Document:

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                                HOMEGOLD, INC.

                   THIRD EXTENSION RE: FORBEARANCE AGREEMENT

Household Commercial Financial Services, Inc.
Wood Dale, Illinois 60191

Gentlemen:

     Reference is hereby made to that certain Credit Agreement dated as of May
2, 2000 as heretofore amended pursuant to, inter alia, that certain Third
Amendment to Credit Agreement and Forbearance Agreement dated as of October 25,
2000 as heretofore modified pursuant to that certain Extension Re: Forbearance
Agreement dated as of January 25, 2001 and as further modified pursuant to that
certain Second Extension Re: Forbearance Agreement dated as of February 25, 2001
(the "Forbearance Agreement') (such Credit Agreement as so amended being
hereinafter referred to as the "Credit Agreement') between the undersigned,
Homegold, Inc., a South Carolina corporation (the "Borrower"), and you (the
`Lender'). All capitalized terms used herein without definition shall have the
same meanings herein as such terms have in the Credit Agreement.

     The Borrower has requested that the Lender extend its agreement to forbear
pursuant to the Forbearance Agreement from exercising its rights on account of
existing Events of Defaults by an additional month and the Lender is willing to
do so under the terms and conditions set forth in this Agreement.

I.   EXTENSION OF FORBEARANCE.

     Events of Default have occurred and are continuing under Section 8.1 (b) of
the Credit Agreement as a result of the Borrower's non-compliance with the
covenants contained in Sections 7.14, 7.15 and 7.16 of the Credit Agreement.

     Pursuant to the Forbearance Agreement, as an accommodation to Borrower
while not waiving any such Events of Default, but subject to compliance by
Borrower with the terms and conditions set forth in the Forbearance Agreement,
Lender agreed to (i) forebear through January 25, 2001 from accelerating the
Loans or exercising any rights and remedies to which it is entitled as a result
of the occurrence thereof except as provided therein and (ii) continue to extend
Loans to the Borrower on the terms and conditions set forth in the Credit
Agreement.

     Lender hereby agrees to extend the forbearance period provided for in the
Forbearance Agreement from March 31, 2001 to the earlier of (i) receipt by
Borrower from Lender of an amendment or an amended and restated credit agreement
setting forth the terms and conditions upon which Lender is willing to continue
extending credit to Borrower or (ii) April 30, 2001 (the earlier of (i) or (ii)
being hereinafter referred to as the "Extension Expiration Date') subject to
compliance by the Borrower with the terms and conditions of the Credit Agreement
and the Forbearance Agreement.

     This agreement shall not establish a custom or course of dealing and does
not waive, limit or postpone any of Borrower's obligations under the Credit
Agreement, any of the Loan Documents or otherwise, and any discussions (written
or oral) which have occurred or which may hereafter occur are not, and shall not
be deemed to be, a waiver, limitation or postponement of any of Lender's rights
and remedies under the Credit Agreement, any of the Loan Documents or applicable
law, all of which rights and remedies are expressly reserved. This agreement
shall not become effective until the conditions precedent set forth in Section 2
hereof have been satisfied. This agreement shall expire on the Extension
Expiration Date at which time all terms and conditions of the Credit Agreement
shall apply without giving effect to the forbearance provided for herein and
Lender shall be entitled to exercise all rights and remedies available to it on
account of any Event of Default, whether existing as of the date hereof, the
date of the Forbearance Agreement or otherwise.

2.   CONDITIONS PRECEDENT.

     The effectiveness of this Agreement is subject to the satisfaction of all
of the following conditions precedent:

     2.1  The Borrower and the Lender shall have executed and delivered this
          Agreement.

          The Corporate Guarantors and Ronald J. Sheppard shall have consented
          hereto in the space provided for such purpose below.

     2.3  Legal matters incident to the execution and delivery of this Agreement
          shall be satisfactory to the Lender and its counsel.
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     2.4  The Lender shall have received copies (executed or certified, as may
be appropriate) of all legal documents or proceedings taken in connection with
the execution and delivery of this Agreement to the extent the Lender or its
counsel may reasonably request.

3.   REPRESENTATIONS.

     In order to induce the Lender to execute and deliver this Agreement, the
Borrower hereby represents to the Lender that as of the date hereof, the
representations and warranties set forth in Section 5 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 5.5 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Lender) and except for the Events of
Default set forth in Section 1 hereof, the Borrower is in full compliance with
all of the terms and conditions of the Credit Agreement and no Default or Event
of Default has occurred and is continuing under the Credit Agreement or shall
result after giving effect hereof.

4.   MISCELLANEOUS.

     4.1  The Borrower and the Corporate Guarantors have heretofore executed and
delivered to the Lender that certain Security Agreement dated as of May 2, 2000
(the "Security Agreement'. The Borrower hereby, and the Corporate Guarantors by
their consent hereto in the space provided for that purpose below, each
acknowledges and agrees that, notwithstanding the execution and delivery of this
Agreement, the Security Agreement remains in full force and effect and the
rights and remedies of the Lender thereunder, the obligations of the Borrower
and Corporate Guarantors thereunder and the liens and security interests created
and provided for thereunder remain in full force and effect and shall not be
affected, impaired or discharged hereby. Nothing herein contained shall in any
manner affect or impair the priority of the liens and security interests created
and provided for by the Security Agreement as to the indebtedness which would be
secured thereby prior to giving effect to this Agreement.

     4.2  The Credit Agreement shall continue in full force and effect in
accordance with its original terms.

     4.3  The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Lender in connection with the negotiation, preparation,
execution and delivery of this Agreement, including the fees and expenses of
counsel for the Lender.

