Document:

<PAGE>
                                                                 Exhibit 10.17

                                 FIRST AMENDMENT

                                       TO

                           LOAN AND SECURITY AGREEMENT

              This First Amendment to Loan and Security Agreement (the
"Amendment"), made as of the 23rd day of February, 2000, among FLOORING AMERICA,
INC., a Delaware corporation, 4 FLOORS, INC., an Ohio corporation, ADVANCE FLOOR
DECORATORS, INC., a Michigan corporation, BAILEY & ROBERTS CARPETMAX OF
TENNESSEE, INC., a Tennessee corporation, CARPETMAX OF UTAH, INC., a Utah
corporation, FLOORING AMERICA FRANCHISING, L.P. (f/k/a Carpetmax, L.P.), a
Georgia limited partnership, CARPETMAX RETAIL STORES, INC., a Delaware
corporation, MANASOTA CARPET, INC., a Florida corporation, WADSWORTH & OWENS
DECORATING CENTER, INC., a Florida corporation, CARPETSPLUS OF AMERICA, INC., a
Georgia corporation, GCO CARPET OUTLET, INC., an Alabama corporation, KAREN'S
INC., a Michigan corporation, MAXIM RETAIL GROUP, INC., a Georgia corporation,
MAXIM RETAIL STORES, INC., a Georgia corporation, C & S TEXTILES, INC., an Idaho
corporation, COLORADO CARPET & RUGS, INC., a Colorado corporation, TRI-R OF
ORLANDO, INC., a Georgia corporation, and GCO, INC., a Nevada corporation, as
borrowers ("Borrowers" and each "Borrower"), the LENDERS (as defined below), and
FOOTHILL CAPITAL CORPORATION, as agent for the Lenders (the "Agent"),

                              W I T N E S S E T H:

              WHEREAS, the Borrowers, the financial institutions party thereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), and the Agent are parties to that certain Loan
and Security Agreement dated as of January 28, 2000 (the "Loan Agreement"); and

              WHEREAS, the Agent has agreed to enter into a Blocked Account
Agreement (as defined in the Loan Agreement) with SunTrust Bank so long as the
Borrowers covenant and agree to replace such Blocked Account Agreement with an
acceptable Blocked Account Agreement as set forth in this Amendment; and

              WHEREAS, the Borrowers have requested that certain other terms and
conditions of the Loan Agreement be amended; and

              WHEREAS, the Agent and the Lenders have agreed to the requested
amendments on the terms and conditions set forth herein;

              NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree that all capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Loan Agreement, and further
agree as follows:

<PAGE>

              1.      AMENDMENTS TO ARTICLE 3 OF THE LOAN AGREEMENT.

                      (a)  Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete the reference to "February
7, 2000" in subsection (c) thereof and to substitute "March 1, 2000" therefor.

                      (b) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete the reference to "February
14, 2000" in subsection (e) thereof and to substitute "March 1, 2000" therefor.

                      (c) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete subsection (g) thereof in
its entirety and to substitute the following therefor:

                               "(g) on or before March 1, 2000, Borrowers shall
              have delivered to Agent evidence that the Liens referenced on
              Schedule 3.3 have been terminated. Prior to such date, such Liens
              shall be deemed to be Permitted Liens;"

                      (d) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete subsection (j) thereof in
its entirety and to substitute the following therefor:

                               "(j) on or before the date forty-five (45) days
              following the Closing Date, Borrowers shall have delivered to
              Agent a Blocked Account Agreement in form and substance reasonably
              acceptable to Agent for a new Concentration Account and Credit
              Card Concentration Account, evidence that the Concentration
              Account and the Credit Card Concentration Account in existence on
              the Closing Date have been closed, and all documentation necessary
              to provide that all Collections deposited into any Blocked Account
              (other than the new Concentration Account and the new Credit Card
              Concentration Account) will thereafter be transferred to the new
              Concentration Account or the new Credit Card Concentration
              Account, as the case may be, on a daily basis as otherwise
              provided for in the relevant Blocked Account Agreement;"

                      (d)  Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete subsection (o) thereof in
its entirety and to substitute the following therefor:

                               "(o) on or before May 17, 2000, Borrowers shall
deliver to Agent a certificate of title for each vehicle owned by a Borrower."

