Document:

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                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT, dated as of March 2, 2001 (this
"AGREEMENT"), among the persons listed on Schedule A attached hereto (the
"INVESTORS"); and Technology Ventures Group, Inc., a Florida corporation (the
"COMPANY").

                                    RECITALS

         A. The Investors own certain shares of the Company's common stock, par
value $0.01 per share (the "Common Stock");

         B. The Company has agreed to grant the Investors certain registration
rights; and

         C. The Company and the Investors desire to define the registration
rights of the Investors on the terms and subject to the conditions herein set
forth.

         NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:

                                   SECTION 1.
                                   DEFINITIONS

         As used in this Agreement, the following terms have the respective
meanings set forth below:

         AFFILIATE: shall mean any Person or entity, directly or indirectly
controlling, controlled by or under common control with such Person or entity;

         COMMISSION: shall mean the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act;

         EXCHANGE ACT: shall mean the Securities Exchange Act of 1934, as
amended;

         HOLDER: shall mean any holder of Registrable Securities;

         OTHER STOCKHOLDERS: shall mean Persons who, by virtue of agreements
with the Company or otherwise, are entitled to include their securities in a
registration.

         PERSON: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;

         REGISTER, REGISTERED and REGISTRATION: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;

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         REGISTRABLE SECURITIES: shall mean (A) 10,000 shares of Common Stock
owned by each of Peter or Shelley Goldstein as of the date of this Agreement,
(B) 717,000 shares of Common Stock owned by Goldco Properties Limited
Partnership as of the date of this Agreement, (C) any capital stock of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Common Stock referred to in clauses (A)
or (B);

         REGISTRATION EXPENSES: shall mean all expenses incurred by the Company
in compliance with Section 2(a) hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company);

         SECURITY, SECURITIES: shall have the meaning set forth in Section 2(1)
of the Securities Act;

         SECURITIES ACT: shall mean the Securities Act of 1933, as amended; and

         SELLING EXPENSES: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, as well as
expenses of counsel for any of the Holders.

                                   SECTION 2.
                               REGISTRATION RIGHTS

         (a) COMPANY REGISTRATION.

         (i) INCLUSION IN REGISTRATION. If the Company shall determine to
register any of its equity securities either for its own account or for the
account of Other Stockholders, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does not
permit secondary sales or does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities, the Company will:

                  (A) give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and

                  (B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, up to 300,000 shares of the Registrable Securities in the
first registration, up to 250,000 shares in the second registration, and up to
167,000 shares in the third registration which are specified in a written
request or requests, made by the Holders within twenty (20) days after receipt
of the written notice from the Company described in Section 2(a)(i) above,
except as set forth in Section 2(a)(ii) below.

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         (ii)  LIMITATION OF REGISTRATION RIGHTS.

                  (A) UNDERWRITING. If the registration for which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(a)(i)(A). In such event, the right of each of the
Holders to registration pursuant to this Section 2(a) shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 2(a), if the representative determines that marketing factors
require a limitation on the number of shares to be underwritten, the
representative may exclude from the second or third registration and
underwriting some or all of the Registrable Securities which would otherwise be
underwritten pursuant hereto. The parties have agreed that the initial 300,000
shares must be included in the first registration statement and therefore are
not subject to the limitation set forth in this paragraph. The Company shall
promptly advise all holders of securities of the Company requesting registration
of such limitation. If any of the Holders or any officer, director or Other
Stockholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by promptly notifying in writing the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

                  (B) NUMBER OF REGISTRATIONS. In no event shall the Company be
required to include in any registration, any Registrable Securities of a Holder,
after the Company has effected three registrations pursuant to Section 2(a), and
such registrations have been declared or ordered effective and the sale of
Registrable Securities thereunder shall have closed. Notwithstanding the
foregoing, if a Holder is wholly cutback by the underwriter, such that a Holder
cannot include any of his or its Registrable Securities in an underwritten
Company registration, then the Registrable Securities which were cutback shall
all be included in any subsequent Company registration.

         (b) EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered; provided, that, expenses of counsel for
the Holders shall be borne as agreed to by the Holders.

         (c) REGISTRATION PROCEDURES. In the case of each registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:

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         (i) prepare and file with the Commission a registration statement with
respect to such Registrable Securities, use commercially reasonable efforts to
cause such registration to become effective, and keep such registration
effective for a period of one hundred twenty (120) days or until the Holders, as
applicable, have completed the distribution described in the registration
statement relating thereto, whichever first occurs; PROVIDED, HOWEVER, that (A)
such 120-day period shall be extended for a period of time equal to the period
during which the Holders, as applicable, refrain from selling any securities
included in such registration in accordance with provisions in Section 2(g)
hereof; and (B) such 120-day period shall be extended for a period of time equal
to the period during which the Holders, as applicable, refrain from selling any
securities included in such registration for such time as is necessary to
correct a materially inaccurate prospectus under Section 2 (c)(iv) below;

         (ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
Securities covered by such registration statement for, subject to the provisions
of Section 2 (c)(i) above, up to one hundred twenty (120) days;

         (iii) when reasonably possible, furnish such number of prospectuses and
other documents incident thereto as each of the Holders, as applicable, from
time to time may reasonably request;

         (iv) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing;

         (v) use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdiction as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act;

         (vi) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement;

         (vii) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed; and

         (viii) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.