     4.4  This Agreement may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Agreement by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Agreement shall be governed by the internal laws of the State of Illinois.

Dated as of March 30, 2001.

                         HOMEGOLD, INC.

                         By:
                         Name:  William E. Long
                         Its: Executive Vice President

Accepted and agreed to in Wood Dale, Illinois as of the date and year last above
written.

                         HOUSEHOLD COMMERCIAL FINANCIAL SERVICES, INC.

                         By:
                         Name:  Loren J. Morris
                         Its: Vice President

#45457v1 - Household Finance - Homegold Third Extension re Forbearance Agreement
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CONSENT

     A. CORPORATE GUARANTORS. The undersigned have heretofore executed and
delivered to the Lender (i) a Guaranty dated May 2, 2000 (the "Guaranty') and
(ii) a Security Agreement dated May 2, 2000 (the "Security Agreement'). Each of
the undersigned hereby consents to the Agreement set forth above and confirms
that the Guaranty and the Security Agreement remain in full force and effect in
accordance with the terms thereof. Each of the undersigned further agrees that
the consent of the undersigned to any further modifications to the Forbearance
Agreement or to the Credit Agreement shall not be required as a result of this
consent having been obtained, except to the extent, if any, required by the
Guaranty or Security Agreement.

HOMEGOLD FINANCIAL, INC.
By:
Name: William E. Long
Its:  Executive Vice President

CAROLINA INVESTORS, INC.
By:
Name: William E. Long
Its:  Executive Vice President

PREMIER FINANCIAL SERVICES INC.
By:
Name: William E. Long
Its:  Executive Vice President

LOAN PROS, INC.
By:
Name: William E. Long
Its:  Executive Vice President

EMERGENT BUSINESS CAPITAL ASSET BASED LENDING, INC.
By:
Name: William E. Long
Its:  Executive Vice President

REEDY RIVER VENTURES, LP
By:
Name: William E. Long
Its:  Executive Vice President

EMERGENT SBI
By:
Name: William E. Long
Its:  Executive Vice President

EMERGENT COMMERCIAL MORTGAGE, INC.
By:
Name: William E. Long
Its:  Executive Vice President

EMERGENT BUSINESS CAPITAL, INC.
By:
Name: William E. Long
Its:  Executive Vice President

EMERGENT INSURANCE AGENCY CORP. By:
Name: William E. Long
Its:  Executive Vice President
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EMERGENT MORTGAGE CORP. OF TENNESSEE
By:
Name: William E. Long
Its:  Executive Vice President

HOMEGOLD REALTY, INC.
By:
Name: William E. Long
Its:  Executive Vice President

     B. INDIVIDUAL GUARANTOR. The undersigned has heretofore executed and
delivered to the Lender a Guaranty dated October 25, 2001 (the "Guaranty'). The
undersigned hereby consents to the Agreement set forth above and confirms that
the Guaranty remains in full force and effect in accordance with the terms
thereof. The undersigned further agrees that at the consent of the undersigned
to any further modifications to the Forbearance Agreement or to the Credit
Agreement shall not be required as a result of this consent having been
obtained, except to the extent, if any, required by the Guaranty.

                                        RONALD J. SHEPPARD<PAGE>

                                   AGREEMENT

     THIS AGREEMENT is entered into by and between HomeGold Financial, Inc.
("HomeGold") and Ronald J. Sheppard ("Sheppard").

     WHEREAS, HomeGold entered into a Reorganization Agreement with HomeSense
Financial Corp. and its Affiliated Companies dated February 9, 2000, which
Agreement was consummated as of May 9, 2000, and

     WHEREAS, each of HomeGold and HomeSense made certain warranties and
representations in connection with said Reorganization Agreement, and Sheppard,
as the principal shareholder of HomeSense also undertook certain obligations
pursuant to related agreements, and

     WHEREAS, in view of the events which have occurred following the
consummation of the Reorganization Agreement, all parties agree that it would be
in the best interests of the parties, as well as the shareholders of HomeGold,
to enter into this Agreement in order to resolve all matters with respect to the
Reorganization Agreement with finality and the parties wish to resolve all such
matters on the terms set forth herein:

          NOW, THEREFORE, it is agreed

     That Sheppard shall continue to be a guarantor with respect to HomeGold's
     warehouse lines with RMST and Household, amounting to approximately $60
     million notwithstanding the obligation undertaken by IlomeGold under the
     Reorganization Agreement to attempt to relieve him from such guaranties.
     Sheppard shall not, however, have any obligation to guaranty any renewal or
     refinancing of any such indebtedness. Notwithstanding the foregoing,
     Sheppard's voluntary agreement to guarantee the Imperial line ($25 million)
     is acknowledged.

     Sheppard does hereby assign to HomeGold for cancellation those certain
     options for purchase of 825,423 shares of HomeGold stock pursuant to
     Employment and Noncompetition Agreement dated May 9, 2000.

     The Mutual Indemnity Agreement dated May 9, 2000 is cancelled and neither
party shall have any responsibility or obligation thereunder and each party
hereby releases the other from any and all claims and causes of action arising
under the Reorganization Agreement or related agreements as of the date hereof.

     IN WITNESS WHEREOF, the Agreement is executed by and between HomeGold
Financial, Inc. and Ronnald J. Sheppard this 30/th/ day of January, 2001.

                                    HOMEGOLD FINANCIAL, INC.

 Forrest E. Ferrell                     John M. Sterling
 President                              Chairman

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