1
EXHIBIT 10.5
AMENDMENT AND CONSENT
AMENDMENT AND CONSENT dated May 23, 1997 by and among CONGRESS FINANCIAL
CORPORATION, a California corporation ("Lender"), THE RUG BARN, INC., a South
Carolina corporation, HOME INNOVATIONS, INC., a Delaware corporation, DHA HOME,
INC., formerly known as CALVIN KLEIN HOME, INC., a Delaware corporation, and
R.A. BRIGGS AND COMPANY, an Illinois corporation (each, individually, a
"Borrower", and, collectively, the "Borrowers"), DECORATIVE HOME ACCENTS, INC.,
a Delaware corporation, and DRAYMORE MFG. CORP., a North Carolina corporation
(each, individually, a "Guarantor", and collectively, the "Guarantors"), and
HOME INNOVATIONS, INC. ("HI New York"), a New York corporation.
W I T N E S S E T H:
WHEREAS, Lender, Borrowers, Guarantors and HI New York entered into a Loan
and Security Agreement dated November 13, 1996 which has been amended pursuant
to a letter agreement dated March 1, 1997 (as so amended, the "Loan
Agreement"), pursuant to which Lender has made and may continue to make loans,
and has provided and may continue to provide other financial accommodations, to
Borrowers; and
WHEREAS, Borrowers desire to obtain additional working capital financing
pending a proposed restructuring of the liabilities and capital stock of
Decorative Home Accents, Inc. and Borrowers and Draymore Mfg. Corp.
("Draymore"); and
WHEREAS, various investment advisory clients (the "Term Lenders") of
Magten Asset Management Corp., a Delaware corporation ("Magten"), Borrowers,
Guarantors, and HI New York are entering into the Term Loan Documents (as
defined herein) pursuant to which the Term Lenders will make secured loans to
Borrowers up to an aggregate principal amount of $20,000,000 (together with the
related $5,000,000 closing fee referred to in the Term Loan Documents,
collectively, the "Bridge Loan") to provide such additional working capital,
which Bridge Loan will be guaranteed on a secured basis by Guarantors and HI
New York; and
WHEREAS, Borrowers have requested Lender's consent under the Loan
Agreement to their execution and delivery of the Term Loan Documents, the
incurrence of the indebtedness arising from the Bridge Loan, and the granting
of liens and security interests contemplated by the Term Loan Documents; and
WHEREAS, certain Events of Default (as defined in the Loan Agreement) have
occurred, and Borrowers have requested waivers thereof from Lender; and
-1-
2
WHEREAS, Lender is willing to grant such consent and waivers, but only on
the terms and conditions of this Amendment and Consent.
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Incorporation of Definitions. Capitalized terms used but not defined
in this Amendment and Consent shall have the meanings given to such terms in
the Loan Agreement.
2. Consent to Term Loan Documents and Related Transactions. To the extent
that Lender's consent is required under the Loan Agreement, effective upon the
satisfaction of the conditions set forth in Section 6 of this Amendment and
Consent, Lender hereby consents to Borrowers', Guarantors', and HI New York's
execution and delivery of the Term Loan Documents and their consummation of the
transactions contemplated thereby, on the terms contained in the definitive
Term Loan Documents delivered to and found satisfactory by Lender and its
counsel in accordance with Section 6 of this Amendment and Consent, including,
without limitation, (a) the granting by Borrowers, Guarantors, and HI New York
to the Term Lenders of (i) a first priority lien on and security interest in
all of their existing and other acquired equipment, fixtures (excluding
fixtures bearing or identified by the Calvin Klein Intellectual Property (as
defined in the Loan Agreement)) and interests in real property and the proceeds
thereof, in accordance with the terms of the Intercreditor Agreement (the
"Intercreditor Agreement"), dated May 23, 1997, between Lender and the Term
Lenders, and (ii) a lien and security interest, subordinate to those of Lender,
on and in their existing and future accounts, inventory, general intangibles,
documents, instruments, chattel paper, and all other assets and the proceeds
thereof (excluding the Calvin Klein License), and (b) the granting by Holdings
and HI Delaware to the Term Lenders of a first priority pledge of and security
interest in the capital stock of Holdings' and HI Delaware's subsidiaries, and
the proceeds thereof, in order to secure their respective obligations under the
Bridge Loan. Lender's consent above is limited to the terms and conditions
contained in the definitive Term Loan Documents delivered to and found
satisfactory by Lender and its counsel in accordance with Section 6 hereof, and
Borrowers, Guarantors, and HI New York shall be required to obtain Lender's
further consent to any modification, supplement, amendment, extension, renewal,
restatement, or replacement of the Term Loan Documents or any transaction not
contemplated by such definitive Term Loan Documents.