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         (d)  INDEMNIFICATION.

         (i) The Company will indemnify each of the Holders, as applicable, each
of its officers, directors, partners, agents, affiliates and advisors, and each
person controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 2, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of the Securities Act or the Exchange Act or any
rule or regulation thereunder applicable to the Company and relating to action
or inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of its
officers, directors and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by the Holders or underwriter.

         (ii) Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors,
officers, agents, affiliates and advisors, and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter, each Other Stockholder and each of
their officers, directors, and partners, and each person controlling such Other
Stockholder against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement of a material
fact contained in any such registration statement, prospectus, offering circular
or other document made by such Holder in writing, or any omission to state
therein a material fact required to be stated therein or necessary to make the
statements by such Holder therein not misleading, and will reimburse the Company
and such Other Stockholders, directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent that such untrue
statement or omission is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company by such Holder.

         (iii) Each party entitled to indemnification under this Section 2(d)
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations

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under this Section 2 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. No Indemnified Party, in its defense, may consent to any entry of
any judgment without the approval of the Indemnifying Party, which consent shall
not be unreasonably withheld. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

         (iv) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated by
this Agreement are in conflict with the foregoing provisions, the provisions in
such underwriting agreement shall be controlling.

         (v) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "FINAL
PROSPECTUS"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder if a copy of the Final Prospectus was
furnished to the underwriter and was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is required
by the Securities Act.

         (e) INFORMATION BY THE HOLDERS. Each of the Holders holding securities
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 2.

         (i) Each of the Holders shall cooperate as reasonably requested by the
Company with the Company in connection with the preparation of the registration
statement, and for so long as the Company is obligated to file and keep
effective the registration statement, shall provide to the Company, in writing,
for use in the registration statement, all such information regarding such
Holder and its plan of distribution of the Registrable Securities as may be
reasonably necessary to enable the Company to prepare the registration statement
and prospectus covering the Registrable Securities, to maintain the currency and
effectiveness thereof and otherwise to comply with all applicable requirements
of law in connection therewith.

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         (ii) During such time as such Holder may be engaged in a distribution
of the Registrable Securities, such Holder shall comply with Regulation M
promulgated under the Exchange Act and pursuant thereto it shall, among other
things; (x) not engage in any stabilization activity in connection with the
securities of the Company in contravention of such regulation; (y) distribute
the Registrable Securities under the registration statement solely in the manner
described in the registration statement; (z) cease distribution of such
Registrable Securities pursuant to such registration statement upon receipt of
written notice from the Company that the prospectus covering the Registrable
Securities contains any untrue statement of a material fact or omits a material
fact required to be stated therein or necessary to make the statements therein
not misleading.

         (f)  RULE 144 REPORTING.

         With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:

         (i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("RULE 144"), at all
times from and after ninety (90) days following the effective date of the first
registration under the Securities Act filed by the Company for an offering of
its securities to the general public;

         (ii) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements; and

         (iii) so long as the Holder owns any Registrable Securities, furnish to
the Holder upon request, a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 (at any time from and after ninety
(90) days following the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public), and of
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed as the
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing the Holder to sell any such securities without
registration.

         (iv) Notwithstanding anything contained in this Agreement, if any of
Holders Registrable Securities have not been included in an effective
Registration, then any of such Holder's Registrable Securities can be sold
pursuant to Rule 144. The registration rights set forth in this Section 2 shall
remain available to any Holder even if, in the opinion of counsel to the
Company, all of the Registrable Securities then owned by such Holder could be
sold in any 90-day period pursuant to Rule 144 (without giving effect to the
provisions of Rule 144(k)).

         (g) "MARKET STAND-OFF" AGREEMENT. Each of the Holders agrees, if
requested by the Company and an underwriter of equity securities of the Company,
not to sell or otherwise transfer or dispose of any Registrable Securities held
by such Holder during the period of time reasonably requested by any
underwriter, not in excess of 180 days, following the effective date of a
registration statement of the Company filed under the Securities Act; PROVIDED,

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THAT, such agreement only applies to the Company's initial public offering. If
requested by the underwriters, the Holders shall execute a separate agreement to
the foregoing effect. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 180-day period. The provisions of this Section 2(g) shall be
binding upon any transferee who acquires Registrable Securities.

                                   SECTION 3.
                                 MISCELLANEOUS

         (a) DIRECTLY OR INDIRECTLY. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.

         (b) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida (without giving effect to the
choice of law principles thereof) which are applicable to contracts made and to
be performed entirely within such State. Each of the parties hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of Florida and of any Florida state court sitting in
Miami-Dade County for purposes of all legal proceedings arising out of or
relating to this Agreement and the transactions contemplated hereby. Each of the
parties irrevocably waives, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

         (c) SECTION HEADINGS. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.

         (d) NOTICES.

         (i) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by overnight courier or by
registered mail or certified mail, postage prepaid:

         (A) if to an Investor, to the Investor's address or facsimile number
         which is on file with the Company.

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         (B) if to the Company, to Technology Ventures Group, Inc., 12400 S.W.
         134 Court, Suite 11, Miami, Florida 33186, Attn: President, with a copy
         to Leslie J. Croland, Esq. at Steel Hector & Davis LLP, 200 S. Biscayne
         Blvd. Suite 4000, Miami, FL 33131, fax: 305.577.7001.

