Document:

EXHIBIT 10.7

Below is the form of the Employment Severance Agreement entered into between the
Company and the persons listed below, including the dates of the agreements, and
the number of months of severance compensation under item 4.2:
<TABLE>
<CAPTION>
         Individual                 Date of Agreement         Months of Severance Protection
         ----------                 -----------------         ------------------------------
<S>                                       <C>                          <C>
         H. Kim Bullard             April 7, 2000                      12 months
         William E. Long, Jr.       April 6, 2000                      12 months
         Kevin J. Mast              April 6, 2000                      24 months
         Karen A. Miller            April 6, 2000                      12 months
         Laird Minor                April 7, 2000                      12 months
</TABLE>
                         EMPLOYMENT SEVERANCE AGREEMENT

         THIS EMPLOYMENT SEVERANCE AGREEMENT is entered into by and between
HomeGold Financial, Inc., a South Carolina corporation, and all of its
subsidiaries and affiliates (collectively, the "Corporation") and ___________
(the "Executive"), this ____ day of April, 2000.

         The Board of Directors of the Corporation has determined that it is in
the best interests of the Corporation and its stockholders to aid in the
competitive employment and retention of key executives and to diminish the
distraction of its executives and assure that the Corporation will have the
continued dedication of its executives notwithstanding the possibility, threat
or occurrence of a change in control.

         In order to accomplish these objectives, the Board of Directors has
authorized the Corporation to enter into this Employment Severance Agreement
(the "Agreement") with the Executive.

1.       COVERAGE

         1.1     This Agreement provides for the payment of severance
                 compensation to the Executive if his or her employment is
                 terminated in any manner which is other than a Termination for
                 Cause, a Voluntary Termination, or the retirement, death, or
                 disability of the Executive.

         1.2      This Agreement also provides for the payment of severance
                  compensation to the Executive if the Executive's resignation
                  is based upon:

                  (a) a substantial reduction in responsibility, or authority of
                  Executive without consent of the Executive; or

                  (b) a relocation of Executive's services to a location which
                  is a more than 35 miles from the location where Executive was
                  primarily employed immediately preceding the effective date of
                  this Agreement without the written consent of the Executive;
                  or

(c)      any reduction in an Executive's Base Salary in excess of ten percent;

                  none of which shall be deemed a Voluntary Termination.

2.       DEFINITIONS

         2.1      "Base Salary" means the base rate of compensation paid to the
                  Executive immediately preceding the month during which the
                  Date of Termination occurs, without regard to bonus or
                  incentive

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<PAGE>

                  payments, relocation or other allowances or payments under any
                  benefit plan or perquisites of any nature.

         2.2      "Corporation" means HomeGold Financial, Inc. and its
                  subsidiaries and affiliated companies.

         2.3      "Date of Termination" means the last date on which the
                  Executive is actively employed by the Corporation.

         2.4      "Executive" means the officer whose name appears the recital
                  of this Agreement.

         2.5      "Termination for Cause" means:

                  (a) in the judgment of management of the Corporation,
                  continuing and habitual failure to perform the material duties
                  of the Executive or willful breach in material respects of the
                  obligations of Executive to the Corporation, either of which
                  cause significant harm to the Corporation;

                  (b) in the judgment of management of the Corporation, an act
                  of willful misconduct or gross negligence in the performance
                  of an Executive's material duties or obligations to the
                  Corporation, except in the event of Executive's disability,
                  causing significant harm to the Corporation; or

                  (c) in the judgment of management of the Corporation, an act
                  of dishonesty or breach of trust on the part of an Executive
                  resulting or intended to result directly or indirectly in
                  personal gain or enrichment at the expense of the Corporation;
                  or

                  (d) failure to be acquitted of any criminal offense or acts:
                  (i) constituting a felony under the laws of the United States
                  of America or any state thereof; or (ii) involving dishonesty
                  or a breach of trust.

         2.6      "Voluntary Termination" means any termination not by the
                  Corporation, except a resignation based upon the circumstances
                  described in subparagraph 1.2 above.

