TULTEX CORP, S-1, 1995-01-23

TULTEX CORP
S-1, 1995-01-23
KNIT OUTERWEAR MILLS

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As filed with the Securities and Exchange Commission on January 23, 1995
Registration No. 33-______
___________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

TULTEX CORPORATION
(Exact name of registrant as specified in its charter)
(List of Co-Registrants Appears on Next Page)

<TABLE>
<S> <C> <C>
Virginia 228 54-0367896
(State or other jurisdiction (Primary standard industrial (I.R.S. Employer Identification No.)
of incorporation or organization) classification code number)
</TABLE>
101 Commonwealth Boulevard
Martinsville, Virginia 24112
(703) 632-2961
(Address, including zip code, and telephone number
including area code, of Registrants' principal executive offices)

O. Randolph Rollins
Executive Vice President and General Counsel
Tultex Corporation
101 Commonwealth Boulevard
Martinsville, Virginia 24112
(703) 632-2961
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies to:
Lathan M. Ewers, Jr. Daniel J. Zubkoff
Hunton & Williams Cahill Gordon & Reindel
951 East Byrd Street 80 Pine Street
Richmond, Virginia 23219-4074 New York, New York 10005
(804) 788-8269 (212) 701-3466

Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box.

CALCULATION OF REGISTRATION FEE

Proposed Proposed Amount of
Title of each Amount to be maximum maximum registration
class of registered offering aggregate fee
securities to be price offering
registered per price(1)(2)
unit(1)(2)
Senior Notes due $115,000,000 100% $115,000,000 $39,656
2005

Guarantees of
Senior Notes
due 2005 by
subsidiaries
of Tultex
Corporation --- --- --- (3)

(1) Estimated solely for the purpose of determining the registration fee.
(2) Plus accrued interest, if any, from the date of issuance.
(3) Pursuant to Rule 457(n) under the Securities Act of 1933, no
registration fee for the guarantees is payable.

The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

Co-Registrants

State or Other
Exact Name of Co- Jurisdiction of I.R.S. Employer
Registrant Incorporation Identification No.
As Specified in its or Organization
Charter

AKOM, Ltd. Cayman Islands, BWI (foreign)

Dominion Stores, Inc. Virginia 54-1427013

Tultex International, Virginia 54-1513129
Inc.

Logo 7, Inc. Virginia 54-1611615
Universal Industries, Massachusetts 04-3022142
Inc.

Tultex Canada, Inc. Canada (foreign)
Sweatjet, Inc. Virginia 54-1403227

Tultex Corporation

Cross Reference Sheet
Pursuant to Item 501(b) of Regulation S-K

Form S-1 Item Number/Heading Registration Statement/Prospectus
Location

1. Forepart of Registration Registration statement facing page;
Statement and Outside Front Outside front cover page of
Cover Page of Prospectus Prospectus

2. Inside Front and Outside Back Inside front cover page of
Cover Pages of Prospectus Prospectus

3. Summary Information, Risk Prospectus Summary; Certain
Factors and Ratio of Earnings Considerations
to Fixed Charges

4. Use of Proceeds Use of Proceeds and Refinancing

5. Determination of Offering Not Applicable
Price

6. Dilution Not Applicable

7. Selling Security Holders Not Applicable

8. Plan of Distribution Underwriting

9. Description of Securities to Description of the Notes
Be Registered

10. Interests of Named Experts and Legal Matters
Counsel

11. Information with Respect to Prospectus Summary; Certain
the Registrant Considerations; Selected
Consolidated Financial Data;
Management's Discussion and
Analysis of Financial Condition and
Results of Operations; Business;
Management; Certain Relationships
and Related Transactions; Principal
Shareholders and Security Ownership
of Management; Consolidated
Financial Statements

12. Disclosure of Commission Not Applicable
Position on Indemnification
for Securities Act Liabilities

Prospectus Subject to Completion
Dated January ___, 1995
[LOGO]

$115,000,000
______% Senior Notes due 2005

Interest payable June 15 and December 15

Issue Price: _____%

The ____% Senior Notes due 2005 (the "Notes") are being offered (the "Offering")
by Tultex Corporation, a Virginia corporation ("Tultex" or the "Company"). The
Notes mature on _____________, 2005, unless previously redeemed. Interest on
the Notes is payable semiannually on June 15 and December 15, commencing June
15, 1995. The Notes are not redeemable prior to ____________ 2000, except as
set forth below. The Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after ______, 2000, at the redemption prices
set forth herein, together with accrued and unpaid interest to the redemption
date. In addition, prior to _________, 1998, the Company may redeem up to
approximately 35% of the principal amount of the Notes with the cash proceeds
received by the Company from one or more sales of capital stock of the Company
(other than Disqualified Stock (as defined)) at a redemption price of ________%
of the principal amount thereof, plus accrued and unpaid interest to the
redemption date; provided, however, that at least $75 million in aggregate
principal amount of the Notes remains outstanding immediately after any such
redemption.

Upon a Change of Control (as defined), the Company will be required to make an
offer to purchase all outstanding Notes at 101% of the principal amount thereof
plus accrued and unpaid interest to the purchase date.

The Notes will be general unsecured obligations of the Company and will rank
pari passu in right of payment with all other unsubordinated indebtedness of the
Company. The Notes will be guaranteed on a joint and several basis (the
"Guarantees") by each subsidiary of the Company (the "Guarantors").
The Guarantees will be general unsecured obligations of the Guarantors and will
rank pari passu in right of payment with all other unsubordinated indebtedness
of the Guarantors. At December 31, 1994, as adjusted to give effect to the
transactions described herein under "Use of Proceeds and Refinancing," the total
indebtedness of the Company would have been approximately $222.6 million, none
of which would have been subordinated to the Notes.

See "Certain Considerations" For A Discussion Of Certain Factors
That Should Be Considered By Prospective Investors.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

Price to Underwriting Proceeds to
Public(1) Compensation(2) Company (1)(3)

Per Note % % %

Total $ $ $

(1) Plus accrued interest, if any, from the date of issuance.

(2) The Company and the Guarantors have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended. See "Underwriting."

(3) Before deducting expenses payable by the Company estimated at
$___________.

The Notes are being offered by the Underwriters, subject to prior sale, when,
asand if delivered to and accepted by the Underwriters, and subject to approval
of certain legal matters by Cahill Gordon & Reindel, counsel for the
Underwriters, and certain other conditions. The Underwriters withhold the right
to withdraw, cancel or modify such offer and to reject orders in whole or in
part. It is expected that delivery of the Notes will be made against payment
therefor on or about __________, 1995 at the offices of J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York.

J.P. Morgan Securities Inc. NationsBanc Capital Markets, Inc.

, 1995

RED HERRING: INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and, if given
or made, such information or representation must not be relied upon as
having been authorized by the Company, any Guarantor or either of the
Underwriters. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offerto buy
such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sale made
hereundershall, underany circumstances, create any implication that there
has been no change in the affairs of the Company or any Guarantor since the
datehereof or that information contained herein is correct as of any time
subsequent to its date.

Table Of Contents

Page Page
Available Information . 2 Management . . . . . . 34
Prospectus Summary . . . 4 Certain Relationships and
Certain Considerations . 10 Related Transactions 40
Use of Proceeds and Principal Shareholders
Refinancing . . . . . 14 and Security Ownership
Capitalization . . . . . 15 of Management . . . 41
Selected Consolidated Description of the Notes 42
Financial Data . . . . 16 Underwriting . . . . . 61
Management's Discussion and Legal Matters . . . . 62
Analysis of Financial Experts . . . . . . . 62
Condition and Results of Index to Financial
Operations . . . . 18 Statements . . . . . F-1
Business . . . . . . 21

Available Information

Additional information regarding the Company, the Guarantors, the Notes and
the Guarantees is contained in the Registration Statement on Form S-1 (the
"Registration Statement") and the exhibits relating thereto, filed with the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act"). For such information,
reference is made to the Registration Statement and the exhibits thereto.

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other
information with the Commission. Such reports, proxy statements and other
information, including the Registration Statement and the exhibits thereto,
can be inspected and copied at the public reference facilities maintained
by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 500
West Madison Street, Suite 1400, Chicago, IL 60661 and 7 World Trade
Center, Suite 1300, New York, NY 10048. Copies of such material can also
be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C., 20549, at
prescribed rates. In addition, such material can be inspected at the
offices of the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street,
New York, New York 10005.

Trademarks and service marks of the Company are italicized where they appear in
this Prospectus. Tultex(Registered Mark), Discus Athletic(Registered Mark) and
The Sweatshirt Company(Registered Mark) are registered trademarks of the
Company. Logo 7(Registered Mark) and Logo Athletic(Registered Mark) are
registered trademarks of the Company's subsidiary, Logo 7, Inc. ("Logo 7").
The Company's principal executive offices are located at 101 Commonwealth
Boulevard, Martinsville, Virginia 24112, telephone (703) 632-2961.

Prospectus Summary

The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this
Prospectus. Unless the context requires otherwise, "Tultex" or the
"Company" refers to Tultex Corporation and its consolidated subsidiaries.
"Guarantors" refers to all of the Company's subsidiaries. Capitalized
terms used in this summary under the caption "The Offering" and not
otherwise defined are defined below under the caption "Description of the
Notes -- Certain Definitions." References to "year end" refer to the
Company's fiscal year end.

The Company

Tultex Corporation is one of the world's largest marketers and
manufacturers of activewear and licensed sports apparel for consumers and
sports enthusiasts. The Company's diverse product line includes fleeced
sweats, jersey products (outerwear T-shirts), jackets and caps. These
products are sold under the Company's own brands led by the Discus Athletic
and Logo Athletic premium labels and under private labels, including Nike,
Levi Strauss, Reebok and Pro Spirit. In addition, the Company has numerous
professional and college sports licenses to manufacture and market
embroidered and screen-printed products with team logos and designs under
its Logo Athletic and Logo 7 brands. The Company is a "super" licensee of
professional sports apparel, holding licenses from the National Football
League, Major League Baseball, the National Basketball Association and the
National Hockey League to manufacture a full range of apparel for adults
and children.

Historically a producer of quality fleecewear, in recent years Tultex has
initiated a strategy to enhance its competitiveness and to capitalize on
growth opportunities by becoming a consumer-oriented apparel maker able to
compete in a changing industry. This strategy includes the following
elements:

(bullet) Increasing Emphasis on Higher-Margin Products. The Company is
strengthening its competitiveness in the activewear business through
(i) the development of branded and private label, higher- quality and
higher-margin products to supplement its traditionally strong position
in the lower-priced segment of the business and (ii) since 1991, the
manufacture of jersey products. The Company is developing its own
brands, promoting Discus Athletic for its premium products and using
the Tultex label for the value-oriented segment of the market.
Discus Athletic's highly visible sponsorship of college football and
basketball on the ESPN and ABC television networks and Atlantic Coast
Conference basketball has contributed to significant annual increases
in sales of this brand since 1992. In addition, Tultex has partnering
arrangements to supply higher-quality, private label products to
companies such as Reebok, Levi Strauss and Nike.

(bullet) Expanding into Licensed Apparel Business to Complement Activewear
Business. Tultex's 1992 acquisitions of Logo 7, a marketer of
licensed sports apparel, and Universal Industries, Inc.
("Universal"), a marketer of sports and entertainment licensed
headwear, enabled the Company to achieve the fourth largest
market share in the higher-margin licensed apparel business in
1993, and have created opportunities for significant
manufacturing and distribution synergies with the Company's
activewear business. The promotion of the Logo Athletic brand of
licensed apparel through television and print advertising, as
well as promotional arrangements featuring Dallas Cowboys'
quarterback Troy Aikman, San Francisco 49ers' quarterback Steve
Young, Miami Dolphins' quarterback Dan Marino, the Chicago Black
Hawks' Chris Chelios and the Washington Bullets' Chris Webber,
among others, has helped to increase the visibility and sales of
Logo Athletic products.

(bullet) Increasing Distribution Channels and Strengthening Customer
Relationships. Tultex actively pursues strong relationships with
department, sporting goods and other specialty stores, such as Sears,
JC Penney, Modell's, Dillard's, Foot Locker, Champs and Sports
Authority, to distribute its higher margin branded and private label
products. In addition, the Company continues to strengthen its
relationships with high volume retailers such as Wal-Mart, Kmart and
Target through private label and Tultex products. Tultex strives to
provide its customers with exceptional service support; for example,
its distribution capabilities are highly responsive to customers'
changing delivery and inventory management requirements.

(bullet) Investing in Modern Distribution and Production Facilities.
Between January 1, 1988 and October 1, 1994, Tultex made
approximately $189 million in capital expenditures, investing
primarily in the construction of its customer service center and
in high-efficiency spinning, knitting, dyeing, cutting and
embroidering machinery. In 1991, Tultex began operating the
customer service center, which the Company believes is the most
highly automated in the industry. Having made significant
investments in its distribution and production facilities, the
Company's average annual capital expenditures are not expected to
exceed approximately $20 million annually through 1997.

The Company's strategy has helped contribute to an improved sales mix.
While total sales increased 4.9% in the first nine months of 1994 over the
comparable period in 1993, sales of Discus Athletic activewear and premium
private label sweats under the Nike, Levi Strauss and Reebok names
increased 45.9% to $51.2 million and sales of Logo Athletic licensed
apparel increased 265% to $45.5 million. Sales of jersey products were
$38.9 million for the nine months ended October 1, 1994, representing 17.3%
of the Company's activewear sales during such period compared to 13.2% for
the same period in 1993. However, reduced consumer demand for activewear
and an oversupply of activewear in retail inventories in the first half of
1994, the MLB strike, the NHL lockout and higher raw material costs
adversely affected Tultex's results of operations in the first nine months
of 1994.

The Refinancing

Net proceeds of this Offering will be used to repay in full the Company's
variable rate note due July 31, 1996 (the "Term Loan"), the Company's 8 7/8%
Senior Notes due June 1, 1999 (the "8 7/8% Notes"), and related prepayment
expenses. See "Use of Proceeds and Refinancing." The Company believes
that the longer maturity and the increased covenant flexibility provided
under the terms of the Notes will allow the Company to continue to increase
its long-term investment in brand promotion and higher-margin products.

Contemporaneously with the completion of this Offering, the Company and its
subsidiaries will enter into a $225 million, three-year revolving credit
facility with a group of commercial banks (the "Senior Credit Facility" and
together with the Offering, the "Refinancing"). The Senior Credit Facility
will replace the Company's existing $225 million revolving credit facility,
which expires on October 6, 1995. Scheduled amortization requirements
prior to this Offering (excluding the Senior Credit Facility) totaled $92.3
million from January 1, 1995 through December 31, 1998. After giving
effect to the Refinancing, there will be no material scheduled amortization
requirements (other than under the Senior Credit Facility), until the
maturity of the Notes.

Borrowings under the Senior Credit Facility will be general unsecured
obligations of the Company and will rank pari passu in right of payment
with the Notes and all other unsubordinated indebtedness of the Company and
will be guaranteed by the Guarantors. The closings of this Offering and of
the Senior Credit Facility are conditioned upon each other. See "Use of
Proceeds and Refinancing."

The Offering

Securities Offered . . . . $115 million aggregate principal amount of
___% Senior Notes due 2005.

Maturity Date . . . . . . . ___________, 2005.

Interest Payment Dates . . June 15 and December 15, commencing June 15,
1995.

Optional Redemption by the Company
The Notes are not redeemable prior to
________, 2000, except as set forth below.
The Notes will be redeemable at the option of
the Company, in whole or in part, at any time
on or after _________, 2000, at the redemption
prices set forth herein, together with accrued
and unpaid interest to the redemption date.
In addition, prior to ____, 1998, the Company
may redeem up to approximately 35% of the
principal amount of the Notes with the cash
proceeds received by the Company from one or
more sales of capital stock of the Company
(other than Disqualified Stock) at a
redemption price of ____% of the principal
amount thereof, plus accrued and unpaid
interest to the redemption date; provided,
however, that at least $75 million in
aggregate principal amount of the Notes
remains outstanding immediately after any such
redemption.

Sinking Fund . . . . . . . None.

Ranking . . . . . . . . . . The Notes will be general unsecured
obligations of the Company and will rank pari
passu in right of payment with all other
unsubordinated Indebtedness (including the
Senior Credit Facility) of the Company.

Guarantees . . . . . . . . The Notes will be guaranteed on a joint and
several basis by each of the Guarantors. The
Guarantees will be general unsecured
obligations of the Guarantors and will rank
pari passu in right of payment with all other
unsubordinated indebtedness of the
Guarantors. The Guarantors' liability under
the Guarantees will be limited as described
herein and Guarantees will be released in
connection with certain asset sales and
dispositions. See "Description of the Notes
-- Guarantees."

Change of Control Offer . . Upon a Change of Control, the Company will be
required to make an offer to purchase all
outstanding Notes at a purchase price of 101%
of the principal amount thereof, plus accrued
and unpaid interest to the repurchase date.

Certain Covenants . . . . . The Indenture will contain certain covenants
that, among other things, limit the ability
of the Company or any of its Subsidiaries to
incur additional Indebtedness, make certain
Restricted Payments, make certain
Investments, create Liens, engage in Sale and
Leaseback Transactions, permit dividend or
other payment restrictions to apply to
Subsidiaries, enter into certain transactions
with Affiliates or Related Persons or
consummate certain merger, consolidation or
similar transactions. In addition, in
certain circumstances, the Company will be
required to offer to purchase Notes at 100%
of the principal amount thereof with the net
proceeds of certain asset sales. These
covenants are subject to a number of
significant exceptions and qualifications.
See "Description of the Notes."

Senior Credit Facility . . Concurrently with this Offering, the Company
and its subsidiaries will enter into the
Senior Credit Facility, a $225 million,
three-year revolving credit facility, with a
group of commercial banks. The Senior Credit
Facility will replace the Company's existing
$225 million revolving credit facility, which
expires on October 6, 1995. See "Use of
Proceeds and Refinancing."

Summary Consolidated Financial Data

The following table sets forth summary consolidated financial data for the
Company for each of the five fiscal years in the period ended January 1,
1994 and the nine month periods ended October 1, 1994 and October 2, 1993.
The summary consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Consolidated Financial Statements, related
notes, and other financial data included elsewhere herein.

<TABLE>
<CAPTION>
Nine Months Ended Year Ended
Oct. 1 Oct. 2 Jan. 1 Jan. 2 Dec. 28 Dec. 29 Dec. 30
1994 1993(1) 1994(1) 1993(2,3) 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
In thousands, except ratios

Statement of Income Data:
Net sales and other income $397,125 $378,369 $533,611 $503,946 $349,910 $390,336 $361,721
Cost of products sold 298,701 278,623 395,727 368,027 271,243 283,907 279,040
Depreciation 18,220 16,773 23,364 20,831 17,369 14,775 14,125
Selling, general and
administrative 67,885 64,813 88,433 81,297 45,481 52,546 46,866
Income from operations 12,319 18,160 26,087 33,791 15,817 39,108 21,690
Gain on sale of facilities 0 0 0 0 4,014 0 0

Interest expense 13,203 12,337 16,996 13,540 9,064 8,838 8,274
Income (loss) before income
taxes and cumulative effect
of accounting change (884) 5,823 9,091 20,251 10,767 30,270 13,416
Income taxes (benefit) (336) 2,161 3,188 7,060 3,443 11,097 4,701
Income (loss) before cumulative
effect of accounting change (548) 3,662 5,903 13,191 7,324 19,173 8,715
Cumulative effect of accounting change 0 0 0 0 2,8484 0 0

Net income (loss) $(548) $3,662 $5,903 $13,191 $10,172 $19,173 $8,715
Balance Sheet Data
(end of period):
Working capital $299,422 $115,641 $243,553 $126,717 $85,011 $92,432 $96,285
Total assets 549,506 550,854 474,965 435,818 314,957 328,643 323,778
Total debt 308,667 303,892 239,438 200,531 115,032 123,069 131,133
Total stockholders' equity 177,363 178,618 179,197 178,793 157,091 155,301 143,864

Other Data:
EBITDA(5) 31,451 35,845 50,668 55,559 32,321 53,018 34,950
Capital expenditures 7,105 20,556 22,250 30,330 14,360 21,983 59,153
Ratio of EBITDA to
interest expense(5) 2.98 4.10 3.57 6.00 4.22

Ratio of EBITDA minus
capital expenditures
to interest expense(5) 1.67 1.86 1.98 3.51 --(6)
Ratio of earnings
to fixed charges(7) --(8) 1.36 1.41 2.11 1.54 2.27 1.59
</TABLE>
__________
(1) See Note 3 to the Company's Consolidated Financial Statements for
information with respect to the Company's change in the method of
determining the cost of inventory from the LIFO method to the FIFO method in
the fourth quarter of fiscal 1993.

(2) See Note 2 to the Consolidated Financial Statements for information with
respect to the acquisition of Logo 7 and Universal Industries, Inc.

(3) Includes 53 weeks. All other years presented include 52 weeks.

(4) Reflects the Company's adoption of SFAS No. 96 "Accounting for Income Taxes"
as of the beginning of the fiscal year.

(5) EBITDA represents earnings before taking into consideration interest
expense, income taxes, depreciation and amortization and excludes gain on
sale of facilities. EBITDA is included herein to provide additional
information related to the Company's ability to service debt. EBITDA should
not be considered as an alternative measure of the Company's net income,
operating performance, cash flow or liquidity. After giving effect to the
Refinancing, for the year ended January 1, 1994, EBITDA, pro forma ratio of
EBITDA to interest expense and pro forma ratio of EBITDA minus capital
expenditures to interest expense would have been $50,441, 2.42 and 1.35,
respectively.

(6) The deficiency of EBITDA minus capital expenditures to interest expense for
the year ended December 30, 1989 was $32,477.

(7) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
amortization of deferred debt issuance costs and one-third of rental expense
(the portion considered representative of the interest factor). After giving
effect to the Offering (but without giving effect to incremental interest
expense associated with borrowings under the Senior Credit Facility on a pro
forma basis), the pro forma deficiency of earnings to fixed charges would
have been $3,838 for the nine months ended October 1, 1994 and the pro forma
ratio of earnings to fixed charges would have been 1.23 for the year ended
January 1, 1994.

(8) The deficiency of earnings to fixed charges for the nine months ended
October 1, 1994 was $884.

Certain Considerations

Prospective investors should consider carefully all the information
contained in this Prospectus, including the following factors.

Substantial Leverage

As of December 31, 1994, after giving effect to the Refinancing, the
Company's total indebtedness would have been approximately $222.6 million,
all of which was unsubordinated, and total shareholders' equity would have
been approximately $___ million, resulting in a pro forma total debt to
total capitalization ratio of ___%. In addition, at such date
approximately $60.4 million of additional borrowing capacity would have
been available (subject to the borrowing base formula) under the Senior
Credit Facility. The Indenture will permit the Company and its
subsidiaries to incur certain additional specified indebtedness. See
"Description of the Notes."

The Company's borrowing needs are seasonal. The maximum amount of
indebtedness outstanding at any fiscal month end in 1994 was approximately
$309 million at October 1, 1994. Management believes that amounts
available pursuant to the borrowing base formula to be contained in the
Senior Credit Facility will be sufficient to meet its expected peak
borrowing requirements. See "-- Seasonality and Cyclicality."

The Company currently has incurred, and after the consummation of the
Offering will continue to incur, significant annual cash interest expense.
After giving effect to the Refinancing, the pro forma ratio of EBITDA to
interest expense would have been 2.06 to 1 for the 12 months ended October
1, 1994 compared to 2.59 to 1 before the Refinancing. After giving effect
to the Offering, the pro forma deficiency of earnings to fixed charges for
the 12 months ended October 1, 1994 would have been $1.4 million. The
ratio of earnings to fixed charges for the 12 months ended October 1, 1994
was 1.10 to 1 before the Offering. See "Use of Proceeds and Refinancing"
and "Capitalization."

The level of the Company's indebtedness could have important consequences
to holders of the Notes, including: (i) the Company's ability to obtain
additional financing in the future for working capital, capital
expenditures, acquisitions, debt service requirements, general corporate
purposes or other purposes may be restricted, (ii) a substantial portion of
the Company's cash flow from operations must be dedicated to the payment of
the Company's interest expense, (iii) the Company is more highly leveraged
than certain of its competitors, which may place the Company at a
competitive disadvantage and (iv) the Company's borrowings under the Senior
Credit Facility will accrue interest at variable rates, which could result
in increased interest expense in the event of higher interest rates.

The Company's ability to make interest payments on the Notes will be
dependent on the Company's future operating performance, which is itself
dependent on a number of factors, many of which are beyond the Company's
control. The Company's ability to repay the Notes at maturity will depend
upon these same factors and the ability of the Company to raise additional
funds. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Financial Condition, Liquidity and Capital
Resources."

During 1993 and 1994, the Company sought and obtained waivers and
amendments of violations of certain financial covenants contained in the
instruments relating to the 8 7/8% Notes, the Term Loan and the Company's
existing revolving credit facility. During the second quarter of 1994, the
Company suspended the payment of dividends on its preferred and common
stock. Substantially contemporaneously with the consummation of the
Offering, the Company expects to pay existing dividend arrearages on its
preferred stock and thereafter to resume paying quarterly dividends
thereon. No decision with respect to renewal of common stock dividends has
been made.

Restrictive Debt Covenants

The Senior Credit Facility and the Indenture will contain provisions that
may substantially restrict the Company's operations. Any or all of such
restrictions as well as the Company's substantial leverage, could adversely
affect the Company's or its subsidiaries' ability to incur additional
indebtedness, make capital expenditures, take advantage of business
opportunities and withstand competitive pressures or adverse economic
conditions. See "Use of Proceeds and Refinancing."

Senior Credit Facility

The Senior Credit Facility is expected to contain material restrictions on
the operation of the Company's business, including covenants restricting,
among other things, the ability of the Company and certain subsidiaries to
incur indebtedness, create liens on the Company's property, guarantee
obligations, alter the character of the Company's business, consolidate,
merge or purchase or sell the Company's assets, make investments or advance
funds, prepay indebtedness and transact business with affiliates. The
Senior Credit Facility is also expected to contain certain financial
covenants, including covenants that will require the Company to maintain a
minimum tangible net worth, leverage ratio and fixed charges coverage
ratio, as well as customary representations and warranties, funding
conditions and events of default. A breach of one or more covenants under
such facility could result in an acceleration of the Company's obligations
thereunder, and the inability of the Company to borrow additional amounts
under the Senior Credit Facility. In addition, a default under the Notes
will constitute an event of default under the Senior Credit Facility. See
"Use of Proceeds and Refinancing."

Indenture

The Indenture will contain material restrictions on the Company's
operations, including covenants that restrict or limit (i) indebtedness
that may be incurred by the Company and its subsidiaries, (ii) the ability
of the Company and its subsidiaries to pay dividends or make other
distributions, purchase or redeem stock and make other investments, (iii)
the creation of liens, (iv) the disposition of assets, (v) sale and
leaseback transactions, (vi) the issuance and sale of capital stock of the
Company's subsidiaries, (vii) transactions with affiliates, (viii) a change
of control of the Company and (ix) mergers, consolidations and certain
sales of assets by the Company. A breach of one or more covenants under
the Indenture could result in an acceleration of the Company's obligations
thereunder. See "Description of the Notes."

Competition and Other Industry Concerns

Domestic and Foreign Competition

The activewear and licensed apparel industries are highly competitive.
Since the 1980s, the activewear industry, and in recent years the licensed
apparel industry, have been characterized by the acquisition of existing
competitors by larger companies with substantial financial resources and
manufacturing and distribution capabilities. Certain participants in these
industries have greater financial and other resources than the Company.
Over the past five years, the quality of activewear products has improved
significantly, through the use of a higher proportion of cotton, heavier
fabric weights, a broader range of sizes, greater sewing detail and a
greater variety of colors. Despite these improvements, retail prices have
risen only slightly due to better manufacturing efficiencies and
competitive pressures. Increased competition from these and future
competitors could reduce sales and prices, adversely affecting the
Company's results of operations. Because of the Company's high leverage,
it may be less able to respond effectively to such competition than other
participants.

The Company's products are subject to foreign competition. The extent of
import protection afforded to domestic manufacturers has been, and is
likely to remain, subject to considerable political deliberation.
Beginning in 1995, the General Agreement on Tariffs and Trade ("GATT") will
eliminate over a period of 10 years restrictions on imports of apparel. In
addition, on January 1, 1994, the North American Free Trade Agreement
("NAFTA") became effective. The implementation of NAFTA could result in an
increase in apparel imported from Mexico that would compete against certain
of the Company's products. However, management believes that freight costs
and shipping times are significant competitive barriers to foreign
activewear manufacturers and that, although there can be no assurance, the
implementation of GATT and NAFTA will not have a material adverse effect on
the results of operations or financial condition of the Company.

Licenses and Trademarks

Professional and collegiate athletic licensors successfully have sought to
increase their royalty percentages and minimum guaranteed payments in
contracts with licensees, such as the Company's subsidiaries. In addition,
the Company's material licenses are non-exclusive, and new or existing
competitors may obtain similar licenses. While the Company has enjoyed
long, successful and uninterrupted licensing relationships with its
professional and collegiate athletic licensors, if a significant license or
licenses were not renewed or replaced, the Company's sales and results of
operations likely would be materially and adversely affected. See
"Business -- Licenses."

Because of its growing emphasis on branded products, the Company
increasingly will rely on the strength of its trademarks. The Company has
in the past and may in the future be required to expend significant
resources protecting these trademarks, and the loss or limitation of the
exclusive right to use them could adversely affect the Company's sales and
results of operations. See "Business -- Industry -- Competition" and
"-- Trademarks."

Major League Baseball Strike and National Hockey League Lockout

Through its subsidiaries, the Company sells activewear and headwear bearing
professional and college sports licensed logos and designs, including Major
League Baseball ("MLB") and National Hockey League ("NHL") team logos and
designs. The MLB players' strike and NHL lockout, which was settled on
January 13, 1995, have adversely affected sales of items bearing these
marks and the MLB players' strike will continue to adversely affect sales
of MLB products until this dispute is resolved. The Company expects that
consumer demand for NHL products and, once play resumes, MLB products will
rebound, but may recover slowly. There can be no assurance that the MLB
dispute will be resolved in the near future or that sales of MLB and NHL
products will increase or return to prior levels. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Results of Operations -- Nine Months Ended October 1, 1994 Compared to Nine
Months Ended October 2, 1993."

Unionization of Hourly Workers at Martinsville Facilities

In August 1994, hourly employees at the Company's Martinsville, Virginia
facilities voted for representation by the Amalgamated Clothing and Textile
Workers Union. The Company currently is negotiating a labor agreement with
the union which would cover all hourly employees at the Martinsville
facilities. As of December 31, 1994, the Company's approximately 2,200
hourly employees in Martinsville accounted for approximately 32% of the
Company's total employees and approximately 36% of the Company's hourly
employees. Although the Company does not anticipate such a result, failure
to reach agreement with the union could materially adversely affect the
Company's operations at its Martinsville facilities. None of the Company's
other employees are represented by a union. See "Business -- Employees."

Raw Materials

The principal raw materials used by the Company in the manufacture of its
products are cotton of various grades and staple lengths and polyester in
staple form. Although the Company has been able to acquire sufficient
quantities of cotton for its operations in the past, any shortage in the
cotton supply by reason of weather, crop disease or other factors, or
significant increase in the price of cotton or polyester, could adversely
affect the Company's results of operations. Tultex makes advance purchases
of raw cotton based on projected demand. The Company has purchased
substantially all of its raw cotton needs for 1995 and has fixed the price
on approximately 35% of such cotton. See "Business -- Raw Materials."

Seasonality and Cyclicality

Historically, the fleecewear and licensed apparel industries have been
seasonal, with peak sales occurring in the third and fourth quarters of the
calendar year, coinciding with cooler weather and the playing seasons for
some of the most popular professional and college sports. The activewear
and licensed apparel industries also are cyclical, and the Company's
performance may be negatively affected by changing retailer and consumer
demands and downturns in consumer spending, such as the downturn that began
during the latter part of 1993 and that affected the Company's performance
into 1994. See "Business -- Industry" and " -- Seasonality."

Fraudulent Conveyance Considerations

Each Guarantor's Guarantee of the obligations of the Company under the
Notes may be subject to review under relevant federal and state fraudulent
conveyance statutes (the "fraudulent conveyance statutes") in a bankruptcy,
reorganization or rehabilitation case or similar proceeding or a lawsuit by
or on behalf of unpaid creditors of such Guarantor. If a court were to
find under relevant fraudulent conveyance statutes that, at the time the
Notes were issued, (a) a Guarantor guaranteed the Notes with the intent of
hindering, delaying or defrauding current or future creditors or (b)(i) a
Guarantor received less than reasonably equivalent value or fair
consideration for guaranteeing the Notes and (ii)(A) was insolvent or was
rendered insolvent by reason of such Guarantee, (B) was engaged, or about
to engage, in a business or transaction for which its assets constituted
unreasonably small capital or (C) intended to incur, or believed that it
would incur, obligations beyond its ability to pay as such obligations
matured (as all of the foregoing terms are defined in or interpreted under
such fraudulent conveyance statutes), such court could avoid or subordinate
such Guarantee to presently existing and future indebtedness of such
Guarantor and take other action detrimental to the holders of the Notes,
including, under certain circumstances, invalidating such Guarantee. See
"Description of the Notes -- Guarantees."

The Board of Directors and management of the Company and each Guarantor
believe that at the time of issuance of the Notes and the Guarantees, each
Guarantor will be (a) neither insolvent nor rendered insolvent thereby, (b)
in possession of sufficient capital to meet its obligations as the same
mature or become due and to operate its business effectively and (c)
incurring obligations within its ability to pay as the same mature or
become due. There can be no assurance, however, that a court passing on
such questions would reach the same conclusions.

No Market for Notes

The Notes are new securities for which there is no trading market. The
Company does not intend to list the Notes on any securities exchange. The
Company has been advised by the Underwriters that the Underwriters
currently intend to make a market in the Notes; however, the Underwriters
are not obligated to do so and may discontinue any such market making at
any time without notice. No assurance can be given as to the development
or liquidity of any trading market for the Notes. See "Underwriting."

