Exhibit 10.1
                               RSI HOLDINGS, INC.
                         8.0% Convertible Note due 2005

December 20, 2000                                                    $500,000.00

         RSI HOLDINGS, INC., a corporation organized and existing under the laws
of North Carolina  (herein called the  "Company"),  for value  received,  hereby
promises to pay to MINOR H. MICKEL or her  successors  or assigns  (hereinafter,
the "Holder") the principal sum of Five Hundred Thousand  ($500,000) on December
20, 2005 and to pay  interest  thereon from the date of issuance  written  above
annually on December 20 in each year,  (each an Interest  Payment Date),  at the
rate of 8.0% per annum, until the principal hereof is paid or made available for
payment.  The interest so payable,  and punctually paid or duly provided for, on
any Interest  Payment  Date will be paid to the Holder  holding this Note on the
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will be paid to such Holder on the next following  Interest  Payment Date or
be  paid at any  time  in any  other  lawful  manner.  All  unpaid  interest  is
convertible,  at the option of the Company or the Holder,  on the terms provided
herein.

         Payment of the  principal  of and interest on this Note will be made at
the office or agency of the Company in Greenville,  South Carolina or such other
office as the  Company  may in the  future  designate  (the  "Company  Office"),
provided  written  notice of such  designation is provided to the Holder of this
Note at the time of such  designation.  Payment of the principal of and interest
on this Note  will be made in such  coin or  currency  of the  United  States of
America  as at the time of payment  is legal  tender  for  payment of public and
private debts; provided,  however, that, at the option of the Company payment of
principal  and interest may be made by check mailed to the address of the person
entitled  thereto as such address  shall appear in the security  register of the
Company.

         The Company may voluntarily  prepay any or all of the principal  amount
hereof without premium or penalty. Once borrowed and repaid, principal cannot be
re-borrowed.

         No  provision  of this Note  shall  require  the  payment or permit the
collection of interest in excess of that permitted by applicable law.

         TRANSFER.  The transfer of this Note is  registrable  in the  Company's
security  register (the  "Security  Register"),  upon surrender of this Note for
registration of transfer at the Company Office, duly endorsed by, or accompanied
by a written  instrument  of transfer in form  satisfactory  to the Company duly
executed by the Holder  hereof or her attorney duly  authorized in writing,  and
thereupon one or more new Notes,  of authorized  denominations  and for the same
aggregate  principal  amount,  will be issued to the  designated  transferee  or
transferees.  No  service  charge  shall be made for any  such  registration  of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.


     THE SALE OF THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OR
ANY STATE SECURITIES LAW IN RELIANCE UPON EXEMPTIONS THEREFROM

         THE HOLDER MUST HOLD THIS NOTE UNTIL MATURITY OR CONVERSION  UNLESS THE
         SALE OR OTHER TRANSFER  THEREOF IS  SUBSEQUENTLY  REGISTERED  UNDER THE
         SECURITIES ACT AND ANY APPLICABLE  STATE  SECURITIES LAWS OR EXEMPTIONS
         FROM SUCH REGISTRATIONS ARE AVAILABLE.


<PAGE>

         CONVERSION.  At any time prior to the  maturity  date of the Note,  the
Holder  may  opt to  convert  part  or all of  this  Note  into  fully-paid  and
non-assessable shares of the common stock of the Company (the "Common Stock") at
a  conversion  price of $0.075  (Seven and  One-Half  Cents) per share of Common
Stock,  subject to adjustment as described herein (the "Conversion  Price").  At
the option of the Holder (upon  notice),  unpaid  interest shall be added to the
principal  amount of this Note and shall be equally  subject  to the  conversion
provisions of this Note.

