Document:

<PAGE>   1
                                                                    EXHIBIT 10.2

                               FIRST AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT

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

                            FLEET RETAIL FINANCE INC.
                              ADMINISTRATIVE AGENT
                                COLLATERAL AGENT

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

                                  AmSouth Bank
                            Fleet Retail Finance Inc.
                       The CIT Group Business Credit, Inc.
                           FINOVA Capital Corporation
                          Foothill Capital Corporation
                             Heller Financial, Inc.
                    IBJ Whitehall Business Credit Corporation
                     Jackson National Life Insurance Company
                          LaSalle Business Credit, Inc.
                               The Provident Bank
                             WORKING CAPITAL LENDERS

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

                          BACK BAY CAPITAL FUNDING LLC
                                   TERM LENDER
             -------------------------------------------------------

                           HOMEPLACE OF AMERICA, INC.
                                Lead Borrower for

                           HOMEPLACE OF AMERICA, INC.
                             HOMEPLACE STORES, INC.
                           HOMEPLACE STORES TWO, INC.
                           HOMEPLACE MANAGEMENT, INC.
                                  THE BORROWERS

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

                                  May 12, 2000

<PAGE>   2

       This First Amendment (hereinafter, this "AMENDMENT") is made as of this
12th day of May, 2000 to that Loan and Security Agreement dated June 15, 1999
(hereinafter, the "LOAN AGREEMENT"). (Capitalized terms used herein and not
otherwise defined shall have the meanings as defined in the Loan Agreement).
This First Amendment is made by and among:

              FLEET RETAIL FINANCE INC. formerly known as BankBoston Retail
       Finance Inc., a Delaware corporation with its principal executive offices
       at 40 Broad Street, Boston, Massachusetts, as Agent for the ratable
       benefit of the "LENDERS" (individually, a "LENDER") who are, at present:

              Fleet Retail Finance Inc. formerly known as BankBoston Retail
              Finance Inc. (in such capacity, the "ADMINISTRATIVE AGENT") a
              Delaware corporation with its principal executive offices at 40
              Broad Street, Boston, Massachusetts, as Administrative Agent for
              the ratable benefit of the Working Capital Lenders and the Term
              Lender;

              and

              Fleet Retail Finance Inc. formerly known as BankBoston Retail
              Finance Inc. (in such capacity, the "COLLATERAL AGENT"), as agent
              for the ratable benefit of the Administrative Agent, the Working
              Capital Lenders, and the Term Lender;

              and

              Back Bay Capital Funding LLC (in such capacity, the "TERM
              LENDER"), a limited liability company with offices at 40 Broad
              Street, Boston, Massachusetts 02109,

              and

              HomePlace of America, Inc., a Delaware corporation with its
       principal executive offices at 3200 Pottery Drive, Myrtle Beach, South
       Carolina 29577 (in such capacity, the "LEAD BORROWER") as agent for the
       following borrowers (individually, a "BORROWER" and collectively, the
       "BORROWERS"):

                     HomePlace of America, Inc. (a Delaware corporation with its
              principal executive offices at 3200 Pottery Drive, Myrtle Beach,
              South Carolina 29577 );

                     HomePlace Stores, Inc. (a Delaware corporation with its
              principal executive offices at 3200 Pottery Drive, Myrtle Beach,
              South Carolina 29577 );

                     HomePlace Stores Two, Inc. (a Delaware corporation with its
              principal executive offices at 3200 Pottery Drive, Myrtle Beach,
              South Carolina 29577 ); and

                     HomePlace Management, Inc. (an Ohio corporation with its
              principal executive offices at 3200 Pottery Drive, Myrtle Beach,
              South Carolina 29577 );

in consideration of the mutual covenants contained herein and benefits to be
derived herefrom.

<PAGE>   3

                                   BACKGROUND:

       On June 15, 1999, the Administrative Agent, the Collateral Agent, the
Working Capital Lenders, the Term Lender, the Lead Borrower, and the Borrowers
entered into the Loan Agreement. The Borrowers have advised the Working Capital
Lenders and the Term Lender that the Borrowers will have insufficient liquidity
to satisfy certain of the Financial Performance Covenants, and have requested
that the Working Capital Lenders and the Term Lender amend certain provisions of
the Loan Agreement. The Working Capital Lenders and the Term Lender are willing
to do so, but only upon the terms and conditions set forth herein.

       Accordingly, at this time the Administrative Agent, the Collateral Agent,
the Working Capital Lenders, the Term Lender, the Lead Borrower, and the
Borrowers hereby amend the Loan Agreement and otherwise agree as follows:

       1.    The definition of "BASE MARGIN" on page 4 of the Loan Agreement is
             hereby deleted, and the following is substituted in its place:

       "BASE MARGIN": (a) Until Section (b) of this Definition is in effect:
                       0.25

                     (b) Commencing with the first day of the Borrower's third
                     fiscal quarter in calendar year 2000, the Base Margin shall
                     be reset quarterly (commencing with the Business Day after
                     the Administrative Agent's receipt of the Pricing
                     Certificate (Section 6-7(b)) based on the Pricing Grid. The
                     Base Margin for Tiers I, II, or IV of the Pricing Grid
                     shall apply in the event that both criteria applicable to
                     that Tier are satisfied. In all other circumstances, the
                     Base Margin for Tier III of the Pricing Grid shall apply.