3.       EMPLOYMENT

         3.1      So long as Corporation employs Executive, said employment
                  shall be "at will."

         3.2      Nothing in this Agreement will limit the Executive's
                  continuing or future participation during his or her
                  employment in any benefit, bonus, incentive or other plans
                  provided by the Corporation.

4.       SEVERANCE COMPENSATION AND BENEFITS

         4.1      The Executive whose employment is terminated under
                  circumstances covered by Paragraph I above shall be paid by
                  the Corporation severance compensation in cash in a lump sum
                  within Thirty (30) days following the Date of Termination.

         4.2      The Executive whose employment is terminated under
                  circumstances covered by Paragraph I above shall receive
                  severance compensation in the amount of ___________ months of
                  Base Salary, plus payment of any bonus or incentive pay earned
                  and due in accordance with any applicable plan or policy of
                  the Corporation.

         4.3      The Executive shall not be obligated to seek other employment
                  in mitigation of the severance compensation payable under this
                  Agreement and any subsequent employment, if obtained, shall
                  not in any manner effect the payments to be made hereunder.

         4.4      The Executive and his or her family will continue to be
                  covered under Corporation's medical insurance policy for
                  twelve (12) months following termination under circumstances
                  covered by Paragraph 1 above.

                                       2
<PAGE>
         4.5      Upon termination under circumstance covered by paragraph 1
                  above, all stock options held by Executive to purchase the
                  Company's stock shall be exercisable for the period of twelve
                  (12) months following termination of Executive's employment.

         4.6      Payment of any benefits (other than severance compensation)
                  under any other benefit plan of the Corporation shall be made
                  in accordance with the terms of such plan.

         4.7      The Corporation may withhold from any amounts payable under
                  this Agreement such federal, state and local taxes as shall be
                  required pursuant to applicable laws or regulations.

5.       ENFORCEMENT

                 The prevailing party shall be entitled to recover from the
                 non-prevailing party all legal fees and expenses of the
                 prevailing party in the event there is a disagreement between
                 the parties hereto concerning the validity or enforceability
                 of, or any determination under, this Agreement.

6.       OUTPLACEMENT

                  The Executive terminated under circumstances covered by
                  Paragraph I herein shall, at the request of Executive, receive
                  outplacement services for three months with Right Associates
                  or a comparable agency, at the cost of the Corporation.

7.       SUCCESSORS, ASSIGNMENT AND ASSUMPTION

         7.1      The Executive may not assign the benefits provided by this
                  Agreement. Notwithstanding the foregoing, the benefits
                  provided herein may be enforced by an Executive's heirs or
                  legal representatives.

         7.2      The Corporation shall require any successor (whether direct or
                  indirect, by purchase, merger, consolidation or otherwise) to
                  all or substantially all of the business and/or assets of the
                  Corporation to expressly assume this Agreement and provide the
                  benefits hereunder in the same manner and to the same extent
                  that the Corporation would be required to perform as if no
                  such succession had taken place. As used in this Agreement,
                  "Corporation" shall mean the Corporation as defined above and
                  any successor to its business and/or assets as aforesaid which
                  assumes and agrees to perform this Agreement by operation of
                  law, or otherwise.

8.       MISCELLANEOUS

         8.1      If the Corporation does not breach any material term of this
                  Agreement, receipt by Executive of all severance compensation
                  hereunder shall operate as a general release of Corporation
                  for any claim of wrongful discharge and/or discrimination.

         8.2      If the Corporation does not breach any material term of this
                  Agreement, Executive commits not to: (a) disparage the
                  Corporation to any third parties, (b) disclose confidential
                  information concerning the Corporation to third parties,
                  and/or (c) solicit the Corporation's employees or customers
                  for a period of two years.

         8.3      This Agreement shall be governed by and construed in
                  accordance with the laws of the State of South Carolina.

         8.4      This Agreement contains the entire agreement of the parties
                  and may not be amended or modified except by further written
                  agreement executed by the parties hereto.