3. Waiver of Defaults. Effective upon the satisfaction of the conditions
set forth in Section 6 of this Amendment and Consent, Lender waives any Event
of Default: (a) based on Borrowers' failure to comply with Section 9.13 of the
Loan Agreement on or prior to the date hereof; (b) based on Borrowers' and
Guarantors' failure to comply with the covenants set forth in Section 9.6 of
the Loan Agreement with respect to the delivery, on or prior to the dates
required under Section 9.6(a) of the Loan Agreement, of audited financial
statements for the
-2-
3
fiscal year ended December 31, 1996 or unaudited financial statements for the
months of March 1997 and April 1997, (c) based on Borrowers' and Guarantors'
failure at any time to comply with the covenant set forth in Section 9.9(b) of
the Loan Agreement insofar as they have any trade obligations unpaid for more
than 50 days; (d) based on Borrower's and Guarantors' failure to comply with
the covenant set forth in Section 9.16(a) of the Loan Agreement insofar as the
Calvin Klein License has been terminated without Lender's consent; and (e)
based on HI New York's failure to effectively merge into HI Delaware under the
applicable laws of the State of New York (the "Merger") on or prior to the date
hereof. In order to induce Lender to grant the foregoing waivers, (x) Borrowers
and Guarantors agree to deliver audited financial statements meeting the
requirements of Section 9.6(a) of the Loan Agreement for the fiscal year ended
December 31, 1996 no later than May 30, 1997, unaudited financial statements
meeting such requirements for the month of March 1997 no later than May 23,
1997, and unaudited financial statements meeting such requirements for the
month of April 1997 no later than June 6, 1997, and (y) Holdings, HI Delaware
and HI New York covenant and agree to take all necessary action to effect the
Merger, and to deliver evidence of such effectiveness to Lender, not later than
June 30, 1997. Any failure to comply with any agreement in the immediately
preceding sentence shall be an Event of Default.
4. Amendments to Loan Agreement. Effective upon the satisfaction of the
conditions set forth in Section 6 of this Amendment and Consent:
(a) Section 1 of the Loan Agreement is amended by amending the
following definition in its entirety to read as follows:
"Adjusted Tangible Net Worth" shall mean as to any Person, at any
time, in accordance with GAAP (except as otherwise specifically set
forth below), on a consolidated basis for such Person and its
subsidiaries (if any), the amount, calculated in the same manner as
set forth on Schedule 1.3, equal to: (a) the difference between: (i)
the aggregate net book value of all assets of such Person and its
subsidiaries, calculating the book value of inventory for this
purpose on a first-in-first-out basis, after deducting from such
book values all appropriate reserves in accordance with GAAP
(including all reserves for doubtful receivables, obsolescence,
depreciation and amortization) and (ii) the aggregate amount of the
indebtedness and other liabilities of such Person and its
subsidiaries (including tax and other proper accruals); minus (b)
the net book value of (i) deferred assets, other than prepaid
insurance, prepaid taxes, deferred income taxes, prepaid
advertising, deposits, and other prepaid costs, (ii) patents,
copyrights, trademarks, trade names, licenses, customer lists,
franchises, goodwill, and other similar intangibles, (iii) amounts
due from affiliates and stockholders, and (iv) unamortized debt
discount and expense; provided, however, that the foregoing
calculation shall exclude and not otherwise give effect to any
cancellation, forgiveness, exchange, or restructuring of the
indebtedness or capital stock of such Person or any of its
subsidiaries
-3-
4
accruing on or after the date of the Term Loan Documents.
