Second Amendment to Loan and Security Agreement among Fleet Retail Finance Inc., Back Bay Capital Funding LLC, and HomePlace of America, Inc. and Affiliates

Summary

This amendment updates the original Loan and Security Agreement dated June 15, 1999, between Fleet Retail Finance Inc. (as Administrative and Collateral Agent), Back Bay Capital Funding LLC (Term Lender), and HomePlace of America, Inc. and its affiliates (Borrowers). The amendment increases the term loan by $2 million to a total of $17 million, adjusts certain interest rates, and modifies inventory appraisal caps. All other terms of the original agreement remain in effect, and the borrowers waive any claims against the lenders as of the amendment date.

EX-10.2 3 g64558ex10-2.txt 2ND AMENDMENT TO LOAN & SECURITY AGREEMENT 1 Exhibit 10.2 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT ---------------------------------------------------- FLEET RETAIL FINANCE INC. ADMINISTRATIVE AGENT COLLATERAL AGENT ---------------------------------------------------- AmSouth Bank Fleet Retail Finance Inc. The CIT Group Business Credit, Inc. FINOVA Capital Corporation Foothill Capital Corporation Heller Financial, Inc. IBJ Whitehall Business Credit Corporation Jackson National Life Insurance Company LaSalle Business Credit, Inc. The Provident Bank WORKING CAPITAL LENDERS ---------------------------------------------------- BACK BAY CAPITAL FUNDING LLC TERM LENDER ---------------------------------------------------- HOMEPLACE OF AMERICA, INC. Lead Borrower for HOMEPLACE OF AMERICA, INC. HOMEPLACE STORES, INC. HOMEPLACE STORES TWO, INC. HOMEPLACE MANAGEMENT, INC. THE BORROWERS ---------------------------------------------------- September 12, 2000 2 This Second Amendment (hereinafter, this "Amendment") is made as of this 12th day of September, 2000 to that Loan and Security Agreement dated June 15, 1999 (hereinafter, the "Loan Agreement"). (Capitalized terms used herein and not otherwise defined shall have the meanings as defined in the Loan Agreement). This Second Amendment is made by and among: FLEET RETAIL FINANCE INC. formerly known as BankBoston Retail Finance Inc., a Delaware corporation with its principal executive offices at 40 Broad Street, Boston, Massachusetts, as Agent for the ratable benefit of the "LENDERS" (individually, " LENDER") who are, at present: Fleet Retail Finance Inc. formerly known as BankBoston Retail Finance Inc. (in such capacity, the "ADMINISTRATIVE AGENT") a Delaware corporation with its principal executive offices at 40 Broad Street, Boston, Massachusetts, as Administrative Agent for the ratable benefit of the Working Capital Lenders and the Term Lender; and Fleet Retail Finance Inc. formerly known as BankBoston Retail Finance Inc. (in such capacity, the "COLLATERAL AGENT"), as agent for the ratable benefit of the Administrative Agent, the Working Capital Lenders, and the Term Lender; and Back Bay Capital Funding LLC (in such capacity, the "TERM LENDER"), a limited liability company with offices at 40 Broad Street, Boston, Massachusetts 02109, and HomePlace of America, Inc., a Delaware corporation with its principal executive offices at 3200 Pottery Drive, Myrtle Beach, South Carolina 29577 (in such capacity, the "LEAD BORROWER") as agent for the following borrowers (individually, " BORROWER" and collectively, the "BORROWERS"): HomePlace of America, Inc. (a Delaware corporation with its principal executive offices at 3200 Pottery Drive, Myrtle Beach, South Carolina 29577 ); HomePlace Stores, Inc. (a Delaware corporation with its principal executive offices at 3200 Pottery Drive, Myrtle Beach, South Carolina 29577 ); HomePlace Stores Two, Inc. (a Delaware corporation with its principal executive offices at 3200 Pottery Drive, Myrtle Beach, South Carolina 29577 ); and HomePlace Management, Inc. (an Ohio corporation with its principal executive offices at 3200 Pottery Drive, Myrtle Beach, South Carolina 29577 ); in consideration of the mutual covenants contained herein and benefits to be derived herefrom. 