                                       3
<PAGE>

         8.5      The invalidity or non-enforceability of any provision of this
                  Agreement shall not affect the validity or enforceability of
                  any other provision of this Agreement and this Agreement shall
                  be construed in all respects as if such invalid or
                  unenforceable provision were omitted.

         8.6     The Executive's failure to insist on the strict compliance with
                 or performance of any provision of this Agreement shall not be
                 deemed to be a waiver of that provision or any other provision
                 of this Agreement.

         8.7     All notices, consents, waivers or communications which are
                 required or permitted hereunder shall be sufficient if given in
                 writing and delivered personally or by registered or certified
                 mail, return receipt requested, postage prepaid, as follows (or
                 to such other addressee or address as shall be set forth in a
                 notice given in the same manner):

If to the Corporation:

         HomeGold Financial, Inc.
         3901 Pelham Rd.
         Greenville, SC  29615
         Attn:    Chief Executive Officer

If to Executive:

         _______________________
         _______________________
         _______________________

All such notices shall be deemed to have been given when delivered or mailed in
the manner provided above.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date
first above written.

HomeGold Financial, Inc.                             Executive

By: ____________________                             Signature: ________________

Name: John M. Sterling, Jr.                           Name: ____________________

Title:  Chairman and Chief Executive Officer

                                       4EXHIBIT 10.8

STATE OF SOUTH CAROLINA    )
                           )        EMPLOYMENT AND NONCOMPETITION
                           )        AGREEMENT
COUNTY OF GREENVILLE       )

         THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT ("Agreement") is made and
entered into effective as of the 1st day of May, 2000 (the "Effective Date") by
and between RONALD J. SHEPPARD, an individual ("Employee"), and HOMEGOLD
FINANCIAL, INC., a South Carolina corporation headquartered in Greenville, South
Carolina (the "Company"). As used herein, the term "Company" shall include the
Company and any and all of its subsidiaries where the context so applies.

                               W I T N E S S E T H

         WHEREAS, the Company desires to enter into an employment relationship
with Employee on certain terms and conditions as set forth herein; and

         WHEREAS, Employee has agreed to accept such employment upon the terms
and conditions as set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

         1. POSITION. Subject to the terms and conditions of this Agreement, the
Company hereby employs the Employee and Employee hereby accepts such employment
as President and Chief Executive Officer of the Company.

         2. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings specified below.

         "Cause" shall mean: (a) fraud; or (b) embezzlement; or (c) conviction
of the Employee of any felony; or (d) a material breach of, or the willful
failure or refusal by the Employee to perform and discharge the Employee's
duties, responsibilities and obligations under this Agreement, as determined by
the Board in its reasonable judgment, or the failure of the Employee to follow
reasonable directives and performance standards established by the Board which
breach, failure or refusal remains uncured for a period of thirty (30) days
after receipt of a written request from the Board for cure; or (e) any act of
moral turpitude or willful misconduct by the Employee which is intended to
result in personal enrichment of the Employee at the expense of the Company, or
any of its affiliates, or which has a material adverse impact on the business or
reputation of the Company or any of its affiliates (such determination to be
made by the Board in its reasonable judgment); or

                                       1
<PAGE>

(f) intentional material damage to the property or business of the Company; or
(g) gross negligence; or (h) the ineligibility of the Employee to perform his
duties because of a ruling, directive or other action by any agency of the
United States or any state of the United States having regulatory authority over
the Company, which ineligibility remains uncured for a period of ninety (90)
days after receipt of a written request from the Board for cure.

         "Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute, rule or regulation of similar effect.

         "Common Stock" shall mean, the Company's common stock.

         "Disability" or "Disabled" shall mean the Employee's inability as a
result of physical or mental incapacity to substantially perform his duties for
the Company on a full-time basis for a period of six (6) months as determined in
good faith by the Board.

         "Involuntary Termination" shall mean the termination of Employee's
employment by the Employee which is due to (i) a substantial change of the
Employee's responsibilities, position (including status as President and Chief
Executive Officer of the Company, its successor or ultimate parent entity,
office, title, reporting relationships or working conditions) authority or
duties of this Agreement; or (ii) a substantial reduction in the Employee's
compensation or benefits.