          (ii) Any notice so addressed shall be deemed to be given: if delivered
by hand or facsimile, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.

         (e) SUCCESSORS AND ASSIGNS. This Agreement, and the rights and
obligations created hereunder, may only be assigned with the written consent of
the other parties hereto. Subject to the foregoing, this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties.

         (f) ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement constitutes
the entire understanding of the parties hereto and supersedes all prior and
contemporaneous understandings and agreements among such parties with respect to
the subject matter hereof. This Agreement may be amended, and the observance of
any term of this Agreement may be waived, with (and only with) the written
consent of the Company and the Investors.

         (g) SEVERABILITY. If any one or more of the provisions of this
Agreement should be ruled wholly or partly invalid or unenforceable by a court
or other government body of competent jurisdiction, then: (i) the validity and
enforceability of all provisions of this Agreement not ruled to be invalid or
unenforceable shall be unaffected; (ii) the effect of the ruling shall be
limited to the jurisdiction of the court or other government body making the
ruling; (iii) the provision(s) held wholly or partly invalid or unenforceable
shall be deemed amended, and the court or other government body is authorized to
reform the provision(s), to the minimum extent necessary to render them valid
and enforceable in conformity with the parties intent as manifested herein; and
(iv) if the ruling and/or the controlling principle of law or equity leading to
the ruling is subsequently overruled, modified, or amended by legislative,
judicial, or administrative action, then the provision(s) in question as
originally set forth in this Agreement shall be deemed valid and enforceable to
the maximum extent permitted by the new controlling principle of law or equity.

          (h) COUNTERPARTS; FAX SIGNATURES. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same agreement. Facsimile
signatures shall constitute original signatures for all purposes of this
Agreement.

                          SIGNATURES ON FOLLOWING PAGE

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         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.

TECHNOLOGY VENTURES GROUP, INC.

By:  /s/ SHELLEY S. GOLDSTEIN
------------------------------------
Name: Shelley S. Goldstein
Title:   Director

INVESTORS:

 /s/ PETER GOLDSTEIN
------------------------------------
Peter Goldstein

 /s/ SHELLEY GOLDSTEIN
------------------------------------
Shelley Goldstein

GOLDCO PROPERTIES LIMITED PARTNERSHIP

By:  /s/ PETER GOLDSTEIN
------------------------------------
Name:  Peter Goldstein
Title:    President

                (Signature Page to Registration Rights Agreement)

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                                   SCHEDULE A

                                    INVESTORS

NAME OF INVESTOR                              NO. OF SHARES
----------------                              -------------

Peter Goldstein                                  10,000

Shelley Goldstein                                10,000

Goldco Properties Limited Partnership           717,000

                                       11<PAGE>   1
                                                                   EXHIBIT 10.15

                              EMPLOYMENT AGREEMENT

     This Employment Agreement is made as of the 20th day of May, 1999 (the
"Agreement") by and between Service Merchandise Company, Inc., a Tennessee
corporation (the "Company"), and Jerry Foreman (the "Executive).

                                    RECITALS

     WHEREAS, the Company desires to provide for the employment of the Executive
in accordance with the terms and conditions provided herein; and

     WHEREAS, the Executive wishes to perform services for the Company in
accordance with the terms and conditions provided herein.

     NOW, THEREFORE, in consideration of the premises hereof and of the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

     1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to perform services for the Company, on the terms and
conditions set forth herein.

     2. Term. The term of employment of the Executive by the Company hereunder
shall commence effective as of May 20, 1999 (the "Effective Date"), and shall
end on May 19, 2002, unless further extended or sooner terminated as hereinafter
provided. Commencing on May 20, 2002, and on each anniversary thereafter (each
such date, an "Anniversary Date"), the term of the Executive's employment shall
automatically be extended for one additional year unless, not later than the
December 31, immediately preceding an Anniversary Date, either party shall have
given notice to the other party that it does not wish to extend this
Agreement,(a "Notice of Non-Renewal"). References herein to the "Term" of this
Agreement shall refer to both the initial term and any extended term of the
Executive's employment hereunder. Notwithstanding the foregoing, if a Change of
Control (as defined in Section 6) occurs during the Term, in no event shall the
Term end prior to the end of the twenty-fourth (24th) month following the month
in which such Change of Control occurs.

     3. Position and Duties.

          (a) The Executive shall serve as Senior Vice President, Hardlines
     Merchandising of the Company and shall have such responsibilities, duties
     and authority as are generally consistent and customary with such
     positions. Executive shall report solely to the President and Chief
     Operating Officer of the Company. The Executive shall also serve, if
     requested by the Board of Directors (the "Board"), as a director or officer
     of any of the Company's present or future direct or indirect subsidiaries.

<PAGE>   2

          (b) During the Term, and excluding any periods of vacation and sick
     leave to which the Executive is entitled, the Executive shall devote
     reasonable attention and time during normal business hours, to the business
     and affairs of the Company and, to the extent necessary to discharge the
     responsibilities assigned to the Executive under this Agreement, use the
     Executive's reasonable best efforts to carry out such responsibilities
     faithfully and efficiently. It shall not be considered a violation of the
     foregoing for the Executive to serve on corporate, industry, civic or
     charitable boards or committees, so long as such activities do not
     significantly interfere with the performance of the Executive's
     responsibilities as an employee of the Company in accordance with this
     Agreement.

