Document:

<PAGE>   1
                                                                    EXHIBIT 10.7

                                PLEDGE AGREEMENT

                  AGREEMENT dated as of June 6, 2000, between the undersigned,
HUNT FAMILY INVESTMENTS, L.L.L.P., a Georgia limited liability partnership (the
"PLEDGOR"), and HORIZON MEDICAL PRODUCTS, INC., a Georgia corporation (the
"COMPANY").

                              W I T N E S S E T H:

                  WHEREAS, the Pledgor is the owner of all of the outstanding
shares of capital stock of the Company described on Schedule I attached hereto;
and

                  WHEREAS, in order to induce the Company to advance to the
Pledgor and Marshall B. Hunt a $900,000 short-term loan pursuant to a Loan
Agreement dated as of even date herewith (the "LOAN AGREEMENT"), the Pledgor
has agreed to grant a continuing security interest in and to the Collateral (as
hereafter defined) to secure such loan and the promissory note issued with
respect thereto;

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

SECTION 1.  DEFINITIONS.

                  "COLLATERAL" has the meaning assigned to such term in Section
3(A).

                  "COMPANY SHARES" means the issued and outstanding shares of
capital stock of the Company owned by the Pledgor and more particularly
described on Schedule I attached hereto.

                  "EVENT OF DEFAULT" has the meaning assigned to such term in
Section 10.

                  "LOAN AGREEMENT" has the meaning assigned to such term in the
recitals hereof.

                  "NOTE" means that certain Promissory Note, dated of even date
herewith, made by the Pledgor and Marshall B. Hunt payable to the order of the
Company in the original principal amount of $900,000, having a maturity date of
August 30, 2000.

                  "PLEDGED SECURITIES" means the Pledged Stock.

                  "PLEDGED STOCK" means the Company Shares and any other
capital stock required to be pledged to the Secured Party pursuant to Section
3(B).

<PAGE>   2

                  "SECURED OBLIGATIONS" means the obligations secured under
this Agreement including (a) all principal of and interest (including any
interest which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Pledgor,
whether or not allowed or allowable as a claim in any such proceeding) on the
Note, and all other obligations and liabilities owing under the Loan Agreement,
(b) all advances, if any, made by the Secured Party pursuant to this Agreement
or the Loan Agreement, (c) all expenses incident to the collection of the
indebtedness secured by this Agreement, and (d) any amendments, restatements,
renewals, extensions or modifications of any of the foregoing.

                  "SECURED PARTY" means the Company, its successors and assigns.

                  "SECURITY INTERESTS" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.

                  "UCC" has the meaning given such term in the Security
Agreements.

                  Unless otherwise defined herein, or unless the context
otherwise requires, all terms used herein which are defined in the Georgia UCC
as in effect on the date hereof shall have the meanings therein stated.

SECTION 2.  REPRESENTATIONS AND WARRANTIES.

                  The Pledgor represents and warrants as follows:

                  (A)      Title to Pledged Securities. The Pledgor owns all of
the Pledged Securities, free and clear of any Liens other than the Security
Interests, and has full right and authority to grant the Security Interests to
the Secured Party as provided in Section 3. All of the Pledged Stock has been
duly authorized and validly issued, and is fully paid and non-assessable, and
is subject to no options to purchase or similar rights of any Person. The
Pledgor is not and will not become a party to or otherwise bound by any
agreement, other than this Agreement, which restricts in any manner the rights
of any present or future holder of any of the Pledged Securities with respect
thereto.

                  (B)      Validity, Perfection and Priority of Security
Interests. Upon the delivery of certificates representing the Pledged Stock to
the Secured Party in accordance with Section 4 hereof, the Secured Party will
have valid and perfected security interests in the Collateral subject to no
prior Lien. No registration, recordation or filing with any governmental body,
agency or official is required in connection with the execution or delivery of
this Agreement or necessary for the validity or enforceability hereof or for
the perfection or enforcement of the Security Interests. The Pledgor has not
performed and will not perform any acts which might prevent the Secured Party
from enforcing any of the terms and conditions of this Agreement or which would
limit the Secured Party in any such enforcement.

                                      -2-
<PAGE>   3

                  (C)      UCC Filing Locations. The chief executive office of
(or, if an individual, the residence address of) the Pledgor is located at its
address set forth on the signature page hereof. Under the Uniform Commercial
Code as in effect in the state in which such office is located, no local filing
is required to perfect a security interest in collateral consisting of general
intangibles.

SECTION 3.  THE SECURITY INTERESTS.

                  In order to secure the full and punctual payment and
performance of the Secured Obligations in accordance with the terms thereof,
and to secure the performance of all the obligations of the Pledgor hereunder:

                  (A)      The Pledgor hereby assigns and pledges to and with
the Secured Party and grants to the Secured Party a security interest in the
Pledged Securities, and all of its rights and privileges with respect to the
Pledged Securities, and all income and profits thereon, and all interest,
dividends and other payments and distributions with respect thereto, and all
proceeds of the foregoing (the "COLLATERAL"). Contemporaneously with the
execution and delivery hereof, the Pledgor is delivering the certificates
representing the Company Shares in pledge hereunder.

                  (B)      In the event that the Company at any time issues any
additional or substitute shares of capital stock of any class or owes any other
Debt to the Pledgor, the Pledgor will immediately pledge and deposit with the
Secured Party certificates representing all such shares or an instrument
evidencing such other Debt as additional security for the Secured Obligations.
All such shares and instruments constitute Pledged Securities and are subject
to all provisions of this Agreement.

                  (C)      The Security Interests are granted as security only
and shall not subject the Secured Party to, or transfer or in any way affect or
modify, any obligation or liability of the Pledgor with respect to any of the
Collateral or any transaction in connection therewith.

SECTION 4.  DELIVERY OF PLEDGED SECURITIES.

                  All certificates representing Pledged Stock delivered to the
Secured Party by the Pledgor pursuant hereto shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, and accompanied by any required transfer tax
stamps, all in form and substance satisfactory to the Secured Party.

SECTION 5.  FILING; FURTHER ASSURANCES.

                  (A)      The Pledgor agrees that it will, at its expense and
in such manner and form as the Secured Party may require, execute, deliver,
file and record any financing statement, specific assignment or other paper and
take any other action that may be necessary or desirable, or that the Secured
Party may request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Secured Party to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, the Pledgor hereby

                                      -3-
<PAGE>   4

authorizes the Secured Party to execute and file, in the name of the Pledgor or
otherwise, UCC financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing
statement relating to this Agreement) which the Secured Party in its sole
discretion may deem necessary or appropriate to further perfect the Security
Interests.

                  (B)      The Pledgor agrees that it will not change (i) its
name, identity or form of organization in any manner or (ii) the location of
its chief executive office (or if an individual, its residence) unless it shall
have given the Secured Party not less than 30 days' prior written notice
thereof.

SECTION 6.  RECORD OWNERSHIP OF PLEDGED STOCK.

                  The Secured Party may at any time or from time to time, upon
the occurrence and during the continuance of an Event of Default, in its sole
discretion, cause any or all of the Pledged Stock to be transferred of record
into the name of the Secured Party or its nominee. The Pledgor will promptly
give to the Secured Party copies of any notices or other communications
received by it with respect to Pledged Stock registered in the name of the
Pledgor and the Secured Party will promptly give to the Pledgor copies of any
notices and communications received by the Secured Party with respect to
Pledged Stock registered in the name of the Secured Party or its nominee.

SECTION 7.  RIGHT TO RECEIVE DISTRIBUTIONS ON COLLATERAL.

                  Upon the occurrence and during the continuance of any Event of
Default, the Secured Party shall have the right to receive and retain as
Collateral hereunder all dividends, interest and other payments and
distributions made upon or with respect to the Collateral and the Pledgor shall
take all such action as the Secured Party may deem necessary or appropriate to
give effect to such right. Upon the occurrence and during the continuance of
any Event of Default, all such dividends, interest and other payments and
distributions which are received by the Pledgor shall be received in trust as
Collateral for the benefit of the Secured Party and, if the Secured Party so
directs, shall be segregated from other funds of the Pledgor and shall,
forthwith upon demand by the Secured Party during the continuance of an Event
of Default, be paid over to the Secured Party as Collateral in the same form as
received (with any necessary endorsement). After all Events of Default that
shall have occurred have been cured, the Secured Party's right to retain
dividends, interest and other payments and distributions under this Section 7
shall cease and the Secured Party shall pay over to the Pledgor any such
Collateral retained by the Secured Party during the continuance of an Event of
Default.

                                      -4-
<PAGE>   5

SECTION 8.  RIGHT TO VOTE PLEDGED STOCK.

                  Unless an Event of Default shall have occurred and be
continuing, the Pledgor shall have the right, from time to time, to vote and to
give consents, ratifications and waivers with respect to the Pledged Stock, and
the Secured Party shall, upon receiving a written request from the Pledgor
accompanied by a certificate signed by the Pledgor and the Company's principal
financial officer stating that no Event of Default has occurred and is
continuing, deliver to the Pledgor or as specified in such request such
proxies, powers of attorney, consents, ratifications and waivers in respect of
any of the Pledged Stock which is registered in the name of the Secured Party
or its nominee as shall be specified in such request and be in form and
substance satisfactory to the Secured Party.

                  If an Event of Default shall have occurred and be continuing,
the Secured Party shall have the right to the extent permitted by law and the
Pledgor shall take all such action as may be necessary or appropriate to give
effect to such right, to vote and to give consents, ratifications and waivers,
and take any other action with respect to any or all of the Pledged Stock with
the same force and effect as if the Secured Party were the absolute and sole
owner thereof.