              2.      WAIVER. Any Defaults with respect to Section 3.3(c), (e)
or (g) existing on the date hereof immediately prior to the effectiveness of
this Amendment and the Events of Default existing on the date hereof immediately
prior to the effectiveness of this Amendment under Section 8.2 arising out of
Borrowers' failure to satisfy the conditions set forth in Section 3.3(c), (e)
and (g) are hereby waived.

                                      -2-
<PAGE>

              3.      NO OTHER AMENDMENT OR WAIVER. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided above,
operate as a waiver of any right, power or remedy of the Agent or the Lenders
under the Loan Agreement or any of the other Loan Documents, nor constitute a
waiver of any provision of the Loan Agreement or any of the other Loan
Documents. Except for the amendments and waiver expressly set forth above, the
text of the Loan Agreement and all other Loan Documents shall remain unchanged
and in full force and effect and the Borrowers hereby ratify and confirm their
obligations thereunder, including without limitation their obligations under
Section 3.3 of the Loan Agreement, as amended hereby. This Amendment shall not
constitute a modification of the Loan Agreement or a course of dealing with the
Agent or the Lenders at variance with the Loan Agreement such as to require
further notice by the Agent or the Lenders to require strict compliance with the
terms of the Loan Agreement and the other Loan Documents in the future, except
as expressly set forth herein. The Borrowers acknowledge and expressly agree
that the Agent and the Lenders reserve the right to, and do in fact, require
strict compliance with all terms and provisions of the Loan Agreement and the
other Loan Documents, including without limitation Section 3.3 of the Loan
Agreement, as amended hereby. The Borrowers have no knowledge of any challenge
to the Agent's or the Lenders' claims arising under the Loan Documents or the
effectiveness of the Loan Documents.

              4.      CONDITIONS OF EFFECTIVENESS.

                      This Amendment shall become effective as of the date
hereof when, and only when, the Agent, on behalf of the Lenders, shall have
received, in form and substance satisfactory to it:

                      (a)      counterparts of this Amendment executed by the
Borrowers, the Agent and each of the Lenders; and

                      (b)      such other information, documents, instruments or
approvals as the Agent, the Lenders or the Agent's counsel may require.

              5.      REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.

                      Each Borrower represents and warrants as follows:

                      (a)      Such Borrower is a corporation or limited
partnership, as the case may be, organized, validly existing and in good
standing under the laws of the jurisdiction indicated at the beginning of this
Amendment;

                      (b)      The execution, delivery and performance by such
Borrower of this Amendment and the Loan Documents, as amended hereby, are within
such Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) such Borrower's articles or
certificate of incorporation, or (ii) law or any contractual restriction binding
on or affecting such Borrower;

                                      -3-
<PAGE>

                      (c)      Except for approvals which have been obtained, no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body, is required for the due execution,
delivery and performance by such Borrower of this Amendment or any of the Loan
Documents, as amended hereby, to which such Borrower is or will be a party;

                      (d)      This Amendment and each of the other Loan
Documents, as amended hereby, to which such Borrower is a party, constitute
legal, valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms; and

                      (e)      Except for the Defaults and Events of Default
waived as set forth in Section 3 hereof, no Default or Event of Default is
existing.

              6.      REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to "the Loan Agreement," "thereunder," "thereof" or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as amended hereby.

              7.      COSTS, EXPENSES AND TAXES. Each Borrower, jointly and
severally, agrees to pay on demand all reasonable costs and expenses in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder.

              8.      GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia, without regard to
conflict of laws principles of such state.

              9.      LOAN DOCUMENT. This Amendment shall be deemed to be a Loan
Document for all purposes.

              10.     COUNTERPARTS. This Amendment may be executed by one or
more of the parties hereto on any number of separate counterparts, each of which
shall be deemed an original and all of which, taken together, shall be deemed to
constitute one and the same instrument. Delivery of an executed counterpart of
this Amendment by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.

                  [remainder of page intentionally left blank]

                                      -4-
<PAGE>

              IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized officers or representatives to execute and deliver
this Amendment as of the day and year first written above.