          (c) The Executive shall be based primarily and reside in the general
     area of Nashville, Tennessee, except for such reasonable travel obligations
     as do not materially exceed the Executive's travel obligations immediately
     prior to the Effective Date.

     4. Compensation.

          (a) Signing Bonus. Upon the execution hereof and approval of this
     Agreement by the Board and the United States Bankruptcy Court for the
     Middle District of Tennessee, the Executive shall receive a one-time
     signing bonus of $212,000, provided that such signing bonus shall be
     returned to the Company if the Executive voluntarily terminates employment
     with the Company within one (1) year of the date of this contract.

          (b) Base Salary. During the Term, the Executive shall receive an
     annual base salary ("Annual Base Salary") of $325,000. The Annual Base
     Salary shall be payable in accordance with the Company's regular payroll
     practice for its senior executives, as in effect from time to time. During
     the Term, the Annual Base Salary shall be reviewed by the Compensation
     Committee of the Board for possible increase at least annually. Any
     increase in the Annual Base Salary shall not limit or reduce any other
     obligation of the Company under this Agreement. The Annual Base Salary
     shall not be reduced after any such increase, and the term "Annul Base
     Salary" shall thereafter refer to the Annual Base Salary as so increased.

          (c) Annual Bonus; Retention Program. During the Term, the Executive
     shall be entitled to receive an annual bonus ("Annual Bonus") pursuant to
     the Company's annual bonus plan, as in effect from time to time, and shall
     be entitled to participate in the Company's Retention Program for Key
     Employees (the "Program") as a Tier III employee, which Program was
     approved by an order (the "Order") of the U.S. Bankruptcy Court for the
     Middle District of Tennessee (the "Court") entered on May 5, 1999 in
     connection with the Company's Chapter 11 case (the "Case"). For fiscal year
     1999, the Executive shall receive, without regard to actual performance, a
     minimum Annual Bonus equal to the amount that he would be entitled to
     receive pursuant to the "Target EBITDAR" benchmark in the Program, which
     amount is calculated to be $97,500. For fiscal year 2001, the Executive
     shall receive total compensation pursuant to this Agreement and, if
     applicable, the Program or other similar plan of the Company, of

                                       2

<PAGE>   3

     not less than $400,000. As part of the Program and pursuant to the terms
     thereof and the Order, the Executive shall be entitled, to an aggregate
     stay bonus equal to $243,750. payable in four equal installments of
     $60,937.50 each. The first three installments are payable on the last
     business day (or, at the Company's option, the payroll date closest to the
     last business day) of July 1999, January 2000 and July 2000. The final
     installment is payable on the earlier of (a) substantial consummation of a
     plan of reorganization in the Case; the sale of all or substantially all of
     the assets in the Case on a going concern basis; or (c) the last business
     day (or, at the Company's option, the payroll date closest to the last
     business day) of December 2001.

          (d) Other Benefits. During the Term, the Executive shall be entitled
     to participate in other employee benefit plans, programs and arrangements
     of the Company, other than Annual Bonus plans (covered by Section 4(b)
     above) (the "Benefit Plans"), now or hereinafter in effect, that are
     applicable to the Company's employees generally or to Its executive
     officers, as the case may be, subject to and on a basis consistent with the
     terms, conditions and overall administration of the Benefit Plans. During
     the Term, the Company shall provide to the Executive all of the fringe
     benefits and perquisites that are provided to senior executives of the
     Company, and the Executive shall be entitled to participate in and receive
     any other fringe benefits or perquisites that become available to the
     Company's senior executives. The Company shall provide to the Executive an
     automobile or car allowance commensurate with that received by other senior
     vice presidents of the Company. The value of the benefit received by the
     Executive pursuant to the previous sentence shall be subject to applicable
     withholding pursuant to Section 13.

          (e) Vacation and Other Leaves. The Executive shall be entitled to
     vacation in accordance with the Company's vacation policy (and to
     compensation in respect of earned but unused vacation days) in the amount
     of four weeks per year, and all paid holidays and personal leave days that
     are available generally to executive officers of the Company.

          (f) Expenses. During the Term, the Executive shall be entitled to
     receive prompt reimbursement for all reasonable and customary expenses
     incurred by the Executive in performing his services hereunder, including
     all expenses of travel and accommodations while engaged in business of the
     Company, provided that such expenses are incurred and accounted for in
     accordance with the policies and procedures established by the Company.

          (g) Services Furnished. The Company shall furnish the Executive with
     office space, secretarial and/or administrative assistance, office
     supplies, support services and such other facilities and services as shall
     be suitable to the Executive's position and adequate for the performance of
     his duties hereunder.