         "Person" shall mean any individual, corporation, bank, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or other entity.

         3. DUTIES. During the term hereof, the Employee shall have such duties
and authority as are typical of someone in his position with a company such as
the Company, including, without limitation, those specified in the Company's
bylaws or those reasonably set forth by the Board. Employee shall report to the
Board. Employee agrees that during the Term hereof, he will devote his full
time, attention and energies to the diligent performance of his duties. Employee
shall not, without the prior written consent of the Company, at any time during
the Term hereof engage in any venture or activity which the Board may in good
faith consider to interfere with Employee's performance of his duties hereunder.

         4. TERM. Unless earlier terminated as provided herein, the Employee's
employment hereunder shall be for a term of three years commencing on the
Effective Date hereof (the "Term").

                  4.1 Upon Employee's death or Disability, the Company shall
have the right to terminate this Agreement immediately. Upon such termination,
the Employee (or his estate) shall be entitled to receive from the Company as
severance upon such termination, the compensation and benefits, as provided in
Sections 5.2, 5.3, and 5.4, through the date of Employee's death or Disability.

                                       2
<PAGE>

                  4.2 At any time, the Company shall have the right to terminate
Employee's employment immediately for Cause, after which the Company's
obligation hereunder shall cease as of the date of the termination.

                  4.3 Employee shall have the right to terminate his employment
hereunder if (i) the Company materially breaches this Agreement and such breach
is not cured within 30 days after written notice of such breach is given by
Employee to the Company; (ii) or there is an Involuntary Termination.

                    4.4 If Employee's employment is terminated other than
pursuant to Section 4.3, the Company's obligations under this Agreement shall
cease as of the date of such termination.

         5. COMPENSATION AND BENEFITS. In consideration of Employee's services
and covenants hereunder, Company shall pay to Employee the compensation and
benefits described below (which compensation shall be paid in accordance with
the normal compensation practices of the Company and shall be subject to such
deductions and withholdings as are required by law or policies of the Company in
effect from time to time, except as otherwise provided in this Section 5):

                  5.1 Annual Salary. During the Term hereof, the Company shall
pay to Employee an initial base salary of $250,000 per year in twenty six
bi-weekly installments or according to such other schedule as Employee and the
Company may agree to. Employee's salary will be reviewed by the Compensation
Committee of the Board at the beginning of each of its fiscal years and, in the
sole discretion of the Compensation Committee of the Board, may be adjusted for
such year.

                  5.2 Bonus. In addition to the above salary, the Company shall
pay to Employee an annual cash bonus, equal to two (2%) of the Net Income of the
Company for the fiscal year, before income taxes, as reflected on the Company's
audited financial statements. Such bonus shall be paid to Employee within thirty
(30) days after receipt of the Independent Auditor's Report on the Company's
audited financial statements as of December 31 or such other fiscal year end as
the Company may adopt.

                  5.3 Additional Bonus. In addition to the above salary and
bonus, the Company, until such time as none of the Company's 10.75% Senior Notes
due 2004 (the "Senior Notes") remain outstanding, shall pay to Employee on the
first (1st) day of each August, November, February and May commencing on August
1, 2000, a quarterly cash bonus in the amount of Two Hundred Thousand Dollars
($200,000.00) subject to adjustment as provided in this Section 5.3. In the
event such Senior Notes are no longer outstanding, the Company shall immediately
pay to Employee an amount equal to one quarter's cash bonus as set forth above,
multiplied by a fraction whose numerator is the number of days in such calendar
quarter which have elapsed until the date the final Senior Note is no longer
outstanding, and whose denominator is the total number of days in such calendar
quarter. In the event of any reduction in the number of shares of the Company's
Series A Non-convertible Preferred Stock (the "Preferred Stock") owned by
Employee from the number acquired by Employee on or about the date hereof, the
amount of the bonus provided for in this Section 5.3 shall automatically and
concurrently be reduced in equal proportion to the reduction in Preferred Stock
ownership of Employee. Such a

                                       3
<PAGE>

reduction in the bonus provided for in this Section 5.3 shall be made each time
the number of shares of Preferred Stock owned by Employee decreases. Unless the
Employee and the Company mutually agree otherwise in writing, the terms of this
Section 5.3 and the quarterly bonus payments payable hereunder shall survive the
termination of Employee's employment hereunder for any reason and shall survive
the expiration or termination of this Agreement.