Use of Proceeds and Refinancing

The net proceeds from this Offering will be approximately $112 million.
The Company intends to use all of such net proceeds and borrowings of
approximately $_____________ million under the Senior Credit Facility to
repay principal, accrued interest and prepayment expenses relating to the
8 7/8% Notes and the Term Loan. The Company intends to use additional
borrowings under the Senior Credit Facility to repay amounts outstanding
under its existing credit facility, which expires on October 6, 1995. The
closings of this Offering and the Senior Credit Facility are conditioned
upon each other. The Refinancing will eliminate certain covenants and
extend the maturities of the Company's indebtedness. Upon consummation of
the Refinancing, the Company expects to record an extraordinary charge,
representing the loss from early extinguishment of debt (including
expensing of unamortized issuance costs and prepayment penalties). As of
October 1, 1994, this charge, net of tax, would have been approximately
$5.5 million.

As of October 1, 1994, there was $95 million in aggregate principal amount
of 8 7/8% Notes outstanding and $18.3 million outstanding under the Term Loan
bearing interest at the annual rate of 90-day LIBOR plus 0.75% (7.19% as of
December 30, 1994). The 8 7/8% Notes mature on June 1, 1999 and the Term Loan
matures on July 31, 1996.

Borrowings under the Senior Credit Facility will be general unsecured
obligations of the Company and will rank pari passu in right of payment
with the Notes and all other unsubordinated indebtedness of the Company.
As of October 1, 1994, all of the Company's outstanding indebtedness was
unsubordinated. Borrowings under the Senior Credit Facility will bear a
floating rate of interest equal to the prime rate or a reference rate plus
a margin ranging from 0.50% to 1.625%, depending upon the applicable
reference rate and the Company's ratio of total debt to tangible
capitalization. The Senior Credit Facility will contain customary
representations and events of default, including default upon a change of
control of the Company. It will also contain covenants restricting, among
other things, the ability of the Company and certain subsidiaries to incur
indebtedness, create liens on the Company's property, guaranty obligations,
alter the character of the Company's business, consolidate, merge or
purchase or sell the Company's assets, make investments or advance funds,
prepay indebtedness and transact business with affiliates. The Senior
Credit Facility will also contain certain financial covenants, including
covenants that will require the Company to maintain a minimum tangible net
worth, leverage ratio and fixed charges coverage ratio.

Capitalization

The following table sets forth the capitalization of the Company at October
1, 1994, and as adjusted to give effect to the consummation of the
Refinancing and the use of the net proceeds from the Offering as set forth
in "Use of Proceeds and Refinancing." See the Company's Consolidated
Financial Statements and the notes thereto included elsewhere herein.

As of October 1, 1994
(unaudited)

Actual As Adjusted
In thousands, except share amounts and
ratios
Short-Term Indebtedness:

Notes payable to bank $ 3,000 $3,000
Current maturities of long-term
indebtedness 28,346 205

Total short-term indebtedness $ 31,346 $3,205
Long-Term Indebtedness, Less Current
Maturities:

____% Senior Notes due 2005 $115,000
Notes payable to banks (Senior Credit 202,599
Facility)

8 7/8% Senior Notes Due June 1, 1999
(8 7/8% Notes) $76,000

Notes payable to banks (existing
revolving credit facility) 192,000

Variable rate note due July 31,
1996 (Term Loan) 9,141

Other long-term indebtedness 180 180
Total long-term indebtedness 277,321 317,779

Stockholders' Equity:
5% Cumulative Preferred Stock, $100
par value per share; 22,000 shares
authorized, 1,975 shares outstanding 198 198

Cumulative Convertible Preferred Stock,
$7.50 Series B, no par value; 150,000
shares authorized and outstanding 15,000 15,000

Common Stock, par value $1 per share;
60,000,000 shares authorized;
29,806,793 shares issued and outstanding 29,807 29,807

Capital in excess of par value 5,279 5,279

Retained earnings 130,783 125,249 (1)

Less notes receivable from stockholders (3,704) (3,704)

Total stockholders' equity 177,363 171,829

Total capitalization $ 454,684 $489,608

Ratio of total long-term indebtedness
to total capitalization 61.0% 64.9%

___________________________

(1) Gives effect, on an after-tax basis, to the charge associated with the
early extinguishment of indebtedness as a result of the Refinancing.

Selected Consolidated Financial Data

The selected consolidated financial data set forth below for each of the
five fiscal years in the period ended January 1, 1994 is derived from the
Consolidated Financial Statements of the Company, as audited by Price
Waterhouse LLP, independent accountants, which are included herein for
fiscal years 1993, 1992 and 1991. The Consolidated Financial Statements of
the Company for fiscal year 1991 and prior years are based, in part, upon
the Financial Statements of Universal which was acquired by the Company in
1992, as audited by Coopers & Lybrand L.L.P., independent accountants. The
consolidated financial data for the nine month periods ended October 1,
1994 and October 2, 1993 are derived from unaudited consolidated financial
statements of the Company. The unaudited consolidated financial statements
include all adjustments, consisting of normal recurring adjustments, that
the Company's management considers necessary for a fair presentation of the
financial position and results of operations for these periods. Operating
results for the nine months ended October 1, 1994 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1994. The data presented below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's Consolidated Financial Statements, related
notes, and other financial data included elsewhere in this Prospectus.

Ratio of EBITDA minus
capital expenditures
to interest expense(5) 1.67 1.86 1.98 3.51 --(6)
Ratio of earnings
to fixed charges(7) --(8) 1.36 1.41 2.11 1.54 2.27 1.59
</TABLE>
____________________
(1) See Note 3 to the Company's Consolidated Financial Statements for
information with respect to the Company's change in the method of
determining the cost of inventory from the LIFO method to the FIFO method in
the fourth quarter of fiscal 1993.

(2) See Note 2 to the Consolidated Financial Statements for information with
respect to the acquisition of Logo 7 and Universal Industries, Inc.

(3) Includes 53 weeks. All other years presented include 52 weeks.

(4) Reflects the Company's adoption of SFAS No. 96 "Accounting for Income Taxes"
as of the beginning of the fiscal year.

(6) The deficiency of EBITDA minus capital expenditures to interest expense for
the year ended December 30, 1989 was $32,477.

(8) The deficiency of earnings to fixed charges for the nine months ended
October 1, 1994 was $884.

Management's Discussion and Analysis of Financial
Condition and Results of Operations

The financial results for the first six months of fiscal 1992 and all prior
periods presented have been restated to include Universal, acquired by the
Company in June 1992 through an exchange of stock accounted for as a
pooling of interests. In addition, the Company changed its method of
determining cost of inventories from the last-in, first-out (LIFO) method
to the first-in, first-out (FIFO) method during the fourth quarter of
fiscal 1993. This change has been applied retroactively by restating all
prior periods presented.

Results of Operations

The following table presents the Company's consolidated income statement
items as a percentage of sales.

<TABLE>
<CAPTION>
Nine Months Ended Year Ended
Oct. 1 Oct. 2 Jan. 1 Jan. 2 Dec. 28
1994 1993 1994 1993 1991
<S> <C> <C> <C> <C> <C>
Net sales and other income 100.0% 100.0% 100.0% 100.0% 100.0%

Cost of products sold 75.2 73.6 74.1 73.0 77.5
Depreciation 4.6 4.4 4.4 4.2 5.0
Selling, general and administrative 17.1 17.1 16.6 16.1 13.0
Gain on sale of facilities ---- ---- ---- ---- (1.2)
Interest 3.3 3.3 3.2 2.7 2.6

Total costs and expenses 100.2 98.4 98.3 96.0 96.9

Income (loss) before taxes (.2) 1.6 1.7 4.0 3.1

Provision for income tax (.1) .6 .6 1.4 .2*

Net income (loss) (.1)% 1.0% 1.1% 2.6% 2.9%
</TABLE>

* Includes the effect of SFAS No. 96, adopted as of the first quarter of
fiscal 1991. Note: Certain items have been rounded to cause the columns
to add to 100%.

Nine Months Ended October 1, 1994 Compared to Nine Months Ended October 2,
1993

Net Sales and Other Income increased $18.7 million or 4.9% for the nine
months ended October 1, 1994 over the comparable period in the prior year,
from $378.4 million to $397.1 million, due to increased sales volume in
activewear and licensed apparel headwear lines. These increases were
partially offset by a decrease in other licensed sports apparel sales due
to the effects of the Major League Baseball strike and the National Hockey
League lockout, and to some general weakening in the licensed sports
apparel marketplace. Activewear sales for the nine months ended October 1,
1994 increased by 2.6% over the comparable period in 1993 from $219.5
million to $225.3 million, and licensed apparel headwear sales increased by
52.1% over the comparable period in 1993 from $36.5 million to $55.5
million. Sales of other licensed sports apparel decreased by 4.9% from the
comparable period in 1993 from $122.3 million to $116.3 million. The
Company's Discus Athletic brand continues to gain recognition in the
marketplace, with sales increasing $10.9 million or 41.8% over the
comparable 1993 period from $26.1 million to $37.0 million.

Cost of Products Sold as a percentage of sales increased to 75.2% for the
nine months ended October 1, 1994 from 73.6% for the comparable 1993
period. The decline in the margin was due mainly to higher raw material
costs for cotton and polyester and reduced operating schedules late in 1993
and early in 1994. The Company's cost of products sold also has been
affected by overhead costs resulting from less than full utilization of its
customer service center which became operational in 1991.

Depreciation expense as a percentage of sales increased to 4.6% for the
nine months ended October 1, 1994 from 4.4% for the comparable 1993 period.
Depreciation expense increased by $1.4 million or 8.3% over the 1993 period
from $16.8 million to $18.2 million, due to fixed asset additions.

Selling, General and Administrative ("SG&A") expenses as a percentage of
sales were 17.1% for both the first nine months of 1994 and 1993. Higher
sales in the nine months ended October 1, 1994 were offset by higher SG&A
expenses, especially royalty expenses.

Interest expense as a percentage of sales was 3.3% for both the nine month
periods of 1994 and 1993. Interest expense increased $0.9 million or 7.3%
in the first nine months of 1994 over the comparable period in 1993, from
$12.3 million to $13.2 million, due to higher average rates and higher
average borrowings to finance working capital requirements. The nature of
the Company's primary businesses requires extensive seasonal borrowings to
support its working capital needs. As of October 6, 1993, the Company
entered into a $225 million revolving credit facility, which replaced its
short-term credit lines. For the first nine months of 1993, short-term
borrowings averaged $120 million at an average rate of 3.7%. Under the
revolving credit facility, average borrowings and interest rate for the
nine months ended October 1, 1994 were $152 million and 4.9%, respectively.

Provision for Income Tax is a function of pretax earnings and the combined
effective rate of federal and state income taxes. The effective rate for
combined federal and state income taxes was 38% for the nine-month period
ended October 1, 1994, versus 37% for the comparable period in 1993. The
increase in provision for income tax for the nine months ended October 1,
1994 is due solely to a change in the estimated federal income tax on the
Company's 1994 expected pretax earnings.

Fiscal Year 1993 Compared to Fiscal Year 1992

Net Sales and Other Income for fiscal 1993 increased $29.7 million or 5.9%
over 1992 from $503.9 million to $533.6 million. The 1993 sales growth was
due to a 23.7% increase in licensed apparel sales partially offset by lower
activewear sales. Unit sales volume of activewear apparel in 1993 was
relatively unchanged from the prior year's level, while the average selling
price of activewear apparel decreased by approximately 2% from 1992. The
1993 average price decline of activewear products was primarily due to
proportionately higher shipping volume of jersey products, which sell at
lower prices than fleece garments.

Cost of Products Sold as a percentage of sales increased from 73.0% for
1992 to 74.1% for 1993. The increase was primarily due to heavier fabric
weights, greater sewing detail for activewear products, strong licensed
apparel sales growth with mass merchandisers which sales generally yield
lower margins, and expenses associated with streamlining operations. The
increase in jersey sales, which traditionally yield lower margins than
fleece, also increased cost of products sold as a percentage of sales.
Apparel production for 1993 decreased 2.5% from 1992.

Depreciation expense as a percentage of sales increased to 4.4% for 1993
from 4.2% for 1992. Depreciation expense increased $2.6 million or 12.5%
over 1992 from $20.8 million to $23.4 million. The 1993 increase was
primarily due to expenditures for machinery and equipment.

Selling, General and Administrative expenses increased as a percentage of
sales from 16.1% in 1992 to 16.6% in 1993. The primary reason for the SG&A
expense increase was an approximately $5 million increase in royalty
expenses related to higher sales of professional sports licensed apparel.

Interest expense was 3.2% of sales for 1993 compared to 2.7% for 1992.
Interest expense increased $3.5 million or 25.9% in 1993 compared to 1992
from $13.5 million to $17.0 million primarily due to higher indebtedness
from increased working capital needs and the acquisition of Logo 7. The
Company experienced increased working capital needs in 1993 due to higher
inventory levels and extended payment terms for some customers.

Provision for Income Tax reflects an effective rate for combined federal
and state income tax of 35% in 1993 and 1992.

Fiscal Year 1992 Compared to Fiscal Year 1991

Net Sales and Other Income for the year ended January 2, 1993, increased
$154.0 million or 44.0% over 1991 from $349.9 million to $503.9 million.
Sales by Logo 7, which was acquired by the Company in January 1992, were
the primary reason for the 1992 sales growth. In addition to Logo 7's
sales, unit sales volume increased 2.2% and the average selling price of
activewear products increased 1.9% in 1992 from 1991. The 1992 volume
increase of activewear products was primarily due to a substantial increase
in jersey shipments, compared to 1991. The price increase of activewear
products was the result of general price increases on a sales mix of
higher-priced fleece garments partially offset by strong growth of jersey
products, which sell at lower prices than fleece garments.

Cost of Products Sold increased 35.7% or $96.8 million in 1992 compared to
1991 from $271.2 million to $368.0 million; however, cost of products sold
as a percentage of sales decreased from 77.5% for 1991 to 73.0% for 1992.
The decrease in cost of products sold as a percentage of sales was
primarily due to higher operating schedules and lower cotton prices. Total
apparel production for 1992 increased 16.9% from 1991, resulting in more
favorable absorption of fixed costs.

Depreciation expense as a percentage of sales was 4.2% for 1992 and 5.0%
for 1991. Depreciation expense in 1992 increased $3.4 million or 19.5%
over 1991 from $17.4 million to $20.8 million. The increase for 1992 was
primarily due to a full year's depreciation of the customer service center
which became operational during 1991.

Selling, General and Administrative expense increased as a percentage of
net sales from 13.0% in 1991 to 16.1% in 1992. This increase was generated
by the effect of the 1992 acquisition of Logo 7 and advertising expense due
to increased brand promotion. The effect of the Logo 7 acquisition on SG&A
expense was due to royalty expenses related to professional sports
licenses, wages and benefits paid to the employees of Logo 7 and increased
sales commissions associated with Logo 7 sales.

Interest expense as a percentage of sales was 2.7% and 2.6% for 1992 and
1991, respectively. Interest expense was $13.5 million for 1992 compared
to $9.1 million for 1991. The increase was the result of higher
indebtedness due to the acquisition of Logo 7, increased working capital
needs and the capitalization of $2.3 million of interest, and costs
pertaining to the construction of the customer service center in the first
half of 1991, which lowered interest expense for that year. The increase
was partially offset by a reduction in short-term interest rates.

The Company's effective income tax rate was 35% in 1992 and 32% in 1991.
The lower rate for 1991 was the result of permanent differences between
book and taxable income and the increased percentage relationship to much
lower pretax earnings. In 1992, the Company adopted SFAS No. 109
"Accounting for Income Taxes," which superseded SFAS No. 96. The Company's
adoption of SFAS No. 109 had no material effect on 1992 earnings. The
implementation of SFAS No. 96 during 1991 reduced the Company's restated
first quarter 1991 deferred tax liability and increased earnings by $2.8
million.

Financial Condition, Liquidity and Capital Resources

Net working capital at October 1, 1994 increased $55.9 million from
January 1, 1994 due mainly to higher receivables offset by current
maturities of long-term debt. Receivables normally peak in September and
October and begin to decline in December as shipment volume decreases and
cash is collected. Net accounts receivable increased $64.0 million from
January 1, 1994 to October 1, 1994 due to the seasonality of activewear
shipments.

Inventories traditionally increase during the first half of the year to
support second-half shipments. In 1994, inventories peaked on July 2, 1994
at $206.5 million and then dropped to $165.6 million on October 1, 1994.
The average month-end inventory level for the nine months ended October 1,
1994 of $185.5 million was 4.7% or $8.4 million higher than the average
month-end inventory level for the comparable period in 1993 due to excess
capacity in the industry and weak demand in late 1993 which continued
through the spring of 1994. However, as of October 1, 1994, inventories
had decreased by approximately $23.7 million or 12.5% from October 2, 1993,
while sales had increased 4.9% in the first nine months of 1994 as compared
to the same period in 1993.

The Current Ratio (ratio of current assets to current liabilities) at
October 1, 1994 was 4.9 compared to 6.4 at January 1, 1994. The decrease
in the current ratio between October 1, 1994 and January 1, 1994 was due
mainly to higher current maturities of long-term debt.

On October 6, 1993, the Company began operating with a two-year $225
million revolving credit facility which replaced the Company's short-term
credit lines. Total long-term debt at October 1, 1994 consisted primarily
of the 8 7/8% Notes totalling $95 million, $192 million outstanding under the
revolving credit facility and $18 million due under the Term Loan. The
Company's average credit facility borrowings during fiscal 1994 were $155
million and its peak borrowing was $192 million during September 1994. The
current portion of long-term debt includes $19 million of the 8 7/8% Notes and
a total of $9 million, due in equal quarterly payments of approximately $2
million each, under the Term Loan. At October 1, 1994, the Company was in
compliance with, or had obtained waivers for violations of, all debt
covenants.

Net proceeds from this Offering will be used to repay in full the 8 7/8% Notes
and the Term Loan. The Company believes that the longer maturities and the
increased covenant flexibility provided under the terms of the Notes will
allow the Company to continue to increase its long-term investment in brand
promotion and higher-margin products. See "Use of Proceeds and
Refinancing."

For the first nine months of 1994 net cash used by operations decreased
$23.6 million or 30.6% compared to the same period in 1993 from $77 million
to $53.4 million. The reduced need for operating cash was due to reduced
inventory partially offset by higher accounts receivable. Cash used for
capital expenditures decreased $13.5 million or 65.5% for the first nine
months of 1994 compared to the same period in 1993 from $20.6 million to
$7.1 million. The Company has budgeted approximately $15 million for
capital expenditures in fiscal 1995. Cash provided by financing activities
decreased $31.6 million or 31.8% for the first nine months of 1993 from
$99.5 million to $67.9 million as a result of lower net borrowings offset
by lower dividend payments in 1994. The Company expects that annual cash
flows from operations, supplemented by borrowings under the Senior Credit
Facility, will be adequate to support its cash requirements.

Stockholders' Equity decreased $1.8 million during the first nine months of
1994 primarily due to the net loss for the period of $0.5 million and cash
dividends of $1.8 million offset by $0.5 million net proceeds from a new
employee stock purchase plan. On April 13, 1994, the Board of Directors
suspended further dividend payments until such time as cash flow and
profitability are sufficient to support them. Accumulated dividends on the
Company's 5% Cumulative Preferred Stock and Cumulative Convertible Preferred
Stock, $7.50 Series B totalled $567,500 at October 1, 1994.

Business

General

Tultex Corporation is one of the world's largest marketers and
manufacturers of activewear and licensed sports apparel for consumers and
sports enthusiasts. The Company's diverse product line includes fleeced
sweats, jersey products (outerwear T-shirts), jackets and caps. These
products are sold under the Company's own brands led by the Discus Athletic
and Logo Athletic premium labels and under private labels, including Nike,
Levi Strauss, Reebok and Pro Spirit. In addition, the Company has numerous
professional and college sports licenses to manufacture and market
embroidered and screen-printed products with team logos and designs under
its Logo Athletic and Logo 7 brands. The Company is a "super" licensee of
professional sports apparel, holding licenses from the National Football
League ("NFL"), MLB, the National Basketball Association ("NBA") and the
NHL to manufacture a full range of apparel for adults and children.

Historically, Tultex has been a producer of quality fleece products for
sale to distributors and resale to consumers under private labels.
However, in the 1980s, the activewear industry began to change. Increasing
consumer demand reflecting more active and casual lifestyles and the
industry's historically good long-term growth prospects and low fashion
risk as compared to other apparel products, attracted large, well-financed
companies which acquired competitors of the Company. Simultaneously,
larger mass merchandise retailers began to exert pressure on margins for
lower-priced fleece products.

In recent years, Tultex has initiated a strategy to enhance its
competitiveness and to capitalize on growth opportunities by becoming a
consumer-oriented apparel maker able to compete in a changing industry.
This strategy includes the following elements:

(bullet) Increasing Emphasis on Higher-Margin Products. The Company is
strengthening its competitiveness in the activewear business
through (i) the development of branded and private label, higher-
quality and higher-margin products to supplement its
traditionally strong position in the lower-priced segment of the
business and (ii) since 1991, the manufacture of jersey products.
The Company is developing its own brands, promoting Discus
Athletic for its premium products and using the Tultex label for
the value-oriented segment of the market. Discus Athletic's
highly visible sponsorship of college football and basketball on
the ESPN and ABC television networks and Atlantic Coast
Conference basketball has contributed to significant annual
increases in sales of this brand since 1992. In addition, Tultex
has partnering arrangements to supply higher-quality, private
label products to companies such as Reebok, Levi Strauss and
Nike.

(bullet) Expanding into Licensed Apparel Business to Complement Activewear
Business. Tultex's 1992 acquisitions of Logo 7, a marketer of
licensed sports apparel, and Universal Industries, Inc., a
marketer of sports and entertainment licensed headwear, enabled
the Company to achieve the fourth largest market share in the
higher-margin licensed apparel business in 1993, and have created
opportunities for significant manufacturing and distribution
synergies with the Company's activewear business. The promotion
of the Logo Athletic brand of licensed apparel through television
and print advertising, as well as promotional arrangements
featuring Dallas Cowboys' quarterback Troy Aikman, San Francisco
49ers' quarterback Steve Young, Miami Dolphins' quarterback Dan
Marino, the Chicago Black Hawks' Chris Chelios and the Washington
Bullets' Chris Webber, among others, has helped to increase the
visibility and sales of Logo Athletic products.

(bullet) Increasing Distribution Channels and Strengthening Customer
Relationships. Tultex actively pursues strong relationships with
department, sporting goods and other specialty stores, such as
Sears, JC Penney, Modell's, Dillard's, Foot Locker, Champs and
Sports Authority, to distribute its higher margin branded and
private label products. In addition, the Company continues to
strengthen its relationships with high volume retailers such as
Wal-Mart, Kmart and Target through private label and Tultex
products. Tultex strives to provide its customers with
exceptional service support; for example, its distribution
capabilities are highly responsive to customers' changing
delivery and inventory management requirements.

The Company's activewear business is vertically integrated, spinning
approximately 80-85% of the yarn it requires in three yarn plants located
in North Carolina (the balance is purchased under yarn supply contracts)
and knitting, dyeing and cutting fabric and sewing finished goods in 11
plants in Virginia and North Carolina and one plant in Jamaica. The
Company's licensed sports operations are conducted from one plant in
Indiana and one plant in Massachusetts.

Industry

The Company produces activewear and licensed apparel and headwear for sale
at a broad range of price points through all major distribution channels.

Activewear

The Company's activewear business consists of its fleecewear and jersey
products. All activewear industry and market share data included herein
has been estimated by the Company based on data provided by Market Research
Corporation of America, a leading provider of market information on the
textile industry.

Fleecewear. The fleecewear industry, with retail sales of approximately
$9.1 billion in 1993, has grown 12.8% in unit sales from 1989 to 1993 and
has experienced a 3.1% compound annual growth rate in unit sales during
this period. The predominant fleecewear products are sweatshirts and
bottoms.

The basic fleecewear industry is characterized by:

(bullet) low fashion risk - although fashion detailing changes often, basic
garment styles are not driven by trends or fads;

(bullet) long-term growth - industry sales volume is estimated to have grown
from 697.4 million units in 1989 to 786.9 million units in 1993, though
this growth has been punctuated with periodic downturns related to
external events such as reduced retailer commitment for activewear
during the Gulf War and the lower consumer demand prevailing in late
1993 to early 1994;

(bullet) entry by well-financed acquirors - new entrants have been attracted by
the industry's long-term growth and have been able to make the large
initial capital investments for manufacturing;

(bullet) barriers to entry - barriers include large required capital
investments, and growing importance of brand-name recognition and
established customer relationships; and

(bullet) low threat of imports - the low labor portion of the cost of
manufacturing fleecewear and the short delivery times required for
inventory control by retail customers reduce the threat of competition
from imports.

Sales of fleeced apparel experienced significant growth during the late
1970s and 1980s due to the increased pursuit of physical fitness and active
lifestyles and the related rise in popularity and acceptance of
sweatshirts, jersey apparel and other types of athletic clothing as
"streetwear." Moreover, fleecewear products have registered significant
improvements in fabric weights, blends, quality of construction, size,
style, and color availability over the past few years, which has
contributed to this growth in demand. In particular, garments are sized
larger and typically use heavier, more shrink-resistant fabrics. In
addition, acrylic-dominant blends have been supplanted by polyester-
dominant and cotton-dominant blends. Despite these upgrades in product
specifications, retail prices have remained relatively flat in real terms
due to improvements in manufacturing technology and competitive pressures.

Fleecewear exhibits a marked seasonality. For example, over the past three
fiscal years, an average of 72% of the Company's fleecewear unit sales have
occurred in the third and fourth quarters.

Jersey (Outerwear T-shirts). Unit retail sales of jersey products has
grown 32.6% over the past five years and in 1993 totaled $6.7 billion, or
66 million units. Like fleecewear, the industry characteristics of jersey
apparel include low fashion risk and long-term growth. Imports are a
greater threat as the weight/labor ratio and the freight costs involved are
lower for jersey products than for fleecewear; however, the ability to
produce large volumes with short delivery times gives domestic
manufacturers an advantage over import competition in both fleecewear and
jersey apparel.

Industry Makeup and Retail Channels. In 1993, the five largest fleece
manufacturers together accounted for an estimated 26.7% of the branded
market in the fleecewear industry. The retail jersey industry also is
fragmented. The activewear industry has been characterized since the 1980s
by the acquisition of existing competitors by larger companies with
substantial financial resources and manufacturing and distribution
capabilities. These factors and the resulting price reductions and
inventory build-ups have adversely affected participants in the activewear
industry, including Tultex, particularly with respect to the fleecewear
industry. In response, several competitors announced reductions in
fleecewear manufacturing capacity during 1993 and 1994. While fleeced
apparel pricing has improved and inventory levels have recovered to more
typical levels in the second half of 1994, there can be no assurance that
these market conditions will continue. Fleecewear is distributed through
department stores, chain stores and sporting goods stores, although mass
merchandisers, wholesale clubs, and other discount retailers represent a
dominant and growing percentage of the total fleecewear market.

Competitive Factors. The Company believes that price and quality are the
primary factors in consumer purchasing decisions. Brand name is often a
proxy for quality; as a result, those companies with brand name recognition
enjoy increased sales from this competitive advantage, as mass
merchandisers, department store chains, and wholesale clubs are requiring
more branded than private label activewear.

Licensed Apparel

Estimated wholesale sales of professional sports licensed apparel
(including headwear) for 1993 were approximately $1.9 billion, according to
Sports Style Magazine, an industry publication. In general, the Company
believes that the prospects for its continued growth in this market are
good, although growth is expected to be less rapid than in recent years due
to increased competition. The continually changing fortunes of existing
teams, together with the introduction of new franchises, has made the
market extremely dynamic, as interest in each team fluctuates with its
performance. Manufacturers, such as the Company, with the capacity to
respond quickly to these changes with new products and designs, enjoy a
competitive advantage over smaller competitors. The MLB players' strike
and the NHL lockout, which was settled on January 13, 1995, have adversely
affected sales of items bearing these marks, and the MLB players' strike
will continue to adversely affect sales of MLB products until this dispute
is resolved. The Company expects that consumer demand for NHL products
and, once play resumes, MLB products will rebound, but may recover slowly.
There can be no assurance that the MLB dispute will be resolved in the near
future or that sales of MLB and NHL products will increase or return to
prior levels.

Industry Makeup and Retail Channels. The industry has expanded rapidly
over the past three years, with the professional sports leagues granting
large numbers of licenses. With this proliferation of licenses, individual
competitor's sales growth slowed, though the top companies continued to
gain market share. After giving effect to industry consolidation,
management estimates that at the end of 1993, the top four companies would
have accounted for approximately 65% of the market, with Starter
Corporation, VF Corporation (Nutmeg Mills, Inc. and H.H. Cutler Sports
Apparel), Fruit of the Loom (Artex, Salem Sportswear and Pro Player) and
Tultex accounting for approximately 19.2%, 18.0%, 15.0% and 13.7% of
wholesale industry sales in 1993, respectively, according to Sports Style
Magazine. No other company had more than 10% of the market. Imports of
finished goods purchased by retailers directly or through import companies
do not represent a significant factor in the industry as a whole, since
there are no foreign licensees. However, all of the larger domestic
companies competing in the market do use significant off-shore sourcing of
finished outerwear goods. Licensed apparel products are generally sold
through the same retail channels as activewear.

Competitive Factors. There are significant barriers to entering the
licensed sports apparel industry and expanding such a business to
significant size. After expanding the number of licensees rapidly in
recent years, the licensing associations have begun to consolidate their
relationships with existing manufacturers and appear less likely to enter
into licensing agreements with new entrants. New entrants would be
required to devote considerable resources to developing their product mix
and sales and distribution capabilities to compete effectively. Like the
activewear industry, the licensed apparel industry has been characterized
in recent years by the acquisition of existing competitors by larger
companies with substantial financial resources and manufacturing and
distribution capabilities, such as VF Corporation, which acquired Nutmeg
Mills, Inc. in 1994, Fruit of the Loom, Inc.'s acquisition of Salem
Sportswear, Inc. in 1993, and Nike's acquisition of Sports Specialties,
Inc. in 1993.

Company Products

Activewear

The principal activewear products of the Company are fleeced knitwear items
such as sweatshirts, jogging suits, hooded jackets, headwear and jersey
apparel for work and casual wear. The Company manufactures apparel
products principally under the Discus Athletic and Tultex brands. Products
carrying the Discus Athletic name are marketed for sale to chains such as
Foot Locker, department stores such as Sears and sporting goods stores,
while Tultex products are marketed for sale to mass merchandisers such as
Wal-Mart and wholesale clubs such as Sam's. The Company is licensed to
manufacture and market adult fleecewear under the Britannia trademark
owned by Levi Strauss & Co. The Company also manufactures private-label
products for sale under many labels, including Nike, Levi Strauss, Reebok
and Pro Spirit.

Licensed Apparel and Headwear

The Company's licensed products include jackets, sweats, T-shirts,
baseball-style caps and other headwear, embroidered or imprinted with
professional and college sports and entertainment-related licensed designs
and logos. These products are marketed under the Logo Athletic and Logo 7
brands. Under the Logo Athletic name, the Company offers premium-quality
jackets, caps and other activewear, including NFL "Pro-Line" authentic
sideline gear and NBA "Authentics" apparel. Tultex, through Logo 7,
acquired Pro-Line status from the NFL in 1993, a flagship program entitling
the Company to sell products identical to those worn on the sidelines by
NFL players and coaches. Under the terms of the four-year contract, the
Company markets Pro-Line products at retail for all 30 NFL teams. NBA
"Authentics" products are identical to those worn by players, coaches and
managers during competition. The Company's NFL Pro-Line and NBA Authentics
products prominently feature the Logo Athletic name and trademark, which
the Company believes are key elements in developing the Logo Athletic
brand. Under the Logo 7 brand, the Company offers moderately-priced
outerwear, fleecewear, T-shirts and caps with licensed designs and logos.
The Company also sells popularly-priced licensed fleecewear, jersey apparel
and headwear.

Customers; Marketing and Sales

Customers

The Company offers a diverse product line for sale at a full range of price
points through all major distribution channels. Customers include chain
stores such as Foot Locker, department stores such as Sears and J.C.
Penney, sporting goods stores, and mass merchandisers such as Target, Wal-
Mart and Kmart. The Company's higher-quality fleecewear and jersey
products, including the Company's premium Discus Athletic and Logo Athletic
brands, are sold primarily through department and specialty stores and
mail-order distribution channels rather than through mass merchandisers and
wholesale clubs, thereby enabling Tultex to enhance the image of these
branded and private label products and achieve higher margins. The Tultex
and Logo 7 brands are marketed to a broader range of channels, including
mass merchandisers and wholesale clubs that compete more on price than
brand. While no single customer accounted for more than 10% of sales in
the first three quarters of 1994, the Company's top four customers together
accounted for approximately 28% of sales. The following chart details the
distribution channels for the Company's branded products.

Brands Products Distribution Channels

Discus Athletic Fleece and jersey Sporting goods specialty
activewear stores and chain stores
(Sports Authority,
Modell's), retail chains
(Sears), international
distributors and sales
agencies (Nissan
Trading)
Tultex Fleece and jersey Mass merchants (Kmart,
activewear Wal-Mart), retail chains
(Montgomery Ward),
regional discounters
(Shopko, Hart's),
distributors and mass
merchant screenprinters
(California Shirt Sales,
T-Shirt City, PM
Enterprises), wholesale
clubs (Sam's)

Logo Athletic Licensed activewear, Retail chains (JC
outerwear and Penney, Sears), sporting
headwear goods specialty stores
(Champs, Foot Locker),
department stores
(Dillard's, Mercantile)

Logo 7 Licensed activewear, Mass merchants (Kmart,
outerwear and Target), distributors
headwear (West Coast Novelties),
wholesale clubs (Sam's)

Marketing and Sales

The Company has shifted its marketing strategy in recent years to focus on
the development of its own brands and sales through distribution channels
that support higher margins. In particular, the Company has devoted
significant resources to the promotion of its Discus Athletic and Logo
Athletic brands.

In 1993, the Company began conducting advertising campaigns to promote its
Discus Athletic and Logo Athletic brands. The Discus Athletic advertising
campaign emphasizes quality and the usefulness of the product for many
sports. The Company believes that this positioning effectively
differentiates the Discus Athletic line from competing specialized lines
with powerful brand associations. To reinforce the association of the
brand with competitive athletics, Discus Athletic sponsors ESPN's college
football and basketball programs, ABC's college basketball program and
Atlantic Coast Conference and Big 10 basketball. Print advertising has
appeared in Sports Illustrated, Street & Smith's, Details, Gentleman's
Quarterly and Rolling Stone. The Company believes these placements are
particularly effective in reaching college sports enthusiasts, an important
part of the Company's target market.