     5. Compensation on Termination of Employment (Except Within Two Years
Following a Change of Control).

                                       3
<PAGE>   4

     This Section 5 shall apply to termination of the Executive's employment
during the Term and prior to a Change of Control (as hereinafter defined in
Section 6) and to termination of the Executive's employment more than two (2)
years following a Change of Control. This Section 5 shall not apply to
termination of Executive's employment during the Change of Control Period (as
hereinafter defined in Section 6):

          (a) Disability. If the Executive's employment with the Company is
     terminated by the Executive or the Company due to the Executive's inability
     to perform Executive's duties as a result of physical or mental incapacity
     ("Disability"), the Executive shall be paid such amounts, if any, as the
     Executive is entitled to receive under the Company's disability insurance
     policies then 'in effect for Company officers, but shall be entitled to no
     further compensation or benefits (unless previously accrued under the
     Company's benefit plans).

          (b) Other Termination Not Giving Rise to Salary Continuation. If the
     Executive's employment shall be terminated for Cause (as hereinafter
     defined) or if the Executive dies or if the Executive terminates
     Executive's employment for any reason other than for a material breach of
     this Agreement by the Company, the Company shall pay the Executive any
     installments of Executive's Annual Base Salary as then in effect that would
     otherwise be due through the date on which Executive's employment is
     terminated. The Company shall then have no further obligations to the
     Executive under this Agreement except that in the event of termination by
     death, the Executive's estate or beneficiaries, as the case may be, shall
     be paid such amounts as may be payable to the Executive under the Company's
     insurance policies and/or other benefit plans. For the purposes of this
     Agreement, the Company shall have "Cause" to terminate the Executive's
     Employment upon (i) the willful engaging by the Executive in misconduct
     materially injurious to the Company, (ii) acts of dishonesty or fraud by
     the Executive, or (iii) the willful violation by the Executive of the
     provisions of Section 8 or Section 9 hereof.

          (c) Termination Giving Rise to Salary Continuation. If the Company
     shall terminate the Executive's employment with the Company or shall
     provide a Notice of Non-Renewal for any reason other than due to the
     Executive's death or Disability or for Cause, or if the Executive
     terminates this Agreement because of a material breach of this Agreement by
     the Company, then, subject to the compliance by the Executive with the
     provisions of Sections 8 and 9 hereof, the Company shall pay, as salary
     continuation, to the Executive an amount equal to two (2) times the
     Executive's maximum Annual Base Salary paid during the prior five (5) year
     period (inclusive of the Annual Bonus paid to Executive during the 12-month
     period preceding the date of termination or the Annual Bonus earned by the
     Executive with respect to the fiscal year immediately preceding the date of
     termination, whichever Annual Bonus is higher, but excluding unearned
     bonuses negotiated by Executive at the time of the Executive's employment
     with the Company), payable in a lump sum, but no other compensation or
     benefits (unless accrued under the Company's benefit plans prior to the
     date of termination of employment or as provided in Section 4(e) hereof)
     shall be paid to the Executive.

                                       4
<PAGE>   5

          (d) Healthcare Coverage. If the Executive's employment with the
     Company is terminated by the Company for any reason other than due to the
     Executive's death or Disability or for Cause, the Company will reimburse
     the Executive for the premium paid by the Executive for continued coverage
     for the Executive (and any dependents of the Executive covered by the
     Company's healthcare plans at the time the Executive's employment was
     terminated) under the Company's healthcare plan pursuant to "COBRA" (or any
     other mandatory healthcare continuation law then in effect), such coverage
     then being substantially similar to that provided by the Company to its
     senior executives and their eligible dependents. The Executive will be
     entitled to reimbursement for such coverage for the period commencing with
     the date of termination of Employment and ending on the earlier of (i) the
     second anniversary of termination of employment, or (ii) the date the
     Executive becomes eligible to receive any healthcare coverage from another
     employer of the Executive or Executive's spouse, or any governmental
     entity, that does not contain any exclusion or limitation with respect to
     any preexisting condition of the Executive or Executive's covered
     dependents. If the Executive (or Executive's dependents covered at the time
     of termination of employment) elects not to continue coverage under COBRA
     (or any other mandatory healthcare continuation law then in effect) or is
     not eligible to continue coverage under such healthcare continuation law,
     and is otherwise eligible under this Section 5(d), the Company will
     reimburse the Executive for the cost of purchasing substantially similar
     coverage or a supplement required to achieve substantially similar coverage
     under another arrangement approved by the Company for the same period;
     however, such reimbursement shall be limited to the then current premium
     charged to others by the Company for substantially similar coverage under
     COBRA (or other mandatory healthcare continuation law then in effect). Any
     amount payable to the Executive shall be subject to withholding of
     applicable taxes as provided in Section 13 hereof. In the event of
     Executive's death following termination giving rise to the benefit
     described in this Section 5(d), but before the expiration of such benefits,
     Executive's dependents shall be entitled to such benefits.

          (e) Sole Remedy. The Executive hereby agrees that amounts payable
     under this Section 5 shall be Executive's sole and exclusive remedy against
     the Company on account of termination of employment during the Term and
     prior to a Change of Control and on account of termination of employment
     more than two (2) years following a Change of Control.

     6. Compensation on Termination of Employment Within Two Years Following A
Change of Control.

     This Section 6 shall apply to termination of Executive's employment during
the "Change of Control Period" (as defined in this Section 6). This Section 6
shall not apply to termination of Executive's employment prior to a Change of
Control or more than two (2) years following a Change of Control:

                                       5
<PAGE>   6

          (a) Definition of Certain Terms.