       2.     The definition of "L/C MARGIN" on page 15 of the Loan Agreement is
              hereby amended by deleting the term "1.5%" in subparagraph (a)
              thereof, and inserting the term "1.75%" in its place.

       3.     The definition of "LIBOR MARGIN" on page 17 of the Loan Agreement
              is hereby amended by deleting the term "2.25%" in subparagraph (a)
              thereof, and inserting the term "2.50%" in its place.

       4.     The definition of "OVERALL INVENTORY APPRAISAL CAP" on page 18 of
              the Loan Agreement is hereby deleted, and the following is
              inserted in its place:

                                       2
<PAGE>   4

       "OVERALL INVENTORY APPRAISAL CAP": The following percentage during the
                periods indicated:

                 Through and including August 31, 2000:   95%
                 From and after September 1, 2000:        92%

       5.     The definition of "PRICING GRID" on page 19 of the Loan Agreement
              is hereby deleted, and the following is inserted in its place:

       "PRICING GRID": The following:

                                  PRICING GRID

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Tier     Minimum 12 month          Consolidated 12 month         Libor        Base          L/C Margin
         trailing average          trailing Consolidated         Margin       Margin
         Availability              Adjusted EBITDA
                                    / Total Interest
------------------------------------------------------------------------------------------------------
<S>      <C>                       <C>                           <C>          <C>           <C>
I        $30 Million               Greater than or Equal to      2.00%        0.00          1.25%
                                   2.25 to 1.0
------------------------------------------------------------------------------------------------------
II       $25 Million               Greater than or Equal to      2.25%        0.00          1.50%
                                   1.75 to 1.0, but less than
                                   2.25 to 1.0
------------------------------------------------------------------------------------------------------
III      Not Applicable            Greater than or Equal to      2.50 %       0.25%         1.75%
                                   1.25 to 1.0, but less than
                                   1.75 to 1.0
------------------------------------------------------------------------------------------------------
IV       Not Applicable            Less than 1.25 to 1.0         2.75 %       0.50%         2.00%
------------------------------------------------------------------------------------------------------
</TABLE>

       6.     The definition of "CURRENT PAY INTEREST MARGIN", to read as
              follows, is hereby added to Article 1 of the Loan Agreement:

       "CURRENT PAY INTEREST MARGIN": (a) Until Section (b) of this Definition
              is in effect: 12.50%

              (b) Commencing with the first day of the Borrower's third fiscal
              quarter in calendar year 2000, the Current Pay Interest Margin
              shall be reset quarterly (commencing with the Business Day after
              the Administrative Agent's receipt of the Pricing Certificate
              (Section 6-7(b)) based on the Current Pay Interest Pricing Grid.
              The Current Pay Interest Margin for Tier I of the Current Pay
              Interest

                                       3
<PAGE>   5

              Pricing Grid shall apply in the event that both criteria
              applicable to that Tier are satisfied. In all other circumstances,
              the Current Pay Interest Margin for Tier II of the Current Pay
              Interest Pricing Grid shall apply.

       7.     The definition of "CURRENT PAY INTEREST PRICING GRID", to read as
              follows, is hereby added to Article 1 of the Loan Agreement:

       "CURRENT PAY INTEREST PRICING GRID": The following:

                        CURRENT PAY INTEREST PRICING GRID

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Tier     Minimum 12 month          Consolidated 12 month         Current Pay Interest
         trailing average          trailing Consolidated
         Availability              Adjusted EBITDA
                                    / Total Interest
-------------------------------------------------------------------------------------
<S>      <C>                       <C>                           <C>
I        $25 Million               Greater than or Equal to      12.00 %
                                   1.75 to 1.0
-------------------------------------------------------------------------------------
II       Not Applicable            Not Applicable                12.50 %
-------------------------------------------------------------------------------------
</TABLE>

       8.     Section 3-4 is hereby deleted in its entirety and the following is
              substituted in its place:

              3-4. Interest.

              (a) The unpaid principal balance of the Term Loan shall bear
       interest, until repaid, floating at the per annum rate equivalent to the
       aggregate of the then applicable per annum interest rate of the Current
       Pay Interest plus 3.00%, determined and payable as follows:

              (i) Interest on the unpaid principal balance of the Term Loan,
              equal to that per annum rate determined by reference to the
              Current Pay Interest Margin ("CURRENT PAY INTEREST") shall be
              payable monthly in arrears, on the first day of each month, and on
              the Maturity Date.