SECTION 9.  GENERAL AUTHORITY.

                  The Pledgor hereby irrevocably appoints the Secured Party its
true and lawful attorney, with full power of substitution, in the name of the
Pledgor, the Secured Party or otherwise, for the sole use and benefit of the
Secured Party, but at the expense of the Pledgor, to the extent permitted by
law to exercise, at any time and from time to time while an Event of Default
has occurred and is continuing, all or any of the following powers with respect
to all or any of the Collateral:

                  (i)      to demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due upon or by virtue
thereof,

                  (ii)     settle, compromise, compound, prosecute or defend any
         action or proceeding with respect thereto,

                  (iii)    to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or avails thereof, as fully and effectually as if
the Secured Party were the absolute owner thereof, and

                  (iv)     to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference thereto;

provided that the Secured Party shall give the Pledgor not less than ten days'
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral. The Secured Party and the Pledgor agree
that such notice constitutes "reasonable notification" within the meaning of
Section 9-504(3) of the UCC.

                                      -5-
<PAGE>   6

SECTION 10.  EVENTS OF DEFAULT.

         The following shall constitute events of default ("EVENTS OF DEFAULT")
by the Pledgor hereunder:

                  (a)      Breach of Covenant. If the Pledgor should violate or
         breach, or should fail fully and completely to observe, perform,
         satisfy or comply with, any of the terms, covenants or conditions set
         forth in this Agreement; or

                  (b)      Note. If any Event of Default under (and as such term
is defined in) the Note shall exist.

SECTION 11.  REMEDIES UPON EVENT OF DEFAULT.

                  If any Event of Default shall have occurred and be
continuing, the Secured Party may exercise all the rights of a secured party
under the UCC (whether or not in effect in the jurisdiction where such rights
are exercised) and, in addition, the Secured Party may, without being required
to give any notice, except as herein provided or as may be required by
mandatory provisions of law, (i) apply the cash, if any, then held by it as
Collateral as specified in Section 14 and (ii) if there shall be no such cash
or if such cash shall be insufficient to pay all the Secured Obligations in
full, sell the Collateral, in its entirety or any part thereof, at public or
private sale or at any broker's board or on any securities exchange, for cash,
upon credit or for future delivery, and at such price or prices as the Secured
Party may deem satisfactory. Any Secured Party may be the purchaser of any or
all of the Collateral so sold at any public sale (or, if the Collateral is of a
type customarily sold in a recognized market or is of a type which is the
subject of widely distributed standard price quotations, at any private sale).
The Secured Party is authorized, in connection with any such sale, if it deems
it advisable so to do, (i) to restrict the prospective bidders on or purchasers
of any of the Pledged Securities to a limited number of sophisticated investors
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all
of the Pledged Securities or on any other securities pledged hereunder a legend
to the effect that such security has not been registered under the Securities
Act of 1933 and may not be disposed of in violation of the provision of said
Act, and (iii) to impose such other limitations or conditions in connection
with any such sale as the Secured Party deems necessary or advisable in order
to comply with said Act or any other law. The Pledgor covenants and agrees that
it will execute and deliver such documents and take such other action as the
Secured Party deems necessary or advisable in order that any such sale may be
made in compliance with law. Upon any such sale the Secured Party shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the Collateral
so sold absolutely and free from any claim or right of whatsoever kind,
including any equity or right of redemption of the Pledgor which may be waived,
and the Pledgor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law
now existing or hereafter adopted. The notice (if any) of such sale required by
Section 9 shall (1) in

                                      -6-
<PAGE>   7

case of a public sale, state the time and place fixed for such sale, (2) in
case of sale at a broker's board or on a securities exchange, state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, will first be offered for
sale at such board or exchange, and (3) in the case of a private sale, state
the day after which such sale may be consummated. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Secured Party may fix in the notice of such sale. At any such
sale the Collateral may be sold in one lot as an entirety or in separate
parcels, as the Secured Party may determine. The Secured Party shall not be
obligated to make any such sale pursuant to any such notice. The Secured Party
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Secured Party until the selling price is paid by the purchaser
thereof, but the Secured Party shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may again be sold upon like notice.
The Secured Party, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.

SECTION 12.  EXPENSES.

                  The Pledgor agrees that it will forthwith upon demand pay to
         the Secured Party:

                  (i)      the amount of any taxes which the Secured Party may
         have been required to pay by reason of the Security Interests or to
         free any of the Collateral from any Lien thereon, and

                  (ii)     the amount of any and all out-of-pocket expenses,
         including the reasonable fees and disbursements of counsel and of any
         other experts, which the Secured Party may incur in connection with
         (w) the administration or enforcement of this Agreement, including
         such expenses as are incurred to preserve the value of the Collateral
         and the validity, perfection, rank and value of any Security Interest,
         (x) the collection, sale or other disposition of any of the
         Collateral, (y) the exercise by the Secured Party of any of the rights
         conferred upon it hereunder or (z) any Default or Event of Default.

Any such amount not paid on demand shall bear interest at the Interest Rate, as
provided in the Note, plus two percentage points (2.0%).

SECTION 13.  LIMITATION ON DUTY OF SECURED PARTY IN RESPECT OF COLLATERAL.

                  Beyond the exercise of reasonable care in the custody
thereof, the Secured Party shall have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or bailee or
any income thereon or as to the preservation of rights against prior parties or
any other rights pertaining thereto. The Secured Party shall be deemed to have

                                      -7-
<PAGE>   8

exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property, and shall not be liable or responsible
for any loss or damage to any of the Collateral, or for any diminution in the
value thereof, by reason of the act or omission of any agent or bailee selected
by the Secured Party in good faith.

SECTION 14.  APPLICATION OF PROCEEDS.

                  Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any
part of the Collateral and any cash held shall be applied by the Secured Party
in the following order of priorities:

                  first, to payment of the expenses of such sale or other
         realization, including reasonable compensation to agents and counsel
         for the Secured Party, and all expenses, liabilities and advances
         incurred or made by the Secured Party in connection therewith, and any
         other unreimbursed expenses for which the Secured Party or any Secured
         Party is to be reimbursed pursuant to Section 11 hereof;

                  second, to the ratable payment of accrued but unpaid interest
         on the Secured Obligations in accordance with the provisions of the
         Loan Agreement;

                  third, to the ratable payment of unpaid principal of the
         Secured Obligations;

                  fourth, to the ratable payment of all other Secured
         Obligations, until all Secured Obligations shall have been paid in
         full; and

                  finally, to payment to the Pledgor or its successors or
         assigns, or as a court of competent jurisdiction may direct, of any
         surplus then remaining from such proceeds.

SECTION 15.  APPOINTMENT OF CO-AGENTS.

                  At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Secured Party may appoint another bank or
trust company or one or more other persons, either to act as co-agent or
co-agents, jointly with the Secured Party, or to act as separate agent or
agents on behalf of the Secured Party with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment.

SECTION 16.  TERMINATION OF SECURITY INTERESTS; RELEASE OF COLLATERAL.

                  Upon the repayment in full of all Secured Obligations (other
than contingent indemnity or similar claims not yet asserted), the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Pledgor. At any time and from time to time prior to such termination of the
Security Interests, the Secured Party may release any of the Collateral. Upon
any such termination of the Security Interests or release of Collateral, the
Secured Party will, at

                                      -8-
<PAGE>   9

the expense of the Pledgor, execute and deliver to the Pledgor such documents
as the Pledgor shall reasonably request to evidence the termination of the
Security Interests or the release of such Collateral, as the case may be.

SECTION 17.  NOTICES.

                  All notices, requests and other communications to any party
hereunder shall be in writing (including prepaid overnight courier, telex,
facsimile transmission or similar writing) and shall be given to such party at
its address or telecopy or telex number set forth on the signature pages
hereof, or at such other address or telecopy or telex number as such party may
hereafter specify for the purpose by notice to the Pledgor and the Secured
Party. Each such notice, request or other communication shall be effective (i)
if given by telex or telecopy, when such telex or telecopy is transmitted to
the telex or telecopy number specified in this Section and the appropriate
answer back is received (in the case of telex) or telephonic confirmation of
receipt thereof is obtained (in the case of telecopy) or (ii) if given by mail,
prepaid overnight courier or any other means, when received at the address
specified in this Section or when delivery at such address is refused.

SECTION 18.  WAIVERS, NON-EXCLUSIVE REMEDIES.

                  No failure on the part of the Secured Party to exercise, and
no delay in exercising and no course of dealing with respect to, any right
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by the Secured Party of any right under the Note or this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The rights in this Agreement and the Note are cumulative and are
not exclusive of any other remedies provided by law.

SECTION 19.  SUCCESSORS AND ASSIGNS.

                  This Agreement is for the benefit of the Secured Party and
its successors and assigns, and in the event of an assignment of all or any of
the Secured Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Pledgor and his heirs, legal representatives,
successors and assigns.

SECTION 20.  CHANGES IN WRITING.

                  Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only in writing signed by
the Pledgor and the Secured Party.

                                      -9-
<PAGE>   10

SECTION 21.  GEORGIA LAW.

             THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW), EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT
TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN
GEORGIA ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION.

SECTION 22.  SEVERABILITY.

             If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Secured Party in order to
carry out the intentions of the parties hereto as nearly as may be possible;
and (ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.