               (i) "Good Reason" shall mean the occurrence or continuation,
          without consent of Executive, after a Change of Control, of any of the
          following events within the Change of Control Period:

                    (A) the assignment to Executive of any duties inconsistent
               with the customary powers and duties that Executive held
               immediately prior to the Change of Control, or an adverse change
               in the status, position or conditions of Executive's employment
               or the nature of Executive's responsibilities in effect
               immediately prior to such Change of Control, or any removal of
               Executive from, or any failure to re-elect Executive to, any of
               such positions;

                    (B) a reduction by the Company in Executive's Annual Base
               Salary as in effect immediately prior to such Change of Control;

                    (C) the relocation of Executive's principal office to a
               location outside a 35 mile radius from Executive's principal
               office immediately prior to such Change of Control, except for
               required travel on the Company's business to an extent
               substantially consistent with Executive's business travel
               obligations immediately prior to such Change of Control;

                    (D) the failure by the Company to continue in effect any
               benefit or compensation plan in which Executive participates
               immediately prior to the Change of Control which is material to
               Executive's total compensation, including but not limited to any
               stock or stock option, employee stock ownership, bonus,
               insurance, disability and vacation plans which the Company
               currently has or any substitute or additional plans adopted prior
               to the Change of Control, unless an equitable arrangement
               (embodied in an ongoing substitute or alternative plan or plans)
               has been made with respect to such plan, or the failure by the
               Company to continue Executive's participation therein (or in such
               substitute or alternative plan) on a basis not materially less
               favorable, both in terms of the amount of benefits provided and
               the level of Executive's participation relative to other
               participants, as in existence immediately prior to such Change of
               Control; or

                    (E) the failure of the Company to obtain an agreement from
               any successor to assume and agree to perform this Agreement as
               contemplated herein.

               (ii) A "Change of Control" shall be deemed to have taken place if
          (i) any person or entity, including a "group" as defined in Section
          13(d)(3) of the Securities and Exchange Act of 1934, other than
          Company or a wholly-owned subsidiary thereof or any employee benefit
          plan of Company or any of its it subsidiaries, becomes the beneficial
          owner of the Company securities having 20%

                                       6
<PAGE>   7

          or more of the combined voting power of the then outstanding
          securities of the Company that may be cast for the election of
          directors of the Company (other than as a result of an in issuance of
          securities initiated by the Company in the ordinary course of
          business); or (ii) as the result of, or in connection with, any cash
          tender or exchange offer, merger or other business combination, sale
          of assets or contested election, or any combination of the foregoing
          transactions, less than a majority of the combined voting power of the
          then outstanding securities of the Company or any successor
          corporation or entity entitled to vote generally in the election of
          the directors of the Company or such other corporation or entity after
          such transaction is held in the aggregate by the holders of the
          Company's securities entitled to vote generally in the election of
          directors of the Company immediately prior to such transaction; or
          (iii) the following individuals cease for any reason to constitute a
          majority of the number of directors then serving: individuals who, as
          of the Effective Date, constitute the Board and any new director
          (other than a director whose initial assumption of office is in
          connection with an actual or threatened election contest, including
          but not limited to, a consent solicitation, relating to the election
          of directors of the Company) whose appointment or election by the
          Board or nomination for election by the Company's shareholders, was
          approved or recommended by a vote of at least two-thirds of the
          directors of the Company then still in office who were directors of
          the Company on the Effective Date or whose appointment, election or
          nomination for election was previously so approved or recommended;
          provided, however, that a "Change of Control" shall not be deemed to
          have taken place if any of the events specified (i), (ii) or (iii) of
          this paragraph occur in connection with the substantial consummation
          of a confirmed plan of reorganization under Chapter 11 of the
          Bankruptcy Code prosecuted by the Company.

               (iii) "Change of Control Period" shall mean the two (2) year
          period following a Change of Control.

               (iv) "Change of Control Severance Benefits" shall mean all of the
          following payments:

                    (A) any installments of Executive's Annual Base Salary
               through the date of termination of employment at the rate in
               effect at the time the Notice of Termination is given,

                    (B) the Special Termination Payment; and

                    (C) the Medical Benefits.

               (v) "Change of Control Date" shall mean the date on which a
          Change of Control occurs.

               (vi) "Medical Benefits" shall mean the reimbursement for
          continued medical coverage for Executive and Executive's dependents
          described in Section 5(d) hereof.

                                       7
<PAGE>   8

               (vii) "Notice of Termination" shall refer to written notice
          described in Section 6(d) indicating the specific termination
          provision of this Agreement relied upon, setting forth in reasonable
          detail the facts and circumstances claimed to provide the basis for
          termination of Executive's employment under the provision so indicated
          and stating the date of termination.

               (viii) "Special Termination Payment" shall mean an amount payable
          in a single lump sum equal to the product of (x) an amount equal to
          the Executive's maximum Annual Base Salary paid in any year of the
          five (5) year period preceding the date of termination (inclusive of
          the Annual Bonus paid to Executive during the 12 month period
          preceding the date of termination or the Annual Bonus earned by the
          Executive with respect to the fiscal year immediately preceding the
          date of termination, whichever Annual Bonus is higher, but excluding
          unearned bonuses negotiated by Executive at the time of Executive's
          employment with the Company), multiplied by (y) the number three (3),
          except that in the event that the Change in Control is the result of a
          liquidation of the Company, the amount specified in (x) will be
          multiplied by (y) the number two (2) instead of the number three (3).

