Exhibit 10.1

EXECUTION

AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT, dated as of September 23, 2011
(this “Amendment No.1”), is by and among Wells Fargo Bank, National Association,
successor by merger to Wells Fargo Retail Finance, LLC, in its capacity as agent
for the Lenders (as hereinafter defined) pursuant to the Loan Agreement defined
below (in such capacity, “Agent”), the parties to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”) and RoomStore, Inc.,
a Virginia corporation (“Borrower”).

W I T N E S S E T H:

WHEREAS, Agent, Lenders and Borrower have entered into financing arrangements
pursuant to which Lenders (or Agent on behalf of Lenders) have made and may make
loans and advances and provide other financial accommodations to Borrower as set
forth in the Loan and Security Agreement dated as of May 27, 2010, by and among
Agent, Lenders and Borrower (as from time to time amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”, and
together with all agreements, documents and instruments at any time executed
and/or delivered in connection therewith or related thereto, as from time to
time amended, modified, supplemented, extended, renewed, restated, or replaced,
collectively, the “Loan Documents”);

WHEREAS, Borrower desires to amend certain provisions of the Loan Agreement as
set forth herein, and Agent and Lenders are willing to agree to such amendments
on the terms and subject to the conditions set forth herein;

WHEREAS, by this Amendment No. 1, Agent, Lenders and Borrower desire and intend
to evidence such amendments;

NOW THEREFORE, in consideration of the foregoing and the mutual agreements and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1. Definitions.

(a) Additional Definitions. As used herein or in the Loan Agreement or any of
the other Loan Documents, the following terms shall have the meanings given to
them below and the Loan Agreement and the other Loan Documents shall be deemed
and are hereby amended to include, in addition and not in limitation, the
following definitions:

(i) “Amendment No. 1”: Amendment No. 1 to Loan and Security Agreement, dated as
of September 23, 2011 by and among Agent, Lenders and Borrower, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.

--------------------------------------------------------------------------------

(ii) “Budget”: The initial budget to be delivered to Agent and Lenders in
accordance with Section 5 of Amendment No. 1, approved by FTI Consulting, Inc.
and in form and substance satisfactory to Agent, setting forth the Projected
Information for the periods covered thereby, together with any subsequent or
amended budget(s) thereto delivered to Agent and Lenders, in form and substance
satisfactory to Agent, in accordance with the terms and conditions hereof.

(iii) “Capital Event”: Defined in Section 10.17.

(iv) “Material Budget Deviation”: With respect to any Test Period, if (A) the
actual aggregate cash disbursements of Borrower during such Test Period exceed
one hundred twenty (120%) percent of the projected aggregate cash disbursements
during such Test Period as reflected in the Budget, (B) the actual aggregate
cash receipts of Borrower during such Test Period are less than seventy-five
(75%) percent of the projected aggregate cash receipts during such Test Period
as reflected in the Budget or (C) the actual aggregate value (calculated at the
lower of Cost or market) of Inventory of Borrower received by Borrower during
such Test Period is less than ninety (90%) percent of the projected value
(calculated at the lower of Cost or market) of such Inventory during such Test
Period as reflected in the Budget.

(v) “Test Period”: At any time, the immediately preceding one week period.

(vi) “WFB”: Wells Fargo Bank, National Association, successor by merger to Wells
Fargo Retail Finance, LLC, in its individual capacity, or any successor entity
thereto.

(b) Amendments to Definitions.

(i) Each reference to “Excess Availability” contained in the Loan Agreement and
each of the other Loan Documents is hereby amended to mean the difference of
(a) Availability minus (b) the aggregate amount of outstanding an unpaid
obligations of the Borrower which are past due beyond customary payment terms
consistent with past practice and which are not being contested in good faith.

(ii) Each reference to “Wells Fargo Retail Finance, LLC” contained in the Loan
Agreement and each of the other Loan Documents is hereby amended to mean “Wells
Fargo Bank, National Association, successor by merger to Wells Fargo Retail
Finance, LLC”

(iii) Each reference to “WFRF” contained in the Loan Agreement and each of the
other Loan Documents is hereby deleted and replaced with “WFB”.

(c) Interpretation. For purposes of this Amendment No. 1, all terms used herein
which are not otherwise defined herein, including but not limited to, those
terms used in the recitals hereto, shall have the respective meanings assigned
thereto in the Loan Agreement as amended by this Amendment No. 1.

 

-2-

--------------------------------------------------------------------------------

2. Inventories, Appraisals and Audits. Section 5.10 of the Loan Agreement is
hereby amended by deleting each of clauses (f), (g) and (h) thereof in its
entirety and replacing it with clauses (f), (g) and (h) below, respectively:

“(f) The Agent may cause periodic appraisals of Borrower’s Inventory to be
conducted as it, in its good faith judgment, deems necessary or appropriate and
Borrower shall be liable for the fees, costs and expenses of the Agent and its
professionals with respect to any such appraisals.