(b) Section 1 of the Loan Agreement is amended by adding the
following definitions thereto in the proper numerical order:
1.8A "Calvin Klein License" shall mean (i) the License
Agreement, dated as of May 26, 1994, between Calvin Klein,
Inc. and Calvin Klein Home, Inc., (ii) the License Agreement,
dated as of April 27, 1997, between Calvin Klein, Inc. and
DHA Home, Inc., and (iii) any other license agreements
entered into in replacement of the foregoing license
agreements regarding Borrowers' right to manufacture and
distribute Inventory bearing Calvin Klein trademarks.
1.45A "Real Property" shall mean all now owned and hereafter
acquired real property of each Borrower, including leasehold
interests, together with all buildings, structures, and other
improvements located thereon and all licenses, easements and
appurtenances relating thereto, wherever located, including
the real property and related assets more particularly
described on Schedule 1.45A hereto (but specifically
excluding fixtures bearing or identified by the Calvin Klein
Intellectual Property).
1.49A "Term Loan Documents" shall mean the Credit Agreement
dated as of May 23, 1997 among Borrowers, Guarantors, HI New
York, and General Motors Employees Domestic Group Pension
Trust, Hughes Master Retirement Trust, Department of
Pensions-City of Los Angeles, Magten Offshore Fund Ltd.,
Magten Partners, L.P., Magten Group Trust, Navy Exchange
Service Command Retirement Trust, Western Union Pension
Trust, and Saturn Fund Ltd., and each and every note,
guarantee, security agreement, pledge agreement, mortgage or
deed of trust, or other agreement, instrument, or document
establishing terms of or evidencing, guaranteeing, or
securing obligations arising in connection with such Credit
Agreement.
(c) Section 4.1(i) of the Loan Agreement is hereby amended in
its entirety to read as follows:
(i) Lender shall have received a written agreement from
Calvin Klein, Inc., in form and substance satisfactory to
Lender, containing certain agreements facilitating Lender's
enforcement of its security interest in Inventory bearing
trademarks licensed under the License Agreement dated as of
May 26, 1994 (the "Original Calvin Klein License") between
Calvin Klein, Inc. and Calvin Klein Home, Inc.; and.
(d) Section 5 of the Loan Agreement is hereby amended in its
entirety
-4-
5
to read as follows:
To secure payment and performance of all Obligations,
each Borrower and HI New York hereby grants to Lender a
continuing security interest in, a lien upon, and a right of
set off against, and hereby assigns to Lender as security,
the following property and interests in property, whether now
owned or hereafter acquired or existing, and wherever located
(collectively, the "Collateral"):
5.1 Accounts;
5.2 all present and future contract rights (specifically
excluding the Calvin Klein License), general intangibles
(including, but not limited to, tax and duty refunds,
registered and unregistered patents, trademarks, service
marks, copyrights, trade names, applications for the
foregoing, trade secrets, goodwill, processes, drawings,
blueprints, customer lists, all licenses (other than the
Calvin Klein License and any sublicenses thereunder), whether
as licensor or licensee, choses in action and other claims),
chattel paper, documents, instruments, letters of credit,
bankers' acceptances and guaranties provided, however, that
this excludes any and all interests and/or rights to use the
trademark "Calvin Klein" (or "CK/Calvin Klein" or other
derivative thereof) deriving from the Calvin Klein License or
otherwise including any and all copyrights, copyrightable
material or other intellectual property or proprietary data
or information which may exist or arise in connection with or
relating to the Calvin Klein License (collectively, the
"Calvin Klein Intellectual Property"), except as otherwise
agreed in writing by Calvin Klein, Inc.;
5.3 all present and future monies, securities, credit
balances, deposits, deposit accounts and other property of
such Borrower or HI New York now or hereafter held or
received by or in transit to Lender or its affiliates or at
any other depository or other institution from or for the
account of such Borrower or HI New York, whether for
safekeeping, pledge, custody, transmission, collection or
otherwise, and all present and future liens, security
interests, rights, remedies, title and interest in, to and in
respect of Accounts and other Collateral, including, without
limitation, (a) rights and remedies under or relating to
guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (b)
rights of stoppage in transit, replevin, repossession,
reclamation and other rights and remedies of an unpaid
vendor, lienor or secured party, (c) goods described in
invoices, documents, contracts or instruments with respect
to, or otherwise representing or evidencing, Accounts or
other Collateral, including, without limitation, returned,
repossessed and reclaimed goods, and (d) deposits by and
property of account debtors or other persons
-5-
6
securing the obligations of account debtors;
5.4 Inventory;
5.5 Records;
5.6 Equipment;
5.7 Real Property; and
5.8 all products and proceeds of the foregoing, in any form,
including, without limitation, insurance proceeds and all
claims against third parties for loss or damage to or
destruction of any or all of the foregoing.