SECTION 23.  COUNTERPARTS.

             This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

                                     -10-
<PAGE>   11

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.

                                       PLEDGOR:

                                       HUNT FAMILY INVESTMENTS, L.L.L.P.

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       Address for Notices:

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

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

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

                                       Telecopy No. (404) 233-0171

                                       COMPANY:

                                       HORIZON MEDICAL PRODUCTS, INC.

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       Address for Notices:

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

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

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

                                       Telecopy No. (404) 233-0171

<PAGE>   12

                                   SCHEDULE I

                                 PLEDGED STOCK

<TABLE>
<CAPTION>
                                          NUMBER AND
       NAME OF CORPORATION              CLASS OF SHARES          CERTIFICATE NO.(S)
       -------------------         -------------------------     ------------------
  <S>                              <C>                           <C>
  Horizon Medical Products, Inc.   924,210 Shares of Class A             72
                                    Class A Common Stock
                                             Stock
</TABLE><PAGE>   1

                                                                   EXHIBIT 10.10

                     CONTINUING COMMERCIAL CREDIT AGREEMENT

                                 by and between

                               CAROLINA FIRST BANK
                                     as Bank

                                       and

                           HOMEPLACE OF AMERICA, INC.

                                       and

                             HOMEPLACE STORES, INC.

                                       and

                           HOMEPLACE STORES TWO, INC.

                                       and

                            HOMEPLACE MANAGEMENT, INC

                                  as Borrowers

                               Dated: July 7, 2000

<PAGE>   2

                                TABLE OF CONTENTS

 SECTION 1.       DEFINITIONS

         1.1      "Application"........................................      1
         1.2      "Default rate".......................................      2
         1.3      "Event of Default"...................................      2
         1.4      "Letter of Credit Accommodations"....................      2
         1.5      "Material Adverse Effect"............................      2
         1.6      "Maximum Credit".....................................      2
         1.7      "Obligations"........................................      2
         1.8      "Obligor"............................................      2
         1.9      "Payment Account"....................................      2
         1.10     "Primary Lender".....................................      2
         1.11     "Prime Rate".........................................      2
         1.12     "Property"...........................................      3
         1.13     "Records"............................................      3
         1.14     "Term"...............................................      3
         1.15     "Transportation Documents............................      3

 SECTION 2. LETTER OF CREDIT ACCOMMODATIONS ...........................      3

          2.1      General Terms and Conditions........................      3
          2.2      Bank's Good Faith Interpretation ...................      4
          2.3      Noncompliance; Acceptance and Rejection; Extensions and
                    Amendments.........................................      5
          2.4      Borrowers' Assumption of Risk; Indemnification and
                    Hold Harmless......................................      5

 SECTION 3. FEES AND CHARGES

          3.1      Closing Fee.........................................      5
          3.2      Transaction Fees....................................      5
          3.3      Attorney's Fees.....................................      5
          3.4      Maximum Interest....................................      6

 SECTION 4. CONDITIONS PRECEDENT

 4.1      Requisite Corporate Action ..................................      6
 4.2      No Material Adverse Change ..................................      6
 4.3      Consents, Waivers, Acknowledgements .........................      6
 4.4      Accurate Representations and Warranties .....................      7
 4.5      No Event of Default .........................................      7

 SECTION 5. BANK'S RIGHTS TO THE PROPERTY AND THE
 TRANSPORTATION DOCUMENTS..............................................      7

<PAGE>   3

 5.1      Bank's Ownership Rights......................................      7
 5.2      No Waiver by Bank ...........................................      7

 SECTION 6. COLLECTION AND ADMINISTRATION. ............................      7

 6.1 Borrowers' Letter of Credit Accounts..............................      7
 6.2 Statements........................................................      7
 6.3 Payments..........................................................      7
 6.4 Authorization to Issue Letter of Credit...........................      8
 6.5 Appointment of HomePlace of America, Inc. and Agent for HomePlace of
     America, Inc., HomePlace Stores, Inc., HomePlace Stores Two, Inc and
     Home Place Management, Inc........................................      8

 SECTION 7. REPRESENTATIONS AND WARRANTIES

 7.1    Corporate Existence, Power and Authority; Subsidiaries.........      9
 7.2    Financial Statements; No Material Adverse Change...............      9
 7.3    Chief Executive Office ........................................      9
 7.4    Tax Returns....................................................      9
 7.5    Litigation.....................................................     10
 7.6    Compliance with Other Agreements and Applicable Laws...........     10
 7.7    Accuracy and Completeness of Information.......................     11
 7.8    Interrelated Business..........................................     11
 7.9    Survival of Warranties; Cumulative.............................     11

 SECTION 8. AFFIRMATIVE AND NEGATIVE COVENANTS
 8.1      Maintenance of Existence ....................................     12
 8.2      Compliance with Laws, Regulations, Etc ......................     12
 8.3      Insurance ...................................................     12
 8.4      Financial Statements and Other Information ..................     13
 8.5      Encumbrances ................................................     14
 8.6      Adjusted Net Worth ..........................................     14
 8.7      Working Capital .............................................     14
 8.8      Costs and Expenses ..........................................     14
 8.9      Further Assurances ..........................................     14

 SECTION 9. EVENTS OF DEFAULT AND REMEDIES.............................     15
 9.1      Events of Default............................................     15
 9.2      Remedies.....................................................     16

 SECTION 10. JURY TRIAL WAIVER, OTHER WAIVERS AND CONSENTS,
 GOVERNING LAW ........................................................     17
 10.1     Governing Law; Choice of Forum; Service of Process; Jury Trial
             Waiver ...................................................     17
 10.2     Waiver of Notices ...........................................     18
 10.3     Amendments and Waivers.......................................     19
 10.4     Waiver of Counterclaims .....................................     19
 10.5     Indemnification .............................................     19

<PAGE>   4

 SECTION 11. TERM OF AGREEMENT: MISCELLANEOUS .........................     19

 11.1     Term.........................................................     19
 11.2     Uniform Customs and Practice ................................     20
 11.3     Notices......................................................     20
 11.4     Partial Invalidity...........................................     20
 11.5     Successors...................................................     20
 11.6     Confidentiality..............................................     21
 11.7     Entire Agreement.............................................     21

<PAGE>   5

CONTINUING COMMERCIAL CREDIT AGREEMENT

         This Continuing Commercial Credit Agreement (the "Agreement") dated
June 22, 2000 is entered into by and among HomePlace of America, Inc., a
Delaware corporation, Home Place Stores, Inc., a Delaware corporation, Home
Place Stores Two, Inc., a Delaware corporation, and HomePlace Management,
Inc.("HomePlace of America, Inc., HomePlace Stores, Inc., HomePlace Stores Two,
Inc., and HomePlace Management, Inc. individually referred to as a "Borrower"
and collectively as "Borrowers") and Carolina First Bank, a South Carolina
corporation ("Bank").

WITNESSETH:

         WHEREAS, Borrowers have requested that Bank establish a facility for
the issuance from time to time, at Bank's option, of one or more International
Documentary Letters of Credit (each being hereafter referred to individually as
a "Letter of Credit" and collectively as "Letters of Credit"); and

         WHEREAS, Bank is willing to provide Letter of Credit Accommodations on
the terms and conditions set forth herein;

         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:

SECTION 1. DEFINITIONS

         All capitalized terms, unless otherwise defined herein, shall have the
meanings given in the Loan and Security Agreement between Fleet Retail Finance,
as agent on behalf of Lenders, and HomePlace of America, Inc, Lead Borrower for,
HomePlace of America, Inc., HomePlace Stores, Inc., HomePlace Stores Two, Inc.
and HomePlace Management, Inc, the Borrowers, dated June 15, 1999 (the "Fleet
Agreement"). Fleet Agreement as in existence as of the date of this Agreement is
attached as Exhibit A. All terms used herein which are defined in Article 1 or
Article 9 of the Uniform Commercial Code shall have the meanings given therein
unless otherwise defined in this Agreement. All references to the plural herein
shall also mean the singular and to the singular shall also mean the plural. All
references to Borrowers shall, unless the context otherwise expressly provides,
mean any Borrower and all Borrowers, individually and collectively, jointly and
severally. All references to Borrowers and Bank pursuant to the definitions set
forth in the recitals hereto, or to any other person herein, shall include their
respective successors and assigns. The words "hereof", "herein", "hereunder",
"this Agreement" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not any particular provision of this
Agreement and as this Agreement now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced. An Event of
Default shall exist or continue or be continuing until such Event of Default is
waived in accordance with Section 10.3. Any accounting term used herein unless
otherwise defined in this Agreement shall have the meaning customarily given to
such term in accordance with GAAP. For purposes of this Agreement, the following
terms shall have the respective meanings given to them below:

<PAGE>   6

         1.1 "Application" shall mean the request made by any Borrower to Bank
for Letter of Credit Accommodations on a form identical to EXHIBIT B.

         1.2 "Default Rate" shall mean the rate of interest for which Borrowers
are obligated to pay to Bank after an Event of Default on unpaid amounts due to
Bank pursuant to Section 2. 1 (e), and shall be the lesser of (a) Bank's Prime
Rate plus two and one-half (2-1/2 %) percent per annum, or (b) the Maximum
Interest Rate.

         1.3 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 9.1 hereof.

         1.4 "Letter of Credit Accommodations" shall mean the Letters of Credit,
merchandise purchase or other guaranties which are from time to time issued or
opened by Bank for the account of any Borrower.