(g) The Agent may conduct periodic commercial finance audits of the Borrower’s
books and records as it, in its good faith judgment, deems necessary or
appropriate and Borrower shall be liable for the fees, costs and expenses of the
Agent and its professionals with respect to any such commercial finance audits.

(h) The Agent may cause periodic appraisals of the Borrower’s Eligible Real
Property to be conducted as it, in its good faith judgment, deems necessary or
appropriate and Borrower shall be liable for the fees, costs and expenses of the
Agent and its professionals with respect to any such appraisals.”

3. Minimum Availability. Section 5.12 of the Loan Agreement is hereby amended by
deleting such Section in its entirety and replacing it with the following:

“5.12 MINIMUM AVAILABILITY.

The Borrower shall not permit Excess Availability at any time during any period
below to be less than the amount corresponding to such period:

 

Period

  

Minimum Excess Availability

Effective date of Amendment No. 1 through and including December 11, 2011

   The greater of (i) $2,000,000 and (ii) ten (10%) percent multiplied by the
Borrowing Base

December 12, 2011 through and including December 18, 2011

   $5,500,000

December 19, 2011 through and including December 25, 2011

   $5,000,000

December 26, 2011 through and including January 1, 2012

   $4,500,000

 

-3-

--------------------------------------------------------------------------------

Period

  

Minimum Excess Availability

January 2, 2012 through and including January 8, 2012

   $4,000,000

January 9, 2012 through and including January 15, 2012

   $3,500,000

January 16, 2012 through and including January 22, 2012

   $3,000,000

January 23, 2012 through and including January 29, 2012

   $2,500,000

At all times thereafter

   The greater of (i) $2,000,000 and (ii) ten (10%) percent multiplied by the
Borrowing Base

Notwithstanding the foregoing, if the Capital Event is consummated prior to
December 12, 2011, then from the date of the consummation of the Capital Event
through and including December 11, 2011, the Borrower shall not permit Excess
Availability to be less than $5,500,000.

Compliance with such financial performance covenant shall be made as if no
Material Accounting Changes had been made. The Agent may determine the
Borrower’s compliance with such covenant based upon financial reports and
statements provided by the Borrower to the Agent (whether or not such financial
reports and statements are required to be furnished pursuant to this Agreement)
as well as by reference to interim financial and collateral information provided
to, or developed by, the Agent.”

4. Events of Default. Article X of the Loan Agreement is hereby amended by
adding a new Section 10.17 at the end thereof as follows:

“10.17 CAPITAL EVENT.

The failure of Borrower to receive, on or before December 9, 2011, net cash
Receipts in an aggregate amount of not less than $5,800,000 from the sale by
Borrower of all or substantially all of the assets or all or substantially all
of the capital stock or equity interests of a Subsidiary of Borrower (the
“Capital Event”).”

 

-4-

--------------------------------------------------------------------------------

5. Budget.

(a) Borrower has prepared and delivered to Agent and Lenders the initial
thirteen (13) week Budget which sets forth, among other information,
(i) projected aggregate weekly cash disbursements of Borrower, (ii) projected
aggregate weekly cash receipts of Borrower and (iii) projected weekly value
(calculated at the lower of Cost or market) of Eligible Inventory commencing
with the week ending as of September 23, 2011 (collectively, the “Projected
Information”). In addition, commencing on the Tuesday of each week thereafter,
Borrower shall deliver to Agent, in form and substance acceptable to Agent, a
subsequent thirteen (13) week Budget approved by FTI Consulting, Inc., which
subsequent Budget(s) shall roll forward by one week the immediately preceding
Budget.

(b) Not later than 10:00 a.m. (Eastern time) on the Tuesday following the end of
each week set forth in the Budget, Borrower shall deliver or cause to be
delivered to Agent, in form and substance satisfactory to Agent, a report that
sets forth for the immediately preceding week a comparison of Borrower’s actual
cash disbursements, receipts and aggregate Inventory value for such week to
Borrower’s projected cash disbursements, receipts and Inventory value for such
week as set forth in the Budget.

(c) Borrower hereby confirms, acknowledges and agrees that (i) the occurrence of
any Material Budget Deviation shall constitute an additional Event of Default
under the Financing Agreements, (ii) any failure of Borrower to deliver any
reports with respect to the Budget as required above shall constitute an
additional Event of Default under the Financing Agreements and (iii) Lenders are
relying upon the Borrower’s delivery of, and compliance with, the Budget in
determining to enter into this Agreement.