              (ii) Accrued Interest on the unpaid principal balance of the Term
              Loan, equal to 3.0% per annum ("PIK INTEREST"), shall be added to
              the then unpaid principal balance of the Term Note monthly, on the
              first day of each month, commencing with July 1, 1999. The
              aggregate balance of PIK Interest so added to the Term Note shall
              bear interest at the then applicable per annum interest rate of
              the Current Pay Interest.

              (b) Following the occurrence of any Event of Default (and whether
       or not the Lender exercises any of the Lender's rights on account of such
       Event of Default), Current Pay Interest shall be that per annum interest
       rate which is the aggregate of the then applicable per annum interest
       rate determined by reference to the Current Pay Interest Margin plus
       2.00% and PIK Interest shall be equal to 5% per annum.

                                       4
<PAGE>   6

       9.     Section 6-7(b) is hereby deleted in its entirety and the following
              is substituted in its place:

              (b) Commencing with the Borrowers' third fiscal quarter in 2000,
       the Lead Borrower shall provide the Administrative Agent with the
       financial statements furnished in accordance with Section 6-7(a), an
       original counterpart of a Certificate (signed by the Borrowers' President
       or Chief Financial Officer) in the form of EXHIBIT 6-7(B), annexed hereto
       (the "PRICING CERTIFICATE"), as such form reasonably may be revised from
       time to time hereafter, on which shall be indicated (with supporting
       calculations) the Borrowers' performance with respect to those criteria
       included in the definition of the applicable margin as set forth in the
       Pricing Grid and in the Current Pay Interest Pricing Grid.

       10.    Exhibit 6-12(a), Financial Performance Covenants, is hereby
              amended by deleting Paragraph 1 thereof and inserting the
              following in its place:

       EBITDA: The Borrowers shall not permit or suffer their Consolidated
       Adjusted EBITDA, tested as of the last day of each fiscal quarter on the
       basis set forth below, to be less than the following:

                          MINIMUM CONSOLIDATED EBITDA:
                              "<>" Denotes Negative

BASIS TESTED                                      MINIMUM CONSOLIDATED ADJUSTED
                                                                         EBITDA
-------------------------------------------------------------------------------
         Quarter Ending August, 1999                               $<3,000,000>
  Two Quarters Ending November, 1999                                <5,000,000>
Three Quarters Ending February, 2000                                <1,000,000>
      Four Quarters Ending May, 2000                                <2,000,000>
   Four Quarters Ending August, 2000                                  2,500,000
 Four Quarters Ending November, 2000                                 16,500,000
 Four Quarters Ending February, 2001                                 27,000,000
      Four Quarters Ending May, 2001                                 35,000,000
   Four Quarters Ending August, 2001                                 35,000,000
 Four Quarters Ending November, 2001                                 40,000,000
 Four Quarters Ending February, 2002                                 40,000,000
      Four Quarters Ending May, 2002                                 40,000,000

       11.    Conditions Precedent. This Amendment and the obligations of the
              Administrative Agent, the Collateral Agent, the Working Capital
              Lenders, and the Term Lender hereunder are conditional upon
              payment of amendment fees in the amount of (i) $200,000.00 to the
              Administrative Agent, for the ratable benefit of the Working
              Capital Lenders, and (ii) $50,000.00 to the Term Lender. The
              Administrative Agent is hereby authorized to debit the Loan
              Account for the purpose

                                       5
<PAGE>   7

              of paying the amendment fees to the Working Capital Lenders and
              the Term Lender, respectively.

       12.    Ratification of Loan Documents. Except as provided herein, all
              terms and conditions of the Loan Agreement and all of the other
              Loan Documents shall remain in full force and effect and are
              hereby ratified, confirmed, and reaffirmed.

       13.    Waiver of Claims. The Lead Borrower and each of the Borrowers
              hereby acknowledges and agrees that none of them has any offsets,
              defenses, claims, or counterclaims against the Administrative
              Agent, the Collateral Agent, the Working Capital Lenders, or the
              Term Lender, or their respective officers, directors, employees,
              attorneys, representatives, parents, affiliates, predecessors,
              successors, or assigns with respect to the Liabilities, or
              otherwise, and that if the Lead Borrower or any of the Borrowers
              now has, or ever did have, any offsets, defenses, claims, or
              counterclaims against the Administrative Agent, the Collateral
              Agent, the Working Capital Lenders, or the Term Lender or their
              respective officers, directors, employees, attorneys,
              representatives, affiliates, predecessors, successors, or assigns,
              whether known or unknown, at law or in equity, from the beginning
              of the world through this date and through the time of execution
              of this Amendment, all of them are hereby expressly WAIVED, and
              the Lead Borrower and each Borrower hereby RELEASES the
              Administrative Agent, the Collateral Agent, the Working Capital
              Lenders, and the Term Lender and their respective officers,
              directors, employees, attorneys, representatives, affiliates,
              predecessors, successors, and assigns from any liability therefor.