                  5.4 Stock Options. The Company hereby grants to the Employee
the option to purchase up to Eight Hundred Twenty Five Thousand Four Hundred
Twenty Three (825,423) shares of Common Stock, on the terms and conditions set
forth in the attached Grant of Option.

                  5.5 Benefits. Employee shall be entitled to share in any
employee benefits generally provided by the Company to its most highly ranking
employees and officers for so long as the Company provides such benefits and to
any other benefits given to Employee in the sole discretion of the Board.

                  5.6 Business Expenses. As a condition of employment, Employee
is required to incur reasonable and necessary expenses for the promotion of the
business of the Company, including without limitation, expenses of
entertainment, travel, telephone costs and similar expenses. Provided that
Employee provides the Company with reasonable written documentation as required
under the Company's policies and procedures to support reimbursement, the
Company shall reimburse Employee for all such expenses reasonably incurred by
Employee in the performance of his duties under this Agreement.

         6.  CONFIDENTIALITY; NON-COMPETITION.

                  6.1 Covenant Term. Employee covenants and agrees that for so
long as he is employed by the Company and, unless his employment is terminated
by the Company without Cause or is terminated by Employee pursuant to Section
4.3 above, for a period of two (2) years after the date his employment is
terminated (the "Covenant Term"), he will not, directly or indirectly, engage in
any activity prohibited pursuant to the terms of this Section 6.

                  6.2 NonCompetition. Employee agrees that for the Covenant
Term, he will not, without the prior written consent of the Company, directly or
indirectly, (i) own, manage, operate, control or participate in, or be
associated with as a director, officer, shareholder, partner, joint venturer,
employee, consultant or otherwise, any financial services business including,
but not limited to, consumer lending which competes, directly or indirectly,
with the Company within any metropolitan statistical service area in which the
Company provides such services on the date of termination of Employee's
employment (the "Prohibited Business"); (ii) become financially interested in
any person or entity engaged in any such Prohibited Business, other than as a
passive investor owning, directly or indirectly, not more than 5% of the equity
securities of a public corporation; (iii) solicit or attempt to solicit any
employee of the Company either to work for the Employee personally or on behalf
of any other person or entity whether or not engaged in a Prohibited Business;
or (iv) solicit or attempt to solicit, for the purpose of providing the services
identified in subpart (i) above, any customer of the Company with which the
Employee had material

                                       4
<PAGE>

contact during the twelvemonth period immediately prior to the Employee's
departure from the Company.

                  6.3 NonDisclosure of Confidential Information. As used in this
Agreement, the term "Confidential Information" shall mean any information which
(i) is not generally available to the public or within the Company's field of
industry; and (ii) pertains to or relates in any way to the Company or its
businesses, proprietary techniques, know-how, independent interpretations of
market information, strategic plans and organizational approaches, activities,
products or services including, without limitation, financial information,
analyses, intellectual property rights, employee compensation information,
reports, marketing methods or other trade secrets. Employee acknowledges that he
may come into possession of certain Confidential Information of the Company or
its affiliates, and agrees that all such Confidential Information is the sole
and exclusive property of the Company. During the Covenant Term, Employee shall
not disclose any such Confidential Information, directly or indirectly, nor use
it in any way, either during the Covenant Term or at any time thereafter, except
as required by law or by any court or governmental agency or body. All files,
records, documents, pricing and other information, data and similar items in any
medium whatsoever relating to the business, assets or prospects of the Company
or its affiliates, whether prepared by Employee or otherwise coming into his
possession, shall remain the exclusive property of the Company and shall not be
copied or removed from the premises of the Company without the Company's prior
written consent. The terms of this Section 6.3 are not intended to limit any
definitions, protections or remedies available to the Company under any local,
state or federal law applicable to trade secrets or confidential information.