2 3 BACKGROUND: On June 15, 1999, the Administrative Agent, the Collateral Agent, the Working Capital Lenders, the Term Lender, the Lead Borrower, and the Borrowers entered into the Loan Agreement. On or about May 12, 2000, a First Amendment to the Loan Agreement was executed. At this time, the Borrowers have requested that (i) certain amendments be made to the financing terms and conditions of the Revolving Credit, and (ii) the amount of the Term Loan be increased. The Working Capital Lenders and the Term Lender are willing to do so, but only upon the terms and conditions set forth herein. Accordingly, at this time the Administrative Agent, the Collateral Agent, the Working Capital Lenders, the Term Lender, the Lead Borrower, and the Borrowers hereby amend the Loan Agreement and otherwise agree as follows: 1. The definition of "INVENTORY APPRAISAL CAP" on page 14 of the Loan Agreement is hereby deleted, and the following is substituted in its place: "INVENTORY APPRAISAL CAP": Shall mean the specified percentage with respect to the corresponding period: -------------------------------------------------- TIME PERIOD PERCENTAGE -------------------------------------------------- From the closing through 85% September 15, 2000 -------------------------------------------------- From September 16, 2000 through December 15, 2000 87.5% -------------------------------------------------- From December 16, 2000 through 85% the Maturity Date -------------------------------------------------- 2. The definition of "OVERALL INVENTORY APPRAISAL CAP" on page 18 of the Loan Agreement is hereby deleted, and the following is inserted in its place: "OVERALL INVENTORY APPRAISAL CAP": Shall mean the specified percentage with respect to the corresponding period: -------------------------------------------------- TIME PERIOD PERCENTAGE -------------------------------------------------- From the closing through 95% September 15, 2000 -------------------------------------------------- From September 16, 2000 through December 15, 2000 96% -------------------------------------------------- From December 16, 2000 through 92% the Maturity Date -------------------------------------------------- 3 4 3. From and after the effectiveness of this Amendment, the Term Loan hereby is, and shall be amended to increase the amount of the Term Loan by $2,000,000.00 to an aggregate total amount of $17,000,000.00. Upon the execution of this Amendment, the Lead Borrower and the Borrowers shall execute and deliver to the term Lender an Amended and Restated Term Note, in the form annexed hereto marked EXHIBIT "A". 4. The definition of "CURRENT PAY INTEREST MARGIN" in Article 1 of the Loan Agreement is hereby amended by deleting the figure "12.5% where it appears therein, and by inserting the figure "13.0%" in its place. 5. The definition of "CURRENT PAY INTEREST PRICING GRID" in Article 1 of the Loan Agreement is hereby amended by deleting the figures "12.00%" and "12.50%" where they appear therein, and by inserting the figures "12.50%" and "13.00%", respectively, in their place. 6. Ratification of Loan Documents. Except as provided herein, all terms and conditions of the Loan Agreement and all of the other Loan Documents shall remain in full force and effect and are hereby ratified, confirmed, and reaffirmed. 7. Waiver of Claims. The Lead Borrower and each of the Borrowers hereby acknowledges and agrees that none of them has any offsets, defenses, claims, or counterclaims against the Administrative Agent, the Collateral Agent, the Working Capital Lenders, or the Term Lender, or their respective officers, directors, employees, attorneys, representatives, parents, affiliates, predecessors, successors, or assigns with respect to the Liabilities, or otherwise, and that if the Lead Borrower or any of the Borrowers now has, or ever did have, any offsets, defenses, claims, or counterclaims against the Administrative Agent, the Collateral Agent, the Working Capital Lenders, or the Term Lender or their respective officers, directors, employees, attorneys, representatives, affiliates, predecessors, successors, or assigns, whether known or unknown, at law or in equity, from the beginning of the world through this date and through the time of execution of this Amendment, all of them are hereby expressly WAIVED, and the Lead Borrower and each Borrower hereby RELEASES the Administrative Agent, the Collateral Agent, the Working Capital Lenders, and the Term Lender and their respective officers, directors, employees, attorneys, representatives, affiliates, predecessors, successors, and assigns from any liability therefor. 