Closing Date as described on Schedule 7.2,  provided,  that such
                                             ------------   ---------
Lien  shall not  apply to any other  property  or asset of the  Borrower  or any
Subsidiary;

    (d) any Liens granted to secure purchase money Indebtedness  permitted to be
incurred as provided in Section 7.1(e) and any renewals and  extensions  thereof
                        --------------
as provided by Section  7.1(e),  provided  that (i) such Lien  secures only such
               ----------------  --------  ----
purchase money Indebtedness,  (ii) such Lien attaches to such asset concurrently
or within 60 days  after  the  acquisition,  improvement  or  completion  of the
construction thereof, and (iii) the Indebtedness secured thereby does not exceed
the cost of acquiring, constructing or improving such fixed or capital assets;

    (e) any Liens  granted  in  respect  of cash  amounts  deposited  or held as
security for payment of the Shareholder  Settlements  pursuant to the terms of a
court order or orders  approving or implementing  such  settlement(s),  provided
                                                                        --------
that the aggregate amount of such cash does not exceed $165,000,000; and

    (f) Liens on the property or assets of a Person  which  becomes a Subsidiary
after the date hereof  securing  Indebtedness  permitted by  subsection  7.1(d),
provided that (i) such Liens existed at the time such Person became a Subsidiary
--------
and were not created in anticipation thereof, (ii) any such Lien does not extend
to cover  any  property  or  assets of such  Person  after

                                       54
<PAGE>

the time such  Person  becomes a  Subsidiary  and (iii) such Liens do not secure
obligations in excess of  $10,000,000 in the aggregate at any time  outstanding;
and

    (g) Liens (not otherwise  permitted  hereunder) which secure obligations not
exceeding (as to the Borrower and all  Subsidiaries  other than DGI) $10,000,000
in aggregate amount at any time outstanding; and

    (h) Liens on the property or assets of a  Mortgagor,  other than any portion
of the Collateral, to secure the DGI Loans permitted by Section 7.1(l).

    Section 7.3. Fundamental Changes.
                 --------------------
    (a) The Borrower will not, and will not permit any Subsidiary to, merge into
or consolidate  into any other Person,  or permit any other Person to merge into
or consolidate with it, or sell,  lease,  transfer or otherwise dispose of (in a
single  transaction or a series of transactions) all or substantially all of its
assets  (in each  case,  whether  now  owned or  hereafter  acquired)  or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired) or liquidate or dissolve;  provided, that if at
                                                            ---------
the time thereof and  immediately  after giving  effect  thereto,  no Default or
Event of Default shall have  occurred and be continuing  (i) the Borrower or any
Subsidiary  may merge with a Person if the Borrower (or such  Subsidiary  if the
Borrower  is not a party  to  such  merger)  is the  surviving  Person,  and any
Subsidiary may merge into another Subsidiary, provided, that (x) if either party
                                              ---------
to such a merger between  Subsidiaries is a Guarantor,  a Guarantor shall be the
surviving  Person,  and (y) any such  merger  involving  a Person  that is not a
wholly-owned  Subsidiary immediately prior to such merger shall not be permitted
hereunder  unless also  permitted by Section 7.4, (ii) any  Subsidiary may sell,
transfer,  lease or otherwise  dispose of all or substantially all of its assets
(including by way of liquidation)  to the Borrower or to a Guarantor,  provided,
                                                                       ---------
that if such  selling  Subsidiary  is a Mortgagor,  after giving  effect to such
sale,  transfer,  lease or other disposition,  the Mortgage and the Lien created
thereunder in favor of the  Administrative  Agent for the benefit of the Lenders
in the related  Mortgaged  Property  owned by the  transferee of such  Mortgaged
Property  shall remain in full force and effect and  perfected  (to at least the
same  extent as in effect  immediately  prior to such sale,  transfer,  lease or
other disposition) and such transferee shall execute an assumption  agreement in
form and substance  satisfactory to the Administrative  Agent expressly assuming
the obligations and  liabilities of such selling  Subsidiary  under the Mortgage
and other  applicable Loan Documents,  and (iii) any Subsidiary may liquidate or
dissolve  if the  Borrower  determines  in good faith that such  liquidation  or
dissolution  is in the best  interests  of the  Borrower  and is not  materially
disadvantageous to the Lenders,  provided,  that if such liquidated or dissolved
                                 ---------
Subsidiary  is  a  Mortgagor,   after  giving  effect  to  such  liquidation  or
dissolution,  the Person  succeeding  to title to the  Mortgaged  Property  is a
Guarantor  and the  Mortgage  and the Lien  created  thereunder  in favor of the
Administrative  Agent for the benefit of the  Lenders in the  related  Mortgaged
Property  owned by such  Guarantor  shall  remain in full  force and  effect and
perfected  (to at least the same extent as in effect  immediately  prior to such
liquidation  or  dissolution)  and such  Guarantor  shall  execute an assumption
agreement  in  form  and  substance  satisfactory  to the  Administrative  Agent
expressly  assuming  the  obligations  and  liabilities  of such  liquidated  or
dissolved Subsidiary under the Mortgage and other applicable Loan Documents; and
provided further,  that any merger or any sale, transfer or other disposition
-------- --------

                                       55
<PAGE>

of assets  described in clause (i) or (ii) above  involving DGI shall be limited
to a merger with the Borrower where the Borrower is the surviving  Person,  or a
sale,  transfer or other disposition of assets from DGI to the Borrower,  as the
case may be.

    (b) The Borrower will not, and will not permit any of its  Subsidiaries  to,
engage in any  business  other  than  businesses  of the type  conducted  by the
Borrower  and its  Subsidiaries  on the date  hereof and  businesses  reasonably
related thereto.  Without limiting the foregoing,  the Borrower shall not permit
DGI to  engage  in any  business  or  activities  other  than  (i)  funding  and
collecting the DGI Loans in accordance  with their  respective  terms,  and (ii)
purchasing any real and/or personal property having an aggregate  purchase price
not to exceed $5,000,000,  and leasing such property on a net lease basis to the
Borrower or any other Subsidiary.

    Section 7.4.  Investments,  Loans,  Etc. The Borrower will not, and will not
                  --------------------------
permit any of its  Subsidiaries to, hold or acquire  (including  pursuant to any
merger  with any Person  that was not a  wholly-owned  Subsidiary  prior to such
merger),  any capital stock,  partner or limited  liability company interests or
other  ownership  interests,   evidence  of  Indebtedness  or  other  securities
(including any option,  warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to,  Guarantee any obligations
of, or make or permit to exist any  investment  or any other  interest  in,  any
other Person (all of the foregoing  being  collectively  called  "Investments"),
except:

    (a)  Investments  (other than  Permitted  Investments)  existing on the date
hereof and set forth on Schedule 7.4 (including Investments in Subsidiaries);

    (b) Permitted Investments;

    (c) Guarantees constituting Indebtedness permitted by Section 7.1;
                                                          ------------

    (d)  repurchase  Senior Notes (to the extent  permitted by the Indenture and
applicable   securities   laws)  for  aggregate   consideration   not  exceeding
$50,000,000  in any calendar  year,  so long as,  before and after giving effect
thereto,  the Borrower shall be in compliance  with the financial  covenants set
forth in Article VI and no other Default or Event of Default shall have occurred
and be continuing at the time such repurchase is effected;

    (e)  Investments  made by the  Borrower in or to any  Subsidiary  and by any
Subsidiary to the Borrower or in or to another  Subsidiary;  provided,  that (i)
                                                             ---------
the aggregate  amount of Investments by Loan Parties in or to, and Guarantees by
Loan  Parties  of  Indebtedness  of,  any  Subsidiary  that  is not a  Guarantor
(including all such  Investments  and Guarantees  existing on the Closing Date),
shall not exceed  $5,000,000 at any time  outstanding,  and (ii) any Acquisition
giving rise to any such Investment shall have been permitted pursuant to
Section 7.10;
-------------

    (f) loans or  advances to  employees  and  officers  of the  Borrower or any
Subsidiary  made in the ordinary course of business and not in excess of amounts
customarily  and  historically  loaned  or  advanced  by the  Borrower  to  such
employees and officers; provided, however, that the aggregate amount of all such
                        --------- --------
loans and advances does not exceed $2,500,000 at any time outstanding;

                                       56
<PAGE>

    (g) Hedging Obligations permitted by Section 7.11;
                                         -------------
    (h)  Investments  received in  settlement  of debt  created in the  ordinary
course of business; and

    (i) extension of trade credit in the ordinary course of business;

    (j)  Investments  in assets  held  under  non-qualified  plans and  deferred
compensation  arrangements for certain members of management and other employees
as  disclosed  from  time to time in the  notes to the  Borrower's  consolidated
financial  statements as filed by the Borrower with the  Securities and Exchange
Commission; and

    (k)  Investments  not otherwise  permitted by the preceding  clauses of this
Section 7.4 in an  aggregate  amount not to exceed  $10,000,000  at any one time
outstanding.

    Section 7.5. Restricted Payments. The Borrower will not, and will not permit
                 --------------------
its  Subsidiaries  to,  declare or make,  or agree to pay or make,  directly  or
indirectly,  any  dividend or  distribution  on any class of its capital  stock,
partner or limited liability company interests, or other ownership interests, or
make any  payment  on  account  of, or set apart  assets  for a sinking or other
analogous fund for, the purchase,  redemption,  retirement,  defeasance or other
acquisition  of,  any  shares of capital  stock,  partner  or limited  liability
company interests, or other ownership interests, or Indebtedness subordinated to
the Obligations of the Borrower,  or any options,  warrants,  or other rights to
purchase such capital stock, partner or limited liability company interests,  or
other  ownership  interests,  or such  Indebtedness,  whether  now or  hereafter
outstanding  (each,  a  "Restricted  Payment"),  except  for (i)  dividends  and
distributions  payable  by the  Borrower  solely  in  shares of any class of its
common stock, (ii) Restricted Payments made by any Subsidiary to the Borrower or
to another  Subsidiary,  (iii) cash dividends paid on, and cash  redemptions of,
the common  stock of the  Borrower so long as,  before and after  giving  effect
thereto,  the Borrower shall be in compliance  with the financial  covenants set
forth in Article VI and no other Default or Event of Default shall have occurred
and be  continuing  at the time such  dividend is paid or redemption is made and
(iv) Restricted  Payments made in respect of restricted  stock and stock options
granted or to be granted under the employee  compensation  plans of the Borrower
described in  applicable  reports or other filings made by the Borrower with the
Securities and Exchange  Commission or as otherwise disclosed by the Borrower in
writing to the Lenders.

    Section 7.6. Sale of Assets.  The Borrower will not, and will not permit any
                 ---------------
of its  Subsidiaries  to, convey,  sell,  lease,  assign,  transfer or otherwise
dispose  of, any of its  assets,  business  or  property,  whether  now owned or
hereafter acquired, or, in the case of any Subsidiary,  issue or sell any shares
of such  Subsidiary's  common stock to any Person other than the Borrower or any
wholly-owned  Subsidiary of the Borrower (or to qualify directors if required by
applicable law), except:

    (a) the sale or other disposition, for fair market value and in the ordinary
course of  business,  of obsolete or worn out  property  or other  property  not
necessary for operations of the Borrower and its Subsidiaries;

                                       57
<PAGE>

    (b) the sale of inventory and Permitted  Investments in the ordinary  course
of business;

    (c) the sale or transfer of properties in accordance with Section 7.9; and

    (d) the sale or other  disposition  of other assets in an  aggregate  amount
from the Closing Date to the Commitment Termination Date not to exceed 5% of the
consolidated  total  assets  of the  Borrower  as of the  last  day of the  most
recently  ended Fiscal Year of the Borrower;  provided that if at the end of any
Fiscal Year, 5% of the consolidated total assets of the Borrower for such Fiscal
Year is less than 5% of the  consolidated  total  assets of the Borrower for any
preceding  Fiscal Year and the Borrower's  sales and dispositions of assets made
from the Closing Date to such date exceed 5% of the consolidated total assets of
the Borrower for such Fiscal Year but do not exceed 5% of the consolidated total
assets of the Borrower for such preceding Fiscal Year, the Borrower shall not be
in violation of this Section 7.6(d).

    Section 7.7.  Transactions with Affiliates.  The Borrower will not, and will
                  -----------------------------
not permit any of its  Subsidiaries  to, sell,  lease or otherwise  transfer any
property or assets to, or purchase,  lease or otherwise  acquire any property or
assets from,  or otherwise  engage in any other  transactions  with,  any of its
Affiliates, except (i) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such  Subsidiary than could
be  obtained  on an  arm's-length  basis  from  unrelated  third  parties,  (ii)
transactions between or among the Borrower and its wholly owned Subsidiaries not
involving  any other  Affiliates,  (iii) any  Restricted  Payment  permitted  by
Section 7.5 and (iv) any transaction permitted under Section 7.4(e).

    Section 7.8.  Restrictive  Agreements.  The Borrower  will not, and will not
                  ------------------------
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement that prohibits,  restricts or imposes any condition upon (i)
the ability of the  Borrower or any  Subsidiary  to create,  incur or permit any
Lien  upon any of its  assets or  properties,  whether  now  owned or  hereafter
acquired,  or (ii) the  ability  of any  Subsidiary  to pay  dividends  or other
distributions  with respect to its capital stock,  partner or limited  liability
company  interests,  or other  ownership  interests,  to make or repay  loans or
advances to the Borrower or any other Subsidiary,  to Guarantee  Indebtedness of
the  Borrower or any other  Subsidiary,  or to transfer  any of its  property or
assets to the Borrower or any  Subsidiary  of the Borrower;  provided,  that the
                                                             ---------
foregoing shall not apply to (x) restrictions or conditions imposed by law or by
this Agreement,  the 3-Year Credit Agreement or the Indenture,  (y) restrictions
or  conditions  imposed  by  any  agreement  relating  to  secured  Indebtedness
permitted by this Agreement if such  restrictions  and conditions  apply only to
the property or assets securing such Indebtedness,  and (z) customary provisions
in leases and other contracts restricting the assignment thereof.

    Section 7.9.  Sale and  Leaseback  Transactions.  The Borrower will not, and
                  ----------------------------------
will not permit any of the Subsidiaries to, enter into any arrangement, directly
or  indirectly,  whereby  it shall  sell or  transfer  any  properties,  real or
personal,  used or  useful in its  business,  whether  now owned or  hereinafter
acquired,  having market values in excess of $50,000,000  in the aggregate,  and
thereafter rent or lease such properties or portions  thereof that it intends to

                                       58
<PAGE>

use for  substantially  the same purpose or purposes as the  properties  sold or
transferred.

    Section 7.10.  Acquisitions.  The Borrower will not, and will not permit any
                   -------------
Subsidiary  to, make or effect any  Acquisitions  for a total  purchase price in
excess of $50,000,000 in the aggregate during any twelve (12) month period.  For
purposes  hereof,  any  purchase  price  shall be  determined  by the sum of the
following items paid, given, transferred or assumed or acquired in consideration
of such Acquisition:  (i) all cash, (ii) the principal amounts of all promissory
notes,   other  deferred  payment   obligations   given  as  a  portion  of  the
consideration  for such  Acquisition,  and all  Indebtedness  of the  Person  or
business acquired in such Acquisition that remains in effect as an obligation of
the Borrower or any Subsidiary  following such  Acquisition,  (iii) the value of
all capital stock,  partner or limited  liability company  interests,  and other
ownership interests, and (iv) the value of all other property (the value of such
stock and property to be as determined in good faith by the Borrower).

    Section  7.11.  Hedging  Transactions.  The Borrower  will not, and will not
                    ----------------------
permit any of its  Subsidiaries  to, enter into any Hedging  Transaction,  other
than Hedging  Transactions  entered  into in the ordinary  course of business to
hedge or mitigate  risks to which the Borrower or any  Subsidiary  is exposed in
the management of its  liabilities  arising in the ordinary  course of business.
Solely for the  avoidance  of doubt,  the Borrower  acknowledges  that a Hedging
Transaction  entered into for  speculative  purposes or of a speculative  nature
(which  shall be deemed to  include  any  Hedging  Transaction  under  which the
Borrower or any of its Subsidiaries is or may become obliged to make any payment
(i) in  connection  with the  purchase by any third party of any capital  stock,
partner or limited liability company interests or other ownership interests,  or
any  Indebtedness,  of the  Borrower or any  Subsidiary,  or (ii) as a result of
changes  in the  market  value of any such  capital  stock,  partner  or limited
liability  company interests or other ownership  interests,  or Indebtedness) is
not a Hedging  Obligations  entered into in the  ordinary  course of business to
hedge or mitigate such risks.

    Section 7.12.  Actions  Relating to Indenture and Senior Notes. The Borrower
                   ------------------------------------------------
will not (i) amend, supplement,  or otherwise modify the Indenture or the Senior
Notes in any manner so as to increase the interest rate payable thereon, shorten
the maturity or the average life thereof,  or impose or modify any  restrictions
on the  Borrower of a type or in a manner,  taken as a whole with other  changes
effected by such amendment, more restrictive on, or otherwise less favorable to,
the Borrower, or (ii) repurchase, redeem, or otherwise acquire any of the Senior
Notes prior to the maturity thereof except as permitted by Section 7.4(d).

    Section 7.13. Accounting Changes. The Borrower will not, and will not permit
                  -------------------
any  Subsidiary  to, make any  significant  change in  accounting  treatment  or
reporting  practices,  except as required or  permitted  by GAAP,  or change the
Fiscal Year of the  Borrower or of any  Subsidiary,  except to change the fiscal
year of a Subsidiary to conform its Fiscal Year to that of the Borrower.

                                       59
<PAGE>

ARTICLE VIII

                                EVENTS OF DEFAULT

    Section  8.1.  Events of Default.  If any of the  following  events (each an
                   ------------------
"Event of Default") shall occur:
------------------
    (a) the Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable,  whether at the due date thereof or at a date
fixed for prepayment or otherwise; or

    (b) the  Borrower  shall fail to pay any  interest on any Loan or any fee or
any other amount (other than an amount  payable under clause (a) of this Section
                                                                         -------
8.1) payable under this  Agreement or any other Loan  Document,  within five (5)
----
Business Days after the same shall have become due and payable; or

    (c) any  representation  or warranty  made or deemed made by or on behalf of
the Borrower or any  Subsidiary in or in connection  with this  Agreement or any
other Loan Document (including the Schedules attached hereto) and any amendments
or modifications  hereof or waivers  hereunder,  or in any certificate,  report,
financial  statement or other document submitted to the Administrative  Agent or
the Lenders by any Loan Party or any  representative  of any Loan Party pursuant
to or in connection with this Agreement or any other Loan Document,  shall prove
to be incorrect in any material  respect when made or deemed made or  submitted;
or

    (d) the Borrower  shall fail to observe or perform any covenant or agreement
contained  in  Sections  5.1,  5.2,  or 5.3 (with  respect  to any Loan  Party's
               --------------  ----     ---
existence), 6.1, 6.2, 6.4, and 6.5 or Article VII; or
            ---- ---- ----     ---

    (e) any Loan  Party  shall  fail to  observe  or  perform  any  covenant  or
agreement  contained in this Agreement  (other than those referred to in clauses
(a),  (b) and (d)  above) or any other Loan  Document,  and such  failure  shall
remain  unremedied  for 30 days  after the  earlier  of (i) any  officer  of the
Borrower  becomes aware of such failure,  or (ii) notice thereof shall have been
given to the Borrower by the Administrative Agent or any Lender; or

    (f) the  Borrower  or any  Subsidiary  (whether  as  primary  obligor  or as
guarantor or otherwise shall fail to pay any principal of or premium or interest
on any Material  Indebtedness  that is  outstanding,  when and as the same shall
become due and payable  (whether at  scheduled  maturity,  required  prepayment,
acceleration,  demand or  otherwise),  and such failure shall continue after the
applicable  grace  period,  if any,  specified in the  agreement  or  instrument
evidencing  or governing  such  Indebtedness;  or any other event shall occur or
condition  shall  exist  under any  agreement  or  instrument  relating  to such
Indebtedness  and shall  continue  after the  applicable  grace period,  if any,
specified  in such  agreement  or  instrument,  if the  effect of such  event or
condition is to accelerate,  or permit the acceleration of, the maturity of such
Indebtedness;  or any such Indebtedness  shall be declared to be due and payable
or  required to be prepaid or  redeemed  (other  than by a  regularly  scheduled
required  prepayment  or  redemption),  purchased or  defeased,  or any offer to
prepay,  redeem,  purchase or defease such Indebtedness  shall be required to be
made, in each case prior to the stated maturity thereof; or

                                       60
<PAGE>

    (g) the Borrower or any  Subsidiary  shall (i) commence a voluntary  case or
other proceeding or file any petition  seeking  liquidation,  reorganization  or
other relief under any federal, state or foreign bankruptcy, insolvency or other
similar  law  now or  hereafter  in  effect  or  seeking  the  appointment  of a
custodian,  trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in  clause  (i) of this  subsection  (g),  (iii)  apply  for or  consent  to the
appointment  of a custodian,  trustee,  receiver,  liquidator  or other  similar
official for the Borrower or any such  Subsidiary or for a  substantial  part of
its  property,  (iv) file an answer  admitting  the  material  allegations  of a
petition filed against it in any such proceeding,  (v) make a general assignment
for the  benefit  of  creditors,  or (vi) take any  action  for the  purpose  of
effecting any of the foregoing; or

    (h) an involuntary  proceeding shall be commenced or an involuntary petition
shall be filed  seeking  (i)  liquidation,  reorganization  or other  relief  in
respect of the Borrower or any Subsidiary or its debts, or any substantial  part
of its property,  under any federal, state or foreign bankruptcy,  insolvency or
other  similar law now or  hereafter  in effect,  or (ii) the  appointment  of a
custodian,  trustee,  receiver,  liquidator  or other  similar  official for the
Borrower or any Subsidiary or for a substantial part of its property, and in any
such case, such proceeding or petition shall remain  undismissed for a period of
60 days or an order or decree  approving or ordering any of the foregoing  shall
be entered; or

    (i) the Borrower or any  Subsidiary  shall become unable to pay, shall admit
in writing its  inability  to pay, or shall fail  generally to pay, its debts as
they become due; or

    (j) an ERISA Event shall have occurred  that, in the opinion of the Required
Lenders,  when taken  together  with other ERISA Events that have  occurred,  is
reasonably likely to result in liability to the Borrower and the Subsidiaries in
an aggregate amount exceeding $10,000,000; or

    (k) any judgment or order for the payment of money in excess of  $10,000,000
in the  aggregate  (other than the  Shareholder  Settlements)  shall be rendered
against the Borrower or any Subsidiary,  and either (i) enforcement  proceedings
shall have been  commenced by any creditor upon such judgment or order,  or (ii)
there shall be a period of more than 30 consecutive  days during which a stay of
enforcement  of such  judgment  or  order,  by  reason  of a  pending  appeal or
otherwise, shall not be in effect; or

    (l) any  non-monetary  judgment  or order  shall  be  rendered  against  the
Borrower or any Subsidiary that is reasonably  likely to have a Material Adverse
Effect,  and there  shall be a period of more than 30  consecutive  days  during
which a stay of  enforcement  of such judgment or order,  by reason of a pending
appeal or otherwise, shall not be in effect; or

    (m) a Change in Control shall occur or exist; or

    (n) any provision of the Guaranty Agreement shall for any reason cease to be
valid and binding on, or enforceable  against,  any Guarantor,  or any Guarantor
shall so  state  in  writing,  or any  Guarantor  shall  seek to  terminate  its
obligations under the Guaranty Agreement; or

                                       61
<PAGE>

    (o) the Shareholder  Settlements shall exceed $165,000,000 in the aggregate,
or the amounts  required to be paid pursuant to any  settlement  arrangement(s),
judgment(s), decree(s), or order(s) agreed by or entered against the Borrower in
respect of the SEC Investigation shall exceed $15,000,000 in the aggregate; or

    (p) an "Event of Default" shall occur under any other Loan Document or under
the 3-Year Credit Agreement;

    then,  and in every such  event  (other  than an event  with  respect to the
Borrower  described in  subsections  (g) or (h) of this Section) and at any time
thereafter during the continuance of such event, the  Administrative  Agent may,
and upon the written  request of the Required  Lenders  shall,  by notice to the
Borrower,  take any or all of the  following  actions,  at the same or different
times:  (i) terminate the  Commitments,  whereupon the Commitment of each Lender
shall  terminate  immediately;  (ii)  declare the  principal  of and any accrued
interest  on the  Loans,  and all  other  Obligations  owing  hereunder,  to be,
whereupon   the  same  shall  become  due  and  payable   immediately,   without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby  waived by the  Borrower;  (iii)  exercise all remedies  contained in any
other Loan Document; and (iv) exercise any other remedies available at law or in
equity;  and that, if an Event of Default specified in either subsections (g) or
(h) of this Section  shall occur with respect to the Borrower,  the  Commitments
shall  automatically  terminate and the principal of the Loans then outstanding,
together with accrued interest thereon, and all fees and other Obligations shall
automatically become due and payable,  without presentment,  demand,  protest or
other  notice  of any  kind,  all of which are  hereby  waived by the  Borrower.
Notwithstanding  anything in this  Agreement or the other Loan  Documents to the
contrary,  all payments  received as proceeds  hereunder or under any other Loan
Document,  or any  part  thereof,  as well as any and all  amounts  realized  in
connection  with the enforcement of any right or remedy under or with respect to
any Loan  Document,  shall be applied by the  Administrative  Agent as  follows:
first, to the payment of all necessary expenses incident to the execution of any
------
remedies  under  any Loan  Document,  including  reasonable  attorneys'  fees as
provided  herein and in the other Loan Documents,  appraisal fees,  title search
fees and foreclosure notice costs; second, to all fees and reimbursable expenses
                                   -------
of the  Administrative  Agent  and the  Collateral  Agent  then due and  payable
pursuant  to any of the Loan  Documents;  third,  to all  fees and  reimbursable
                                          ------
expenses of the Lenders and with respect to any proceeds  received  with respect
to any  Mortgaged  Properties,  the Issuing Bank (as such term is defined in the
3-Year  Credit  Agreement),  then due and  payable  pursuant  to any of the Loan
Documents,  made pro rata to the  Lenders and such  Issuing  Bank based on their
respective  Pro Rata Share of such fees and expenses;  fourth,  to interest then
                                                       ------
due and  payable  on the  Loans,  made  pro rata to the  Lenders  based on their
respective  Pro Rata  Shares of the  Loans;  fifth,  to  principal  then due and
                                             ------
payable on the Loans and with respect to any proceeds  received  with respect to
any Mortgaged  Properties,  the unreimbursed LC  Disbursements  (as such term is
defined in the 3-Year Credit  Agreement)  under the 3-Year Credit  Agreement and
amounts due in respect of cash collateral  required to be maintained for undrawn
amounts  under any  Letters  of Credit  (as such term is  defined  in the 3-Year
Credit Agreement) issued and outstanding under the 3-Year Credit Agreement, made
pro rata to the Lenders,  the Administrative Agent and the Issuing Bank (as such
term is defined in the 3-Year Credit  Agreement)  based on their  respective Pro
Rata  Shares of the Loans,  such  unreimbursed  LC  Disbursements  and such cash
collateral  amounts;  and  sixth,  to the  payment of any  amounts  then due and
                           ------
payable  with  respect to any Hedging  Obligations  and any other  amounts  then
included in the Obligations as provided herein,

                                       62
<PAGE>

and the  remainder,  if any, shall be paid to the Borrower or such other persons
as may be  entitled  thereto  by law,  after  deducting  therefrom  the  cost of
ascertaining  their identity;  provided that, all such payments  received by the
Collateral  Agent in respect of the Mortgaged  Properties  shall be applied on a
pro rata basis between the Related Revolving Credit Facilities.

