Document:

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                     WAREHOUSE LOAN AND SECURITY AGREEMENT
                     -------------------------------------

     This Warehouse Loan and Security Agreement ("Agreement") is made and
     entered into on this 3rd day of November, 2000, between  HomeGold, Inc., a
     South Carolina Corporation with its principal place of business located at
     3901 Pelham Road., Greenville, SC, 29615 ("Borrower"), and The Provident
     bank, an Ohio banking corporation with its principal place of business
     located at One East Fourth Street, Cincinnati, Ohio 45202 ("Provident").

                                  WITNESSETH:
                                  ----------

      WHEREAS, Borrower is engaged in the business of underwriting, processing,
      originating, closing, funding, purchasing, servicing and selling mortgage
      loans secured by first or second liens evidenced by mortgages on real
      property; and

      WHEREAS, Borrower has requested and Provident has agreed to finance the
      funding of mortgage loans by Borrower in connection with its origination
      thereof subject to the terms, conditions and limitations set forth in this
      Agreement.

      NOW, THEREFORE, in consideration of the premises, the extension of credit
      by Provident to Borrower, and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, Provident and
      Borrower agree as follows:

      1. DEFINITIONS. (a) When used in this Agreement, the following terms shall
         -----------
      have the following meanings and the terms defined elsewhere in this
      Agreement shall have the meanings assigned to them (such meanings to be
      equally applicable to both the singular and plural forms of the terms
      defined):

          "Advance" shall mean any amount loaned by Provident to Borrower under
           -------
this Agreement.

          "Affiliate" shall mean, in relation to any Person (in this definition
           ---------
called "Affiliated Person"), any Person (i) which (directly or indirectly)
controls or is controlled by or is under common control with such Affiliated
Person; or (ii) which (directly or indirectly) owns or holds five percent (5%)
or more of any equity interest in Borrower; or (iii) five percent (5%) or more
of whose voting stock or other equity interest is directly or indirectly owned
or held by Borrower. For the purposes of this definition, the term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of such Person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such Person or by contract or otherwise.

          "Assignment of Mortgage" shall mean, with respect to any Mortgage, an
           ----------------------
assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction in which the
related Mortgaged Property is located to reflect the assignment of the Mortgage.

          "Business Day" shall mean a day other than Saturdays, Sundays,
           ------------
holidays or other days on which the main office of Provident is not open for
business.

          "Cash Collateral Account" shall mean the demand deposit account
           -----------------------
comprising a portion of the Collateral and established and maintained by
Borrower with Provident pursuant to Section 5(d).

          "Change of Control" shall mean the time at which (i) any Person
           -----------------
(including a Person's Affiliates and associates) or group (as that term is
understood under Section 13(d) of the Securities Exchange Act of 1934 and the
rules and regulations thereunder), other than Management Shareholders and
Affiliates thereof (the "Control Group") or a group controlled by the Control
Group, has become the beneficial owner of a percentage (based on voting power,
in the event different classes of stock shall have different voting powers) of
the voting stock of Borrower equal to at least ten percent (10%), (ii) there
shall be consummated any consolidation or merger of Borrower pursuant to which
Borrower's common stock (or other capital stock) would be converted into cash,
securities or other property, other than a merger or consolidation of Borrower
in which the holders of such common stock (or such other capital stock)
immediately prior to the merger have the same proportionate ownership, directly
or indirectly, of common stock of the surviving corporation immediately after
the merger as they had of Borrower's common stock immediately prior to such
merger, or (iii) all or substantially all of Borrowers assets shall be sold,
leased, conveyed or otherwise disposed of as an entirety or substantially as an
entirety to any Person (including an Affiliate or associate of Borrower) in one
or a series of transactions.

          "Closing Date" shall mean the date on which Borrower sells, transfers
           ------------
or otherwise disposes of a Mortgage Loan funded and originated by Borrower with
an Advance made by Provident to Borrower under this Agreement.

                    "Collateral" shall have the meaning set forth in Section
                     ----------
          5(a).
<PAGE>

          "Collections" shall mean, collectively, all Sale Proceeds, all Payment
           -----------
Collections and all other collections and Proceeds on or in respect of the
Mortgage Loans.

                    "Cost and Fee Schedule" shall have the meaning set forth in
                     ---------------------
          Section 2(f).