                  6.4 Remedies. Employee acknowledges that any violation of this
Section 6 will cause irreparable harm to the Company and that damages are not an
adequate remedy. Employee therefore agrees that the Company shall be entitled to
injunctive relief enjoining, prohibiting and restraining Employee from the
continuance of any such violation, in addition to any monetary damages which
might occur by reason of a violation of this Section 6 or any other remedies at
law or in equity, including, without limitation, specific performance.

                  6.5 Independent Covenants. The covenants set forth in this
Section 6 are and shall be deemed and construed as separate and independent
covenants. Should any part or provision of such covenants be held invalid, void
or unenforceable by any court of competent jurisdiction, such invalidity or
unenforceability shall not render invalid, void or unenforceable any other part
or provision thereof. Specifically, and without limiting the generality of the
foregoing, if any portion of this Section 6 is found to be invalid by a court of
competent jurisdiction because its duration, the territory and/or the restricted
activities are invalid or unreasonable in scope, such duration, territory and/or
restricted activity, as the case may be, shall be redefined by consideration of
the reasonable concerns and needs of the Company such that the intent of the
Company, in consummating the transactions contemplated by the Agreement will not
be impaired and shall be enforceable to the fullest extent permissible under
applicable laws.

                                       5
<PAGE>

         7. ASSIGNMENT. The parties acknowledge that this Agreement has been
entered into due to, among other things, the special skills of Employee, and
agree that Employee may not assign any of his rights or delegate any of his
duties or obligations under this Agreement. The rights and obligations of
Company under this Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company.

         8. NOTICES. All notices, requests, demands, and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or seven days after mailing if mailed, first class,
certified or registered mail, postage prepaid:

         To the Company:            John M. Sterling Jr.
                                    HomeGold Financial, Inc.
                                    3901 Pelham Road
                                    Greenville, South Carolina  29615

         Copies to:                 William E. Long, Jr.
                                    HomeGold Financial, Inc.
                                    3901 Pelham Road
                                    Greenville, South Carolina  29615

                                    Cary H. Hall, Esq.
                                    Wyche, Burgess, Freeman & Parham, P.A.
                                    Post Office Box 728 (29602-0728)
                                    44 East Camperdown Way
                                    Greenville, South Carolina 29601

         To Employee:               Ronald J. Sheppard
                                    113 Reed Avenue
                                    Lexington, South Carolina  29072

         Copy to:                   Mark L. Bender, Esq.
                                    Nexsen Pruet Jacobs & Pollard LLP
                                    P.O. Drawer 2426
                                    Columbia, South  Carolina 29202

Any party may change the address to which notices, requests, demands, and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.

         9. PROVISIONS SEVERABLE. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or

                                       6
<PAGE>

enforceability of the remaining provisions or covenants, or any part thereof, of
this Agreement, all of which shall remain in full force and effect.

         10. WAIVER. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition. No waiver shall be valid unless in writing signed by the
party sought to be bound.

         11. REPRESENTATIONS. Employee agrees that this Agreement constitutes
the legal, valid and binding obligation of Employee, enforceable in accordance
with its terms. Employee further represents and warrants to Company that he is
subject to no agreement or obligation (including, without limitation, any
non-competition or confidentiality agreement) or bound by any contract with any
Person, corporation, or other entity that would prohibit him from entering into
or delivering this Agreement or taking the position described herein or in any
way interfere with the performance of his duties and obligations to Company
under this Agreement. Employee agrees to indemnify and hold harmless the Company
and its officers, directors, employees, managers, members, shareholders and
agents from and against any (1) claim (and the expenses associated therewith,
including without limitation reasonable attorney's fees) by a third party under
a non-competition, confidentiality or similar agreement or (2) any loss arising
as a result of Employee's breach of any of Employee's representations or
warranties contained in this Agreement, including the exhibits and other
attachments hereto.