       14.    Miscellaneous.

              (a)    The Lead Borrower and each Borrower shall execute and
                     deliver to the Administrative Agent and the Collateral
                     Agent whatever additional documents, instruments, and
                     agreements that the Administrative Agent and/or the
                     Collateral Agent may require in order to give effect to,
                     and implement the terms and conditions of this Amendment.

              (b)    This Amendment may be executed in several counterparts and
                     by each party on a separate counterpart, each of which when
                     so executed and delivered shall be an original, and all of
                     which together shall constitute one instrument.

              (c)    This Amendment expresses the entire understanding of the

                                       6
<PAGE>   8

                     parties with respect to the transactions contemplated
                     hereby. No prior negotiations or discussions shall limit,
                     modify, or otherwise affect the provisions hereof.

              (d)    The Borrower shall pay on demand all reasonable costs and
                     expenses of the Administrative Agent, the Collateral Agent,
                     the Working Capital Lenders, and the Term Lender,
                     including, without limitation, reasonable attorneys' fees
                     in connection with the preparation, negotiation, execution,
                     and delivery of this Amendment.

       IN WITNESS WHEREOF, the parties have executed this First Amendment to
Loan and Security Agreement by their respective duly authorized officers.

                                                      HOMEPLACE OF AMERICA, INC.
                                                               THE LEAD BORROWER

                                             By  /s/ David A. Frost
                                                 -------------------------------

                                     Print Name: David A. Frost

                                          Title: Senior Vice Pres. Finance

                                 THE BORROWERS

HOMEPLACE OF AMERICA, INC.                                HOMEPLACE STORES, INC.

By /s/ David A. Frost                        By  /s/ David A. Frost
   -----------------------------                 -------------------------------

Print Name: David A. Frost           Print Name: David A. Frost

Title: Senior Vice Pres. Finance          Title: Senior Vice Pres. Finance

HOMEPLACE HOLDINGS, INC.                              HOMEPLACE STORES TWO, INC.

By /s/ David A. Frost                        By /s/ David A. Frost
   -----------------------------                --------------------------------

Print Name: David A. Frost          Print Name: David A. Frost

Title: Senior Vice Pres. Finance         Title: Senior Vice Pres. Finance

HOMEPLACE MANAGEMENT, INC.

By  /s/ David A. Frost
    -------------------------------

Print Name: David A. Frost

Title: Senior Vice Pres. Finance

                                       7
<PAGE>   9

                                                       FLEET RETAIL FINANCE INC.
                                                            ADMINISTRATIVE AGENT
                                                                COLLATERAL AGENT

                                                By /s/ James R. Dore
                                                   -----------------------------
                                                   James R. Dore, Vice President

                           THE WORKING CAPITAL LENDERS

                                                                    AMSOUTH BANK

                                             By /s/ Kathleen F. Kerlinger
                                                --------------------------------
                                                Attorney-In-Fact

                                             Notice Address:
                                                     350 Park Avenue, 19th Floor
                                                     New York, New York 10022
                                             Attention: Kathleen F. Kerlinger
                                             Fax (212) 935-7458

                                                       FLEET RETAIL FINANCE INC.

                                            By /s/ James R. Dore
                                               ---------------------------------
                                            James R. Dore, Vice President
                                            Notice Address:
                                                                 40 Broad Street
                                                     Boston, Massachusetts 02109
                                            Attention:
                                            Fax

                                             THE CIT GROUP BUSINESS CREDIT, INC.

                                                 By /s/ Christopher Hill
                                                    ----------------------------

                                             Notice Address:
                                                     1211 Avenue of the Americas
                                                        New York, New York 10036
                                             Attention: R. Chimanti
                                             Fax (212) 536-1295

                                       8
<PAGE>   10

                                                      FINOVA CAPITAL CORPORATION

                                                 By /s/ Bruce Mattel
                                                    ----------------------------
                                              Notice Address:
                                              311 South Wacker Drive, Suite 4400
                                                         Chicago, Illinois 60606
                                              Attention: Bruce Mattel
                                              Fax 312-322-7250

                                                    FOOTHILL CAPITAL CORPORATION

                                                 By /s/ Todd R. Nakahoto
                                                    ----------------------------
                                                 Notice Address:
                                            11111 Santa Monica Blvd., Suite 1500
                                              Los Angeles, California 90025-3333
                                                 Attention: Todd R. Nakahoto
                                                 Fax 310-479-8952

                                                          HELLER FINANCIAL, INC.