6. Representations and Warranties. Borrower represents and warrants with and to
Agent and Lenders as follows, which representations and warranties shall survive
the execution and delivery hereof:

(a) no Default or Event of Default has occurred and is continuing as of the date
of this Amendment No. 1;

(b) this Amendment No. 1 and each other agreement to be executed and delivered
by Borrower in connection herewith (collectively, together with this Amendment
No. 1, the “Amendment Documents”) has been duly authorized, executed and
delivered by all necessary action on the part of Borrower and, if necessary, its
equity holders and is in full force and effect as of the date hereof, and the
agreements and obligations of Borrower contained herein and therein constitute
legal, valid and binding obligations of Borrower, enforceable against Borrower
in accordance with their terms, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought;

 

-5-

--------------------------------------------------------------------------------

(c) the execution, delivery and performance of each Amendment Document (i) are
all within Borrower’s corporate powers and (ii) are not in contravention of law
or the terms of Borrower’s certificate of incorporation, by laws, or other
organizational documentation, or any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower or its property are bound; and

(d) all of the representations and warranties set forth in the Loan Agreement
and the other Loan Documents, each as amended hereby, are true and correct in
all material respects on and as of the date hereof, as if made on the date
hereof, except to the extent any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct in all material respects as of such date.

7. Conditions Precedent. The amendments contained herein shall only be effective
upon the satisfaction of each of the following conditions precedent in a manner
satisfactory to Agent:

(a) Agent shall have received counterparts of this Amendment No. 1, duly
authorized, executed and delivered by Borrower and Required Lenders;

(b) Agent shall have received a true and correct copy of each consent, waiver or
approval (if any) to or of this Amendment No. 1, which Borrower is required to
obtain from any other Person, and such consent, approval or waiver (if any)
shall be in form and substance reasonably satisfactory to Agent; and

(c) No Default or Event of Default shall have occurred and be continuing.

8. Effect of Amendment No. 1. Except as expressly set forth herein, no other
amendments, changes or modifications to the Loan Documents are intended or
implied, and in all other respects the Loan Documents are hereby specifically
ratified, restated and confirmed by all parties hereto as of the effective date
hereof and Borrower shall not be entitled to any other or further amendment by
virtue of the provisions of this Amendment No. 1 or with respect to the subject
matter of this Amendment No. 1. To the extent of conflict between the terms of
this Amendment No. 1 and the other Loan Documents, the terms of this Amendment
No. 1 shall control. The Loan Agreement and this Amendment No. 1 shall be read
and construed as one agreement.

9. Governing Law. This Amendment No. 1 and all rights and obligations hereunder,
including matters of construction, validity, and performance, shall be governed
by the internal laws of the State of New York but excluding any principles of
conflicts of law or other rule of law that would cause the application of the
law of any jurisdiction other than the laws of the State of New York.

10. Jury Trial Waiver. BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AMENDMENT NO. 1 OR
ANY OF THE OTHER LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AMENDMENT
NO. 1 OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR

 

-6-

--------------------------------------------------------------------------------

THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER, AGENT AND LENDERS EACH HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER, AGENT OR ANY LENDER
MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT NO. 1 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

11. Binding Effect. This Amendment No. 1 shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.

12. Waiver, Modification, Etc. No provision or term of this Amendment No. 1 may
be modified, altered, waived, discharged or terminated orally, but only by an
instrument in writing executed by the party against whom such modification,
alteration, waiver, discharge or termination is sought to be enforced.

13. Further Assurances. Borrower shall execute and deliver such additional
documents and take such additional action as may be reasonably requested by
Agent to effectuate the provisions and purposes of this Amendment No. 1.

14. Entire Agreement. This Amendment No. 1 represents the entire agreement and
understanding concerning the subject matter hereof among the parties hereto, and
supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.

15. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment No. 1.

16. Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Amendment No. 1 by telefacsimile or other electronic method
of transmission shall have the same force and effect as delivery of an original
executed counterpart of this Amendment No. 1. Any party delivering an executed
counterpart of this Amendment No. 1 by telefacsimile or other electronic method
of transmission shall also deliver an original executed counterpart of this
Amendment No. 1, but the failure to do so shall not affect the validity,
enforceability, and binding effect of this Amendment No. 1.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

-7-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly executed and delivered by their authorized officers as of the day and year
first above written.

 

ROOMSTORE, INC. By:   /s/     Curtis C. Kimbrell, III Name:    Curtis C.
Kimbrell, III Title:   President & CEO

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, successor by merger to Wells

Fargo Retail Finance, LLC, as Agent

By:   /s/    Connie Liu Name:    Connie Liu Title:   Vice President

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, successor by merger to Wells

Fargo Retail Finance, LLC

By:   /s/    Connie Liu Name:    Connie Liu Title:   Vice President

[Amendment No. 1 to Loan and Security Agreement]