The Logo Athletic campaign focuses on establishing the "authenticity" of
Logo Athletic products. The Company believes that licensed apparel sales
benefit substantially from the perception that products are the same as
those worn by professional sports stars. Logo Athletic acquired NFL Pro-
Line status in 1993. To provide visibility and reinforce this
authenticity, the Company provided sideline garments and caps prominently
featuring the Logo Athletic trademark for five NFL teams in 1994, the Green
Bay Packers, Indianapolis Colts, Los Angeles Rams, Phoenix Cardinals and
Tampa Bay Buccaneers, as well as for several NFL All-Pro players, such as
San Francisco 49ers' quarterback Steve Young, Miami Dolphins' quarterback
Dan Marino and Green Bay Packers' defensive lineman Reggie White. The "Get
Real" series of television advertisements features Dallas Cowboys'
quarterback Troy Aikman, NBA star Chris Webber and NHL All-Star Chris
Chelios, all wearing Logo Athletic gear and encouraging consumers to "Get
Real" with Logo Athletic. The Company participates in the NBA Authentics
program and provides ball-boy garments featuring the Logo Athletic
trademark to the Boston Celtics, Denver Nuggets, Indiana Pacers and
Minnesota Timberwolves for use during games. The Company also has become
recognized as a prominent designer and supplier of distinctive "locker
room" caps bearing championship team logos and carrying the highly visible
Logo Athletic trademark.

Advertising expenditures were $12.3 million and $17.1 million in 1993 and
1994, respectively, of which $10.0 million and $14.7 million, respectively,
were expensed in those years. The advertising expense budget for 1995 is
$21.8 million.

New product introductions are important to the Company's licensed apparel
business and are undertaken to generate consumer excitement and demand.
Logo 7's creative design team, in cooperation with key customers and
licensors, continually develops and introduces new products and styles.
For example, the "shark's tooth" design featured on certain Logo Athletic
caps and jackets has been extremely successful and is in high demand. The
Company is able to react quickly to changing team fortunes, designing new
products to capitalize on shifts in popularity and delivering those
products to the market rapidly, sometimes in a matter of hours. During
major professional and collegiate sporting events, such as the Super Bowl,
the Company produces on-site decorated products with championship logos of
the winning teams for immediate distribution and sale at the event.

The Company's marketing methods for other products are typical of producers
of basic clothing products. Its merchandising department keeps abreast of
current fashionable styles and colors. After internal reviews by
manufacturing departments, selected customers preview and comment upon
prototype garments before the merchandising department determines those to
be presented in sales catalogs. Production is planned on orders received
and anticipated customer orders for these garments.

As of December 31, 1994, Tultex operated a sales office in each of New
York, Boston, Chicago, Seattle, Orlando and Los Angeles and a Discus
Athletic showroom in New York City. These offices are the primary points
of contact for customers and coordinate sales, distribution of sales
information, certain advertising, point-of-sale displays and customer
service. The Company also employs eight independent sales representatives
to market its Discus Athletic line in the fragmented sporting goods market.
Logo 7's products are marketed through a sales force of 50 people,
including Logo 7 employees and independent sales representatives. In 1992,
the Company entered into an agreement with Nissan Trading Co., Ltd., a
subsidiary of Nissan Motor Co., to market and sell the Company's products
in Japan. While international sales were immaterial in 1994, this venture
experienced strong sales growth over the prior year.

At December 31, 1994, Dominion Stores, Inc., a wholly-owned subsidiary,
operated 14 outlet stores in North Carolina, Virginia and West Virginia,
which sell surplus Company apparel and apparel items of other
manufacturers, and operated 32 The Sweatshirt Company retail stores in 19
states, which primarily sell first-quality Company-made products and
accessories. Dominion Stores' total sales in the first nine months of 1994
were approximately $12 million.

Licenses

Most of the Company's licensed products are sold through Logo 7. The
Company is a "super" licensee of professional sports apparel, maintaining a
full complement of licenses with all of the major North American
professional sports leagues -- the NFL, MLB, the NBA and the NHL -- and the
Collegiate Licensing Company. The Company also holds licenses for World
Cup Soccer 1994, NASCAR, the 1996 Summer Olympics in Atlanta and
entertainment-related products. These licenses require the payment of
royalties ranging from 5% to 15% of sales with annual guaranteed royalties
aggregating approximately $11.5 million. The Company's major licenses with
the NFL, NBA and NHL expire in 1997 and the MLB license expires in 1995.
The Company is licensed to manufacture and market adult fleecewear under
the Britannia trademark owned by Levi Strauss & Co.

The Company's ability to compete is dependent on its ability to obtain and
renew licenses, particularly those from the major professional sports
leagues. The Company enjoys long-standing relationships with its major
league licensees, having been awarded its first licenses with the NFL in
1971, with the NBA in 1977, with MLB in 1980 and with the NHL in 1988. The
Company has no reason to believe that it will not be able to successfully
renew these licenses. While the Company has enjoyed long, successful and
uninterrupted licensing relationships with its professional and collegiate
athletic licensors, if a significant license or licenses were not renewed
or replaced, the Company's sales would likely be materially and adversely
affected. In addition, the Company's material licenses are non-exclusive
and new or existing competitors may obtain similar licenses.

Manufacturing

Because consumer value is a key competitive factor in the activewear
industry, Tultex has focused on being a low-cost producer of quality goods.
The Company pursues this goal through cost reduction measures, plant
modernization and improvement of garment characteristics, such as
increasing the range of garment sizes, cloth weight, durability, style and
comfort to meet consumer demands.

Implementation of modern information systems and inventory cost control
measures have allowed the closing or sale of several costlier, less
efficient plants, including the Company's December 1994 sale of its yarn
production plant in Rockingham, North Carolina. Savings are achieved
through lower average production costs in the more modern facilities and
higher capacity utilization in the remaining plants.

The Company's manufacturing process consists of: yarn production; fabric
construction including knitting, dyeing and finishing operations; apparel
manufacturing including cutting and sewing operations; and, for garments
with logos, screenprint and embroidery operations. As a result of its
modernization efforts, the Company believes that its manufacturing
facilities are outfitted with some of the most efficient and
technologically-advanced equipment in the industry.

Between January 1, 1988 and October 1, 1994, the Company invested
approximately $189 million to open new facilities, including sewing
facilities in Roanoke, Virginia and Montego Bay, Jamaica (a leased
facility), and the highly automated customer service center in
Martinsville, Virginia, and to modernize other facilities. Open-end
spinning frames were acquired to increase yarn production and reduce costs,
higher color quality and lower dyeing costs were achieved from the
installation of new jet dyeing equipment, new dryers were added in the
fabric finishing process, automated cutting machines were introduced, and
new information systems were implemented.

Tultex's highly-automated customer service center, opened in 1991, has
greatly expanded the Company's distribution capabilities. The customer
service center allows the Company to package and ship its products
according to the more detailed color, size and quantity specifications
typically required by high-margin retailers and department stores and has
permitted consolidation of the Company's warehouses. However, the customer
service center currently is underutilized during the first half of the year
and has significantly contributed to the Company's fixed costs. Management
believes that its strategy of increasing sales of higher-margin retail
products, which require more sophisticated packaging, will result in
improved utilization of the customer service center.

In spring 1992, Logo 7 moved its operations to a newly-constructed, leased
facility built to Logo 7's specifications. This 650,000 square foot
building allowed Logo 7 to centralize operations, increase inventory
control, improve material flow and will allow for future expansion.

Tultex manufactures yarn at three facilities located in North Carolina,
which have a combined production capacity of 1.3 million pounds per week,
utilizing modern, open-end spinning frames. For its knitting operations,
Tultex operates approximately 500 modern high-speed, latch-needle circular
knitting machines, which produce various types of fabrics. The Company
believes its dyeing operations are among the most modern and
technologically efficient in the industry; dyeing operations are computer-
controlled, allowing precise duplication of dyeing procedures to ensure
"shade repeatability" and color-fast properties. The finishing operations
employ mechanical squeezing and steaming equipment.

The Martinsville cutting facility uses advanced Bierrebi automatic
continuous cutting machines with computer-controlled hydraulic die-cutting
heads and "lay-up" machines and high-speed reciprocating knives. Sewing
production at the Company's nine sewing facilities is organized on an
assembly-line basis.

The Company has incorporated sophisticated systems into several key areas
of the manufacturing process. The Company relies on a knitting ticket
system to track and report the manufacturing process from yarn inventory
through the knitting of individual rolls of fabric into greige cloth
storage. From this point, the shop floor control module of the Cullinet
manufacturing system monitors and reports the movement of each production
lot through the operations of dyeing, finishing, cutting and sewing. Each
sewing plant then electronically transmits an advance shipping notice to
the automated customer service center so the distribution planning module
at the center can plan the arrival and storage/packing of the sewn
garments. Frontier knitting monitor systems, cutting production systems,
and sewing production systems use computer-based data collection on each
knitting, cutting, and sewing machine to monitor machine and operator
efficiency, data that is useful for quality control, incentive-based
payroll data, and production management information.

The Company decorates its unfinished licensed apparel products using
screenprinting or embroidery at Logo 7's facilities in Indianapolis and
Universal's facilities in Massachusetts. It uses automatic silkscreen
machines and dryers for longer runs and hand-operated presses for shorter
or more complicated runs. The embroidering is carried out using high-
speed, computerized stitching equipment. The Company believes its graphics
and creative design capabilities help to distinguish its products from
those of its competitors.

The Company's order backlog at December 31, 1993 was approximately $67
million and at October 1, 1994 was approximately $163 million. Backlogs
are computed from orders on hand at the last day of each fiscal period.
The Company believes that due to the seasonality of the Company's business
and the just-in-time nature of much of the Company's sales, order backlogs
are not a reliable indicator of future sales volume.

Raw Materials

The Company's principal raw materials for the production of activewear are
cotton and polyester. Cotton content in fleecewear typically is 50% and in
jersey apparel typically is 100%. The Company is producing increasing
amounts of fleecewear containing 90-100% cotton. Fleecewear and jersey
manufacturers are extremely sensitive to fluctuations in cotton and
polyester prices as these materials represent approximately 30% of the
manufacturing cost of the product. In addition, the Company is indirectly
impacted by increasing costs of raw materials in its licensed apparel
business because the Company purchases finished goods containing cotton and
polyester and these higher raw materials costs often are effectively passed
on to the Company. Cotton prices increased significantly (approximately
22%) in the first nine months of 1994 over its 1993 level. The Company
expects cotton and polyester prices to continue to rise somewhat in 1995.
For the first nine months of 1994 the Company's average price per pound of
cotton was $0.73, compared with $0.60 in 1993, and the average price per
pound of polyester was $0.63 for the same period in 1993, compared with
$0.67 in 1994. In 1995, Tultex expects to use approximately 60 million
pounds of raw cotton and 20 million pounds of polyester staple in its
manufacture of fleecewear and jersey apparel. Tultex makes advance
purchases of raw cotton based on projected demand. The Company has
purchased substantially all of its raw cotton needs for 1995 and has fixed
the price on approximately 30% of such cotton.

Trademarks

The Company increasingly promotes and relies upon its trademarks, including
Discus Athletic, Logo Athletic, Tultex, and Logo 7, which are registered in
the United States and many foreign countries.

Seasonality

The Company's business is seasonal. The majority of fleecewear sales occur
in the third and fourth quarters, coinciding with cooler weather and the
playing seasons of popular professional and college sports. Jersey sales
peak in the second and third quarters of the year, somewhat offsetting the
seasonality of fleecewear sales.

Environmental Matters

The Company is subject to various federal, state and local environmental
laws and regulations governing, among other things, the discharge, storage,
handling and disposal of a variety of hazardous and nonhazardous substances
and wastes used in or resulting from its operations, including, but not
limited to, the Water Pollution Control Act, as amended; the Clean Air Act,
as amended; the Resource Conservation and Recovery Act, as amended; the
Toxic Substances Control Act, as amended; and the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.

The Company returns dyeing wastes for treatment to the City of
Martinsville, Virginia's municipal wastewater treatment systems operated
pursuant to a permit issued by the state. The city has filed a timely
application to renew its permit. In 1989, the city adopted a plan for
removing the coloration, caused by the dye wastes, from the water by using
polymer chemicals to combine with the extremely small particles of the dye
to create a sludge-like substance that can be retrieved from the water at
the city's wastewater treatment plant and disposed of as a non-hazardous
waste in the city's landfill. To cover the cost to the city, the Company
pays 50 to 80 cents per thousand gallons of water above regular water
costs. The expenditures required do not have a material effect on the
Company's earnings or competitive position.

The Company's operations also are governed by laws and regulations relating
to employee safety and health, principally the Occupational Safety and
Health Act and regulations thereunder, which, among other things, establish
exposure limitations for cotton dust, formaldehyde, asbestos and noise, and
regulate chemical and ergonomic hazards in the workplace.

The Company believes that it is in material compliance with the
aforementioned laws and regulations and does not expect that future
compliance will have a material adverse effect on its capital expenditures,
earnings or competitive position in the foreseeable future. However, there
can be no assurances that environmental and other legal requirements will
not become more stringent in the future or that the Company will not incur
significant costs in the future to comply with such requirements.

Litigation

The Company is not currently a party to any legal proceedings the result of
which it believes could have a material adverse impact on its business or
financial condition.

Employees

The Company had approximately 6,933 employees at December 31, 1994, of
which 6,043 or 87% were paid hourly.

In August 1994, hourly employees at the Company's Martinsville, Virginia
facilities voted for representation by the Amalgamated Clothing and Textile
Workers Union. The Company currently is negotiating a labor contract with
the union, which would cover all hourly employees at the Martinsville
facilities. As of December 31, 1994, the Company's approximately 2,200
hourly employees in Martinsville accounted for approximately 32% of the
Company's total employees and approximately 36% of the Company's hourly
employees. See "Certain Considerations -- Unionization of Hourly Workers
at Martinsville Facilities." None of the Company's other employees are
represented by a union. The following table summarizes the approximate
number of employees in the Company's principal divisions at December 31,
1994 and January 1, 1994.

<TABLE>
December 31, 1994 January 1, 1994
Division Salary Hourly Total Salary Hourly Total
<S> <C> <C> <C> <C> <C> <C>
Activewear 743 5,380 6,123 866 5,794 6,660
Licensed Apparel 104 503 607 94 541 635
Licensed Headwear 43 160 203 43 175 218
Total 890 6,043 6,933 1,003 6,510 7,513

</TABLE>

Properties

Almost all of the Company's principal physical facilities (other than those
of Logo 7 and Universal) are located in Virginia and North Carolina, within
a 150-mile radius of the City of Martinsville. All buildings are well-
maintained. The Company and its subsidiaries also lease sales offices and
retail outlets in major cities from coast to coast. The location,
approximate size and use of the Company's principal owned properties are
summarized in the following table:

Square
Location Footage Use

Martinsville, VA 45,200 Administrative offices
Martinsville, VA 1,100,000 Manufacturing (apparel)
Koehler, VA 60,000 Warehousing
Martinsville, VA 70,000 Warehousing
South Boston, Va 130,000 Sewing (apparel)
Bastian, VA 53,500 Sewing (apparel)
Longhurst, NC 287,000 Manufacturing (yarn)
Roxboro, NC 110,000 Manufacturing (yarn)
Dobson, NC 38,000 Sewing (apparel)
Mayodan, NC 612,000 Manufacturing, warehousing
and shipping (yarn and
apparel)
Vinton, VA 50,000 Sewing (apparel)
Martinsville, VA 502,200 Warehousing and shipping
(apparel)
Mattapoisett, MA 116,250 Distribution (headwear)

The following table presents certain information relating to the Company's
principal leased facilities:
<TABLE>
Lease Current
Square Expiration Annual
Location Footage Date Rental Use

<S> <C> <C> <C> <C>
Chilhowie, VA 40,015 08/31/97 $ 46,200 Sewing
(apparel)
Montego Bay, Jamaica 66,000 Monthly 266,040 Sewing
(apparel)

Marion, NC 48,760 11/02/98 95,000 Sewing
(apparel)

Martinsville, VA 31,000 Monthly 18,700 Warehousing
(apparel)
Martinsville, VA 300,000 6/1/98 684,000 Warehousing
(apparel)

Martinsville, VA 500,000 6/1/98 978,000 Warehousing
(apparel)
Indianapolis, IN 650,000 04/30/97 1,404,000 Distribution
(licensed
apparel)
</TABLE>

Manufacturing equipment, substantially all of which is owned by the
Company, includes carding, spinning and knitting machines, jet-dye
machinery, dryers, cloth finishing machines, cutting and sewing equipment
and automated storage/retrieval equipment. This machinery is modern and
kept in good repair. The Company leases a fleet of trucks and tractor-
trailers which are used for transportation of raw materials and for
interplant transportation of semi-finished and finished products.

The Company's facilities and its manufacturing equipment are considered
adequate for its immediate needs.

Management

Board of Directors

The members of the Company's Board of Directors are listed below:

Name Age Director Since

Charles W. Davies, Jr. 46 1990
Lathan M. Ewers, Jr. 53 1993
John M. Franck 41 1984
William F. Franck 77 1950
J. Burness Frith 78 1978
Irving M. Groves, Jr. 65 1978
H. Richard Hunnicutt, Jr. 56 1981
Bruce M. Jacobson 45 1992
Richard M. Simmons, Jr. 68 1973
John M. Tully 69 1964

Charles W. Davies, Jr., Chief Executive Officer of the Company, was
President and Chief Operating Officer of the Company from January 1991 to
January 1995, and Executive Vice President from December 1989 to January
1991. From February 1988 through November 1989, he was President and Chief
Executive Officer of Signal Apparel Company in Chattanooga, Tennessee.
From March 1986 to February 1988, Mr. Davies was President of Little Cotton
Manufacturing Company in Wadesboro, North Carolina and from December 1984
through February 1986 was Senior Vice President of Fieldcrest-Cannon in
Kannapolis, North Carolina.

Lathan M. Ewers, Jr. has been a partner since 1976 with Hunton & Williams,
Richmond, Virginia, counsel to the Company.

John M. Franck, Chairman of the Board of Directors, was Chairman of the
Board and Chief Executive Officer of the Company from January 1991 to
January 1995, and served as President and Chief Operating Officer from
November 1988 to January 1991. Mr. Franck is a director of Piedmont Trust
Bank, Martinsville, Virginia. He is the son of William F. Franck.

William F. Franck, Chairman Emeritus, retired December 31, 1993. He was
Chairman of the Board of Directors of the Company from 1984 to November
1988, and was its Chief Executive Officer from 1952 to November 1988. Mr.
Franck is a director of Henry County Plywood Corporation, Martinsville,
Virginia, a plywood manufacturer. He is the father of John M. Franck.

J. Burness Frith was Chairman of the Board of Directors of Frith
Construction Company, Inc., Martinsville, Virginia, from 1984 to 1993, when
he retired.

Irving M. Groves, Jr. retired as President, Chief Executive Officer and
Chairman of the Board of Piedmont BankGroup Incorporated, the parent of
Piedmont Trust Bank, Martinsville, Virginia in June 1994. Mr. Groves was
President of Piedmont Trust Bank, Martinsville, Virginia, from 1973 through
December 1993, when he retired from that position. Mr. Groves is a director of
Hooker Furniture Corporation, Martinsville, Virginia, a furniture manufacturing
firm, and Multitrade Group, Inc., a generator of steam energy.

H. Richard Hunnicutt, Jr. was Chairman of the Board and Chief Executive
Officer of the Company from November 1988 through December 1990, when he
retired. He was President and Chief Operating Officer from 1984 to 1988.

Bruce M. Jacobson has been a partner in Katz, Sapper & Miller,
Indianapolis, Indiana, certified public accountants, since 1977. In
connection with the Company's acquisition of Logo 7 on January 31, 1992 and
the issuance of the Series B Preferred Stock, the Company agreed that so
long as the previous shareholders of Logo 7 and their affiliates hold at
least 3% of the voting securities of the Company (on a fully-diluted
basis), the Company will nominate a designee of such shareholders for
election to the Board. Mr. Jacobson is the designee.

Richard M. Simmons, Jr. is the retired Chairman of the Board of Virginia
Carolina Freight Lines, Inc., Martinsville, Virginia, a trucking firm. He
served as Chairman of that company from 1987 until 1992. He was a
consultant to American Furniture Company from 1987 to 1988, and was its
President from 1961 to 1987 and its Chairman of the Board from 1974 to
1986. He is a director of Piedmont BankGroup Incorporated, Piedmont Trust
Bank and Dibrell Brothers, Inc., Danville, Virginia, tobacco manufacturers.

John M. Tully was Treasurer of the Company from 1975 until he retired in
1985.

Executive Officers of the Company

The following information is furnished concerning the executive officers of
the Company.

<TABLE>

Name Age Office
<S> <C> <C>
John M. Franck 41 Chairman
Charles W. Davies, Jr. 46 Chief Executive Officer and President
O. Randolph Rollins 51 Executive Vice President and General Counsel
Walter J. Caruba 47 Vice President - Marketing and Sales
W. Jack Gardner, Jr. 51 Vice President - Operations
B. Alvin Ratliff 49 Vice President and Service/Quality Coordinator
Don P. Shook 56 Vice President - Human and Financial Resources
John J. Smith 52 Vice President - Customer Service
James M. Baker 64 Secretary - Treasurer
Suzanne H. Wood 34 Controller
</TABLE>

O. Randolph Rollins became Executive Vice President and General Counsel in
October, 1994. Prior thereto, Mr. Rollins was a partner with the law firm
of McGuire, Woods, Battle & Boothe, Richmond, Virginia, from 1973 to 1990
and from January 1994 to October 1994. From 1990 to January 1994, Mr.
Rollins served in the Cabinet of Virginia's Governor L. Douglas Wilder,
first as Deputy Secretary of Public Safety and from 1992 through January
14, 1994 as Secretary of Public Safety of the Commonwealth of Virginia.
Mr. Rollins is the brother-in-law of John M. Franck and the son-in-law of
William F. Franck.

Walter J. Caruba became Vice President - Marketing and Sales in September
1992. He served as Vice President- Distribution between October 1990 and
September 1992. He served as General Manager - Planning from November 1989
to October 1990 and was Director - Production Control from December 1985 to
November 1989.

W. Jack Gardner, Jr. became Vice President - Operations in September 1994
and served as General Manager - Fabric Manufacturing from January 1988
until that time.

B. Alvin Ratliff became Vice President and Service/Quality Coordinator in
February 1994 and served as Vice President - Operations from December 1984
until that time.

Don P. Shook became Vice President - Human and Financial Resources in
January 1994 and previously served as Vice President - Finance and
Administration from December 1988. Prior thereto, he served as Vice
President - Finance from January 1987 to November 1988 and was Controller
between December 1985 and January 1987.

John J. Smith became Vice President - Customer Service in September 1992.
Prior thereto, he served as Vice President - Sales and Marketing since
December 1987 after serving as Director - Corporate Planning since May
1987. He was Manager - Information Systems & Services between December
1985 and May 1987.

James M. Baker became Secretary - Treasurer in January 1991 after serving
as Director - External Reporting from August 1987 to January 1991. Between
December 1985 and August 1987, he was Director - Budgets and Financial
Reporting.

Suzanne H. Wood became Controller of the Company in October 1993 after
joining the Company in June 1993. In the ten years prior to joining the
Company, she was employed by Price Waterhouse LLP, most recently as Audit
Senior Manager.

All terms of office will expire concurrently with the meeting of directors
following the next annual meeting of stockholders at which the directors
are elected.

Compensation of Directors

Directors of the Company who are not full-time employees are paid a fee of
$2,500 for each fiscal quarter. In addition, they are paid $1,000 for each
Board meeting attended, $1,000 for each committee meeting attended that
does not occur on the same date as a Board meeting, and $500 for each
committee meeting attended that does occur on the same date as a Board
meeting.

Executive Compensation

The following table presents information relating to total compensation of
the Chief Executive Officer and the four next most highly compensated
executive officers of the Company during the fiscal year ended December 31,
1994.

<TABLE>

SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
Securities
Underlying
Name and Other Annual Options All Other
Principal Position Year Salary Bonus Compensation(1) (shares) Compensation(2)
<S> <C> <C> <C> <C> <C> <C>
John M. Franck 1994 $240,000 $-- $-- 30,000 $--
Chairman and Chief 1993 240,000 -- -- 15,000 --
Executive Officer 1992 240,000 -- -- 0 --

Charles W. Davies, Jr. 1994 246,541 -- -- 30,000 --
President and 1993 245,834 -- -- 165,000 --
Chief Operating Officer 1992 240,000 -- -- 15,000 --

B. Alvin Ratliff 1994 163,800 -- -- 10,000 --
Vice President and 1993 172,800 -- -- 23,000 --
Service/Quality Coordinator 1992 172,800 -- -- 15,000 --

John J. Smith 1994 146,400 5,636 -- 10,000 --
Vice President - 1993 146,400 -- 1,860 8,000 --
Customer Service 1992 146,400 -- 1,595 15,000 --

Don P. Shook 1994 144,000 5,543 -- 12,500 936
Vice President - 1993 144,000 -- -- 18,000 936
Human and Financial 1992 144,000 -- -- 15,000 288
Resources
</TABLE>
_____________
(1) Country club dues and fees.
(2) Payment of excess life insurance premium.

The following tables present information concerning options to acquire
Common Stock of the Company granted to the Chief Executive Officer and the
four next most highly compensated executive officers of the Company and
exercises of options by such persons during the fiscal year ended December
31, 1994.

OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
Individual Grants
Potential
Number of % of Total Realizable Value at
Securities Options Assumed Annual
Underlying Granted to Rates of Stock Price
Options Employees Exercise Appreciation
Granted in Fiscal or Base Expiration for Option Term
Name (shares) Year Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
John M. Franck . . . . . 30,000 7.5% $6.00 05/19/99 $49,731 $109,892
Charles W. Davies, Jr. . 30,000 7.5 6.00 05/19/99 49,731 109,892
B. Alvin Ratliff . . . . 10,000 2.5 6.00 05/19/99 16,577 36,631
John J. Smith . . . . . . 10,000 2.5 6.00 05/19/99 16,577 36,631
Don P. Shook . . . . . . 12,500 3.1 6.00 05/19/99 20,721 45,788
</TABLE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUE
<TABLE>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at FY-End In-the-Money Options at
Shares Acquired Value (shares) FY-End
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
John M. Franck . . . . . -- -- 45,000 -- -- --
Charles W. Davies, Jr. . -- -- 95,000 150,000 -- --
B. Alvin Ratliff . . . . -- -- 48,000 -- -- --
John J. Smith . . . . . . -- -- 33,000 -- -- --
Don P. Shook . . . . . . -- -- 45,500 -- -- --
</TABLE>

Employment Contracts and Employment Continuity Agreements

The Company has entered into employment continuity agreements with John M.
Franck, Charles W. Davies, Jr., B. Alvin Ratliff, John J. Smith, and Don P.
Shook, which provide for their continued employment in the event of a
change in control of the Company and the payment of compensation and
benefits if their employment is terminated following a change in control.
The Board of Directors believes that these agreements will enable key
employees to conduct the Company's business with less concern for personal
economic risk when faced with a possible change in control. The Board
believes the agreements also should enhance the Company's ability to
attract new key executives as needed.

The agreements define "change in control" as occurring when a person
becomes the owner of 20% or more of the Company's voting securities or when
there is a change in a majority of the members of the Board of Directors,
direct or indirect, as a result of a cash tender or exchange offer, a
merger or other business combination, a sale of assets, a contested
election of directors or a combination of such transactions. Upon a change
in control, the Company agrees to continue the employee's employment with
responsibilities, compensation and benefits identical to or greater than
those prior to the change in control until the earlier of the third
anniversary following the change in control or the employee's normal
retirement date. If employment is terminated without cause by the Company
during this period, or if the employee voluntarily terminates employment
within six months after receiving lesser responsibilities, compensation or
benefits or after being relocated without his consent, and the employee has
made an offer to work that has been rejected by the Company, the Company
must pay the employee compensation as follows: (i) three times the
employee's annual base salary as of his termination date, (ii) three times
the employee's average incentive bonus payable for the two fiscal years
prior to the termination date, (iii) cash or property due as a result of
exercise of stock options, and (iv) amounts the employee is entitled to
receive under the Company's tax-qualified benefit plans and, at the
employee's expense, health care coverage under welfare plans. This
compensation will be reduced, if necessary, to assure that any payments
would not be "excess parachute payments" under the Internal Revenue Code,
which imposes significant penalties on payments under such severance
agreements which equal or exceed 300% of an employee's average annual
compensation during the five most recent taxable years ending prior to a
change in control. The Company must pay all legal fees and expenses
incurred by the employee in seeking to obtain these benefits. All
agreements continue in effect from year to year unless the Company notifies
the employee before an anniversary date that the agreement will terminate.
The Company has entered into similar arrangements with other members of
management.

Retirement Plan

The Company maintains for the benefit of its eligible employees a defined
benefit pension plan qualified under section 401(a) of the Internal Revenue
Code. The following table illustrates annual retirement benefits payable
under the plan at the indicated final average compensation and credited
service levels, assuming retirement at age 65 in 1995.

<TABLE>

Annual retirement benefits payable for continuous service of
Final Average Compensation 10 years 20 years 30 years 40 years
<S> <C> <C> <C> <C>
$100,000 $10,380 $20,760 $31,140 $36,140
150,000 16,380 32,760 49,140 56,640
200,000 22,380 44,760 67,140 77,140
250,000 28,380 56,760 85,140 97,640
300,000 34,380 68,760 103,140 118,140
</TABLE>

Benefits are paid to plan participants based on their final average
compensation (as limited according to federal tax laws), years of credited
service with the Company, and the amount of covered compensation (as
determined by Social Security). Benefits under the Retirement Plan are not
subject to any deduction for Social Security or other offset amounts.
Under current federal tax law, in 1995 compensation in excess of $150,000
may not be taken into account for purposes of accruing benefits under the
Retirement Plan.

Generally, on the occurrence of a "change in control," all plan
participants will immediately become fully vested (regardless of their
credited service) in any accrued benefits under the plan. All assets of
the plan, including any assets in excess of the present value of the plan's
liabilities, will be allocated among the plan participants as additional
nonforfeitable benefits. This plan defines a "change in control" as
occurring when a person becomes the owner of more than 20% of the Company's
voting securities or when there is a change in the majority of the Board of
Directors, direct or indirect, as a result of a cash tender offer or
exchange offer, a merger other than a business combination, a sale of
assets, a contested election of directors or a combination of such
transactions.

The number of credited years of service as of December 31, 1994 for each
person named in the Summary Compensation Table are as follows: John M.
Franck -- 18 years, Charles W. Davies, Jr. -- 18 years, B. Alvin Ratliff
26 years, John J. Smith -- 10 years and Don P. Shook -- 19 years.

The Company maintains a supplemental benefit plan to provide key management
personnel who have satisfied the eligibility requirements with supplemental
retirement benefits, including a retirement benefit which, when aggregated
with the benefits available under the retirement plan, is equivalent to 50%
of their final average earnings for 30 years of service. The eligibility
requirements include being 100% vested under the retirement plan. The
majority of this benefit will be funded through the retirement plan, with
the balance being funded by the Company through a supplemental nonqualified
program which is funded through the purchase of life insurance policies on
each covered individual. Benefits under the supplemental benefit plan are
fully vested after five years of service. The estimated annual benefits
under the supplemental benefit plan for each officer named in the Summary
Compensation Table as of December 31, 1994 are as follows: John M. Franck
-- $41,459, Charles W. Davies, Jr. -- $41,729, B. Alvin Ratliff -- $52,332,
John J. Smith -- $12,605 and Don P. Shook -- $30,408.

Executive Compensation Committee Interlocks and Insider Participation

John M. Franck, Chairman of the Board, is a director of Piedmont Trust Bank
and serves on the Bank Board's Asset/Liability Management, Audit/Code of
Conduct, and Corporate Benefit and Compensation committees. Irving M.
Groves, Jr., a director of Tultex, was President, Chief Executive Officer
and Chairman of the Board of Piedmont BankGroup, Incorporated until he
retired from these positions in March 1994.

Certain Relationships and Related Transactions

Frith Construction Company, Inc., of which J. Burness Frith, a director of the
Company, was Honorary Chairman, a director and a principal stockholder until
September 1994, performed construction work for the Company during fiscal 1994,
1993 and 1992. The aggregate amount paid to Frith Construction Company, Inc.
by the Company for such construction work (at cost plus a fixed percentage of
cost) during fiscal 1994, 1993 and 1992 was $131,749, $427,263 and $469,352,
respectively.

During fiscal 1994, Piedmont Trust Bank performed routine banking services for
the Company. John M. Franck and Richard M. Simmons, Jr. are two of the 13
current members of the Board of Directors of Piedmont. Piedmont Trust Bank is
a subsidiary of Piedmont BankGroup Incorporated. Mr. Simmons is one of the 12
current members of the Board of Directors of Piedmont BankGroup Incorporated.

Multitrade Group, Inc., of which Mr. Frith and Mr. Groves, are shareholders
and of which Mr. Groves is a director, provided the Company with steam
energy in fiscal 1994, 1993 and 1992 for which it was paid $4,039,895,
$3,989,117 and $4,299,061, respectively.

Virginia Carolina Freight Lines, Inc., of which Mr. Simmons was a principal
shareholder and Chairman of the Board, provided trucking services to the
Company in fiscal 1992 for which it was paid $114,946.

The Company believes that the terms of the transactions described above are
comparable to terms available for similar transactions with entities
unaffiliated with its officers and directors.

Lathan M. Ewers, Jr. is a partner with the law firm of Hunton & Williams,
Richmond, Virginia, counsel to the Company.

Principal Shareholders and Security Ownership of Management

As of December 31, 1994, the Company had outstanding 29,806,793 shares of
Common Stock, par value $1.00 per share ("Common Stock"), 1,975 shares of
5% Cumulative Preferred Stock, par value $100 per share, and 150,000 shares
of Cumulative Convertible Preferred Stock, $7.50 Series B, no par value
("Series B Preferred Stock"). The Common Stock and the Series B Preferred
Stock have one vote per share on all matters.