                                                 By /s/ Dennis Graham
                                                    ----------------------------
                                                 Notice Address:
                                                  150 East 42d Street, 7th Floor
                                                        New York, New York 10017
                                                 Attention: Dennis Graham
                                                 Fax 212-880-7002

                                       IBJ WHITEHALL BUSINESS CREDIT CORPORATION

                                                 By  illegible
                                                    ----------------------------
                                                 Notice Address:
                                                                One State Street
                                                        New York, New York 10004
                                                 Attention: Jim Dorce
                                                 Fax 617-434-432

                                       9
<PAGE>   11

                                         JACKSON NATIONAL LIFE INSURANCE COMPANY

                                                 By  illegible
                                                    ----------------------------

                                                 Notice Address:
                                                                 c/o PPM America
                                                     225 West Wacker, Suite 1200
                                                         Chicago, Illinois 60606
                                                 Attention:
                                                 Fax

                                                   LASALLE BUSINESS CREDIT, INC.

                                                 By /s/ Ellen T. Cook
                                                    ----------------------------

                                                 Notice Address:
                                                    135 South LaSalle, Suite 400
                                                         Chicago, Illinois 60603
                                                 Attention: Ellen T. Cook
                                                 Fax (310) 904-0291

                                                              THE PROVIDENT BANK

                                                 By /s/ Josh V. Garde
                                                    ----------------------------
                                                 Notice Address:
                                                    One East Fourth Street, 249A
                                                          Cincinnati, Ohio 45202
                                                 Attention: Josh V. Garde
                                                 Fax (513) 634-1588

                                                                 THE TERM LENDER
                                                    BACK BAY CAPITAL FUNDING LLC

                                            By /s/ Michael Pizette
                                               ---------------------------------

                                              Michael Pizette, Managing Director
                                            Notice Address:
                                                                 40 Broad Street
                                                     Boston, Massachusetts 02109
                                            Attention:
                                            Fax

                                       10<PAGE>   1
                                                                    EXHIBIT 10.3

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made
and entered into as of the 14th day of May, 1999 by and between GREGORY K.
JOHNSON ("Employee") and WACCAMAW CORPORATION AND ITS SUCCESSORS AND ASSIGNS,
(the "Company").

                                   WITNESSETH:

         WHEREAS, Employee is currently employed by Waccamaw Corporation as its
President and Chief Executive Officer pursuant to an Employment Agreement
entered into on October 23, 1995 and amended on March 13, 1997 (the "Current
Agreement");

         WHEREAS, Waccamaw Corporation is in the process of merging with
HomePlace of America, Inc. (the "Merger"), and the name of the surviving entity
upon the successful completion of the Merger will be HomePlace of America, Inc.
("HomePlace");

         WHEREAS, upon consummation of the Merger, this Agreement shall be
assigned to and assumed by HomePlace by operation of law, and Employee shall be
employed as the President and Chief Executive Officer of HomePlace on the terms
and conditions hereinafter set forth;

         WHEREAS, the parties desire to amend and restate Employee's existing
Employment Agreement as set forth herein;

         WHEREAS, the parties desire that this Agreement shall become effective
only upon the consummation of the Merger,

         NOW, THEREFORE, Employee and the Company covenant and agree as follows:

         1.       Employment. Upon the terms and conditions set forth in this
Agreement, the Company hereby agrees to continue to employ Employee, and
Employee hereby agrees to continue his employment with the Company, for the
Period of Employment (as defined in Paragraph 2 hereof), in the position and
with the duties and responsibilities set forth in Paragraph 3 hereof.

         2.       Period of Employment. Upon consummation of the Merger, this
Agreement and the period of employment hereunder (the "Period of Employment")
shall become effective as of June 1, 1999 (the "Effective Date") and shall
expire, unless earlier terminated in accordance with the terms hereof, on May
31, 2004. This Agreement shall be null and void ab initio in the event that the
merger is not consummated on or before July 31, 1999 in which event the Current
Agreement shall remain in full force and effect until amended by mutual
agreement of the parties.

<PAGE>   2

         3.       Position. During the Period of Employment, Employee shall be
the President and Chief Executive Officer of the Company. In such capacities, he
shall supervise and control the business of the Company, subject only to the
general supervision of the Board of Directors and the Chairman of the Board.

         4.       Performance. Throughout the Period of Employment, Employee
agrees to serve the Company faithfully and to the best of his ability and shall
devote all of his working time and energies to the furtherance of the Company's
business. During the Period of Employment, Employee shall not work in any
advisory or other capacity for any other individual, firm, corporation or other
entity without the Company's prior express written consent thereto, or engage in
any activity which materially interferes with the performance of his duties
hereunder.

         5.       Compensation. During the Period of Employment, as compensation
for services rendered, the Company shall pay Employee a base salary, payable in
equal monthly installments, of Four Hundred Fifty Thousand Dollars ($450,000)
per year. The Company will review Employee's base salary every two years and
make any adjustments that are deemed appropriate in the sole discretion of the
Board of Directors.