         1.5 "Material Adverse Effect" shall mean any material adverse effect
upon the business, assets or financial condition of Borrowers, or any material
adverse effect upon the Property or Bank's rights or interests in or with
respect to the Property.

         1.6 "Maximum Credit" shall mean $5,000,000.

         1.7 "Obligations" shall mean any and all Letters of Credit
Accommodations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by any or all Borrowers to Bank and/or its
affiliates, including principal, interest, charges, fees, costs and expenses,
however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, whether arising under this Agreement or otherwise, whether now
existing or hereafter arising, whether arising before, during or after the term
of this Agreement or after the commencement of any case with respect to any
Borrower under the United States Bankruptcy Code or any similar statute
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the commencement of such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, secured or unsecured, and
however acquired by Bank.

         1.8 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than a Borrower.

         1.9 "Payment Account" shall have the meaning set forth in Section 6.3
hereof.

         1.10 "Primary Lender" shall mean Fleet Retail Finance, as agent on
behalf of lenders (Fleet).

         1.11 "Prime Rate" shall mean the rate from time to time publicly
announced by Bank, or its successors, at its office in Columbia, South Carolina,
as its prime rate, whether or not such announced rate is the best rate available
at such bank.

<PAGE>   7

         1.12 "Property" shall mean all goods and merchandise shipped by any
vendor at the request of any Borrower for which Bank has issued Letter of Credit
Accommodations and for which Borrowers have not complied with this Agreement in
general, and Section 2. 1 (e) in particular.

         1.13 "Records" shall mean, as to each Borrower, all of such Borrower's
present and future books of account of every kind or nature, purchase and sale
agreements, invoices, ledger cards, bills of lading and other shipping evidence,
statements, correspondence, memoranda, credit files and other data relating to
the Property, together with the tapes, disks, diskettes and other data and
software storage media and devices, file cabinets or containers in or on which
the foregoing are stored (including any rights of such Borrower with respect to
the foregoing maintained with or by any other person).

         1.14 "Term" shall mean the period of time set forth in Section 11. 1
during which this Agreement shall continue in full force and effect.

         1.15 "Transportation Documents" shall mean all documents relating to
the Property shipped under or pursuant to or in connection with the Letter of
Credit Accommodations under this Agreement, including but not limited to (a)
import, export or other licenses for import, export or shipping of any and all
of the Property; (b) bills of lading of other documents issued or purporting to
be issued by or on behalf of any carrier which acknowledges receipt of the
Property for transportation, and (c) insurance policies and insurance
certificates relating to the Property.

SECTION 2. LETTER OF CREDIT ACCOMMODATIONS

         2.1 General Terms and Conditions. Subject to, and upon the terms and
conditions contained herein, at the request of a Borrower, Bank agrees to issue
one or more Letters of Credit for the account of such Borrower containing terms
and conditions acceptable to Bank.

                  (a) The purpose for the Letter of Credit Accommodations shall
be for Borrower's purchase of goods and merchandise that, upon satisfaction of
Borrowers' requirements under Section 2.1(e), would qualify as "Eligible
Inventory" under the Fleet Agreement.

                  (b) The aggregate amount of all outstanding Letters of Credit
issued by Bank shall not at any time exceed the Maximum Credit.

                  (c) Except in Bank's sole discretion, no single Letter of
Credit shall be available to Borrower in an amount in excess of $500,000.

                  (d) The term of each individual Letter of Credit issued shall
not exceed 120 days, and the expiration date of a Letter of Credit shall not
extend beyond JUNE 30, 2001.

                  (e) Borrowers shall establish and maintain a depository
account with Bank with a minimum balance of $20,000 at all times. At least one
day prior to Bank's release of the Transportation Documents, Borrowers shall
transfer into this account, on demand, or have sufficient funds available in the
account in fully collected United States currency, to cover the amount specified
under each Letter of Credit.

<PAGE>   8

                  (f) All Letters of Credit issued by Bank shall be payable at
sight and shall provide for the Transportation Documents to be consigned to the
order of Bank.

                  (g) All negotiations as to amendments, extensions, or
discrepancies of Transportation Documents shall be at the sole discretion of
Bank.

                  (h) No new Letter of Credit Accommodations shall be available
to a Borrower at any time an Event of Default exists or has occurred and is
continuing.

                  (i) Except for contrary instructions given by Borrowers to
Bank prior to the issuance of a Letter of Credit: (i) Bank may receive and
accept as Transportation Documents relating to Property any document issued or
purporting to be issued by or on behalf of any carrier which acknowledges
receipt of Property for transportation, regardless of the specific provisions of
the documents, the date of each document shall be deemed the date of shipment of
the Property mentioned therein, and any Transportation Document issued by or on
behalf of an ocean carrier may be accepted by Bank whether or not the entire
transportation is by water; (ii) part shipment and/or shipments in excess of the
quantity called for in the Letter of Credit may be made, and Bank may honor the
relative drafts, the liability of Borrowers to reimburse Bank for payments made
or obligations incurred on such drafts being limited to the amount of the Letter
of Credit; (iii) if the Letter of Credit specifies shipments in installments
within stated periods, and the shipper fails to ship in any designated period,
the Letter of Credit shall not be available for that or any subsequent
installments; (iv) Bank may receive and accept as documents of Insurance either
insurance policies or insurance certificates which need not be for an amount of
insurance greater than the amount paid by Bank or relative to a Letter of
Credit; and (v) Bank may receive or pay as complying with the terms of the
Letter of Credit any drafts or other documents otherwise in order, which may be
signed by, or issued to, the trustee in bankruptcy of, or the receiver of any of
the Property of, the party in whose name the Letter of Credit provides that any
drafts or other document should be drawn or issued.

                  (j) Nothing contained herein shall be deemed or construed to
grant Borrowers any right or authority to pledge the credit of Bank in any
manner.

         2.2 Bank's Good Faith Interpretation . Borrowers shall be bound by any
interpretation made in good faith by Bank under or in connection with any Letter
of Credit or any documents, drafts or acceptances thereunder, notwithstanding
that such interpretation may be inconsistent with any instructions of Borrowers.

         2.3 Noncompliance, Acceptance and Rejection, Extensions and Amendments.
Bank shall have the sole and exclusive right and authority to, and Borrowers
shall not: (a) at any time an Event of Default exists or has occurred and is
continuing, (i) approve or resolve any questions of noncompliance of the
Transportation Documents, (ii) give any instructions as to acceptance or
rejection of any Transportation Documents or goods, (iii) execute any and all
applications for steamship or airway guaranties, indemnities or delivery orders,
or (iv) transfer to and/or register in the name of Bank or its nominee all or
part of the Property and to do so with or without notice to Borrowers, and (b)
at all times, (i) grant any extensions of the maturity of, time of payment for,
or time of presentation of, any drafts, acceptances, or Transportation
Documents, and (ii) agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the Applications, Letters of Credit or

<PAGE>   9

Transportation Documents thereunder. Bank may take such actions either in its
own name or in the name of a Borrower.

         2.4 Borrowers' Assumption of Risk, Indemnification and Hold Harmless.
Borrowers assume all risks with respect to the acts or omissions of the
beneficiary of any Letter of Credit, and for such purposes the beneficiary shall
be deemed the agent of Borrowers. Borrowers assume all risks for, and agree to
pay, all foreign, Federal, State and local taxes, duties and levies relating to
any goods subject to any Letter of Credit or any Transportation Documents
thereunder. Borrowers shall indemnify and hold Bank harmless from and against
any and all losses, claims, damages, liabilities, costs and expenses which Bank
may suffer or incur in connection with any Letter of Credit and any
Transportation Documents relating thereto. Borrowers hereby release and hold
Bank harmless from and against any acts, waivers, errors, delays or omissions
with respect to or relating to any Letter of Credit. The provisions of this
Section 2.4 shall survive the payment of Obligations and the termination or
non-renewal of this Agreement.

SECTION 3. FEES AND CHARGES

         3.1 Closing Fee. Borrowers shall pay to Bank as a closing fee the
amount of $50,000 which shall be fully earned as of and payable on the date
hereof.

         3.2 Transaction Fees. Borrowers shall pay to Bank for each Letter of
Credit issued the transaction fees as shown on EXHIBIT C.

         3.3 Attorney's Fees. Borrowers shall pay to Bank immediately upon
demand the full amount of all reasonable costs and expenses, including attorneys
fees, incurred by Bank (a) in connection with negotiation and preparation of
this Agreement, and (b) for which Borrowers are obligated to reimburse Bank in
accordance with the terms of Section 2. 1 (e).

         3.4 Maximum Interest. Notwithstanding anything to the contrary
contained in this Agreement, in no event whatsoever shall the aggregate of all
amounts that are contracted for, charged or received by Bank pursuant to the
terms of this Agreement and that are deemed interest under applicable law exceed
the Maximum Interest Rate. No agreements, conditions, provisions or stipulations
contained in this Agreement, or any Event of Default, or the exercise by Bank of
the right to accelerate the payment or the maturity of all or any portion of the
Obligations, or the exercise of any option whatsoever contained in this
Agreement, or the prepayment by Borrowers of any of the Obligations, or the
occurrence of any event or contingency whatsoever, shall entitle Bank to
contract for, charge or receive in any event, interest or any charges, amounts,
premiums or fees deemed interest by applicable law in excess of the Maximum
Interest Rate. In no event shall Borrowers be obligated to pay interest or such
amounts as may be deemed interest under applicable law in amounts which exceed
the Maximum Interest Rate. All agreements, conditions or stipulations, if any,
which may in any event or contingency whatsoever operate to bind, obligate or
compel. Borrowers to pay interest or such amounts which are deemed to constitute
interest in amounts which exceed the Maximum Interest Rate shall be (i) without
binding force or effect, at law or in equity, to the extent of the excess of
interest or such amounts which are deemed to constitute interest over such
Maximum Interest Rate, and (ii) deemed amended to conform to the provisions of
this Section 3.4.