                                   ARTICLE IX

                            THE ADMINISTRATIVE AGENT
                            ------------------------

    Section  9.1.  Appointment  of  Administrative  Agent.  Each of the  Lenders
                   ---------------------------------------
irrevocably  appoints  SunTrust  Bank  as the  Administrative  Agent  (it  being
understood   and  agreed  that  each   reference  in  this  Article  IX  to  the
Administrative  Agent  shall be deemed to  include  the  Collateral  Agent)  and
authorizes  it to take such actions on its behalf and to exercise such powers as
are  delegated to the  Administrative  Agent under this  Agreement and the other
Loan  Documents,  together with all such actions and powers that are  reasonably
incidental  thereto.  The  Administrative  Agent may  perform  any of its duties
hereunder  or under the  other  Loan  Documents  by or  through  any one or more
sub-agents  or  attorneys-in-fact  appointed by the  Administrative  Agent.  The
Administrative  Agent and any such sub-agent or attorney-in-fact may perform any
and  all of its  duties  and  exercise  its  rights  and  powers  through  their
respective Related Parties. The exculpatory provisions set forth in this Article
shall apply to any such sub-agent or attorney-in-fact and the Related Parties of
the Administrative  Agent, any such sub-agent and any such  attorney-in-fact and
shall apply to their respective activities in connection with the syndication of
the  credit   facilities   provided  for  herein  as  well  as   activities   as
Administrative Agent.

    Section 9.2. Nature of Duties of  Administrative  Agent. The  Administrative
                 -------------------------------------------
Agent shall not have any duties or obligations  except those expressly set forth
in this Agreement and the other Loan Documents.  Without limiting the generality
of the  foregoing,  (i) the  Administrative  Agent  shall not be  subject to any
fiduciary or other implied  duties,  regardless of whether a Default or an Event
of Default has occurred and is continuing,  (ii) the Administrative  Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers,  except those discretionary rights and powers expressly  contemplated by
the Loan  Documents  that the  Administrative  Agent is  required to exercise in
writing by the  Required  Lenders  (or such other  number or  percentage  of the
Lenders as shall be  necessary  under the  circumstances  as provided in Section
                                                                         -------
10.2),  and (iii)  except as  expressly  set  forth in the Loan  Documents,  the
-----
Administrative  Agent  shall  not have any duty to  disclose,  and  shall not be
liable for the failure to disclose,  any information relating to the Borrower or
any  of  its   Subsidiaries   that  is   communicated  to  or  obtained  by  the
Administrative   Agent  or  any  of  its   Affiliates  in  any   capacity.   The
Administrative  Agent  shall not be liable for any action  taken or not taken by
it, its  sub-agents or  attorneys-in-fact  with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be  necessary  under the  circumstances  as provided in Section  10.2) or in the
                                                        -------------
absence of its own gross negligence or willful  misconduct.  The  Administrative
Agent  shall  not  be  responsible  for  the  negligence  or  misconduct  of any
sub-agents  or  attorneys-in-fact  selected  by it  with  reasonable  care.  The
Administrative  Agent  shall not be deemed to have  knowledge  of any Default or
Event

                                       63
<PAGE>

of Default  unless and until written  notice  thereof  (which notice shall
expressly state that it is a notice of Default or Event of Default arising under
this  Agreement),  is given to the  Administrative  Agent by the Borrower or any
Lender,  and the  Administrative  Agent shall not be responsible for or have any
duty to ascertain or inquire into (A) any statement,  warranty or representation
made in or in  connection  with  any  Loan  Document,  (B) the  contents  of any
certificate,  report or other document  delivered  hereunder or thereunder or in
connection  herewith or therewith,  (C) the  performance or observance of any of
the covenants,  agreements,  or other terms and conditions set forth in any Loan
Document, (D) the validity, enforceability,  effectiveness or genuineness of any
Loan  Document  or any  other  agreement,  instrument  or  document,  or (E) the
satisfaction  of any condition set forth in Article III or elsewhere in any Loan
Document,  other  than to  confirm  receipt of items  expressly  required  to be
delivered to the Administrative Agent.

    Section  9.3.  Lack of Reliance  on the  Administrative  Agent.  Each of the
                   ------------------------------------------------
Lenders  acknowledges  that it has,  independently and without reliance upon the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this  Agreement.  Each of the Lenders  also  acknowledges
that it will,  independently and without reliance upon the Administrative  Agent
or any other Lender and based on such documents and information as it has deemed
appropriate,  continue to make its own  decisions in taking or not taking of any
action under or based on this Agreement,  any related  agreement or any document
furnished  hereunder or thereunder.  Each Lender  represents to each other party
hereto that it is a bank,  savings and loan association or other similar savings
or thrift institution,  insurance company,  investment fund or company, or other
financial institution or lending company that makes or acquires commercial loans
in the ordinary course of its business and that it is participating hereunder as
a  Lender  for  its own  account  (but  subject  to its  rights  to  direct  the
disposition of its assets, including, without limitation,  assignments and sales
of  participation  interest  in the Loans  and its  Commitment  as  contemplated
hereunder),  and for such commercial purposes, and that it has the knowledge and
experience  to be and is capable of  evaluating  the merits and risks of being a
Lender hereunder.

    Section  9.4.   Certain  Rights  of  the   Administrative   Agent.   If  the
                    --------------------------------------------------
Administrative  Agent shall request  instructions from the Required Lenders with
respect to any action or actions  (including  the failure to act) in  connection
with this Agreement,  the Administrative Agent shall be entitled to refrain from
such  act  or  taking  such  act,  unless  and  until  it  shall  have  received
instructions  from such Lenders;  and the  Administrative  Agent shall not incur
liability  to any  Person by  reason  of so  refraining.  Without  limiting  the
foregoing,  no Lender  shall  have any right of action  whatsoever  against  the
Administrative  Agent  as  a  result  of  the  Administrative  Agent  acting  or
refraining  from acting  hereunder in accordance  with the  instructions  of the
Required Lenders where required by the terms of this Agreement.

    Section 9.5.  Reliance by  Administrative  Agent. The  Administrative  Agent
                  ----------------------------------
shall be entitled to rely upon,  and shall not incur any  liability  for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing  believed by it to be genuine and to have been signed,  sent or
made by the  proper  Person.  The

                                       64
<PAGE>

Administrative  Agent may also rely upon any  statement  made to it orally or by
telephone and believed by it to be made by the proper Person and shall not incur
any liability for relying  thereon.  The  Administrative  Agent may consult with
legal  counsel  (including   counsel  for  the  Borrower),   independent  public
accountants  and other  experts  selected  by it and shall not be liable for any
action taken or not taken by it in  accordance  with the advice of such counsel,
accountants or experts.

    Section 9.6. The Administrative Agent in its Individual Capacity. The Person
                 ----------------------------------------------------
serving as the Administrative  Agent shall have the same rights and powers under
this  Agreement  and any other Loan  Document in its capacity as a Lender as any
other Lender and may exercise or refrain from  exercising  the same as though it
were not the Administrative Agent; and the terms "Lenders",  "Required Lenders",
"holders  of Notes",  or any similar  terms  shall,  unless the context  clearly
otherwise indicates,  include the Administrative Agent in its capacity as one of
such Lenders or holders.  The Person acting as the Administrative  Agent and its
Affiliates may accept deposits from, lend money to, and generally  engage in any
kind of  business  with the  Borrower  or any  Subsidiary  or  Affiliate  of the
Borrower as if it were not the Administrative Agent hereunder.

    Section 9.7. Successor Administrative Agent.
                 -------------------------------
    (a) The Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, subject to the
approval  by the  Borrower  provided  that no Default or Event of Default  shall
exist at such time.  If no  successor  Administrative  Agent  shall have been so
appointed,  and shall have  accepted such  appointment  within 30 days after the
retiring  Administrative  Agent gives notice of  resignation,  then the retiring
Administrative  Agent  may,  on  behalf  of the  Lenders,  appoint  a  successor
Administrative  Agent, which shall be a commercial bank organized under the laws
of the United States of America or any state  thereof or a bank which  maintains
an office in the United  States,  having a combined  capital  and  surplus of at
least $500,000,000.

    (b) Upon the  acceptance  of its  appointment  as the  Administrative  Agent
hereunder by a successor,  such successor  Administrative  Agent shall thereupon
succeed to and become vested with all the rights, powers,  privileges and duties
of the retiring  Administrative  Agent,  and the retiring  Administrative  Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan  Documents.  If within 45 days after  written  notice is given of the
retiring  Administrative Agent's resignation under this Section 9.7 no successor
                                                        -----------
Administrative  Agent shall have been  appointed  and shall have  accepted  such
appointment,  then on such  45th  day (i) the  retiring  Administrative  Agent's
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon  be  discharged  from  its  duties  and  obligations  under  the  Loan
Documents, and (iii) the Required Lenders shall thereafter perform all duties of
the retiring  Administrative  Agent under the Loan Documents  until such time as
the Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent's resignation hereunder,  the provisions
of this  Article IX shall  continue in effect for the  benefit of such  retiring
Administrative  Agent  and its  representatives  and  agents in

                                       65
<PAGE>

respect of any actions taken or not taken by any of them while it was serving as
the Administrative Agent.

                                   ARTICLE X

                                  MISCELLANEOUS
                                  -------------

Section 10.1.     Notices.
                  --------
    (a)  Except  in the  case of  notices  and  other  communications  expressly
permitted to be given by telephone,  all notices and other communications to any
party herein to be effective  shall be in writing and shall be delivered by hand
or overnight courier service,  mailed by certified or registered mail or sent by
telecopy, as follows:

     To the Borrower:              Dollar General Corporation
                                   100 Mission Ridge
                                   Goodlettsville, Tennessee  37072
                                   Attention:  Wade Smith
                                   Telecopy Number:  (615) 855-4973

     To the Administrative Agent:  SunTrust Bank
                                   303 Peachtree Street, N. E.
                                   Atlanta, Georgia 30308
                                   Attention: Agency Services
                                   Telecopy Number: (404)-724-3879

     With copies to:               SunTrust Capital Markets, Inc.
                                   303 Peachtree Street, N. E., 24th Floor
                                   Atlanta, Georgia 30308
                                   Attention:  Jeff Titus
                                   Telecopy Number:   (404) 827-6514

                                   SunTrust Bank
                                   201 Fourth Avenue North
                                   3rd Floor
                                   Nashville, Tennessee  37219
                                   Attention:  Scott Corley
                                   Telecopy Number:   (615) 748-5269

     To any other Lender:          the address set forth in the Administrative
                                   Questionnaire

    Any party  hereto may change its address or telecopy  number for notices and
other  communications  hereunder by notice to the other parties hereto. All such
notices and other communications  shall, when transmitted by overnight delivery,
or faxed,  be effective when  delivered for overnight  (next-day)  delivery,  or

                                       66
<PAGE>

transmitted in legible form by facsimile  machine,  respectively,  or if mailed,
upon  the  third  Business  Day  after  the date  deposited  into the mail or if
delivered, upon delivery; provided, that notices delivered to the Administrative
                          ---------
Agent  shall not be  effective  until  actually  received  by such Person at its
address specified in this Section 10.1.

    (b) Any  agreement  of the  Administrative  Agent and the Lenders  herein to
receive  certain notices by telephone or facsimile is solely for the convenience
and at the request of the  Borrower.  The  Administrative  Agent and the Lenders
shall  be  entitled  to  rely in  good  faith  on the  authority  of any  Person
purporting to be a Person authorized by the Borrower to give such notice and the
Administrative Agent and Lenders shall not have any liability to the Borrower or
other Person on account of any action  taken or not taken by the  Administrative
Agent or the Lenders in good faith  reliance  upon such  telephonic or facsimile
notice.  The  obligation  of the  Borrower  to repay  the  Loans  and all  other
Obligations  hereunder  shall not be affected in any way or to any extent by any
failure  of  the  Administrative  Agent  and  the  Lenders  to  receive  written
confirmation of any telephonic or facsimile notice.

    Section 10.2. Waiver; Amendments.
                  -------------------
    (a) No  failure  or  delay by the  Administrative  Agent  or any  Lender  in
exercising  any right or power  hereunder  or any other  Loan  Document,  and no
course of dealing  between  the  Borrower  and the  Administrative  Agent or any
Lender,  shall  operate  as a waiver  thereof,  nor shall any  single or partial
exercise  of any such right or power or any  abandonment  or  discontinuance  of
steps to enforce  such right or power,  preclude  any other or further  exercise
thereof or the exercise of any other right or power hereunder or thereunder. The
rights and remedies of the  Administrative  Agent and the Lenders  hereunder and
under the other Loan  Documents  are  cumulative  and are not  exclusive  of any
rights or remedies provided by law. No waiver of any provision of this Agreement
or any other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by subsection
(b) of this Section,  and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without limiting the
generality  of the  foregoing,  the making of a Loan shall not be construed as a
waiver  of  any  Default  or  Event  of  Default,   regardless  of  whether  the
Administrative  Agent or any  Lender may have had  notice or  knowledge  of such
Default or Event of Default at the time.

    (b) No amendment or waiver of any  provision of this  Agreement or the other
Loan Documents, nor consent to any departure by the Borrower therefrom, shall in
any event be  effective  unless the same  shall be in writing  and signed by the
Borrower and the Required Lenders or the Borrower and the  Administrative  Agent
with the consent of the Required  Lenders and then such waiver or consent  shall
be  effective  only in the specific  instance  and for the specific  purpose for
which  given;  provided,  that no amendment  or waiver  shall:  (i) increase the
               ---------
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the  principal  amount of any Loan or reduce the rate of  interest  thereon,  or
reduce any fees payable  hereunder,  without the written  consent of each Lender
affected thereby, (iii) postpone the date fixed for any

                                       67
<PAGE>

scheduled  payment of any  principal  of, or  interest  on, any Loan or interest
thereon or any fees  hereunder or reduce the amount of, waive or excuse any such
scheduled  payment,  or  postpone  the  scheduled  date for the  termination  or
reduction of any Commitment, without the written consent of each Lender affected
thereby,  (iv) change  Section  2.19 (b) or (c) in a manner that would alter the
pro rata sharing of payments  required  thereby,  without the written consent of
each Lender,  (v) change any of the provisions of this Section or the definition
of "Required  Lenders" or any other  provision  hereof  specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any  determination or grant any consent  hereunder,  without the consent of
each  Lender,  (vi)  release any  Guarantor  or limit the  liability of any such
Guarantor  under the  Guaranty  Agreement,  without the written  consent of each
Lender,  or (vii)  release  all or any  substantial  portion  of the  Collateral
without the  written  consent of each  Lender;  provided  further,  that no such
amendment or waiver shall amend,  modify or otherwise affect the rights,  duties
or obligations of the Administrative  Agent without the prior written consent of
such Person.

    Section 10.3. Expenses; Indemnification.
                  --------------------------
    (a) The  Borrower  shall  pay (i) all  reasonable,  out-of-pocket  costs and
expenses  of  the  Administrative  Agent  and  its  Affiliates,   including  the
reasonable fees,  charges and disbursements of a single firm of primary counsel,
the local counsel referred to in Section 3.1(b)(xv), and all other local counsel
as  the  Administrative  Agent  may  reasonably  deem  necessary,   and  of  the
Administrative  Agent and its Affiliates,  in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Loan Documents and any amendments, modifications or waivers thereof (whether
or not  the  transactions  contemplated  in this  Agreement  or any  other  Loan
Document shall be consummated);  and (ii) all reasonable out-of-pocket costs and
expenses  (including,  without  limitation,  the  reasonable  fees,  charges and
disbursements  of outside  counsel  and the  allocated  cost of inside  counsel)
incurred  by the  Administrative  Agent or after the  occurrence  and during the
continuance  of any  Event  of  Default,  any  Lender  in  connection  with  the
enforcement  or  protection  of its rights in  connection  with this  Agreement,
including  its rights under this Section,  or in connection  with the Loans made
hereunder,  including  all  such  out-of-pocket  expenses  incurred  during  any
workout,  restructuring  or  negotiations in respect of such Loans or Letters of
Credit.

    (b) The Borrower shall indemnify the  Administrative  Agent and each Lender,
and each Related Party of any of the foregoing (each, an "Indemnitee")  against,
and hold each of them harmless  from,  any and all costs,  losses,  liabilities,
claims,   damages  and  related  expenses,   including  the  fees,  charges  and
disbursements  of any  counsel for any  Indemnitee,  which may be incurred by or
asserted  against  any  Indemnitee  arising out of, in  connection  with or as a
result of (i) the  execution  or  delivery  of this  Agreement,  any other  Loan
Document,  or any other agreement or instrument  contemplated hereby or thereby,
the performance by the parties hereto of their respective  obligations hereunder
or thereunder or the consummation of any of the transactions contemplated hereby
or  thereby,  (ii)  any  Loan or any  actual  or  proposed  use of the  proceeds
therefrom,  (iii)  any  actual or  alleged  presence  or  release  of  Hazardous
Materials on or from any property owned by the Borrower or any Subsidiary or any
Environmental  Liability  related in any way to the Borrower or any  Subsidiary,
and  (iv)  any  actual  or  prospective  claim,  litigation,   investigation  or
proceeding relating to any of the foregoing,  whether based on contract, tort or
any other theory and  regardless of whether any  Indemnitee is a party  thereto;
provided,  that the Borrower  shall not be obligated to indemnify any Indemnitee
---------
for any of the foregoing

                                       68
<PAGE>

arising out of such  Indemnitee's  gross  negligence  or willful  misconduct  as
determined  by a court of competent  jurisdiction  in a final and  nonappealable
judgment.

    (c) The Borrower  shall pay, and hold the  Administrative  Agent and each of
the Lenders  harmless  from and against,  any and all present and future  stamp,
documentary,  and other  similar  taxes with respect to this  Agreement  and any
other Loan  Documents,  any collateral  described  therein,  or any payments due
thereunder,  and save the Administrative Agent and each Lender harmless from and
against any and all  liabilities  with respect to or resulting from any delay or
omission to pay such taxes.

    (d) To the extent that the Borrower  fails to pay any amount  required to be
paid to the Administrative  Agent under subsections (a), (b) or (c) hereof, each
Lender  severally  agrees to pay to the  Administrative  Agent such Lender's Pro
Rata Share (determined as of the time that the unreimbursed expense or indemnity
payment  is sought)  of such  unpaid  amount;  provided,  that the  unreimbursed
                                               ---------
expense or indemnified payment, claim, damage,  liability or related expense, as
the case may be, was incurred by or asserted against the Administrative Agent in
its capacity as such.

    (e) To the extent  permitted  by  applicable  law,  the  Borrower  shall not
assert,  and hereby waives,  any claim against any Indemnitee,  on any theory of
liability, for special, indirect,  consequential or punitive damages (as opposed
to actual or direct  damages)  arising out of, in connection with or as a result
of, this  Agreement or any  agreement or  instrument  contemplated  hereby,  the
transactions contemplated therein, any Loan or the use of proceeds thereof.

    (f) All  amounts  due under this  Section  shall be payable  promptly  after
written demand therefor.

    Section 10.4. Successors and Assigns.
                  -----------------------

    (a) The provisions of this Agreement  shall be binding upon and inure to the
benefit  of the  parties  hereto and their  respective  successors  and  assigns
permitted hereby,  except that the Borrower may not assign or otherwise transfer
any of its rights or obligations  hereunder without the prior written consent of
each Lender (and any attempted  assignment  or transfer by the Borrower  without
such consent shall be null and void).  Nothing in this  Agreement,  expressed or
implied,  shall be construed  to confer upon any Person  (other than the parties
hereto,  their  respective  successors and assigns  permitted hereby and, to the
extent  expressly  contemplated  hereby,  the  Related  Parties  of  each of the
Administrative  Agent and the Lenders) any legal or equitable  right,  remedy or
claim under or by reason of this Agreement.

    (b) Any Lender may assign to one or more Eligible Assignees all or a portion
of its rights and obligations  under this Agreement  (including all or a portion
of its  Commitment  and the Loans at the time  owing to it);  provided  that (i)
                                                              --------
except  in the case of an  assignment  of the  entire  remaining  amount  of the
assigning  Lender's  Commitment  and the Loans at the time owing to it or in the
case of an assignment to a Lender,  an Affiliate of a Lender or an Approved Fund

                                       69
<PAGE>

with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans  outstanding  thereunder) of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative  Agent) shall
be an amount which is not less than  $1,000,000  and in an integral  multiple of
$1,000,000,  unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is  continuing,  the Borrower  otherwise  consent (such
consent of the Borrower not to be unreasonably  withheld or delayed),  (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning  Lender's rights and obligations under this Agreement with respect
to the Loan or the Commitment assigned, and (iii) the parties to each assignment
shall  execute  and  deliver  to the  Administrative  Agent  an  Assignment  and
Acceptance,  together with a processing and recordation  fee of $1,000,  and the
Eligible  Assignee,  if  it  shall  not  be  a  Lender,  shall  deliver  to  the
Administrative Agent an Administrative Questionnaire.  Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c) of this
Section,  from and after the effective  date  specified in each  Assignment  and
Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the
extent of the interest  assigned by such  Assignment  and  Acceptance,  have the
rights and  obligations  of a Lender  under this  Agreement,  and the  assigning
Lender  thereunder  shall,  to the  extent  of the  interest  assigned  by  such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance  covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall  continue to be entitled to the benefits of Sections
                                                                        --------
2.16,  2.18,  2.19 and 10.3. Any assignment or transfer by a Lender of rights or
-----  -----  ----     -----
obligations under this Agreement that does not comply with this subsection shall
be  treated  for  purposes  of this  Agreement  as a sale by  such  Lender  of a
participation  in such rights and  obligations in accordance with subsection (d)
of this Section.

    (c) The Administrative  Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of
each  Assignment  and  Acceptance  delivered  to  it  and  a  register  for  the
recordation of the names and addresses of the Lenders,  and the  Commitments of,
and  principal  amount of the Loans owing to, each Lender  pursuant to the terms
hereof from time to time (the "Register").  The entries in the Register shall be
                              ----------
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register  pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.  The Register shall be available for inspection by the Borrower
and any Lender,  at any  reasonable  time and from time to time upon  reasonable
prior notice.

    (d) Any  Lender  may,  without  the  consent  of, or prior  notice  to,  the
Borrower,  or the Administrative  Agent sell participations to one or more banks
or other entities (a  "Participant") in all or a portion of such Lender's rights
                       -----------
and/or  obligations  under  this  Agreement  (including  all or a portion of its
Commitment  and/or  the  Loans  owing to it);  provided  that (i) such  Lender's
                                               --------
obligations under this Agreement shall remain unchanged,  (ii) such Lender shall
remain solely  responsible  to the other parties  hereto for the  performance of
such obligations and (iii) the Borrower,  the Administrative Agent and the other
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's rights and obligations  under this Agreement.  Any
agreement or  instrument  pursuant to which a Lender sells such a  participation
shall  provide  that such  Lender  shall  retain the sole right to enforce  this
Agreement and to approve any amendment,  modification or waiver of any provision

                                       70
<PAGE>

of this  Agreement;  provided that such agreement or instrument may provide that
such Lender  will not,  without  the  consent of the  Participant,  agree to any
amendment,  modification  or waiver with respect to the  following to the extent
affecting such  Participant:  (i) increase the Commitment of such Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or reduce the rate of interest  thereon,  or reduce any fees payable  hereunder,
without the written consent of such Lender if affected  thereby,  (iii) postpone
the date fixed for any payment of any  principal of, or interest on, any Loan or
interest  thereon or any fees hereunder or reduce the amount of, waive or excuse
any  such  payment,  or  postpone  the  scheduled  date for the  termination  or
reduction  of any  Commitment,  without  the  written  consent of such Lender if
affected  thereby,  (iv)  change  Section  2.19(b) or (c) in a manner that would
                                  ---------------
alter the pro rata  sharing of payments  required  thereby,  without the written
consent of each Lender,  (v) change any of the provisions of this Section or the
definition of "Required  Lenders" or any other provision  hereof  specifying the
number or percentage of Lenders which are required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,  (vi)
release any  Guarantor or limit the  liability of any such  Guarantor  under the
Guaranty  Agreement  without  the written  consent of such Lender  except to the
extent  such  release  is  expressly  provided  under the terms of the  Guaranty
Agreement,  or  (vii)  release  all or  substantially  all  collateral  (if any)
securing any of the Obligations.  Subject to subsection (e) of this Section, the
Borrower  agrees that each  Participant  shall be  entitled  to the  benefits of
Sections 2.16,  2.17, and 2.18 to the same extent as if it were a Lender and had
         -----  -----     ----
acquired its interest by assignment  pursuant to subsection (b) of this Section.
To the extent  permitted by law, each  Participant also shall be entitled to the
benefits of Section 10.7 as though it were a Lender,  provided such  Participant
            ------------
agrees to be subject to Section 10.7 as though it were a Lender.
                        ------------
    (e) A Participant shall not be entitled to receive any greater payment under
Section 2.16 or Section 2.18 than the applicable Lender would have been entitled
to receive with respect to the participation  sold to such  Participant,  unless
the sale of the  participation  to such  Participant is made with the Borrower's
prior written consent. A Participant that would be a Non-U.S.  Lender if it were
a Lender  shall not be  entitled  to the  benefits  of Section  2.18  unless the
Borrower is  notified of the  participation  sold to such  Participant  and such
Participant  agrees,  for the benefit of the  Borrower,  to comply with  Section
2.18(e) as though it were a Lender.

    (f) Any Lender may at any time  pledge or assign a security  interest in all
or any portion of its rights under this Agreement to secure  obligations of such
Lender,  including  without  limitation  any  pledge  or  assignment  to  secure
obligations  to a  Federal  Reserve  Bank;  provided  that  no  such  pledge  or
                                            --------
assignment  of a  security  interest  shall  release  a  Lender  from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

    (g) Notwithstanding anything to the contrary set forth herein, no assignment
by any Lender to an Approved Fund shall  relieve the assigning  Lender of any of
its  obligations  to fund Loans under this  Agreement  if, for any reason,  such
Approved  Fund fails to fund any such Loans or make any such  payments,  and the
assigning  Lender  (and not the  Approved  Fund)  shall  have the sole right and
responsibility to deliver all consents,  waivers,  amendments, and other actions
required or  requested  under the terms of this  Agreement  with  respect to its
Approved Fund.

                                       71
<PAGE>

    Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process.
                  ----------------------------------------------------------
    (a) This  Agreement  and the other  Loan  Documents  shall be  construed  in
accordance  with  and be  governed  by the law  (without  giving  effect  to the
conflict of law principles thereof) of the State of Georgia.