                                         FLOORING AMERICA, INC.,
                                         a Delaware corporation

                                         By:
                                         Name:    Thomas Leahey
                                         Title:   Executive Vice President

                                         4 FLOORS, INC.,
                                         an Ohio corporation

                                         By:
                                         Name:    Thomas Leahey
                                         Title:   Vice President

                                         ADVANCE FLOOR DECORATORS, INC.,
                                         a Michigan corporation

                                         By:
                                         Name:    Thomas Leahey
                                         Title:   Vice President

                                         BAILEY & ROBERTS CARPETMAX OF
                                         TENNESSEE, INC.,
                                         a Tennessee corporation

                                         By:
                                         Name:    Thomas Leahey
                                         Title:   Vice President

                                         CARPETMAX OF UTAH, INC.,
                                         a Utah corporation

                                         By:
                                         Name:    Thomas Leahey
                                         Title:   Vice President

<PAGE>

                                         FLOORING AMERICA FRANCHISING, L.P.,
                                         a Georgia limited partnership

                                         By:  Flooring America, Inc., its
                                              general partner

                                         By:
                                         Name:   Thomas Leahey
                                         Title: Executive Vice President

                                         CARPETMAX RETAIL STORES, INC.,
                                         a Delaware corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         MANASOTA CARPET, INC.,
                                         a Florida corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         WADSWORTH & OWENS DECORATING
                                         CENTER, INC.,
                                         a Florida corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         CARPETSPLUS OF AMERICA, INC.,
                                         a Georgia corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

<PAGE>

                                         GCO CARPET OUTLET, INC.,
                                         an Alabama corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         KAREN'S INC.,
                                         a Michigan corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         MAXIM RETAIL GROUP, INC.,
                                         a Georgia corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         MAXIM RETAIL STORES, INC.,
                                         a Georgia corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:   Vice President

                                         C&S TEXTILES, INC.,
                                         an Idaho corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

<PAGE>

                                         COLORADO CARPET & RUGS, INC.,
                                         a Colorado corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         TRI-R OF ORLANDO, INC.,
                                         a Georgia corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

                                         GCO, INC.,
                                         a Nevada corporation

                                         By:
                                         Name:   Thomas Leahey
                                         Title:  Vice President

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

                                         By:
                                         Name:   Todd Colpitts
                                         Title:  Vice President<PAGE>

                                                                 Exhibit 10.18

                                SECOND AMENDMENT

                                       TO

                           LOAN AND SECURITY AGREEMENT

              This Second Amendment to Loan and Security Agreement (the
"Amendment"), made as of the ___ day of March, 2000, among FLOORING AMERICA,
INC., a Delaware corporation, 4 FLOORS, INC., an Ohio corporation, ADVANCE FLOOR
DECORATORS, INC., a Michigan corporation, BAILEY & ROBERTS CARPETMAX OF
TENNESSEE, INC., a Tennessee corporation, CARPETMAX OF UTAH, INC., a Utah
corporation, FLOORING AMERICA FRANCHISING, L.P. (f/k/a Carpetmax, L.P.), a
Georgia limited partnership, CARPETMAX RETAIL STORES, INC., a Delaware
corporation, MANASOTA CARPET, INC., a Florida corporation, WADSWORTH & OWENS
DECORATING CENTER, INC., a Florida corporation, CARPETSPLUS OF AMERICA, INC., a
Georgia corporation, GCO CARPET OUTLET, INC., an Alabama corporation, KAREN'S
INC., a Michigan corporation, MAXIM RETAIL GROUP, INC., a Georgia corporation,
MAXIM RETAIL STORES, INC., a Georgia corporation, C & S TEXTILES, INC., an Idaho
corporation, COLORADO CARPET & RUGS, INC., a Colorado corporation, TRI-R OF
ORLANDO, INC., a Georgia corporation, and GCO, INC., a Nevada corporation, as
borrowers ("Borrowers" and each "Borrower"), the LENDERS (as defined below), and
FOOTHILL CAPITAL CORPORATION, as agent for the Lenders (the "Agent"),

                              W I T N E S S E T H:

              WHEREAS, the Borrowers, the financial institutions party thereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), and the Agent are parties to that certain Loan
and Security Agreement dated as of January 28, 2000, as modified and amended by
that certain First Amendment to Loan and Security Agreement dated as of February
23, 2000 (the "Loan Agreement"); and

              WHEREAS, the terms of that certain Offer to Purchase and Consent
Solicitation dated as of November 1, 1999 with respect to the Senior
Subordinated Notes (as defined in the Loan Agreement)(the "Consent
Solicitation") have been modified and amended pursuant to that certain Amendment
No. 1 (dated March 3, 2000) to Offer to Purchase and Consent Solicitation; and