Each Borrower hereby confirms that the property constituting Collateral
is, and is intended to be, the same as the property of Borrowers and HI New
York in which security interests and liens have been or will be granted
pursuant to the Term Loan Documents, notwithstanding any differences in the
language used to describe such property in the Term Loan Documents.
(d) The first sentence of Section 9.13 of the Loan Agreement
is hereby amended in its entirety to read as follows:
Borrowers shall maintain an aggregate Adjusted Tangible
Net Worth of not less than ($110,000,000) at all times.
5. Amendment to General Security Agreement. Effective upon the
satisfaction of the conditions set forth in Section 6 of this Amendment and
Consent:
(a) Section 1 of the General Security Agreement dated
November 12, 1996 between Draymore and Lender (the "General Security
Agreement") is amended by adding the following definition in the proper
numerical order:
1.12A "Real Property" shall mean all now owned and hereafter
acquired real property of Guarantor, including leasehold
interests, together with all buildings, structures, and other
improvements located thereon and all licenses, easements and
appurtenances relating thereto, wherever located, including
the real property and related assets more particularly
described on Schedule 1.12A hereto.
(b) Section 2 of the General Security Agreement is hereby
amended in its entirety to read as follows:
To secure payment and performance of all Obligations,
Guarantor
-6-
7
hereby grants to Lender a continuing security interest in, a
lien upon, and a right of set off against, and hereby assigns
to Lender as security, the following property and interests
in property, whether now owned or hereafter acquired or
existing, and wherever located (collectively, the
"Collateral"):
2.1 Accounts;
2.2 all present and future contract rights, general
intangibles (including, but not limited to, tax and duty
refunds, registered and unregistered patents, trademarks,
service marks, copyrights, trade names, applications for the
foregoing, trade secrets, goodwill, processes, drawings,
blueprints, customer lists, all licenses, whether as licensor
or licensee, choses in action and other claims), chattel
paper, documents, instruments, letters of credit, bankers'
acceptances and guaranties;
2.3 all present and future monies, securities, credit
balances, deposits, deposit accounts and other property of
Guarantor now or hereafter held or received by or in transit
to Lender or its affiliates or at any other depository or
other institution from or for the account of Guarantor,
whether for safekeeping, pledge, custody, transmission,
collection or otherwise, and all present and future liens,
security interests, rights, remedies, title and interest in,
to and in respect of Accounts and other Collateral,
including, without limitation, (a) rights and remedies under
or relating to guaranties, contracts of suretyship, letters
of credit and credit and other insurance related to the
Collateral, (b) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (c) goods described
in invoices, documents, contracts or instruments with respect
to, or otherwise representing or evidencing, Accounts or
other Collateral, including, without limitation, returned,
repossessed and reclaimed goods, and (d) deposits by and
property of account debtors or other persons securing the
obligations of account debtors;
2.4 Inventory;
2.5 Records;
2.6 Equipment;
2.7 Real Property; and
2.8 all products and proceeds of the foregoing, in any form,
including, without limitation, insurance proceeds and all
claims against third parties
-7-
8
for loss or damage to or destruction of any or all of the
foregoing.
