Document:

<PAGE>

                              ASSUMPTION OF DEBT &
                        CONTRIBUTION TO CAPITAL AGREEMENT

         This Assumption of Debt and Contribution to Capital Agreement (this
"Agreement") is entered into by and between HomeGold Financial, Inc., a South
Carolina corporation ("HFI"), HomeGold, Inc., a South Carolina corporation
("HGI"), and Carolina Investors, Inc., a South Carolina corporation ("CII"), to
be effective as of December 31, 2000.

         WHEREAS, HGI is the borrower and CII is the lender under that certain
Subordinated Intercompany Promissory Note & Security Agreement dated December
28, 1998 pursuant to which HGI borrowed the principal amount of $10,000,000 from
CII (the "Equipment Note") secured by certain of HGI's equipment and proceeds
therefrom; and

         WHEREAS, HGI is the borrower and CII is the lender under that certain
Subordinated Warehouse Line of Credit dated December 1, 1998 with a maximum line
amount of $100,000,000 (the "Subordinated Warehouse"); and

         WHEREAS, HGI is the borrower and CII is the lender under that certain
Subordinated Intercompany Promissory Note dated June 30, 1998 in a principal
amount of up to $200,000,000 (the "HGI Subnote"), and CII is the borrower and
HGI is the lender under a similar Subordinated Intercompany Promissory Note
dated June 30, 1998 in a principal amount of up to $200,000,000 (the "CII
Subnote"), both of which were entered into in connection with the entry of HGI
and CII into a warehouse line of credit with The CIT Group/ Business Credit,
Inc. as the primary lender and administrative agent; and

         WHEREAS, as of December 31, 2000, the principal amount of all
outstanding indebtedness of HGI to CII and the accrued and unpaid interest
thereon is $100,840,449; and

         WHEREAS, HFI, HGI and CII desire that HFI assume all of HGI's
indebtedness to CII as of December 31, 2000 as a contribution by HFI to the
capital of HGI;

         NOW THEREFORE, in consideration of the mutual covenants set forth
herein, the parties hereto hereby agree as follows:

         1. HFI Assumption of HGI Debt to CII. As a contribution to the capital
of HGI, effective December 31, 2000, HFI hereby assumes all obligations, as
amended hereby, of HGI to CII under (a) the Equipment Note, (b) the Subordinated
Warehouse, (c) the HGI Subnote and (d) any other indebtedness of HGI to CII
(whether or not such indebtedness is evidenced by a writing).

         2. Documentation and Amendment of Terms of Debt Assumed. HFI, HGI and
CII hereby agree that, effective as of December 31, 2000, the terms and
provisions of (a) the Equipment Note, (b) the Subordinated Warehouse, (c) the
HGI Subnote and (d) any other indebtedness of HGI to CII (whether or not such
indebtedness is evidenced by a writing) are all collectively hereby amended,
restated and replaced in their entirety as set forth in the revolving promissory
note attached hereto as Exhibit A (the "HFI Revolver").

                                       1
<PAGE>

         3. HGI Guaranty of HFI Obligations Under the HFI Revolver. As a
condition of CII's entry into this Agreement, HGI hereby agrees to guaranty the
obligations of HFI to CII under the HFI Revolver by execution of the guaranty
attached hereto as Exhibit B and agrees that all of the property of HGI which
secures such guaranty as provided therein and which also secures the Equipment
Note and the Subordinated Warehouse shall continue to secure HGI's obligations
under such guaranty.

         4. CII Subnote Terminated. HGI and CII hereby (a) acknowledge that no
amounts are outstanding under the CII Subnote as of December 31, 2000, (b) agree
that the CII Subnote is hereby terminated as of December 31, 2000 and (c) hereby
acknowledge and agree that neither of them has any remaining obligation to the
other under the CII Subnote.

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Assumption of Debt and Contribution to Capital Agreement to be executed on its
behalf by its duly authorized officer as of the date first set forth above.

                                            HOMEGOLD FINANCIAL, INC.

                                            By: _________________________

                                            Name: _______________________

                                            Title: ________________________

                                            HOMEGOLD, INC.