The table below presents certain information as of December 31, 1994
regarding beneficial ownership of Common Stock by (i) each of the named
executive officers, (ii) each director, (iii) all directors and executive
officers as a group and (iv) certain 5% holders of the Company's Common
Stock. Except as set forth in the table, no person or group is known by
the Company to own more than 5% of the Common Stock. The Series B
Preferred Stock is owned by Simon Trust Partnership No. 3 (25%), Herbert
Simon Trust No. 3 (25%) and LG Sale Corporation, Inc. (50%)
<TABLE>
Sole Voting Aggregate
and Investment Percentage
Name Power(1) Other(2) Owned
<S> <C> <C> <C>
Charles W. Davies, Jr. 131,284 142 *
Lathan M. Ewers, Jr. 5,025 2,400 *
John M. Franck 767,547 120,233 2.97
William F. Franck 922,902 175,231 3.68
J. Burness Frith 380,000 1,200 1.28
Irving M. Groves, Jr. 68,766 19,618 *
H. Richard Hunnicutt, Jr. 35,000 *
Bruce M. Jacobson(3) 2,000 *
Richard M. Simmons, Jr. 176,121 615 *
John M. Tully 243,524 81,696 1.09
B. Alvin Ratliff 74,267 *
John J. Smith 43,620 47 *
Don P. Shook 76,471 18,200 *
All executive officers and directors as a group
(18 persons including those named above) 3,121,425 980,107 13.61
Sound Shore Management, Inc. 1,772,600(4) -- 5.95(4)
8 Sound Shore Drive
Greenwich, Connecticut
</TABLE>
_________________________
* Less than 1%

(1) Includes shares that may be acquired by certain of the Company's
officers within 60 days under the Company's stock option plans.
(2) Includes shares (a) owned by or with certain relatives; (b) held in
various fiduciary capacities; and (c) held by certain corporations.
(3) Mr. Jacobson is the designee of Simon Trust Partnership No. 3, Herbert
Simon Trust No. 3 and LG Sale Corporation, Inc., which own 37,500
shares, 37,500 shares and 75,000 shares, respectively, of the Series B
Preferred Stock, which are convertible into 1,496,260 shares of Common
Stock. Mr. Jacobson does have voting or investment power with respect
to these shares and disclaims beneficial ownership of them.
(4) As reported in Schedule 13G filed by Sound Shore Management, Inc.
dated December 31, 1993.

Description of the Notes

The Notes are to be issued under an Indenture, to be dated as of _______,
1995 (the "Indenture"), among the Company, the Guarantors and First Union
National Bank of Virginia, as Trustee (the "Trustee"). The Indenture is
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The statements under this caption relating to the
Notes, the Guarantees and the Indenture are summaries and do not purport to
be complete, and where reference is made to particular provisions of the
Indenture, such provisions, including the definitions of certain terms, are
incorporated by reference as a part of such summaries or terms, which are
qualified in their entirety by such reference. A copy of the proposed form
of Indenture has been filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part.

General

The Notes will be general unsecured obligations of the Company, will be
limited to $115 million aggregate principal amount and will rank pari passu
in right of payment with all other indebtedness of the Company that is not,
by its terms, expressly subordinated in right of payment to the Notes. The
Notes will be guaranteed on a joint and several basis by each of the
Guarantors pursuant to the Guarantees described below. The Guarantees will
be general unsecured obligations of the Guarantors and will rank pari passu
in right of payment with all other indebtedness of the Guarantors that is
not, by its terms, expressly subordinated in right of payment to the
Guarantees. At December 31, 1994, as adjusted to give effect to the
transactions described under "Use of Proceeds and Refinancing," the total
indebtedness of the Company, other than the Notes, would have been
approximately $222.6 million, none of which would have been subordinated to
the Notes. Secured creditors of the Company or any Guarantor will have a
claim on the assets which secure the obligations of the Company or such
Guarantor, as the case may be, prior to claims of holders of the Notes
against those assets. At December 31, 1994, as adjusted to give effect to
the transactions described under "Use of Proceeds and Refinancing," the
Company and the Guarantors had no secured indebtedness.

The Notes will mature on ________, 2005 and will bear interest at the rate
per annum shown on the front cover of this Prospectus from ________, 1995
or from the most recent interest payment date to which interest has been
paid or provided for. Interest will be payable semi-annually on June 15 and
December 15 of each year, commencing June 15, 1995, to the Person in whose
name a Note is registered at the close of business on the preceding June 1
or December 1 (each, a "Record Date"), as the case may be. Interest on the
Notes will be computed on the basis of a 360-day year of twelve 30-day
months. Holders must surrender the Notes to the paying agent for the Notes
to collect principal payments. The Company will pay principal and interest
by check and will mail interest checks to a Holder's registered address.

The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. No service
charge will be made for any registration of transfer or exchange of Notes,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

Initially, the Trustee will act as paying agent and registrar for the
Notes. The Notes may be presented for Registration of transfer and
exchange at the offices of the registrar for the Notes.

Redemption

The Notes will be subject to redemption, at the option of the Company, in
whole or in part, at any time on or after ____________, 2000 and prior to
maturity, upon not less than 30 nor more than 60 days' notice mailed to
each Holder of Notes to be redeemed at his address appearing in the
register for the Notes, in amounts of $1,000 or an integral multiple of
$1,000, at the following redemption prices (expressed as percentages of
principal amount) plus accrued interest to but excluding the date fixed for
redemption (subject to the right of Holders of record on the relevant
Record Date to receive interest due on an interest payment date that is on
or prior to the date fixed for redemption), if redeemed during the 12-month
period beginning ______________ of the years indicated:

Year Redemption Price

. . . . . . . %
. . . . . . . %
. . . . . . . %

If less than all the Notes are to be redeemed, the Trustee shall select, in
such manner as it shall deem fair and appropriate, the particular Notes to
be redeemed or any portion thereof that is an integral multiple of $1,000.

In addition, prior to _______, 1998, the Company may redeem up to
approximately 35% of the principal amount of the Notes with the cash
proceeds received by the Company from a public offering of capital stock of
the Company (other than Disqualified Stock), at a redemption price
(expressed as a percentage of the principal amount) of ___% of the
principal amount thereof, plus accrued and unpaid interest to the date
fixed for redemption; provided, however, that at least $75 million in
aggregate principal amount of the Notes remains outstanding immediately
after any such redemption.

The Notes will not have the benefit of any sinking fund.

The Guarantees

Each of the Guarantors will unconditionally guarantee on a joint and
several basis all of the Company's obligations under the Notes, including
its obligations to pay principal, premium, if any, and interest with
respect to the Notes. The obligations of each Guarantor are limited to the
maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of
the obligations of such other Guarantor under its Guarantee or pursuant to
its contribution obligations under the Indenture, will result in the
obligations of such Guarantor under the Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
Each Guarantor that makes a payment or distribution under a Guarantee shall
be entitled to a contribution from each other Guarantor in an amount pro
rata, based on the net assets of each Guarantor determined in accordance
with GAAP. Except as provided in "Certain Covenants" below, the Company is
not restricted from selling or otherwise disposing of any of the
Guarantors.

The Indenture will provide that each Subsidiary of the Company in existence
on the Issue Date and each Material Subsidiary whether formed or acquired
after the Issue Date will be a Guarantor, provided that, any Material
Subsidiary acquired after the Issue Date which is prohibited from entering
into a Guarantee pursuant to restrictions contained in any debt instrument
or other agreement in existence at the time such Material Subsidiary was so
acquired and not entered into in anticipation or contemplation of such
acquisition shall not be required to become a Guarantor so long as any such
restriction is in existence and to the extent of any such restriction.

The Indenture provides that if the Notes are defeased in accordance with
the terms of the Indenture, or if all or substantially all of the assets of
any Guarantor or all of the capital stock of any Guarantor is sold
(including by issuance or otherwise) by the Company or any of its
Subsidiaries in a transaction constituting an Asset Disposition, and if (x)
the Net Available Proceeds from such Asset Disposition are used in
accordance with the covenant "Limitation on Certain Asset Dispositions" or
(y) the Company delivers to the Trustee an Officers' Certificate to the
effect that the Net Available Proceeds from such Asset Disposition shall be
used in accordance with the covenant " Limitation on Certain Asset
Dispositions" and within the time limits specified by such covenant, then
such Guarantor (in the event of a sale or other disposition of all of the
capital stock of such Guarantor) or the corporation acquiring such assets
(in the event of a sale or other disposition of all or substantially all of
the assets of such Guarantor) shall be released and discharged of its
Guarantee obligations.

Separate financial statements of the Guarantors are not included herein
because such Guarantors are jointly and severally liable with respect to
the Company's obligations pursuant to the Notes, and the aggregate net
assets, earnings and equity of the Guarantors and the Company are
substantially equivalent to the net assets, earnings and equity of the
Company on a consolidated basis.

Covenants

The Indenture contains, among others, the following covenants:

Limitation on Indebtedness

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, Incur any Indebtedness except, subject to the
provisions set forth below under " Additional Limitation on Subsidiary
Indebtedness": (i) Indebtedness of the Company or its Subsidiaries, if
immediately after giving effect to the Incurrence of such Indebtedness and
the receipt and application of the net proceeds thereof, the Consolidated
Cash Flow Ratio of the Company for the four full fiscal quarters for which
quarterly or annual financial statements are available next preceding the
Incurrence of such Indebtedness, calculated on a pro forma basis as if such
Indebtedness had been incurred at the beginning of such four full fiscal
quarters, would be greater than 2.00 to 1 if such Indebtedness is Incurred
on or before December 31, 1997 and 2.25 to 1 if such Indebtedness is
Incurred after December 31, 1997; (ii) Indebtedness of the Company, and
guarantees of such Indebtedness by any Guarantor, Incurred under the Senior
Credit Facility in an aggregate principal amount at any one time not to
exceed the greater of (x) $225 million or (y) the sum of (A) 80% of
Eligible Accounts Receivable and (B) 65% of Eligible Inventory; (iii)
Indebtedness owed by the Company to any Wholly Owned Subsidiary of the
Company (provided that such Indebtedness is at all times held by a Person
which is a Wholly Owned Subsidiary of the Company) or Indebtedness owed by
a Subsidiary of the Company to the Company or a Wholly Owned Subsidiary of
the Company (provided that such Indebtedness is at all times held by the
Company or a Person which is a Wholly Owned Subsidiary of the Company);
provided, however, upon either (x) the transfer or other disposition by
such Wholly Owned Subsidiary or the Company of any Indebtedness so
permitted under this clause (iii) to a Person other than the Company or
another Wholly Owned Subsidiary of the Company or (y) the issuance (other
than directors' qualifying shares), sale, transfer or other disposition of
shares of Capital Stock or other ownership interests (including by
consolidation or merger) of such Wholly Owned Subsidiary to a Person other
than the Company or another such Wholly Owned Subsidiary of the Company,
the provisions of this clause (iii) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been Incurred at
the time of any such issuance, sale, transfer or other disposition, as the
case may be; (iv) Indebtedness incurred by a Person prior to the time (x)
such Person becomes a Subsidiary of the Company, (y) such Person merges
into or consolidates with a Subsidiary of the Company or (z) another
Subsidiary of the Company merges into or consolidates with such Person (in
a transaction in which such Person becomes a Subsidiary of the Company),
which Indebtedness was not Incurred in anticipation or contemplation of
such transaction and was outstanding prior to such transaction; (v)
Indebtedness of the Company or its Subsidiaries under any interest rate or
currency swap agreement to the extent entered into to hedge any other
Indebtedness permitted under the Indenture; (vi) Capital Lease Obligations
of the Company or its Subsidiaries Incurred with respect to a Sale and
Leaseback Transaction which was made in accordance with the provisions of
the Indenture described under " Limitation on Sale and Leaseback
Transactions"; (vii) Indebtedness Incurred to renew, extend, refinance or
refund (collectively for purposes of this clause (vii) to "refund") any
Indebtedness outstanding on the Issue Date and Indebtedness Incurred under
the prior clause (i) or the Notes; provided, however, that (x) such
Indebtedness does not exceed the principal amount of Indebtedness so
refunded plus the amount of any premium required to be paid in connection
with such refunding pursuant to the terms of the Indebtedness refunded or
the amount of any premium reasonably determined by the Company as necessary
to accomplish such refunding by means of a tender offer, exchange offer, or
privately negotiated repurchase, plus the expenses of the Company or such
Subsidiary Incurred in connection therewith and (y)(A) in the case of any
refunding of Indebtedness which is pari passu with the Notes, such
refunding Indebtedness is made pari passu with or subordinate in right of
payment to the Notes, and, in the case of any refunding of Indebtedness
which is subordinate in right of payment to the Notes, such refunding
Indebtedness is subordinate in right of payment to the Notes on terms no
less favorable to the Holders then those contained in the Indebtedness
being refunded and (B) in either case, the refunding Indebtedness by its
terms, or by the terms of any agreement or instrument pursuant to which
such Indebtedness is issued, does not have an Average Life that is less
than the remaining Average Life of the Indebtedness being refunded and does
not permit redemption or other retirement (including pursuant to an offer
to purchase made by the Company or a Subsidiary of the Company) of such
Indebtedness at the option of the holder thereof prior to the final stated
maturity of the Indebtedness being refunded, other than a redemption or
other retirement at the option of the holder of such Indebtedness
(including pursuant to an offer to purchase made by the Company or a
Subsidiary of the Company) which is conditioned upon a change of control of
the Company pursuant to provisions substantially similar to those contained
in the Indenture described under " Change of Control" below; (viii)
Indebtedness of the Company or its Subsidiaries Incurred for the purpose of
financing all or any part of the purchase price or the cost of construction
or improvement of any property provided that the aggregate principal amount
of such Indebtedness does not exceed 100% of such purchase price or cost
and any Lien associated with such Indebtedness complies with clause (iv) of
the "Limitation on Liens" covenant; (ix) Indebtedness of the Company or its
Subsidiaries, not otherwise permitted to be Incurred pursuant to clauses
(i) through (viii) above, which, together with any other outstanding
Indebtedness Incurred pursuant to this clause (ix), has an aggregate
principal amount not in excess of $10 million at any time outstanding; and
(x) Indebtedness of the Company and its Subsidiaries under the Notes and
the Guarantees.

Additional Limitation on Subsidiary Indebtedness

The Indenture will provide that, notwithstanding the provisions of the
Indenture described under " Limitation on Indebtedness," the Company will
not permit any of its Subsidiaries to Incur any Indebtedness (other than
the guarantee of Indebtedness under the Senior Credit Facility) in an
amount which, when aggregated with (A) all Indebtedness (other than any
Indebtedness included in the following clause (B) or (C)) secured by Liens
permitted by the provisions of the Indenture described in clause (viii)
under " Limitation on Liens," (B) all Capital Lease Obligations of the
Company and its Subsidiaries Incurred in compliance with the provisions of
the Indenture described in " Limitation on Indebtedness" and this
"Additional Limitation on Subsidiary Indebtedness" and then outstanding,
and (C) all other Indebtedness of Subsidiaries of the Company (other than
the guarantee of Indebtedness under the Senior Credit Facility) Incurred in
compliance with " Limitation on Indebtedness" and this " Additional
Limitation on Subsidiary Indebtedness" and then outstanding would exceed
10% of Consolidated Net Tangible Assets.

Limitation on Restricted Payments

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, (i) directly or indirectly, declare or pay any
dividend, or make any distribution of any kind or character (whether in
cash, property or securities), in respect of any class of its Capital Stock
or to the holders thereof, excluding any (x) dividends or distributions
payable solely in shares of its Capital Stock (other than Disqualified
Stock) or in options, warrants or other rights to acquire its Capital Stock
(other than Disqualified Stock), or (y) in the case of any Subsidiary of
the Company, dividends or distributions payable to the Company or a
Subsidiary of the Company, (ii) directly or indirectly, purchase, redeem,
or otherwise acquire or retire for value shares of Capital Stock of the
Company or any of its Subsidiaries, any options, warrants or rights to
purchase or acquire shares of Capital Stock of the Company or any of its
Subsidiaries or any securities convertible or exchangeable into shares of
Capital Stock of the Company or any of its Subsidiaries, excluding any such
shares of Capital Stock, options, warrants, rights or securities which are
owned by the Company or a Subsidiary of the Company, (iii) make any
Investment in (other than a Permitted Investment), or payment on a
guarantee of any obligation of, any Person, other than the Company or a
Wholly Owned Subsidiary of the Company, or (iv) redeem, defease,
repurchase, retire or otherwise acquire or retire for value, prior to any
scheduled maturity, repayment or sinking fund payment, Indebtedness which
is subordinate in right of payment to the Notes (each of clauses (i)
through (iv) being a "Restricted Payment") if at the time thereof: (1) an
Event of Default, or an event that with the passing of time or giving of
notice, or both, would constitute an Event of Default, shall have occurred
and is continuing, or (2) upon giving effect to such Restricted Payment,
the Company could not incur at least $1.00 of additional Indebtedness
pursuant to the terms of the Indenture described in clause (i) of "
Limitation on Indebtedness" above, or (3) upon giving effect to such
Restricted Payment, the aggregate of all Restricted Payments from the Issue
Date exceeds the sum of: (a) 50% of cumulative Consolidated Net Income of
the Company (or, in the case Consolidated Net Income of the Company shall
be negative, less 100% of such deficit) since the end of the fiscal quarter
in which the Issue Date occurs through the last day of the fiscal quarter
for which financial statements are available; plus (b) 100% of the
aggregate net proceeds received after the Issue Date, including the fair
market value of property other than cash (determined in good faith by the
Board of Directors of the Company as evidenced by a resolution of such
Board of Directors filed with the Trustee), from the issuance of Capital
Stock (other than Disqualified Stock) of the Company and warrants, rights
or options on Capital Stock (other than Disqualified Stock) of the Company
and the principal amount of Indebtedness that has been converted into or
exchanged for Capital Stock (other than Disqualified Stock) of the Company
which Indebtedness was incurred after the Issue Date; plus (c) in the case
of the disposition or repayment of any Investment constituting a Restricted
Payment made after the Issue Date (other than any Investment made pursuant
to clause (vi) of the following paragraph), an amount equal to the lesser
of the return of capital with respect to such Investment and the cost of
such Investment, in either case, less the cost of the disposition of such
Investment, provided that at the time any such Investment is made the
Company delivers to the Trustee a resolution of its Board of Directors to
the effect that, for purposes of this "Limitation on Restricted Payments"
covenant, such Investment constitutes a Restricted Payment made after the
Issue Date (other than an Investment made pursuant to clause (vi) of the
following paragraph); plus (d) $4 million.

The foregoing provision will not be violated by (i) reason of the payment
of any dividend on Capital Stock of any class within 60 days after the
declaration thereof if, on the date when the dividend was declared, the
Company or such Subsidiary, as the case may be, could have paid such
dividend in accordance with the provisions of the Indenture, (ii) the
renewal, extension, refunding or refinancing of any Indebtedness otherwise
permitted pursuant to the terms of the Indenture described in clause (vii)
of " Limitation on Indebtedness," (iii) the exchange or conversion of any
Indebtedness of the Company or any Subsidiary of the Company for or into
Capital Stock of the Company (other than Disqualified Stock of the
Company), (iv) any payments, loans or other advances made pursuant to any
employee benefit plans (including plans for the benefit of directors) or
employment agreements or other compensation arrangements, in each case as
approved by the Board of Directors of the Company in its good faith
judgment evidenced by a resolution of such Board of Directors filed with
the Trustee, (v) the redemption of the Company's rights issued pursuant to
the Rights Agreement dated as of March 20, 1990, between the Company and
Sovran Bank, N.A., as Rights Agent, as in existence on the Issue Date or
(vi) so long as no Default or Event of Default has occurred and is
continuing, additional Investments constituting Restricted Payments in an
aggregate outstanding amount (valued at the cost thereof) not to exceed at
any time 5% of Consolidated Net Tangible Assets. Each Restricted Payment
described in clauses (i), (iv) and (v) of the previous sentence shall be
taken into account for purposes of computing the aggregate amount of all
Restricted Payments pursuant to clause (3) above.

Limitations Concerning Distributions and Transfers
by Subsidiaries

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist any consensual encumbrance or restriction on the
ability of any Subsidiary of the Company (i) to pay, directly or
indirectly, dividends or make any other distributions in respect of its
Capital Stock or pay any Indebtedness or other obligation owed to the
Company or any Subsidiary of the Company, (ii) to make loans or advances to
the Company or any Subsidiary of the Company or (iii) to transfer any of
its property or assets to the Company or any Subsidiary of the Company
except for such encumbrances or restrictions existing under or by reason of
(a) any agreement in effect on the Issue Date, (b) an agreement relating to
any Indebtedness Incurred by such Subsidiary prior to the date on which
such Subsidiary was acquired by the Company and outstanding on such date
and not Incurred in anticipation or contemplation of becoming a Subsidiary
and provided such encumbrance or restriction shall not apply to any assets
of the Company or its Subsidiaries other than such Subsidiary, (c)
customary provisions contained in an agreement which has been entered into
for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, or (d) an agreement effecting a
renewal, exchange, refunding or extension of Indebtedness incurred pursuant
to an agreement referred to in clause (a) or (b) above; provided, however,
that the provisions contained in such renewal, exchange, refunding or
extension agreement relating to such encumbrance or restriction are no more
restrictive in any material respect than the provisions contained in the
agreement the subject thereof in the reasonable judgment of the Board of
Directors of the Company as evidenced by a resolution of such Board of
Directors filed with the Trustee.

Limitation on Liens

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, Incur any Lien on or with respect to any
property or assets of the Company or any Subsidiary of the Company now
owned or hereafter acquired to secure Indebtedness without making, or
causing such Subsidiary to make, effective provision for securing the Notes
(and, if the Company shall so determine, any other Indebtedness of the
Company or such Subsidiary, including Indebtedness which is subordinate in
right of payment to the Notes, provided, that Liens securing the Notes and
any Indebtedness pari passu with the Notes are senior to such Liens
securing such subordinated Indebtedness) equally and ratably with such
Indebtedness or, in the event such Indebtedness is subordinate in right of
payment to the Notes, prior to such Indebtedness, as to such property or
assets for so long as such Indebtedness shall be so secured. The foregoing
restrictions shall not apply to (i) Liens in respect of Indebtedness
existing on the Issue Date; (ii) Liens securing only the Notes; (iii) Liens
in favor of the Company; (iv) Liens to secure Indebtedness Incurred for the
purpose of financing all or any part of the purchase price or the cost of
construction or improvement of the property subject to such Liens; provided
that (a) the aggregate principal amount of any Indebtedness secured by such
a Lien does not exceed 100% of such purchase price or cost, (b) such Lien
does not extend to or cover any other property other than such item of
property and any improvements on such item, (c) the Indebtedness secured by
such Lien is incurred by the Company or its Subsidiary within 180 days of
the acquisition, construction or improvement of such property and (d) the
incurrence of such Indebtedness is permitted by the provisions of the
Indenture described under " Limitation on Indebtedness"; (v) Liens on
property existing immediately prior to the time of acquisition thereof (and
not created in anticipation or contemplation of the financing of such
acquisition); (vi) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any
Subsidiary of the Company (and not created in anticipation or contemplation
thereof); (vii) Liens on property of the Company or any Subsidiary of the
Company in favor of the United States of America, any state thereof, or any
instrumentality of either to secure certain payments pursuant to any
contract or statute; (viii) Liens securing an aggregate principal amount of
Indebtedness at any one time outstanding which, when taken together with
(A) all Capital Lease Obligations of the Company and its Subsidiaries
Incurred in compliance with "Limitation on Indebtedness" and " Additional
Limitation on Subsidiary Indebtedness" and then outstanding and (B) all
other Indebtedness of Subsidiaries of the Company Incurred in compliance
with the provisions of the Indenture described under " Limitation on
Indebtedness" and " Additional Limitation on Subsidiary Indebtedness" and
then outstanding would not exceed 10% of Consolidated Net Tangible Assets;
and (ix) Liens to secure Indebtedness Incurred to extend, renew, refinance
or refund (or successive extensions, renewals, refinancings or refundings),
in whole or in part, any Indebtedness secured by Liens referred to in the
foregoing clause (i) so long as such Lien does not extend to any other
property and the principal amount of Indebtedness so secured is not
increased except for the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Indebtedness
refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing by means of a tender
offer, exchange offer or privately negotiated repurchase, plus the expenses
of the Company or such Subsidiary incurred in connection with such
refinancing.

Limitation on Certain Asset Dispositions

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, make one or more Asset Dispositions for
aggregate consideration of, or in respect of assets having an aggregate
fair market value of, $5 million or more in any 12-month period, unless:
(i) the Company or the Subsidiary, as the case may be, receives
consideration for such Asset Disposition at least equal to the fair market
value of the assets sold or disposed of as determined by the Board of
Directors of the Company in good faith and evidenced by a resolution of
such Board of Directors filed with the Trustee; (ii) not less than 75% of
the consideration for the disposition consists of cash or readily
marketable cash equivalents or the assumption of Indebtedness of the
Company or such Subsidiary or other obligations relating to such assets
(and release of the Company or such Subsidiary from all liability on the
Indebtedness or other obligations assumed); and (iii) all Net Available
Proceeds, less any amounts invested within 360 days of such Asset
Disposition in assets related to the business of the Company (including the
Capital Stock of another Person (other than the Company or any Person that
is a Subsidiary of the Company immediately prior to such investment)
provided that immediately after giving effect to any such investment (and
not prior thereto) such Person shall be a Subsidiary of the Company), are
applied either (i) to an Offer to Purchase outstanding Notes at 100% of
their principal amount or (ii) to the permanent reduction and repayment of
Indebtedness then outstanding under the Senior Credit Facility, to the
repayment of other Indebtedness that is not subordinated in right of
payment to the Notes and to the purchase of Notes pursuant to an Offer to
Purchase outstanding Notes at 100% of their principal amount plus accrued
interest to the date of purchase, provided, that (x) any Net Available
Proceeds not applied to the repayment of Indebtedness under the Senior
Credit Facility or other Indebtedness not subordinated in right of payment
to the Notes in accordance with clause (ii) of this sentence shall be added
to the Net Available Proceeds to be used for an Offer to Purchase
outstanding Notes and (y) the Company may defer making any Offer to
Purchase outstanding Notes until there are aggregate unutilized Net
Available Proceeds equal to or in excess of $5 million resulting from one
or more Asset Dispositions (at which time, the entire unutilized Net
Available Proceeds, and not just the amount in excess of $5 million, shall
be applied as required pursuant to this paragraph). Any repayment of
Indebtedness in accordance with the previous sentence shall be made pro
rata, based on the principal amount (or, in the case of Indebtedness having
an amortized discount, the accredited value thereof) of such Indebtedness
outstanding. Any remaining Net Available Proceeds following the completion
of the Offer to Purchase may be used by the Company for any other purpose
(subject to the other provisions of the Indenture) and the amount of Net
Available Proceeds then required to be otherwise applied in accordance with
this covenant shall be reset to zero, subject to any subsequent Asset
Disposition. These provisions will not apply to a transaction consummated
in compliance with the provisions of the Indenture described under "
Mergers, Consolidations and Certain Sales and Purchases of Assets" and "
Limitation on Sale and Leaseback Transactions" below.

In the event that the Company makes an Offer to Purchase the Notes, the
Company intends to comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act and any violation of the provisions of
the Indenture relating to such Offer to Purchase occurring as a result of
such compliance shall not be deemed an Event of Default or an event that
with the passing of time or giving of notice, or both, would constitute an
Event of Default.

Limitation on Sale and Leaseback Transactions

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, enter into any Sale and Leaseback Transaction
(except for a period not exceeding 30 months) unless the Company or such
Subsidiary applies the net proceeds of the property sold pursuant to the
Sale and Leaseback Transaction as if such net proceeds were Net Available
Proceeds subject to disposition as provided above under " Limitation on
Certain Asset Dispositions."

Limitation on Issuance and Sale of Capital
Stock of Subsidiaries

The Company (a) may not, and may not permit any Subsidiary of the Company
to, transfer, convey, sell or otherwise dispose of any shares of Capital
Stock of such Subsidiary or any other Subsidiary (other than to the Company
or a Wholly Owned Subsidiary of the Company) except that the Company and
any Subsidiary may, in any single transaction, sell all, but not less than
all, of the issued and outstanding Capital Stock of any Subsidiary to any
Person, subject to the conditions described above under " Limitation on
Certain Asset Dispositions" and (b) may not permit any Subsidiary of the
Company to issue shares of its Capital Stock (other than directors'
qualifying shares), or securities convertible into, or warrants, rights or
options to subscribe for or purchase shares of, its Capital Stock to any
Person other than to the Company or a Wholly Owned Subsidiary of the
Company.

Transactions with Affiliates and Related Persons

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to enter into any transaction with an Affiliate or
Related Person of the Company (other than the Company or a Subsidiary of
the Company), including, without limitation, the purchase, sale, lease or
exchange of property, the rendering of any service, or the making of any
guarantee, loan, advance or Investment, either directly or indirectly,
involving aggregate consideration in excess of $500,000 unless (i) a
majority of the disinterested directors of the Board of Directors of the
Company determines, in its good faith judgment evidenced by a resolution of
such Board of Directors filed with the Trustee, that such transaction is in
the best interests of the Company or such Subsidiary, as the case may be;
and (ii) such transaction is, in the opinion of a majority of the
disinterested directors of the Board of Directors of the Company evidenced
by a resolution of such Board of Directors filed with the Trustee, on terms
no less favorable to the Company or such Subsidiary, as the case may be,
than those that could be obtained in a comparable arm's length transaction
with an entity that is not an Affiliate or a Related Person.

Change of Control

Within 30 days following the date of the consummation of a transaction
resulting in a Change of Control, the Company will commence an Offer to
Purchase all outstanding Notes at a purchase price equal to 101% of their
principal amount plus accrued interest to the date of purchase. Such Offer
to Purchase will be consummated not earlier than 30 days and not later than
60 days after the commencement thereof. A "Change of Control" will be
deemed to have occurred in the event that (whether or not otherwise
permitted by the Indenture), after the Issue Date (a) any Person or any
Persons acting together that would constitute a group (for purposes of
Section 13(d) of the Exchange Act, or any successor provision thereto) (a
"Group"), together with any Affiliates or Related Persons thereof, shall
beneficially own (as defined in Rule 13d-3 under the Exchange Act, or any
successor provision thereto) at least 40% of the Voting Stock of the
Company; (b) any sale, lease or other transfer (in one transaction or a
series of related transactions) by the Company or any of its Subsidiaries
of all or substantially all of the consolidated assets of the Company to
any Person (other than a Wholly Owned Subsidiary of the Company); (c)
Continuing Directors cease to constitute at least a majority of the Board
of Directors of the Company; or (d) the stockholders of the Company approve
any plan or proposal for the liquidation or dissolution of the Company.

Provision of Financial Information

Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file
with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) or any successor
provision thereto if the Company were so required, such documents to be
filed with the Commission on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so required. The Company shall
also in any event (a) within 15 days of each Required Filing Date
(i) transmit by mail to all Holders, as their names and addresses appear in
the Note Register, without cost to such Holders, and (ii) file with the
Trustee, copies of the annual reports, quarterly reports and other
documents which the Company is required to file with the Commission
pursuant to the preceding sentence, and (b) if, notwithstanding the
preceding sentence, filing such documents by the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request supply copies of such documents to any prospective Holder.

Mergers, Consolidations and Certain
Sales and Purchases of Assets

Neither the Company nor any Subsidiary will consolidate or merge with or
into any Person, and the Company will not, and will not permit any of its
Subsidiaries to, sell, lease, convey or otherwise dispose of all or
substantially all of the Company's consolidated assets (as an entirety or
substantially an entirety in one transaction or a series of related
transactions, including by way of liquidation or dissolution) to, any
Person unless, in each such case: (i) the entity formed by or surviving
any such consolidation or merger (if other than the Company or such
Subsidiary, as the case may be), or to which such sale, lease, conveyance
or other disposition shall have been made (the "Surviving Entity"), is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the Surviving Entity
assumes by supplemental indenture all of the obligations of the Company or
such Subsidiary, as the case may be, on the Notes or such Subsidiary's
Guarantee, as the case may be, and under the Indenture; (iii) immediately
after giving effect to such transaction and the use of any net proceeds
therefrom on a pro forma basis, the Consolidated Net Worth of the Company
or the Surviving Entity (in the case of a transaction involving the
Company), as the case may be, would be at least equal to the Consolidated
Net Worth of the Company immediately prior to such transaction; (iv)
immediately after giving effect to such transaction and the use of any net
proceeds therefrom on a pro forma basis, the Company or the Surviving
Entity (in the case of a transaction involving the Company), as the case
may be, could incur at least $1.00 of Indebtedness pursuant to clause (i)
of the "Limitation on Indebtedness" covenant; (v) immediately before and
after giving effect to such transaction and treating any Indebtedness which
becomes an obligation of the Company or any of its Subsidiaries as a result
of such transaction as having been incurred by the Company or such
Subsidiary, as the case may be, at the time of the transaction, no Event of
Default or event that with the passing of time or the giving of notice, or
both, would constitute an Event of Default shall have occurred and be
continuing; and (vi) if, as a result of any such transaction, property or
assets of the Company or a Subsidiary would become subject to a Lien not
excepted from the provisions of the Indenture described under " Limitation
on Liens" above, the Company, any such Subsidiary or the Surviving Entity,
as the case may be, shall have secured the Notes as required by said
covenant. The provisions of this paragraph shall not apply to any merger
of a Subsidiary of the Company with or into the Company or a Wholly Owned
Subsidiary of the Company or any transaction pursuant to which a
Guarantor's Guarantee is to be released in accordance with the terms of the
Guarantee and the Indenture in connection with any transaction complying
with the provisions of the Indenture described under " Limitation on
Certain Asset Dispositions."