Guarantor hereby confirms that the property constituting
Collateral is, and is intended to be, the same as the property of Guarantor in
which security interests and liens have been or will be granted pursuant to the
Term Loan Documents (as defined in the Loan Agreement), notwithstanding any
differences in the language used to describe such property in the Term Loan
Documents.
6. Conditions Precedent. The consent set forth in Section 2
hereof, the waivers set forth in Section 3 hereof, and the amendments to the
Loan Agreement and General Security Agreement set forth in Section 4 and
Section 5 hereof shall not be effective unless and until each of the following
conditions precedent is satisfied as determined by Lender:
(a) each of Borrowers, Guarantors and HI New York shall have
executed and delivered to Lender this Amendment and Consent;
(b) Lender and its counsel shall have received, reviewed and
found satisfactory, in form and substance, each of the
documents listed on Exhibit A hereto, and all other
agreements, instruments, and documents entered into or
delivered pursuant thereto or in connection therewith to
establish terms or conditions of or evidence, secure, or
guarantee the Bridge Loan (collectively, the "Term Loan
Documents");
(c) the Term Lenders shall have executed and delivered to
Lender the Intercreditor Agreement, in form and substance
satisfactory to Lender, together with the acknowledgement of
Borrowers, Guarantors and HI New York, in form and substance
satisfactory to Lender, indicating their agreement and
acknowledgement of the terms thereof;
(d) Lender and its counsel shall have received, reviewed and
found satisfactory, in form and substance, the Supplemental
Indenture to the Indenture, containing the waiver of any
breach of the Indenture arising from the Term Loan Documents
and this Amendment and Consent;
(e) Lenders and its counsel shall have received, reviewed,
and found satisfactory, in form and substance, (i) the
License Agreement dated April 27, 1997 between Calvin Klein,
Inc. and DHA Home, Inc. (the "New CK License") and (ii)
Letter Agreements from Calvin Klein Inc., substantially
identical to those letter agreements dated November 8, 1996,
between Calvin Klein, Inc. and Lender relating to the New CK
License;
(f) DHA Home, Inc. shall have executed and delivered to
Lender such UCC-1 Financing Statements and other instruments
and documents, and taken such other action, as Lender shall
have requested to continue the
-8-
9
perfection of Lender's security interest after giving effect
to the change of name of Calvin Klein Home, Inc. to DHA Home,
Inc.;
(g) Borrowers, HI New York, and Guarantors shall have
executed and delivered to Lender such UCC-3 Amendments and
other instruments and documents, and taken such other action,
as Lender shall have requested to perfect or continue the
perfection of Lender's security interests in and liens on the
Collateral, after giving effect to the amendments in Section
4 and 5 hereof; and
(h) at the time the conditions in sections (a) through (g)
above have been satisfied, no Event of Default or default
under the Indenture shall have occurred and be continuing.
7. Fees and Expenses. In consideration of Lender's
agreements contained herein and in order to induce Lender to enter into this
Amendment and Consent, Borrowers, Guarantors and HI New York shall herewith pay
Lender a non-refundable fee of $25,000, due as of the date hereof, which each
of Borrowers, Guarantors and HI New York acknowledge and agree has been fully
earned by Lender and is payable on such date and which Lender is authorized to
charge to Borrowers' loan account with Lender. Each of Borrowers, Guarantors,
and HI New York confirms that, under the Loan Agreement, it shall pay Lender's
attorneys' fees and expenses incurred in connection with this Amendment and
Consent and the transactions contemplated hereby.
8. Ratification. (a) Except as expressly set forth
herein, the Loan Agreement and the other Financing Agreements are not modified
hereby and each shall remain in full force and effect in accordance with the
respective provisions thereof on the date hereof, and the Loan Agreement and
the other Financing Agreements are each in all respects ratified and affirmed.
The consent and waivers given herein are limited to the specific instances in
which given and shall not be deemed to be a consent to or waiver of any other
or further divergence from full compliance with the terms of the Financing
Agreements, or, except as expressly set forth herein, to be an amendment or
modification of any of the terms of the Financing Agreements, or to require
Lender to give a consent or waiver in any other or subsequent situation,
regardless of the similarity of circumstances. Lender's agreements herein
shall not be construed to require Lender to extend any additional credit not
expressly contemplated by the Loan Agreement, or make any amendment to the Loan
Agreement or any other Financing Agreements, on any other occasion, regardless
of the similarity of circumstances.