         6.       Perquisites. During the Period of Employment, Employee shall
be entitled to, in addition to and without limiting those perquisites and fringe
benefits accorded executives of equal rank, the following:

                  (a)      an automobile or an automobile allowance in
accordance with Company policy;

                  (b)      payment or reimbursement of club initiation fees and
membership dues, for Employee's membership in a country club mutually acceptable
to Employee and the Company;

                  (c)      four (4) weeks of paid vacation annually;

                  (d)      upon proof of payment, reimbursement for all
reasonable and necessary expenses incurred by Employee on behalf of the Company;
and

                  (e)      tax planning and tax preparation services provided by
the Company's accounting firm.

         7.       Executive Bonus. During the Period of Employment,
Employee shall be entitled to an incentive bonus (the "Incentive Bonus"),
pursuant to the Company's Executive Incentive Bonus Plan as it may be amended
and modified from time to time by the Board of Directors. Under such Plan, the
Incentive Compensation opportunity for Employee will be for a higher percentage
of base salary than for other participants.

                                       2
<PAGE>   3

         8.       Employment Benefit Plans. Employee, his qualified dependents
and beneficiaries shall be entitled to all payments, employee benefits and
service credits during the Period of Employment to which executives of the
Company, their qualified dependents and beneficiaries are entitled during the
Period of Employment under the terms of the employee benefit plans and practices
of the Company, including, without limitation, the Company's 401(k) savings
plan, pension plan, life insurance plan (death benefit to be no less than
Employee's base salary set forth in paragraph 5 above), disability plan, death
benefit plan, medical, dental, and health and welfare plans and other present or
equivalent successor plans and practices of the Company for which officers,
their qualified dependents and beneficiaries are eligible, and to all payments
or other benefits under any such plan or practice during the Period of
Employment. This Agreement shall not preclude the Company from amending or
terminating any employee benefit plan or practice.

         9.       Grant of Stock Options. Promptly after the consummation of the
Merger, the Company agrees to grant to Employee, pursuant to the terms and
subject to the conditions of a Nonqualified Stock Option Agreement (the "Option
Agreement") to be entered into between the Company and Employee, options to
purchase Two Hundred Fifty Thousand (250,000) shares of common stock of the
Company at an exercise price of $12.00 per share. The Option Agreement will
provide that such options will vest at a rate of twenty percent (20%) per year
commencing on the first anniversary of the effective date of the granting of the
options.

         10.      Death. In the event of the death of Employee during the Period
of Employment, the legal representative of Employee shall be entitled to an
amount equal to the base salary provided for in Paragraph 5 hereof for the month
in which death shall have occurred, at the rate being paid at the time of death,
and shall also receive, within one hundred twenty (120) days after the close of
the fiscal year of the Company in which death occurs, a cash payment from the
Company equal to the pro rata portion of the bonus that otherwise would have
been paid to Employee under Paragraph 7 hereof for that portion of the fiscal
year prior to the date of death as calculated under Paragraph 7 hereof. The
Period of Employment shall be deemed to have ended as of the close of business
on the last day of the month in which Employee's death shall have occurred but
without prejudice to any payments otherwise due in respect of Employee's death.

         11.      Disability.

                  (a)      In the event of Disability (as defined in Paragraph
11(c) hereof) of Employee during the Period of Employment, Employee shall be
entitled to an amount equal to the base salary provided for in Paragraph 5
hereof, at the rate being paid at the time of the commencement of Disability,
for the period of such Disability but not in excess of six (6) months.

                  (b)      The amount of any payments due under Paragraph 11(a)
hereof shall be reduced by any payments to which Employee shall be entitled for
the same period because of disability under any disability or pension plan of
the Company or as the result of worker's compensation or non-occupational
disability payments.

                                       3
<PAGE>   4

                  (c)      The term "Disability", as used in this Agreement,
shall mean an illness or accident occurring during the Period of Employment
which prevents Employee from performing his duties, with or without reasonable
accommodation, under this Agreement.

                  (d)      In the event Employee shall have been unable to
perform substantially his duties under this Agreement for a period of six (6)
consecutive months by reason of Disability, the Company may terminate Employee's
employment by giving Employee written notice of termination. In the event of
such a termination due to Disability as provided above, Employee shall receive,
within one hundred twenty (120) days after the close of the fiscal year in which
termination occurs, a cash payment from the Company equal to the pro rata
portion of the bonus that otherwise would have been paid to Employee under
Paragraph 7 hereof for that portion of the fiscal year ending on the date of
termination of employment. Nothing herein, however, shall preclude Employee from
receiving the disability benefits in this Paragraph 11 in the event of such
termination.