              WHEREAS, the Borrower has requested that the Loan Agreement be
modified and amended to contemplate such amendment to the Consent Solicitation;
and

              WHEREAS, the Agent and the Lender have agreed to such amendment as
set forth in this Amendment and pursuant to the terms and conditions of this
Amendment;

              NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree that all capitalized terms used

<PAGE>

but not otherwise defined herein shall have the meanings ascribed thereto in the
Loan Agreement, and further agree as follows:

              1.      AMENDMENT TO ARTICLE 1 OF THE LOAN AGREEMENT.

                      (a)      Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to add the following definition of "FIFTH
SUPPLEMENTAL INDENTURE" immediately after the existing definition of "FEIN":

                      ""FIFTH SUPPLEMENTAL INDENTURE" means that certain Fifth
              Supplemental Indenture among Parent, as issuer, the guarantors
              party thereto, and the Indenture Trustee, relating to the Senior
              Subordinated Notes, dated the Settlement Date (as defined in the
              Offer and Solicitation)."

                      (b)      Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to delete the existing definitions of "INDENTURE"
and "INDENTURE DOCUMENTS" in their entirety and to substitute the following
therefor:

                      ""INDENTURE" means that certain Indenture dated as of
              October 16, 1997, as supplemented by that certain First
              Supplemental Indenture dated as of January 30, 1998, as further
              supplemented by that certain Second Supplemental Indenture dated
              as of August 9, 1998, as further supplemented by that certain
              Third Supplemental Indenture dated as of November 25, 1998, as
              further supplemented by that certain Fourth Supplemental Indenture
              dated as of July 31, 1999, as further supplemented by the Fifth
              Supplemental Indenture, among Parent, as issuer, the guarantors
              party thereto, and the Indenture Trustee, relating to the Senior
              Subordinated Notes.

                      "INDENTURE DOCUMENTS" means collectively, the Indenture
              and each document executed in connection therewith, including
              without limitation the Indenture Security Documents, executed in
              connection therewith.

                      "INDENTURE SECURITY DOCUMENTS" means, collectively, that
              certain Security Agreement, Conditional Assignment and Trademark
              Security Agreement, Pledge Agreement and the mortgages described
              on Schedule 1 of the Second Amendment, in each case dated as of
              the date of the Second Amendment, among the Borrower Parties and
              the Indenture Trustee, and any other documents executed in
              connection with the Indenture providing for the grant by a
              Borrower Party in favor of the Indenture Trustee or any holder of
              the Senior Subordinated Notes (in its capacity as such a holder)
              of a security interest in any assets of any Borrower Party."

                      (c)      Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to add the following definition of "INTERCREDITOR
AGREEMENT" immediately after the existing definition of "INTANGIBLE ASSETS":

                      ""INTERCREDITOR AGREEMENT" means that certain
              Intercreditor Agreement dated as of the date of the Fifth
              Supplemental Indenture among Borrowers, the Indenture

                                      -2-
<PAGE>

              Trustee and Agent, in form and substance satisfactory to
              Agent, as the same may be modified, amended or restated from
              time to time."

                      (d)      Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to add the words "the Intercreditor Agreement"
immediately after the words "Lender Group" in the definition of "LOAN
DOCUMENTS".

                      (e)      Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to add the following definition of "Offer and
Solicitation" immediately after the existing definition of "Obligations:"

                      ""OFFER AND SOLICITATION" means that certain Offer to
              Purchase and Consent Solicitation with respect to the Senior
              Subordinated Notes dated November 1, 1999, as modified and amended
              pursuant to that certain Amendment No. 1 (dated March 3, 2000) to
              such Offer to Purchase and Consent Solicitation."

                      (f)      Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to delete the existing definition of "ORIGINAL
PROPOSED REDEMPTION" and to substitute the following therefor:

                      ""ORIGINAL PROPOSED REDEMPTION" means a redemption of the
              Senior Subordinated Notes in the aggregate principal amount of
              $25,000,000, plus accrued and unpaid interest and fees owing
              thereon, all as more particularly set forth in the Offer and
              Solicitation."

                      (g)      Article 1 of the Loan Agreement, DEFINITIONS,
is hereby modified and amended to delete subsection (l) of the definition of
"PERMITTED LIENS" and to substitute the following therefor:

                      "(l) subject to the Intercreditor Agreement, Liens in
favor of the Indenture Trustee."