Events of Default

The following will be Events of Default under the Indenture: (a) failure
to pay principal of (or premium, if any, on) any Note when due; (b) failure
to pay any interest on any Note when due, continued for 30 days; (c)
default in the payment of principal of and interest on Notes required to be
purchased pursuant to an Offer to Purchase as described under " Change of
Control" and " Limitation on Certain Asset Dispositions" when due and
payable; (d) failure to perform or comply with the provisions described
under " Mergers, Consolidations and Certain Sales and Purchases of
Assets"; (e) failure to perform any other covenant or agreement of the
Company under the Indenture or the Notes continued for 30 days after
written notice to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of outstanding Notes; (f) default under the
terms of any instrument evidencing or securing Indebtedness for money
borrowed by the Company or any Subsidiary of the Company having an
outstanding principal amount of $5 million or more individually or in the
aggregate which results in the acceleration of the payment of such
Indebtedness or which shall constitute the failure to pay principal when
due at the stated maturity of such Indebtedness; (g) the rendering of a
final judgment or judgments (not subject to appeal) against the Company or
any Subsidiary in an amount of $5 million or more which remains
undischarged or unstayed for a period of 60 days after the date on which
the right to appeal has expired; (h) certain events of bankruptcy,
insolvency or reorganization affecting the Company or any Material
Subsidiary; and (i) the Guarantee of any Guarantor which is a Material
Subsidiary ceases to be in full force and effect (other than in accordance
with the terms of such Guarantee and the Indenture) or is declared null and
void and unenforceable or found to be invalid or any Guarantor which is a
Material Subsidiary denies its liability under its Guarantee (other than by
reason of a release of such Guarantor from its Guarantee in accordance with
the terms of the Indenture and the Guarantee). Subject to the provisions
of the Indenture relating to the duties of the Trustee, in case an Event of
Default (as defined) shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the outstanding Notes will have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee.

If an Event of Default (other than an Event of Default with respect to the
Company described in clause (h)) shall occur and be continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Notes may accelerate the maturity of all Notes; provided,
however, that after such acceleration, but before a judgment or decree
based on acceleration, the Holders of a majority in aggregate principal
amount of outstanding Notes may, under certain circumstances, rescind and
annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided
in the Indenture. If an Event of Default specified in clause (h) above
with respect to the Company occurs, the outstanding Notes will ipso facto
become immediately due and payable without any declaration or other act on
the part of the Trustee or any Holder. For information as to waiver of
defaults, see " Modification and Waiver."

No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing
Event of Default and unless the Holders of at least 25% in aggregate
principal amount of the outstanding Notes shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee, and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the outstanding
Notes a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. However, such limitations do not
apply to a suit instituted by a Holder of a Note for enforcement of payment
of the principal of and premium, if any, or interest on such Note on or
after the respective due dates expressed in such Note.

The Company will be required to furnish to the Trustee annually a statement
as to the performance by it of certain of its obligations under the
Indenture and as to any default in such performance.

Covenant Defeasance

The Indenture will provide that the Company may omit to comply with certain
restrictive covenants, any such omission shall not be deemed to be an Event
of Default under the Indenture and the Notes and the Guarantees will be
released, upon irrevocable deposit with the Trustee, in trust, of money
and/or U.S. government obligations which will provide money in an amount
sufficient in the opinion of a nationally recognized firm of independent
certified public accountants to pay the principal of and premium, if any,
and each installment of interest, if any, on the outstanding Notes. The
obligations under the Indenture other than with respect to such covenants
and the Events of Default (other than the Events of Default relating to
such covenants above) shall remain in full force and effect. Such trust
may only be established if, among other things, (i) the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Notes will not recognize gain or loss for U.S. federal
income tax purposes as a result of such deposit and defeasance and will be
subject to U.S. federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit and
defeasance had not occurred; (ii) no Event of Default or event that, with
the passing of time or the giving of notice, or both, shall constitute an
Event of Default shall have occurred or be continuing; (iii) the Company
has delivered to the Trustee an Opinion of Counsel with respect to certain
bankruptcy matters and to the effect that such deposit shall not cause the
Trustee or the trust so created to be subject to the Investment Company Act
of 1940; and (iv) certain other customary conditions precedent are met.

Governing Law

The Indenture, the Notes and the Guarantees will be governed by the laws of
the State of New York.

Modification and Waiver

Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the outstanding Notes; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Note affected thereby, (a) change the Stated Maturity of the principal of
or any installment of interest on any Note, (b) reduce the principal amount
of (or the premium) or interest on any Note, (c) change the place or
currency of payment of principal of (or premium) or interest on any Note,
(d) impair the right to institute suit for the enforcement of any payment
on or with respect to any Note or any Guarantee, (e) reduce the
above-stated percentage of outstanding Notes necessary to modify or amend
the Indenture, (f) reduce the percentage of aggregate principal amount of
outstanding Notes necessary for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults, (g) modify
any provisions of the Indenture relating to the modification and amendment
of the Indenture or the waiver of past defaults or covenants, except as
otherwise specified, (h) modify the ranking or priority of the Notes or the
Guarantee of any Guarantor which is a Material Subsidiary, (i) release any
Guarantor which is a Material Subsidiary from any of its obligations under
its Guarantee or the Indenture otherwise than in accordance with the terms
of the Indenture, or (j) modify the provisions relating to any Offer to
Purchase of the Notes required under the "Limitation on Certain Asset
Dispositions" or "Change of Control" covenants contained in the Indenture
in a manner materially adverse to the Holders thereof.

The Holders of a majority in aggregate principal amount of the outstanding
Notes, on behalf of all Holders of Notes, may waive compliance by the
Company with certain restrictive provisions of the Indenture. Subject to
certain rights of the Trustee, as provided in the Indenture, the Holders of
a majority in aggregate principal amount of the outstanding Notes, on
behalf of all Holders of Notes, may waive any past default under the
Indenture, except a default in the payment of principal, premium or
interest or a default arising from failure to purchase any Note tendered
pursuant to an Offer to Purchase.

The Trustee

The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set
forth in the Indenture. During the existence of an Event of Default, the
Trustee will exercise such rights and powers vested in it under the
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise under the circumstances in the conduct of
such person's own affairs.

The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the Trustee, should
it become a creditor of the Company, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any
such claim as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company or an Affiliate of the Company;
provided, however, that if it acquires any conflicting interest (as defined
in the Indenture or in the Trust Indenture Act), it must eliminate such
conflict or resign.

Certain Definitions

Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of
all such terms, as well as any other terms used herein for which no
definition is provided.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with any specified Person.

"Asset Disposition" means any sale, transfer or other disposition of (i)
shares of Capital Stock of a Subsidiary of the Company (other than
directors' qualifying shares) or (ii) property or assets of the Company or
any Subsidiary of the Company; provided, however, that an Asset Disposition
shall not include (a) any sale, transfer or other disposition of shares of
Capital Stock, property or assets by a Subsidiary of the Company to the
Company or to another Subsidiary of the Company, (b) any sale, transfer or
other disposition of defaulted receivables for collection or any sale,
transfer or other disposition of property or assets in the ordinary course
of business or (c) any isolated sale, transfer or other disposition that
does not involve aggregate consideration in excess of $250,000
individually.

"Average Life" means, as of the date of determination, with respect to any
Indebtedness for borrowed money or Preferred Stock, the quotient obtained
by dividing (i) the sum of the products of the number of years from the
date of determination to the dates of each successive scheduled principal
or liquidation value payments of such Indebtedness or Preferred Stock,
respectively, and the amount of such principal or liquidation value
payments, by (ii) the sum of all such principal or liquidation value
payments.

"Capital Lease Obligations" of any Person means the obligations to pay rent
or other amounts under a lease of (or other Indebtedness arrangements
conveying the right to use) real or personal property of such Person which
are required to be classified and accounted for as a capital lease or
liability on the face of a balance sheet of such Person in accordance with
GAAP. The amount of such obligations shall be the capitalized amount
thereof in accordance with GAAP and the stated maturity thereof shall be
the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by
the lessee without payment of a penalty.

"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock
of such Person (including any Preferred Stock outstanding on the Issue
Date).

"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or
winding up of such Person, to shares of Capital Stock of any other class of
such Person.

"Consolidated Cash Flow Available for Fixed Charges" of any Person means
for any period the Consolidated Net Income for such period increased by the
sum of (i) Consolidated Interest Expense of such Person for such period,
plus (ii) Consolidated Income Tax Expense of such Person for such period,
plus (iii) the consolidated depreciation and amortization expense included
in the income statement of such Person for such period, plus (iv) other
non-cash charges of such Person for such period deducted from consolidated
revenues in determining Consolidated Net Income for such period, minus (v)
non-cash items (including the partial or entire reversal of reserves taken
in prior periods) of such Person for such period increasing consolidated
revenues in determining Consolidated Net Income for such period.

"Consolidated Cash Flow Ratio" of any Person means for any period the ratio of
(i) Consolidated Cash Flow Available for Fixed Charges of such Person for
such period to (ii) the sum of (A) Consolidated Interest Expense of such
Person for such period, plus (B) the annual interest expense with
respect to any Indebtedness proposed to be Incurred by such Person
or its Subsidiaries, minus (C) Consolidated Interest Expense of such Person to
the extent included in clause (ii)(A) with respect to any Indebtedness that
will no longer be outstanding as a result of the incurrence of the
Indebtedness proposed to be Incurred, plus (D) the annual interest expense
with respect to any other Indebtedness Incurred by such Person or its
Subsidiaries since the end of such period to the extent not included in
clause (ii)(A), minus (E) Consolidated Interest Expense of such Person to
the extent included in clause (ii)(A) with respect to any Indebtedness
that no longer is outstanding as a result of the Incurrence of the
Indebtedness referred to in clause (ii)(D); provided, however, that in making
such computation, the Consolidated Interest Expense of such Person
attributable to interest on any Indebtedness bearing a floating interest rate
shall be computed on a pro forma basis as if the rate in effect on the date
of computation (after giving effect to any hedge in respect of such
Indebtedness that will, by its terms, remain in effect until the earlier
of the maturity of such Indebtedness or the date one year after the date of
such determination) had been the applicable rate for the entire period;
provided further that, in the event such Person or any of its Subsidiaries
has made any Asset Dispositions or acquisitions of assets not in the
ordinary course of business (including acquisitions of other Persons by
merger, consolidation or purchase of Capital Stock) during or after such
period, such computation shall be made on a pro forma basis as if the
Asset Dispositions or acquisitions had taken place on the first day of such
period. Calculations of pro forma amounts in accordance with this definition
shall be done in accordance with Rule 11-02 of Regulation S-X under the
Securities Act of 1933 or any successor provision.

"Consolidated Income Tax Expense" of any Person means for any period the
consolidated provision for income taxes of such Person for such period
calculated on a consolidated basis in accordance with GAAP.

"Consolidated Interest Expense" for any Person means for any period the
consolidated interest expense included in a consolidated income statement
(without deduction of interest income) of such Person for such period
calculated on a consolidated basis in accordance with GAAP, plus cash
dividends declared on any Preferred Stock (other than any Preferred Stock of
the Company outstanding on the Issue Date). For purposes of this definition,
the amount of any cash dividends declared will be deemed to be equal to
the amount of such dividends multiplied by a fraction, the numerator of
which is one and the denominator of which is one minus the maximum statutory
combined Federal, state, local and foreign income tax rate then applicable
to such Person and its Subsidiaries (expressed as a decimal between one and
zero), on a consolidated basis.

"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person for such period determined
on a consolidated basis in accordance with GAAP; provided that there shall
be excluded therefrom (a) the net income (or loss) of any Person acquired
by such Person or a Subsidiary of such Person in a pooling-of-interests
transaction for any period prior to the date of such transaction, (b) the
net income (but not net loss) of any Subsidiary of such Person which is
subject to restrictions which prevent or limit the payment of dividends or
the making of distributions to such Person to the extent of such
restrictions, (c) the net income of any Person that is not a Subsidiary of
such Person except to the extent of the amount of dividends or other
distributions actually paid in cash to such Person by such other Person
during such period, (d) gains or losses on Asset Dispositions by such
Person or its Subsidiaries and (e) all extraordinary gains and
extraordinary losses determined in accordance with GAAP.

"Consolidated Net Tangible Assets" means, at any date, the consolidated
book value as shown by the accounting books and records of the Company and
its Subsidiaries of all their property, both real and personal, less (i)
the book value of all their licenses, patents, patent applications,
copyrights, trademarks, trade names, goodwill, non-compete agreements or
organizational expenses and other intangibles, (ii) unamortized
Indebtedness, discount and expenses, (iii) all reserves for depreciation,
obsolescence, depletion and amortization of their properties and (iv) all
other proper reserves which in accordance with GAAP should be provided in
connection with the business conducted by the Company and its Subsidiaries.

"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance
with GAAP, less (without duplication) amounts attributable to Disqualified
Stock of such Person.

"Continuing Director" means a director who either was a member of the Board
of Directors of the Company on the Issue Date or who became a director of
the Company subsequent to such date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of
the Continuing Directors than on the Board of Directors of the Company,
either by a specific vote or by approval of the proxy statement issued by
the Company on behalf of the entire Board of Directors of the Company in
which such individual is named as nominee for director.

"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the final maturity of the
Notes; provided that any Preferred Stock of the Company outstanding on the
Issue Date shall not be deemed Disqualified Stock.

"Eligible Accounts Receivable" means the face value of all "eligible
receivables" of the Company and its Subsidiaries party to any credit
agreement constituting Senior Credit Facility (as such term is defined for
purposes of such credit agreement).

"Eligible Inventory" means the face value of all "eligible inventory" of
the Company and its Subsidiaries party to any credit agreement constituting
the Senior Credit Facility (as such term is defined for purposes of such
credit agreement).

"Exchange Act" means the Securities and Exchange Act of 1934, as amended.

"GAAP" means generally accepted accounting principles, consistently
applied, as in effect on the Issue Date in the United States of America, as
set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as is approved by a
significant segment of the accounting profession.

"guarantee" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the holder of
such Indebtedness of the payment of such Indebtedness, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness (and "guaranteed," "guaranteeing" and "guarantor" shall
have meanings correlative to the foregoing); provided, however, that the
guarantee by any Person shall not include endorsements by such Person for
collection or deposit, in either case, in the ordinary course of business.

"Guarantee" means the guarantee of the Notes by each Guarantor under the
Indenture.

"Guarantors" means (i) each of Dominion Stores, Inc., Tultex International,
Inc., Logo 7, Inc., Universal Industries, Inc., AKOM, Ltd., Tultex Canada
Inc. and Sweat Jet, Incorporated and (ii) each Material Subsidiary, whether
formed or acquired after the Issue Date provided that, any Material
Subsidiary acquired after the Issue Date which is prohibited from entering
into a Guarantee pursuant to restrictions contained in any debt instrument
in existence at the time such Material Subsidiary was so acquired and not
entered into in anticipation or contemplation of such acquisition shall not
be required to become a Guarantor so long as any such restriction is in
existence and to the extent of any such restriction.

"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred," "Incurrable"
and "Incurring" shall have meanings correlative to the foregoing).
Indebtedness of any Person or any of its Subsidiaries existing at the time
such Person becomes a Subsidiary of the Company (or is merged into or
consolidates with the Company or any of its Subsidiaries) whether or not
such Indebtedness was incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary of the Company (or being merged into or
consolidated with the Company or any of its Subsidiaries) shall be deemed
Incurred at the time any such Person becomes a Subsidiary of the Company or
merges into or consolidates with the Company or any of its Subsidiaries.

"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which are being
contested in good faith), (v) every Capital Lease Obligation of such
Person, (vi) every net obligation under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of
such Person and (vii) every obligation of the type referred to in clauses
(i) through (vi) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor, guarantor or
otherwise. Indebtedness shall include the liquidation preference and any
mandatory redemption payment obligations in respect of any Disqualified
Stock of the Company, and any Preferred Stock of a Subsidiary of the
Company. Indebtedness shall never be calculated taking into account any
cash and cash equivalents held by such Person.

"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to (by means of transfers
of cash or other property to others or payments for property or services
for the account or use of others, or otherwise), or purchase or acquisition
of Capital Stock, bonds, notes, debentures or other securities or evidence
of Indebtedness issued by any other Person.

"Issue Date" means the original issue date of the Notes.

"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, security interest, lien,
charge, easement (other than any easement not materially impairing
usefulness or marketability), encumbrance, preference, priority or other
security agreement with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).

"Material Subsidiary" means any Subsidiary of the Company which would
constitute a "significant subsidiary" as defined in Rule 1.02 of Regulation
S-X promulgated by the Commission except that for purposes of this
definition all reference therein to ten (10) percent shall be deemed to be
references to five (5) percent.

"Net Available Proceeds" from any Asset Disposition by any Person means
cash or readily marketable cash equivalents received (including by way of
sale or discounting of a note, installment receivable or other receivable,
but excluding any other consideration received in the form of assumption by
the acquiree of Indebtedness or other obligations relating to such
properties or assets or received in any other noncash form) therefrom by
such Person, net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses Incurred and all federal, state,
foreign and local taxes required to be accrued as a liability as a
consequence of such Asset Disposition, (ii) all payments made by such
Person or its Subsidiaries on any Indebtedness which is secured by such
assets in accordance with the terms of any Lien upon or with respect to
such assets or which must by the terms of such Lien, or in order to obtain
a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (iii) all payments
made with respect to liabilities associated with the assets which are the
subject of the Asset Disposition, including, without limitation, trade
payables and other accrued liabilities, (iv) appropriate amounts to be
provided by such Person or any Subsidiary thereof, as the case may be, as a
reserve in accordance with GAAP against any liabilities associated with
such assets and retained by such Person or any Subsidiary thereof, as the
case may be, after such Asset Disposition, including, without limitation,
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, until
such time as such amounts are no longer reserved or such reserve is no
longer necessary (at which time any remaining amounts will become Net
Available Proceeds to be allocated in accordance with the provisions of
clause (iii) of "Limitation on Certain Asset Dispositions") and (v) all
distributions and other payments made to minority interest holders in
Subsidiaries of such Person or joint ventures as a result of such Asset
Disposition.

"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each Holder at his address
appearing in the register for the Notes on the date of the Offer offering
to purchase up to the principal amount of Notes specified in such Offer at
the purchase price specified in such Offer (as determined pursuant to the
Indenture). Unless otherwise required by applicable law, the Offer shall
specify an expiration date (the "Expiration Date") of the Offer to Purchase
which shall be, not less than 30 days or more than 60 days after the date
of such Offer and a settlement date (the "Purchase Date") for purchase of
Notes within five Business Days after the Expiration Date. The Company
shall notify the Trustee at least 15 Business Days (or such shorter period
as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be
mailed by the Company or, at the Company's request, by the Trustee in the
name and at the expense of the Company. The Offer shall contain all the
information required by applicable law to be included therein. The Offer
shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Offer to Purchase. The Offer shall
also state:

(1) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;

(2) the Expiration Date and the Purchase Date;

(3) the aggregate principal amount of the outstanding Notes offered
to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has
been determined pursuant to the Section of the Indenture requiring the
Offer to Purchase) (the "Purchase Amount");

(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Notes accepted for payment (as specified
pursuant to the Indenture) (the "Purchase Price");

(5) that the Holder may tender all or any portion of the Notes
registered in the name of such Holder and that any portion of a Note
tendered must be tendered in an integral multiple of $1,000 principal
amount;

(6) the place or places where Notes are to be surrendered for tender
pursuant to the Offer to Purchase;

(7) that interest on any Note not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;

(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Note being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on
and after the Purchase Date;

(9) that Holders will be entitled to withdraw all or any portion of
Notes tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the fifth Business Day next
preceding the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder tendered, the certificate
number of the Note the Holder tendered and a statement that such
Holder is withdrawing all or a portion of his tender;

(10) that (a) if Notes in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Notes and (b) if Notes in an aggregate principal amount in excess of
the Purchase Amount are tendered and not withdrawn pursuant to the
Offer to Purchase, the Company shall purchase Notes having an
aggregate principal amount equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only
Notes in denominations of $1,000 or integral multiples thereof shall
be purchased); and

(11) that in the case of any Holder whose Note is purchased only in
part, the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Note without service charge, a new
Note or Notes, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for
the unpurchased portion of the Note so tendered. An Offer to Purchase
shall be governed by and effected in accordance with the provisions
above pertaining to any Offer.

"Permitted Investments" means (i) Investments in marketable, direct
obligations issued or guaranteed by the United States of America, or any
governmental entity or agency or political subdivision thereof (provided
that the good faith and credit of the United States of America is pledged
in support thereof), maturing within one year of the date of purchase; (ii)
Investments in commercial paper issued by corporations, each of which shall
have a consolidated net worth of at least $500,000,000, maturing within 180
days from the date of the original issue thereof, and rated "P-1" or better
by Moody's Investors Service or "A-1" or better by Standard & Poor's
Corporation or an equivalent rating or better by any other nationally
recognized securities rating agency; (iii) Investments in certificates of
deposit issued or acceptances accepted by or guaranteed by any bank or
trust company organized under the laws of the United States of America or
any state thereof or the District of Columbia, in each case having capital,
surplus and undivided profits totalling more than $500,000,000, maturing
within one year of the date of purchase; (iv) Investments representing
Capital Stock or obligations issued to the Company or any of its
Subsidiaries in the course of the good faith settlement of claims against
any other Person or by reason of a composition or readjustment of debt or a
reorganization of any debtor of the Company or any of its Subsidiaries; (v)
deposits, including interest-bearing deposits, maintained in the ordinary
course of business in banks; and (vi) any acquisition of the Capital Stock
of any Person provided that after giving effect to any such acquisition
such Person shall become a Subsidiary of the Company.

"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivisionthereof.

"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution
of assets upon any voluntary or involuntary liquidation, dissolution or
winding up of such Person, to shares of Capital Stock of any other class of
such Person.

"Related Person" of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding Common Stock of such
Person (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest in such Person) or (b) 5% or more of the combined
voting power of the Voting Stock of such Person.

"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such
Person which has been or is being sold or transferred by such Person more
than 270 days after the acquisition thereof or the completion of
construction or commencement of operation thereof to such lender or
investor or to any Person to whom funds have been or are to be advanced by
such lender or investor on the security of such property or asset. The
stated maturity of such arrangement shall be the date of the last payment
of rent or any other amount due under such arrangement prior to the first
date on which such arrangement may be terminated by the lessee without
payment of a penalty.

"Senior Credit Facility" means the Credit Agreement, dated as of ________,
1995, among the Company as borrower thereunder, any Subsidiaries of the
Company as guarantors thereunder and NationsBank, N.A. (Carolinas), as
agent on behalf of itself and the other lenders named therein, including
any deferrals, renewals, extensions, replacements, refinancings or
refundings thereof, or amendments, modifications or supplements thereto and
any agreement providing therefor whether by or with the same or any other
lender, creditors, group of lenders or group of creditors.

"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such
Person and one or more other Subsidiaries thereof or (ii) any other Person
(other than a corporation) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiar-
ies thereof, directly or indirectly, has at least a majority ownership and
voting power relating to the policies, management and affairs thereof.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only
so long as no senior class of securities has such voting power by reason of
any contingency.

"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or
by such Person and one or more Wholly Owned Subsidiaries of such Person.

Underwriting

Under the terms and subject to the conditions contained in the Underwriting
Agreement dated __________, 1995 (the "Underwriting Agreement"), J.P.
Morgan Securities Inc. ("J.P. Morgan") and NationsBanc Capital Markets,
Inc. ("NationsBanc" and collectively with J.P. Morgan, the "Underwriters"),
have severally agreed to purchase from the Company, and the Company has
agreed to sell to them, severally, the principal amount of Notes set forth
opposite their names below. Under the terms and conditions of the
Underwriting Agreement, the Underwriters are obligated to take and pay for
the entire principal amount of the Notes, if any Notes are purchased.

Principal
Amount

J.P. Morgan Securities Inc. $
NationsBanc Capital Markets, Inc. _________

Total $115,000,000

The Underwriters propose initially to offer the Notes directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of _____% of
the principal amount of the Notes. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of ______% of the principal
amount of the Notes to certain others dealers. After the initial public
offering of the Notes, the initial public offering price and such
concessions may be changed.

The Company and the Guarantors in existence on the closing date of the
Offering have agreed, jointly and severally, to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act.

There is currently no trading market for the Notes. The Company does not
intend to list the Notes on any securities exchange. The Company has been
advised by the Underwriters that the Underwriters currently intend to make
a market in the Notes; however, the Underwriters are not obligated to do so
and may discontinue any such market making at any time without notice. No
assurance can be given as to the development or liquidity of any trading
market for the Notes.

J.P. Morgan has provided investment banking and other financial services
for the Company in the past. In addition, Morgan Guaranty Trust Company of
New York, an affiliate of J.P. Morgan, will act as a lender under the
Senior Credit Facility.

NationsBank N.A. (Carolinas), an affiliate of NationsBanc, acted as lender,
Co-Agent and Administrative Agent under the Company's existing revolving
credit facility and will act in the same capacities under the Senior Credit
Facility. NationsBanc acted as Structuring and Syndicating Agent under the
Company's existing revolving credit facility, for which it has received
customary fees and will act in the same capacity under the Senior Credit
Facility, for which it will receive customary fees. In addition,
NationsBanc has provided investment banking and other financial services
for the Company in the past.

Legal Matters

The validity of the Notes will be passed upon for the Company by Hunton &
Williams, Richmond, Virginia. Lathan M. Ewers, Jr., a partner of Hunton &
Williams, is a director of the Company. Certain legal matters in
connection with the Notes offered hereby will be passed upon for the
Underwriters by Cahill Gordon & Reindel (a partnership including a
professional corporation), New York, New York.

Experts

The financial statements of Tultex Corporation included in this Prospectus,
except as they relate to the unaudited nine-month periods ended October 1,
1994 and October 2, 1993 and except as they relate to Universal for the
year ended December 31, 1991 (whose financial statements are not presented
separately herein), have been audited by Price Waterhouse LLP, independent
accountants, and, insofar as they relate to Universal for the year ended
December 31, 1991, by Coopers & Lybrand L.L.P., independent accountants,
whose report thereon appears herein. Such financial statements have been
so included in reliance on the reports of such independent accountants
given on the authority of such firms as experts in auditing and accounting.

Index to Financial Statements

Page

Report of Price Waterhouse LLP . . . . . . . . . . . . . . . . . . . . .F-2

Report of Coopers & Lybrand L.L.P. . . . . . . . . . . . . . . . . . . .F-3

Consolidated Balance Sheets of Tultex Corporation as of
October 1, 1994 (unaudited), January 1, 1994 and
January 2, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-4

Consolidated Statements of Income of Tultex Corporation for the
Nine Months Ended October 1, 1994 and October 2, 1993 (unaudited),
Fiscal 1993, 1992 and 1991 . . . . . . . . . . . . . . . . . . . . . . .F-5

Consolidated Statements of Stockholders' Equity of Tultex Corporation
for Fiscal 1993, 1992 and 1991 . . . . . . . . . . . . . . . . . . . . F-6

Consolidated Statements of Cash Flows of Tultex Corporation for
the Nine Months Ended October 1, 1994 and October 2, 1993
(unaudited), Fiscal 1993, 1992 and 1991 . . . . . . . . . . . . . . . . F-7

Notes to Consolidated Financial Statements of Tultex Corporation for
Fiscal 1993, 1992 and 1991 and the Nine Months Ended October 1, 1994 . F-8

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors of Tultex Corporation

In our opinion, based upon our audits and the report of other auditors, the
accompanying consolidated balance sheet and the related consolidated statements
of income, of cash flows and of changes in stockholders' equity present fairly,
in all material respects, the financial position of Tultex Corporation and its
subsidiaries (the company) at January 1, 1994 and January 2, 1993, and the
results of their operations and their cash flows for each of the three years in
the period ended January 1, 1994, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of Universal Industries, Inc., a wholly-owned subsidiary, which
statements reflect total revenues of $34,984,000 for the year ended December 31,
1991. Those statements were audited by other auditors whose report thereon has
been furnished to us, and our opinion expressed herein, insofar as it relates to
the amounts included for Universal Industries, Inc., is based solely on the
report of other auditors. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits and the report of other auditors provide a reasonable
basis for the opinion expressed above.

As discussed in Note 9 of Notes to Financial Statements, the company changed its
method of accounting for income taxes in 1992 and 1991. In addition, as
discussed in Notes 3 and 10 of Notes to the Financial Statements, the company
changed its method of valuing inventory and accounting for postretirement
medical and life insurance benefits, respectively, in 1993.

PRICE WATERHOUSE LLP

Winston-Salem, North Carolina
February 23, 1994

F-2

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Universal Industries, Inc.:

We have audited the consolidated balance sheets of Universal Industries,
Inc. as of December 31, 1991 and 1990 and the related consolidated statements
of income and retained earings and cash flows for each of the three years
ended December 31, 1991. These financial statements are the responsibility of
the Company's management. Our Responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above fairly, in all
material respects, the financial position of Universal Industries, Inc. as of
December 31, 1991 and 1990, and the results of its operations and cash flows
for each of the three years in the period ended December 31, 1991 in
conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
March 19, 1992

F-3

BALANCE SHEET
(In thousands of dollars
except share data)

OCT. 1, 1994 Jan. 1, 1994 Jan. 2, 1993
ASSETS (UNAUDITED)

<S> <C> <C> <C>
Current assets:
Cash and equivalents (Note 5) $ 14,726 $ 6,754 $ 3,603
Accounts receivable, less allowance for doubtful
accounts and returns of $2,374 (1993) and $2,360
(1992) 180,395 116,383 109,880
Inventories (Note 3) 165,593 157,278 130,166
Prepaid expenses 15,040 8,276 5,678

Total current assets 375,754 288,691 249,327

Property, plant and equipment, net of depreciation (Note
4) 140,660 151,775 153,188
Intangible assets 27,071 27,983 29,200
Other assets 6,021 6,516 4,103

TOTAL ASSETS $549,506 $474,965 $435,818

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable to banks (Note 5) $ 3,000 $ -- $ 79,825
Current maturities of long-term debt (Note 6) 28,346 8,524 2,268
Accounts payable - trade 25,180 18,170 16,977
Accrued liabilities - other 18,917 13,923 15,914
Dividends payable (Note 7) -- 1,736 1,728
Income taxes payable 889 2,785 5,898

Total current liabilities 76,332 45,138 122,610

Long-term debt, less current maturities (Note 6) 277,321 230,914 118,438

Deferrals:
Deferred income taxes (Note 9) 12,839 14,014 12,134
Other 5,651 5,702 3,843

Total deferrals 18,490 19,716 15,977

Stockholders' equity (Notes 6, 8, 15 and 16):
5% cumulative preferred stock, $100 par value;
authorized - 22,000 shares,
issued and outstanding - 1,975 shares (1993
and 1992) 198 198 198
Series B, $7.50 cumulative convertible preferred
stock; issued and outstanding - 150,000 shares
(1993 and 1992) 15,000 15,000 15,000
Common stock, $1 par value; authorized - 60,000,000
shares, issued and outstanding - 29,053,126
shares (1993) and 28,877,526 shares (1992) 29,807 29,053 28,878
Capital in excess of par value 5,279 1,889 681
Retained earnings 130,783 133,107 134,136

181,067 179,247 178,893
Less notes receivable from stockholders 3,704 50 100

Total stockholders' equity 177,363 179,197 178,793

Commitments and contingencies (Notes 12, 13 and 14)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $549,506 474,965 $435,818
</TABLE>

The accompanying Notes to Financial Statements are an integral part of
this statement.

F-4

STATEMENT OF INCOME

<TABLE>
<CAPTION>
Fiscal years ended: OCT. 1, 1994 Oct. 2,1993 Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991
(Nine months, (Nine months, (52 weeks) (53 weeks) (52 weeks)
unaudited) unaudited)
(In thousands of dollars except
per share data)

<S> <C> <C> <C> <C> <C>
Net sales and other income $397,125 $378,369 $ 533,611 $ 503,946 $ 349,910

Costs and expenses:

Cost of products sold 298,701 278,623 395,727 368,027 271,243

Depreciation 18,220 16,773 23,364 20,831 17,369

Selling, general and administrative 67,885 64,813 88,433 81,297 45,481

Gain on sale of facilities -- -- -- -- (4,014)

Interest 13,203 12,337 16,996 13,540 9,064

Total costs and expenses 398,009 372,546 524,520 483,695 339,143

Income before income taxes and cumulative
effect of change in accounting principle (884) 5,823 9,091 20,251 10,767

Provision for income taxes (Note 9) (336) 2,161 3,188 7,060 3,443

Income before cumulative effect of
a change in accounting principle (548) 3,662 5,903 13,191 7,324

Cumulative effect of a change in
accounting principle (Note 9) -- -- -- -- 2,848

Net income $ (548) $ 3,662 $ 5,903 $ 13,191 $ 10,172

Earnings per share:

Income before cumulative effect of
a change in accounting principle $ (.05) $ .10 $ .16 $ .42 $ .25

Cumulative effect of a change
in accounting principle (Note 9) -- -- -- -- .10

Net income per common share $ (.05) $ .10 $ .16 $ .42 $ .35

Dividends per common share (Note 7) $ .05 $ .15 $ .20 $ .20 $ .32
</TABLE>

The accompanying Notes to Financial Statements are an integral part of
this statement.

F-5

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
CAPITAL NOTES
5% SERIES B IN EXCESS RECEIVABLE- TOTAL
PREFERRED PREFERRED COMMON OF PAR RETAINED STOCK- STOCKHOLDERS'
STOCK STOCK STOCK VALUE EARNINGS HOLDERS EQUITY
(In thousands of dollars
except share data)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AS OF DEC. 29, 1990 $208 $28,860 $ 565 $126,304 $ (636) $155,301

Net income for the 52 weeks
ended Dec. 28, 1991 (Note 3) 10,172 10,172
Preferred stock reacquired
and cancelled (108 shares) (10) (10)
Exercise of stock options 2 15 (10) 7
Collections - stockholders'
notes receivable 462 462
Cash dividends on common stock
($.32 per share) (Note 7) (8,831) (8,831)
Cash dividends on preferred
stock (Note 7) (10) (10)

BALANCE AS OF DEC. 28, 1991 198 28,862 580 127,635 (184) 157,091

Net income for the 53 weeks
ended Jan. 2, 1993 13,191 13,191
Series B, preferred stock
issued (150,000 shares) $ 15,000 15,000
Exercise of stock options 16 101 (30) 87
Collections - stockholders'
notes receivable 114 114
Cash dividends on common stock
($.20 per share) (Note 7) (5,649) (5,649)
Cash dividends on preferred stock
(Note 7) (1,041) (1,041)

BALANCE AS OF JAN. 2, 1993 198 15,000 28,878 681 134,136 (100) 178,793

Net income for the 52 weeks
ended Jan. 1, 1994 5,903 5,903
Exercise of stock options 175 1,208 (11) 1,372
Collections - stockholders'
notes receivable 61 61
Cash dividends on common stock
($.20 per share) (Note 7) (5,797) (5,797)
Cash dividends on preferred stock
(Note 7) (1,135) (1,135)

BALANCE AS OF JAN. 1, 1994 $198 $ 15,000 $29,053 $1,889 $133,107 $ (50) $179,197
</TABLE>

The accompanying Notes to Financial Statements are an integral part
of this statement.