<PAGE>   10

SECTION 4. CONDITIONS PRECEDENT. Each of the following is a condition precedent
to Bank issuing any Letter of Credit hereunder:

         4.1 Requisite Corporate Action. All requisite corporate action and
proceedings in connection with this Agreement shall be satisfactory in form and
substance to Bank, and Bank shall have received all information and copies of
all documents, including, without limitation, records of requisite corporate
action and proceedings which Bank may have requested in connection therewith,
such documents where requested by Bank or its counsel to be certified by
appropriate corporate officers or governmental authorities.

         4.2 No Material Adverse Change. No material adverse change shall have
occurred in the consolidated assets, business or prospects of Borrowers since
the date of Borrowers' consolidated financial statement for the fiscal year
ended February 28, 2000. No material change or event shall have occurred which
would impair the ability of any Borrower or any Obligor to perform its
obligations hereunder or of Bank to enforce the Obligations or realize upon the
Property.

         4.3 Consents, Waivers, Acknowledgements. Bank shall have received, in
form and substance satisfactory to Bank, all consents, waivers, acknowledgments
and other agreements from Primary Lender and other third persons which Bank may
deem necessary or desirable in order to permit, protect and perfect its rights
in or liens upon the Transportation Documents and the Property or to effectuate
the provisions or purposes of this Agreement, including, without limitation,
written consent from Primary Lender for Borrowers to enter into this Agreement
and to exercise any privileges hereunder with respect to the issuance of Letters
of Credit, acknowledgements by lessors, mortgagees and warehousemen of Bank's
ownership rights or security interests in the Transportation Documents and the
Property, waivers by such persons of any security interests, liens or other
claims by such persons to the Transportation Documents and the Property and
agreements permitting Bank access to, and the right to exercise its rights and
remedies and otherwise deal with the Transportation Documents and the Property.

         4.4 Accurate Representations and Warranties. All representations and
warranties contained herein shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of providing each such Letter of Credit Accommodation and
after giving effect thereto.

         4.5 No Event of Default. No Event of Default and no event or condition
which, with notice or passage of time or both, would constitute an Event of
Default, shall exist or have occurred and be continuing on and as of the date of
providing each such Letter of Credit Accommodation and after giving effect
thereto.

SECTION 5. BANK'S RIGHTS TO THE PROPERTY AND THE TRANSPORTATION DOCUMENTS.
Borrowers recognize and admit that Bank has the following rights until the
Borrowers have satisfied the requirements of Section 2. 1 (e).

         5.1 Bank's Ownership Rights. Borrowers have conveyed and assigned to
Bank all rights they may have in the Property and the Transportation Documents,
and Bank shall have the unqualified right to the possession and disposal of any
and all Property and Transportation Documents.

<PAGE>   11

         5.2 No Waiver by Bank. Nothing Bank does or attempts to do, including
the sale or disposal of the Property or the transfer and assignment of the
Transportation Documents, in connection with protecting its rights in the
Property and the Transportation Documents shall operate as a waiver or an
estoppal to its right to be paid for Borrowers' Obligations pursuant to
Section 2.

SECTION 6. COLLECTION AND ADMINISTRATION.

         6.1 Borrowers' Letter of Credit Accounts. Bank shall maintain one or
more Letter of Credit account(s) on its books in which shall be recorded (a) all
Letters of Credit and the Property, (b) all payments made by or on behalf of
Borrowers and (c) all other appropriate debits and credits related to Borrowers'
Obligations as provided in this Agreement, including, without limitation, fees,
charges, costs, expenses and interest. All entries in the Letter of Credit
account(s) shall be made in accordance with Bank's customary practices as in
effect from time to time.

         6.2 Statements. Bank shall render to HomePlace (i) a monthly
outstanding Letter of Credit statement setting forth the Maximum Credit, all
draws made during the Term, current outstanding Letters of Credit, and the
expiration dates of all Letters of Credit; and (ii) a statement of fees as each
Letter of Credit is issued setting forth the amount of fees, costs and expenses
due to Bank from Borrowers. Each such statement shall be subject to subsequent
adjustment by Bank but shall, absent manifest errors or omissions, be considered
correct and deemed accepted by Borrowers and conclusively binding upon Borrowers
as an account stated except to the extent that Bank receives a written notice
from any Borrower of any specific exceptions of such Borrower thereto within
thirty (30) days after the date such statement has been mailed by Bank. Until
such time as Bank shall have rendered to HomePlace a written statement as
provided above, the balance(s) in Borrowers' Letter of Credit account(s) shall
be presumptive evidence of the amounts due and owing to Bank by Borrowers.

         6.3 Payments. All statements for fees, costs and expenses shall be paid
to Bank at the time payment is effected on Letter of Credit draws. Borrowers
shall make all payments to Bank on the Obligations free and clear of, and
without deduction or withholding for or on account of, any setoff, counterclaim,
defense, duties, taxes, levies, imposts, fees, deductions, withholding,
restrictions or conditions of any kind. If after receipt of any payment of, or
proceeds of Property applied to the payment of, any of the Obligations, Bank is
required to surrender or return such payment or proceeds to any Person for any
reason, then the Obligations intended to be satisfied by such payment or
proceeds shall be reinstated and continue and this Agreement shall continue in
full force and effect as if such payment or proceeds had not been received by
Bank. Borrowers shall be liable to pay to Bank, and each Borrower does hereby
indemnify and hold Bank harmless for the amount of any payments or proceeds
surrendered or returned. This Section 6.3 shall remain effective notwithstanding
any contrary action which may be taken by Bank in reliance upon such payment or
proceeds. This Section 6.3 shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.

         6.4 Authorization to Issue Letter of Credit. Bank is authorized to
issue Letters of Credit based upon a facsimile of the front page of an
Application, the form of which is attached hereto as EXHIBIT B, received from
anyone purporting to be an officer of a Borrower (including

<PAGE>   12

HomePlace of America, Inc for itself and/or on behalf of HomePlace Stores, Inc
and/or HomePlace Stores Two, Inc. and/or HomePlace Management, Inc.) or other
authorized person. The facsimile of the Application shall be sent by Borrowers
to the address and facsimile number shown below. All Applications for Letters of
Credit hereunder shall specify the date on which the requested issuance is to
occur (which day shall be a Business Day) and the amount of the requested Letter
of Credit. Applications received after 12:00 noon Eastern Time on any day shall
be deemed to have been made as of the opening of business on the immediately
following business day. All Letters of Credit under this Agreement shall be
conclusively presumed to have been made to, and at the request of and for the
benefit of, Borrowers when issued in accordance with the instructions of a
Borrower (including HomePlace of America, Inc for itself and/or on behalf of
HomePlace Stores, Inc and/or HomePlace Stores Two, Inc. and/or HomePlace
Management, Inc.) or in accordance with the terms and conditions of this
Agreement.

         6.5 Appointment of HomePlace of America, Inc. as Agent for HomePlace
Stores, Inc., HomePlace Stores Two, Inc., and HomePlace. HomePlace Stores, Inc.,
HomePlace Stores Two, Inc., and HomePlace Management, Inc. hereby irrevocably
appoint HomePlace of America, Inc., and each officer thereof, as their agent and
attorney-in-fact to request Letters of Credit on their behalf, to receive
notices and statements of account from Bank, to take such other actions in their
behalf as is provided hereunder and generally to deal with Bank in their behalf,
for all matters pertaining to the credit arrangements under this Agreement.

SECTION 7. REPRESENTATIONS AND WARRANTIES

         Borrowers hereby, jointly and severally, represent and warrant to Bank
the following (which shall survive the execution and delivery of this
Agreement), the truth and accuracy of which are a continuing condition of
providing Letters of Credit by Bank on behalf of Borrowers:

         7.1 Corporate Existence, Power and Authori1y; Subsidiaries. Each
Borrower is a corporation duly organized and in good standing under the laws of
its state of incorporation and is duly qualified as a foreign corporation and in
good standing in all states or other jurisdictions where the nature and extent
of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on such Borrower's financial
condition, results of operation or business or the rights of Bank in or to any
of the Transportation Documents or Property. The execution, delivery and
performance of this Agreement and the transactions contemplated hereunder and
thereunder are all within each Borrower's corporate powers, have been duly
authorized and are not in contravention of law or the terms of any Borrower's
certificate of incorporation, by-laws, or other organizational documentation, or
any indenture, agreement or undertaking to which any Borrower is a party or by
which any Borrower or its or their property or properties are bound. This
Agreement constitutes a legal, valid and binding obligation of Borrowers
enforceable in accordance with its respective terms. Borrowers do not have any
subsidiaries except as set forth on EXHIBIT D attached hereto.

         7.2 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrowers which have been or may hereafter be delivered
by Borrowers to Bank have been prepared in accordance with GAAP and fairly
present the financial condition and the results of operation of Borrowers as at
the dates and for the periods set forth therein. Except as disclosed in any
interim financial statements furnished by Borrowers to Bank prior to the date of
this

<PAGE>   13

Agreement, there has been no material adverse change in the assets, liabilities,
properties and condition, financial or otherwise, of the Borrowers on a
consolidated basis, since the date of the most recent audited financial
statements furnished by Borrowers to Bank prior to the date of this Agreement.