                      (h)  Article 1 of the Loan Agreement, DEFINITIONS, is
hereby modified and amended to add the following definition of "Second
Amendment" immediately after the existing definition of "REVOLVING FACILITY
USAGE":

                      ""SECOND AMENDMENT" means that certain Second Amendment to
              Loan and Security Agreement dated as of March ___, 2000 among
              Borrowers, the Lenders, and Agent."

              2.      AMENDMENT TO ARTICLE 3 OF THE LOAN AGREEMENT. Section 3.2
of the Loan Agreement, CONDITIONS PRECEDENT TO ALL ADVANCES AND ALL LETTERS OF
CREDIT, is hereby modified and amended to delete the word "and" at the end of
subsection (b) thereof, and to add the following additional subsection
immediately following subsection (c) thereof:

                                      -3-
<PAGE>

              "; and

                      (d) until the date Borrowers deliver to Agent Borrowers'
              then current thirteen (13) week cash flow forecast which forecast
              is satisfactory to Agent in its reasonable judgment and in form
              satisfactory to Agent, after giving effect to any Advance or the
              issue of any Letter of Credit hereunder and any reserve created by
              Agent in its reasonable judgment for any deterioration in
              Borrowers' accounts payable since completion of Agent's
              pre-Closing Date audit of Borrowers, there shall exist
              Availability of not less than $2,000,000."

              3.      AMENDMENT TO ARTICLE 7 OF THE LOAN AGREEMENT.

                      (a)      Section 7.8 of the Loan Agreement, PREPAYMENTS
AND AMENDMENTS, is hereby modified and amended to delete the first and second
provisos of Section 7.8(a) and to substitute the following therefor:

              "; PROVIDED, HOWEVER, that Parent may make the Original Proposed
              Redemption so long as (i) no Default or Event of Default exists or
              would be caused thereby; (ii) either (A) the Availability
              hereunder on the date of such Original Proposed Redemption after
              giving effect to such redemption, less any reserve created by
              Agent in its reasonable judgment for any deterioration in
              Borrowers' accounts payable since completion of Agent's
              pre-Closing Date audit of Borrowers, is in excess of $10,000,000,
              or (B) (x) the Availability hereunder on the date of such Original
              Proposed Redemption after giving effect to such redemption, less
              any reserve created by Agent in its reasonable judgment for any
              deterioration in Borrowers' accounts payable since completion of
              Agent's pre-Closing Date audit of Borrowers, is in excess of
              $5,000,000 and (y) Borrowers have provided to Agent Borrowers'
              then current thirteen (13) week cash flow forecast which forecast
              is acceptable to Agent in its reasonable judgment and in form and
              substance satisfactory to Agent, and (iii) such Original Proposed
              Redemption is consummated on or before March 3, 2000; PROVIDED
              FURTHER, HOWEVER, that Parent may make any subsequent mandatory
              redemptions (including without limitation any redemptions pursuant
              to the Initial Deferred Offer and the Second Deferred Offer (each
              as defined in the Fifth Supplemental Indenture) of the Senior
              Subordinated Notes as required by the Indenture so long as (i) no
              Default or Event of Default exists or would be caused thereby,
              (ii) the average Availability hereunder for the four (4) months
              prior to any such redemption payment (or, in the case of any
              payment to be made prior to the date four (4) months following the
              Closing Date, for the period from the Closing Date to the date of
              such payment) less the amount of such redemption payment, less any
              reserve created by Agent in its reasonable judgment for any
              deterioration in Borrowers' accounts payable, is in
              excess of $10,000,000, and (iii) the Availability hereunder on the
              date of such redemption after giving effect to such redemption,
              less any reserve created by Agent in its reasonable judgment for
              any deterioration in Borrowers' accounts payable, is in excess of
              $10,000,000. For purposes of this paragraph (a) of this Section
              7.8, the date of the Original Proposed

                                      -4-
<PAGE>

              Redemption or of any other redemption permitted hereunder
              shall be the date on which Senior Subordinated Notes tendered
              for purchase in accordance with the terms of the Offer and
              Solicitation, Initial Deferred Offer, Second Deferred Offer or
              other offer to purchase made in connection therewith, as the
              case may be, shall have been accepted by the Parent for
              purchase;"

                  (b)      Section 7.8 of the Loan Agreement, PREPAYMENTS AND
AMENDMENTS, is hereby modified and amended to delete the proviso of Section
7.8(c) in its entirety.