4 5 8. Amendment Fee. In consideration of the Working Capital Lenders entering into this Amendment, upon the execution of this Amendment the Lead Borrower shall pay to the Administrative Agent an amendment fee in the amount of $100,000.00. Upon receipt of the amendment fee, the Administrative Agent shall distribute to each of the Working Capital Lenders its pro rata share of the amendment fee. 9. Miscellaneous. (1) The Lead Borrower and each Borrower shall execute and deliver to the Administrative Agent and the Collateral Agent whatever additional documents, instruments, and agreements that the Administrative Agent and/or the Collateral Agent may require in order to give effect to, and implement the terms and conditions of this Amendment. (2) This Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original and all of which together shall constitute one instrument. (3) This Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof. (4) The Borrower shall pay on demand all reasonable costs and expenses of the Administrative Agent, the Collateral Agent, the Working Capital Lenders, and the Term Lender, including, without limitation, reasonable attorneys' fees in connection with the preparation, negotiation, execution, and delivery of this Amendment. IN WITNESS WHEREOF, the parties have executed this Second Amendment to Loan and Security Agreement by their respective duly authorized officers. 5 6 HOMEPLACE OF AMERICA, INC. THE LEAD BORROWER By_______________________________ Print Name:______________________________ Title:______________________________ THE BORROWERS HOMEPLACE OF AMERICA, INC. HOMEPLACE STORES, INC. By_________________________________ By_______________________________ Print Name:________________________ Print Name:_______________________________ Title:_____________________________ Title:_______________________________ HOMEPLACE HOLDINGS, INC. HOMEPLACE STORES TWO, INC. By_________________________________ By_______________________________ Print Name:________________________ Print Name:_______________________________ Title:_____________________________ Title:_______________________________ HOMEPLACE MANAGEMENT, INC. By_________________________________ Print Name:________________________ Title:_____________________________ 6 7 FLEET RETAIL FINANCE INC. ADMINISTRATIVE AGENT COLLATERAL AGENT By_________________________________ James R. Dore, Vice President THE WORKING CAPITAL LENDERS AMSOUTH BANK By_____________________________ Notice Address: 350 Park Avenue, 19th Floor New York, New York 10022 Attention: Fax FLEET RETAIL FINANCE INC. By_____________________________ James R. Dore, Vice President Notice Address: 40 Broad Street Boston, Massachusetts 02109 Attention: Fax THE CIT GROUP BUSINESS CREDIT, INC. By_____________________________ Notice Address: 1211 Avenue of the Americas New York, New York 10036 Attention: Fax 7 8 FINOVA CAPITAL CORPORATION By_____________________________ Notice Address: 311 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Attention: Fax FOOTHILL CAPITAL CORPORATION By_____________________________ Notice Address: 11111 Santa Monica Blvd., Suite 1500 Los Angeles, California 90025-3333 Attention: Fax HELLER FINANCIAL, INC. By_____________________________ Notice Address: 150 East 42d Street, 7th Floor New York, New York 10017 Attention: Fax IBJ WHITEHALL BUSINESS CREDIT CORPORATION By_____________________________ Notice Address: One State Street New York, New York 10004 Attention: Fax 8 9 JACKSON NATIONAL LIFE INSURANCE COMPANY By_____________________________ Notice Address: c/o PPM America 225 West Wacker, Suite 1200 Chicago, Illinois 60606 Attention: Fax LASALLE BUSINESS CREDIT, INC. By_____________________________ Notice Address: 135 South LaSalle, Suite 400 Chicago, Illinois 60603 Attention: Fax THE PROVIDENT BANK By_____________________________ Notice Address: One East Fourth Street, 249A Cincinnati, Ohio 45202 Attention: Fax THE TERM LENDER BACK BAY CAPITAL FUNDING LLC By_____________________________ Michael Pizette, Managing Director Notice Address: 40 Broad Street Boston, Massachusetts 02109 Attention: Fax 9