         7.3 Chief Executive Office. The chief executive office of each Borrower
is located at the address set forth below.

         7.4 Tax Returns. Each Borrower has filed, or caused to be filed, in a
timely manner all tax returns, reports and declarations which are required to be
filed by it, except where the failure to do so does not, and could not
reasonably be expected to, result in any Material Adverse Effect. All
information in such tax returns, reports and declarations is complete and
accurate in all material respects. Each Borrower has paid or caused to be paid
all taxes due and payable or claimed due and payable in any assessment received
by it, and has collected, deposited and remitted in accordance with all
applicable laws all sales and/or use taxes applicable to the conduct of its
business, except taxes the validity of which are being contested in good faith
by appropriate proceedings diligently pursued and available to such Borrower and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed. Each Borrower has collected and
remitted when due to the appropriate tax authority all sales and/or use taxes
applicable to its business required to be collected under the laws of the United
States and each possession or territory thereof, and each State or political
subdivision thereof.

         7.5 Litigation. Except as previously disclosed to Bank in writing,
there is no present investigation by any governmental agency pending, or to the
best of any Borrower's knowledge threatened, against or affecting any Borrower,
its assets or business and there is no action, suit, proceeding or claim by any
Person pending, or to the best of any Borrower's knowledge threatened, against
any Borrower or its assets or goodwill, or against or affecting any transactions
contemplated by this Agreement, which if adversely determined against any
Borrower would result in any material adverse change in the assets, business or
prospects of Borrowers on a consolidated basis, or would impair the ability of
any Borrower to perform its obligations hereunder or of Bank to enforce any
obligations or realize upon any Transportation Documents or Property.

         7.6 Compliance with Other Agreements and Applicable Laws.

                  (a) No Borrower is in default in any respect under, or in
violation in any respect of any of the terms of, any material agreement,
contract, instrument, lease or other commitment to which it is a party or by
which it or any of its assets are bound, except for any such default or
violation which does not, and could not reasonably be expected to, result in a
Material Adverse Effect. Each Borrower is in compliance in all material respects
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority relating to its business, including, without
limitation, those set forth in or promulgated pursuant to the Occupational
Safety and Hazard Act of 1970, as amended, the Fair Labor Standards Act of 1938,
as amended, ERISA, the Code, as amended, and the rules and regulations
thereunder, all federal, state and local statutes, regulations, rules and orders
relating to consumer credit (including, without limitation, as each has been
amended, the Truth- in-Lending Act, the Fair Credit Billing

<PAGE>   14

Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act, and
regulations, rules and orders promulgated thereunder), all federal, state and
local states, regulations, rules and orders pertaining to sales of consumer
goods (including, without limitation, the Consumer Products Safety Act of 1972,
as amended, and the Federal Trade Commission Act of 1914, as amended, and all
regulations, rules and orders promulgated hereunder).

                  (b) Each Borrower has obtained all material permits, licenses,
approvals, consents, certificates, orders or authorizations of any governmental
agency required for the lawful conduct of its business and is in compliance in
all material respects with the requirements of all applicable laws, rules,
regulations and orders of any governmental agency (including, but not limited
to, the Department of State, the Department of Commerce, the Bureau of Alcohol,
Tobacco and Firearms, and the Environmental Protection Agency) relating to its
business (including, without limitation, those set forth in or promulgated
pursuant to ERISA, the Occupational Safety and Hazard Act of 1970, as amended,
the Fair Labor Standards Act of 1938, as amended, the Code, and the
Environmental Laws). Each Borrower has all of the permits, licenses, approvals,
consents, certificates, orders or authorizations (the "Permits") issued by the
appropriate federal, state or local governmental agency necessary for each
Borrower to own and operate its business as presently conducted or proposed to
be conducted, except where the failure to have such Permits does not, and could
not reasonably be expected to, result in a Material Adverse Effect or any
adverse effect on the legality, validity or enforceability of this Agreement or
the ability of any Borrower to perform its obligations under the Agreement or
the rights and remedies of Bank under this Agreement. All of the Permits are
valid and subsisting and in full force and effect. There are no actions, claims
or proceedings pending or threatened that seek the revocation, cancellation,
suspension or modification of any of the Permits.

         7.7 Accuracy and Completeness of Information. All information furnished
by or on behalf of any Borrower in writing to Bank in connection with this
Agreement or any transaction contemplated hereby or thereby, including, without
limitation, all information in Borrowers' consolidated financial statement for
the fiscal year ended February 28, 2000, is true and correct in all material
respects on the date as of which such information is dated or certified and does
not omit any material fact necessary in order to make such information not
misleading. No event or circumstance has occurred which has had or could
reasonably be expected to have a material adverse affect on the business, assets
or prospects of any Borrower, which has not been fully and accurately disclosed
to Bank in writing.

         7.8 Interrelated Business. HomePlace of America, Inc. is the direct and
beneficial owner and holder of all of the issued and outstanding shares of
Capital Stock of HomePlace Stores, Inc., HomePlace Two, Inc. and HomePlace
Management, Inc. Borrowers share an identity of interests such that any benefit
received by any Borrower benefits the others. Each Borrower (a) renders services
to or for the benefit of other Borrowers, (b) makes loans and advances and
provides other financial accommodations to or for the benefit of other Borrowers
(including, inter alia, the payment and or guaranties by one Borrower of
indebtedness of another Borrower), and (c) provides administrative, marketing,
payroll and management services to or for the benefit of other Borrowers.
Borrowers have centralized purchasing, collection, distribution, accounting,
legal and other services.

         7.9 Survival of Warranties, Cumulative. All representations and
warranties contained

<PAGE>   15

in this Agreement shall survive the execution and delivery of this Agreement and
shall be deemed to have been made again to Bank on the date of issuance of each
Letter of Credit hereunder and shall be conclusively presumed to have been
relied on by Bank regardless of any investigation made or information possessed
by Bank. The representations and warranties set forth herein shall be cumulative
and in addition to any other representations or warranties which Borrowers shall
now or hereafter give, or cause to be given, to Bank.

SECTION 8. AFFIRMATIVE AND NEGATIVE COVENANTS

         8.1 Maintenance of Existence. Each Borrower shall at all times
preserve, renew and keep in full, force and effect its corporate existence and
rights and franchises with respect thereto and maintain in full force and effect
all permits, licenses, trademarks, trade names, approvals, authorizations,
leases and contracts necessary to carry on the business as presently or proposed
to be conducted. Each Borrower shall give Bank thirty (30) days prior written
notice of any proposed change in its corporate name, which notice shall set
forth the new name and such Borrower shall deliver to Bank a copy of the
amendment to the Certificate of Incorporation of such Borrower providing for the
name change certified by the Secretary of State of the jurisdiction of
incorporation of such Borrower as soon as it is available.

         8.2 Compliance with Laws, Regulations, Etc. Each Borrower shall, at all
times, comply in all material respects with all laws, rules, regulations,
licenses, permits, approvals and orders applicable to it and duly observe all
material requirements of any Federal, State or local governmental authority,
including, without limitation, the Employee Retirement Security Act of 1974, as
amended, the Occupational Safety and Hazard Act of 1970, as amended, the Fair
Labor Standards Act of 1938, as amended.

         8.3 Insurance. Each Borrower shall, at all times, maintain with
financially sound and reputable insurers insurance with respect to the Property
against loss or damage. The policies of insurance shall be satisfactory to Bank
as to form, amount and insurer. Each Borrower shall furnish certificates,
policies, or endorsements to Bank as Bank shall require as proof of such
insurance, and, if any Borrower fails to do so, Bank is authorized, but not
required, to obtain such insurance at the expense of Borrowers. Each Borrower
shall cause Bank to be named as a loss payee and an additional insured (but
without any liability for any premiums) under such insurance policies and each
Borrower shall obtain non-contributory lender's loss payable endorsements for
such policies in favor of Bank and Bank's interests with regard to Property in
form and substance satisfactory to Bank. Such lender's loss payable endorsements
shall specify that the proceeds of such insurance shall be payable to Bank as
its interests may appear with regard to Property and further specify that Bank
shall be paid regardless of any act or omission by any Borrower or any of its
affiliates. At its option, Bank may apply any insurance proceeds received by
Bank at any time to payment of the Obligations, whether or not then due, in any
order and in such manner as Bank may determine or hold such proceeds as cash
collateral for the Obligations.

         8.4 Financial Statements and Other Information.

                  (a) Each Borrower shall keep proper books and records in which
true and complete entries shall be made of all dealings or transactions of or in
relation to the Property and the business of such Borrower and its subsidiaries
(if any) in accordance with GAAP and such

<PAGE>   16

Borrower shall furnish or cause to be furnished to Bank: (i) within thirty (30)
days after the end of each fiscal month, except within forty-five (45) days
after the end of each fiscal month that coincides with the end of a fiscal
quarter, monthly unaudited consolidated financial statements, and, if a Borrower
has any subsidiaries or any other subsidiaries, unaudited consolidating
financial statements (including in each case balance sheets, statements of
income and loss statements of cash flow and statements of shareholders, equity),
all in reasonable detail, fairly presenting the financial position and the
results of the operations of Borrowers and each of their subsidiaries as of the
end of and through such fiscal month and (ii) within ninety (90) days after the
end of each fiscal year, audited consolidated financial statements (including in
each case balance sheets, statements of income and loss, statements of cash flow
and statements of shareholders' equity), and the accompanying notes thereto, all
in reasonable detail, fairly presenting the financial position and the results
of the operations of Borrowers and their subsidiaries as of the end of and for
such fiscal year, together with the opinion of independent certified public
accountants, which accountants shall be an independent accounting firm selected
by Borrowers and reasonably acceptable to Bank, that such financial statements
have been prepared in accordance with GAAP, and present fairly the results of
operations and financial condition of Borrowers and their subsidiaries as of the
end of and for the fiscal year then ended.