    (b) The Borrower hereby irrevocably and unconditionally  submits, for itself
and  its  property,  to the  non-exclusive  jurisdiction  of the  United  States
District  Court of the Northern  District of Georgia,  and of any state court of
the State of Georgia  located in Fulton County and any appellate  court from any
thereof,  in any  action  or  proceeding  arising  out of or  relating  to  this
Agreement or any other Loan Document or the transactions  contemplated hereby or
thereby,  or for  recognition or  enforcement  of any judgment,  and each of the
parties hereto hereby irrevocably and unconditionally  agrees that all claims in
respect of any such action or  proceeding  may be heard and  determined  in such
Georgia state court or, to the extent  permitted by applicable law, such Federal
court.  Each of the  parties  hereto  agrees  that a final  judgment in any such
action  or  proceeding  shall  be  conclusive  and  may  be  enforced  in  other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding  relating to this  Agreement or any other Loan  Document  against the
Borrower or its properties in the courts of any jurisdiction.

    (c) The Borrower irrevocably and unconditionally  waives any objection which
it may now or hereafter have to the laying of venue of any such suit,  action or
proceeding  described in subsection (b) of this Section and brought in any court
referred  to in  subsection  (b) of this  Section.  Each of the  parties  hereto
irrevocably  waives,  to the fullest  extent  permitted by  applicable  law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

    (d) Each party to this  Agreement  irrevocably  consents  to the  service of
process in the manner  provided  for  notices in Section  10.1.  Nothing in this
                                                 -------------
Agreement  or in any other  Loan  Document  will  affect  the right of any party
hereto to serve process in any other manner permitted by law.

    Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO
                  ---------------------
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO  REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER  PARTIES  HERETO  HAVE  BEEN  INDUCED  TO ENTER  INTO THIS
AGREEMENT  AND THE OTHER LOAN

                                       72
<PAGE>

DOCUMENTS BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

    Section  10.7.  Right of Setoff.  In addition to any rights now or hereafter
                    ----------------
granted  under  applicable  law and not by way of limitation of any such rights,
each  Lender  shall  have the  right,  at any time or from time to time upon the
occurrence  and during the  continuance  of an Event of Default,  without  prior
notice to the Borrower,  any such notice being expressly  waived by the Borrower
to the extent  permitted  by  applicable  law, to set off and apply  against all
deposits  (general  or  special,  time or demand,  provisional  or final) of the
Borrower at any time held or other  obligations at any time owing by such Lender
to or for  the  credit  or the  account  of the  Borrower  against  any  and all
Obligations  held by such Lender  irrespective of whether such Lender shall have
made demand  hereunder and although  such  Obligations  may be  unmatured.  Each
Lender agrees promptly to notify the Administrative Agent and the Borrower after
any such set-off and any  application  made by such Lender;  provided,  that the
                                                             ---------
failure to give such notice  shall not affect the  validity of such  set-off and
application.

    Section 10.8. Counterparts;  Integration.  This Agreement may be executed by
                  ---------------------------
one or  more  of the  parties  to  this  Agreement  on any  number  of  separate
counterparts  (including  by  telecopy),  and  all of  said  counterparts  taken
together  shall  be  deemed  to  constitute  one and the same  instrument.  This
Agreement,  the other Loan Documents, and any separate letter agreement(s) among
the Borrower,  SunTrust Bank and SunTrust Capital Markets,  Inc.  constitute the
entire  agreement  among the parties  hereto and thereto  regarding  the subject
matters   hereof  and   thereof  and   supersede   all  prior   agreements   and
understandings, oral or written, regarding such subject matters.

    Section 10.9.  Survival.  All  covenants,  agreements,  representations  and
                   ---------
warranties  made  by  the  Borrower  herein  and in the  certificates  or  other
instruments  delivered in connection with or pursuant to this Agreement shall be
considered  to have been  relied  upon by the  other  parties  hereto  and shall
survive  the  execution  and  delivery of this  Agreement  and the making of any
Loans,  regardless of any  investigation  made by any such other party or on its
behalf and notwithstanding  that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect  representation  or warranty
at the time any credit is extended  hereunder,  and shall continue in full force
and effect as long as the  principal  of or any accrued  interest on any Loan or
any fee or any other amount  payable  under this  Agreement is  outstanding  and
unpaid  and so long as the  Commitments  have not  expired  or  terminated.  The
provisions of Sections  2.16,  2.17,  2.18,  10.3 and 10.11 and Article IX shall
survive and remain in full force and effect  regardless of the  consummation  of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or  termination of the  Commitments or the  termination of this Agreement or any
provision  hereof.  All  representations  and  warranties  made  herein,  in the
certificates,  reports,  notices, and other documents delivered pursuant to this
Agreement  shall survive the  execution  and delivery of this  Agreement and the
other Loan Documents, and the making of the Loans.

    Section  10.10.  Severability.  Any provision of this Agreement or any other
                     ------------
Loan Document held to be illegal,  invalid or unenforceable in any jurisdiction,

                                       73
<PAGE>

shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or  unenforceability  without  affecting  the  legality,  validity or
enforceability  of  the  remaining   provisions  hereof  or  thereof;   and  the
illegality,  invalidity  or  unenforceability  of a  particular  provision  in a
particular  jurisdiction  shall  not  invalidate  or render  unenforceable  such
provision in any other jurisdiction.

    Section 10.11.  Confidentiality.  Each of the  Administrative  Agent and the
                    ----------------
Lenders agrees to maintain the  confidentiality  of the  Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates',
directors,  officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be  informed of the  confidential  nature of such  Information  and
instructed to keep such Information  confidential pursuant to the terms hereof),
(b) to the  extent  requested  by any  regulatory  authority,  (c) to the extent
required by applicable  laws or  regulations or by any subpoena or similar legal
process,  (d) to any other party to this  Agreement,  (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or  thereunder,  (f)  subject  to  a  written  agreement  containing  provisions
substantially  the same as  those of this  Section,  to (i) any  assignee  of or
Participant  in, or any  prospective  assignee of or Participant  in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such  Information (x) is publicly  available at the time of
disclosure or become  publicly  available  other than as a result of a breach of
this Section or (y) becomes available to the Administrative  Agent or any Lender
on  a   nonconfidential   basis  other  than  from  any  Person   known  by  the
Administrative  Agent  or  Lender,  as the  case  may  be,  to  have  made  such
information  available  in violation  of a duty of  confidentiality  owed to the
Borrower or any  Subsidiary.  For the  purposes of this  Section,  "Information"
means all information  received from the Borrower or any Subsidiary  relating to
the Borrower or any  Subsidiary or its business;  provided  that, in the case of
information  received from the Borrower or any Subsidiary after the date hereof,
such information is clearly  identified at the time of delivery as confidential.
Any Person required to maintain the  confidentiality  of Information as provided
in this Section shall be  considered to have complied with its  obligation to do
so if such Person has observed customary  practices and procedures of commercial
banks in respect of  confidential  information of their  customers and otherwise
exercised  the same  degree  of care to  maintain  the  confidentiality  of such
Information as such Person would accord to its own confidential information

    Section 10.12. Interest Rate Limitation.  Notwithstanding anything herein to
                   -------------------------
the contrary,  if at any time the interest rate applicable to any Loan, together
with all fees,  charges  and other  amounts  which may be treated as interest on
such Loan under applicable law (collectively,  the "Charges"),  shall exceed the
maximum  lawful rate of interest  (the  "Maximum  Rate") which may be contracted
for,  charged,  taken,  received or reserved  by a Lender  holding  such Loan in
accordance with applicable law, the rate of interest  payable in respect of such
Loan hereunder,  together with all Charges payable in respect thereof,  shall be
limited to the Maximum Rate and, to the extent lawful,  the interest and Charges
that would have been  payable in respect of such Loan but were not  payable as a
result of the  operation of this Section shall be cumulated and the interest and
Charges  payable to such  Lender in respect of other  Loans or periods  shall be
increased (but not

                                       74
<PAGE>

above the Maximum Rate  therefor)  until such  cumulated  amount,  together with
interest thereon at the Federal Funds Rate to the date of repayment,  shall have
been received by such Lender.

                                       75
<PAGE>

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their  respective  authorized  officers as of the day and year first
above written.

                                       DOLLAR GENERAL CORPORATION

                                       By      /s/ Wade Smith
                                               ----------------------
                                       Name:   Wade Smith
                                       Title:  Treasurer

<PAGE>

                                       SUNTRUST BANK,
                                       as Administrative Agent
                                       and as a Lender

                                       By /s/ Scott Corley
                                          ------------------------------
                                       Name:  Scott Corley
                                       Title: Director

                                       Commitment:                $34,333,333
                                                                  -----------

<PAGE>

                                       CREDIT SUISSE FIRST BOSTON,
                                       as Syndication Agent and as a Lender

                                       By /s/ Vitaly G. Buterko
                                          ------------------------------
                                       Name:  Vitaly G. Buterko
                                       Title: Associate

                                       By /s/ Jay Chall
                                          ------------------------------
                                       Name:  Jay Chall
                                       Title: Director

                                       Commitment:                $16,666,667
                                                                  -----------

<PAGE>

                                       U.S. BANK NATIONAL ASSOCIATION
                                       as Co-Documentation Agent and as a Lender

                                       By /s/ Brian H. Gallagher
                                          ------------------------------

                                       Name:  Brian H. Gallagher
                                       Title: Vice President

                                       Commitment:                $16,666,667
                                                                  -----------

<PAGE>

                                       KEYBANK NATIONAL ASSOCIATION,
                                       as Co-Documentation Agent and as a Lender

                                       By /s/ Mary K. Young
                                          ------------------------------
                                       Name:  Mary K. Young
                                       Title: Vice President

                                       Commitment:                $16,666,667
                                                                  -----------

<PAGE>

                                       AMSOUTH BANK,
                                       as a Lender

                                       By /s/ Monty R. Trimble
                                          ------------------------------

                                       Name:  Monty R. Trimble
                                       Title: Senior Vice President

                                       Commitment:                $11,666,667
                                                                  -----------

<PAGE>

                                       BANK OF AMERICA, N.A.,
                                       as a Lender

                                       By /s/ Dan M. Killian
                                          ------------------------------

                                       Name:  Dan M. Killian
                                       Title: Manager Director

                                       Commitment:                $13,333,333
                                                                  -----------

<PAGE>

                                       LASALLE BANK NATIONAL ASSOCIATION,
                                       as a Lender

                                       By /s/ Mark Mital
                                          ------------------------------

                                       Name:  Mark Mital
                                       Title: Vice President

                                       Commitment:                $8,333,333
                                                                  ----------

<PAGE>

                                       UNION PLANTERS BANK, N.A.
                                       as a Lender

                                       By /s/ Kathleen I. Nelson
                                          ------------------------------

                                       Name:  Kathleen I. Nelson
                                       Title: Senior Vice President

                                       Commitment:                $8,333,333
                                                                  ----------

<PAGE>

                                       BRANCH BANKING & TRUST CO.,
                                       as a Lender

                                       By /s/ R. Andrew Beam
                                          ------------------------------

                                       Name:  R. Andrew Beam
                                       Title: Senior Vice President

                                       Commitment:                $5,000,000
                                                                  ----------

<PAGE>

                                       FIFTH THIRD BANK,
                                       as a Lender

                                       By /s/ Megan S. Heisel
                                          ------------------------------

                                       Name:  Megan S. Heisel
                                       Title: Assistant Vice President

                                       Commitment:                $5,000,000
                                                                  ----------

<PAGE>

                                       NATIONAL CITY BANK,
                                       as a Lender

                                       By /s/ Michael J. Durbin
                                          ------------------------------

                                       Name:  Michael J. Durbin
                                       Title: Vice President

                                       Commitment:                $5,000,000
                                                                  ----------

<PAGE>

                                       TRANSAMERICA BUSINESS CAPITAL
                                         CORPORATION, as a Lender

                                       By /s/ Steve Goetschius
                                          ------------------------------

                                       Name:  Steve Goetschius
                                       Title: Senior Vice President

                                       Commitment:                $5,000,000
                                                                  ----------

<PAGE>

                                       CHANG HWA COMMERCIAL BANK,
                                       LTD., LOS ANGELES BRANCH, as a Lender

                                       By /s/ James Lin
                                          ------------------------------

                                       Name:  James Lin
                                       Title: SVP & General Manager

                                       Commitment:                $2,333,333
                                                                  ----------

<PAGE>

                                       BANK OF OKLAHOMA N.A.,
                                       as a Lender

                                       By /s/ Pamela J. Amburgy
                                          ------------------------------

                                       Name:  Pamela J. Amburgy
                                       Title: Vice President

                                       Commitment:                $1,666,667
                                                                  ----------

<PAGE>

                                                                  SCHEDULE 1.1-A

<TABLE>
<CAPTION>

                          APPLICABLE MARGINS AND APPLICABLE PERCENTAGES
                          ---------------------------------------------

      Level          Debt Rating           Applicable Margin                 Applicable Percentage
      -----          -----------           -----------------                 ---------------------

                                                LIBOR           Base Rate
                                                -----           ---------
       <S>         <C>                         <C>                <C>                 <C>
        I          greater BBB+/Baa1           0.800%             0.000%              0.100%
       II               BBB/Baa2               0.900%             0.000%              0.150%
       III             BBB-/Baa3               1.300%             0.000%              0.200%
       IV               BB+/Ba1                1.800%             0.500%              0.200%
        V                BB/Ba2                2.050%             0.875%              0.325%
       VI          greater than BB/Ba2         2.300%             1.250%              0.450%

</TABLE>

                                 SCHEDULE 1.1-A

<PAGE>

                                                                  SCHEDULE 1.1-B

                         MORTGAGED NON-RETAIL PROPERTIES
                         -------------------------------

                           PROPERTY                        CITY            STATE
--------------------------------------------------------------------------------
     1)       Distribution Center                Alachua                     FL
     2)       Distribution Center                Zanesville                  OH
     3)       Headquarters                       Goodlettsville              TN

                                 SCHEDULE 1.1-B

<PAGE>

<TABLE>
<CAPTION>

                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
  ST     SITE #      STORE #                ADDRESS                       CITY                COUNTY
------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  AL    HC-00082      1111           1421 Golden Springs Rd             Anniston              Calhoun
------------------------------------------------------------------------------------------------------------
  AL    HC-00065      2822           609 East Church Street              Atmore              Escambia
------------------------------------------------------------------------------------------------------------
  AL    HC-00075      0703              800 McMeans Ave.               Bay Minette            Baldwin
------------------------------------------------------------------------------------------------------------
  AL    HC-00080      3788              1632 Hwy 80 East                Demopolis             Marengo
------------------------------------------------------------------------------------------------------------
  AL    HC-00062      2366             1400 Temple Ave W.                Fayette              Fayette
------------------------------------------------------------------------------------------------------------
  AL    HC-00113      7101              1729 Decatur Hwy               Fultondale            Jefferson
------------------------------------------------------------------------------------------------------------
  AL    HC-00067      3291                  82 West                       Gordo               Pickens
------------------------------------------------------------------------------------------------------------
  AL    HC-00086      7175                4979 Hwy 17                    Helena               Shelby
------------------------------------------------------------------------------------------------------------
  AL    HC-00053      0710               1627 Lott Road                Eight Mile             Mobile
------------------------------------------------------------------------------------------------------------
  AL    HC-00061      1642             415 Old Highway 31                Warrior             Jefferson
------------------------------------------------------------------------------------------------------------
  AR    CN-00084      2020           2203 N. Reynolds Road               Bryant               Saline
------------------------------------------------------------------------------------------------------------
  AR    CN-00085      7026             14 Prospect Court                  Cabot               Lanoke
------------------------------------------------------------------------------------------------------------
  AR    CN-00100      2730            1305 Dave Ward Drive               Conway              Faulkner
------------------------------------------------------------------------------------------------------------
  AR    CN-00076      1254         609 J.P. Wright Loop Road          Jacksonville            Pulaski
------------------------------------------------------------------------------------------------------------
  FL    UR-00090      1635       14201 Martin Luther King Blvd.          Alachua              Alachua
------------------------------------------------------------------------------------------------------------
  FL    UR-00100      1332           856 South Broad Street            Brooksville           Hernando
------------------------------------------------------------------------------------------------------------
  FL    UR-00109      1651            125 West Belt Avenue              Bushnell              Sumter
------------------------------------------------------------------------------------------------------------
  FL    UR-00096      1337            1302 N. Young Blvd.               Chiefland              Levy
------------------------------------------------------------------------------------------------------------
  FL    UR-00127      7232             225 Raspberry Rd.                Crestview            Okaloosa
------------------------------------------------------------------------------------------------------------
  FL    UR-00112      4052           16075 US Highway 331-S             Freeport              Walton
------------------------------------------------------------------------------------------------------------
  FL    UR-00086      7049             1498 S. Highway 29         Gonzales (Cantonment)      Escambia
------------------------------------------------------------------------------------------------------------
  FL    UR-00124      7141             2207 S. Highway 77              Lynn Haven               Bay
------------------------------------------------------------------------------------------------------------
  FL    UR-00084      7228              4439 Highway 90                   Pace              Santa Rosa
------------------------------------------------------------------------------------------------------------
  FL    UR-00088      2877          3070 W. Michigan Avenue             Pensacola            Escambia
------------------------------------------------------------------------------------------------------------
  FL    UR-00097      7400            301 Beverly Parkway               Pensacola            Escambia
------------------------------------------------------------------------------------------------------------
  FL    UR-00098      0772            4818 Mobile Highway               Pensacola            Escambia
------------------------------------------------------------------------------------------------------------
  FL    UR-00121      4127            4023 Pine Forest Rd.              Pensacola            Escambia
------------------------------------------------------------------------------------------------------------
  GA    UR-00026      3117          1011 South Pierce Street              Alma                 Bacon
------------------------------------------------------------------------------------------------------------
  GA    UR-00067      1265           1640 Glen Carrie Road                Hull                Madison
------------------------------------------------------------------------------------------------------------
  GA    UR-00113      1206          1460 Atlanta Highway NW              Auburn               Barrow
------------------------------------------------------------------------------------------------------------
  GA    UR-00064      0706            314 S. Church Street               Blakely               Early
------------------------------------------------------------------------------------------------------------
  GA    UR-00032      4800             108 Burson Street                 Bowdon               Carroll
------------------------------------------------------------------------------------------------------------
  GA    UR-00058      2618            3050 Mount Zion Road               Bremen               Carroll
------------------------------------------------------------------------------------------------------------
  GA    UR-00073      1272              1003 N. Park St.               Carrollton             Carroll
------------------------------------------------------------------------------------------------------------
  GA    UR-00036      4773             U.S. Highway 129-S               Cleveland              White
------------------------------------------------------------------------------------------------------------
  GA    UR-00007      0997             3219 Maysville Rd.               Commerce              Jackson
------------------------------------------------------------------------------------------------------------
  GA    UR-00024      2386             101 W. 14th Avenue                Cordele               Crisp
------------------------------------------------------------------------------------------------------------
  GA    UR-00028      4808              5321 Highway 20                 Covington             Newton
------------------------------------------------------------------------------------------------------------
  GA    UR-00122      7057            7118 Highway 278 NE               Covington             Newton
------------------------------------------------------------------------------------------------------------
  GA    UR-00104      1025            6010 Bethelview Rd.                Cumming              Forsyth
------------------------------------------------------------------------------------------------------------
  GA    UR-00105      1266          121 North Corner Parkway             Cumming              Forsyth
------------------------------------------------------------------------------------------------------------
  GA    UR-00059      3703             295 Blakely Street               Cuthbert             Randolph
------------------------------------------------------------------------------------------------------------
  GA    UR-00061      0571           Morrison Moore Parkway             Dahlonega             Lumpkin
------------------------------------------------------------------------------------------------------------
  GA    UR-00068      0630            1293 Merchants Drive               Dallas              Paulding
------------------------------------------------------------------------------------------------------------
  GA    UR-00042      0046          2280 Chatsworth Highway              Dalton              Whitfield
------------------------------------------------------------------------------------------------------------
  GA    UR-00091      0872             Cleveland Highway                 Dalton              Whitfield
------------------------------------------------------------------------------------------------------------
  GA    UR-00055      0851             409 E. 3rd Street              Donalsonville          Seminole
------------------------------------------------------------------------------------------------------------
  GA    UR-00027      4789         1730 South Peterson Avenue            Douglas              Coffee
------------------------------------------------------------------------------------------------------------
  GA    UR-00115      3399              2190 Midway Rd.               Douglasville            Douglas
------------------------------------------------------------------------------------------------------------
  GA    UR-00016      2099           118 Hillcrest Parkway               Dublin               Laurens
------------------------------------------------------------------------------------------------------------
  GA    UR-00017      4655             531 Central Drive               East Dublin            Laurens
------------------------------------------------------------------------------------------------------------
  GA    UR-00093      1257            4388 Washington Rd.                 Evans              Columbia
------------------------------------------------------------------------------------------------------------
  GA    UR-00020      4775           2500 Limestone Parkway            Gainesville             Hall
------------------------------------------------------------------------------------------------------------
  GA    UR-00065      0780          188 West Clinton Street               Gray                 Jones
------------------------------------------------------------------------------------------------------------
  GA    UR-00005      4572            1019 Memorial Drive                Griffin             Spaulding
------------------------------------------------------------------------------------------------------------
  GA    UR-00108      1325                  Rte. 92                      Griffin             Spaulding
------------------------------------------------------------------------------------------------------------
  GA    UR-00054      4954            5130 Wrightsboro Rd.              Groveton             Columbia
------------------------------------------------------------------------------------------------------------
  GA    UR-00021      0076          1323 E. Franklin Street             Hartwell               Hart
------------------------------------------------------------------------------------------------------------
  GA    UR-00089      0996            890 West Church St.                Jasper               Pickens
------------------------------------------------------------------------------------------------------------
  GA    UR-00025      0301           995 East Cherry Street               Jesup                Wayne
------------------------------------------------------------------------------------------------------------

</TABLE>

                                 Schedule 1.1.C                           Page 2

<PAGE>

<TABLE>
<CAPTION>
                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  GA    UR-00013      4837            214 Commerce Avenue               LaGrange               Troup
------------------------------------------------------------------------------------------------------------
  GA    UR-00014      4656           1811 West Pointe Road              LaGrange               Troup
------------------------------------------------------------------------------------------------------------
  GA    UR-00003      4792            5544 Thomaston Road                 Macon                Bibb
------------------------------------------------------------------------------------------------------------
  GA    UR-00120      7133          3501 Hartley Bridge Rd.               Macon                Bibb
------------------------------------------------------------------------------------------------------------
  GA    UR-00006      0519             1521 Eatonton Road                Madison              Morgan
------------------------------------------------------------------------------------------------------------
  GA    UR-00002      0126         1104 Warm Springs Highway           Manchester           Meriwether
------------------------------------------------------------------------------------------------------------
  GA    UR-00079      1094              210 Baston Road                 Martinez             Columbia
------------------------------------------------------------------------------------------------------------
  GA    UR-00019      4882          1440 South Cedar Street             McDonough              Henry
------------------------------------------------------------------------------------------------------------
  GA    UR-00072      1089          1550 N. Columbia Street           Milledgeville           Baldwin
------------------------------------------------------------------------------------------------------------
  GA    UR-00035      2331            1908 1st Avenue S.E.              Moultrie             Colquitt
------------------------------------------------------------------------------------------------------------
  GA    UR-00008      4778             245 Temple Avenue                 Newnan               Coweta
------------------------------------------------------------------------------------------------------------
  GA    UR-00077      0738          234 West Railroad Street             Pelham              Mitchell
------------------------------------------------------------------------------------------------------------
  GA    UR-00126      7172         6391 Hiram Douglas Highway        Powder Springs          Paulding
------------------------------------------------------------------------------------------------------------
  GA    UR-00010      1904          1225 East Jackson Street           Thomasville            Thomas
------------------------------------------------------------------------------------------------------------
  GA    UR-00023      2521               US Highway 27                    Trion              Chattoga
------------------------------------------------------------------------------------------------------------
  GA    UR-00001      4963            106 Feagin Mill Road           Warner Robbins           Houston
------------------------------------------------------------------------------------------------------------
  GA    UR-00009      4857       1515 Richard B. Russell Pkwy.       Warner Robbins           Houston
------------------------------------------------------------------------------------------------------------
  GA    UR-00033      4807               751 Highway 96           Warner Robbins (Bonaire)    Houston
------------------------------------------------------------------------------------------------------------
  GA    UR-00076      2059             2451 Watson Blvd.             Warner Robbins           Houston
------------------------------------------------------------------------------------------------------------
  GA    UR-00040      4856         1902 South Georgia Parkway           Waycross               Ware
------------------------------------------------------------------------------------------------------------
  GA    UR-00075      0800            11067 Millarden Road              Woodbury            Meriwether
------------------------------------------------------------------------------------------------------------
  IA    HC-00093      2228            900 Princeton Drive                 Albia               Monroe
------------------------------------------------------------------------------------------------------------
  IA    HC-00132      7234            701 - 8th Street SW                Altoona               Polk
------------------------------------------------------------------------------------------------------------
  IA    HC-00162      7310          901 S. Ankeny Boulevard              Ankeny                Polk
------------------------------------------------------------------------------------------------------------
  IA    HC-00092      0111             1805 E. 7th Street               Atlantic               Cass
------------------------------------------------------------------------------------------------------------
  IA    HC-00128      2578              3025 West Avenue               Burlington           Des Moines
------------------------------------------------------------------------------------------------------------
  IA    HC-00116      7053            1006 N. 18th Street              Centerville           Appanoose
------------------------------------------------------------------------------------------------------------
  IA    HC-00161      2305         200 E. Glenn Miller Drive            Clarinda               Page
------------------------------------------------------------------------------------------------------------
  IA    HC-00118      7138             535 16th Avenue SE              Dyersville             Dubuque
------------------------------------------------------------------------------------------------------------
  IA    HC-00156      7054              3206 Main Street               Emmetsburg            Palo Alto
------------------------------------------------------------------------------------------------------------
  IA    HC-00106      1458            3715 Lafayette Road               Evansdale           Black Hawk
------------------------------------------------------------------------------------------------------------
  IA    HC-00158      7142             2304 N. Burlington               Fairfield            Jefferson
------------------------------------------------------------------------------------------------------------
  IA    HC-00119      7109              114 West Street                 Grinnell             Poweshiek
------------------------------------------------------------------------------------------------------------
  IA    HC-00121      2329            1304 1st Street West            Independence           Buchanon
------------------------------------------------------------------------------------------------------------
  IA    HC-00097      3540         1420 North Lincoln Street            Knoxville             Marion
------------------------------------------------------------------------------------------------------------
  IA    HC-00176      7226            1135 East Post Road                Marion                Linn
------------------------------------------------------------------------------------------------------------
  IA    HC-00103      4206          2413 South Center Street          Marshalltown           Marshall
------------------------------------------------------------------------------------------------------------
  IA    HC-00109      2019            408 South 9th Street            Marshalltown           Marshall
------------------------------------------------------------------------------------------------------------
  IA    HC-00117      2010            710 N. Grand Avenue             Mt. Pleasant             Henry
------------------------------------------------------------------------------------------------------------
  IA    HC-00127      7027           2000 Cedar Plaza Drive             Muscatine            Muscatine
------------------------------------------------------------------------------------------------------------
  IA    HC-00104      1536            1705 South B Avenue                Nevada                Story
------------------------------------------------------------------------------------------------------------
  IA    HC-00126      7179            721 N. Quincy Avenue               Ottumwa              Wapello
------------------------------------------------------------------------------------------------------------
  IA    HC-00134      2342              1010 26th Street                  Perry               Dallas
------------------------------------------------------------------------------------------------------------
  IA    HC-00120      4513              4840 Maple Drive              Pleasant Hill            Polk
------------------------------------------------------------------------------------------------------------
  IA    HC-00133      7136          66 East Tower Park Drive            Waterloo            Black Hawk
------------------------------------------------------------------------------------------------------------
  IL    CN-00134      7180           2160 West Ramada Lane             Carbondale             Jackson
------------------------------------------------------------------------------------------------------------
  IL    CN-00130      7181              1940 18th Street               Charleston              Coles
------------------------------------------------------------------------------------------------------------
  IL    CN-00141      7223         17 West Plumner Boulevard             Chatham             Sangamon
------------------------------------------------------------------------------------------------------------
  IL    CN-00105      2066             3797 US Route 36-E                Decatur               Macon
------------------------------------------------------------------------------------------------------------
  IL    CN-00111      1452             1200 - 17th Street                Fulton              Whiteside
------------------------------------------------------------------------------------------------------------
  IL    CN-00082      1387             713 Madison Street                Lebanon             St. Clair
------------------------------------------------------------------------------------------------------------
  IL    CN-00120      7137            1640 N. Main Street               Princeton             Bureau
------------------------------------------------------------------------------------------------------------
  IN    PR-00016      0939             11 Saratoga Drive               Batesville            Franklin
------------------------------------------------------------------------------------------------------------
  IN    PR-00005      1268        12050 West Washington Street         Cumberland             Marion
------------------------------------------------------------------------------------------------------------
  IN    PR-00006      2144          1800 Medical Arts Drive            Huntingburg            Dubois
------------------------------------------------------------------------------------------------------------
  IN    PR-00003      4509          4117 North Mannheim Road             Jasper               Dubois
------------------------------------------------------------------------------------------------------------
  IN    PR-00009      1146             913 Commerce Place               Ligionier              Noble
------------------------------------------------------------------------------------------------------------
  IN    PR-00007      1140                3121 S.R. 24                 Logansport              Cass
------------------------------------------------------------------------------------------------------------
  IN    PR-00013      7035        932 South Merrifield Avenue           Mishawaka           St. Joseph
------------------------------------------------------------------------------------------------------------
  IN    PR-00012      0155              906 Broad Street               New Castle              Henry
------------------------------------------------------------------------------------------------------------
  IN    PR-00011      2361            999 West Main Street                Peru                 Miami
------------------------------------------------------------------------------------------------------------
  IN    PR-00002      1269              1299 South Adams               Versailles             Ripley
------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Schedule 1.1-C                           Page 3