          (b) Termination Not Giving Rise To Special Termination Payments or
     Medical Benefits. If Executive's employment is terminated during the Change
     of Control Period for Cause (as defined in Section 5(b), or on account of
     Disability (as defined in Section 5(a)), or if Executive dies during the
     Change of Control Period, or if Executive terminates Executive's employment
     during the Change of Control Period without Good Reason, the Company shall
     pay to Executive any installments of Executive's Annual Base Salary as then
     in effect that would otherwise be due through the date on which Executive's
     employment is terminated. The Company shall then have no further
     obligations to the Executive under this Agreement (unless accrued under the
     Company's benefit plans) except that in the event of termination by death,
     the Executive's estate or beneficiaries, as the case may be, shall be paid
     such amounts as may be payable to the Executive under the Company's ,
     insurance policies and/or other benefit plans, and except that in the event
     of termination by Disability, the Executive shall be paid such amounts as
     Executive is entitled to receive under the Company's disability insurance
     policies and plans then in effect covering the Executive.

          (c) Termination Giving Rise to Change of Control Severance Benefits.
     If the Executive's employment is terminated or a Notice of Non-Renewal is
     given by the Company during the Change of Control Period for any reason
     other than Cause, death of the Executive or Disability, or if the Executive
     terminates his employment during the Change of Control Period for Good
     Reason, then Executive shall be entitled to receive the Change of Control
     Severance Benefits, all of which (except the Medical Benefits) shall be
     paid to Executive within ten (10) days following the date of termination.

          (d) Notice of Termination. Any termination of Executive's Employment
     by the Company or by Executive pursuant to this Section 6 shall be
     communicated by written notice of termination (the "Notice of Termination")
     to the other party hereto, which shall indicate the specific termination
     provision in the Agreement relied upon,

                                       8
<PAGE>   9

     shall set forth in reasonable detail the facts and circumstances claimed to
     provide a basis for termination of Executive's employment and shall state
     the date of termination.

          (e) Sole Remedy. The Executive hereby agrees that the Change of
     Control Severance Benefits shall be Executive's sole and exclusive remedy
     against the Company or any successor on account of termination of
     employment during the Change of Control Period.

     7. Certain Reduction in Payments by the Company.

          (a) Definition of Certain Terms.

               (i) A "Payment" shall mean any payment or distribution in the
          nature of compensation to or for the benefit of Executive, whether
          paid or payable pursuant to this Agreement or otherwise.

               (ii) An "Agreement Payment" shall mean a Payment paid or payable
          on account of termination of employment during the Change in Control
          Period pursuant to Section 6 of this Agreement (disregarding the
          reduction provided by Section 7(b)).

               (iii) "Net After Tax Receipt" shall mean the Present Value (as
          defined below) of all Payments that are contingent on a Change of
          Control within the meaning of Section 280G of the Internal Revenue
          Code of 1986, as amended (the "Code"), net of all taxes imposed on
          Executive with respect thereto under Sections I and 4999 of the Code,
          determined by applying the highest marginal rate under Section I of
          the Code which applied to Executive's taxable income for the
          immediately preceding taxable year.

               (iv) "Present Value" shall mean such value determined in
          accordance with Section 280G(d)(4) of the Code.

          (b) Limitation on Agreement Payments. It is intended that all
     Agreement Payments hereunder, together with all other Payments to Executive
     contingent upon or in connection with a Change of Control, are reasonable
     compensation for Executive's service to Company and its subsidiaries.
     Notwithstanding the foregoing, should Company determine, based upon the
     opinion of the independent accounting advisors of Company immediately prior
     to the Change of Control ("Accounting Firm"), that the Agreement Payments
     and other Payments, together with any other amounts received by Employee
     that must be included in such determination, would result in the payment of
     an "excess parachute payment" as defined in Section 280G of the Code, then
     Company will reduce the Agreement Payments to the minimum extent necessary
     so that no portion of the aggregate Payments would result in the payment of
     an "excess parachute payment;" provided, however, that such reduction will
     be made if, but only if, the value of all such Payments (without regard to
     the foregoing reduction) would result in Net After Tax Receipts which are
     less than the Net After Tax Receipts that would result after taking into
     account any such reduction.

                                       9
<PAGE>   10

          (c) Opinion of Accounting Firm. Company may reduce the Agreement
     Payments pursuant to this Section 7 only if within thirty (30) days of
     Executive's termination it provides Executive with an opinion of the
     Accounting Firm that Executive will be considered to have received "excess
     parachute payments" as defined in Section 280G of the Code if Executive
     were to receive the full amounts owing pursuant to the terms of this
     Agreement and that the reduced amount proposed to be paid by the Company
     will result in Net After Tax Receipts that are equal to or greater than the
     Net After Tax Receipts which would result from reduction in the Agreement
     Payments by any other amount.