F-6

STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
OCT. 1, 1994 Oct. 2, 1993 Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991
Fiscal years ended: (Nine months, (Nine months, (52 weeks) (53 weeks) (52 weeks)
unaudited) unaudited)
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ (548) $ 3,662 $ 5,903 $ 13,191 $ 10,172
Items not requiring (providing) cash:
Depreciation 18,220 16,773 23,364 20,831 17,369
Gain on sale of facilities -- -- -- -- (4,014)
Deferred income taxes -- -- 1,880 (234) 3,815
Amortization of excess of fair value of
assets acquired over cost -- -- -- (280) (865)
Amortization of intangible assets 912 912 1,217 1,217 --
Other deferrals (1,226) (187) 1,859 1,982 1,051
Cumulative effect of a change in accounting
principle -- -- -- -- (2,848)

Changes in assets and liabilities:
Accounts receivable (64,012) (49,717) (6,503) (17,685) (3,921)
Inventories (8,315) (59,137) (27,112) (25,461) 9,380
Prepaid expenses (6,764) (1,328) (2,598) (2,227) (151)
Accounts payable and accrued expenses 10,268 13,487 (790) 1,139 (6,044)
Income taxes payable (1,896) (1,450) (3,113) 2,690 (2,548)

Cash provided (used) by operating activities
(Notes 3, 6 and 9) (53,361) (76,985) (5,893) (4,837) 21,396

INVESTING ACTIVITIES:
Additions to property, plant and equipment (7,105) (20,556) (22,250) (30,330) (14,360)
Change in other assets 495 (1,456) (2,413) 113 (1,179)
Sales and retirements of property and equipment -- -- 299 182 10,951
Acquisition of assets and certain liabilities
of Logo 7 -- -- -- (57,756) --

Cash provided (used) by investing activities (6,610) (22,012) (24,364) (87,791) (4,588)

FINANCING ACTIVITIES:
Issuance (payment) of short-term borrowings 3,000 103,500 (79,825) 24,063 12,463
Issuance of long-term debt 73,019 -- 121,000 140,000 24
Payments of long-term debt (6,790) (139) (2,268) (79,156) (20,524)
Preferred stock issued -- -- -- 15,000 --
Cash dividends (Note 7) (1,774) (5,195) (6,932) (6,690) (8,841)
Proceeds from exercise of stock options 488 1,358 1,433 201 469
Other -- -- -- -- (10)

Cash provided (used) by financing activities 67,943 99,524 33,408 93,418 (16,419)

Net increase (decrease) in cash and equivalents 7,972 527 3,151 790 389

Cash and equivalents at beginning of year 6,754 3,603 3,603 2,813 2,424

CASH AND EQUIVALENTS AT END OF YEAR $ 14,726 $ 4,130 $ 6,754 $ 3,603 $ 2,813
</TABLE>

The accompanying Notes to Financial Statements are an integral part of this
statement.

F-7

NOTES TO FINANCIAL STATEMENTS

Fiscal years ended January 1, 1994, January 2, 1993 and
December 28, 1991.

NOTE 1-ACCOUNTING POLICIES

The significant accounting policies followed by Tultex Corporation
and its subsidiaries in preparing the accompanying consolidated
financial statements are as follows:

Basis of Consolidation: The consolidated financial statements
include the accounts of the company and its subsidiaries. All
significant intercompany balances and transactions are eliminated
in consolidation.

Cash and Equivalents: The company considers cash on hand,
deposits in banks, certificates of deposit and short-term marketable
securities as cash and equivalents for the purposes of the state-
ment of cash flows.

Inventories: Inventories are recorded at the lower of cost or
market, with cost determined on the first-in, first-out (FIFO)
method. See Note 3 for information concerning the change in the
method of valuing inventories from the last-in, first-out (LIFO)
method to the FIFO method during 1993.

Property, Plant and Equipment: Land, buildings and equipment are
carried at cost. Major renewals and betterments are charged to the
property accounts while replacements, maintenance and repairs
which do not improve or extend the lives of the respective assets
are expensed currently. Gain or loss on retirement or disposal of
individual assets is recorded as income or expense.

Depreciation is provided on the straight-line method for all
depreciable assets over their estimated useful lives as follows:

Classification Estimated Useful Lives

Land improvements 20 years
Buildings and improvements 12-50 years
Machinery and equipment 3-20 years

Capitalized Interest: Interest is capitalized on major capital
expenditures during the period of construction. Total interest costs
incurred and amounts capitalized for the fiscal years were:

Nine Months Ended: Fiscal Years Ended:
(Unaudited)

(In thousands OCT. 1, Oct. 2, Jan. 1, Jan. 2, Dec. 28,
of dollars) 1994 1993 1994 1993 1991

Total interest $13,203 $12,337 $16,996 $13,540 $ 11,414
Interest
capitalized -- -- -- -- (2,350)
Net interest
expense $13,203 $12,337 $16,996 $13,540 $ 9,064

Intangible Assets: Goodwill and licenses are being
amortized on a straight-line basis over 25 years.

Pensions: Pension expense includes charges for amounts not less
than the actuarially determined current service costs plus
amortization of prior service costs over 30 years. The company
funds amounts accrued for pension expense not in excess of the
amount deductible for federal income tax purposes.

Revenue Recognition: The company recognizes the sale when the
goods are shipped or ownership is assumed by the customer.

Income Taxes: Income taxes are provided based upon income
reported for financial statement purposes. Deferred income taxes
reflect the tax effect of temporary differences between financial and
taxable income.

Net Income per Share: Net income per common share is computed
using the weighted average number of common shares outstanding
during the period after giving retroactive effect to stock splits and
stock dividends and after deducting the preferred dividend
requirements which accrued during the period.

Segment Information: The company is a vertically integrated
manufacturer and marketer of activewear and leisure-time apparel
which is considered a single business segment.

Fiscal Year: The company's fiscal year ends on the Saturday
nearest to December 31, which periodically results in a fiscal year of
53 weeks. The Universal Industries subsidiary historically observed
a calendar year. The difference in the year-ends was considered to
be immaterial on the pooled financial results contained in this
report. Universal Industries, Inc. adopted the fiscal year-end and
quarterly reporting periods of Tultex as of the acquisition date.

Other Postretirement Benefits: As further described in Note 10, the
company changed its method of accounting for the costs of certain life
insurance and medical benefits for eligible retirees and dependents in
1993.

Unaudited Interim Results: The accompanying balance sheet as of October 1,
1994 and the statements of income and cash flows for the nine months ended
October 1, 1994 and October 2, 1993 are unaudited. In the opinion of
management, these statements have been prepared on the same basis as the
audited consolidated financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position of the company at October 1, 1994
and results of its operations and its cash flows for the nine month periods.
The information disclosed in the notes to the consolidated financial
statements at October 1, 1994 and for the nine-month periods ended October 1,
1994 and October 2, 1993 are unaudited.

F-8

NOTE 2-MERGERS AND ACQUISITIONS

On January 31, 1992, effective as of January 1, 1992, the company acquired
assets, certain liabilities, contracts and licenses of Logo 7, Inc., a major
producer and marketer of licensed sports apparel, for a purchase price of
approximately $58 million, consisting of $15 million (stated value) of a new
series of Cumulative Convertible Preferred Stock, $7.50 Series B and $43
million cash. The $43 million cash was obtained with a 17-month interim loan
from two banks which was prepaid without penalty. The company obtained
permanent financing on June 26, 1992. The results of Logo 7 Inc. are included
in the company's consolidated statement of income for 1992. The purchase
price of $58 million has been allocated to the various acquired
assets. Goodwill of $4 million was determined and is being amortized
over 25 years on a straight-line basis. Logo 7, Inc., which was a
Subchapter S corporation, reported audited net sales of $92 million
and earnings before taxes of $3 milion for the 12 months ended December
31, 1991. Logo 7, Inc. had stockholders' equity of $14 million
at December 31, 1991.

The following pro forma results for 1991 include Logo 7, and do not purport to
be indicative of the results of operations that actually would have resulted
had the combination been in effect for the fiscal year or that may result in
the future. Also included in these 1991 results is Universal Industries, Inc.
which was acquired in June 1992 and accounted for as a pooling of interests.

Pro Forma
(In thousands of dollars except per share data) 1991 (Unaudited)

Net sales and other income $427,699

Income before cumulative effect of
a change in accounting principle 5,181

Net income 8,029

Earnings per share:
Income before cumulative effect of
a change in accounting principle $ .14

Net income $ .24

On June 30, 1992, the company completed the acquisition of Universal
Industries, Inc., a professional sports hatwear licensee located in
Mattapoisett, Massachusetts, through an all-stock deal valued at $11.1
million for nearly 1.3 million common shares. The acquisition has been
accounted for as a pooling of interests, and accordingly, the financial
statements have been restated to include the results of operations for
Universal for all periods presented.

(In thousands Six Months Ended Year ended
of dollars) June 1992 (Unaudited) Dec. 28, 1991

Net sales and
other income:
Tultex $ 138,588 $315,234
Universal 20,777 34,676

Combined $ 159,365 $349,910

Income before
cumulative effect of a
change in accounting
principle:
Tultex $ (5,331) $ 6,651
Universal 859 673
Combined $ (4,472) $ 7,324

Net income:
Tultex $ (5,331) $ 9,499
Universal 859 673

Combined $ (4,472) $ 10,172

NOTE 3-INVENTORIES

The components of inventories are as follows:
OCT. 1, Jan. 1, Jan. 2, Dec. 28,
(In thousands 1994 1994 1993 1991
of dollars) (UNAUDITED)
Raw materials $ 25,581 $ 29,291 $ 23,664 $ 5,074
Goods in process 18,628 11,956 13,641 12,494
Finished goods 117,705 112,296 88,549 68,243
Supplies 3,679 3,735 4,312 3,557

Total inventory $165,593 $157,278 $130,166 $89,368

During the fourth quarter of 1993, the company changed its method of
determining the cost of inventories from the LIFO method to the FIFO
method. Under the current economic environment of low inflation, the
company believes that the FIFO method will result in a better measure-
ment of operating results. This change has been applied by retroactively
restating the accompanying consolidated financial statements. Although
this change in method did not materially impact net income in 1993, it
decreased net income by $4,001,000 or 14 cents per share in 1992,
and $416,000 or 1 cent per share in 1991.

F-9

NOTE 4-PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consist of the following:

OCT. 1, Jan. 1, Jan. 2,
1994 1994 1993
(In thousands of dollars) (UNAUDITED)
Land and improvements $ 3,830 $ 3,821 $ 3,808
Buildings and improvements 68,674 68,204 65,254
Machinery and equipment 211,782 209,044 186,768
Construction in progress 4,660 2,863 8,399

288,946 283,932 264,229
Less accumulated
depreciation 148,286 132,157 111,041
Net property, plant and
equipment $140,660 $151,775 $153,188

NOTE 5-SHORT-TERM CREDIT AGREEMENTS

Until October 6, 1993, when the company entered into a two-year
revolving credit agreement with 12 banks (see Note 6), it had formal
short-term lines of credit with lending banks aggregating
$57,000,000 with interest payable at or below the prime rate. At
January 2, 1993 and December 28, 1991, the weighted average
interest rates on borrowings outstanding of $79,825,000 and
$51,000,000 were 4.1% and 5.3%, respectively. The use of these
lines was restricted to the extent that the company was required to
liquidate its indebtedness to certain individual banks for a 30-day
period each year. At times, the company borrowed amounts in
excess of the lines on a short-term negotiated basis.

The company currently has short-term lines of credit with two lending
banks totaling $5,000,000. There were no borrowings outstanding under
these lines at January 1, 1994.

As part of the borrowing arrangements, the company was expected to
maintain average compensating cash balances, which were based on a
percentage of the available credit line by bank and the percentages varied
by bank. The amount of compensating balances required for credit lines in
effect at January 2, 1993 was an average of $1,320,000. The compensat-
ing balances were held under agreements which did not legally restrict the
use of such funds, and therefore the funds were not segregated on the
face of the balance sheet. The compensating cash balances were deter-
mined daily by the lending banks based upon balances shown by the
bank, adjusted for average uncollected funds and Federal Reserve
requirements. During the periods shown in the statements, the company
was in substantial compliance with the compensating requirements.
Funds on deposit with the lending banks and considered in the compen-
sating balances were subject to withdrawal; however, the availability of
the short-term lines of credit were dependent upon the maintenance of
sufficient average compensating balances.

The Universal Industries subsidiary, accounted for as a pooling-of-
interests acquisition, had outstanding under short-term banker's accep-
tance agreements $4,762,000 at December 31, 1991.

The company utilizes letters of credit for foreign sourcing of inventory.
Letters of credit outstanding were $9,715,000, $5,266,000 and $771,000 at
January 1, 1994, January 2, 1993 and December 28, 1991, respectively.
After October 6, 1993, all letters of credit issued were part of the revolving
credit agreement described in Note 6.

NOTE 6-LONG-TERM DEBT

OCT. 1, JAN. 1, Jan. 2,
1994 1994 1993
(In thousands of dollaars) (UNAUDITED)

Amount due under
revolving credit agreement $192,000 $121,000 $ --
8 7/8% senior notes due
June 1, 1999 95,000 95,000 95,000
8.94% term loan due
July 31, 1996 -- 22,917 25,000
Variable rate term loan due
July 31, 1996 18,282 -- --
Other indebtedness 385 521 706
305,667 239,438 120,706
Less current maturities 28,346 8,524 2,268
Total long-term debt $277,321 $230,914 $118,438

On October 6, 1993, the company signed a two-year $225 million
revolving credit agreement with 12 banks with interest at or below prime.
The facility replaced the company's previous short-term credit lines used
to support working capital and future growth. The agreement provides for
a two-year maturity with three annual options to renew.

On June 26, 1992 the company issued 8.875% unsecured, senior
notes totaling $95,000,000. Payments consist of interest only for the
first two years and installment payments of principal and interest for
the remaining five years. The proceeds of this financing retired an
interim loan of $45,000,000 used to acquire Logo 7, prepaid
$25,000,000 of the $50,000,000 term loan obtained in 1989 and
refinanced other indebtedness.

Interest is due quarterly and principal is due in 11 remaining quarterly
installments of $2,083,000 on the remaining $22,917,000 of the term loan.
As a condition to the $25,000,000 prepayment in 1992, the company
indemnified the term-loan lender for the costs and liabilities associated
with an interest rate credit exchange agreement that allowed the lender to
provide fixed-rate financing to the company at the inception of the term loan
in 1989.

As of March 1, 1994, the company amended and restated its 8.94%
term loan. As a condition to the restatement of the term loan, the
company agreed to assume the cost to unwind an interest rate
credit exchange agreement that allowed the lender to provide fixed
rate financing to the company at the inception of the term loan in
1989. Interest is due quarterly at 90-day LIBOR + .75% and
principal is due in eight remaining quarterly installments of
$2,285,000 on the remaining balance of the term loan on October 1,
1994 of $18,282,000.

F-10

The term loan agreement, senior notes and revolving credit
agreement contain provisions regarding maintenance of working
capital and restrictions on payment of cash dividends. At October 1,
1994 and January 1, 1994, the company was in compliance or had
obtained waivers for any violations of the covenants. Consolidated
retained earnings, which were free of dividend restrictions,
amounted to $2,744,000 at January 1, 1994.

Interest paid by the company (net of capitalized amounts) in 1993,
1992 and 1991 was $16,830,000, $13,180,000 and $10,706,000,
respectively.

The approximate aggregate maturities of long-term debt for each
of the next five fiscal years are as follows:

(In thousands of dollars) Total
1994 $ 8,524
1995 148,541*
1996 25,373
1997 19,000
1998 19,000

*Includes maturity of $121,000,000 outstanding under revolving credit agreement
which the company expects to renew.

NOTE 7-DIVIDENDS

At December 30, 1989, dividends payable represented amounts paid January 2, 1990
and April 2, 1990. The latter dividend was declared in December 1989 and was
charged against stockholders' equity in that period. This dividend was for the
first quarter 1990 and therefore not included in 1989 dividends per share
information presented in this report. At January 1, 1994, dividends payable
represents amounts paid on January 3, 1994.

Prior to second quarter 1994, all stated dividends on the five percent
cumulative preferred stock had been declared and paid. Cumulative dividends on
such stock that have not been declared or paid as of October 1, 1994, amounted
to $5,000. Prior to second quarter 1994, all stated dividends on the Series B
cumulative preferred stock had been declared and paid. Cumulative dividends on
such stock that have not been declared or paid as of October 1, 1994 amounted
to $563,000.

NOTE 8-STOCK OPTIONS

In 1988, the company's stockholders ratified the 1987 Stock Option Plan under
which 700,000 shares of common stock were reserved for stock option grants to
certain officers and employees. The plan provided that options may be granted
at prices not less than the fair market value on the date the option is
granted, which means the closing price of a share of common stock as reported
on the New York Stock Exchange composite tape on such day. Some options remain
unexercised from the 1987 Stock Option Plan, which expired November 19, 1992.

On March 21, 1991, the company's stockholders ratified the 1990 Stock
Option Plan under which 700,000 shares of common stock were reserved
for stock option grants to certain officers and employees. Options granted
under the 1990 Plan may be incentive stock options ("ISOs") or non-
qualified stock options. The option price will be fixed by the Executive
Compensation Committee of the Board at the time the option is granted,
but in the case of an ISO, the price cannot be less than the share's
fair market value on the date of grant. Grants must be made before
October 18, 2000 and expire within 10 years of the date of grant. In
exercising options, an employee may receive a loan from the
company for up to 90% of the exercise price. Outstanding loans are
shown as a reduction of stockholders' equity on the balance sheet.

On October 28, 1993, the Board of Directors approved an increase
of 500,000 shares in the maximum number of shares to be issued
pursuant to the exercise of options granted under the Plan, ex-
tended the date that grants could be made to October 27, 2003, and
provided that no participant may be granted options in any calendar
year for more than 50,000 shares of Common Stock. Shareholders
will be asked to approve these changes at the Annual Meeting.

A summary of the changes in the number of common shares under option
for each of the three previous years follows:

Year ended Number Per Share
January 1, 1994 of Shares Option Price

Outstanding at
beginning of year 1,015,833 $ 7.50-$9.63
Granted 280,000 $ 6.88-$9.75
Exercised 175,600 $ 7.63-$9.63
Expired 165,000 $ 7.88
Cancelled 27,000 $ 7.63-$9.63

Outstanding at end of year 928,233 $ 6.88-$9.75

Exercisable at end of year 748,233 $ 6.88-$9.75

Shares reserved for future grant:
Beginning of year 307,400

End of year 39,900

Year ended Number Per Share
January 2, 1993 of Shares Option Price

Outstanding at
beginning of year 545,196 $7.50-$11.92
Granted 536,600 $ 8.38-$9.63
Exercised 14,734 $ 7.63-$9.63
Expired 26,463 $ 11.92
Cancelled 24,766 $ 7.63-$9.63

Outstanding at end of year 1,015,833 $ 7.50-$9.63

Exercisable at end of year 945,833 $ 7.50-$9.63

Shares reserved for future grant:
Beginning of year 836,350

End of year 307,400

F-11

NOTE 8 (Continued)

Year ended Number Per Share
December 28, 1991 of Shares Option Price

Outstanding at
beginning of year 861,483 $7.50-$12.67
Granted 30,000 $ 8.25-$8.38
Exercised 2,550 $ 7.63
Expired 172,446 $ 12.67
Cancelled 171,291 $7.63-$12.67
Outstanding at end of year 545,196 $7.50-$11.92

Exercisable at end of year 515,196 $7.50-$11.92

Shares reserved for future grant:
Beginning of year 47,500

End of year 836,350

NOTE 9-PROVISION FOR INCOME TAXES

The components of the provision for federal and state income taxes are
summarized as follows:
Jan. 1, Jan. 2, Dec. 28,
(In thousands of 1994 1993 1991
dollars)

Currently payable:
Federal $1,192 $6,694 $ (459)
State 116 600 87
1,308 7,294 (372)
Deferred:
Federal 1,723 (214) 3,275
State 157 (20) 540
1,880 (234) 3,815
Total provision $3,188 $7,060 $ 3,443

Deferred income taxes resulted from the following temporary differences:

Jan. 1, Jan. 2, Dec. 28,
(In thousands of dollars) 1994 1993 1991

Depreciation $ 2,095 $ 2,864 $2,346
Inventory (24) (3,110) (188)
Pension (486) (83) 373
Debt prepayment penalty -- -- 415
Abandonment loss 187 -- 845
Goodwill 283 -- --
Postretirement benefits (172) -- --
Other (3) 95 24
Total $ 1,880 $ (234) $3,815

Significant components of the deferred tax liabilities and assets are as
follows:
Jan. 1, Jan. 2,
(In thousands of dollars) 1994 1993

Deferred tax liabilities:
Tax over book depreciation $15,990 $13,842
Spare parts inventory 797 788
Other 665 425
Gross deferred tax liabilities $17,452 $15,055

Deferred tax assets:
Bad debt reserves 766 765
Inventory reserves 1,211 1,186
Postretirement benefits 176 --
Pension obligations 962 462
Workmen's compensation 182 181
Abandonment loss -- 193
Other 141 134
Gross deferred tax assets $ 3,438 $ 2,921

Net deferred tax liabilities $14,014 $12,134

A reconciliation of the statutory federal income tax rates with the
company's effective income tax rates for 1993, 1992 and 1991 was as
follows:

Jan. 1, Jan. 2, Dec. 28,
1994 1993 1991

Statutory federal rate 34% 34% 34%
State rate, net 2 2 3
Goodwill -- -- (3)
Untaxed foreign income -- (1) (2)
Other (1) -- --
Effective income tax rate 35% 35% 32%

Income tax payments were $4,512,000, $4,404,000 and $2,705,000 for
1993, 1992 and 1991, respectively.

In 1992, the company adopted the provisions of the Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes." This Statement, issued in February 1992, superseded SFAS No.
96, "Accounting for Income Taxes," which the company had adopted in
1991. Both statements require the liability method in accounting for
deferred income taxes. The company's adoption of SFAS No. 109
resulted in no material effect on 1992 earnings. The cumulative effect of
the change in accounting principle due to the adoption of SFAS No. 96 at
the beginning of the 1991 fiscal year was $2,848,000, or 10 cents per
share, and is separately shown in the 1991 statement of income.

The company is currently undergoing an examination by the Internal
Revenue Service for the years ended 1991, 1992 and 1993. While
the examination is not complete, management does not expect the
outcome to materially impact the financial position or results of operation
of the company.

F-12

NOTE 10-EMPLOYEE BENEFITS

All qualified employees of the parent company and its Universal subsidiary
are covered by a noncontributory, defined benefit plan. The benefits are
based on years of service and the employee's highest 5 consecutive
calendar years of compensation paid during the 10 most recent years
before retirement. Prior service costs are amortized over 30 years. The
status of the defined benefit plan as of January 1, 1994 and January 2,
1993 was as follows:

(In thousands of dollars) 1993 1992

Fair value of plan assets, primarily
listed stocks and corporate and
government debt $ 40,261 $ 40,006

Accumulated benefit obligation,
including vested benefits of $29,294
and $27,149, respectively 30,114 27,977
Additional benefits based on
estimated future salary levels 6,851 9,592

Projected benefit obligation 36,965 37,569

Plan assets in excess of
projected benefit obligation 3,296 2,437
Unrecognized net gain (2,910) (1,253)
Unrecognized net transitional assets (2,308) (2,777)
Unrecognized prior service cost 257 293

Accrued pension liability $ (1,665) $ (1,300)

The following rate assumptions were made for the noncontributory,
defined benefit and the nonqualified unfunded supplementary retirement
plans:
1993 1992
Discount rate of return on
projected benefit obligation 8.0% 9.0%
Rate of return on plan assets 10.0% 9.0%

The long-term rate of salary progression for 1993 reflected no anticipated
rate increase for the first two years, followed by 3.5% for two years, 4%
for six years and 5% thereafter. The comparable rate in 1992 was 5% for
all years. The changes in rates from year to year were made to reflect
what management considered to be a better approximation of the rates
to be realized.

Pension expense in 1993 and 1992 included the following components:
(In thousands of dollars) 1993 1992

Service cost-benefits earned
during the period $ 1,861 $ 1,697
Interest on projected benefit obligation 2,893 3,176
Actual gain on plan assets (2,362) (2,400)
Net deferral (1,919) (1,370)
Curtailment loss -- 104
Settlement gain -- (151)
Net periodic pension cost $ 473 $ 1,056

The company's policy has been to fund the minimum required contribution
after the end of the fiscal year plus interest on the contribution from the
end of the plan year until paid. The company's Universal Industries
subsidiary historically funded the maximum required contribution during
the year.

At the end of 1992, Universal Industries, Inc. pension plan's future service
benefits were frozen and the plan assets were absorbed into the
company's pension plan, which resulted in a curtailment loss of $104,000.

The company has a nonqualified, unfunded supplementary retirement
plan for which it has purchased cost recovery life insurance on the lives of
the participants. The company is the sole owner and beneficiary of such
policies. The amount of coverage is designed to provide sufficient
revenues to recover all costs of the plan if assumptions made as to
mortality experience, policy earnings and other factors are realized.
Expenses related to the plan were $547,000 in 1993, $395,000 in 1992
and $312,000 in 1991. The actuarially determined liability which has been
included in other deferrals was $3,190,000 at January 1, 1994,
$2,313,000 at January 2, 1993 and $1,962,000 at December 28, 1991.

The following table sets forth the plan's status and amounts recognized
in the company's financial statements at January 1, 1994 and January 2,
1993:

(In thousands of dollars) 1993 1992

Fair value of plan assets $ -- $ --

Accumulated benefit obligation, including
vested benefits of $3,043 and $2,284,
respectively 3,190 2,313
Additional benefits based on estimated
future salary levels (5) 1,341

Projected benefit obligation 3,185 3,654

Projected benefit obligation in excess
of plan assets (3,185) (3,654)
Unrecognized net loss 667 1,213
Unrecognized transitional obligation 1,092 1,193
Adjustment required to recognize
minimum liability (1,764) (1,065)

Unfunded accrued supplementary costs $ (3,190) $ (2,313)

F-13

NOTE 10 (Continued)

Net supplementary pension cost for the two years included the following
components:

(In thousands of dollars) 1993 1992

Service cost-benefits earned during
the period $110 $ 95
Interest on projected benefit obligation 276 200
Net amortization 161 100

Net periodic supplementary pension cost $547 $395

Substantially all employees meeting certain service requirements
are eligible to participate in the company's employee savings
(401-K) plan. Employee contributions are limited to a percentage of
their compensation, as defined in the plan. Although the plan did not
provide for any company contributions in 1992, a matching provision
became effective in April 1993, but was discontinued on January 2,
1994.

A new profit sharing plan was implemented January 1, 1991
which provides for a quarterly payment to employees if a profit is
reported in the most recently completed quarter and is sufficient to
recover any previously reported quarterly losses. This replaced the
employee bonus plan that was in effect in the previous years. The
employee profit sharing/bonus expense was $727,000 in 1993,
$4,614,000 in 1992 and $2,446,000 in 1991.

The company also provides certain postretirement medical and life
insurance benefits to substantially all employees who retire with a
minimum of 15 years of service for the period of time until the employee
and any dependents reach age 65. The medical plan requires monthly
contributions by retired participants which are dependent on the partici-
pant's length of service, age at the date of retirement and Medicare
eligibility. The life insurance plan is noncontributory. Prior to 1993, the
company expensed the costs relating to these unfunded plans as incurred.
Such costs amounted to approximately $375,000 in 1992 and 1991.

In 1993, the company adopted Statement of Financial Accounting Standards
(SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions." The standard required companies to recognize the
estimated costs of providing postretirement benefits on an accrual basis.
The company elected the delayed recognition method of adoption which
allows amortization of the initial transitional obligation over a 20-year
period. At January 3, 1994, the actuarially determined accumulated
postretirement benefit obligation was $5,101,000.

The amounts recognized in the company's balance sheet at January 1,
1994 were as follows:

(In thousands of dollars) 1993
Accumulated postretirement
benefit obligation $5,323
Unrecognized transitional
obligation (4,846)
Accrued liability $ 477

Net periodic postretirement benefit cost for 1993 included the
following components:

(In thousands of dollars) 1993

Service cost-benefits earned during
the period $171
Interest on accumulated postretirement
benefit obligation 402
Amortization of accumulated
postretirement benefit obligation 256

Total $829

The discount rate used in determining the accumulated postretirement
benefit obligation was 8%. The assumed medical cost trend rate
was 12% in 1993, declining by 1% per year until an ultimate rate of 5%
is achieved. The medical cost trend rate assumption has a significant
effect on the amount of the obligation and net periodic cost reported. A
one percentage point increase in the medical cost trend rate would have
increased the accumulated postretirement benefit obligation by
$337,000 and the aggregate service and interest cost components of
the net periodic postretirement benefit cost for 1993 by $52,000.

In November 1992, the Financial Accounting Standards Board released
Statement No. 112 "Employers' Accounting for Postemployment Benefits."
As the company does not have significant postemployment benefits, the
adoption of this statement in 1994 is not expected to have a material
impact on the company's results of operations or financial position.

F-14

NOTE 11-QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of the unaudited quarterly financial information for
the nine-month period ended October 1, 1994 and the years ended January 1, 1994
and January 2, 1993.*

(In thousands of dollars 1994 1993 1992
except per share data) (UNAUDITED)

NET SALES AND OTHER INCOME

1st quarter $ 86,294 $ 91,022 $ 70,762
2nd quarter 101,900 100,238 88,603
3rd quarter 208,931 187,109 181,129
4th quarter -- 155,242 163,452

Total $397,125 $533,611 $503,946

GROSS PROFIT
1st quarter $ 18,511 $ 21,957 $ 14,823
2nd quarter 18,757 23,386 17,805
3rd quarter 44,136 38,742 37,813
4th quarter -- 31,985 45,820

Total $ 81,404 $116,070 $116,261

INCOME BEFORE INCOME TAXES
1st quarter $ (7,916) $ (2,295) $ (4,849)
2nd quarter (4,892) 681 (2,816)
3rd quarter 11,924 7,437 7,729
4th quarter -- 3,268 20,187

Total $ (884) $ 9,091 $ 20,251

PROVISION FOR INCOME TAXES
1st quarter $ (3,008) $ (852) $ (1,791)
2nd quarter (1,859) 246 (1,402)
3rd quarter 4,531 2,767 3,086
4th quarter -- 1,027 7,167

Total $ (336) $ 3,188 $ 7,060

NET INCOME
1st quarter $ (4,908) $ (1,443) $ (3,058)
2nd quarter (3,033) 435 (1,414)
3rd quarter 7,393 4,670 4,643
4th quarter -- 2,241 13,020

Total $ (548) $ 5,903 $ 13,191

NET INCOME PER COMMON SHARE
1st quarter $ (.18) $ (.06) $ (.11)
2nd quarter (.11) .01 (.06)
3rd quarter .24 .15 .15
4th quarter -- .06 .44

Total $ (.05) $ .16 $ .42

*The first two quarters of 1992 have been restated to reflect the acquisition of
Universal Industries, Inc. treated as a pooling of interests. In addition, all
quarters have been restated to reflect a change in accounting method from LIFO
to FIFO.

NOTE 12-LEASE COMMITMENTS

At January 1, 1994, the company was obligated under a number of noncancellable,
renewable operating leases as follows:

Data Manufacturing
(In thousands Processing Facilities and
of dollars) Equipment Other Total

1994 $ 3,064 $ 5,316 $ 8,380
1995 2,568 4,582 7,150
1996 1,905 3,578 5,483
1997 1,450 2,701 4,151
1998 1,051 2,124 3,175
1999 and after -- 14,771 14,771

$10,038 $33,072 $43,110

Rental expense charged to income was $15,092,000 in 1993, $13,696,000 in 1992
and $12,309,000 in 1991.

NOTE 13-EMPLOYMENT AGREEMENTS

The company has entered into employment continuity agreements with certain of
its executives which provide for the payments to these executives of amounts up
to three times their annual compensation plus continuation of certain benefits,
if there is a change in control in the company (as defined) and a termination
of their employment. The maximum contingent liability at January 1, 1994 under
these agreements was approximately $4,560,000.

Employment agreements with certain executives were executed as a result of the
Logo 7 acquisition. Under predefined events of termination, the company could
incur a maximum liability of $9,786,000 as of January 1, 1994.

NOTE 14-CONCENTRATION OF CREDIT RISK

The company's concentration of credit risk is limited due to the large number
of primarily domestic customers who are geographically dispersed. The company
has no customer that constituted 10% of net sales in 1993. As disclosed on the
balance sheet, the company maintains an allowance for doubtful accounts to
cover estimated credit losses.

F-15

NOTE 15-SHAREHOLDER RIGHTS PLAN

In March 1990, the Board of Directors of the company adopted a Shareholder
Rights Plan and declared a dividend of one right for each outstanding share of
common stock to shareholders of record on April 2, 1990. Each right entitles
the registered holder to purchase from the company, until the earlier of March
22, 2000 or the redemption of the rights, one one-thousandth of a share of newly
authorized Junior Participating Cumulative Preferred Stock, Series A, without
par value, at an exercise price of $40. The rights are not exercisable or
transferable apart from the common stock until the earlier of (i) 10 days
following the public announcement that a person or a group of affiliated persons
has acquired or obtained the right to acquire beneficial ownership of 10% or
more of the company's outstanding common stock or (ii) 10 business days
following the commencement of a tender offer or exchange offer that would result
in a person or group owning 10% or more of the company's outstanding common
stock. The company may redeem the rights at a price of $.01 per right at any
time prior to the acquisition of 10% or more of the company's outstanding common
stock or certain other triggering events.

NOTE 16-STOCK PURCHASE PLAN

In February 1994, the company initiated the Salaried Employees' Stock Purchase
Plan. Under the plan, employees may elect to purchase shares of the company's
common stock in amounts ranging from 20-30% of their annual salary. Employees
will pay for the stock through payroll deductions over a 60-month period. The
shares will be held by the company and interest of 6% per annum will be charged
until the end of the 60-month period. The price of the shares will be fixed as
of the last day of trading in February 1994. The company has reserved 925,000
shares of common stock for issuance pursuant to the plan.