<PAGE>

<TABLE>
<CAPTION>
                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  KS    HC-00139      4470          1805 South Range Avenue               Colby               Thomas
------------------------------------------------------------------------------------------------------------
  KS    HC-00108      1049              20 Market Street              Council Grove           Morris
------------------------------------------------------------------------------------------------------------
  KS    HC-00115      4427               1208 East 27th                   Hays                 Ellis
------------------------------------------------------------------------------------------------------------
  KS    HC-00122      2537           901 South First Street             Hiawatha               Brown
------------------------------------------------------------------------------------------------------------
  KS    HC-00059      1009             200 Arizona Avenue                Holton               Jackson
------------------------------------------------------------------------------------------------------------
  KS    HC-00090      2579             211 South Franklin             Junction City            Geary
------------------------------------------------------------------------------------------------------------
  KS    HC-00100      7224           403 North Main Street               Lansing            Leavenworth
------------------------------------------------------------------------------------------------------------
  KS    HC-00096      7056          2321 Turtle Creek Blvd.             Manhattan              Riley
------------------------------------------------------------------------------------------------------------
  KS    HC-00147      7171            1310 East 1st Street                Pratt                Pratt
------------------------------------------------------------------------------------------------------------
  KS    HC-00063      1171             1001 S.W. Fairlawn                Topeka               Shawnee
------------------------------------------------------------------------------------------------------------
  KS    HC-00094      1457             1410 West Hwy. 24                 Wamego            Pottawatomie
------------------------------------------------------------------------------------------------------------
  KS    HC-00060      0859            221 West 47th South                Wichita             Sedgwick
------------------------------------------------------------------------------------------------------------
  KY    HC-00047      1029             7704 S. Highway 27               Burnside              Pulaski
------------------------------------------------------------------------------------------------------------
  KY    HC-00044      0316           2203 East Main Street             Cumberland             Harlan
------------------------------------------------------------------------------------------------------------
  KY    HC-00043      2654                Hwy 131 West                   Elkhorn               Pike
------------------------------------------------------------------------------------------------------------
  KY    HC-00114      0338              1645 Ashland Rd.                 Greenup              Greenup
------------------------------------------------------------------------------------------------------------
  KY    HC-00150      7110           1201 Cherrywood Drive              LaGrange              Oldham
------------------------------------------------------------------------------------------------------------
  KY    HC-00101      1275             8491 Pembroke Rd.                Oak Grove            Christian
------------------------------------------------------------------------------------------------------------
  KY    HC-00084      1057             1006 Center Drive                Richmond              Madison
------------------------------------------------------------------------------------------------------------
  KY    HC-00071      1088            21 Mount Tabor Court             Shelbyville            Shelby
------------------------------------------------------------------------------------------------------------
  KY    HC-00089      1459            639 Highland Avenue              Vine Grove             Hardin
------------------------------------------------------------------------------------------------------------
  LA    BM-00058      2771            13965 Coursey Blvd.              Baton Rouge       East Baton Rouge
------------------------------------------------------------------------------------------------------------
  LA    BM-00040      0759            175 Arlington Street             Bayou Vista        St. Mary Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00036      0448              254 Rees Street               Breaux Bridge      St. Martin Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00063      7022              11215 Joor Road                  Central         East Baton Rouge
------------------------------------------------------------------------------------------------------------
  LA    BM-00037      2884              3039 Hwy 1-South             Donaldsonville      Ascension Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00016      0621         2216 E.E. Wallace Blvd. N.           Ferriday         Corcordia Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00056      1544             300 Joe Hoy Drive                Franklin          St. Mary Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00071      7177              41065 Highway 42                 Galvez          Ascension Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00054      3839           1207 University Avenue              Hammond            Tangipahoa
------------------------------------------------------------------------------------------------------------
  LA    BM-00039      1045           5744 West Main Street                Houma          Terrebonne Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00061      7023           226 S. Hollywood Blvd.               Houma          Terrebonne Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00017      2492             109 Jasper Street                Rayville          Richland Parish
------------------------------------------------------------------------------------------------------------
  LA    BM-00053      2740           2115 Gause Blvd. East               Slidell        St. Tammany Parish
------------------------------------------------------------------------------------------------------------
  LA    MB-00035      0071        213 North Cities Service Hwy           Sulphur         Calcasieu Parish
------------------------------------------------------------------------------------------------------------
  LA    MB-00032      0777             347 W. Main Street             Ville Platte       Evangeline Parish
------------------------------------------------------------------------------------------------------------
  LA    MB-00051      0562              1200 Thomas Road               West Monroe        Ouchita Parish
------------------------------------------------------------------------------------------------------------
  LA    MB-00049      0917                5938 Hwy 167                  Winnfield           Winn Parish
------------------------------------------------------------------------------------------------------------
  MO    CN-00060      7058              2148 NW7 Highway              Blue Springs            Jackson
------------------------------------------------------------------------------------------------------------
  MO    CN-00114      4338              3020 Paris Road                 Columbia               Boone
------------------------------------------------------------------------------------------------------------
  MO    CN-00063      1433          2114 Scotthill Woods Rd.         Jefferson City            Cole
------------------------------------------------------------------------------------------------------------
  MO    CN-00102      1768             1350 N. Bryon Dr.                  Nixa               Christian
------------------------------------------------------------------------------------------------------------
  MO    CN-00115      0404             1202-A Highway 28               Owensville            Gasconade
------------------------------------------------------------------------------------------------------------
  MO    CN-00061      7102           2535 W. Kearney Street            Springfield            Greene
------------------------------------------------------------------------------------------------------------
  MS    BM-00066      7104            267 Highway 15 North              Ackerman              Choctaw
------------------------------------------------------------------------------------------------------------
  MS    BM-00045      1289             524 Highway 6 East              Batesville             Panola
------------------------------------------------------------------------------------------------------------
  MS    BM-00008      4928        2768 Highway 15 Court Street         Bay Springs            Jasper
------------------------------------------------------------------------------------------------------------
  MS    BM-00007      1565         125 Swinging Bridge Drive              Byram                Hinds
------------------------------------------------------------------------------------------------------------
  MS    BM-00018      4884           808 South State Street            Clarksdale             Coahoma
------------------------------------------------------------------------------------------------------------
  MS    BM-00004      4711             206 Alabama Street               Columbus              Lowndes
------------------------------------------------------------------------------------------------------------
  MS    BM-00010      1046             108 Deason Street               Ellisville              Hinds
------------------------------------------------------------------------------------------------------------
  MS    BM-00033      0875             117 Progress Drive                 Flora               Madison
------------------------------------------------------------------------------------------------------------
  MS    BM-00021      0218         2250 South Commerce Street            Grenada              Grenada
------------------------------------------------------------------------------------------------------------
  MS    BM-00046      1717              5021 Highway 42                Hattiesburg            Forrest
------------------------------------------------------------------------------------------------------------
  MS    BM-00048      1039             1909 Hardy Street               Hattiesburg            Forrest
------------------------------------------------------------------------------------------------------------
  MS    BM-00029      0629              28065 Highway 28               Hazlehurst             Copiah
------------------------------------------------------------------------------------------------------------
  MS    BM-00001      2372            611 Highway 82 West               Indianola            Sunflower
------------------------------------------------------------------------------------------------------------
  MS    BM-00003      1296              3322 Terry Road                  Jackson               Hinds
------------------------------------------------------------------------------------------------------------
  MS    BM-00041      0942             16180 Highway 603                  Kiln                Hancock
------------------------------------------------------------------------------------------------------------
  MS    BM-00034      1388       55 Veterans Memorial Boulevard         Kosciusko             Attala
------------------------------------------------------------------------------------------------------------
  MS    BM-00013      0878             384 Winter Street                Lucedale              George
------------------------------------------------------------------------------------------------------------
  MS    BM-00011      4742           6650 North Hill Street             Meridian            Lauderdale
------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Schedule 1.1-C                           Page 4

<PAGE>

<TABLE>
<CAPTION>
                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  MS    BM-00020      4900          10956 Nichols Boulevard           Olive Branch            Desoto
------------------------------------------------------------------------------------------------------------
  MS    BM-00042      0926           1405 South Main Street            Poplarville          Pearl River
------------------------------------------------------------------------------------------------------------
  MS    BM-00009      4802             1012 Market Street              Port Gibson           Claiborne
------------------------------------------------------------------------------------------------------------
  MS    BM-00030      0888             267 Magnolia Drive                Raleigh               Smith
------------------------------------------------------------------------------------------------------------
  MS    BM-00015      0667            410 East Lee Street                Sardis               Panola
------------------------------------------------------------------------------------------------------------
  MS    MB-00044      1169           8274 Airways Boulevard            Southhaven             Desoto
------------------------------------------------------------------------------------------------------------
  MS    BM-00064      7025              1300 Stark Road                Starksville           Oktibbeha
------------------------------------------------------------------------------------------------------------
  MS    BM-00028      1178         3309 McCullough Boulevard             Tupelo                 Lee
------------------------------------------------------------------------------------------------------------
  MS    BM-00006      4710              11980 Highway 57               Van Cleave             Jackson
------------------------------------------------------------------------------------------------------------
  MS    BM-00002      0678               100 Highway 27                 Vicksburg             Warren
------------------------------------------------------------------------------------------------------------
  MS    BM-00012      0894           1006 Mississippi Drive            Waynesboro              Wayne
------------------------------------------------------------------------------------------------------------
  MS    BM-00057      0688         104 South Applegate Street            Winona             Montgomery
------------------------------------------------------------------------------------------------------------
  NC    CN-00028      4849            1810 Live Oak Street              Beaufort             Carteret
------------------------------------------------------------------------------------------------------------
  NC    CN-00087      1440           131 N. NC 41 Act. Hwy             Beulaville             Duplin
------------------------------------------------------------------------------------------------------------
  NC    CN-00001      4651              519 Market Place                 Biscoe             Montgomery
------------------------------------------------------------------------------------------------------------
  NC    CN-00078      1236             1007 Monroe Street               Carthage               Moore
------------------------------------------------------------------------------------------------------------
  NC    CN-00022      4942            1008 N. Brown Street              Chadbourn            Columbus
------------------------------------------------------------------------------------------------------------
  NC    CN-00051      0346              122 Hwy 29 South               China Grove             Rowan
------------------------------------------------------------------------------------------------------------
  NC    CN-00002      4650             210 Market Street                Cramerton             Gaston
------------------------------------------------------------------------------------------------------------
  NC    CN-00053      0425           302 East Atkins Street              Dobson                Surry
------------------------------------------------------------------------------------------------------------
  NC    CN-00026      4744           120 Brookfall Dairy Rd               Elkin                Surry
------------------------------------------------------------------------------------------------------------
  NC    CN-00052      4943         711 South McDaniel Street             Enfield              Halifax
------------------------------------------------------------------------------------------------------------
  NC    CN-00057      0168           105 East Marlboro Rd.              Farmville              Pitt
------------------------------------------------------------------------------------------------------------
  NC    CN-00136      7144          507 East Wellons Street             Four Oaks            Johnston
------------------------------------------------------------------------------------------------------------
  NC    CN-00009      4723          3864 West Franklin Blvd.            Gastonia              Gaston
------------------------------------------------------------------------------------------------------------
  NC    CN-00059      0285           1410 West Grantham St.             Goldsboro              Wayne
------------------------------------------------------------------------------------------------------------
  NC    CN-00048      4905         101 Granite Quarry Street            Salisbury              Rowan
------------------------------------------------------------------------------------------------------------
  NC    CN-00041      4886              479 Hwy 70 West                 Havelock              Craven
------------------------------------------------------------------------------------------------------------
  NC    CN-00027      2782            1942 Spartanburg Hwy           Hendersonville          Henderson
------------------------------------------------------------------------------------------------------------
  NC    CN-00030      4827          407 E Washington Street             LaGrange              Lenoir
------------------------------------------------------------------------------------------------------------
  NC    CN-00081      1442       180 W. Cornelius Hernett Blvd.        Lillington             Harnett
------------------------------------------------------------------------------------------------------------
  NC    CN-00138      7225               103 Wade Ave.                  Louisburg            Franklin
------------------------------------------------------------------------------------------------------------
  NC    CN-00011      4770           W. Martin L. King Dr.               Maxton              Scotland
------------------------------------------------------------------------------------------------------------
  NC    CN-00018      4777            914 West Main Street            Murfreesboro           Hertford
------------------------------------------------------------------------------------------------------------
  NC    CN-00068      0430              1445 Andrews Rd.                 Murphy              Cherokee
------------------------------------------------------------------------------------------------------------
  NC    CN-00025      4791            800 E Washington St               Nashville              Nash
------------------------------------------------------------------------------------------------------------
  NC    CN-00016      4868            871 Granberry Street               Newland               Avery
------------------------------------------------------------------------------------------------------------
  NC    CN-00023      4818                359 Main St                 Newton Grove            Sampson
------------------------------------------------------------------------------------------------------------
  NC    CN-00010      4674           496 South Main Street               Norwood              Stanly
------------------------------------------------------------------------------------------------------------
  NC    CN-00003      4771              341 Aquadale Rd                  Oakboro              Stanly
------------------------------------------------------------------------------------------------------------
  NC    CN-00013      4829            917 West 3rd Street               Pembroke              Robeson
------------------------------------------------------------------------------------------------------------
  NC    CN-00047      4899           315 East Hamlet Street             Pinetops             Edgecombe
------------------------------------------------------------------------------------------------------------
  NC    CN-00045      0880              704 East Street                 Pittsboro             Chatham
------------------------------------------------------------------------------------------------------------
  NC    CN-00075      2449            724 U.S. Hwy 64 East              Plymouth            Washington
------------------------------------------------------------------------------------------------------------
  NC    CN-00020      4790            105 Fayetteville Rd                Raeford               Hoke
------------------------------------------------------------------------------------------------------------
  NC    CN-00014      4769              905 East 4th Ave               Red Springs            Robeson
------------------------------------------------------------------------------------------------------------
  NC    CN-00056      2906              139 North Hwy 49                Richfield             Stanly
------------------------------------------------------------------------------------------------------------
  NC    CN-00131      7098           2104 Fayetteville Rd.             Rockingham            Richmond
------------------------------------------------------------------------------------------------------------
  NC    CN-00058      0801            411-K South Main St.             Rolesville              Wake
------------------------------------------------------------------------------------------------------------
  NC    CN-00015      4873             608 East NC Hwy 24               Roseboro              Sampson
------------------------------------------------------------------------------------------------------------
  NC    CN-00089      1235              4205 NC Hwy 211                 West End               Moore
------------------------------------------------------------------------------------------------------------
  NC    CN-00029      4945             4301 Church Street              Sharpsburg              Nash
------------------------------------------------------------------------------------------------------------
  NC    CN-00012      4774           584 West Clark Street              St. Pauls             Robeson
------------------------------------------------------------------------------------------------------------
  NC    CN-00039      0869           1413 West Corbett Ave.             Swansboro             Onslow
------------------------------------------------------------------------------------------------------------
  NC    CN-00044      4906            1207 East Fifth St.              Tabor City            Columbus
------------------------------------------------------------------------------------------------------------
  NC    CN-00005      4819              717 Albemarle Rd                  Troy              Montgomery
------------------------------------------------------------------------------------------------------------
  NC    CN-00090      3216             8681 North Hwy 10                  Vale                Lincoln
------------------------------------------------------------------------------------------------------------
  NC    CN-00034      4977          421 South Brooks Street            Wake Forest             Wake
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
  NC    CN-00080      7059            1035 NC Hwy 65 West              Walnut Cove            Stokes
------------------------------------------------------------------------------------------------------------
  NC    CN-00054      0203            1431 John Small Ave.             Washington            Beaufort
------------------------------------------------------------------------------------------------------------
  NC    CN-00017      4890         31 Beaver Creek School Rd         West Jefferson            Ashe
------------------------------------------------------------------------------------------------------------
  NC    CN-00074      1016        2119 Forest Hills Rd., West            Wilson               Wilson
------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Schedule 1.1-C                           Page 5

<PAGE>

<TABLE>
<CAPTION>
                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  NC    CN-00092      7033              221 West Hwy. 74                 Wingate               Union
------------------------------------------------------------------------------------------------------------
  NE    HC-00135      3025           2120 North 6th Street              Beatrice               Gage
------------------------------------------------------------------------------------------------------------
  OH    ZR-00055      1542             825 E. Main Street                Ashland              Ashland
------------------------------------------------------------------------------------------------------------
  OH    ZR-00064      7103            3520 N. Ridge Road E              Ashtabula            Ashtabula
------------------------------------------------------------------------------------------------------------
  OH    ZR-00001      4694            888 West Main Street              Bellevue             Sandusky
------------------------------------------------------------------------------------------------------------
  OH    ZR-000066     7028             1905 Havemann Rd.                 Celina               Mercer
------------------------------------------------------------------------------------------------------------
  OH    ZR-00008      4776           1400 N. Bridge Street             Chillicothe             Ross
------------------------------------------------------------------------------------------------------------
  OH    ZR-00070      7134               251 Elida Road                  Delphos               Allen
------------------------------------------------------------------------------------------------------------
  OH    ZR-00077      7107             2205 Tiffin Avenue                Findlay              Hancock
------------------------------------------------------------------------------------------------------------
  OH    ZR-00059      1932              478 Jackson Pike               Gallipolis             Gallia
------------------------------------------------------------------------------------------------------------
  OH    ZR-00009      0120             100 Commerce Place                Geneva              Ashtabula
------------------------------------------------------------------------------------------------------------
  OH    ZR-00046      0994         22081 State Route 51 West              Genoa               Ottawa
------------------------------------------------------------------------------------------------------------
  OH    ZR-00035      4987              2393 Dayton Pike               Germantown           Montgomery
------------------------------------------------------------------------------------------------------------
  OH    ZR-00043      0604          108 W. Washington Street            Jamestown             Greene
------------------------------------------------------------------------------------------------------------
  OH    ZR-00079      7227              7000 Rose Drive                  Lisbon             Columbiana
------------------------------------------------------------------------------------------------------------
  OH    ZR-00063      7030            1212 W. Main Street              Louisville              Stark
------------------------------------------------------------------------------------------------------------
  OH    ZR-00004      0324             1509 Ashland Road                Mansfield            Richland
------------------------------------------------------------------------------------------------------------
  OH    ZR-00005      4740            320 Mill Creek Drive             Marysville              Union
------------------------------------------------------------------------------------------------------------
  OH    ZR-00057      2015          495 S. Washington Street           New Bremen            Auglaize
------------------------------------------------------------------------------------------------------------
  OH    ZR-00012      0169             753 Carroll Street             New Lexington            Perry
------------------------------------------------------------------------------------------------------------
  OH    ZR-00020      0390            101 W. State Street             Newcomerstown         Tuscarawas
------------------------------------------------------------------------------------------------------------
  OH    ZR-00006      4741              359 Milan Avenue                 Norwalk               Huron
------------------------------------------------------------------------------------------------------------
  OH    ZR-00003      4673          1660 West Fourth Street              Ontario             Richland
------------------------------------------------------------------------------------------------------------
  OH    ZR-00067      7029            1444 N. Perry Street               Ottawa               Putnam
------------------------------------------------------------------------------------------------------------
  OH    ZR-00034      1241          5055 College Corner Pike             Oxford               Butler
------------------------------------------------------------------------------------------------------------
  OH    ZR-00050      0539            75 Oak Meadow Drive               Pataskala             Licking
------------------------------------------------------------------------------------------------------------
  OH    ZR-00019      2779           840 East Perry Street              Paulding             Paulding
------------------------------------------------------------------------------------------------------------
  OH    ZR-00007      4779            2824 East Harbo Road            Port Clinton            Ottawa
------------------------------------------------------------------------------------------------------------
  OH    ZR-00011      2260           3508 West Main Street               Ravenna              Portage
------------------------------------------------------------------------------------------------------------
  OH    ZR-00061      7099             844 Indiana Avenue             Saint Mary's           Auglaize
------------------------------------------------------------------------------------------------------------
  OH    ZR-00054      1450            955 N. State Street                Trenton              Butler
------------------------------------------------------------------------------------------------------------
  OH    ZR-00053      1955            785 W. Market Street                Troy                 Miami
------------------------------------------------------------------------------------------------------------
  OH    ZR-00033      0360           1260 East Wyandot Ave.          Upper Sandusky           Wyandot
------------------------------------------------------------------------------------------------------------
  OH    ZR-00056      2047            1821 Columbus Avenue        Washington Courthouse       Fayette
------------------------------------------------------------------------------------------------------------
  OH    ZR-00010      4739            201 W. Walton Street               Willard               Huron
------------------------------------------------------------------------------------------------------------
  OH    ZR-00040      1043             359 Lewisville Rd               Woodsfield             Monroe
------------------------------------------------------------------------------------------------------------
  OK    HC-00036      4984               217 N.E. Tenth                 Blanchard             McClain
------------------------------------------------------------------------------------------------------------
  OK    HC-00064      0294             201 S. 9th Street                 Duncan              Stephens
------------------------------------------------------------------------------------------------------------
  OK    HC-00038      0208              14143 Elm Street                Glenpool               Tulsa
------------------------------------------------------------------------------------------------------------
  OK    CH-00040      0633             211 N. 5th Street                Henryetta            Okmulgee
------------------------------------------------------------------------------------------------------------
  OK    HC-00039      7051              1305 South Main                Kingfisher           Kingfisher
------------------------------------------------------------------------------------------------------------
  OK    HC-00049      0122             844 NW 32nd Street              New Castle             McClain
------------------------------------------------------------------------------------------------------------
  OK    HC-00037      0132         210 North Harrison Street             Shawnee           Pottawatomie
------------------------------------------------------------------------------------------------------------
  PA    ZR-00015      4865              105 Wilson Road               Bentleyville          Washington
------------------------------------------------------------------------------------------------------------
  PA    ZR-00036      1445      Rt. 209-S, Chestnuthill Township     Broadheadsville          Monroe
------------------------------------------------------------------------------------------------------------
  PA    ZR-00048      7139              115 Roberts Road               Grindstone             Fayette
------------------------------------------------------------------------------------------------------------
  PA    ZR-00021      4986          4052 Philadelphia Avenue          Chambersburg           Franklin
------------------------------------------------------------------------------------------------------------
  PA    ZR-00022      0316            944 Lincoln Way West            Chambersburg           Franklin
------------------------------------------------------------------------------------------------------------
  PA    ZR-00042      0270             1700 Peach Street                  Erie                 Erie
------------------------------------------------------------------------------------------------------------
  PA    ZR-00024      4940            1403 W. Main Street              Grove City             Mercer
------------------------------------------------------------------------------------------------------------
  PA    ZR-00028      1151              State Route 590                  Hamlin                Wayne
------------------------------------------------------------------------------------------------------------
  PA    ZR-00045      2940            701 W. Centre Street            Mahanoy City          Schuylkill
------------------------------------------------------------------------------------------------------------
  PA    ZR-00044      1271            7097 Mason Dixon Hwy             Meyersdale            Somerset
------------------------------------------------------------------------------------------------------------
  PA    ZR-00023      2203            553 West Main Street              Mount Joy            Lancaster
------------------------------------------------------------------------------------------------------------
  PA    ZR-00047      7032              535 Pocono Blvd.               Mt. Pocono             Monroe
------------------------------------------------------------------------------------------------------------
  PA    ZR-00018      4903            2205 W. State Street             New Castle            Lawrence
------------------------------------------------------------------------------------------------------------
  PA    ZR-00065      7108             10670 W. Main Road               Northeast              Erie
------------------------------------------------------------------------------------------------------------
  PA    ZR-00039      1059            383 Meridian Avenue               Scranton            Lackawanna
------------------------------------------------------------------------------------------------------------
  PA    ZR-00029      1625              State Route 924                Shenandoah           Schuylkill
------------------------------------------------------------------------------------------------------------
  PA    ZR-00026      0149            486 East King Street            Shippensburg          Cumberland
------------------------------------------------------------------------------------------------------------
  PA    ZR-00051      1449              5034 Hann Drive               Mechanicsburg         Cumberland
------------------------------------------------------------------------------------------------------------
  PA    ZR-00025      0145               State Route 6                   Towanda             Bradford
------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Schedule 1.1-C                           Page 6