         12.      Termination. The Company may, by written notice to Employee,
terminate this Agreement at any time for "Cause." As used herein, the term
"Cause" shall mean:

                  (a)      the commission of fraud, embezzlement, theft or other
material violation of law by Employee in connection with or related to
Employee's employment with the Company or the conviction of Employee of a crime
involving moral turpitude;

                  (c)      the willful and material failure of Employee to
comply with the requirements of the Company's Code of Business Conduct or
Antitrust and Trade Regulation Booklet; or

                  (d)      after specific written notice from the Board of
Directors setting forth the particular duty or obligation required of Employee,
and after a reasonable time to cure, the continued willful and material failure
by Employee to perform a duty or obligation reasonably required of him under
this Agreement or by the Board of Directors.

         13.      Change in Control. In the event of the termination of the
employment of Employee hereunder within one (1) year following a Change in
Control (i) by the Company for any reason other than for Cause, death,
Disability or normal retirement of Employee or (ii) by the Employee for Good
Reason, Employee shall be entitled to receive (A) a lump sum equal to two (2)
times Employee's annual base salary at the highest rate in effect during the
twelve (12) months immediately preceding the Change in Control and (B) his
Incentive Bonus through the end of the fiscal year in which termination occurs.

                  A "Change in Control" of the Company shall mean:

                           (i)      any stock sale, exchange, merger,
reorganization, stock issuance, stock redemption, or other transaction,
occurrence or series of transactions or occurrences

                                       4
<PAGE>   5

resulting in a change in the ownership of the Company such that more than fifty
(50%) percent of the voting rights of the Company stock is held, after such
change, directly, indirectly or beneficially by a person or entity (or a group
of persons or entities under common control) (a "New Control Person") other than
the Government of Kuwait or an entity controlled, directly or indirectly, by the
Government of Kuwait unless the New Control Person has advised Employee of its
good faith intent to register the common stock of the Company in an initial
public offering (an "IPO") under the Securities Exchange Act of 1934 within six
(6) months of such change;

                           (ii)     any sale of all or substantially all of the
assets of the Company to a New Control Person;

               provided, anything herein to the contrary notwithstanding, a
Change in Control cannot occur subsequent to an IPO.

               Good Reason shall mean there has been a material diminution of
your responsibilities or compensation.

               In the event Employee should become entitled to any benefits
under this paragraph, such entitlement shall not limit the damages to Employee
upon a breach of this Agreement by Company but such benefits shall mitigate the
damages, if any, to which Employee may be entitled as a result of such breach.

         14.   Confidential Information.

               (a)      It is stipulated and agreed that, during the Period
of Employment, Employee will be placed in a position by the Company to become
acquainted with confidential, proprietary and privileged information of the
Company and its affiliates and successors (referred to herein as the
"Confidential Information") and that the use of the Confidential Information
against the Company would seriously damage the Company's business. As a
consequence of the above, Employee agrees that during the Period of Employment
and thereafter:

                           (i)      he shall not, directly or indirectly, unless
required by law, use, divulge, publish or otherwise reveal or allow to be
revealed any aspect of the Confidential Information to any person or entity
without the Company's prior express written consent;

                           (ii)     he shall refrain from any action or conduct
which might reasonably or foreseeably be expected to compromise the
confidentiality, proprietary or privileged nature of the Confidential
Information;

                           (iii)    he shall follow the reasonable suggestions
made by the Company from time to time regarding the confidentiality, proprietary
and privileged nature of the Confidential Information; and

                                       5
<PAGE>   6

                           (iv)     he shall have no right, to the greatest
extent permitted by law, to apply for or to obtain any patent, copyright or
other form of intellectual property protection with regard to the Confidential
Information.

                  (b)      Employee agrees that all files, documents, records,
customer lists, books and other materials that come into his use or possession
during the Period of Employment and that are in any way related to the Company's
business shall at all times remain the property of the Company, and that, upon
the termination of this Agreement for any reason, Employee shall immediately
surrender to the Company all such materials. Employee shall disclose promptly
and in writing to the Company all inventions, discoveries, processes and
improvements, whether or not patentable ("Discoveries"), and all notes, models,
drawings, software, and compilations of data relating thereto ("Writings"), made
or discovered by him or with others at any time during the Period of Employment.
To the maximum extent permitted by law, such Discoveries and Writings and any
patent rights, copyrights and other intellectual property rights relating
thereto ("Rights") shall constitute the sole property of the Company and its
successors and assigns. Employee shall execute, acknowledge and deliver any and
all documents and instruments deemed necessary or desirable by the Company
confirming complete ownership by the Company of all Discoveries, Writings and
Rights. Employee shall assist the Company and its successors and assigns, at the
Company's expense, (i) in obtaining patents, copyrights and other protection, as
applicable, for the Discoveries, Writings and Rights in any country if the
Company, in its sole discretion, elects to apply for such patents, copyrights or
other protection and (ii) in any prosecution or defense of any litigation
involving the Discoveries, Writings and Rights.