F-16

NOTE 17-CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following financial information presents condensed consolidating financial
data which includes i) the parent company only ("Parent"), ii) the wholly-owned
subsidiaries on a combined basis ("Wholly-owned Subsidiaries"), iii) the
majority owned subsidiary ("Majority-owned Subsidiary") and iv) the company on
a consolidated basis. All subsidiaries will guarantee the Senior Notes as
further discussed in Note 18.

(In thousands of Wholly-owned Majority-owned
dollars) Parent Subsidiaries Subsidiary Eliminations Consolidated

As of and for the nine months
ended October 1, 1994 (unaudited)

<S> <C> <C> <C> <C> <C>
Current assets $314,849 $158,475 $2,333 $ (99,903) $375,754
Non-current assets 193,291 42,592 -- (62,131) 173,752

Total Assets $508,140 $201,067 $2,333 $(162,034) $549,506

Current liabilities $ 19,038 $122,847 $2,075 $ (67,628) $ 76,332
Non-current liabilities 322,733 794 (58) (27,658) 295,811

Total liabilities $341,771 $123,641 $2,017 $ (95,286) $372,143

Net sales $226,112 $184,336 $2,633 $ (15,956) $397,125
Cost and expenses 231,698 179,888 2,885 (16,462) 398,009

Pretax net income (loss) $ (5,587) $ 4,448 $ (252) $ 507 $ (884)

As of and for the year ended
January 1, 1994

Current assets $237,088 $111,401 $2,906 $ (62,704) $288,691
Non-current assets 203,828 44,578 -- (62,132) 186,274

Total assets $440,916 $155,979 $2,906 $(124,836) $474,965

Current liabilities $ 15,597 $ 80,895 $2,442 $ (53,796) $ 45,138
Non-current liabilities 257,459 486 (51) (7,264) 250,630

Total liabilities $273,056 $ 81,381 $2,391 $ (61,060) $295,768

Net sales $323,785 $234,278 $6,489 $ (30,941) $533,611
Cost and expenses 320,689 227,673 6,632 (30,474) 524,520

Pretax net income (loss) $ 3,097 $ 6,605 $ (144) $ (467) $ 9,091

As of and for the year ended
January 2, 1993

Current assets $206,692 $ 82,901 $2,518 $ (42,784) $249,327
Non-current assets 205,689 45,624 -- (64,822) 186,491

Total assets $412,381 $128,525 $2,518 $(107,606) $435,818

Current liabilities $105,406 $ 58,268 $1,999 $ (43,063) $122,610
Non-current liabilities 135,633 16 (48) (1,186) 134,415

Total liabilities $241,039 $ 58,284 $1,951 $ (44,249) $257,025

Net sales $338,856 $192,586 $3,725 $ (31,221) $503,946
Cost and expenses 327,889 181,922 3,489 (29,605) 483,695

Pretax net income (loss) $ 10,967 $ 10,664 $ 236 $ (1,616) $ 20,251

As of and for the year ended
December 28, 1991

Current assets $ 98,838 $ 86,670 $3,267 $ (17,083) $171,692
Non-current assets 140,683 4,643 -- (2,061) 143,265

Total assets $239,521 $ 91,313 $3,267 $ (19,144) $314,957

Current liabilities $ 48,603 $ 49,961 $2,844 $ (14,727) $ 86,681
Non-current liabilities 71,603 2,254 (10) (2,662) 71,185

Total liabilities $120,206 $ 52,215 $2,834 $ (17,389) $157,866

Net sales $306,972 $ 58,697 $1,650 $ (17,409) $349,910
Cost and expenses 307,155 50,449 1,455 (19,916) 339,143

Pretax net income (loss) $ (183) $ 8,247 $ 195 $ 2,508 $ 10,767

</TABLE>
NOTE 18-SENIOR NOTE OFFERING (UNAUDITED)

The company is anticipating the completion of a public offering of
$115,000,000 principal amount of Senior Notes due 2005 ("Senior Notes")
during the first quarter of 1995. All subsidiaries of the company (the
"Subsidiary Guarantors") will fully and unconditionally guarantee the
company's obligations under the Notes on a joint and several basis.

F-17

PART II

Information Not Required in Prospectus

Item 13. Other Expenses of Issuance and Distribution

The estimated expenses in connection with the offering are as follows:

SEC Registration Fee . . . . . . . . . . . . . $ 39,656
NASD Fee . . . . . . . . . . . . . . . . . . . 12,000
Blue Sky Fees . . . . . . . . . . . . . . . . *
Legal Fees . . . . . . . . . . . . . . . . . . *
Accounting Fees . . . . . . . . . . . . . . . *
Printing Expenses . . . . . . . . . . . . . . *
Miscellaneous . . . . . . . . . . . . . . . . *
Total . . . . . . . . . . . . . . . . . . . $ *
__________________
*To be completed by amendment.

Item 14. Indemnification of Officers and Directors

The Virginia Stock Corporation Act permits, and the Company's Articles of
Incorporation (the "Articles") require, indemnification of the Company's
directors and officers in a variety of circumstances that may include
liabilities under the Securities Act of 1933, as amended (the "Securities
Act"). Under sections 13.1-697 and 13.1-702 of the Virginia Stock
Corporation Act, a Virginia corporation is generally authorized to
indemnify its directors and officers in civil or criminal actions if they
acted in good faith and, in the case of criminal actions, had no reasonable
cause to believe that the conduct was unlawful. The Company's Articles
require indemnification of any person with respect to certain liabilities
incurred in connection with any proceeding to which that person is made a
party by reason of (i) his service to the Company as a director or officer,
or (ii) his service as director, officer, trustee or partner to some other
enterprise at the request of the Company, except in the case of willful
misconduct or a knowing violation of criminal law. In addition, the
Company carries insurance on behalf of directors, officers, employees and
agents that may cover liabilities under the Securities Act. As permitted
by the Virginia Stock Corporation Act, the Company's Articles provide that
in any proceeding brought by a shareholder of the Company in the right of
the Company or brought by or on behalf of shareholders of the Company, no
director or officer of the Company shall be liable to the Company or its
shareholders for monetary damages with respect to any transaction,
occurrence or course of conduct, whether prior or subsequent to the
effective date of such Articles, except for liability resulting from such
person having engaged in willful misconduct or a knowing violation of the
criminal law or any federal or state securities law.

Item 15. Recent Sales of Unregistered Securities

The Company has sold the following securities during the past three years
on the dates and for the consideration indicated:

Capital Stock

In January 1992, the Company issued an aggregate of 150,000 shares of
Cumulative Convertible Preferred Stock, $7.50 Series B, having a stated
value of $15 million to LG Sale Corporation, Inc. and Herbert and Melvin
Simon in connection with the acquisition of the business of Logo 7.

In June 1992, the Company issued 1,263,393 shares of Common Stock having a
market value of $11,086,268 in exchange for the capital stock of Universal.

Debt

In June 1992, the Company issued $95 million of the 8 7/8% Notes to various
institutional investors. J. P. Morgan Securities Inc. acted as placement
agent for the 8 7/8% Notes.

All of the above securities were offered and issued in private transactions
not involving any public offering and were accordingly exempt from the
registration provisions of the Securities Act pursuant to Section 4(2)
thereof.

Item 16.

(a) Exhibits

1 Form of Underwriting Agreement among Tultex Corporation, the
Guarantors and the Underwriters*

3.1 Restated Articles of Incorporation of Tultex Corporation (filed
as Exhibit 3.1 to the Company's Form 10-K for the fiscal year
ended December 29, 1990 and incorporated herein by reference)

3.2 Articles of Amendment to the Restated Articles of Incorporation
of Tultex Corporation (filed as Exhibit 3 to the Company's
Current Report on Form 8-K dated January 31, 1992 and
incorporated herein by reference)

3.3 By-laws of Tultex Corporation*

3.4 Articles of Incorporation of AKOM, Ltd.*

3.5 Bylaws of AKOM, Ltd.*

3.6 Articles of Incorporation of Dominion Stores, Inc.*

3.7 Bylaws of Dominion Stores, Inc.*

3.8 Articles of Incorporation of Tultex International, Inc.*

3.9 Bylaws of Tultex International, Inc.*

3.10 Articles of Incorporation of Logo 7, Inc.*

3.11 Bylaws of Logo 7, Inc.*

3.12 Articles of Incorporation of Universal Industries, Inc.*

3.13 Bylaws of Universal Industries, Inc.*

3.14 Articles of Incorporation of Tultex Canada, Inc.*

3.15 Bylaws of Tultex Canada, Inc.*

3.16 Articles of Incorporation of Sweatjet, Inc.*

3.17 Bylaws of Sweatjet, Inc.*

4.1 Form of Indenture among Tultex Corporation, the Guarantors and
First Union National Bank of Virginia, as Trustee, relating to
the Notes*

4.2 Form of Senior Note (included in Exhibit 4.1)*

4.3 Form of Subsidiary Guarantee (included in Exhibit 4.1)*

5 Opinion of Hunton & Williams (including consent)*

10.1 Tultex Corporation 1987 Stock Option Plan (filed as Exhibit B to
the Company's Definitive Proxy Statement dated January 15, 1988
and incorporated herein by reference)

10.2 Tultex Corporation 1990 Stock Option Plan (filed as Exhibit A to
the Company's Definitive Proxy Statement dated February 14, 1991
and incorporated herein by reference)

10.3 Tultex Corporation Supplemental Retirement Plan (filed as Exhibit
10.3 to the Company's Form 10-K for the fiscal year ended
December 30, 1989 and incorporated herein by reference)

10.4 Tultex Corporation Salaried Employees' Common Stock Purchase
Plan, dated February 11, 1994 (filed as Exhibit 4.5 to the
Company's Registration Statement Form S-8 dated February 11, 1994
and incorporated herein by reference)

10.5 Form of Employment Continuity Agreement (filed as Exhibit 10.6 to
the Company's Form 10-Q for the quarter ended April 1, 1989 and
the Company's Form 10-Q for the quarter ended March 31, 1990 and
incorporated herein by reference)

10.6 Standstill Agreement, dated as of January 31, 1992, among Tultex
Corporation, Logo 7, Inc. (Ind.), Melvin Simon and Herbert Simon
(filed as Exhibit 10(b) to the Company's Current Report on Form
8-K dated January 31, 1992 and incorporated herein by reference)

10.7 Credit Agreement, dated as of October 6, 1993, as amended by
First Amendment and Waiver to Credit Agreement dated as of March
4, 1994 for $225 million credit facility (filed as Exhibit 10.18
to the Company's Form 10-Q for the quarter ended October 2, 1993
(Credit Agreement) and Exhibit 10.22 to the Company's Form 10-Q
for the quarter ended April 2, 1994 (First Amendment and Waiver
to Credit Agreement) and incorporated herein by reference)

10.8 Agreement for Amended and Restated Term Loan Agreement, dated
March 1, 1994 between the Company and Wachovia Bank of North
Carolina, N.A. (filed as Exhibit 10.21 to the Company's Form 10-Q
for the quarter ended April 2, 1994 and incorporated herein by
reference)

10.9 Note Agreements, dated June 1, 1992, as amended by Amendment No.
1 to Note Agreements dated as of September 1, 1993 and Second
Amendment to Note Agreements dated as of March 1, 1994, between
the Company and each of the institutions named therein (filed as
Exhibit 4.1 to the Company's Form 10-Q for the quarter ended June
27, 1992 (Note Agreements), Exhibit 10.17 to the Company's Form
10-Q for the quarter ended October 2, 1993 (Amendment No. 1 to
Note Agreements), and Exhibit 10.20 to the Company's Form 10-Q
for the quarter ended April 2, 1994 (Second Amendment to Note
Agreements) and incorporated herein by reference)

11 The computation of earnings per share can be clearly determined
from the financial statements of the Company contained in the
Prospectus

12 Computation of ratios of earnings to fixed charges

21 Subsidiaries of the Company

23.1 Consent of Price Waterhouse LLP

23.2 Consent of Coopers & Lybrand L.L.P.

23.3 Consent of Hunton & Williams (included in Exhibit 5)*

24 Powers of attorney (included on the signature pages of this
Registration Statement)

25 Statement of Eligibility and Qualification on Form T-1 of First
Union National Bank of Virginia, as the Trustee under the Trust
Indenture Act of 1939
__________________________
* To be filed by amendment.

(b) Financial Statement Schedule

The following Report of Coopers & Lybrand L.L.P. and financial statement
schedule are included as part of this Registration Statement:

Report of Coopers & Lybrand L.L.P.

Schedule VIII Valuation and Qualifying Accounts and Reserves

Note: All other schedules for which provision is made in the
applicable accounting regulations of the Commission are not required
under the related instructions, are inapplicable or have been
disclosed in the Notes to Consolidated Financial Statements and,
therefore, have been omitted.

Item 17. Undertakings

(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

(b) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.

(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

Signatures

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Martinsville, State
of Virginia, on this 20th day of January, 1995.

TULTEX CORPORATION
(Registrant)

By /s/ Charles W. Davies, Jr.

Charles W. Davies, Jr.
President and Chief Executive Officer

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 20, 1995. Each of the directors and/or
officers of Tultex Corporation whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and
each of them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission any and all amendments, including post-effective amendments, to
this registration statement, making such changes in the registration
statement as appropriate, and generally to do all such things in their
behalf in their capacities as officers and directors to enable Tultex
Corporation to comply with the provisions of the Securities Act of 1933,
and all requirements of the Securities and Exchange Commission.

Signature Title

/s/ John M. Franck Chairman of the Board
John M. Franck

/s/ Charles W. Davies, Jr. President and Chief Executive Officer
Charles W. Davies, Jr. (Principal Executive Officer)

/s/ Don P. Shook Vice President-Human and
Don P. Shook Financial Resources (Principal
Financial Officer)

/s/ Suzanne H. Wood Controller
Suzanne H. Wood (Principal Accounting Officer)

/s/ Lathan M. Ewers, Jr. Director
Lathan M. Ewers, Jr.

/s/ William F. Franck Director
William F. Franck

/s/ J. Burness Frith Director
J. Burness Frith

/s/ Irving M. Groves, Jr. Director
Irving M. Groves, Jr.

/s/ Bruce M. Jacobson Director
Bruce M. Jacobson

/s/ Richard M. Simmons, Jr. Director
Richard M. Simmons, Jr.

/s/ John M. Tully Director
John M. Tully

Signatures

Pursuant to the requirements of the Securities Act, the Co-Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Martinsville, State
of Virginia, on this 23rd of January, 1995.

AKOM, LTD.
(Co-Registrant)

By /s/John M. Franck
John M. Franck
President

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of AKOM, Ltd. whose signature appears below hereby appoints O.
Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and each of them
severally, as his attorney-in-fact to sign in his name and behalf, in any
and all capacities stated below, and to file with the Commission any and
all amendments, including post-effective amendments, to this registration
statement, making such changes in the registration statement as
appropriate, and generally to do all such things in their behalf in their
capacities as officers and directors to enable AKOM, Ltd. to comply with
the provisions of the Securities Act of 1933, and all requirements of the
Securities and Exchange Commission.

Signature Title

/s/ John M. Franck President and Director (Chief Executive Officer)
John M. Franck

/s/ James M. Baker Treasurer (Chief Financial Officer and
James M. Baker Chief Accounting Officer)

/s/ Charles W. Davies, Jr. Director
Charles W. Davies, Jr.

/s/ B. Alvin Ratliff Director
B. Alvin Ratliff

/s/ Don P. Shook Director
Don P. Shook

Signatures

DOMINION STORES, INC.
(Co-Registrant)

By /s/ John J. Smith
John J. Smith
President

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of Dominion Stores, Inc. whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and
each of them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission any and all amendments, including post-effective amendments, to
this registration statement, making such changes in the registration
statement as appropriate, and generally to do all such things in their
behalf in their capacities as officers and directors to enable Dominion
Stores, Inc. to comply with the provisions of the Securities Act of 1933,
and all requirements of the Securities and Exchange Commission.

Signature Title

/s/ John J. Smith President and Director (Chief
John J. Smith Executive Officer)

/s/ James M. Baker Treasurer (Chief Financial Officer and
James M. Baker Chief Accounting Officer)

/s/ W.J. Caruba Director
W. J. Caruba

/s/ Charles W. Davies, Jr. Director
Charles W. Davies, Jr.

/s/ Don P. Shook Director
Don P. Shook

/s/ John M. Franck Director
John M. Franck

Signatures

TULTEX INTERNATIONAL, INC.
(Co-Registrant)

By /s/ Walter J. Caruba
Walter J. Caruba
President

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of Tultex International, Inc. whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and each
of them severally, as his attorney-in-fact to sign in his name and behalf, in
any and all capacities stated below, and to file with the Commission any and
all amendments, including post-effective amendments, to this registration
statement, making such changes in the registration statement as
appropriate, and generally to do all such things in their behalf in their
capacities as officers and directors to enable Tultex International, Inc. to
comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.

Signature Title

/s/ Walter J. Caruba President and Director
Walter J. Caruba

/s/ James M. Baker Treasurer (Chief Financial Officer and
James M. Baker Chief Accounting Officer)

/s/ Charles W. Davies, Jr. Director
Charles W. Davies, Jr.

/s/ Barry W. Hanson Director
Barry W. Hanson

/s/ John M. Franck Director
John M. Franck

/s/ Don P. Shook Director
Don P. Shook

Signatures

TULTEX CANADA, INC.
(Co-Registrant)

By /s/ Walter J. Caruba
Walter J. Caruba
Chairman of the Board and President

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of Tultex Canada, Inc. whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and
each of them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission any and all amendments, including post-effective amendments, to
this registration statement, making such changes in the registration
statement as appropriate, and generally to do all such things in their
behalf in their capacities as officers and directors to enable Tultex
Canada, Inc. to comply with the provisions of the Securities Act of 1933,
and all requirements of the Securities and Exchange Commission.

Signature Title

/s/ Walter J. Caruba Chairman of the Board and President
Walter J. Caruba

/s/ Eric Delfs Treasurer and Director (Chief Financial
Eric Delfs Officer and Chief Accounting Officer)

/s/ Jeffrey M. Boruvka Director
Jeffrey M. Boruvka

/s/ Barry Keohan Director
Barry Keohan

/s/ Laura Delfs Director
Laura Delfs

Signatures

SWEATJET, INC.
(Co-Registrant)

By /s/John M. Franck
John M. Franck
Chief Executive Officer

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of Sweatjet, Inc. whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and
each of them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission any and all amendments, including post-effective amendments, to
this registration statement, making such changes in the registration
statement as appropriate, and generally to do all such things in their
behalf in their capacities as officers and directors to enable Sweatjet,
Inc. to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.

Signature Title

/s/ John M. Franck Chief Executive Officer and Director
John M. Franck

/s/ Don P. Shook Vice President, Chief Financial and
Don P. Shook Accounting Officer

/s/ Charles W. Davies, Jr. Vice President and Director
Charles W. Davies, Jr.

/s/ John J. Smith Director
John J. Smith

/s/ B. Alvin Ratliff Director
B. Alvin Ratliff

/s/ W. J. Caruba Director
W.J. Caruba

Signatures

Pursuant to the requirements of the Securities Act, the Co-Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Indianapolis,
Indiana, on this 23rd day of January, 1995.

LOGO 7, INC.
(Co-Registrant)

By /s/ Thomas K. Shine
Thomas K. Shine
President and Chief Executive
Officer

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of Logo 7, Inc. whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and
each of them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission any and all amendments, including post-effective amendments, to
this registration statement, making such changes in the registration
statement as appropriate, and generally to do all such things in their
behalf in their capacities as officers and directors to enable Logo 7, Inc.
to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.

Signature Title

/s/ Thomas K. Shine President, Chief Executive Officer and Director
Thomas K. Shine

/s/ Jeffrey M. Boruvka Chief Financial Officer and Chief
Jeffrey M. Boruvka Accounting Officer

/s/ Charles W. Davies, Jr. Director
Charles W. Davies, Jr.

/s/ Michael R. Kistler Director
Michael R. Kistler

/s/ Brian D. Edington Director
Brian D. Edington

/s/ John M. Franck Director
John M. Franck

Signatures

Pursuant to the requirements of the Securities Act, the Co-Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Mattapoisett,
Commonwealth of Massachusetts, on this 23rd day of January, 1995.

UNIVERSAL INDUSTRIES, INC.
(Co-Registrant)

By /s/ Gregg Browne
Gregg Browne
President

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on January 23, 1995. Each of the directors and/or
officers of Universal Industries, Inc. whose signature appears below hereby
appoints O. Randolph Rollins, Don P. Shook and Lathan M. Ewers, Jr., and
each of them severally, as his attorney-in-fact to sign in his name and
behalf, in any and all capacities stated below, and to file with the
Commission any and all amendments, including post-effective amendments, to
this registration statement, making such changes in the registration
statement as appropriate, and generally to do all such things in their
behalf in their capacities as officers and directors to enable Universal
Industries, Inc. to comply with the provisions of the Securities Act of
1933, and all requirements of the Securities and Exchange Commission.

Signature Title

/s/ Gregg Browne President (Chief Executive Officer)
Gregg Browne

/s/ Don P. Shook Vice President (Chief Financial Officer
Don P. Shook and Chief Accounting Officer)

/s/ Charles W. Davies, Jr. Director
Charles W. Davies, Jr.

/s/ Thomas K. Shine Director
Thomas K. Shine

/s/ Michael R. Kistler Director
Michael R. Kistler

/s/ Brian D. Edington Director
Brian D. Edington

/s/ John M. Franck Director
John M. Franck

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Universal Industries, Inc.:

In connection with our audits of the consolidated financial statements of
Universal Industries, Inc. as of December 31, 1991 and 1990, and for each
of the three years in the period ended December 31, 1991, we have also audited
the following financial statement schedules:

Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation of Property, Plant and Equipment
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-term Borrowings
Schedule X - Supplementary Income Statement Information

In our opinion, these financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly,
in all material respects, the information required to be included therein.

COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 19, 1992

TULTEX CORPORATION SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
CONSOLIDATED

<TABLE>
(In thousands of dollars)

Balance at Additions Balance
Reserve for doubtful beginning charged to at end
accounts and returns of period operations Reductions of period
<S> <C> <C> <C> <C>
For the fifty-two weeks
ended December 28, 1991 $ 2,432 $ 3,337 $(4,047)(1) $ 1,722

For the fifty-three weeks
ended January 2, 1993 $ 1,722 $ 4,703 $(4,065)(1) $ 2,360

For the fifty-two weeks
ended January 1, 1994 $ 2,360 $ 3,241 $(3,227)(1) $ 2,374
</TABLE>

(1) Amounts represent write-off of uncollectible receivable balances.

TULTEX CORPORATION EXHIBIT 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands)
<TABLE> Nine Months
Year Ended Ended

Dec. 30 Dec.29 Dec. 28 Jan. 2 Jan.1 Oct. 2 Oct. 1
1989 1990 1991 1993 1994 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes
and cumulative effect of
accounting change $13,416 $30,270 $10,767 $20,251 $9,091 $5,823 ($884)

Interest on indebtedness (C) 12,504 15,162 11,414 13,540 16,996 12,337 13,203

Amortization of deferred debt
issue costs 0 0 0 106 268 159 1,205

Portion of rental expense representative
of the interest factor (33%) 3,029 3,724 4,103 4,565 5,031 3,703 3,444

Total fixed charges 15,533 18,886 15,517 18,211 22,295 16,199 17,852

Income (loss) before income taxes and
cumulative effect of accounting
change and fixed charges (C) $24,719 $42,832 $23,934 $38,462 $31,386 $22,022 $16,968

Ratio of earnings to fixed charges 1.59 2.27 1.54(B) 2.11 1.41 1.36 (A)

COMPUTATION OF PRO FORMA
RATIO OF EARNINGS TO FIXED
CHARGES AFTER ADJUSTMENT
FOR DEBT ISSUANCE

Income (loss) before income taxes and
cumulative effect of accounting
change and fixed charges, as above (C) $31,386 $16,968

Fixed charges, as above 22,295 17,852

Adjustments:

Estimated net increase in interest
expense from refinancing 3,090 3,307

Estimated net increase (decrease)
in amortization of deferred debt
issue costs 133 (353)

Total pro forma fixed charges $25,518 $20,806

Pro forma ratio of earnings to fixed charges 1.23 (D)
</TABLE>
(A) Earnings did not cover fixed charges by $884 for the nine months ended
October 1, 1994.

(B) Included in earnings for the year ended December 28, 1991 was a
nonrecurring gain of $4,014 before income taxes related to the sale of
facilities. If such sale had not occurred, the ratio of earnings to fixed
charges would have been 1.28.

(C) Interest on indebtedness includes capitalized interest of $4,230, $6,324,
and $2,350 for the years ended Dec. 30, 1989, Dec. 29, 1990 and Dec. 28,
1991, respectively. This capitalized interest has been excluded from
"Income (loss) before income taxes and cumulative effect of accounting
change and fixed charges".

(D) On a pro forma basis, earnings did not cover fixed charges by $3,838 for
the nine months ended October 1, 1994.

Exhibit 21

Subsidiaries of the Company

During fiscal 1994, the Company had the following subsidiaries, all of which
are included in the consolidated financial statements incorporated in this
report:

AKOM, Ltd., a Cayman Islands, B.W.I. corporation (100% owned)

Dominion Stores, Inc., a Virginia corporation (100% owned)

Tultex International, Inc., a Virginia corporation (100% owned)

Logo 7, Inc., a Virginia corporation (100% owned)

Universal Industries, Inc., a Massachusetts corporation (100% owned)

Tultex Canada, Inc., a Canadian corporation (78% owned)

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated February 23, 1994
relating to the financial statements of Tultex Corporation, which appear in
such Prospectus. We also consent to the application of such report to the
Financial Statement Schedules for the three years ended January 1, 1994 listed
under Item 16(b) of this Registration Statement when such schedules are read
in conjunction with the financial statements referred to in our report. The
audits referred to in such report also included these schedules. We also
consent to the references to us under the headings "Experts" and "Selected
Consolidated Financial Data" in such Prospectus. However, it should be noted
that Price Waterhouse LLP has not prepared or certified such "Selected
Consolidated Financial Data."

PRICE WATERHOUSE LLP

Winston-Salem, North Carolina
January 20, 1995

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in the registration statement on Form S-1 of
Tultex Corporation of our reports, dated March 19, 1992, on our audits of the
consolidated financial statements and consolidated statement of schedules of
Universal Industries, Inc. We also consent to the reference to our firm under
the caption "Selected Consolidated Financial Data" and "Experts".

Coopers & Lybrand L.L.P.

Boston, Massachusetts
January 20, 1995

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT FOR 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

FIRST UNION NATIONAL BANK OF VIRGINIA

(Exact name of Trustee as specified in its charter)

213 SOUTH JEFFERSON STREET
ROANOKE, VIRGINIA 24011 54-0211320
(Address of principal executive office) (Zip Code) (I.R.S. Employer
Identification No.)-

Tultex Corporation
(Exact name of obligor as specified in its charter)

Virginia 54-0367896
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

101 Commonwealth Boulevard
Martinsville, Virginia 24112
(Address of principal executive offices) (Zip Code)

% SENIOR NOTES DUE 2005
(Title of the indenture securities)
<PAGE>

1. General information.

(a) The following are the names and addresses of each examining or
supervising authority to which the Trustee is subject:

The Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of Richmond, Virginia.
Federal Deposit Insurance Corporation, Washington, D.C.
Securities and Exchange Commission, Division of Market
Regulation, Washington, D.C.

(b) The Trustee is authorized to exercise corporate trust powers.

2. Affiliations with obligor.

The obligor is not an affiliate of the Trustee.
(See Note 2 on Page 5)

3. Voting Securities of the Trustee.

The following information is furnished as to each class of voting
securities of the Trustee:

As of September 30, 1994

Column A Column B

Title of Class Amount Outstanding

Common Stock, par value $3.33-1/3 a share 174,774,410 shares

4. Trusteeships under other indentures.

The Trustee is not a trustee under another indenture under which
any other securities, or certificates of interest or participation in
any other securities, of the obligor are outstanding.

5. Interlocking directorates and similar relationships with the obligor or
underwriters.

Neither the Trustee nor any of the directors or executive
officers of the Trustee is a director, officer, partner, employee,
appointee or representative of the obligor or of any underwriter for
the obligor.

(See Note 2 on Page 5)

6. Voting securities of the Trustee owned by the obligor or its officials.

Voting securities of the Trustee owned by the obligor and its
directors, partners, executive officers, taken as a group, do not
exceed one percent of the outstanding voting securities of the
Trustee.

(See Notes 1 and 2 on Page 5)

7. Voting securities of the Trustee owned by underwriters or their officials.

Voting securities of the Trustee owned by any underwriter and
its directors, partners, and executive officers, taken as a group, do
not exceed one percent of the outstanding voting securities of the
Trustee.

(See Note 2 on Page 5)

8. Securities of the obligor owned or held by the Trustee.

The amount of securities of the obligor which the Trustee owns
beneficially or holds as collateral security for obligation in
default does not exceed one percent of the outstanding securities of
the obligor.

(See Note 2 on Page 5)

9. Securities of underwriters owned or held by the Trustee.

The Trustee does not own beneficially or hold as collateral
security for obligations in default any securities of an underwriter
for the obligor.

(See Note 2 on Page 5)

10. Ownership or holdings by the Trustee of voting securities of certain
affiliates or security holders of the obligor.

The Trustee does not own beneficially or hold as collateral
security for obligations in default voting securities of a person,
who, to the knowledge of the Trustee (1) owns 10% or more of the
voting securities of the obligor or (2) is an affiliate, other than
a subsidiary, of the obligor.

(See Note 2 on Page 5)

11. Ownership of holders by the Trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.

The Trustee does not own beneficially or hold as collateral
security for obligations in default any securities of a person who,
to the knowledge of Trustee, owns 50 percent or more of the voting
securities of the obligor. (See Note 2 on Page 5)

12. Indebtedness of the obligor to the Trustee.

The obligor is not indebted to the Trustee.

13. Defaults by the obligor.

Not applicable.

14. Affiliations with the underwriters.

No underwriter is an affiliate of the Trustee.

15. Foreign trustee.

Not applicable.

16. List of Exhibits.

(1) Articles of Association of the Trustee as now in effect. Exhibit 1.

(2) Certificate of Authority of the Trustee to commence business, if
not contained in the articles of association.

(3) Authorization of the Trustee to exercise corporate trust powers,
if such authorization is not contained in the documents specified
in exhibits (1) and (2) above.

(4) By-Laws of the Trustee. Exhibit 2.

(5) Inapplicable.

(6) Consent by the Trustee required by Section 321(b) of the Trust
Indenture Act of 1939. Included at Page 6 of this Form T-1 Statement.

(7) Report of condition of Trustee.

(8) Inapplicable.

(9) Inapplicable.
<PAGE>

NOTES

1. Since the Trustee is a member of First Union Corporation, a bank
holding company, all of the voting securities of the Trustee are held
by First Union Corporation. The securities of First Union
Corporation are described in Item 3.

2. Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base responsive answers to Items
2, 5, 6, 7, 8, 9, 10 and 11, the answers to said Items are based on
incomplete information. Items 2, 5, 6, 7, 8, 9, 10 and 11 may,
however by considered as correct unless amended by an amendment to
this Form T-1.
<PAGE>

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, FIRST UNION NATIONAL BANK OF VIRGINIA, a national
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Richmond, and Commonwealth of Virginia on the 18th day of January,
1995.

FIRST UNION NATIONAL BANK OF VIRGINIA
(Trustee)

BY: H. H. Hall, Jr. /s/
H. H. Hall, Jr.,
Assistant Vice President

EXHIBIT T-1 (6)

CONSENT OF TRUSTEE

Under section 321(b) of the Trust Indenture Act of 1939 and in
connection with the proposed issuance by Tultex Corporation of its % Senior
Notes Due 2005, First Union National Bank of Virginia, as the Trustee herein
named, hereby consents that reports of examinations of said Trustee by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.

FIRST UNION NATIONAL BANK OF VIRGINIA

BY: John M. Turner /s/
John M. Turner, Vice President

Dated: January 18, 1995
<PAGE>
Exhibit 1
Charter No. 2737

FIRST UNION NATIONAL BANK OF VIRGINIA

ARTICLES OF ASSOCIATION

For the purpose of organizing an association to carry on the business of
banking under the laws of the United States, the undersigned do enter into
the following Articles of Association:

FIRST. The title of the association shall be FIRST UNION NATIONAL BANK
OF VIRGINIA.

SECOND. The main office of the association shall be in Roanoke,
Virginia. The general business of the association shall be conducted at its
main office and its branches.

THIRD. The Board of Directors of this association shall consist of not
less than five nor more than twenty-five shareholders, the exact number to be
fixed and determined from time to time by resolution of a majority of the
full Board of Directors or by resolution of the shareholders at any annual or
special meeting thereof. Each director, during the full term of his
directorship, shall own a minimum of $1,000 aggregate par value of stock of
this association or a minimum par market value or equity interest of $1,000
of stock in the bank holding company controlling this association. Any
vacancy in the Board of Directors may be filled by action of the Board of
Directors.

FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place
the Board of Directors may designate, on the day of each year specified
thereby in the bylaws, but if no election is held on that day, it may be held
on any subsequent day according to such lawful rules as may be prescribed by
the Board of Directors.

Nominations for election to the Board of Directors may be made by
the Board of Directors or by any stockholder of any outstanding class of
capital stock of the bank entitled to vote for election of directors.
Nominations other than those made by or on behalf of the existing bank
management shall be made in writing and be delivered or mailed to the
president of the bank and to the Comptroller of the Currency, Washington,
D.C., not less than 14 days nor more than 50 days prior to any meeting of
stockholders called for the election of directors, provided, however, that if
less than 21 days notice of the meeting is given to shareholders, such
nomination shall be mailed or delivered to the president of the bank and to
the Comptroller of
the Currency not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed.

Such notification shall contain the following information to the
extent known to the notifying shareholder:

o The name and address of each proposed nominee.

o The principal occupation of each proposed nominee.

o The total number of shares of capital stock of the bank
that will be voted for each proposed nominee.

o The name and residence address of the notifying
shareholder.

o The number of shares of capital stock of the bank owned
by the notifying shareholder. Nominations not made in
accordance herewith may, in his discretion, be
disregarded by the chairperson of the meeting, and upon
his instructions, the vote tellers may disregard all
votes cast for each such nominee.