<PAGE>

<TABLE>
<CAPTION>
                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  PA    ZR-00049      7024              440 Main Street                Walnutport          Northhampton
------------------------------------------------------------------------------------------------------------
  PA    ZR-00030      2993            1034 E. Main Street               Bradford              McKeen
------------------------------------------------------------------------------------------------------------
  SC    UR-00080      2640           10306 Dunbarton Blvd.              Barnwell             Barnwell
------------------------------------------------------------------------------------------------------------
  SC    UR-00063      3253              543 Langster Hwy                 Chester              Chester
------------------------------------------------------------------------------------------------------------
  SC    UR-00103      1165              1020 West Blvd.               Chesterfield         Chesterfield
------------------------------------------------------------------------------------------------------------
  SC    UR-00052      4914               590 E. Barnch                   Denmark              Bamberg
------------------------------------------------------------------------------------------------------------
  SC    UR-00114      1448            550 East Main Street               Duncan             Spartanburg
------------------------------------------------------------------------------------------------------------
  SC    UR-00062      0736             1326 Redbank Road               Goose Creek           Berkeley
------------------------------------------------------------------------------------------------------------
  SC    UR-00081      3044            1713 Elm Street West               Hampton              Hampton
------------------------------------------------------------------------------------------------------------
  SC    UR-00048      8376              1752 River Road               John's Island         Charleston
------------------------------------------------------------------------------------------------------------
  SC    UR-00053      4983            15 Roseborough Road                Lugoff               Kershaw
------------------------------------------------------------------------------------------------------------
  SC    UR-00118      1142            500 W. Boyce Street                Manning             Clarendon
------------------------------------------------------------------------------------------------------------
  SC    UR-00102      1203              2433 East Hwy 76                 Marion               Marion
------------------------------------------------------------------------------------------------------------
  SC    UR-00056      3629           7530 Kirkpatrick Lane          North Charleston        Charleston
------------------------------------------------------------------------------------------------------------
  SC    UR-00071      0317           195 Market Plaza Drive            N. Augusta              Aiken
------------------------------------------------------------------------------------------------------------
  SC    UR-00049      3218             1365 Remount Road                 Hanahan            Charleston
------------------------------------------------------------------------------------------------------------
  SC    CN-00008      4772      209 South Van Lingle Mungo Blvd.        Pageland           Chesterfield
------------------------------------------------------------------------------------------------------------
  SC    UR-00051      0163            1005 Mechanic Street              Pendleton            Anderson
------------------------------------------------------------------------------------------------------------
  SC    UR-00094      3635              211 Main Street                 Ridgeland             Jasper
------------------------------------------------------------------------------------------------------------
  SC    UR-00044      4866              9120 Old #6 Hwy                  Santee             Orangeburg
------------------------------------------------------------------------------------------------------------
  SC    UR-00029      4799            5722 Memorial Blvd.              St. George           Dorchester
------------------------------------------------------------------------------------------------------------
  SC    UR-00039      4913            1650 N. Main Street              Summerville           Berkeley
------------------------------------------------------------------------------------------------------------
  SC    UR-00043      4862               597 Bells Hwy.                Walterboro            Colleton
------------------------------------------------------------------------------------------------------------
  TN    HC-00046      0881            200 Brush Creek Road             Alexandria             Dekalb
------------------------------------------------------------------------------------------------------------
  TN    HC-00087      1252              2410 Madison St.               Clarksville          Montgomery
------------------------------------------------------------------------------------------------------------
  TN    CP-00019      4781            2430 Blackburn Rd SE              Cleveland             Bradley
------------------------------------------------------------------------------------------------------------
  TN    HC-00045      2004             8 Main Street East             Gordonsville             Smith
------------------------------------------------------------------------------------------------------------
  TN    HC-00088      1439                124 Hwy 321                    Hampton              Carter
------------------------------------------------------------------------------------------------------------
  TN    HC-00085      1443                5934 Hwy 58                   Harrison             Hamilton
------------------------------------------------------------------------------------------------------------
  TN    HC-00167      1769               104 Laker Lane                 Lake City            Anderson
------------------------------------------------------------------------------------------------------------
  TN    BM-00024      0166          5083 Raleigh-LaGrange Rd             Memphis              Shelby
------------------------------------------------------------------------------------------------------------
  TN    BM-00025      4482           7110 East Shelby Drive              Memphis              Shelby
------------------------------------------------------------------------------------------------------------
  TN    HC-00078      0870             915 W. Main Street               Monteagle             Grundy
------------------------------------------------------------------------------------------------------------
  TN    HC-00054      0207           2984 S. Church Street            Murfreesboro          Rutherford
------------------------------------------------------------------------------------------------------------
  TN    HC-00056      1021            2011 SE Broad Street            Murfreesboro          Rutherford
------------------------------------------------------------------------------------------------------------
  TN    HC-00051      0204              227 Carson Lane               Murfreesboro          Rutherford
------------------------------------------------------------------------------------------------------------
  TN    DG-00001      0150             1370 Robinson Road              Old Hickory           Davidson
------------------------------------------------------------------------------------------------------------
  TN    CP-00021      0740         1106 Mineral Wells Avenue              Paris                Henry
------------------------------------------------------------------------------------------------------------
  TN    HC-00076      2310              414 Hwy 52 West                 Portland              Sumner
------------------------------------------------------------------------------------------------------------
  TN    HC-00072      1540           7601 Norman Jack Lane              Knoxville              Knox
------------------------------------------------------------------------------------------------------------
  TN    HC-00074      1082          772 Mountain Creek Road          Signal Mountain         Hamilton
------------------------------------------------------------------------------------------------------------
  TX    HC-00129      7176          1200 E. Pioneer Parkway             Arlington             Tarrant
------------------------------------------------------------------------------------------------------------
  TX    HC-00141      7145             651 E. Main Street               Bellville             Austin
------------------------------------------------------------------------------------------------------------
  TX    HC-00077      1222             501 E. 6th Street                 Belton                Bell
------------------------------------------------------------------------------------------------------------
  TX    CP-00028      0828             Hwy 62 Main Street                 Buna                Jasper
------------------------------------------------------------------------------------------------------------
  TX    CP-00029      4804               303 N.W. Loop                  Carthage              Panola
------------------------------------------------------------------------------------------------------------
  TX    CP-00010      4904             1602 W. Henderson                Cleburne              Johnson
------------------------------------------------------------------------------------------------------------
  TX    CP-00016      7034             Farm to Market St             Corpus Christi           Nueces
------------------------------------------------------------------------------------------------------------
  TX    CP-00005      4782               200 N. Roberts                  Crowley              Tarrant
------------------------------------------------------------------------------------------------------------
  TX    HC-00079      0417               2127 Sadau Ct.                  Denton               Denton
------------------------------------------------------------------------------------------------------------
  TX    HC-00153      7050            1609 E. McKinney St.               Denton               Denton
------------------------------------------------------------------------------------------------------------
  TX    HC-00180      1577            1317 E. Main Street               Eastland             Eastland
------------------------------------------------------------------------------------------------------------
  TX    CP-00031      4901              300 W. Commerce                 Fairfield            Freestone
------------------------------------------------------------------------------------------------------------
  TX    CP-00006      4738           1601 S. Morgan Street              Granbury               Hood
------------------------------------------------------------------------------------------------------------
  TX    CP-00008      0600           604 E. Pioneer Parkway           Grand Prairie           Dallas
------------------------------------------------------------------------------------------------------------
  TX    CP-00026      4803             980 W. Main Street              Gun Barrell           Henderson
------------------------------------------------------------------------------------------------------------
  TX    CP-00022      4757                  Hwy 87 N                    Hemphill              Sabine
------------------------------------------------------------------------------------------------------------
  TX    HC-00034      0632                120 Hwy 64-W                  Henderson              Rusk
------------------------------------------------------------------------------------------------------------
  TX    HC-00069      0525                234 S. Waco                   Hillsboro              Hill
------------------------------------------------------------------------------------------------------------
  TX    HC-00198      7405               Rt. 2 Box 370                 Huntington            Angelina
------------------------------------------------------------------------------------------------------------
  TX    HC-00091      7170             400 S. Nursery Rd.                Irving               Dallas
------------------------------------------------------------------------------------------------------------
  TX    CP-00007      4975                321 Broadway                   Joshua               Johnson
------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Schedule 1.1-C                           Page 7

<PAGE>

<TABLE>
<CAPTION>
                                                                  SCHEDULE 1.1-C

                           MORTGAGED RETAIL PROPERTIES
                           ---------------------------

------------------------------------------------------------------------------------------------------------
<S>     <C>           <C>        <C>                              <C>                      <C>
  TX    HC-00050      0802           2221 S. Washington St.              Kaufman              Kaufman
------------------------------------------------------------------------------------------------------------
  TX    CP-00024      0833            312 N. Margaret St.              Kirbyville             Jasper
------------------------------------------------------------------------------------------------------------
  TX    CP-00001      4692             403 S. Denton Dr.               Lake Dallas            Denton
------------------------------------------------------------------------------------------------------------
  TX    CP-00003      4606              416 Hwy 720 West               Little Elm             Denton
------------------------------------------------------------------------------------------------------------
  TX    CP-00004      0995               1707 Deans Way                  Lufkin              Angelina
------------------------------------------------------------------------------------------------------------
  TX    HC-00052      0259               1016 S. 3rd St                  Mabank              Henderson
------------------------------------------------------------------------------------------------------------
  TX    HC-00048      0515               407 W. Royall                  Malakoff             Henderson
------------------------------------------------------------------------------------------------------------
  TX    CP-00018      2663              502 E. Brood St                  Mineloa               Wood
------------------------------------------------------------------------------------------------------------
  TX    CP-00023      0653           927 N. University Dr.             Nacogdoches          Nacogdoches
------------------------------------------------------------------------------------------------------------
  TX    HC-00042      4956               2003 South St.                Nacogdoches          Nacogdoches
------------------------------------------------------------------------------------------------------------
  TX    HC-00041      0555               460 S. Hwy 377                Pilot Point            Denton
------------------------------------------------------------------------------------------------------------
  TX    HC-00143      7135                702 East 120                  Pottsboro             Grayson
------------------------------------------------------------------------------------------------------------
  TX    HC-00020      4743             243 E. Ovilla Rd.                 Red Oak               Ellis
------------------------------------------------------------------------------------------------------------
  TX    HC-00123      4540              5610 Rowlett Rd.                 Rowlett              Dallas
------------------------------------------------------------------------------------------------------------
  TX    HC-00151      7105               6502 S. Hwy 78                  Sachse               Dallas
------------------------------------------------------------------------------------------------------------
  TX    HC-00033      4955               1006 N. Fifth                   Sanger               Denton
------------------------------------------------------------------------------------------------------------
  TX    CP-00025      0839                955 Hwy 327E                   Silsbee              Hardin
------------------------------------------------------------------------------------------------------------
  TX    CP-00002      4684                6546 Watanga                   Watanga              Tarrant
------------------------------------------------------------------------------------------------------------
  TX    HC-00144      7055            809 W. Montgomery St               Willis             Montgomery
------------------------------------------------------------------------------------------------------------
  TX    CP-00030      0687             801 S. Main Street               Winnsboro              Wood
------------------------------------------------------------------------------------------------------------
  TX    CP-00017      4780                421 Hwy 78N                     Wylie               Collin
------------------------------------------------------------------------------------------------------------
  VA    CN-00103      1386               90 Scruggs Rd.                  Moneta              Franklin
------------------------------------------------------------------------------------------------------------
  VA    CN-00098      7060            411 Wytle Creek Rd.               Poquoson               York
------------------------------------------------------------------------------------------------------------
  VA    CN-00133      7106           302 South Main Street               Stuart               Patrick
------------------------------------------------------------------------------------------------------------
  VA    CN-00129      0474             8494 Country Place               Cheriton           North Hampton
------------------------------------------------------------------------------------------------------------
  VA    CN-00118      7031              1018 3rd Avenue                 Dungannon              Scott
------------------------------------------------------------------------------------------------------------
  VA    CN-00096      1747               88 Main Street                Lovingston             Nelson
------------------------------------------------------------------------------------------------------------
  VA    CN-00091      1543            17413 Warwick Blvd.             Newport News               *
------------------------------------------------------------------------------------------------------------
  VA    CN-00077      1360              Rt. 3, Box 5435                  Dillwyn            Buckingham
------------------------------------------------------------------------------------------------------------
  VA    CN-00067      0879            36108 Goodwin Drive             Locust Grove            Orange
------------------------------------------------------------------------------------------------------------
  VA    CN-00065      0481            21319 Bennett Street              Parksley             Accomack
------------------------------------------------------------------------------------------------------------
  VA    CN-00050      0375           927 North Main Street             Chase City           Mecklenburg
------------------------------------------------------------------------------------------------------------
  VA    CN-00049      2285            15810 King's Highway              Montross           Westmoreland
------------------------------------------------------------------------------------------------------------
  VA    CN-00043      0339          2146 East Midland Trail            Buena Vista          Rockbridge
------------------------------------------------------------------------------------------------------------
  VA    CN-00040      0583             1220 Tyler Avenue                 Radford            Montgomery
------------------------------------------------------------------------------------------------------------
  VA    CN-00037      0366            West Virginia Avenue                Crew               Nottoway
------------------------------------------------------------------------------------------------------------
  VA    CN-00033      0484           1011 South Main Street            Blackstone            Nottoway
------------------------------------------------------------------------------------------------------------
  VA    CN-00021      2581         1200 U.S. Highway 211 West             Luray                Page
------------------------------------------------------------------------------------------------------------
  VA    CN-00019      0439          2900 King William Avenue           West Point          King William
------------------------------------------------------------------------------------------------------------
 WVA    CN-00117      4445              7131 Harper Road               Glen Daniel            Raleigh
------------------------------------------------------------------------------------------------------------
 WVA    CN-00079      0383          741 #D North Main Street            Moorfield              Hardy
------------------------------------------------------------------------------------------------------------
 WVA    CN-00064      1008              219 Seneca Trail                 Fairlea            Greenbriar
------------------------------------------------------------------------------------------------------------
</TABLE>

* Please note that everything is filed in the City of Newport News

                                 SCHEDULE 1.1-C                           Page 8

<PAGE>

                                                                    SCHEDULE 4.1

                                EXISTENCE; POWER
                                ----------------

As disclosed  in Section  4.8(b),  the Borrower and certain of its  Subsidiaries
have failed to file  certain  information  with certain  governmental  and state
authorities.  As a result of this failure to provide  information,  the Borrower
and certain of its Subsidiaries may not be in good standing in the states listed
on this Schedule 4.1.

Borrower/Subsidiary                  State                     Reason
--------------------------------------------------------------------------------
DG Logistics, LLC                    TN          Unfiled franchise tax returns
Dolgencorp of TX                     TX          Unfiled franchise tax returns
Dollar General Financial, Inc.       TN          Unfiled franchise tax returns
Dolgencorp, Inc.                     TN          Unfiled franchise tax returns
Nations Title Company, Inc.          TN          Unfiled franchise tax returns

                                  Schedule 4.1

<PAGE>
                                                                   SCHEDULE 4.5

                      LITIGATION AND ENVIRONMENTAL MATTERS
                      ------------------------------------

                              EXISTING LITIGATION
-------------------------------------------------------------------------
      None

                                  Schedule 4.5

<PAGE>
                                                                   SCHEDULE 4.10

                                  ERISA MATTERS
                                  -------------

                             EXISTING ERISA MATTERS
--------------------------------------------------------------------------------

     Dollar General  Corporation  Retiree Medical Plan - Medical and Rx coverage
     for officers of the corporation. The eligibility requirement is age 45 or 5
     years  of  service.  Coverage  terminates  when  retiree  becomes  Medicare
     eligible;  death of employee;  employee has access to other group  coverage
     through an employer.

                                 Schedule 4.10

<PAGE>

                                                                   SCHEDULE 4.16
<TABLE>
<CAPTION>

                                         SUBSIDIARIES
                                         ------------

                                       JURISDICTION OF
                                        INCORPORATION/
 NO.                  ENTITY            ORGANIZATION        OWNERSHIP OF CAPITAL STOCK/PARTNERS/MEMBERS       TYPE
------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>           <C>                                                <C>
 1   Dolgencorp, Inc.                     Kentucky      Dollar General Corporation                         Corporation
 2   Dolgencorp of Texas, Inc.            Kentucky      Dolgencorp, Inc.                                   Corporation
 3   Dade Lease Management, Inc.          Delaware      Dollar General Corporation                         Corporation
 4   The Greater Cumberland Insurance     Vermont       Dollar General Financial, Inc.                     Corporation
     Company
 5   Dollar General Financial, Inc.       Tennessee     Dollar General Corporation                         Corporation
 6   Dollar General Intellectual          Vermont       Dade Lease Management, Inc. - General Partner      Limited partnership
     Property, LP                                       The Greater Cumberland Insurance Company -
                                                        Limited Partner
 7   Dollar General Partners              Kentucky      Dolgencorp, Inc. - General Partner                 General partnership
                                                        Dade Lease Management, Inc. - General Partner
                                                        Dollar General Financial, Inc. - General Partner
 8   Dolgencorp of New York, Inc.         Kentucky      Dolgencorp, Inc.                                   Corporation
 9   DG Logistics, LLC                    Tennessee     Dolgencorp, Inc.                                   Limited liability company
10   Dollar General Stores, Ltd.          Kentucky      Dolgencorp, Inc. - General Partner                 Limited partnership
                                                        Dade Lease Management, Inc. - Limited Partner
11   Nations Title Company, Inc.          Tennessee     Dollar General Financial, Inc.                     Corporation
12   Dollar General Properties LLC        Delaware      Dolgencorp, Inc.                                   Limited liability company
13   Dollar General Properties of         Delaware      Dollar General Partners                            Limited liability company
     Kentucky, LLC
14   Dollar General Investment, Inc.      Delaware      Dollar General Corporation                         Corporation

</TABLE>

                                 Schedule 4.16

<PAGE>

                                                                    SCHEDULE 7.1
<TABLE>
<CAPTION>

                                        EXISTING INDEBTEDNESS
                                        ---------------------

                                                                                                        AMOUNT
   NO.                          EXISTING INDEBTEDNESS AS OF MAY 3, 2002                             $ IN THOUSANDS
-------------------------------------------------------------------------------------------------------------------------
   <S>    <C>                                                                                           <C>
    1     Indenture dated as of June 21, 2000 between Dollar General Corporation as Issuer,             $200,000
            the Guarantors and First Union National Bank as Trustee, governing the Borrower's
            8 5/8% Notes due June 15, 2010

    2     Lease and Agreement dated as of April 30, 1997 between Sun-Dollar, L.P. as Landlord            $53,121
            and Dollar General Corporation as Tenant (South Boston, VA distribution center);
            (Capital Lease Obligation)

    3     Lease dated as of January 19, 1999 between DG Ardmore, LLC as Landlord and                     $42,365
            Dollar General Corporation as Tenant (Ardmore, OK distribution center)
            (Capital Lease Obligation)

    4     Lease Agreement dated as of June 1, 2000 between FU/DG Fulton, LLC as Lessor and               $14,873
            Dollar General Corporation as Lessee (Fulton, MO distribution center)
            (Capital Lease Obligation)

    5     Lease Agreement dated as of June 1, 2000 between FU/DG Indianola, LLC as Lessor                $10,321
            and Dollar General Corporation as Lessee (Indianola, MS  distribution center)
            (Capital Lease Obligation)

    6     Equipment Lease dated as of July 28, 1999 between First Union Commercial                        $8,216
            Corporation as Lessor and Dollar General Corporation as Lessee
            (Capital Lease Obligation for airplane)

    7     Term Lease Master Agreement dated as of November 14, 1994 between IBM Credit                   $28,486
            Corporation as Lessor and Dollar General Corp as Lessee
            (Capital Lease Obligation)

    8     Standby letter of credit, Bank of America as Issuer, Dollar General Corporation                 $1,959
            as Applicant and National Union Fire Insurance as Beneficiary - (face amount)

    9     Standby letter of credit, Bank of America as Issuer, Dollar General Corporation                   $135
            as Applicant and Ace American Insurance Group as Beneficiary - (face amount)

   10     Standby letter of credit line, Farmers National Bank as lender and Dollar General                  $98
            Corporation as borrower ($250 line of credit; $98 face amount)

   11     Interest Rate Swap Transaction dated as of July 20, 1999 between Dollar General                   $922
            Corporation and SunTrust Bank, Atlanta, expiring September 1, 2002
            ($100,000 notional amount; $922 termination cost)

   12     Promissory Notes to Robert J. Wood and John C. Wellons dated as of October 7, 1977                 $39
            (Outstanding principal amount)

   13     Intercompany indebtedness

</TABLE>

                                  Schedule 7.1

<PAGE>

                                                                    SCHEDULE 7.2
<TABLE>
<CAPTION>

                                     EXISTING LIENS
                                     --------------

   NO.                              EXISTING LIENS ($ IN THOUSANDS)
----------------------------------------------------------------------------------------------
  <S>        <C>
  1 - 7    Leases described in items 1 through 7 of Schedule 7.1

    8      Cash collateral under the Cash Collateral Agreement between
           Dolgencorp, Inc. and D.L. Peterson Trust in the amount of $1,551 as of May 31, 2002

    9      Security interests granted in goods that are the subjects of drafts drawn under the
             trade letters of credit issued pursuant to the FUNB Group Irrevocable Commercial
             Letter of Credit Agreement Terms and Conditions

    10     Security interests granted in goods that are the subjects of drafts drawn under the
             trade letters of credit issued pursuant to the Continuing Documentary Credit
             Agreement between Dolgencorp, Inc. and Continental Bank N.A.

    11     The Greater Cumberland Insurance Company cash collateral in the amount of $250 as
             May 31, 2002

    12     Collateral for workers' compensation claims - Texas Workers' Compensation
           Commission in the amount of $3,800 as of May 31, 2002
</TABLE>

                                  Schedule 7.2

<PAGE>

                                                                    SCHEDULE 7.4

                                  INVESTMENTS
                                  -----------

                    EXISTING INVESTMENTS ($ IN THOUSANDS)
----------------------------------------------------------------------
        Promissory Note between Standard Candy Company, Inc.
          as Maker and Dolgencorp, Inc. in the amount of $389 as
          of May 3, 2002

                                  Schedule 7.4

<PAGE>

                                    EXHIBIT A
                                    ---------

                      FORM OF 364-DAY REVOLVING CREDIT NOTE
                      -------------------------------------

[$___________]                                                  Atlanta, Georgia
                                                                   June __, 2002

    FOR VALUE RECEIVED, the undersigned, DOLLAR GENERAL CORPORATION, a Tennessee
corporation  (the  "Borrower"),  hereby promises to pay to the order of [NAME OF
LENDER] (the "Lender"), for the account of its Applicable Lending Office, at the
office of SunTrust Bank, as Administrative Agent (the  "Administrative  Agent"),
at  303  Peachtree  St.,  N.E.,  Atlanta,   Georgia  30303,  on  the  Commitment
Termination Date, the principal sum of [amount of such Lender's  Commitment] or,
if less, the aggregate  unpaid  principal amount of all Loans made by the Lender
to the Borrower  pursuant to the Credit  Agreement  described  below,  in lawful
money of the United States of America in immediately available funds, and to pay
interest from the date hereof on the principal  amount thereof from time to time
outstanding,  in like funds, at said office,  at the rate or rates per annum and
payable on such dates as  provided in the Credit  Agreement.  In  addition,  the
Borrower  further  promises  to pay  all  costs  of  collection,  including  the
reasonable  attorneys' fees of the Lender, if any amounts evidenced by this Note
are  collected  by or  through  an  attorney-at-law  or in  bankruptcy  or other
judicial proceedings.

    The Borrower  promises to pay interest,  on demand, on any overdue principal
and, to the extent  permitted by law, overdue interest from their due dates at a
rate or rates provided in the Credit Agreement.

    All  borrowings  evidenced by this Note and all payments and  prepayments of
the principal hereof and the date thereof shall be endorsed by the holder hereof
on the  schedule  attached  hereto and made a part  hereof or on a  continuation
thereof  which shall be attached  hereto and made a part  hereof,  or  otherwise
recorded by such holder in its internal records;  provided,  that the failure of
                                                  ---------
the holder  hereof to make such a notation or any error in such  notation  shall
not affect the obligations of the Borrower to make the payments of principal and
interest in accordance with the terms of this Note and the Credit Agreement.

    This  Note  is one of the  Notes  referred  to in,  and is  entitled  to the
benefits of, the 364-Day  Revolving  Credit Agreement dated as of June __, 2002,
among the Borrower,  the Lender and certain other lenders parties  thereto,  the
Administrative  Agent,  Credit Suisse First Boston,  as Syndication  Agent,  and
KeyBank   National   Association   and  U.S.  Bank  National   Association,   as
Co-Documentation  Agents (as the same may be amended,  supplemented or otherwise
modified from time to time, the "Credit  Agreement";  the capitalized terms that
are defined in the Credit  Agreement being used in this Note with the respective
meanings assigned to such capitalized terms in the Credit Agreement). The Credit
Agreement contains,  among other things,  provisions for the acceleration of the
maturity  hereof upon the  happening of certain  events,  for  prepayment of the
principal hereof prior to the maturity hereof and for the amendment or waiver of

                                 Exhibit A - 1

<PAGE>

certain  provisions of the Credit  Agreement,  all upon the terms and conditions
therein specified.

    THIS NOTE HAS BEEN  EXECUTED  AND  DELIVERED  BY THE  BORROWER  IN  ATLANTA,
GEORGIA,  AND SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE LAWS OF
THE STATE OF GEORGIA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

                                                  DOLLAR GENERAL CORPORATION

                                                  ---------------------------
                                                  Name:
                                                  Title:

                                 Exhibit A - 2

<PAGE>

<TABLE>
<CAPTION>

                                                LOANS AND PAYMENTS
                                                ------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------
                                                                      Unpaid Principal          Name of Person
                          Amount and                 Payments of         Balance of                 Making
    Date                 Type of Loan                 Principal             Note                   Notation

-------------- --------------------------------- -------------------- ------------------ -----------------------------
<S>             <C>                              <C>                   <C>                <C>

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------

-------------- --------------------------------- -------------------- ------------------ -----------------------------
</TABLE>

                                  Exhibit A - 3

<PAGE>

                                    EXHIBIT B
                                    ---------

                        FORM OF ASSIGNMENT AND ACCEPTANCE
                        ---------------------------------

     Reference is made to the 364-Day  Revolving Credit  Agreement,  dated as of
June ___,  2002 (as amended,  supplemented  or otherwise  modified  from time to
time, the "Credit Agreement"),  among Dollar General Corporation,  a corporation
          ------------------
organized  under the laws of Tennessee (the  "Borrower"),  the several banks and
other financial  institutions or entities from time to time parties thereto (the
"Lenders"),  SunTrust  Bank,  as  Administrative  Agent for the Lenders (in such
capacity,   the  "Administrative   Agent"),   Credit  Suisse  First  Boston,  as
Syndication  Agent for the  Lenders,  and U.S.  Bank  National  Association  and
KeyBank National Association, as Co-Documentation Agents for the Lenders. Unless
otherwise defined herein,  terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.

     The  Assignor  identified  on  Schedule 1 hereto (the  "Assignor")  and the
Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows:

     1. The  Assignor  hereby  irrevocably  sells and  assigns  to the  Assignee
without recourse to the Assignor,  and the Assignee hereby irrevocably purchases
and  assumes  from the  Assignor  without  recourse to the  Assignor,  as of the
Effective Date (as defined below),  the interest  described in Schedule 1 hereto
(the "Assigned  Interest") in and to the Assignor's rights and obligations under
the Credit  Agreement with respect to those credit  facilities  contained in the
Credit  Agreement  as are set  forth  on  Schedule  1 hereto  (individually,  an
"Assigned Facility";  collectively,  the "Assigned Facilities"),  in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.

