<PAGE>   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-

<PAGE>   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-
<PAGE>   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-

<PAGE>   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-

<PAGE>   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-
<PAGE>   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-

<PAGE>   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-
<PAGE>   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-

<PAGE>   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-
<PAGE>   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-
<PAGE>   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:__________________________     





<PAGE>   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                  


<PAGE>   13

                                       By:_____________________________   
                                                                          
                                       Title:___________________________  
                                                                          
                                       Chief Executive Office:            
                                       -----------------------
                                   
                                       346 East Plaza Drive               
                                       Mooresville, North Carolina  28115 






                                     -13-
<PAGE>   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 










<PAGE>   15
     
                                  EXHIBIT A
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                             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)



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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.








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                                  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.





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                                  EXHIBIT C
                                  ---------