FIFTH. The authorized amount of capital stock of this association shall
be 15,000,000 shares of common stock of the par value of Ten Dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.

If the capital stock is increased by the sale of additional shares
thereof, each shareholder shall be entitled to subscribe for such additional
shares in proportion to the number of shares of said capital stock owned by
him at the time the increase is authorized by the shareholders, unless
another time subsequent to the date of the shareholders' meeting is specified
in a resolution by the shareholders at the time the increase is authorized.
The Board of Directors will have the power to prescribe a reasonable period
of time within which the preemptive rights to subscribe to the new shares of
capital stock must be exercised.

The association, at any time and from time to time, may authorize
and issue debt obligations, whether or not subordinated, without the approval
of the shareholders.

SIXTH. The Board of Directors shall appoint one of its members
president of this association, who shall be chairperson of the Board, unless
the Board appoints another director to be the chairperson. The Board of
Directors shall have the power to appoint one or more vice presidents; and to
appoint a cashier and such other officers and employees as may be required to
transact the business of this association.

The Board of Directors shall have the power to:

o Define the duties of the officers and employees of the
association.

o Fix the salaries to be paid to the officers and
employees.

o Dismiss officers and employees.

o Require bonds from officers and employees and to fix the
penalty thereof.

o Regulate the manner in which any increase of the capital
of the association shall be made.

o Manage and administer the business and affairs of the
association.

o Make all bylaws that it may be lawful for the Board to
make.

o Generally to perform all acts that are legal for a Board
of Directors to perform.

SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of Roanoke,
Virginia, without the approval of the shareholders, and shall have the power
to establish or change the location of any branch or branches of the
association to any other location, without the approval of the shareholders.

EIGHTH. The corporate existence of this association shall continue
until terminated according to the laws of the United States.

NINTH. The Board of Directors of this association, or any three or more
shareholders owning, in the aggregate, not less than 10 percent of the stock
of this association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the laws of the United States, a notice of the
time, place and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage pre-paid, mailed at
least 10 days prior to the date of the meeting to each shareholder of record
at his address as shown upon the books of this association.

TENTH. Each director and executive officer of this association shall be
indemnified by the association against liability in any proceeding (including
without limitation a proceeding brought by or on behalf of the association
itself) arising out of his status as such or his activities in either of the
foregoing capacities, except for any liability incurred on account of
activities which were at the time taken known or believed by such person to
be clearly in conflict with the best interests of the association.
Liabilities incurred by a director or executive officer of the association in
defending a proceeding shall be paid by the association in advance of the
final disposition of such proceeding upon receipt of an undertaking by the
director or executive officer to repay such amount if it shall be determined,
as provided in the last paragraph of this Article Tenth, that he is not
entitled to be indemnified by the association against such liabilities.

The indemnity against liability in the preceding paragraph of this
Article Tenth, including liabilities incurred in defending a proceeding,
shall be automatic and self-operative.

Any director, officer or employee of this association who serves at the
request of the association as a director, officer, employee or agent of a
charitable, not-for-profit, religious, educational or hospital corporation,
partnership, joint venture, trust or other enterprise, or a trade
association, or as a trustee or administrator under an employee benefit plan,
or who serves at the request of the association as a director, officer or
employee of a business corporation in connection with the administration of
an estate or trust by the association, shall have the right to be indemnified
by the association, subject to the provisions set forth in the following
paragraph of this Article Tenth, against liabilities in any manner arising
out of or attributable to such status or activities in any such capacity,
except for any liability incurred on account of activities which were at the
time taken known or believed by such person to be clearly in conflict with
the best interests of the association, or of the corporation, partnership,
joint venture, trust, enterprise, association or plan being served by such
person.

In the case of all persons except the directors and executive officers
of the association, the determination of whether a person is entitled to
indemnification under the preceding paragraph of this Article Tenth shall be
made by and in the sole discretion of the Chief Executive Officer of the
association. In the case of the directors and executive officers of the
association, the indemnity against liability in the preceding paragraph of
this Article Tenth shall be automatic and self-operative.

For purposes of this Article Tenth of these Articles of Association
only, the following terms shall have the meanings indicated:

(a) "Association" means First Union National Bank of Virginia and
its direct and indirect wholly-owned subsidiaries.

(b) "Director" means an individual who is or was a director of the
association.

(c) "Executive officer" means an officer of the association who by
resolution of the Board of Directors of the association has
been determined to be an executive officer of the association
for purposes of Regulation O of the Federal Reserve Board.

(d) "Liability" means the obligation to pay a judgment,
settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan), or reasonable
expenses, including counsel fees and expenses, incurred with
respect to a proceeding.

(e) "Party" includes an individual who was, is, or is threatened
to be made a named defendant or respondent in a proceeding.

(f) "Proceeding" means any threatened, pending, or completed
claim, action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or
informal.

The association shall have no obligation to indemnify any person for an
amount paid in settlement of a proceeding unless the association consents in
writing to such settlement.

The right to indemnification herein provided for shall apply to persons
who are directors, officers, or employees of banks or other entities that are
hereafter merged or otherwise combined with the association only after the
effective date of such merger or other combination and only as to their
status and activities after such date.

The right to indemnification herein provided for shall inure to the
benefit of the heirs and legal representatives of any person entitled to such
right.

No revocation of, change in, or adoption of any resolution or provision
in the Articles of Association or By-laws of the association inconsistent
with, this Article Tenth shall adversely affect the rights of any director,
officer, or employee of the association with respect to (i) any proceeding
commenced or threatened prior to such revocation, change, or adoption, or
(ii) any proceeding arising out of any act or omission occurring prior to
such revocation, change, or adoption, in either case, without the written
consent of such director, officer, or employee.

The rights hereunder shall be in addition to and not exclusive of any
other rights to which a director, officer, or employee of the association may
be entitled under any statute, agreement, insurance policy, or otherwise.

The association shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, or employee of the
association, or is or was serving at the request of the association as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, trade association, employee benefit plan, or other
enterprise, against any liability asserted against such director, officer, or
employee in any such capacity, or arising out of their status as such,
whether or not the association would have the power to indemnify such
director, officer, or employee against such liability, excluding insurance
coverage for a formal order assessing civil money penalties against an
association director or employee.

Notwithstanding anything to the contrary provided herein, no person
shall have a right to indemnification with respect to any liability (i)
incurred in an administrative proceeding or action instituted by an
appropriate bank regulatory agency which proceeding or action results in a
final order assessing civil money penalties or requiring affirmative action
by an individual or individuals in the form of payments to the association,
(ii) to the extent such person is entitled to receive payment therefor under
any insurance policy or from any corporation, partnership, joint venture,
trust, trade association, employee benefit plan, or other enterprise other
than the association, or (iii) to the extent that a court of competent
jurisdiction determines that such indemnification is void or prohibited under
state or federal law.

ELEVENTH. These Articles of Association may be amended at any regular
or special meeting of the shareholders by the affirmative vote of the holders
of a majority of the stock of this association, unless the vote of the
holders of a greatest amount of stock is required by law, and in that case by
the vote of the holders of such greater amount.
<PAGE>
Exhibit 2

BY-LAWS OF

FIRST UNION NATIONAL BANK OF VIRGINIA

ARTICLE I

Meetings of Shareholders

Section 1.1 Annual Meeting. The annual meeting of the shareholders for
the election of directors and for the transaction of such other business as
may properly come before the meeting shall be held on the third Tuesday of
April in each year, commencing with the year 1994, except that the Board of
Directors may, from time to time and upon passage of a resolution
specifically setting forth their reasons, set such other date for such
meeting during the month of April as the Board of Directors may deem
necessary or appropriate; provided, however, that if an annual meeting shall
fall on a legal holiday, then such annual meeting shall be held on the second
business day following such legal holiday. The holders of a majority of
those outstanding shares entitled to vote which are represented at any
meeting of the shareholders may choose persons to act as Chairman and as
Secretary of the meeting.

Section 1.2 Special Meetings. Except as otherwise specifically provided
by statute, special meetings of the shareholders may be called for any
purpose at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock
of the Association. Every such special meeting, unless otherwise provided by
law, shall be called by mailing, postage prepaid, not less than ten days
prior to the date fixed for such meeting, to each shareholder at his address
appearing on the books of the Association, a notice stating the purpose of
the meeting.

Section 1.3 Nominations for Directors. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any
stockholder of any outstanding class of capital stock of the bank entitled to
vote for the election of directors. Nominations, other than those made by or
on behalf of the existing management of the bank, shall be made in writing
and shall be delivered or mailed to the President of the Bank and to the
Comptroller of the Currency, Washington, D. C., not less than 14 days nor
more than 50 days prior to any meeting of stockholders called for the
election of directors, provided however, that if less than 21 days' notice of
such meeting is given to shareholders, such nomination shall be mailed or
delivered to the President of the Bank and to the Comptroller of the Currency
not later than the close of business on the seventh day following the day on
which the notice of meeting was mailed. Such notification shall contain the
following information to the extent known to the notifying shareholder: (a)
the name and address of each proposed nominee; (b) the principal occupation
of each proposed nominee; (c) the total number of shares of capital stock of
the bank that will be voted for each proposed nominee; (d) the name and
residence address of the notifying shareholder; and (e) the number of shares
of capital stock of the bank owned by the notifying shareholder. Nominations
not made in accordance herewith may, in his discretion, be disregarded by the
chairman of the meeting, and upon his instructions, the vote tellers may
disregard all votes cast for each such nominee.

Section 1.4 Judges of Election. The Board may at any time appoint from
among the shareholders three or more persons to serve as Judges of Election
at any meeting of shareholders; to act as judges and tellers with respect to
all votes by ballot at such meeting and to file with the Secretary of the
meeting a Certificate under their hands, certifying the result thereof.

Section 1.5 Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or
employee of this Association shall act as proxy. Proxies shall be valid only
for one meeting, to be specified therein, and any adjournments of such
meeting. Proxies shall be dated and shall be filed with the records of the
meeting.

Section 1.6 Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting
of shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.

ARTICLE II

Directors

Section 2.1 Board of Directors. The Board of Directors (hereinafter
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law,
all corporate powers of the Association shall be vested in and may be
exercised by said Board.

Section 2.2 Number. The Board shall consist of not less than five nor
more than twenty-five directors, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of
a majority of the full Board or by resolution of the shareholders at any
meeting thereof; provided, however, that a majority of the full Board of
Directors may not increase the number of directors to a number which, (1)
exceeds by more than two the number of directors last elected by shareholders
where such number was fifteen or less, and (2) to a number which exceeds by
more than four the number of directors last elected by shareholders where
such number was sixteen or more, but in no event shall the number of
directors exceed twenty-five.

Section 2.3 Organization Meeting. The Secretary of the meeting upon
receiving the certificate of the judges, of the result of any election, shall
notify the directors-elect of their election and of the time at which they
are required to meet at the Main Office of the Association for the purpose of
organizing the new Board and electing and appointing officers of the
Association for the succeeding year. Such meeting shall be held as soon
thereafter as practicable. If, at the time fixed for such meeting, there
shall not be a quorum present, the directors present may adjourn the meeting
from time to time, until a quorum is obtained.

Section 2.4 Regular Meetings. Regular meetings of the Board of
Directors shall be held at such place and time as may be designated by
resolution of the Board of Directors. Upon adoption of such resolution, no
further notice of such meeting dates or the place and time thereof shall be
required. Upon the failure of the Board of Directors to adopt such a
resolution, regular meetings of the Board of Directors shall be held, without
notice, on the Tuesday following the fourth Monday in February, April, June,
August, October and December beginning in 1994, at the main office or at such
other place and time as may be designated by the Board of Directors. When
any regular meeting of the Board falls upon a holiday, whether such regular
meeting is established by resolution or falls on the Tuesday following the
fourth Monday of the month as a result of the Board not having established
regular meeting dates by resolution, the meeting shall be held on the next
banking business day unless the Board shall designate some other day.

Section 2.5 Special Meetings. Special meetings of the Board of
Directors may be called by the President of the Association, or at the
request of three (3) or more directors. Each member of the Board of
Directors shall be given notice stating the time and place, by telegram,
letter, or in person, of each such special meeting.

Section 2.6 Quorum. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but a less
number may adjourn any meeting, from time to time, and the meeting may be
held, as adjourned, without further notice.

Section 2.7 Vacancies. When any vacancy occurs among the directors, the
remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.

Section 2.8 Advisory Boards. The Board of Directors may appoint an
Advisory Board or Boards in such place or places as the Board of Directors
may determine. Each such Advisory Board shall consist of as many persons as
the Board of Directors may determine. The duties of each Advisory Board
shall be to consult and advise with the Board of Directors and senior
officers of the Bank with regard to the best interests of the Association and
to perform such other duties as the Board of Directors may lawfully delegate.

ARTICLE III

Committees of the Board

Section 3.1 The Board of Directors, by resolution adopted by a majority
of the number of directors fixed by these By-Laws, may designate three or
more directors to constitute an Executive Committee and other committees,
each of which, to the extent authorized by law and provided in such
resolution, shall have and may exercise all of the authority of the Board of
Directors and the management of the Association. The designation of any
committee and the delegation thereto of authority shall not operate to
relieve the Board of Directors, or any member thereof, of any responsibility
or liability imposed upon it or any member of the Board of Directors by law.
The Board of Directors reserves to itself alone the power to act on (1)
dissolution, merger or consolidation, or disposition of substantially all
corporate property, (2) designation of committees or filling vacancies on the
Board of Directors or on a committee of the Board (except as hereinafter
provided), (3) adoption, amendment or repeal of By-laws, (4) amendment or
repeal of any resolution of the Board which by its terms is not so amendable
or repealable, and (5) declaration of dividends, issuance of stock, or
recommendations to stockholders of any action requiring stockholder approval.

The Board of Directors or the Chairman of the Board of Directors of the
Association may change the membership of any committee at any time, fill
vacancies therein, discharge any committee or member thereof either with or
without cause at any time, and change at any time the authority and
responsibility of any such committee.

A majority of the members of any committee of the Board of Directors may
fix such committee's rules of procedure. All action by any committee shall
be reported to the Board of Directors at a meeting succeeding such action,
except such actions as the Board may not require to be reported to it in the
resolution creating any such committee. Any action by any committee shall be
subject to revision, alteration, and approval by the Board of Directors,
except to the extent otherwise provided in the resolution creating such
committee; provided, however, that no rights or acts of third parties shall
be affected by any such revision or alteration.

ARTICLE IV

Officers and Employees

Section 4.1 Officers. The officers of this Association may be a
Chairman of the Board, one or more Vice Chairman (who shall not be required
to be a director of the Association), a President, one or more Vice
Presidents, a Secretary, and such other officers as may be appointed by the
Board of Directors. The Chairman of the Board and the President shall be a
member of the Board of Directors. Any two offices or more may be held by one
person, but no officer shall sign or execute any document in more than one
capacity.

Section 4.2 Election, Term of Office, and Qualification. Each officer
shall be chosen by the Board of Directors and shall hold office until the
annual meeting of the Board of Directors held next after his election or
until his successor shall have been duly chosen and qualified, or until his
death, or until he shall resign, or shall have been disqualified, or shall
have been removed from office.

Section 4.2(a) Officers Acting as Assistant Secretary. Notwithstanding
Section 1 of these By-laws, any Senior Vice President, Vice President, or
Assistant Vice President shall have, by virtue of his office, and by
authority of the By-laws, the authority from time to time to act as an
Assistant Secretary of the Bank, and to such extent, said officers are
appointed to the office of Assistant Secretary.

Section 4.3 Chief Executive Officer. The Board of Directors shall
designate one of its members to be the President of this Association, and the
officer so designated shall be an ex officio member of all committees of the
Association except the Examining Committee, and its Chief Executive Officer
unless some other officer is so designated by the Board of Directors.

Section 4.4 Duties of Officers. The duties of all officers shall be
prescribed by the Board of Directors. Nevertheless, the Board of Directors
may delegate to the Chief Executive Officer the authority to prescribe the
duties of other officers of the corporation not inconsistent with law, the
charter, and these By-laws, and to appoint other employees, prescribe their
duties, and to dismiss them. Notwithstanding such delegation of authority,
any officer or employee also may be dismissed at any time by the Board of
Directors.

Section 4.5 Other Employees. The Board of Directors may appoint from
time to time such tellers, vault custodians, bookkeepers, and other clerks,
agents, and employees as it may deem advisable for the prompt and orderly
transaction of the business of the Association, define their duties, fix the
salary to be paid them, and dismiss them. Subject to the authority of the
Board of Directors, the Chief Executive Officer or any other officer of the
Association authorized by him, may appoint and dismiss all such tellers,
vault custodians, bookkeepers and other clerks, agents, and employees,
prescribe their duties and the conditions of their employment, and from time
to time fix their compensation.

Section 4.6 Removal and Resignation. Any officer or employee of the
Association may be removed either with or without cause by the Board of
Directors. Any employee other than an officer elected by the Board of
Directors may be dismissed in accordance with the provisions of the preceding
Section 4.5. Any officer may resign at any time by giving written notice to
the Board of Directors or to the Chief Executive Officer of the Association.
Any such resignation shall become effective upon its being accepted by the
Board of Directors, or the Chief Executive Officer.

ARTICLE V

Fiduciary Powers

Section 5.1 Capital Management Group. There shall be an area of this
Association known as the Capital Management Group which shall be responsible
for the exercise of the fiduciary powers of this Association. The Capital
Management Group shall consist of four service areas: Fiduciary Services,
Retail Services, Investments and Marketing. The Fiduciary Services unit
shall consist of personal trust, employee benefits, corporate trust and
operations. The General Office for the Fiduciary Services unit shall be
located in Roanoke, Virginia, with City Trust Offices located in such cities
within the State of Virginia as designated by the Board of Directors.

Section 5.2 Trust Officers. There shall be a General Trust Officer of
this Association whose duties shall be to manage, supervise and direct all
the activities of the Capital Management Group. Further, there shall be one
or more Senior Trust Officers designated to assist the General Trust Officer
in the performance of his duties. They shall do or cause to be done all
things necessary or proper in carrying out the business of the Capital
Management Group in accordance with provisions of applicable law and
regulation.

Section 5.3 Capital Management/General Trust Committee. There shall be
a Capital Management/General Trust Committee composed of not less than four
(4) members of the Board of Directors of this Association who shall be
appointed annually or from time to time by its membership. The General Trust
Officer shall serve as an ex-officio member of the Committee. Each member
shall serve until his successor is appointed. The Board of Directors or the
Chairman of the Board may change the membership of the Capital
Management/General Trust Committee at any time, fill vacancies therein, or
discharge any member thereof with or without cause at any time. The
Committee shall counsel and advise on all matters relating to the business or
affairs of the Capital Management Group and shall adopt overall policies for
the conduct of the business of the Capital Management Group including but not
limited to: general administration, investment policies, new business
development, and review for approval of major assignments of functional
responsibilities. The Committee shall meet at least quarterly or as called
for by its Chairman or any three (3) members of the Committee. A quorum
shall consist of three (3) members. In carrying out its responsibilities,
the Capital Management/General Trust Committee shall review the actions of
all officers, employees and committees utilized by this Association in
connection with the activities of the Capital Management Group and may assign
the administration and performance of any fiduciary powers or duties to any
of such officers or employees or to the Investment Policy Committee, Personal
Trust Administration Committee, Account Review Committee, Corporate and
Institutional Accounts Committee, or any other committees it shall designate.
One of the methods to be used in the review process will be the thorough
scrutiny of the Report of Examination by the Office of the Comptroller of the
Currency and the reports of the Audit Division of First Union Corporation, as
they relate to the activities of the Capital Management Group. These reviews
shall be in addition to reviews of such reports by the Audit Committee of the
Board of Directors. The Chairman of the Capital Management/ General Trust
Committee shall be appointed by the Chairman of the Board of Directors. He
shall cause to be recorded in appropriate minutes all actions taken by the
Committee. The minutes shall be signed by its Secretary and approved by its
Chairman. Further, the Committee shall summarize all actions taken by it and
shall submit a report of its proceedings to the Board of Directors at its
next regularly scheduled meeting following a meeting of the Capital
Management/General Trust Committee. As required by Section 9.7 of
Regulation 9 of the Comptroller of the Currency, the Board of Directors
retains responsibility for the proper exercise of the fiduciary powers of
this Association.

The Fiduciary Services unit of the Capital Management Group will
maintain a list of securities approved for investment in fiduciary accounts
and will from time to time provide the Capital Management/General Trust
Committee with current information relative to such list and also with
respect to transactions in other securities not on such list. It is the
policy of this Association that members of the Capital Management/General
Trust Committee should not buy, sell or trade in securities which are on such
approved list or in any other securities in which the Fiduciary Services unit
has taken, or intends to take, a position in fiduciary accounts in any
circumstances in which any such transaction could be viewed as a possible
conflict of interest or could constitute a violation of applicable law or
regulation. Accordingly, if any such securities are owned by any member of
the Capital Management/General Trust Committee at the time of appointment to
such Committee, the Capital Management Group shall be promptly so informed in
writing. If any member of the Capital Management/General Trust Committee
intends to buy, sell, or trade in any such securities while serving as a
member of the Committee, he should first notify the Capital Management Group
in order to make certain that any proposed transaction will not constitute a
violation of this policy or of applicable law or regulation.

Section 5.4 Investment Policy Committee. There shall be an Investment
Policy Committee composed of not less than seven (7) officers and/or
employees of this Association who shall be appointed annually or from time to
time by the Board of Directors. Each member shall serve until his successor
is appointed. Meetings shall be called by the Chairman or any two (2)
members of the Committee. A quorum shall consist of five (5) members. The
Investment Policy Committee shall exercise such fiduciary powers and perform
such duties as may be assigned to it by the Capital Management/General Trust
Committee. All actions taken by the Investment Policy Committee shall be
recorded in appropriate minutes, signed by the Secretary thereof, approved by
its Chairman and submitted to the Capital Management/General Trust Committee
at its next ensuing regular meeting for its review and approval.

Section 5.5 Personal Trust Administration Committee. There shall be a
Personal Trust Administration Committee composed of not less than five (5)
officers, who shall be appointed annually or from time to time by the Board
of Directors. Each member shall serve until his successor is appointed.
Meetings shall be called by the Chairman or any three (3) members of the
Committee. A quorum shall consist of three (3) members. The Personal Trust
Administration Committee shall exercise such fiduciary powers and perform
such duties as may be assigned to it by the Capital Management/General Trust
Committee. All action taken by the Personal Trust Administration Committee
shall be recorded in appropriate minutes signed by the Secretary thereof,
approved by its Chairman, and submitted to the Capital Management/General
Trust Committee at its next ensuing regular meeting for its review and
approval.

Section 5.6 Account Review Committee. There shall be an Account Review
Committee composed of not less than four (4) officers and/or employees of
this Association, who shall be appointed annually or from time to time by the
Board of Directors. Each member shall serve until his successor is
appointed. Meetings shall be called by the Chairman or any two (2) members
of the Committee. A quorum shall consist of three (3) members. The Account
Review Committee shall exercise such fiduciary powers and perform such duties
as may be assigned to it by the Capital Management/General Trust Committee.
All actions taken by the Account Review Committee shall be recorded in
appropriate minutes, signed by the Secretary thereof, approved by its
Chairman and submitted to the Capital Management/ General Trust Committee at
its next ensuing regular meeting for its review and approval.

Section 5.7 Corporate and Institutional Accounts Committee. There shall
be a Corporate and Institutional Accounts Committee composed of not less than
five (5) officers and/or employees of this Association, who shall be
appointed annually, or from time to time, by the Capital Management/General
Trust Committee and approved by the Board of Directors. Meetings may be
called by the Chairman or any two (2) members of the Committee. A quorum
shall consist of three (3) members. The Corporate and Institutional Accounts
Committee shall exercise such fiduciary powers and duties as may be assigned
to it by the General Trust Committee. All actions taken by the Corporate and
Institutional Accounts Committee shall be recorded in appropriate minutes,
signed by the Secretary thereof, approved by its Chairman and made available
to the General Trust Committee at its next ensuing regular meeting for its
review and approval.

ARTICLE VI

Stock and Stock Certificates

Section 6.1 Transfers. Shares of stock shall be transferable on the
books of the Association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall, in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.

Section 6.2 Stock Certificates. Certificates of stock shall bear the
signature of the Chairman, the Vice Chairman, the President, or a Vice
President (which may be engraved, printed, or impressed), and shall be signed
manually or by facsimile process by the Secretary, Assistant Secretary,
Cashier, Assistant Cashier, or any other officer appointed by the Board of
Directors for that purpose, to be known as an Authorized Officer, and the
seal of the Association shall be engraved thereon. Each certificate shall
recite on its face that the stock represented thereby is transferable only
upon the books of the Association properly endorsed.

ARTICLE VII

Corporate Seal

Section 7.1 The President, the Cashier, the Secretary, or any Assistant
Cashier, or Assistant Secretary, or other officer thereunto designated by the
Board of Directors shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same. Such seal shall be
substantially in the following form.

ARTICLE VIII

Miscellaneous Provisions

Section 8.1 Fiscal Year. The fiscal year of the Association shall be
the calendar year.

Section 8.2 Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations,
receipts, discharges, releases, satisfactions, settlements, petitions,
schedules, accounts, affidavits, bonds, undertakings, proxies, and other
instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the
Board, or the President, or any Vice Chairman of the Board, any Vice
President or Assistant Vice President, or the Secretary or Assistant
Secretary, Cashier, or Assistant Cashier, or, if in connection with the
exercise of fiduciary powers of the Association, by any of said officers or
by any Trust Officer or Assistant Trust Officer; provided, however, that
where required, any such instrument shall be attested by one of said officers
other than the officer executing such instrument. Any such instruments may
also be executed, acknowledged, verified, delivered, or accepted in behalf of
the Association in such other manner and by such other officers as the Board
of Directors may from time to time direct. The provisions of this Section
8.2 are supplementary to any other provision of these By-laws.

Section 8.3 Records. The Articles of Association, the By-laws, and the
proceedings of all meetings of the shareholders, the Board of Directors,
standing committees of the Board, shall be recorded in appropriate minute
books provided for the purpose. The minutes of each meeting shall be signed
by the Secretary, Cashier, or other officer appointed to act as Secretary of
the meeting.

ARTICLE IX

By-laws

Section 9.1 Inspection. A copy of the By-laws, with all amendments
thereto, shall at all times be kept in a convenient place at the Head Office
of the Association, and shall be open for inspection to all shareholders,
during banking hours.

Section 9.2 Amendments. The By-laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a
vote of a majority of the whole number of Directors.

First Union National Bank of Virginia
Article X
Emergency By-laws

In the event of an emergency declared by the President of the United
States or the person performing his functions, the officers and employees of
this Association will continue to conduct the affairs of the Association
under such guidance from the directors or the Executive Committee as may be
available except as to matters which by statute require specific approval of
the Board of Directors and subject to conformance with any applicable
governmental directives during the emergency.

OFFICERS PRO TEMPORE AND DISASTER

Section 1. The surviving members of the Board of Directors or the
Executive Committee shall have the power, in the absence or disability of any
officer, or upon the refusal of any officer to act, to delegate and prescribe
such officer's powers and duties to any other officer, or to any director,
for the time being.

Section 2. In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of this
Association by its directors and officers as contemplated by these By-laws,
any two or more available members of the then incumbent Executive Committee
shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Association in accordance with
the provisions of Article II of these By-laws; and in addition, such
Committee shall be empowered to exercise all of the powers reserved to the
General Trust Committee under Section 5.3 of Article V hereof. In the event
of the unavailability, at such time, of a minimum of two members of the then
incumbent Executive Committee, any three available directors shall constitute
the Executive Committee for the full conduct and management of the affairs
and business of the Association in accordance with the foregoing provisions
of this section. This By-law shall be subject to implementation by
resolutions of the Board of Directors passed from time to time for that
purpose, and any provisions of these By-laws (other than this section) and
any resolutions which are contrary to the provisions of this section or to
the provisions of any such implementary resolutions shall be suspended until
it shall be determined by an interim Executive Committee acting under this
section that it shall be to the advantage of this Association to resume the
conduct and management of its affairs and business under all of the other
provisions of these By-laws.

Officer Succession

BE IT RESOLVED, that if consequent upon war or warlike damage or
disaster, the Chief Executive Officer of this Association cannot be located
by the then acting Head Officer or is unable to assume or to continue normal
executive duties, then the authority and duties of the Chief Executive
Officer shall, without further action of the Board of Directors, be
automatically assumed by one of the following persons in the order
designated:

Chairman
President
Division Head/Area Administrator - Within this officer class, officers
shall take seniority on the basis of length of service in such office
or, in the event of equality, length of service as an officer of the
Association.

Any one of the above persons who in accordance with this resolution
assumes the authority and duties of the Chief Executive Officer shall
continue to serve until he resigns or until five-sixths of the other officers
who are attached to the then acting Head Office decide in writing he is
unable to perform said duties or until the elected Chief Executive Officer of
this Association, or a person higher on the above list, shall become
available to perform the duties of Chief Executive Officer of the
Association.

BE IT FURTHER RESOLVED, that anyone dealing with this Association may
accept a certification by any three officers that a specified individual is
acting as Chief Executive Officer in accordance with this resolution; and
that anyone accepting such certification may continue to consider it in force
until notified in writing of a change, said notice of change to carry the
signatures of three officers of the Association.

Alternate Locations

The offices of the Association at which its business shall be conducted
shall be the main office thereof in each city which is designated as a City
Office (and branches, if any), and any other legally authorized location
which may be leased or acquired by this Association to carry on its business.
During an emergency resulting in any authorized place of business of this
Association being unable to function, the business ordinarily conducted at
such location shall be relocated elsewhere in suitable quarters, in addition
to or in lieu of the locations heretofore mentioned, as may be designated by
the Board of Directors or by the Executive Committee or by such persons as
are then, in accordance with resolutions adopted from time to time by the
Board of Directors dealing with the exercise of authority in the time of such
emergency, conducting the affairs of this Association. Any temporarily
relocated place of business of this Association shall be returned to its
legally authorized location as soon as practicable and such temporary place
of business shall then be discontinued.

Acting Head Offices

BE IT RESOLVED, that in case of and provided because of war or warlike
damage or disaster, the General Office of this Association, located in
Roanoke, Virginia, is unable temporarily to continue its functions, the
Richmond, located in Richmond, Virginia, shall automatically and without
further action of this Board of Directors, become the "Acting Head Office of
this Association";

BE IT FURTHER RESOLVED, that if by reason of said war or warlike damage
or disaster, both the General Office of this Association and the said
Richmond Office of this Association are unable to carry on their functions,
then and in such case, the Tyson's Corner Office of this Association, located
in Tyson's Corner, Virginia, shall, without further action of this Board of
Directors, become the "Acting Head Office of this Association"; and if
neither the Richmond Office nor the Tyson's Corner Office can carry on their
functions, then the Norfolk Office of this Association, located in Norfolk,
Virginia, shall, without further action of this Board of Directors, become
the "Acting Head Office of this Association"; and if neither the Richmond
Office, the Tyson's Corner Office, nor the Norfolk Office can carry on their
functions, then the Harrisonburg Office of this Association, located in
Harrisonburg, Virginia, shall, without further action of this Board of
Directors, become the "Acting Head Office of this Association". The Head
Office shall resume its functions at its legally authorized location as soon
as practicable.

<PAGE>

R E P O R T OF C O N D I T I O N

Consolidating domestic subsidiaries of the

First Union National Bank of Virginia of Roanoke
Name of Bank

City in the state of Virginia, at the close of business on September 30, 1994,
published in response to call made by Comptroller of the Currency, under title
12, United States Code, Section 161.

Charter Number 02737 Comptroller of the Currency Southeastern District

Statement of Resources and Liabilities
<TABLE>

ASSETS
<S> <C>
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . . . . . . . . . . . . . . . .418,673
Interest-bearing balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2,887
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,568
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,544,501
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,935
Securities purchased under agreements to resell . . . . . . . . . . . . . . . . . . . . . .0.00000
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . . . . . . . . . . . . . . . . . . . . .5,409,124
LESS: Allowance for loan and lease losses. . . . . . . . . . . . . . . . . . . . . . . .191,431
LESS: Allocated transfer risk reserve . . . . . . . . . . . . . . . . . . . . . . . . .0.00000
Loans and leases, net of unearned income, allowance, and reserve . . . . . . . . . . .5,217,693
Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Premises and fixed assets (including capitalized leases). . . . . . . . . . . . . . . . . .171,862
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,205
Investments in unconsolidated subsidiaries and associated companies . . . . . . . . . . . . 14,674
Customers' liability to this bank on acceptances outstanding. . . . . . . . . . . . . . . . .6,341
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,226
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .278,009
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7,930,582

LIABILITIES

Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6166117
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,099,343
Interest-bearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5,066,774
Federal funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 569315
Securities sold under agreements to repurchase. . . . . . . . . . . . . . . . . . . . . . . 263569
Demand notes issued to the U.S. Treasury. . . . . . . . . . . . . . . . . . . . . . . . . . . 5997
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .0.00000
Other borrowed money: . . . . . . . . . . . . . . . . . . . . . . . . . . . . .///////////////////
With original maturity of one year or less . . . . . . . . . . . . . . . . . . . . . . . . . .4
With original maturity of more than one year . . . . . . . . . . . . . . . . . . . . . .0.00000
Mortgage indebtedness and obligations under capitalized leases. . . . . . . . . . . . . . . . . 53
Bank's liability on acceptances executed and outstanding. . . . . . . . . . . . . . . . . . . 6341
Subordinated notes and debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125857
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7197253
Limited-life preferred stock and related surplus. . . . . . . . . . . . . . . . . . . . . .0.00000

EQUITY CAPITAL

Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . . . . . . . .0.00000
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65164
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415847
Undivided profits and capital reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . 307300
Net unrealized holding gains (losses) on available-for-sale securities. . . . . . . . . . . (54982)
Total equity capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733329
Total liabilities, limited-life preferred stock, and equity capital . . . . . . . . . . . .7930582
</TABLE>

We, the undersigned directors, attest to the correctness of
this statement of resources and liabilities. We declare that it
has been examined by us, and to the best of our knowledge
and belief has been prepared in
conformance with the Title instructions and is true and correct.

Warner N. Dalhouse
Benjamin P. Jenkins, III
Robert W. Helms