     2. The  Assignor  (a) makes no  representation  or warranty  and assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in  connection  with the  Credit  Agreement  or with  respect  to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit  Agreement,  any other Loan  Document or any other  instrument  or
document  furnished  pursuant  thereto,  other  than that the  Assignor  has not
created any adverse claim upon the interest  being  assigned by it hereunder and
that such  interest is free and clear of any such  adverse  claim;  (b) makes no
representation  or warranty  and assumes no  responsibility  with respect to the
financial  condition  of the  Borrower  or any  obligor  or the  performance  or
observance  by the Borrower or any obligor of any of its  obligations  under the
Credit  Agreement or any other Loan Document or any other instrument or document
furnished  pursuant  hereto or thereto;  and (c)  attaches  any Notes held by it
evidencing the Assigned  Facilities  and [(i)] requests that the  Administrative
Agent, upon request by the Assignee,  exchange the attached Notes, if any, for a
new Note or Notes payable to the Assignee [and (ii) if the Assignor has retained
any interest in an Assigned  Facility,  requests that the  Administrative  Agent
exchange the  attached  Notes,  if any,  for a new Note or Notes  payable to the
Assignor,  in each case] in amounts  which  reflect  the  assignment  being made
hereby  (and after  giving  effect to any other  assignments  which have  become
effective on the Effective Date).

                                  Exhibit B-1

<PAGE>

     3. The Assignee (a) represents  and warrants that it is legally  authorized
to enter into this Assignment and Acceptance;  (b) confirms that it has received
a copy of the Credit  Agreement and each other Loan Document which such Assignee
has  requested,  together  with  copies of the  financial  statements  delivered
pursuant to Section 4.4 thereof and such other  documents and  information as it
has deemed  appropriate  to make its own credit  analysis  and decision to enter
into this Assignment and Acceptance;  (c) agrees that it will, independently and
without reliance upon the Assignor, the Administrative Agent or any other Lender
and based on such documents and information as it shall deem  appropriate at the
time,  continue to make its own credit  decisions in taking or not taking action
under the Credit Agreement,  the other Loan Documents or any other instrument or
document furnished  pursuant hereto or thereto;  (d) appoints and authorizes the
Administrative  Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement,  the other Loan Documents
or any other instrument or document  furnished pursuant hereto or thereto as are
delegated to the Administrative  Agent by the terms thereof,  together with such
powers as are  incidental  thereto;  and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations  which by the terms of the Credit  Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligations pursuant to Section 2.18
of the Credit Agreement.

     4.  The  effective  date of this  Assignment  and  Acceptance  shall be the
Effective  Date of  Assignment  described  in Schedule 1 hereto (the  "Effective
Date").  Following the execution of this Assignment and  Acceptance,  it will be
delivered to the Administrative  Agent for acceptance by it and recording by the
Administrative  Agent  pursuant  to the Credit  Agreement,  effective  as of the
Effective   Date  (which  shall  not,   unless   otherwise   agreed  to  by  the
Administrative  Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative  Agent).  Assignee  represents to
each other party hereto that it is a bank, savings and loan association or other
similar savings or thrift  institution,  insurance  company,  investment fund or
company,  or other  financial  institution  or  lending  company  that  makes or
acquires  commercial loans in the ordinary course of its business and that it is
participating  in the  Credit  Agreement  as a Lender for its own  account  (but
subject  to its  rights to direct  the  disposition  of its  assets,  including,
without limitation, assignments and sales of participation interest in the Loans
and its  Commitment  as  contemplated  in the  Credit  Agreement  and  for  such
commercial  purposes,  and that it has  knowledge  and  experience  to be and is
capable of  evaluating  the merits and risks of being a Lender  under the Credit
Agreement.

     5. Upon such  acceptance and recording,  from and after the Effective Date,
the  Administrative  Agent shall make all  payments  in respect of the  Assigned
Interest (including payments of principal, interest, fees and other amounts) [to
the Assignor for amounts  which have  accrued to the  Effective  Date and to the
Assignee for amounts which have accrued  subsequent  to the Effective  Date] [to
the Assignee  whether such amounts have accrued prior to the  Effective  Date or
accrue  subsequent to the Effective  Date.  The Assignor and the Assignee  shall
make all  appropriate  adjustments in payments by the  Administrative  Agent for
periods  prior to the  Effective  Date or with  respect  to the  making  of this
assignment directly between themselves.]

     6. From and after the Effective  Date, (a) the Assignee shall be a party to
the  Credit  Agreement  and,  to the  extent  provided  in this  Assignment  and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound

                                  Exhibit B-2

<PAGE>

by the provisions  thereof and (b) the Assignor shall, to the extent provided in
this Assignment and Acceptance and the Credit  Agreement,  relinquish its rights
and be released from its obligations under the Credit Agreement.

     7. This  Assignment  and  Acceptance  shall be governed by and construed in
accordance with the laws of the State of Georgia.

     8. This  Agreement may be executed in any number of  counterparts,  each of
which when so executed  and  delivered  shall be an  original,  but all of which
shall constitute one and the same instrument.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Assignment  and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.

                                  Exhibit B-3

<PAGE>

                                   Schedule 1
                          to Assignment and Acceptance

Name of Assignor: ____________________________________________

Name of Assignee: ____________________________________________

Effective Date of Assignment: ________________________________

Credit Facility Assigned    Principal Amount Assigned      Commitment Percentage
------------------------    -------------------------      ---------------------
                                                                   Assigned
Revolving Credit Facility       $________________                  ________%

[Name of Assignee]                          [Name of Assignee]

By:___________________________________      By:_________________________________
       Title                                       Title

                                  Exhibit B-4

<PAGE>

Accepted:                                   Consented to (if required pursuant
                                            to the Credit Agreement):
SUNTRUST BANK,
as Administrative Agent                     DOLLAR GENERAL CORPORATION

By:___________________________________      By:_________________________________
       Title                                       Title

                                  Exhibit B-5

<PAGE>

                                    EXHIBIT C
                                    ---------

                           FORM OF GUARANTY AGREEMENT
                           --------------------------

    THIS GUARANTY  AGREEMENT  (this  "Guarantee")  made and delivered as of June
___,  2002,  by  each of the  Subsidiaries  of  Dollar  General  Corporation,  a
Tennessee corporation, identified on the signature pages of this Guarantee (each
a "Guarantor" and  collectively  the  "Guarantors")  in favor of (i) each of the
Lenders from time to time parties to the Credit Agreement  described below (each
a "Lender" and  collectively  the  "Lenders"),  and (ii)  SUNTRUST  BANK, in its
capacities as  Administrative  Agent and Collateral Agent under the terms of the
Credit  Agreement  and  the  other  Loan  Documents  referred  to in the  Credit
Agreement (in such capacities,  the  "Administrative  Agent" and the "Collateral
Agent" respectively;  the Lenders, the Administrative Agent and Collateral Agent
collectively referred to herein as the "Guaranteed Parties").

                              W I T N E S S E T H:
                              --------------------

    WHEREAS,  Borrower,  the Lenders,  the Administrative  Agent,  Credit Suisse
First Boston,  as  Syndication  Agent,  and U.S. Bank National  Association  and
KeyBank  National  Association,  as  Co-Documentation  Agents,  are parties to a
certain 364-Day  Revolving  Credit  Agreement dated as of June ___, 2002 (as the
same may be amended,  restated,  and supplemented from time to time, the "Credit
Agreement";  capitalized  terms used in this  Guarantee  that are defined in the
Credit  Agreement  being used herein with the respective  meanings given to such
capitalized terms in the Credit Agreement);

    WHEREAS,  it is a  condition  to the  Lenders'  obligation  to make Loans to
Borrower  as  provided  in  the  Credit  Agreement  that  each  Guarantor,  as a
subsidiary of Borrower,  unconditionally  guarantee the payment of the Loans and
all other  Obligations  of Borrower as provided in the Loan Documents (the Loans
and  such  other  Obligations  being  herein  collectively  referred  to as  the
"Guaranteed Obligations";  the term "Guaranteed Obligations" to include, without
limitation  (i) all  principal  and  interest  due  with  respect  to all  Loans
outstanding  under  the  terms  of  the  Credit  Agreement,  including,  without
limitation,  interest  accruing or that would have accrued after the filing of a
petition in bankruptcy or other insolvency proceeding (whether or not such claim
for interest is allowed or allowable in such  proceeding),  and all  obligations
and liabilities of Borrower  arising pursuant to any interest rate protection or
swap  agreements  entered into with one or more of the  Lenders,  (ii) all fees,
expenses, amounts payable by Borrower for reimbursement or indemnification under
the terms of the Credit  Agreement and any other Loan Document,  and all amounts
advanced by any of the  Guaranteed  Parties to protect or preserve  the value of
any  security  for the  Loans and other  Guaranteed  Obligations,  and (iii) all
renewals, extensions,  modifications,  and refinancings (in whole or in part) of
any of the amounts referred to in clauses (i) and (ii) above);

    WHEREAS,  the  making of the Loans  will  result in direct  and  substantial
benefits to each Guarantor.

                                  Exhibit C-1

<PAGE>

    NOW, THEREFORE,  in order to induce the Guaranteed Parties to make the Loans
and otherwise to extend and continue to extend credit to Borrower hereafter, and
in consideration of $10.00 and other good and valuable consideration received by
Guarantor, each Guarantor hereby declares and agrees:

     1. Each Guarantor hereby  unconditionally and irrevocably guarantees to the
Guaranteed  Parties,  and any transferee of any of the  Guaranteed  Obligations,
jointly and severally, the full and prompt payment of all Guaranteed Obligations
and all costs,  charges and  expenses  (including  reasonable  attorneys'  fees)
incurred or sustained by the Guaranteed  Parties in enforcing the obligations of
such Guarantor  hereunder.  If any portion of the Guaranteed  Obligations is not
paid when due, each Guarantor  hereby agrees to and will  immediately  pay same,
without  resort by the  Guaranteed  Parties  to any other  person or party.  The
obligation of each  Guarantor to the  Guaranteed  Parties  hereunder is primary,
absolute and unconditional,  except as may be specifically set forth herein. Any
and all payments by each  Guarantor  hereunder  shall be made free and clear of,
and without deduction for, any set-off, counterclaim, recoupment, or withholding
so that, in each case, each Guaranteed  Party will receive,  after giving effect
to any Taxes (other than taxes  applicable to the Guaranteed  Party of the types
described  in the  definition  of  "Excluded  Taxes" as set forth in the  Credit
Agreement),  the full amount that it would otherwise be entitled to receive with
respect to the Guaranteed  Obligations  (but without  duplication of amounts for
Taxes  already   included  in  the  Guaranteed   Obligations).   Each  Guarantor
acknowledges and agrees that this is a guarantee of payment when due, and not of
collection.

     2. This  Guarantee  is  continuing  in nature and shall be  effective  with
respect to the full amount  outstanding  under all Guaranteed  Obligations,  now
existing or hereafter made or extended,  and notwithstanding (i) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
like proceeding relating to any Guarantor or Borrower,  or any action taken with
respect to this  Guarantee by any trustee or receiver,  or by any court,  in any
such  proceeding,  (ii) any lack of  validity  or  enforceability  of the Credit
Agreement  or the other Loan  Documents,  or (iii) any other  circumstance  that
might  otherwise  constitute  a defense  available  to, or a  discharge  of, any
Guarantor. Each Guarantor acknowledges and agrees that the number and amounts of
outstanding  Guaranteed  Obligations  may fluctuate from time to time hereafter,
and that Borrower may make payments to the Guaranteed  Parties from time to time
hereafter. Each Guarantor expressly agrees that this Guarantee shall continue in
full  force and effect  notwithstanding  such  fluctuations  and  payments,  and
whether or not any  Guaranteed  Obligations  are  outstanding  at any particular
time,  until such time as all Guaranteed  Obligations have been paid in full and
any  commitment of the  Guaranteed  Parties under the Credit  Agreement has been
terminated.

     3.  Each  Guarantor  hereby  waives  notice  of  the  Guaranteed   Parties'
acceptance of this Guarantee and the creation, extension or renewal of any Loans
or other Guaranteed Obligations. Each Guarantor hereby consents and agrees that,
at any time or times, without notice to or further approval from Guarantor,  and
without in any way affecting the  obligations of such Guarantor  hereunder,  the
Guaranteed  Parties may, with or without  consideration (i) release,  compromise
with, or agree not to sue, in whole or in part,  Borrower or any other  obligor,
guarantor,  endorser or surety on any Loans or any other Guaranteed Obligations,
(ii) renew, extend,  accelerate, or increase or decrease the principal amount of
any Loans or other  Guaranteed  Obligations,  either in whole or in part,  (iii)
amend, waive,

                                  Exhibit C-2

<PAGE>

or  otherwise  modify  any of  the  terms  of  any  Loans  or  other  Guaranteed
Obligations  or of any mortgage,  deed of trust,  security  agreement,  or other
undertaking of Borrower or any other obligor,  endorser,  guarantor or surety in
connection with any Loans or other  Guaranteed  Obligations,  and (iv) apply any
payment received from Borrower or from any other obligor, guarantor, endorser or
surety on the Loans or other Guaranteed Obligations to any of the liabilities of
Borrower or of such other  obligor,  guarantor,  endorser,  or surety  which the
Guaranteed Parties may choose.

     4. Each Guarantor  hereby  consents and agrees that the Guaranteed  Parties
may at any time or  times,  either  with or  without  consideration,  surrender,
release  or  receive  any  property  or other  collateral  of any kind or nature
whatsoever held by it or for its account  securing any Loans or other Guaranteed
Obligations,  or substitute any collateral so held by the Guaranteed Parties for
other collateral of like or different kind, without notice to or further consent
from such Guarantor, and such surrender,  receipt, release or substitution shall
not in  any  way  affect  the  obligations  of  such  Guarantor  hereunder.  The
Guaranteed Parties shall have full authority to adjust,  compromise, and receive
less than the amount due upon any such collateral, and may enter into any accord
and  satisfaction  agreement with respect to the same as the Guaranteed  Parties
may  deem  advisable   without  affecting  the  obligations  of  such  Guarantor
hereunder. The Guaranteed Parties shall be under no duty to undertake to collect
upon  such  collateral  or any  part  thereof,  and no  Guarantor's  obligations
hereunder  shall be affected by the Guaranteed  Parties'  alleged  negligence or
mistake in judgment in handling,  disposing of, obtaining, or failing to collect
upon or perfect a security interest in, any such collateral.

     5. Each Guarantor hereby waives presentment, demand, protest, and notice of
dishonor of any of the liabilities  guaranteed  hereby.  The Guaranteed  Parties
shall have no duty or  obligation  (i) to proceed or exhaust any remedy  against
Borrower,  any other  obligor,  guarantor,  endorser,  or surety on any Loans or
other  Guaranteed  Obligations,  or any other  security  held by the  Guaranteed
Parties  for any  Loans or  other  Guaranteed  Obligations,  or (ii) to give any
notice whatsoever to Borrower, any Guarantor,  or any other obligor,  guarantor,
endorser,  or surety on any Loans or other Guaranteed  Obligations,  in any case
before  bringing  suit,  exercising  rights to any such security or  instituting
proceedings  of any kind against any  Guarantor,  Borrower,  or any of them, and
each Guarantor  hereby waives any requirement for such actions by the Guaranteed
Parties.  Upon default by Borrower  and the  Guaranteed  Parties'  demand to any
Guarantor  hereunder,  such Guarantor  shall be held and bound to the Guaranteed
Parties  directly as  principal  debtor in respect of the payment of the amounts
hereby guaranteed, such liability of such Guarantor being joint and several with
Borrower, each other Guarantor,  and all other obligors,  guarantors,  endorsers
and sureties on the Loans or other Guaranteed Obligations.

     6. Each Guarantor  hereby waives to the fullest extent  possible as against
Borrower  and its  assets,  any and all rights,  whether at law,  in equity,  by
agreement or otherwise, to subrogation, indemnity, reimbursement,  contribution,
payment  or any  other  claim,  cause of  action,  right or  remedy  that  would
otherwise arise out of any payment by such Guarantor hereunder,  notwithstanding
the manner or nature of such  payment  including  but not  limited to (a) direct
payment by such Guarantor, (b) set-off by the Administrative Agent or any Lender
against any  liability  or deposit  owed by such entity to such  Guarantor,  (c)
recovery by the

                                  Exhibit C-3

<PAGE>

Administrative  Agent or any Lender  against  such  Guarantor or any property of
such Guarantor, as the result of any judgment,  judgment lien, or legal process,
(d) the application of the proceeds of any disposition of all or any part of the
collateral to the repayment or all or any part of the Guaranteed Obligations, or
(e) the  conveyance of all or any part of any  Collateral to the  Administrative
Agent  or the  Lenders  in  satisfaction  of all or any  part of the  Guaranteed
Obligations,   until  the  indefeasible   payment  in  full  of  the  Guaranteed
Obligations.  The waivers set forth above are  intended by each  Guarantor,  the
Administrative Agent, and the Lenders to be for the benefit of Borrower and such
waivers shall be enforceable by Borrower as an absolute defense to any action by
such  Guarantor  against  Borrower or its assets which action  arises out of any
payment by any Guarantor hereunder.

     7. As an independent  covenant,  each Guarantor hereby expressly  covenants
and agrees for the benefit of the Guaranteed  Parties that all  obligations  and
liabilities of Borrower and any other  Subsidiaries of Borrower to any Guarantor
of  whatsoever  description,  including  without  limitation,  all  intercompany
receivables  of such  Guarantor  from  Borrower and any such other  Subsidiaries
(collectively,  the "Junior Claims") shall be subordinate and junior in right of
payment to all  obligations of Borrower and any such other  Subsidiaries  to the
Guaranteed Parties under the terms of the Credit Agreement,  this Guarantee, and
the other Loan Documents  (collectively,  the "Senior  Claims").  If an Event of
Default  shall occur,  then,  unless and until such Event of Default  shall have
been  cured,  waived,  or shall  have  otherwise  ceased to exist,  no direct or
indirect payment (in cash, property,  securities, by set-off or otherwise) shall
be made by Borrower and any such other  Subsidiaries to any Guarantor on account
of or in any manner in respect of any Junior  Claim  except  such  payments  and
distributions  the  proceeds  of which shall be applied to the payment of Senior
Claims.

    In the event of a Proceeding  (as  hereinafter  defined),  all Senior Claims
shall  first  be  paid  in  full  before  any  direct  or  indirect  payment  or
distribution (in cash, property,  securities,  by set-off or otherwise) shall be
made to any  Guarantor  on  account of or in any manner in respect of any Junior
Claim  except such  payments  and  distributions  the proceeds of which shall be
applied  to the  payment  of Senior  Claims.  For  purposes  of the  immediately
preceding sentence,  "Proceeding" means Borrower or any Guarantor shall commence
a voluntary case  concerning  itself under the United States  Bankruptcy Code or
any other  applicable  bankruptcy  laws;  or any  involuntary  case is commenced
against Borrower or any Guarantor;  or a custodian (as defined in the Bankruptcy
Code or any other applicable  bankruptcy laws) is appointed for, or takes charge
of, all or any substantial part of the property of Borrower or any Guarantor, or
Borrower  or  any   Guarantor   commences  any  other   proceedings   under  any
reorganization,  arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction,  whether commenced
against  Borrower or any Guarantor,  or Borrower or any Guarantor is adjudicated
insolvent or bankrupt;  or any order of relief or other order approving any such
case or  proceeding  is  entered;  or  Borrower  or any  Guarantor  suffers  any
appointment of any custodian or the like for it or any  substantial  part of its
property;  or  Borrower  or any  Guarantor  makes a general  assignment  for the
benefit of creditors;  or Borrower or any Guarantor  shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay,  its debts  generally
as they become due;  or  Borrower or any  Guarantor  shall call a meeting of its

                                  Exhibit C-4

<PAGE>

creditors with a view to arranging a composition or adjustment of its debts;  or
Borrower  or any  Guarantor  shall by any act or  failure  to act  indicate  its
consent  to,  approval  of or  acquiescence  in  any of  the  foregoing;  or any
organizational  action  shall be  taken by  Borrower  or any  Guarantor  for the
purpose of effecting any of the foregoing.

     In the event any direct or indirect  payment or  distribution  is made to a
Guarantor in contravention of this Section 7, such payment or distribution shall
be deemed received in trust for the benefit of the Guaranteed  Parties and shall
be immediately paid over to the Administrative Agent for application against the
Guaranteed Obligations in accordance with the terms of the Credit Agreement

     Each  Guarantor  agrees  to  execute  such  additional   documents  as  the
Administrative  Agent may  reasonably  request  to  evidence  the  subordination
provided for in this Section 7.

     8. (a) Upon the  occurrence  of an Event of  Default  specified  in Section
8.1(g)  or (h)  of the  Credit  Agreement  with  respect  to the  Borrower,  all
Guaranteed Obligations shall automatically become immediately due and payable by
the  Guarantors,  without  notice or other action on the part of the  Guaranteed
Parties,  and  regardless of whether  payment of the  Guaranteed  Obligations by
Borrower  has then  been  accelerated.  In  addition,  if any event of the types
described  in Section  8.1(g) or (h) of the Credit  Agreement  should occur with
respect to any Guarantor, and the Guaranteed Obligations of the Borrower have or
thereafter  become  due and  payable,  then  the  Guaranteed  Obligations  shall
automatically  become  immediately  due and payable by such  Guarantor,  without
further notice or other action on the part of the Guaranteed Parties.

     (b) Upon the insolvency or bankruptcy of Borrower,  the Guaranteed Parties'
rights  hereunder  shall not be affected or impaired by their  omission to prove
all  or  any  portion  of its  claim,  and  the  Guaranteed  Parties  may in its
discretion  value or refrain from valuing any security held by it without in any
way  releasing,  reducing or otherwise  affecting  any  Guarantor's  obligations
hereunder.  Each  Guarantor  agrees  that this  Guarantee  shall  continue to be
effective  or be  reinstated,  as the case may be, if at any time any payment of
the liabilities hereby guaranteed are rescinded or must otherwise be returned or
restored by the Guaranteed Parties upon the insolvency or bankruptcy of Borrower
or any  other  obligor,  guarantor,  endorser  or  surety  on any Loans or other
Guaranteed Obligations, all as though such payment had not been made.

     9. This Guarantee is in addition to, and is not intended to supersede or be
a substitute for any other guarantee,  suretyship agreement, or instrument which
the Guaranteed Parties may hold in connection with any Loans or other Guaranteed
Obligations  and each  Guarantor's  obligations  hereunder shall be deemed to be
joint and several with the obligations of each other Guarantor.

     10.  This  Guarantee  contains  the entire  agreement  between  the parties
relating to the subject matter hereof,  and no provision hereof may be waived or
modified  except by a writing  executed  by each  Guarantor  and the  Guaranteed
Parties.  There is no  understanding  that any person other than the  Guarantors
shall execute this or any similar  Guarantee.  No

                                  Exhibit C-5

<PAGE>

Guarantor's  execution of this
Guarantee  was based  upon any facts or  materials  provided  by the  Guaranteed
Parties,  nor was  any  Guarantor  induced  to  execute  this  Guarantee  by any
representation,  statement or  information  made or furnished by the  Guaranteed
Parties.  Each  Guarantor  further  acknowledges  and agrees that such Guarantor
assumes sole  responsibility  for  independently  obtaining any  information  or
reports  deemed  necessary by such Guarantor in reaching any decision to execute
this Guarantee.

     11. The failure or forbearance of the Guaranteed Parties on any occasion to
exercise any rights or remedies  hereunder or otherwise  granted to it by law or
another  agreement shall not affect the  obligations of any Guarantor  hereunder
and shall not  constitute a waiver of such right or remedy or preclude the later
or further exercise  thereof.  Time is of the essence of this Guarantee and each
Guarantor's obligations hereunder.

     12. Any notice or demand  which the  Guaranteed  Party's may be required to
give to any Guarantor may be sent or made, at any Guaranteed Parties' option, to
or on such  Guarantor  in the same  manner and with the same  effect as provided
with respect to notices pursuant to Section 10.1 of the Credit  Agreement,  when
delivered,  mailed or sent by  telecopy  to the  address  or  telecopier  number
indicated for such Guarantor below.

     13. This  Guarantee  shall bind and inure to the benefit of the  respective
successors and assigns of each Guarantor and the Guaranteed Parties.

     14. If any provision of this  Guarantee or the  application  thereof to any
person or circumstance  shall, to any extent, be invalid or  unenforceable,  the
remainder of this  Guarantee or the  application  of such provision to the other
persons or  circumstances,  other  than those as to which it is held  invalid or
unenforceable,  shall  not be  affected  thereby,  and  each  provision  of this
Guarantee shall be valid and enforceable to the full extent permitted by law.

     15. In addition to and not in  limitation of all rights of set-off that the
Guaranteed  Parties may have under applicable law, the Guaranteed Parties shall,
upon the  occurrence  of any Event of Default and whether or not the  Guaranteed
Parties have made any demand or the Guaranteed Obligations are matured, have the
right to appropriate and apply to the payment of the Guaranteed  Obligations all
deposits of any Guarantor  (general or special,  time or demand,  provisional or
final) then or thereafter  held by, and other  indebtedness  or property then or
thereafter  owing to any Guarantor by, any of the Guaranteed  Parties whether or
not related to this Guarantee or any transaction hereunder.

     16. (a) It is the intent of each Guarantor and the Guaranteed  Parties that
each Guarantor's maximum obligations hereunder shall be:

    (i) in a case or proceeding commenced by or against such Guarantor under the
Bankruptcy  Code on or  within  one  year  from  the  date on  which  any of the
Guaranteed  Obligations  are  incurred,  the  maximum  amount  which  would  not
otherwise  cause the Guaranteed  Obligations  (or any other  obligations of such
Guarantor to the Guaranteed  Parties) to be avoidable or  unenforceable  against
such  Guarantor  under (A) Section 548 of the  Bankruptcy  Code or (B) any state
fraudulent transfer or fraudulent

                                  Exhibit C-6

<PAGE>

conveyance  act or  statute  applied  in such  case or  proceeding  by virtue of
Section 544 of the Bankruptcy Code; or

          (ii) in a case or  proceeding  commenced by or against such  Guarantor
     under the Bankruptcy Code subsequent to one year from the date on which any
     of the Guaranteed  Obligations are incurred, the maximum amount which would
     not otherwise cause the Guaranteed Obligations (or any other obligations of
     the Guarantor to the Guaranteed  Parties) to be avoidable or  unenforceable
     against such Guarantor  under any state  fraudulent  transfer or fraudulent
     conveyance act or statute  applied in any such case or proceeding by virtue
     of Section 544 of the Bankruptcy Code; or

          (iii) in a case or proceeding  commenced by or against such  Guarantor
     under  any law,  statute  or  regulation  other  than the  Bankruptcy  Code
     (including,  without  limitation,  any  other  bankruptcy,  reorganization,
     arrangement,  moratorium, readjustment of debt, dissolution, liquidation or
     similar  debtor relief laws),  the maximum amount which would not otherwise
     cause  the  Guaranteed  Obligations  (or  any  other  obligations  of  such
     Guarantor  to the  Guaranteed  Parties) to be  avoidable  or  unenforceable
     against such  Guarantor  under such law,  statute or regulation  including,
     without limitation,  any state fraudulent transfer or fraudulent conveyance
     act or statute applied in any such case or proceeding.

    (The substantive laws under which the possible avoidance or unenforceability
of the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed  Parties)  shall be determined  in any such case or proceeding  shall
hereinafter be referred to as the "Avoidance Provisions").