(b) Each Borrower and Guarantor and HI New York
hereby (i) acknowledges notice of the terms and conditions of this Amendment
and Consent, (ii) confirms and agrees that the Guaranteed Obligations under and
as defined in such Borrower's or Guarantor's or in HI New York's guarantee set
forth on Exhibit B hereto (collectively, the "Guarantees") include all
Borrowers' Obligations for or in respect of the principal of, accrued interest
in, and other charges now or hereafter payable in connection with the Loans and
Letter of
-9-
10
Credit Accommodations including, without limitation, those arising after giving
effect to this Amendment and Consent, and (iii) confirms that, after giving
effect to this Amendment and Consent and to the making of the amendments to the
Loan Agreement contemplated hereby, its Guarantee is its valid and binding
obligation, enforceable against it in accordance with their terms, without
defenses, offsets, or counterclaims, and continues in full force and effect.
9. Representations and Warranties. Without limiting any
other provision of this Amendment and Consent, and as an inducement to Lender
to enter into this Amendment and Consent, each of Borrowers, Guarantors and HI
New York hereby: (a) represents, warrants and agrees that the Loan Agreement
and the other Financing Agreements are its valid and binding obligations
enforceable against it in accordance with their terms, without defenses,
offsets or counterclaims; and (b) represents and warrants that: (i) each of the
representations and warranties of each of Borrowers, Guarantors and HI New York
set forth in the Loan Agreement and the other Financing Agreements is true and
correct in all material respects, as of the date hereof, except as set forth in
Exhibit C hereto (it being understood that Lender's receipt of the disclosure
of the exceptions set forth on Exhibit C should not be construed as Lender's
acceptance of or waiver of any of its rights or remedies with respect to the
facts and circumstances so disclosed); and (ii) no Event of Default, or event
which with notice or the passage of time would become an Event of Default, has
occurred and is continuing with respect to each of the Financing Agreements and
the Indenture.
10. Governing Law. The validity, interpretation and
enforcement of this Amendment and Consent and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of law).
11. Amendments and Waivers. Neither this Amendment and
Consent nor any provision hereof shall be amended, modified, waived or
discharged orally or by course of conduct, but only by a written agreement
signed by an authorized officer of Lender. Lender shall not, by any act,
delay, omission or otherwise be deemed to have expressly or impliedly waived
any of its rights, powers and/or remedies unless such waiver shall be in
writing and signed by an authorized officer of Lender. Any such waiver shall
be enforceable only to the extent specifically set forth therein. A waiver by
Lender of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right, power and/or remedy which
Lender would otherwise have on any future occasion, whether similar in kind or
otherwise.
12. Counterparts. This Amendment may be executed in one or
more counterparts, and by Lender and each other party hereto in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-10-
11
IN WITNESS WHEREOF, Lender, Borrowers, Guarantors and HI New York have
caused these presents to be duly executed as of the day and year first above
written.
LENDER BORROWERS
- ------ ---------
CONGRESS FINANCIAL CORPORATION THE RUG BARN, INC.
By:_____________________________ By:_____________________________
Title:__________________________ Title:__________________________
Address: Chief Executive Office:
- -------- -----------------------
1133 Avenue of the Americas Highway 28 Bypass, Industrial Park Road
New York, NY 10036 Abbeville, South Carolina 29620
HOME INNOVATIONS, INC.,
a Delaware corporation
By:_____________________________
Title:__________________________
Chief Executive Office:
-----------------------
346 East Plaza Drive
Mooresville, North Carolina 28115
DHA HOME, INC., formerly known as
CALVIN KLEIN HOME, INC.
By:_____________________________
Title:__________________________
12
Chief Executive Office:
-----------------------
346 East Plaza Drive
Mooresville, North Carolina 28115
R.A. BRIGGS & COMPANY
By:_____________________________
Title:__________________________
Chief Executive Office:
-----------------------
143 Main Street
Lake Zurich, Illinois 60047
GUARANTORS
----------
DECORATIVE HOME ACCENTS, INC.