              4.      WAIVER. The Agent and the Lenders waive any Default caused
by the Borrower's failure to comply with clause (y) of subsection (ii)(B) of the
first proviso of Section 7.8(a) of the Loan Agreement as of the effective date
of this Amendment and any Event of Default under Section 8.2 of the Loan
Agreement caused thereby.

              5.      NO OTHER AMENDMENT OR WAIVER. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided above,
operate as an amendment or waiver of any right, power or remedy of the Agent or
the Lenders under the Loan Agreement or any of the other Loan Documents, nor
constitute a waiver of any provision of the Loan Agreement or any of the other
Loan Documents. Except for the amendments and waiver expressly set forth above,
the text of the Loan Agreement and all other Loan Documents shall remain
unchanged and in full force and effect and the Borrowers hereby ratify and
confirm their obligations thereunder. This Amendment shall not constitute a
modification of the Loan Agreement or a course of dealing with the Agent or the
Lenders at variance with the Loan Agreement such as to require further notice by
the Agent or the Lenders to require strict compliance with the terms of the Loan
Agreement and the other Loan Documents in the future, except as expressly set
forth herein. The Borrowers acknowledge and expressly agree that the Agent and
the Lenders reserve the right to, and do in fact, require strict compliance with
all terms and provisions of the Loan Agreement and the other Loan Documents. The
Borrowers have no knowledge of any challenge to the Agent's or the Lenders'
claims arising under the Loan Documents or the effectiveness of the Loan
Documents.

              6.      CONDITIONS OF EFFECTIVENESS.

                      This Amendment shall become effective as of the date
hereof when, and only when, the Agent, on behalf of the Lenders, shall have
received, in form and substance satisfactory to it:

                      (a)      counterparts of this Amendment executed by the
Borrowers, the Agent and each of the Lenders;

                      (b)      counterparts of the Intercreditor Agreement
executed by Indenture Trustee and acknowledged by the Credit Parties and in form
and substance satisfactory to the Agent;

                                      -5-
<PAGE>

                      (c)      executed copies of the Fifth Supplemental
Indenture and the Indenture Security Documents (each as defined in the Loan
Agreement, as amended by this Amendment), each in form and substance
satisfactory to the Agent;

                      (d)      payment by the Borrowers of an amendment and
waiver fee of $25,000, which shall be fully earned and due on the date hereof
and nonrefundable when paid (it being understood that, by execution and delivery
of this Amendment, the Borrowers authorize the Agent to charge the Borrowers'
Loan Account for such fee and such amount shall thereafter accrue interest at
the rate applicable to Advances under the Loan Agreement in accordance with
Section 2.7(e) of the Loan Agreement); and

                      (e)      such other information, documents, instruments or
approvals as the Agent, the Lenders or the Agent's counsel may require.

              7.      REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.

                      Each Borrower represents and warrants as follows:

                      (a)      Such Borrower is a corporation or limited
partnership, as the case may be, organized, validly existing and in good
standing under the laws of the jurisdiction indicated at the beginning of this
Amendment;

                      (b)      The execution, delivery and performance by such
Borrower of this Amendment and the Loan Documents, as amended hereby, are within
such Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) such Borrower's articles or
certificate of incorporation, or (ii) law or any contractual restriction binding
on or affecting such Borrower;

                      (c)      Except for approvals which have been obtained, no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body, is required for the due execution,
delivery and performance by such Borrower of this Amendment or any of the Loan
Documents, as amended hereby, to which such Borrower is or will be a party;

                      (d)      This Amendment and each of the other Loan
Documents, as amended hereby, to which such Borrower is a party, constitute
legal, valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms; and

                      (e) No Default or Event of Default is existing.

              8.      REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to "the Loan Agreement," "thereunder," "thereof" or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as amended hereby.

                                      -6-
<PAGE>

              9.      COSTS, EXPENSES AND TAXES. Each Borrower, jointly and
severally, agrees to pay on demand all reasonable costs and expenses in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder.

              10.     GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia, without regard to
conflict of laws principles of such state.

              11.     LOAN DOCUMENT. This Amendment shall be deemed to be a Loan
Document for all purposes.

              12.     COUNTERPARTS. This Amendment may be executed by one or
more of the parties hereto on any number of separate counterparts, each of which
shall be deemed an original and all of which, taken together, shall be deemed to
constitute one and the same instrument. Delivery of an executed counterpart of
this Amendment by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.