         12. AMENDMENTS AND MODIFICATIONS. This Agreement may be amended or
modified only by a writing signed by the parties hereto. The parties hereby
agree that this Agreement contains the entire agreement and understanding by and
between the parties with respect to Employee's employment, and no
representations, promises, agreements, or understandings, written or oral,
relating to the employment of the Employee by the Company not contained herein
shall be of any force or effect.

         13. GOVERNING LAW. The validity and effect of this agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of South Carolina, without giving effect to South Carolina's rules of conflicts
law, and regardless of the place or places of its physical execution or
performance.

         14. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.

                                       7
<PAGE>

         16. NO CONSTRUCTION AGAINST EITHER PARTY. In the event that there is
any dispute regarding the interpretation or construction of the provisions of
this Agreement, there shall be no presumption that any provision of this
Agreement is to be construed against either party hereto.

                               ******************

                                       8
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the day and year first above written.

         _______________________                     ___________________________
         Witness                                     RONALD J. SHEPPARD

                                                     HOMEGOLD FINANCIAL, INC.

         ________________________                    By: _______________________
         Witness                                     Name: _____________________
                                                     Title: ____________________

                                       9
<PAGE>

                                 GRANT OF OPTION

         1. Grant of Option. Subject to the terms and conditions hereinafter set
forth, The Company hereby grants to the Employee, as of the ___ day of April,
2000, options ("Options") to purchase up to Eight Hundred Twenty Five Thousand
Four Hundred Twenty Three (825,423) shares of the Common Stock of the Company
(the "Option Shares") at the Exercise Price of One Dollar and Seventy Five Cents
($1.75) per Share.

         2. Vesting of Option. The Options granted hereby shall vest as set
forth below:

         (a) Options hereunder shall vest and become exercisable upon, and only
upon, the issuance of shares pursuant to the exercise of any of the Outstanding
Options, as defined below. Options for sixty-seven shares hereunder shall vest
for each one hundred shares issued upon exercise of an Outstanding Option. Such
vested options shall lapse unless exercised by Employee within 180 days after
the Company gives him written notice of the issuance of the shares, pursuant to
the exercise of an Outstanding Option, which caused the vesting of such options
hereunder.

         (b) Upon the lapse, cancellation or expiration of any of the
Outstanding Options, 67 of the Options granted hereunder shall lapse for each
100 shares of the Outstanding Options which lapse, are cancelled or expire.

         (c)      The "Outstanding Options" are:

                  Options for 404,000 shares granted on or about December 2,
                  1998
                  Options for 584,134 shares granted during 1999
                  Warrants for 250,000 shares when granted to Raymond James

         3.  Exercise of Options.

         (a) The Employee may exercise the Option with respect to all or any
part of the number of Option Shares then exercisable hereunder by giving the
Company written notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least five days after
the giving of such notice unless an earlier time shall have been mutually agreed
upon.

         (b) Full payment by the Employee of the Exercise Price for the Option
Shares purchased shall be made on or before the exercise date specified in the
notice of exercise.

         4. Adjustment of and Changes in Shares of The Company . In any event of
any change in the outstanding shares of Common Stock of the Company by reason of
a stock dividend or distribution, recapitalization, merger, consolidation,
split-up, combination, exchange of shares or the like, the Company shall
appropriately adjust the number of Option Shares subject hereto and the Exercise
Price.

                                       10
<PAGE>

         5. No Rights of Shareholders. The Employee shall not have any of the
rights and privileges of a shareholder of the Company with respect to any Shares
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.

         6. Non-Transferability of Option. The Option hereunder shall be
exercisable only by the Employee and the Option shall not be transferable nor
shall the Option be subject to attachment, execution or other similar process.
In the event of (a) any attempt by the Employee to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option or (b) the levy of any
attachment, execution or similar process upon the rights or interest hereby
conferred, the Company may terminate the Option by notice to the Employee, and
it shall thereupon become null and void.

                                       11

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