                  (b) Borrowers shall promptly notify Bank in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to the Property, (ii) the occurrence of any Event of Default or
act, condition or event which, with the passage of time or giving of notice or
both, would constitute an Event of Default.

                  (c) Borrowers shall promptly after the sending or filing
thereof furnish or cause to be furnished to Bank copies of all reports which
Borrowers send to their stockholders generally and copies of all reports and
registration statements which Borrowers file with the Securities and Exchange
Commission, any national securities exchange or the National Association of
Securities Dealers, Inc.

                  (d) Borrowers shall furnish or cause to be furnished to Bank
such budgets, forecasts, projections and other information respecting the
Property and the business of Borrowers, as Bank may, from time to time,
reasonably request. Bank is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business of Borrowers to any
court or other government agency or to any participant or assignee or
prospective participant or assignee. Borrowers hereby irrevocably authorizes and
directs all accountants or auditors to deliver to Bank, at Borrowers' expense,
copies of the financial statements of Borrowers and any reports or management
letters prepared by such accountants or auditors on behalf of Borrowers and to
disclose to Bank such information as they may have regarding the business of
Borrowers. Any documents, schedules, invoices or other papers delivered to Bank
may be destroyed or otherwise disposed of by Bank one year after the same are
delivered to Bank, except as otherwise designated by Borrowers to Bank in
writing.

         8.5 Encumbrances. No Borrower shall create, incur, assume or suffer to
exist any security interest, mortgage, pledge, lien, charge or other encumbrance
of any nature whatsoever on any of the Property.

         8.6 Adjusted Net Worth. Borrowers shall, at all times, maintain
Adjusted Net Worth as outlined in the Fleet Agreement.

<PAGE>   17

         8.7 Working Capital. Borrowers shall, at all times, maintain Working
Capital as outlined in the Fleet Agreement.

         8.8 Costs and Expenses. Borrowers shall pay to Bank on demand all
costs, expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, Bank's
rights in the Property, this Agreement, and all other documents related hereto
or thereto, including any amendments, supplements or consents which may
hereafter be contemplated (whether or not executed) or entered into in respect
hereof and thereof, including, but not limited to: (a) all costs and expenses of
filing or recording (including Uniform Commercial Code financing statement
filing taxes and fees, documentary taxes, intangibles taxes, if applicable); (b)
charges, fees or expenses charged by Bank in connection with the Letters of
Credit; (c) costs and expenses of preserving and protecting the Property; (d)
costs and expenses paid or incurred in connection with obtaining payment of the
Obligations, enforcing the rights of Bank in the Property, selling or otherwise
realizing upon the Property, and otherwise enforcing the provisions of this
Agreement or defending any claims made or threatened against Bank arising out of
the transactions contemplated hereby and thereby (including, without limitation,
preparations for and consultations concerning any such matters); (e) the
reasonable fees and disbursements of counsel (including legal assistants) to
Bank in connection with any of the foregoing.

         8.9 Further Assurances. At the request of Bank at any time and from
time to time, Borrowers shall, at Borrowers' expense, duly execute and deliver,
or cause to be duly executed and delivered, such further agreements, documents
and instruments, and do or cause to be done such further acts as may be
necessary or proper to evidence, perfect, maintain and enforce the rights of
Bank in the Property and to otherwise effectuate the provisions or purposes of
this Agreement. Bank may at any time and from time to time request a certificate
from an officer of each Borrower representing that all conditions precedent to
issuing a Letter of Credit pursuant hereto are satisfied. In the event of such
request by Bank, Bank may, at its option, if such certificate has not been
delivered within five (5) days after such request, cease to issue any further
Letters of Credit until Bank has received such certificate and, in addition,
Bank has determined that such conditions are satisfied. Where permitted by law,
each of Borrowers hereby authorizes Bank to execute and file one or more UCC
financing statements related to the Property signed only by Bank.

SECTION 9. EVENTS OF DEFAULT AND REMEDIES

         9.1 Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":

                  (a) (i) any Borrower fails to pay when due any of the
Obligations or (ii) any Borrower or any obligor fails to perform any of the
terms, covenants, conditions or provisions contained in this Agreement and such
failure shall continue for twenty (20) days; provided, that, such twenty (20)
day period shall not apply in the case of: (A) any failure to observe any such
term, covenant, condition or provision which is not capable of being cured at
all or within such twenty (20) day period or which has been the subject of a
prior failure within a six (6) month

<PAGE>   18

period or (B) an intentional breach by any Borrower or any Obligor of any such
term, covenant, condition or provision, or (C) the failure to observe or perform
any of the covenants or provisions contained in Sections 8.1, 8.3 or 8.5 of this
Agreement; or

                  (b) any representation, warranty or statement of fact made by
any Borrower to Bank in this Agreement, or any other agreement, schedule,
confirmatory assignment or otherwise shall when made or deemed made be false or
misleading in any material respect;

                  (c) any Obligor revokes, terminates or fails to perform any of
the terms, covenants, conditions or provisions of any guarantee, endorsement or
other agreement of such party in favor of Bank;

                  (d) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against any Borrower or any Obligor or all or any part of
its properties and such petition or application is not dismissed within thirty
(30) days after the date of its filing or any Borrower or any Obligor shall file
any answer admitting or not contesting such petition or application or indicates
its consent to, acquiescence in or approval of, any such action or proceeding or
the relief requested is granted sooner;

                  (e) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by any Borrower or any Obligor or for all or any part of its
property;

                  (f) any act, condition or event shall exist or shall have
occurred that results in a Material Adverse Effect relating to the Property or
Bank's rights or interests in or with respect to the Property; or

                  (g) an Event of Default occurs under the Fleet Agreement.

         9.2 Remedies.

                  (a) At any time an Event of Default exists or has occurred and
is continuing, Borrowers shall pay to Bank interest at the Default Rate on the
aggregate amount of all unpaid amounts due to Bank pursuant to Section 2. 1 (e).

                  (b) At any time an Event of Default exists or has occurred and
is continuing, Bank shall have all rights and remedies provided in this
Agreement, the Uniform Commercial Code and other applicable law, all of which
rights and remedies may be exercised without notice to or consent by any
Borrower or any Obligor, except as such notice or consent is expressly provided
for hereunder or required by applicable law. All rights, remedies and powers
granted to Bank hereunder, the Uniform Commercial Code or other applicable law,
are cumulative, not exclusive, and are enforceable, in Bank's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by any Borrower of this

<PAGE>   19

Agreement. Bank may, at any time or times, proceed directly against any Borrower
or any Obligor to collect the Obligations without prior recourse to the
Property.

                  (c) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, Bank may, in its discretion
and without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Bank (provided, that, upon the occurrence of any
Event of Default described in Sections 9.1(d) and 9.1(e), all Obligations shall
automatically become immediately due and payable), (ii) with or without judicial
process or the aid or assistance of others, present the Transportation Documents
to any port, shipper or freight line service where any of the Property may be
located and take possession of the Property, (iii) collect, foreclose, receive,
appropriate, setoff and realize upon any and all of the Property, (iv) remove
any or all of the Property from any premises on or in which the same may be
located for the purpose of effecting the sale or other disposition thereof or
for any other purpose, (v) sell, lease, transfer, assign, deliver or otherwise
dispose of any and all of the Property (including, without limitation, entering
into contracts with respect thereto, public or private sales at any exchange,
broker's board, at any office of Bank or elsewhere) at such prices or terms as
Bank may deem reasonable, for cash, upon credit or for future delivery, with the
Bank having the right to purchase the whole or any part of the Property at any
such public sale, all of the foregoing being free from any right or equity of
redemption of any Borrower, which right or equity of redemption is hereby
expressly waived and released by each Borrower and/or (vi) terminate this
Agreement. If any of the Property is sold or leased by Bank upon credit terms or
for future delivery, the Obligations shall not be reduced as a result thereof
until payment therefor is finally collected by Bank. If notice of disposition of
the Property is required by law, five (5) days prior notice by Bank to Borrowers
designating the time and place of any public sale or the time after which any
private sale or other intended disposition of the Property is to be made, shall
be deemed to be reasonable notice thereof to Borrowers and each Borrower waives
any other notice. In the event Bank institutes an action to recover any of the
Property or seeks recovery of any of the Property by way of prejudgment remedy,
each Borrower waives the posting of any bond which might otherwise be required.

                  (d) Bank may apply the cash proceeds of the Property actually
received by Bank from any sale, lease, foreclosure or other disposition of the
Property to payment of the Obligations, in whole or in part and in such order as
Bank may elect, whether or not then due. Each Borrower shall remain liable to
Bank for the payment of any deficiency with interest at the Default Rate and all
costs and expenses of collection or enforcement, including reasonable attorneys'
fees and legal expenses.