    (b) To the end set forth in Section  16(a),  but only to the extent that the
Guaranteed  Obligations  would  otherwise  be  subject  to  avoidance  under the
Avoidance  Provisions if such Guarantor is not deemed to have received  valuable
consideration,  fair value or  reasonably  equivalent  value for the  Guaranteed
Obligations,  or if  the  Guaranteed  Obligations  would  render  the  Guarantor
insolvent,  or leave the Guarantor with an unreasonably small capital to conduct
its business, or cause the Guarantor to have incurred debts (or to have intended
to have incurred debts) beyond its ability to pay such debts as they mature,  in
each case as of the time any of the  Guaranteed  Obligations  are deemed to have
been  incurred  under  the  Avoidance  Provisions  and  after  giving  effect to
contribution as among Guarantors,  the maximum Guaranteed  Obligations for which
such Guarantor shall be liable  hereunder shall be reduced to that amount which,
after giving effect thereto,  would not cause the Guaranteed Obligations (or any
other obligations of such Guarantor to the Guaranteed  Parties),  as so reduced,
to be subject to avoidance under the Avoidance Provisions. This Section 16(b) is
intended  solely to preserve the rights of the Guaranteed  Parties  hereunder to
the  maximum  extent  that  would not cause the  Guaranteed  Obligations  of any
Guarantor to be subject to avoidance under the Avoidance Provisions, and neither
such  Guarantor  nor any other  Person  shall have any right or claim under this
Section  16 as against  the  Guaranteed  Parties  that  would not  otherwise  be
available to such Person under the Avoidance Provisions.

                                  Exhibit C-7

<PAGE>

    (c) None of the  provisions of this Section 16 are intended in any manner to
alter the obligations of any holder of  subordinated  Indebtedness or the rights
of the  holders  of  "senior  indebtedness"  as  provided  by the  terms  of the
subordinated  Indebtedness.  Accordingly,  it is  the  intent  of  each  of  the
Guarantors  that,  in the event that any  payment or  distribution  is made with
respect to the  subordinated  Indebtedness  prior to the  payment in full of the
Guaranteed  Obligations  by virtue of the  provisions of this Section 16, in any
case or proceeding of the kinds described in clauses (i)-(iii) of Section 16(a),
the  holders  of the  subordinated  Indebtedness  shall be  obligated  to pay or
deliver such  payment or  distribution  to or for the benefit of the  Guaranteed
Parties.  Furthermore,  in respect of the Avoidance Provisions, it is the intent
of each Guarantor  that the  subrogation  rights of the holders of  subordinated
Indebtedness  with  respect  to the  obligations  of the  Guarantor  under  this
Guaranty, be subject in all respects to the provisions of Section 16(b).

     17. (a) THIS  GUARANTEE AND THE RIGHTS AND  OBLIGATIONS  OF EACH  GUARANTOR
HEREUNDER  SHALL BE  CONSTRUED  IN  ACCORDANCE  WITH AND BE  GOVERNED BY THE LAW
(WITHOUT  GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES  THEREOF) OF THE STATE
OF GEORGIA.

    (b) ANY LEGAL ACTION OR  PROCEEDING  WITH  RESPECT TO THIS  GUARANTEE OR ANY
DOCUMENT  RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF GEORGIA OR
OF THE UNITED  STATES OF AMERICA FOR THE NORTHERN  DISTRICT OF GEORGIA,  AND, BY
EXECUTION AND DELIVERY OF THIS  GUARANTEE,  EACH  GUARANTOR  HEREBY  ACCEPTS FOR
ITSELF  AND IN RESPECT  OF ITS  PROPERTY,  GENERALLY  AND  UNCONDITIONALLY,  THE
JURISDICTION OF THE AFORESAID COURTS.  EACH GUARANTOR HEREBY  IRREVOCABLY WAIVES
ANY OBJECTION,  INCLUDING,  WITHOUT  LIMITATION,  ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE  GROUNDS  OF  FORUM  NON  CONVENIENS,  WHICH IT MAY NOW OR
HEREAFTER  HAVE  TO THE  BRINGING  OF ANY  SUCH  ACTION  OR  PROCEEDING  IN SUCH
RESPECTIVE   JURISDICTIONS.   EACH  GUARANTOR  HEREBY   IRREVOCABLY   DESIGNATES
[CORPORATION  SERVICE  COMPANY]  AS ITS  DESIGNEE,  APPOINTEE  AND AGENT OF SUCH
GUARANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH GUARANTOR, SERVICE OF PROCESS IN
SUCH  JURISDICTION  IN ANY  LEGAL  ACTION OR  PROCEEDING  WITH  RESPECT  TO THIS
GUARANTEE  OR ANY  DOCUMENT  RELATED  HERETO  AND SUCH  SERVICE  SHALL BE DEEMED
COMPLETED THIRTY (30) DAYS AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD
THAT A COPY OF SUCH PROCESS  SERVED ON SUCH AGENT WILL BE PROMPTLY  FORWARDED BY
SUCH AGENT AND BY THE SERVER OF PROCESS BY MAIL TO THE  RESPECTIVE  GUARANTOR AT
ITS ADDRESS SET FORTH HEREIN,  BUT THE FAILURE OF SUCH GUARANTOR TO RECEIVE SUCH
COPY SHALL NOT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE GUARANTEED
PARTIES TO SERVE  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW OR TO COMMENCE
LEGAL  PROCEEDINGS  OR  OTHERWISE  PROCEED  AGAINST ANY  GUARANTOR  IN ANY OTHER
JURISDICTION.

                                  Exhibit C-8

<PAGE>

    (c) TO THE  EXTENT  PERMITTED  BY  APPLICABLE  LAW,  EACH  GUARANTOR  HEREBY
IRREVOCABLY  WAIVES  ALL  RIGHT OF TRIAL BY JURY IN ANY  ACTION,  PROCEEDING  OR
COUNTERCLAIM  ARISING OUT OF OR IN CONNECTION  WITH THIS  GUARANTEE OR ANY OTHER
LOAN DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.

    18.  Upon  execution  and  delivery  by any  Subsidiary  of  Borrower  of an
instrument in the form of Annex I, such  Subsidiary  of Borrower  shall become a
Guarantor  hereunder  with the same  force and effect as if  originally  named a
Guarantor herein (each an "Additional Guarantor"). The execution and delivery of
any such  instrument  shall not require the consent of any Guarantor  hereunder.
The rights and  obligations  of each  Guarantor  hereunder  shall remain in full
force and effect  notwithstanding the addition of any Additional  Guarantor as a
party to this Guarantee.

    19. This  Guarantee may be executed in any number of  counterparts,  each of
which when so executed  and  delivered  shall be an  original,  but all of which
shall constitute one and the same instrument.

                                  Exhibit C-9

<PAGE>

     IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be executed
by its duly authorized officer as of the date first above written.

                         GUARANTORS:
                         -----------

                         DOLLAR GENERAL FINANCIAL, INC.
                         (a Tennessee corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DADE LEASE MANAGEMENT, INC.
                         (a Delaware corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DOLGENCORP, INC.
                         (a Kentucky corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DOLGENCORP OF NEW YORK, INC.
                         (a Kentucky corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DOLGENCORP OF TEXAS, INC.
                         (a Kentucky corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                                  Exhibit C-10

<PAGE>

                         DG LOGISTICS, LLC
                         (a Tennessee limited liability  company)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DOLLAR GENERAL STORES, LTD.
                         (a Kentucky corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DOLLAR GENERAL PARTNERS
                         (a Kentucky general partnership)

                         By:    ________________________________________________
                                Name:
                                Title:

                         THE GREATER CUMBERLAND INSURANCE COMPANY (a Vermont
                         corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         NATIONS TITLE COMPANY, INC.
                         (a Tennessee corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                                  Exhibit C-11

<PAGE>

                         DOLLAR GENERAL INTELLECTUAL PROPERTY, L.P.(a Vermont
                         limited partnership)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DOLLAR GENERAL INVESTMENTS, INC.
                         (a Delaware corporation)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DGC PROPERTIES LLC
                         (a Delaware limited liability company)

                         By:    ________________________________________________
                                Name:
                                Title:

                         DGC PROPERTIES OF KENTUCKY LLC
                         (a Delaware limited liability company)

                         By:    ________________________________________________
                                Name:
                                Title:

THE PROVISIONS OF SECTION 7 ABOVE HEREBY ACKNOWLEDGED AND AGREED TO:

                                                     DOLLAR GENERAL CORPORATION

                                                     By:    ____________________
                                                            Name:
                                                            Title:

                                  Exhibit C-12

<PAGE>

                                     ANNEX I

                        SUPPLEMENT TO GUARANTY AGREEMENT
                        --------------------------------

    THIS SUPPLEMENT TO GUARANTY AGREEMENT (this "Supplement") made and delivered
as    of     __________________,     by     _____________________________,     a
__________________________  (the "Additional Guarantor") in favor of (i) each of
the Lenders from time to time parties to the Credit  Agreement  described  below
(each a "Lender" and collectively the "Lenders"), and (ii) SUNTRUST BANK, in its
capacities as  Administrative  Agent and Collateral Agent under the terms of the
Credit  Agreement  and  the  other  Loan  Documents  referred  to in the  Credit
Agreement (in such capacities, the "Administrative Agent" and "Collateral Agent"
respectively;  the  Lenders,  the  Administrative  Agent  and  Collateral  Agent
collectively referred to herein as the "Guaranteed Parties").

          A. Reference is made to the 364-Day  Revolving  Credit Agreement dated
     as of June __, 2002 (as the same may have been or may hereafter be amended,
     supplemented,  and  restated  from time to time,  the "Credit  Agreement"),
     among Dollar General  Corporation,  a Tennessee  corporation  ("Borrower"),
     SunTrust  Bank,  as  Administrative  Agent,  each  other  bank and  lending
     institution  from  time  to  time  that  has  become  a  Lender  thereunder
     (collectively,  "Lenders"),  Credit  Suisse First  Boston,  as  Syndication
     Agent, and U.S. Bank National Association and KeyBank National Association,
     as Co-Documentation Agents.

          B.  Capitalized  terms used herein and not  otherwise  defined  herein
     shall have the meanings  assigned to such terms in the Credit Agreement and
     the Guaranty Agreement (as defined in the Credit Agreement).

          C.  Certain  Subsidiaries  of Borrower  have entered into the Guaranty
     Agreement in order to induce the Lenders to make Loans and other extensions
     of credit to Borrower under the Credit Agreement.  Pursuant to Section 5.10
     of the Credit Agreement,  certain  Subsidiaries of Borrower are required to
     enter into the Guaranty  Agreement and become a Guarantor  thereunder.  The
     undersigned  (the  "Additional  Guarantor") is executing this Supplement in
     accordance  with the  requirements  of the Credit  Agreement  and  Guaranty
     Agreement to become a Guarantor  under the  Guaranty  Agreement in order to
     induce the Lenders to make Loans and other extensions of credit to Borrower
     and as consideration  for Loans and other  extensions of credit  previously
     made.

          Accordingly,  the  Administrative  Agent and the Additional  Guarantor
     agree as follows:

          SECTION 1.

    (a)   By  its  signature  below,  the  Additional   Guarantor  becomes  a
Guarantor  under the  Guaranty  Agreement  with the same  force and effect as if
originally named as a Guarantor therein, and the Additional Guarantor hereby (a)
agrees to all the terms and provisions of the Guaranty  Agreement  applicable to
it  as a  Guarantor  thereunder,  and  (b)  represents  and  warrants  that  the
representations  and warranties  made with respect to each Guarantor  thereunder
and under the Credit Agreement are true and correct in respect of the Additional
Guarantor on and as of the date hereof.  Each  reference to a "Guarantor" in the
Guaranty  Agreement  shall be deemed to include the  Additional  Guarantor.  The
Guaranty Agreement is hereby incorporated herein by reference.

<PAGE>

     (b) Without limiting the foregoing, the Additional Guarantor hereby jointly
and  severally  (with respect to the  obligations  of the  Guarantors  under the
Guaranty  Agreement)  irrevocably  and  unconditionally  guarantees the punctual
payment when due, whether at stated maturity,  by acceleration or otherwise,  of
all  principal  of, and interest on, each Loan made to Borrower  pursuant to the
Credit Agreement,  the full and punctual payment when due of all fees, expenses,
indemnity and reimbursement  payments, and other Obligations payable by Borrower
under the Credit  Agreement  and the other Loan  Documents  (including,  without
limitation,  interest  accruing or that would have accrued after the filing of a
petition in bankruptcy or other insolvency proceeding,  whether or not any claim
for interest is allowed or allowable in such proceeding), and all obligations of
Borrower  arising  pursuant to any interest rate  protection or swap  agreements
entered  into with one or more of the  Lenders.  Upon failure by Borrower to pay
punctually  when due any such amount,  the Additional  Guarantor  agrees that it
shall  forthwith  on demand  pay the  amount not so paid at the place and in the
manner specified in the Credit Agreement or the relevant Loan Documents,  as the
case may be. The  Additional  Guarantor  acknowledges  and agrees that this is a
guarantee of payment when due, and not of collection,  and that the  obligations
of the  Additional  Guarantor  hereunder  may be  enforced up to the full amount
hereof without proceeding against Borrower, any security held by or on behalf of
the  Lenders,  or against any other  Guarantor  or any other party that may have
liability on all or any portion of the Guaranteed Obligations.

    SECTION  2.  The  Additional   Guarantor  represents  and  warrants  to  the
Administrative  Agent  and the  Lenders  that  this  Supplement  has  been  duly
authorized,  executed and delivered by it and constitutes  its legal,  valid and
binding obligation,  enforceable against it in accordance with its terms, except
as  the  enforceability  thereof  may  be  limited  by  bankruptcy,  insolvency,
reorganization,  or moratorium or other similar laws relating to the enforcement
of creditors' rights generally and by general equitable principles.

    SECTION 3. This  Supplement may be executed in  counterparts,  each of which
shall  constitute  an  original,  but all of which  when  taken  together  shall
constitute a single  agreement.  This Supplement shall become effective when the
Administrative  Agent shall have received  counterparts of this Supplement that,
when taken  together,  bear the signatures of the  Additional  Guarantor and the
Administrative  Agent. Delivery of an executed signature page to this Supplement
by facsimile  transmission  shall be effective as delivery of a manually  signed
counterpart of this Supplement.

    SECTION 4. Except as expressly  supplemented  hereby, the Guaranty Agreement
shall remain in full force and effect.

    SECTION 5. This Supplement shall be governed by, and construed in accordance
with, the laws of the State of Georgia,  without giving effect to the principles
of conflict of laws thereof.

                              Exhibit C - Annex -2

<PAGE>

    SECTION  6. In case  any one or  more of the  provisions  contained  in this
Supplement should be held invalid,  illegal or unenforceable in any respect, the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein  and in the  Guaranty  Agreement  shall  not in any  way be  affected  or
impaired  thereby  (it being  understood  that the  invalidity  of a  particular
provision hereof in a particular  jurisdiction shall not in and of itself affect
the validity of such  provision in any other  jurisdiction.)  The parties hereto
shall  endeavor in good faith  negotiations  to replace the invalid,  illegal or
unenforceable  provisions  with valid  provisions  the economic  effect of which
comes as close as  possible  to that of the  invalid,  illegal or  unenforceable
provisions.

    SECTION 7. All  communications and notices hereunder shall be in writing and
given as provided in the  Guaranty  Agreement.  All  communications  and notices
hereunder  to the  Additional  Guarantor  shall be given to it at the address of
Borrower as set forth in the Credit Agreement.

    IN WITNESS WHEREOF,  the Additional  Guarantor and the Administrative  Agent
have duly executed this  Supplement to the Guaranty  Agreement as of the day and
year first above written.

                                       [Name of Additional Guarantor]

                                       By:    __________________________________
                                              Name:
                                              Title

SUNTRUST BANK,
As Administrative Agent

By:   _____________________________
      Name:
      Title:

                                  Exhibit C - Annex -3

<PAGE>

21384321v1
                                    EXHIBIT D
                                    ---------

                         FORM OF CONTRIBUTION AGREEMENT
                         ------------------------------

    THIS  CONTRIBUTION  AGREEMENT (this  "Agreement") is entered into as of June
__, 2002, by and among DOLLAR GENERAL CORPORATION,  a Tennessee corporation (the
"Principal"),  each  of the  Subsidiaries  of the  Principal  identified  on the
signature  pages of this  Agreement  (each a "Guarantor"  and  collectively  the
"Guarantors"),   and  SUNTRUST   BANK,  a  Georgia   banking   corporation,   as
Administrative  Agent  for the  Lenders  (as  defined  in the  Credit  Agreement
referred to below).

                              W I T N E S S E T H:
                              --------------------

    WHEREAS, the Principal, the Lenders, the Administrative Agent, Credit Suisse
First Boston,  as  Syndication  Agent,  and U.S. Bank National  Association  and
KeyBank  National  Association,  as  Co-Documentation  Agents,  are parties to a
certain 364-Day  Revolving  Credit  Agreement dated as of June ___, 2002 (as the
same may hereafter  from time to time be amended,  modified,  and restated,  the
"Credit  Agreement";  capitalized  terms used  herein  that are  defined in such
Credit Agreement are used herein with the respective  meanings provided for such
terms in the Credit Agreement);

    WHEREAS,   pursuant  to  the  requirements  of  the  Credit  Agreement,  the
Guarantors  have  executed and delivered a Guaranty  Agreement  dated as of June
___, 2002, in favor of the  Administrative  Agent, the Collateral Agent, and the
Lenders (as the same may hereafter from time to time be amended,  modified,  and
restated, the "Guaranty Agreement");

    WHEREAS,  it is a further  requirement and condition of the Credit Agreement
that the Guarantors execute and deliver an agreement in the form hereof;

    NOW,  THEREFORE,   in  consideration  of  the  premises  and  the  covenants
hereinafter  contained,  and to induce the Guarantors to enter into the Guaranty
Agreement, each Guarantor and the Administrative Agent agree as follows:

    SECTION 1.  Indemnity  and  Subrogation.  In  addition to all such rights of
                ---------------------------
indemnity and  subrogation as the Guarantors may have under  applicable law (but
subject to Section 3), the Principal agrees that in the event a payment shall be
made on behalf of the Principal by any Guarantor  under the Guaranty  Agreement,
the Principal shall indemnify such Guarantor for the full amount of such payment
and such Guarantor  shall be subrogated to the rights of the person to whom such
payment shall have been made to the extent of such payment.

    SECTION 2.  Contribution  and  Subrogation.  Each Guarantor (a "Contributing
                -------------------------------
Guarantor")  agrees (subject to Section 3) that, in the event a payment shall be
made by any  other  Guarantor  under  the  Guaranty  Agreement  and  such  other
Guarantor (the "Claiming  Guarantor")  shall not have been fully  indemnified by
the  Principal  as  provided  in Section 1, each  Contributing  Guarantor  shall
indemnify  each  Claiming  Guarantor  in an amount  equal to the  amount of such

                                  Exhibit D - 1

<PAGE>

payment,  in each case  multiplied by a fraction of which the numerator shall be
the  net  worth  of such  Contributing  Guarantor  on the  date  hereof  and the
denominator  shall be the  aggregate  net  worth of all  Guarantors  on the date
hereof (or, in the case of any  Guarantor  becoming a party  hereto  pursuant to
Section 12, the date of the  Supplement  hereto  executed and  delivered by such
Guarantor).  Any  Contributing  Guarantor  making  any  payment  to  a  Claiming
Guarantor  pursuant to this Section 2 shall be  subrogated to the rights of such
Claiming  Guarantor  under  Section  1 to the  extent of such  payment.  As used
herein,  the term "net worth" shall mean, as at any date of  determination,  the
consolidated  members' capital,  partners' capital,  or stockholders'  equity of
each  Guarantor,  as the case may be, as determined on a  consolidated  basis in
accordance with GAAP.

    SECTION 3. Subordination. Notwithstanding any provision of this Agreement to
               --------------
the contrary,  all rights of the Principal and the  Guarantors  under Sections 1
and  2  and  all  other  rights  of  indemnity,  contribution,   subrogation  or
reimbursement  under applicable law or otherwise shall be fully  subordinated to
the  indefeasible  payment  in  full in cash  of the  Obligations  owing  by the
Principal.  No failure on the part of the Principal or any Guarantor to make the
payments  required by  Sections 1 and 2 (or any other  payments  required  under
applicable  law or  otherwise)  shall in any respect limit the  obligations  and
liabilities  of the Principal or any Guarantor  with respect to its  obligations
hereunder, and the Principal and each Guarantor shall remain liable for the full
amount of the obligations of the Principal and such Guarantor hereunder.

    SECTION 4.  Termination.  This Agreement  shall survive and be in full force
                ------------
and effect so long as any Obligation  owing by the Principal is outstanding  and
has not been  indefeasibly  paid in full in cash, and so long as the Commitments
in favor of the Principal under the Credit  Agreement have not been  terminated.
This Agreement shall continue to be effective or be reinstated,  as the case may
be, if at any time  payment,  or any part  thereof,  of any such  Obligation  is
rescinded or must  otherwise be restored by any Lender or any Guarantor upon the
bankruptcy or reorganization of the Principal or any Guarantor or otherwise.

    SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
               --------------
IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF GEORGIA.

    SECTION  6.  No  Waiver;  Amendment.  (a)  No  failure  on the  part  of the
                ------------------------
Administrative Agent, the Principal,  or any Guarantor to exercise, and no delay
in exercising,  any right,  power or remedy  hereunder shall operate as a waiver
thereof,  nor shall any single or partial  exercise of any such right,  power or
remedy by the Administrative  Agent, the Principal or any Guarantor preclude any
other or further  exercise  thereof or the  exercise of any other right power or
remedy. All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law. None of the Administrative Agent, the Principal or the
Guarantors  shall be deemed to have  waived any  rights  hereunder  unless  such
waiver shall be in writing and signed by such parties.

     (b) Neither this Agreement nor any provision hereof may be waived,  amended
or  modified  except  pursuant  to a written  agreement  entered  into among the
Principal, the Guarantors and the Administrative Agent.

                                  Exhibit D - 2
<PAGE>

    SECTION 7. Notices.  All  communications  and notices  hereunder shall be in
               --------
writing  and given as  provided  in the  Guaranty  Agreement  and  addressed  as
specified therein.

    SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement any of
               -------------------------------
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the parties that are contained in this  Agreement  shall bind
and inure to the benefit of their respective successors and assigns. Neither the
Principal  nor any  Guarantor  may  assign  or  transfer  any of its  rights  or
obligations  hereunder (and any such  attempted  assignment or transfer shall be
void) without the prior written consent of the Administrative Agent.

    SECTION 9.  Survival  of  Agreement;  Severability.  (a) All  covenants  and
                ---------------------------------------
agreements  made  by  the  Principal  and  each  Guarantor  herein  and  in  the
certificates or other instruments  prepared or delivered in connection with this
Agreement or the other Credit  Documents shall be considered to have been relied
upon  by  the  Administrative  Agent,  the  Lenders,  the  Principal,  and  each
Guarantor,  and all covenants and agreement made herein shall survive the making
of the Loans and the  issuance of the Letters of Credit,  and shall  continue in
full force and effect as long as the principal of or any accrued interest on any
Loans,  or any  Letter of  Credit,  or any other  fee or amount  payable  by the
Principal under the Credit Agreement or this Agreement or under any of the other
Loan  Documents,  is outstanding  and unpaid,  or as long as any  Commitments in
favor of the Principal under the Credit Agreement have not been terminated.

     (b) In case any one or more of the  provisions  contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid,  illegal or  unenforceable,  but the validity,  legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or  impaired  thereby.  The  parties  shall  endeavor in  good-faith
negotiations to replace the invalid,  illegal or  unenforceable  provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

    SECTION 10.  Counterparts.  This  Agreement may be executed in  counterparts
                 -------------
(and by different parties hereto on different counterparts), each of which shall
constitute an original,  but all of which when taken together shall constitute a
single contract. This Agreement shall be effective with respect to the Principal
or Guarantor  when a counterpart  bearing the signature of the Principal or such
Guarantor shall have been delivered to the Administrative  Agent. Delivery of an
executed signature page to this Agreement by facsimile  transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.

    SECTION 11. Effect of  Contribution  Agreement.  This  Agreement is intended
                -----------------------------------
only to define the relative  rights of the  Principal  and the  Guarantors,  and
nothing  set  forth  in this  Agreement  is  intended  to or  shall  impair  the
obligations of the Guarantors,  jointly and severally, to pay any amounts as and
when the same shall become due and payable in  accordance  with the terms of the
Guaranty   Agreement.   The  parties  hereto  acknowledge  that  the  rights  of
indemnification, subrogation, and contribution hereunder shall constitute assets

                                  Exhibit D - 3

<PAGE>

in favor of each Guarantor to which such right of indemnification,  subrogation,
or indemnification is owing.

    SECTION 12.  Additional  Guarantors.  Pursuant to Section 5.10 of the Credit
                 -----------------------
Agreement,  certain Subsidiaries of the Principal are required to enter into the
Guaranty Agreement as a Guarantor.  Upon execution and delivery,  after the date
hereof,  by the  Administrative  Agent and such a Subsidiary of an instrument in
the form of Annex I hereto,  such Subsidiary shall become a Guarantor  hereunder
            -------
with the same force and effect as if originally named as a Guarantor  hereunder.
The execution and delivery of any instrument adding an additional Guarantor as a
party  to  this  Agreement  shall  not  require  the  consent  of any  Guarantor
hereunder.  The rights and obligations of each Guarantor  hereunder shall remain
in full force and effect  notwithstanding the addition of any new Guarantor as a
party to this Agreement.

                                  Exhibit D - 4

<PAGE>

    IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized offices as of the date first appearing above.

                                     PRINCIPAL:

                                     DOLLAR GENERAL CORPORATION
                                     (a Tennessee corporation)

                                     By:   _____________________________________
                                           Name:
                                           Title:

                                  Exhibit D - 5

<PAGE>

                                     GUARANTORS:
                                     -----------

                                     DOLLAR GENERAL FINANCIAL, INC.
                                     (a Tennessee corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DADE LEASE MANAGEMENT, INC.
                                     (a Delaware corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DOLGENCORP, INC.
                                     (a Kentucky corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DOLGENCORP OF NEW YORK, INC.
                                     (a Kentucky corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DOLGENCORP OF TEXAS, INC.
                                     (a Kentucky corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                  Exhibit D - 6

<PAGE>

                                     DG LOGISTICS, LLC
                                     (a Tennessee limited liability [company])

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DOLLAR GENERAL STORES, LTD.
                                     (a Kentucky corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DOLLAR GENERAL PARTNERS
                                     (a Kentucky general partnership)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     THE GREATER CUMBERLAND INSURANCE COMPANY
                                     (a Vermont corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     NATIONS TITLE COMPANY, INC.
                                     (a Tennessee corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                  Exhibit D - 7

<PAGE>

                                     DOLLAR GENERAL INTELLECTUAL PROPERTY, L.P.
                                    (a Vermont limited partnership)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DOLLAR GENERAL INVESTMENTS, INC.
                                     (a Delaware corporation)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DGC PROPERTIES LLC
                                     (a Delaware limited liability company)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                     DGC PROPERTIES OF KENTUCKY LLC
                                     (a Delaware limited liability company)

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                  Exhibit D - 8

<PAGE>

                                     SUNTRUST BANK,
                                     as Administrative Agent

                                     By:    ____________________________________
                                            Name:
                                            Title:

                                  Exhibit D - 9

<PAGE>

                                     ANNEX I

                                  SUPPLEMENT TO
                             CONTRIBUTION AGREEMENT
                             ----------------------

     THIS SUPPLEMENT TO CONTRIBUTION  AGREEMENT (this  "Supplement") dated as of
________________________,  made by and between  __________________,  a _________
(the "New  Guarantor"),  and the  Administrative  Agent  described in the Credit
Agreement referred to below.