     8. Unauthorized Disclosure.

          (a) During the period in which the Executive is employed by the
     Company, the Executive shall not, without the prior written consent of the
     Board, or a person authorized thereby, disclose to any person, other than a
     person to whom disclosure is necessary or appropriate in connection with
     the performance by the Executive of Executive's duties as an officer of the
     Company, or its subsidiaries or its affiliates, any confidential
     information obtained by Executive while in the employ of the Company with
     respect to any of the Company's products, improvements, formulae, designs
     or styles, processes, customers, methods of marketing or distribution,
     systems, procedures, plans, proposals, policies or methods of manufacture,
     the disclosure of which Executive knows, or should have reason to know,
     will be damaging to the Company or its subsidiaries or its affiliates, nor
     shall Executive make any false statements regarding the Company or its
     subsidiaries or its affiliates or take any other action which Executive
     knows, or should have reason to know, will be damaging to the Company or
     its subsidiaries or its affiliates; provided, however, that confidential
     information shall not include any information known generally to the public
     (other than as a result of unauthorized disclosures by the Executive) or
     any information of a type not otherwise considered confidential by persons
     engaged in the same business or a business similar to that conducted by the
     Company. Following the termination of the Executive's employment with the
     Company for any reason, the Executive shall not disclose any confidential
     information of the type described above or take any action of type
     described above except as may be required in the opinion of the Executive's
     counsel in connection with any judicial or administrative proceeding or
     inquiry. The provisions of this Section 8 shall be binding upon the
     Executive's heirs, successors and legal representatives.

          (b) Company agrees to refrain from making derogatory or defamatory
     statements about or concerning Executive.

     9. Non-Competition. During the period in which the Executive is employed by
the Company and for a period of two (2) years following any termination giving
rise to salary continuation payments pursuant to Section 5(c) or to Change of
Control Severance Benefits pursuant to Section 6(c), the Executive will not (a)
directly or indirectly own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as an officer,
Employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any business which is in
substantial competition with any business conducted by the Company or by any
group, division or subsidiary of the Company in

                                       10
<PAGE>   11

any area where such business is being conducted at the time of such termination
(provided that ownership of five percent (5%) or less of the voting stock of any
publicly held corporation shall not constitute a violation hereof) or (b)
directly or indirectly employ, solicit for employment, or advise or recommend to
any other persons that they employ or solicit for employment any Employee of the
Company or any of its subsidiaries or affiliates.

     10. Specific Performance. The Executive acknowledges and agrees that, in
the event of a breach of Section 8 or Section 9 hereof by the Executive, the
Company would be irreparably harmed and that monetary damages would be an
inadequate remedy in favor of the Company. Accordingly, the Executive and the
Company agree that in the event of such a breach, the Company shall be entitled
to injunctive relief against the Executive.

     11. Binding Agreement. This Agreement and all obligations of the Company
hereunder shall be binding upon the successors and assigns of the Company. This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

     12. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:

         If to the Executive:

         Jerry Foreman
         6012 Jocelyn Hollow Road
         Nashville, Tennessee 37205

         If to the Company:

         Service Merchandise Company, Inc.
         7100 Service Merchandise Drive
         Brentwood, Tennessee 37027
         Attn: General Counsel

or to such other address as any party may have finished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

     13. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement, all federal, state, city or other taxes as shall be
required pursuant to any law or government revocation or ruling.

     14. Governing Law. This Agreement shall be construed according to the laws
of Tennessee, without giving effect to the principles of conflicts of laws of
such State.

     15. Amendment, Modification, Waiver. This Agreement may not be amended
except by the written agreement of the parties hereto. No provisions of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge, is agreed to in

                                       11
<PAGE>   12

writing signed by Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. However, notwithstanding anything
in this Agreement to the contrary, if in the opinion of the Company's
accountants, any provision of this Agreement would preclude the use of "pooling
of interest" accounting treatment for a Change of Control transaction that (i)
would otherwise qualify for such accounting treatment and (ii) is contingent
upon qualifying for such accounting treatment, then to the extent any provision
of this Agreement disqualifies the transaction as a "pooling of interest"
transaction (including, if applicable, the entire Agreement), such provision(s)
shall be null and void as of the date hereof.

     16. Binding Effect. This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided for herein. Without limiting the generality of the foregoing,
Executive's right to receive payments hereunder shall not be assignable,
transferable or delegable, whether by pledge, creation of a security interest or
otherwise, other than by a transfer by his will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary
to this paragraph, the Company shall have no liability to pay any amount so
attempted to be assigned, transferred or delegated.

     17. Entire Contract. This Agreement constitutes the entire agreement and
supersedes all other prior agreements, employment contracts and understandings,
both written and oral, express or implied with respect to the subject matter of
this Agreement, including, without limitation, any employment agreement or any
severance or indemnification, by and between the Company and the Executive, all
of such agreements being tendered null and void by this Agreement.

     18. Termination. This Agreement shall be terminable only upon the
occurrence of any one of the following events: (a) expiration of the Term
without Executive's employment having been previously terminated; (b) the
termination of Executive with payment in full of all the payments/benefits
described in Sections 5 or 6 hereof as appropriate; or (c) the Company (or its
successor in interest) and Executive so agree in writing; provided, however,
that the provisions of Sections 8 and 9 hereof shall survive without limitation.

                                       12
<PAGE>   13

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                        SERVICE MERCHANDISE COMPANY, INC.

                                        By:  /s/ C. Steven Moore
                                           ------------------------------

Accepted and Agreed:

  /s/ Jerry Foreman
---------------------------
Jerry Foreman

                                       13

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