                  [remainder of page intentionally left blank]

                                      -7-
<PAGE>

              IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized officers or representatives to execute and deliver
this Amendment as of the day and year first written above.

                                       FLOORING AMERICA, INC.,
                                       a Delaware corporation

                                       By:
                                          ______________________________
                                       Name:    Thomas Leahey
                                       Title:   Executive Vice President

                                       4 FLOORS, INC.,
                                       an Ohio corporation

                                       By:
                                          ______________________________
                                       Name:    Thomas Leahey
                                       Title:   Vice President

                                       ADVANCE FLOOR DECORATORS, INC.,
                                       a Michigan corporation

                                       By:
                                          ______________________________
                                       Name:    Thomas Leahey
                                       Title:   Vice President

                                       BAILEY & ROBERTS CARPETMAX OF
                                       TENNESSEE, INC.,
                                       a Tennessee corporation

                                       By:
                                          ______________________________
                                       Name:    Thomas Leahey
                                       Title:   Vice President

                                       CARPETMAX OF UTAH, INC.,
                                       a Utah corporation

                                       By:
                                          ______________________________
                                       Name:    Thomas Leahey
                                       Title:   Vice President

<PAGE>

                                       FLOORING AMERICA FRANCHISING, L.P.,
                                       a Georgia limited partnership

                                       By:  Flooring America, Inc., its general
                                            partner

                                       By:
                                           ______________________________
                                       Name:   Thomas Leahey
                                       Title: Executive Vice President

                                       CARPETMAX RETAIL STORES, INC.,
                                       a Delaware corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       MANASOTA CARPET, INC.,
                                       a Florida corporation

                                       By:
                                           ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       WADSWORTH & OWENS DECORATING
                                       CENTER, INC.,
                                       a Florida corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

<PAGE>

                                       CARPETSPLUS OF AMERICA, INC.,
                                       a Georgia corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       GCO CARPET OUTLET, INC.,
                                       an Alabama corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       KAREN'S INC.,
                                       a Michigan corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       MAXIM RETAIL GROUP, INC.,
                                       a Georgia corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       MAXIM RETAIL STORES, INC.,
                                       a Georgia corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:   Vice President

<PAGE>

                                       C&S TEXTILES, INC.,
                                       an Idaho corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       COLORADO CARPET & RUGS, INC.,
                                       a Colorado corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       TRI-R OF ORLANDO, INC.,
                                       a Georgia corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

                                       GCO, INC.,
                                       a Nevada corporation

                                       By:
                                          ______________________________
                                       Name:   Thomas Leahey
                                       Title:  Vice President

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

                                       By:
                                          ______________________________
                                       Name:   Todd Colpitts
                                       Title:  Vice President

<PAGE>

                                    Schedule 1

                                     Mortgages

1.       Deed of Trust, Security Agreement and Fixture Filing (Texas) to be
         recorded in the real estate records of Harris County, Texas and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

2.       Deed of Trust, Security Agreement and Fixture Filing (Tennessee) to be
         recorded in the real estate records of Knox County, Tennessee and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

3.       Deed to Secure Debt to be recorded in the real estate records of Cobb
         County, Georgia and granting a Lien on the applicable real property
         described on Schedule R-1 of the Loan Agreement;

4.       Mortgage, Security Agreement and Fixture Filing (Indiana) to be
         recorded in the real estate records of Grant County, Indiana and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

5.       Mortgage, Security Agreement and Fixture Filing (Indiana) to be
         recorded in the real estate records of Hamilton County, Indiana and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

6.       Mortgage, Security Agreement and Fixture Filing (Indiana) to be
         recorded in the real estate records of Delaware County, Indiana and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

7.       Mortgage, Security Agreement and Fixture Filing (Indiana) to be
         recorded in the real estate records of Marion County, Indiana and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

8.       Deed of Trust, Security Agreement and Fixture Filing (Arizona) to be
         recorded in the real estate records of Maricopa County, Arizona and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

9.       Mortgage, Security Agreement and Fixture Filing (Florida) to be
         recorded in the real estate records of Hillsborough County, Florida and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement;

10.      Mortgage, Security Agreement and Fixture Filing (Florida) to be
         recorded in the real estate records of Volusia County, Florida and
         granting a Lien on the applicable real property described on Schedule
         R-1 of the Loan Agreement.

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