     A. Reference is made to (a) the 364-Day Revolving Credit Agreement dated as
of June ___, 2002 (as amended,  supplemented and restated from time to time, the
"Credit  Agreement"),   among  Dollar  General  Corporation  (the  "Principal"),
SunTrust Bank, as Administrative Agent, the banks and other lending institutions
from time to time that are parties thereto (the "Lenders"),  Credit Suisse First
Boston,  as Syndication  Agent,  and U.S. Bank National  Association and KeyBank
National  Association,  as  Co-Documentation  Agents, (b) the Guaranty Agreement
dated as of June ___,  2002,  among the Guarantors  that are parties  thereto in
favor of the  Administrative  Agent,  the Collateral  Agent, and the Lenders (as
amended, supplemented and restated from time to time, the "Guaranty Agreement"),
and (c) the  Contribution  Agreement  dated as of June  ____,  2002,  among  the
Principal,   the  Guarantors,   and  the   Administrative   Agent  (as  amended,
supplemented and restated from time to time, the "Contribution Agreement").

     B.  Capitalized  terms used herein and not otherwise  defined  herein shall
have the meaning  assigned to such terms in the  Contribution  Agreement  or the
Credit Agreement, as the case may be.

     C. The  Principal  and the  Guarantors  have entered into the  Contribution
Agreement in order to induce the Lenders to make Loans and make other extensions
of credit to the  Principal.  Pursuant to Section 5.10 of the Credit  Agreement,
certain  Subsidiaries  of the  Principal are required to enter into the Guaranty
Agreement as a Guarantor. Section 12 of the Contribution Agreement provides that
additional  Subsidiaries  of the  Principal  may  become  Guarantors  under  the
Contribution Agreement by execution and delivery of an instrument in the form of
this  Supplement.   The  undersigned  Subsidiary  of  the  Principal  (the  "New
Guarantor") is executing this Supplement in accordance with the  requirements of
the Credit Agreement to become a Guarantor under the  Contribution  Agreement in
order to induce the Lenders to make additional  Loans and make other  additional
extensions of credit to the Principal and as  consideration  for Loans and other
extensions of credit previously made and issued.

     Accordingly,  the  Administrative  Agent  and the New  Guarantor  agree  as
follows:

     SECTION 1. In accordance with Section 12 of the Contribution Agreement, the
New Guarantor by its signature below becomes a Guarantor under the  Contribution
Agreement  with the same force and effect as if  originally  named  therein as a
Guarantor,  and the New Guarantor  hereby agrees to all the terms and provisions
of the Contribution  Agreement applicable to it as a Guarantor thereunder.  Each
reference to a  "Guarantor"  in the  Contribution  Agreement  shall be deemed to
include the New Guarantor. The Contribution

                              Exhibit D - Annex - 1

<PAGE>

     Agreement is hereby incorporated herein by reference.

     SECTION 2. The New Guarantor  represents and warrants to the Administrative
Agent and the Lenders that this  Supplement has been duly  authorized,  executed
and delivered by it and  constitutes  its legal,  valid and binding  obligation,
enforceable against it in accordance with its terms.

     SECTION  3.  This  Supplement  may be  executed  in  counterparts  (and  by
different  parties  hereto  on  different  counterparts),  each of  which  shall
constitute an original,  but all of which when taken together shall constitute a
single contract.  This Supplement shall become effective when the Administrative
Agent shall have  received  counterparts  of this  Supplement  that,  when taken
together, bear the signatures of the New Guarantor and the Administrative Agent.
Delivery  of  an  executed  signature  page  to  this  Supplement  by  facsimile
transmission  shall be as effective as delivery of a manually signed counterpart
of this Supplement.

     SECTION  4.  Except as  expressly  supplemented  hereby,  the  Contribution
Agreement shall remain in full force and effect.

     SECTION  5.  THIS  SUPPLEMENT  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.

     SECTION  6. In case  any one or more of the  provisions  contained  in this
Supplement  should be held  invalid,  illegal or  unenforceable  in any respect,
neither party hereto shall be required to comply with such provision for so long
as such  provision  is held to be  invalid,  illegal or  unenforceable,  but the
validity,  legality and  enforceability  of the remaining  provisions  contained
herein and in the  Contribution  Agreement  shall not in any way be  affected or
impaired.  The parties  hereto  shall  endeavor in  good-faith  negotiations  to
replace the invalid,  illegal or unenforceable  provisions with valid provisions
the economic  effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

     SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 7 of the Contribution Agreement. All communications
and notices  hereunder to the New Guarantor  shall be given to it at the address
of the Principal as provided in the Credit Agreement.

                             Exhibit D - Annex - 2

<PAGE>

     IN WITNESS  WHEREOF,  the New Guarantor and the  Administrative  Agent have
duly executed this Supplement to  Contribution  Agreement as of the day and year
first above written.

                                      [Name of New Guarantor]

                                      By:    ___________________________________
                                             Name:
                                             Title

                                      SUNTRUST BANK,
                                      as Administrative Agent

                                      By:    ___________________________________
                                             Name:
                                             Title

                             Exhibit D - Annex - 3

<PAGE>

                                   EXHIBIT 2.3
                                   -----------

                           FORM OF NOTICE OF BORROWING
                           ---------------------------

                                     [Date]

SunTrust Bank,
   as Administrative Agent
   for the Lenders referred to below
303 Peachtree Street, N.E.
Atlanta, GA 30308

Attention:

     Reference is made to the 364-Day  Revolving  Credit  Agreement  dated as of
June  __,  2002 (as  amended  and in  effect  on the date  hereof,  the  "Credit
Agreement"),  among the  undersigned,  as Borrower,  the Lenders named  therein,
SunTrust  Bank,  as  Administrative   Agent,  Credit  Suisse  First  Boston,  as
Syndication  Agent,  and U.S. Bank  National  Association  and KeyBank  National
Association,  as Co-Documentation  Agents. Terms defined in the Credit Agreement
are used herein with the same  meanings.  This  notice  constitutes  a Notice of
Borrowing,  and the  Borrower  hereby  requests  a  Borrowing  under the  Credit
Agreement,   and  in  that  connection  the  Borrower  specifies  the  following
information with respect to the Borrowing requested hereby:

        (A)      Aggregate principal amount of Borrowing1:______________________

        (B)      Date of Borrowing  (which is a Business Day):__________________

        (C)      Interest Rate basis2:__________________________________________

        (D)      Interest Period3:______________________________________________

        (E)      Location  and number of  Borrower's  account to which
                 proceeds of  Borrowing  are to be disbursed:___________________

-----------------------
1    Not less than  $10,000,000 or a larger multiple of $500,000 if a Eurodollar
     Borrowing, and not be less than $1,000,000 or a larger multiple of $100,000
     if a Base Rate Borrowing.

2    Eurodollar Borrowing or Base Rate Borrowing.

3    Which must  comply with the  definition  of  "Interest  Period" and end not
     later than the Commitment Termination Date.

                                 Exhibit 2.3 - 1
<PAGE>

     The Borrower hereby  represents and warrants that the conditions  specified
in  paragraphs  (a),  (b) and (c) of  Section  3.2 of the Credit  Agreement  are
satisfied as of the date hereof.

                                                     Very truly yours,

                                                     DOLLAR GENERAL CORPORATION

                                                     ---------------------------
                                                     Name:
                                                     Title

                                 Exhibit 2.3 - 2

<PAGE>

                                   EXHIBIT 2.5
                                   -----------

                    FORM OF NOTICE OF CONTINUATION/CONVERSION
                    -----------------------------------------

                                     [Date]

SunTrust Bank,
   as Administrative Agent
   for the Lenders referred to below
303 Peachtree Street, N.E.
Atlanta, GA 30308

Attention:

         Reference is made to the 364-Day Revolving Credit Agreement dated as of
June  __,  2002 (as  amended  and in  effect  on the date  hereof,  the  "Credit
Agreement"),  among the  undersigned,  as Borrower,  the Lenders named  therein,
SunTrust  Bank,  as  Administrative   Agent,  Credit  Suisse  First  Boston,  as
Syndication  Agent,  and U.S. Bank  National  Association  and KeyBank  National
Association,  as Co-Documentation  Agents. Terms defined in the Credit Agreement
are used herein with the same  meanings.  This  notice  constitutes  a Notice of
Continuation/Conversion  and the  Borrower  hereby  requests the  conversion  or
continuation of a Borrowing under the Credit  Agreement,  and in that connection
the Borrower  specifies the following  information with respect to the Borrowing
to be converted or continued as requested hereby:

         (A)      Borrowing to which this request
                  applies:                                           (amount)
                             ----------------------------------------
                                            , 200__ (Interest Period End Date)
                             ---------------

         (B)      Principal amount(s) of Borrowing to
                  be converted/continued1:

                  (1)      $
                           -------------------------------
                  (2)      $
                           -------------------------------
                  (3)      $
                           -------------------------------

         (C)      Effective date of election (must be a Business Day):

-----------------------
1    Not less than  $10,000,000 or a larger multiple of $500,000 if a Eurodollar
     Borrowing, and not be less than $1,000,000 or a larger multiple of $100,000
     if a Base Rate Borrowing.

                                Exhibit 2.5 - 1

<PAGE>

         (D)      Interest rates basis for each resulting Borrowing1:

                  (1)
                      -------------------------------
                  (2)
                      -------------------------------
                  (3)
                      -------------------------------

         (E)      Interest period for each resulting Borrowing2:

                  (1)
                  (2)
                  (3)

                                                     Very truly yours,

                                                     DOLLAR GENERAL CORPORATION

                                                     ---------------------------
                                                     Name:
                                                     Title

------------------

1    Eurodollar Borrowing or Base Rate Borrowing.

2    Which must  comply with the  definition  of  "Interest  Period" and end not
     later than the Commitment Termination Date.

                                Exhibit 2.5 - 2Exhibit 10.93 - Grid Demand Promissory Note

	

JPMorgan
Private Bank

GRID DEMAND PROMISSORY
NOTE
(LIBOR/PRIME)

$500,000 

 Dated as of
August 19, 2002  

     For
value received, EOS International, Inc. (the “Borrower”) hereby promises to pay to the
order of JPMorgan Chase Bank (the “Bank”) at its office at 345 Park Avenue, New
York, New York 10154-1002 for the account of the lending office of the Bank, the
principal amount of Five Hundred Thousand Dollars ($500,000) or, if less, the aggregate
unpaid principal amount of all loans made to the undersigned by the Bank and outstanding
under this Note (the “Loans”) on the earlier of August 19, 2003 or DEMAND.  

     The
Borrower promises to pay interest on each Interest Payment Date on the unpaid balance of
the principal amount of each such Loan from and including the date of such Loan to such
Maturity Date at either (i) a floating rate per annum equal to the Prime Rate (such Loan
a “Prime Loan”), or (ii) a fixed rate per annum equal to the Adjusted Libor
Rate applicable to such Loan plus 0.50% (such Loan a “Libor Loan”).
Any principal not paid when due shall bear interest from and including such date until
paid in full at a rate per annum equal to the Default Rate, such interest to be payable
on demand. Interest shall be payable on the relevant Interest Payment Date and shall be
calculated on the basis of a year of 360 days for the actual number of days elapsed.  

     All
payments hereunder shall be made in lawful money of the United States and in immediately
available finds. Any extension of time for the payment of the principal of this Note
resulting from the due date falling on a non-Banking Day shall be included in the
computation of interest. The date, amount, type and Maturity Date of, and the interest
rate with respect to, each Loan evidenced hereby and all payments of principal thereof
shall be recorded by the Bank on its books and, at the discretion of the Bank prior to
any transfer of this Note at any other time, may be endorsed by the Bank on a schedule.
Any such endorsement shall be conclusive absent manifest error. The Bank may (but shall
not be obligated to) debit the amount of any payment under this Note that is not made
when due to any deposit account of the Borrower with the Bank. The Borrower waives
presentment, notice of dishonor, protest and any other notice or formality with respect
to this Note.  

     1.     
Definitions.   The terms listed below shall be defined as follows: 

     “Adjusted
Libor Rate” shall mean the Libor Rate for such Loan divided by one minus the Reserve
Requirement.  

     “Banking
Day” shall mean any day on which commercial banks are not authorized or required to
close in New York City and whenever such day relates to a Libor Loan or notice with
respect to any Libor Loan, a day on which dealings in U.S. dollar deposits are also
carried out in the London interbank market.  

 1

	

     “Default
Rate” means a rate per annum equal to: (a) if a Prime Loan, a floating rate of 2% above
the rate of interest thereon (including any margin); (b) if a Libor Loan, a fixed rate of
2% above the rate of interest in effect thereon (including any margin) at the time of
default until the Maturity Date thereof and, thereafter, a floating rate of 2% above the
rate of interest for a Prime Loan (including any margin).  

     “Facility
Documents” shall mean this Note, the line of credit offer letter dated as of August
19, 2002, and any other documents, instruments, or agreements delivered as security or
collateral for, or a guaranty of, the Loans, or in connection with, or as support for,
any of the foregoing, whether by the Borrower or a Third Party, and any updates or
renewals thereof.  

     “Head
Office” shall mean the head office of the Bank, currently located at 270 Park Avenue,
New York, New York 10017.  

     “Interest
Payment Date” shall mean (i) the last Banking Day of each calendar month; and (ii) on
any payment of principal.  

     “Libor
Rate” shall mean the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) quoted by the Bank at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two Banking Days prior to the first day of such Loan for the
offering by the Bank to leading banks in the London interbank market of U.S. dollar
deposits having a term comparable to such Loan and in an amount comparable to the
principal amount of such Loan.  

     “Maturity
Date” shall mean (i) with respect to a Prime Loan, the period commencing on the date
such Prime Loan is made and ending on the date recorded by the Bank on its books, or if
such day is not a Banking Day then on the immediately succeeding Banking Day, and (ii)
with respect to a Libor Loan, the period commencing on the date such Libor Loan is made
and ending on the numerically corresponding day One, Two, Three or Six  calendar
months thereafter, as recorded by the Bank on its books, or if such day is not a Banking
Day, then on the immediately succeeding Banking Day; provided that if such Banking Day
would fall in the next calendar month, such Maturity Date shall end on the immediately
preceding Banking Day; and provided, further, that each such Maturity Date which
commences on the last Banking Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar month) shall end
on the last Banking Day of the appropriate calendar month. If the Bank shall not have
received notice to the contrary from the Borrower at least three Banking Days prior to
the Maturity Date of a Libor Loan, the Bank may renew such Loan as a Libor Loan for a
period with a duration equal to that then ending, provided that no such renewal shall be
made if the number of months in the renewal period is greater than six.  

     “Prime
Rate” shall mean that rate of interest from time to time announced by the Bank at the
Head Office as its prime commercial lending rate.  

     “Regulation
D” shall mean Regulation D of the Board of Governors of the Federal Reserve System.  

     “Regulatory
Change” shall mean any change after the date of this Note in United States federal,
state or municipal laws or any foreign laws or regulations (including Regulation D) or
the adoption or making after such date of any interpretations, directives or requests
applying to a class of banks, including the Bank, of or under any United States federal,
state or municipal laws or any foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.  

 2

	

     “Reserve
Requirement” shall mean, for any Libor Loan, the average maximum rate at which
reserves (including any marginal, supplemental or emergency reserves) are required to be
maintained during the term of such Loan under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion U.S. dollars, or as
otherwise established by the Board of Governors of the Federal Reserve System and any
other banking authority to which the Bank is subject, against “Eurocurrency
liabilities” (as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (x) any
category of liabilities which includes deposits by reference to which the Libor Rate is
to be determined or (y) any category of extensions of credit or other assets which
include Libor Loans. The Reserve Requirement shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.  

     “Third
Party” shall mean any party liable with respect to, or otherwise granting support
for, this Note, whether by guaranty, subordination, grant of security or otherwise.  

     2.     Borrowings
and Prepayments.    The Borrower shall give the Bank notice of each borrowing request by
12:00 noon New York City time three Banking Days prior to each requested borrowing of a
Libor Loan and by 12:00 noon New York City time on the date of each requested borrowing
of a Prime Loan; provided that no Libor Loan shall be in an amount equal to less than
$500,000; and provided, further, that no Prime Loan shall be in an amount equal to less
than $30,000. The Borrower shall have the right to make prepayments of principal at any
time or from time to time; provided that: (a) the Borrower shall give the Bank
irrevocable notice of each prepayment by 12:00 noon New York City time three Banking Days
prior to prepayment of a Libor Loan, and by 12:00 noon New York City time on the date of
prepayment of a Prime Loan; (b) Libor Loans may be prepaid prior to their Maturity Date
only if accompanied by payment of the additional compensation calculated in accordance
with Section 5 below; (c) all prepayments of Libor Loans shall be in a minimum amount
equal to the lesser of $100,000 or the unpaid principal amount of this Note; and (d) all
prepayments of Prime Rate Loans shall be in a minimum amount equal to the lesser of
$30,000 or the unpaid principal amount of this Note.  

     3.     
Additional Costs.   (a) If as a result of any Regulatory Change which (i) changes the basis
of taxation of any amounts payable to the Bank under this Note (other than taxes imposed
on the overall net income of the Bank or the lending office by the jurisdictions in which
the Head Office of the Bank or the lending office are located) or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessments, minimum capital,
capital ratios or similar requirements relating to any extension of credit or other
assets of, or any deposits with or other liabilities of the Bank, or (iii) imposes any
other condition affecting this Note, the Bank determines (which determination shall be
conclusive absent manifest error) that the cost to it of making or maintaining a Libor
Loan is increased or any amount received or receivable by the Bank under this Note is
reduced, then the Borrower will pay to the Bank on demand an additional amount that the
Bank determines will compensate it for the increased cost or reduction in amount.  

 3

	

     (b)
Without limiting the effect of the foregoing provisions of this Section 3 (but without
duplication), the Borrower shall pay to the Bank from time to time on request such
amounts as the Bank may determine to be necessary to compensate the Bank for any costs
which it determines are attributable to the maintenance by it or any of its affiliates
pursuant to any law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the date of this
Note or thereafter) of any court or governmental or monetary authority of capital in
respect of the Loans hereunder (such compensation to include, without limitation, an
amount equal to any reduction in return on assets or equity of the Bank to a level below
that which it could have achieved but for such law, regulation, interpretation, directive
or request).  

     4.     
Unavailability, Inadequacy or Illegality of Libor Rate.   Anything herein to the contrary
notwithstanding, if the Bank determines (which determination shall be conclusive) that:  

     (a)
quotations of interest rates for the relevant deposits referred to in the definition of
Libor Rate are not being provided in the relevant amounts or for the relevant maturities
for purposes of determining the rate of interest for a Libor Loan; or 

     (b)
the definition of Libor Rate does not adequately cover the cost to the Bank of making or
maintaining a Libor Loan; or 

     (c) as
a result of any Regulatory Change (or any change in the interpretation thereof) adopted
after the date hereof, the Head Office of the Bank or the lending office is subject to
any taxes, reserves, limitations, or other charges, requirements or restrictions on any
claims of such office on non-United States residents (including, without limitation,
claims on non-United States offices or affiliates of the Bank) or in respect of the
excess above a specified level of such claims; or  

     (d) it
is unlawful for the Bank or the lending office to maintain any Libor Loan at the Libor
Rate;  

          THEN, the Bank shall
give the Borrower prompt notice thereof, and so long as such condition remains in effect,
any existing Libor Loan shall bear interest as a Prime Loan and the Bank shall make no
Libor Loans.  

     5.
     Certain Compensation.   If for any reason there is a principal payment of a Libor Loan on a
date other than its Maturity Date (whether by prepayment, demand, acceleration, or
otherwise), the Borrower will pay to the Bank such amount or amounts as shall be
sufficient (in the reasonable opinion of the Bank) to compensate the Bank for any loss,
cost or expense which the Bank determines is attributable to such payment.  

     Without
limiting the generality of the preceding paragraph, such compensation shall include an
amount equal to the excess, if any of (i) the amount of interest which otherwise would
have accrued on the principal amount so paid for the period from the date of such payment
to the Maturity Date at a rate per annum equal to the sum of the then applicable Libor
Rate (plus any margin) over (ii) the interest component of the amount the Bank would have
bid in the Libor interbank market for deposits in U.S. dollars of leading banks in
amounts comparable to such principal amount and with maturities comparable to such period
(as reasonably determined by the Bank).  

 4

	

     6.
     Representations.   The Borrower represents and warrants that: 

     (a)
the Facility Documents constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their terms, except as the
enforcement hereof and thereof may be limited by bankruptcy, insolvency, or other similar
laws affecting the enforcement of creditors’rights generally and subject to the
applicability of general principles of equity;  

     (b)
the execution, delivery and performance by the Borrower of the Facility Documents and all
other documents contemplated hereby or thereby, do not and will not (i) conflict with or
constitute a breach of, or default under, or require any consent under, or result in the
creation of any lien, charge or encumbrance upon the property or assets of the Borrower
pursuant to any other agreement or instrument (other than any pledge of or security
interest granted in any collateral pursuant to any Facility Document) to which the
Borrower is a party or is bound or by which its properties may be bound or affected; or
(ii) violate any provision of any law, rule, regulation (including, without limitation,
Regulation U of the Federal Reserve Board), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrower;  

     (c) no
consent, approval or authorization of, or registration, declaration or filing with, any
governmental authority or other person or entity is required as a condition to or in
connection with the due and valid execution, delivery and performance by the Borrower of
any Facility Document;  

     (d)
there are no actions, suits, investigations or proceedings pending or threatened at law,
in equity, in arbitration or by or before any other authority involving or affecting: (i)
the Borrower that, if adversely determined, are likely to have a material adverse effect
on the prospects or condition of the Borrower; (ii) any material part of the assets or
properties of the Borrower or any part of the collateral (if any) under any Facility
Document; or (iii) any of the transactions contemplated in the Facility Documents. There
are currently no material judgments entered against the Borrower and the Borrower is not
in default with respect to any judgment, writ, injunction, order, decree or consent of
any court or other judicial authority, which default is likely to have or has had a
material adverse effect on the prospects or condition of the Borrower;  

     (e) in
the event that the Borrower is a partnership, limited liability partnership, corporation
or limited liability company, the Borrower also represents and warrants that it is duly
organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, and has all requisite power and authority to execute,
deliver and perform its obligations under the Facility Documents; and  

 5

	

     (f) in
the event that the Borrower is a trust, the Borrower also represents and warrants that
(i) it is a duly constituted and validly existing trust, (ii) the Borrower has delivered
to the Bank a true, complete and accurate copy of the agreement pursuant to which it has
been organized and all amendments and modifications thereto, and (iii) the trustees of
the Borrower signing this Note have the legal capacity and full power and authority to
execute, deliver, and perform their obligations under, and to bind the Borrower to
perform its obligations under, the Facility Documents, and to execute and deliver any and
all documents and instruments in connection therewith.  

     Each
borrowing request by the Borrower under this Note shall constitute a representation and
warranty that the statements above are true and correct both on the date of such request
and on the date of the borrowing.  

     7.
     Expenses.   The Borrower agrees to reimburse the Bank on demand for all costs, expenses and
charges (including, without limitation, fees and charges of counsel and costs allocated
by internal legal counsel) in connection with the preparation or modification of the
Facility Documents, performance or enforcement of the Facility Documents, or the defense
or prosecution of any rights of the Bank pursuant to any Facility Documents.  

     8.
     Jurisdiction.  The Borrower hereby irrevocably submits to the jurisdiction of any New York
state or United States federal court sitting in New York City over any action or
proceeding arising out of this Note, and the Borrower hereby irrevocably agrees that all
claims in respect of such action or proceeding may be held and determined in such New
York State or federal court. The Borrower further agrees that any action or proceeding
brought against the Bank may be brought only in a New York state or United States federal
court sitting in New York county. The Borrower hereby further irrevocably consents to the
service of process in any such action or proceeding in either of said courts by mailing
thereof by the Bank by registered or certified mail, postage prepaid, to the Borrower at
its address specified on the signature page hereof, or at the Borrower’s most recent
mailing address as set forth in the records of the Bank.  

     The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit or proceeding in such
state and hereby waives any defense on the basis of an inconvenient forum. Nothing herein
shall affect the right of the Bank to serve legal process in any other manner permitted
by law or affect the right of the Bank to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdiction.  

     9.
     Waiver of Jury Trial.   

THE BORROWER AND THE
BANK EACH WAIVE ANY RIGHT TO JURY TRIAL

     10.
     Miscellaneous.   (a) The provisions of this Note are intended to be severable. If for any
reason any provisions of this Note shall be held invalid or unenforceable in whole or in
part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or the remaining provisions
thereof in any jurisdiction.  

 6

	

     (b) No
amendment, modification, supplement or waiver of any provision of this Note nor consent
to departure by the Borrower therefrom shall be effective unless the same shall be in
writing and signed by the Borrower and the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given.  

     (c) No
failure on the part of the Bank to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.  

     (d) As
used herein, the term Borrower shall include all signatories hereto, if more than one. In
such event, the obligations, representations and warranties of the Borrower hereunder
shall be joint and several. This Note shall be binding on the Borrower and its successors
and assigns and shall inure to the benefit of the Bank and its successors and assigns,
except that the Borrower may not delegate any of its obligations hereunder without the
prior written consent of the Bank.  

     (e)
Anything herein to the contrary notwithstanding, the obligations of the Borrower under
this Note shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of law
applicable to the Bank limiting rates of interest which may be charged or collected by
the Bank.  

     (f)
Unless otherwise agreed in writing, notices shall be given to the Bank and the Borrower
at their telecopier numbers (confirmed by telephone to their telephone numbers) or
addresses set forth in the signature page of this Note, or such other telecopier (and
telephone) number or address communicated in writing by either such party to the other.
Notices to the Bank shall be effective upon receipt.  

     (g)
The obligations of the Borrower under Sections 3, 5, 7, 8, and 9 hereof shall survive the
repayment of the Loans.  

     (h)
This Note does not create and shall not be construed to create any contractual commitment
to lend by the Bank.  

     (i)
Each reference herein to the Bank shall be deemed to include its successors, endorsees,
and assigns, in whose favor the provisions hereof shall inure. Each reference herein to
the Borrower shall be deemed to include the heirs, executors, administrators, legal
representatives, successors and assigns of the Borrower, all of whom shall be bound by
the provisions hereof.  

     11.
     Governing Law.  This Note shall be governed by and construed in accordance with the laws
of the State of New York, provided that such choice of law is not intended to limit the
maximum rate of interest which may be charged or collected by the Bank hereunder if the
Bank may, under the laws applicable to it, charge or collect interest at a higher rate
than is permissible under the laws of said state.  

 7

	

Address for
notices to the

Bank:

JPMorgan Chase
Bank 
345 Park Avenue

New York, New York  10154-1002

Attn:   Amanda S. Elliott

Telecopier:  212-464-2531

Telephone:   212-464-1518

	EOS International, Inc.

By:  PETER A. LUND 
——————————————

Name:  Peter A. Lund
Title:    Chairman		

	

Address for
notices:

c/o Pat Pinto 

EOS International, Inc.

888 Seventh Avenue

New York, NY  10106

Telecopier:  (212) 554-9873

Telephone:  (212) 887-6869

 8

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