                  (e) Without limiting the foregoing, upon the occurrence of an
Event of Default or an event which with notice or passage of time or both would
constitute an Event of Default, Bank may, at its option, without notice, (i)
cease issuing Letters of Credit and/or (ii) terminate any provision of this
Agreement providing for any future Letters of Credit to be made by Bank on
behalf of Borrowers.

SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW;

         10.1 Governing Law, Choice of Forum, Service of Process, Jury Trial
Waiver.

<PAGE>   20

                  (a) The validity, interpretation and enforcement of this
Agreement 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 South Carolina (without giving effect to
principles of conflicts of law).

                  (b) Each Borrower and Bank irrevocably consent and submit to
the nonexclusive jurisdiction of the Circuit Court of Horry County, South
Carolina and the United States District Court for the District of South Carolina
and waive any objection based on venue or forum non conveniens with respect to
any action instituted therein arising under this Agreement or in any way
connected with or related or incidental to the dealings of the parties hereto in
respect of this Agreement or the transactions related hereto or thereto, in each
case whether now existing or hereafter arising, and whether in contract, tort,
equity or otherwise, and agree that any dispute with respect to any such matters
shall be heard only in the courts described above (except that Bank shall have
the right to bring any action or proceeding against a Borrower or the Property
in the courts of any other jurisdiction which Bank deems necessary or
appropriate in order to realize on the Property or to otherwise enforce its
rights against such Borrower or the Property).

                  (c) Each Borrower hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U. S. mails,
or, at Bank's option, by service upon Borrowers in any other manner provided
under the rules of any such courts. Within thirty (30) days after such service,
such Borrowers shall appear in answer to such process, failing which Borrowers
shall be deemed in default and judgment may be entered by Bank against Borrowers
for the amount of the claim and other relief requested.

                  (d) EACH BORROWER AND BANK HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS
AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR THE TRANSACTIONS
RELATED HERETO ORTHERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH BORROWER AND BANK
HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER OR BANK MAY
FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

                  (e) Bank shall not have any liability to any Borrower (whether
in tort, contract, equity or otherwise) for losses suffered by any Borrower in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment or court order binding on Bank, that the losses were the
result of acts or omissions constituting gross negligence or willful misconduct.
In any such litigation, Bank

<PAGE>   21

shall be entitled to the benefit of the rebuttable presumption that it acted in
good faith and with the exercise of ordinary care in the performance by it of
the terms of this Agreement.

         10.2 Waiver of Notices. Each Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the obligations or the Property, and any and all other demands and notices of
any kind or nature whatsoever with respect to the Obligations, the Property and
this Agreement, except such as are expressly provided for herein. No notice to
or demand on any Borrower which Bank may elect to give shall entitle Borrowers
to any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, each Borrower
waives (i) notice prior to Bank's taking possession or control of any of the
Property or any bond or security which might be required by any court prior to
allowing Bank to exercise any of Bank's remedies, including the transfer into
Bank's name the Property or the Transportation Documents, or the issuance of an
immediate writ of possession, and (ii) the benefit of any valuation,
appraisement and exemption laws.

         10.3 Amendments and Waivers. Neither this Agreement 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
Bank. Bank 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 Bank. Any
such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Bank 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 Bank would otherwise have on any future occasion, whether similar
in kind or otherwise.

         10.4 Waiver of Counterclaims. Each Borrower waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Property or any matter arising therefrom or
relating hereto or thereto.

         10.5 Indemnification. Each Borrower shall indemnify and hold Bank, and
its directors, agents, employees and counsel, harmless from and against any and
all losses, claims, damages, liabilities, costs or expenses imposed on, incurred
by or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, or any undertaking or proceeding related to
any of the transactions contemplated hereby or any act, omission, event or
transaction related or attendant thereto, including, without limitation, amounts
paid in settlement, court costs, and the fees and expenses of counsel. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section may be unenforceable because it violates any law or public policy,
each Borrower shall pay the maximum portion which it is permitted to pay under
applicable law to Bank in satisfaction of indemnified matters under this
Section. The foregoing indemnity shall survive the payment of the Obligations
and the termination or non-renewal of this Agreement.

SECTION 11. TERM OF AGREEMENT: MISCELLANEOUS

<PAGE>   22

         11.1 Term.

                  (a) This Agreement shall become effective as of the date set
forth on the first page hereof and shall continue in full force and effect for a
term ending on the earlier of (i) June 30, 2001, or (ii) the termination of the
Fleet Agreement. At the end of the term, Borrowers shall have paid to Bank, in
full, all outstanding and unpaid Obligations and shall furnish cash collateral
to Bank in such amounts as Bank determines are reasonably necessary to secure
Bank from loss, cost, damage or expense, including attorneys' fees and legal
expenses, in connection with any contingent obligations, including issued and
outstanding Letters of Credit and checks or other payments provisionally
credited to the Obligations and/or as to which Bank has not yet received final
and indefeasible payment. Such payments and cash collateral shall be remitted by
wire transfer in Federal funds to such bank account of Bank, as Bank may, in its
discretion, designate in writing to Borrowers for such purpose. Interest at the
Default Rate shall accrue on all unpaid Obligations not satisfied as of the end
of the Term and shall be due until and including the next business day, if the
amounts so paid by Borrowers to the bank account designated by Bank are received
in such bank account later than 12:00 noon, Greenville, South Carolina time.

                  (b) No termination of this Agreement shall relieve or
discharge any Borrower of its respective duties, obligations and covenants under
this Agreement until all Obligations have been fully and finally discharged and
paid, and Bank's continuing rights in the Property and the rights and remedies
of Bank hereunder, and under applicable law, shall remain in effect until all of
the Obligations have been fully and finally discharged and paid.

         11.2 Uniform Customs and Practice. Except as otherwise expressly
provided in this Agreement or as Borrowers and Bank may otherwise expressly
agree with regard to, and prior to the issuance of, a Letter of Credit, the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 shall in all respects be
deemed a part of this Agreement as fully as if incorporated herein and shall
apply to the Letters of Credit.

         11.3 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Bank at its address set forth below and to each Borrower
at its chief executive office set forth below, or to such other address as
either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.

         11.4 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

         11.5 Successors. This Agreement, and any other document referred to
herein shall be binding upon and inure to the benefit of and be enforceable by
Bank, Borrowers and their respective successors and assigns, except that
Borrowers may not assign their rights under this

<PAGE>   23

Agreement, and any other document referred to herein without the prior written
consent of Bank. Bank may, after notice to Borrowers, assign its rights and
delegate its obligations under this Agreement and further may assign, or sell
participations in, all or any part of the Letters of Credit or any other
interest herein to another financial institution or other person, in which
event, the assignee or participant shall have, to the extent of such assignment
or participation, the same rights and benefits as it would have if it were the
Bank hereunder, except as otherwise provided by the terms of such assignment or
participation.

         11.6 Confidentiality.

                  (a) Bank shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by Borrowers pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by a Borrower to Bank, provided, that, nothing contained herein shall
limit the disclosure of any such information: (i) to the extent required by
statute, rule, regulation, subpoena or court order, (ii) to bank examiners and
other regulators, auditors and/or accountants, (iii) in connection with any
litigation to which Bank is a party, (iv) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) shall have first agreed in writing to treat
such information as confidential in accordance with this Section 11. 6, or (v)
to counsel for Bank or any participant or assignee (or prospective participant
or assignee).

                  (b) In no event shall this Section 11.6 or any other provision
of this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by a Borrower or any
third party without breach of this Section 11.6 or otherwise become generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Bank on a non-confidential basis from a person other than a
Borrower, (iii) require Bank to return any materials furnished by a Borrower to
Bank or (iv) prevent Bank from responding to routine informational requests in
accordance with the Code of Ethics for the Exchange of Credit Information
promulgated by The Robert Morris Associates or other applicable industry
standards relating to the exchange of credit information. The obligations of
Bank under this Section 11.6 shall supersede and replace the obligations of Bank
under any confidentiality letter signed prior to the date hereof.

         11.7 Entire Agreement. This Agreement, any supplements hereto, and any
instruments or documents delivered or to be delivered in connection herewith
represents the entire agreement and understanding concerning the subject matter
hereof and thereof between the parties hereto, and supersede all other prior
agreements, understandings, negotiations and discussions, representations,
warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof, whether oral or written.

<PAGE>   24

         IN WITNESS WHEREOF, Bank and each of Borrowers have caused these
presents to be duly executed as of the day and year first above written.

BANK                                                          BORROWERS

CAROLINA FIRST BANK                          HOMEPLACE OF AMERICA, INC.

By:______________________                    By:_______________________

Title:___________________                    Title:____________________

Address:                                     Principal Executive Offices
International Department                     3200 Pottery Drive
1225 Lady Street                             Myrtle Beach, South Carolina 29577
Columbia, South Carolina 29201
Telephone No. (803) 540-2714
Facsimile No. (803) 540-2718                 HOMEPLACE STORES, INC.

                                             By:_______________________

                                             Title:____________________

                                             Principal Executive Offices
                                             3200 Pottery Drive
                                             Myrtle Beach, South Carolina 29577

                                             HOMEPLACE STORES TWO, INC

                                             By:_______________________

                                             Title:____________________

                                             Principal Executive Offices
                                             3200 Pottery Drive
                                             Myrtle Beach, South Carolina 29577

                                             HOMEPLACE MANAGEMENT, INC

                                             By:_______________________

                                             Title:____________________

                                             Principal Executive Offices
                                             3200 Pottery Drive
                                             Myrtle Beach, South Carolina 29577

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