         15.      Covenant Not to Compete.

                  (a)      For all purposes of this Agreement, the terms defined
below shall have the respective meanings specified, and the following
definitions shall be equally applicable to the singular and plural forms of the
terms defined:

                           (i)      "Business" means purchasing and selling, at
retail, housewares, home furnishings, linens, home decorating goods, and other
merchandise of the type sold by the Company during the Period of Employment.

                           (ii)     "Compete" means directly or indirectly,
other than at the direction of the Company and on behalf of the Company: (A)
organizing or owning any interest in a business which engages in the Business or
a business substantially similar to the Business in the Territory, provided that
Employee shall not be prohibited from owning not more than five percent (5%) of
the outstanding shares of any company whose stock is registered on a national
securities exchange; (B) engaging in the Business or a business substantially
similar to the Business in the Territory; or (C) assisting any Person (as a
director, officer, employee, agent, consultant, manager, lender or otherwise)
engaging in the Business or a business substantially similar to the Business in
the Territory.

                                       6
<PAGE>   7

                           (iii)    "Person" means any person or entity,
including, without limitation, any natural person, firm, company, partnership,
corporation, trust, association, organization or governmental unit.

                           (iv)     "Restricted Period" means during the Period
of Employment and the two (2) year period immediately following the termination
of Employee's employment with the Company for any reason.

                           (v)      "Territory" means the geographic area within
a circle having a radius of 20 miles from each store operated by the Company
upon the termination of Employee's employment for any reason.

                  (b)      The parties stipulate that the Company is engaged in
the Business. In consideration of the Company's agreement to employ Employee
pursuant to the terms hereof, and for other good and valuable consideration,
Employee covenants and agrees that, during the Restricted Period, he shall not:
(i) Compete with the Company or (ii) employ or solicit the employment of any
individual who has been an employee of the Company at any time during the twelve
(12) months preceding the termination of Employee's employment for any reason.
Notwithstanding the foregoing, at any time following termination of his
employment with the Company for any reason, (i) Employee may be employed by, own
an interest in or assist a Person which is not engaged primarily in the
Business, and (ii) Employee may be employed by, own an interest in or assist a
Person provided that Employee's duties do not include, directly or indirectly,
responsibility for any subsidiary, division, unit or other entity controlled by
such Person that is engaged primarily in the Business.

         16.      Amendment; Waiver. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Either
party hereto may, by an instrument in writing, waive compliance by the other
party with any term or provision of this Agreement. The waiver of any provision
of this Agreement shall not be construed as a waiver of any subsequent breach.

         17.      Entire Agreement. This Agreement sets forth the entire
agreement and understanding, and, upon consummation of the Merger, supersedes
all prior agreements and understandings, oral or written, between the parties
hereto, with respect to the subject matter hereof.

         18.      Non-Assignable. This Agreement shall not be assignable by
Employee.

         19.      Binding Nature. This Agreement shall inure to the benefit of
and be binding upon Employee, and his heirs and administrators, and the Company,
and its successors and assigns.

         20.      Severability. If any term or provision of this Agreement is
held or deemed to be invalid or unenforceable, in whole or in part, by a court
of competent jurisdiction, this

                                       7
<PAGE>   8

Agreement shall be ineffective only to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement.

         21.      Notices. Any notice required or permitted to be given to
either party hereunder shall be in writing and shall be deemed effectively given
if (a) mailed by first class, registered or certified mail, return receipt
requested, postage prepaid or (b) provided notice is sent on a business day
between 9:00 a.m. and 5:00 p.m., Myrtle Beach, South Carolina time, by facsimile
transmission, provided sender retains a transmission confirmation, as follows:

<TABLE>

        <S>                                  <C>
        (i)    If to the Company             HomePlace of America, Inc.
                                             3200 Pottery Drive
                                             Myrtle Beach, South Carolina  29577
                                             Facsimile Number: (803) 236-7718

        (ii)   If to Employee                Gregory K. Johnson
                                             154 Salt Creek Court
                                             Pawleys Island, SC 29585
</TABLE>

or, in each case, at such other address or facsimile number as may be specified
in writing to the other party hereto. Alternatively, notices shall also be
deemed effectively given if hand delivered to Employee or the Chairman of the
Board of Directors of the Company, as the case may be.

         22.      Governing Law; Jurisdiction; Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of South
Carolina.

         23.      Survivability. The provisions of Paragraphs 14 and 15 of this
Agreement shall survive the termination of Employee's employment with the
Company for any reason.

         24.      Reasonableness. Employee has carefully read and considered the
provisions of this Agreement and agrees that the restrictions set forth herein
are fair and reasonably required for the Company's protection.

         IN WITNESS WHEREOF, the parties hereto have set their hands and seals
on the day first above written.

                                WACCAMAW CORPORATION

                                By: /s/ G. William Miller
                                   ---------------------------------------------
                                   G. William Miller, Chairman of the Board

                                /s/ Gregory K. Johnson
                                ------------------------------------------------
                                GREGORY K. JOHNSON

                                       8

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