By:_____________________________
Title:___________________________
Chief Executive Office:
-----------------------
Highway 28 Bypass, Industrial Park Road
Abbeville, South Carolina 29620
DRAYMORE MFG. CORP.
By:_____________________________
Title:___________________________
Chief Executive Office:
-----------------------
346 East Plaza Drive
Mooresville, North Carolina 28115
HOME INNOVATIONS, INC.,
a New York corporation
13
By:_____________________________
Title:___________________________
Chief Executive Office:
-----------------------
346 East Plaza Drive
Mooresville, North Carolina 28115
-13-
14
SCHEDULE 1.45A to Loan and Security Agreement
---------------------------------------------
Real Property
Highway 52
Morven, North Carolina 28119
Highway 28 Bypass
Industrial Park Road
Abbeville, South Carolina 29620
346 East Plaza Drive
Mooresville, North Carolina 28115
15
EXHIBIT A
---------
Term Loan Documents
1. Credit Agreement, dated as of May 23, 1997, among The Rug Barn, Inc.,
Home Innovations, Inc., DHA Home, Inc. and R.A. Briggs and Company, as
Borrowers, Decorative Home Accents, Inc., Draymore Mfg. Corp., and Home
Innovations, Inc., as Guarantors and the Lenders Listed on the Signatures
Pages, as Lenders.
2. Security Agreement, dated as of May 23, 1997 from The Rug Barn, Inc.,
Home Innovations, Inc., a Delaware corporation, DHA Home, Inc., R.A.
Briggs and Company, Decorative Home Accents, Inc., Draymore Mfg. Corp.,
and Home Innovations, Inc., a New York corporation as Grantors to the
Lenders Party to the Credit Agreement Referred to Herein.
3. Pledge Agreement, dated as of May 23, 1997, made by Decorative Home
Accents, Inc. in favor of the Lenders Party to the Credit Agreement.
4. Pledge Agreement, dated as of May 23, 1997, made by Home Innovations,
Inc., a Delaware corporation, in favor of the Lenders Party to the Credit
Agreement.
5. Term Notes
6. [Safekeeping Agreement]
7. Collateral Assignment of Trademarks and Trademark Licenses (Security
Agreement), dated as of May 23, 1997, between Home Innovations, Inc., a
Delaware corporation, and the Assignees.
8. Collateral Assignment of Trademarks and Trademark Licenses (Security
Agreement), dated as of May 23, 1997, between The Rug Barn, Inc. and the
Assignees.
9. Collateral Assignment of Trademarks and Trademark Licenses (Security
Agreement), dated as of May 23, 1997, between R.A. Briggs and Company and
the Assignees.
10. Copyright Mortgage and Security Agreement, dated May 23, 1997, between
The Rug Barn, Inc. and the Secured Parties.
11. Copyright Mortgage and Security Agreement, dated May 23, 1997, between
Home Innovations, Inc., a Delaware corporation and the Secured Parties.
12. Instructions for Disbursing Loan Proceeds
13. UCC-1s and UCC-3s
14. Stock Powers (in blank)
16
15. Landlord Waivers
16. Letter from Accountants
17. Letter from Calvin Klein, Inc. dated as of May 23, 1997 addressed to the
Lenders Listed on the Signature Pages thereto regarding Approved
Distribution Channels.
18. Letter from Calvin Klein, Inc. dated as of May 23, 1997 addressed to the
Lenders Listed on the Signature Pages thereto regarding Acknowledgement of
Lenders' Rights with License Agreement and Licensed Articles.
-16-
17
EXHIBIT B
---------
Guarantees
1. Guarantee, dated as of November 12, 1996, of The Rug Barn, Inc.
2. Guarantee, dated as of November 12, 1996, of Home Innovations, Inc., a
Delaware corporation.
3. Guarantee, dated as of November 12, 1996, of R.A. Briggs and Company.
4. Guarantee, dated as of November 12, 1996, of Calvin Klein Home, Inc.
18
EXHIBIT C
---------