         The  number  of  shares  of  Common  Stock  into  which  this  Note  is
convertible shall be adjusted from time to time as follows:

         (1) If the Company shall,  at any time or from time to time (A) declare
or pay any  dividend on its Common  Stock  payable in its Common Stock (a "Stock
Dividend"),  (B) effect a subdivision  of the  outstanding  shares of its Common
Stock into a greater number of shares of Common Stock,  by  reclassification  or
otherwise than by payment of a dividend in its Common Stock (a "Stock Split") or
(C) combine or  consolidate  the  outstanding  shares of its Common Stock into a
lesser number of shares of Common  Stock,  by  reclassification  or otherwise (a
"Reverse  Stock  Split");  then the number of shares of Common  Stock into which
this Note is  convertible  shall be adjusted so that the Holder  shall  receive,
upon  conversion,  the same number of shares of Common  Stock such Holder  would
have received had the Holder converted  immediately prior to the Stock Dividend,
Stock Split or Reverse  Stock Split and then  received the benefits of the Stock
Dividend,  Stock Split or Reverse Stock Split.  An  adjustment  made pursuant to
this paragraph (1) shall become effective (A) in the case of any Stock Dividend,
immediately after the close of business on the record date for the determination
of holders of Common Stock entitled to receive such Stock  Dividend,  (B) in the
case of any such Stock  Split,  at the close of business on the day  immediately
prior to the day upon which such corporate  action  becomes  effective or (C) in
the  case of any  Reverse  Stock  Split,  at the  close of  business  on the day
immediately prior to the day upon which such corporate action becomes effective.

         (2) If the Company  shall,  at any time or from time to time,  declare,
order,  pay or make a  dividend  or  other  distribution  on its  Common  Stock,
(including,   without  limitation,  any  distribution  of  other  or  additional
securities or property or rights or warrants to subscribe for, at less than fair
market  value as  determined  in good  faith by the  Board of  Directors,  other
securities  of the Company or any  subsidiary  of the  Company  now  existing or
hereinafter   formed  by  way  of   dividend  or   spin-off,   reclassification,
recapitalization  or  similar  corporate  rearrangement)  other  than a dividend
payable in cash or shares of the Company's Common Stock or rights or warrants to
subscribe for shares of the Company's Common Stock,  then, and in each such case
(unless the Holder shall receive any such dividend or other  distribution on the
same basis as though this Note had been  converted  into shares of Common  Stock
immediately  prior  to  the  close  of  business  on the  record  date  for  the
determination  of holders of Common Stock  entitled to receive such  dividend or
other  distribution),  the number of shares of Common Stock into which this Note
is  convertible  shall be  adjusted  so that the  Holder of this  Note  shall be
entitled to receive, upon the conversion thereof, the number of shares of Common
Stock  determined by  multiplying  (A) the number of shares of Common Stock into
which this Note was  convertible  immediately  prior to the close of business on
the record date fixed for the  determination of holders of Common Stock entitled
to receive such  dividend or  distribution  by (B) a fraction,  the numerator of
which  shall be the Fair  Market  Value per share of Common  Stock on the record
date fixed for the  determination of holders of Common Stock entitled to receive
such dividend or  distribution,  and the denominator of which shall be such Fair
Market Value per share of Common  Stock less the fair value of such  dividend or
distribution  (as  determined  in good  faith by the Board of  Directors  of the


<PAGE>
Company)  payable in respect of one share of Common Stock.  An  adjustment  made
pursuant to this paragraph (3) shall be made upon the opening of business on the
next business day following the date on which any such dividend or  distribution
is made and  shall be  effective  retroactively  immediately  after the close of
business  on the record  date fixed for the  determination  of holders of Common
Stock entitled to receive such dividend or distribution.

         For purposes  hereof,  Fair Market Value shall be the fair market value
of the  Company's  common  stock,  as  determined  in good faith by the Board of
Directors of the Company