                                            By: _________________________

                                            Name: _______________________

                                            Title: ________________________

                                            CAROLINA INVESTORS, INC.

                                            By: _________________________

                                            Name: _______________________

                                            Title: ________________________

                                       2<PAGE>

                                                                       Exhibit A
                            REVOLVING PROMISSORY NOTE

$125,000,000.00                                                December 31, 2000
                                                      Greenville, South Carolina

         For value received, the undersigned HOMEGOLD FINANCIAL, INC., a South
Carolina corporation (the "Borrower"), hereby promises to pay to the order of
CAROLINA INVESTORS, INC., a South Carolina corporation (the "Lender") (i) the
principal amount of One Hundred Twenty Five Million Dollars ($125,000,000), or
if less, an amount equal to the aggregate unpaid principal amount of loans made
from time to time by the Lender to the Borrower, and (ii) interest on the unpaid
principal amount of this Note from the date hereof, payable monthly in arrears
based on the average principal amount outstanding during such month, no later
than the 15th day of the following month until this Note is paid in full at the
per annum prime rate announced by the Wall Street Journal on the first day of
the month in which interest accrues plus two percent. Notwithstanding any other
provision of this Note, interest paid or becoming due hereunder shall in no
event exceed the maximum rate permitted by applicable law. Interest will be
calculated on a daily basis computed on the actual number of days elapsed over a
year of three hundred sixty-five (365) days. This Note shall mature, and all
outstanding amounts hereunder shall be due and payable, on December 31, 2005.

         This Note amends, restates and replaces collectively in their entirety
(1) that certain Subordinated Intercompany Promissory Note & Security Agreement
dated December 28, 1998 in the original principal amount of $10,000,000 by and
between HomeGold, Inc., as borrower, and Lender, (2) that certain Subordinated
Warehouse Line of Credit dated December 1, 1998, by and between HomeGold, Inc.,
as borrower, and Lender, (3) that certain Subordinated Intercompany Promissory
Note dated June 30, 1998 in a principal amount of up to $200,000,000 by and
between HomeGold, Inc. as borrower, and Lender, and (4) any and all other
indebtedness of HomeGold, Inc. to Lender (whether or not such indebtedness is
evidenced by a writing).

          The Borrower may at any time prepay the whole or any part of the
unpaid principal amount of this Note, without penalty or premium, with interest
accrued to the date fixed for prepayment.

          The Borrower expressly waives presentment, demand, protest, notice of
dishonor, notice of nonpayment and/or protest, and any and all other notices and
demands whatsoever, and agrees to remain bound until the principal and interest
are paid in full, notwithstanding any extension of time for payment or all or
any part of the principal or interest hereof and notwithstanding any inaction
by, or failure to assert any legal right available to Lender.

          In the event that this Note shall at any time after maturity or
default be placed with an attorney for collection, Borrower agrees to pay, in
addition to the entire remaining principal balance and accrued interest, all
costs of collection, including without limitation reasonable

                                       1
<PAGE>

attorneys fees, which attorneys fees shall be based upon the usual and customary
hourly rates of Lender's counsel and not based upon a percentage of the balance
due on this Note.

          Whenever Lender is referred to in this Note, such reference shall be
deemed to include the successors and assigns of Lender, including without
limitation subsequent assigns or holders of this Note, and all covenants,
provisions and agreements by or on behalf of Borrower which are contained herein
shall inure to the benefit of the successors and assigns of Lender.

          The Lender shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder, and no waiver
shall be valid unless in writing, signed by the Lender, and then only to the
extent therein set forth. A waiver by the Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Lender would otherwise have on any future occasion. No failure
to exercise nor any delay in exercising on the part of the Lender, any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by law.

          Any provision of this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         This Note shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of South Carolina applicable to
contracts made and to be performed therein without consideration as to choice of
law.

         In witness whereof, the Borrower has caused this Note to be executed on
its behalf by its duly authorized corporate officer, to be effective as of the
date first written above.

                                 HOMEGOLD FINANCIAL, INC.

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

ACCEPTED AND AGREED:

CAROLINA INVESTORS, INC.

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

                                       2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}]]