         The Holder may  exercise  these  conversion  rights as to a Note or any
part thereof by delivering to the Company during  regular  business hours at the
Company Office the Note to be converted  along with written notice of the amount
to be converted  stating that the Holder  elects to convert such Note or portion
thereof.  Conversion shall be deemed to have been effected on the date when such
delivery is received  by the  Company at the  Company  Office,  and such date is
referred  to  herein  as the  "Conversion  Date."  As  promptly  as  practicable
thereafter, the Company shall issue and deliver to such Holder, a certificate or
certificates  for the number of full shares of Common Stock to which such Holder
is entitled, a check for cash with respect to any fractional interest in a share
of Common Stock, and, in the event of a partial conversion,  a replacement Note,
which shall be identical to the original Note except that the replacement  shall
be in a different  principal  amount and shall  indicate the date of issuance of
the original  Note,  the date of issuance of the  replacement  Note and that the
replacement  was  issued  as a  replacement  for the  original  as a result of a
partial  conversion.  The Holder shall be deemed to have become a shareholder of
record on the  applicable  Conversion  Date  unless  the  transfer  books of the
Company  are closed on the date,  in which  event the Holder  shall be deemed to
have become a Common Stock  shareholder of record on the next succeeding date on
which the transfer  books are open,  but the  Conversion  Price shall be that in
effect on the Conversion Date.

         No  fractional  shares of Common  Stock or scrip  shall be issued  upon
conversion of the Note.  Instead of any fractional  shares of Common Stock which
would otherwise be issuable upon conversion of the Note, the Company shall pay a
cash  adjustment in respect of such  fractional  interest  equal to the value of
such fractional interest as based on the Conversion Price.

         The Company shall at all times reserve and keep  available,  out of its
authorized  but unissued  Common Stock,  solely for the purpose of effecting the
conversion  of the Note,  the full number of shares of Common Stock  deliverable
upon the conversion of all Note from time to time outstanding.

         All shares of Common Stock which may be issued upon  conversion  of the
Note will,  upon  issuance by the  Company,  be validly  issued,  fully paid and
nonassessable.

         Upon  conversion of the Note,  the Holder  thereof shall be entitled to
receive any unpaid interest accrued (but not added to the principal of the Note)
through the Conversion Date.

         CERTAIN  NOTICES.  In case at any time the Company shall propose to (1)
declare any cash dividend  upon its Common Stock,  (2) declare any dividend upon
its  Common  Stock  payable  in  stock  or make any  special  dividend  or other
distribution to the holders of its Common Stock,  (3) offer for  subscription to
the  holders of any of its Common  Stock any  additional  shares of stock in any
class or other rights,  (4)  reorganize,  or reclassify the capital stock of the
Company  or  consolidate,  merge  or  otherwise  combine  with,  or sell  all or
substantially  all of its assets to,  another  corporation,  (5)  voluntarily or
involuntarily  dissolve,  liquidate or wind up of the affairs of the Company, or
(6) redeem or purchase any shares of its capital stock or securities convertible
into its capital stock,  then the Company shall give to the Holder of this Note,

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by certified or  registered  mail,  (i) at least twenty (20) days' prior written
notice  of the date on which the books of the  Company  shall  close or a record
shall be taken for such dividend,  distribution  or  subscription  rights or for
determining   rights   to  vote  in   respect   of  any   such   reorganization,
reclassification,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding  up,  and  (ii) in the  case of such  reorganization,  reclassification,
consolidation,  merger, sale,  dissolution,  liquidation or winding up, at least
twenty  (20)  days'  prior  written  notice of the date when the same shall take
place. Any notice required by clause (i) shall also specify,  in the case of any
such  dividend,  distribution  or  subscription  rights,  the date on which  the
holders of Common Stock shall be entitled  thereto,  and any notice  required by
clause (ii) shall specify the date on which the holders of Common Stock shall be
entitled  to  exchange  their  Common  Stock for  securities  or other  property
deliverable upon such reorganization,  reclassification,  consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be.

         GOVERNING  LAW.  This  Note  shall  be  governed  by and  construed  in
accordance  with the laws of the State of South  Carolina  without regard to any
conflicts of laws principals or provisions.

         IN WITNESS  WHEREOF,  the Company has caused this instrument to be duly
executed as of the date first above written.


                                            RSI HOLDINGS, INC.


                                            By:   /s/ Buck A. Mickel
                                                 -----------------------------
                                            Name:    Buck A. Mickel
                                            Title: President and CEO