          "Credit File" shall mean, as to each Mortgage Loan, a copy of the
           -----------
Mortgage and copies of all intervening assignments of mortgage, if any, with
evidence of recording thereon, showing a complete chain of title from the
originator to Borrower; the original attorney's opinion of title or the original
policy of title insurance, if not previously delivered to Provident; the
originals of all assumption, modification and extension agreements, if any; and
all applications, credit reports, salary or employment verifications,
appraisals, surveys, other underwriting and work papers, closing statements,
HUD-1 settlement statements and any addendums thereto, truth-in-lending
disclosures, right of recission notices, payment histories, and all other
closing documents and all other agreements, reports, certificates, documents and
instruments related thereto or obtained or prepared in connection therewith and
included or includable in Borrower's mortgage file relating to such Mortgage
Loan.

          "Default Interest Rate" shall mean an annual rate of interest which
           ---------------------
shall (to the extent permitted by applicable law) at all times be equal to four
percent (4%) above the Interest Rate.

                    "Demand For Payment" shall have the meaning set forth in
                     ------------------
          Section 4(a).

          "Document Custodian" shall mean Borrower, as custodian and bailee for
           ------------------
Provident, or any successor appointed by Provident at any time.

                    "Fees" shall have the meaning set forth in Section 2(f).

          "Funding Date" shall mean the date on which an Advance is made by
           ------------
Provident to Borrower under this Agreement.

          "Initial Collateral Package" shall mean, as to each Mortgage Loan: (i)
           --------------------------
the original Mortgage Note and the originals of all intervening endorsements, if
any, showing a complete chain of title from the originator of the Mortgage Loan
to Borrower, endorsed in blank (either on the Mortgage Note or a separate
allonge attached thereto); (ii) a certified copy of the original Mortgage and
copies of all intervening assignments of the Mortgage, if any; (iii) the
original Assignment of Mortgage in favor of Provident in recordable form for the
jurisdiction in which the Mortgaged Property is located; and (iv) the original
attorney's opinion of title or the original policy of title insurance (or if
such original policy of title insurance has not yet been received by Borrower, a
copy of such policy or a title insurance binder or commitment for the issuance
of such policy).

          "Interest Rate" shall mean an annual rate of interest which shall (to
           -------------
the extent permitted by applicable law) at all times be equal to the Prime Rate
plus the applicable margin determined by reference to the factors applicable to
such determination set forth in the Cost and Fee Schedule in effect on an
Interest Payment Date or Closing Date, as the case may be.

          "Lien" shall mean any lien, mortgage, pledge, security interest,
charge or other encumbrance of any kind including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any agreement to
give any security interest.

          "Loan Documents" shall mean this Agreement, the Security Documents,
           --------------
the Policies and Procedures, the Cost and Fee Schedule and any other instrument,
certificate or document executed in connection with or pursuant to this
Agreement whether concurrently herewith or subsequent hereto.

                    "Losses" shall have the meaning set forth in Section 1 l
                     ------
          (b).

          "Management Shareholders" shall mean those shareholders of Borrower
           -----------------------
who are senior executive officers of Borrower on the date of this Agreement.

                    "Maturity Date" shall have the meaning set forth in Section
                     -------------
          4(b).

          "Mortgage" shall mean the mortgage, deed of trust or other instrument
           --------
creating a first or second Lien on an estate in fee simple interest in the
Mortgaged Property securing a Mortgage Loan.

          "Mortgage Loan" shall mean any mortgage loan funded and originated by
           -------------
Borrower with any Advance made by Provident to Borrower under this Agreement.
<PAGE>

          "Mortgage Loan Documents" shall mean, with respect to a Mortgage Loan,
           -----------------------
the documents comprising the Initial Collateral Package and the Credit File for
such Mortgage Loan.

          "Mortgage Note" shall mean, with respect to a Mortgage Loan, the
           -------------
original note or other evidence of indebtedness pursuant to which the related
Mortgagor agrees to pay the indebtedness evidenced thereby and which is secured
by the related Mortgage.

          "Mortgaged Property" shall mean the underlying real property,
           ------------------
including all improvements and additions thereon, securing a Mortgage Loan.

                    "Mortgagor" shall mean the obligor or obligors under a
                     ---------
          Mortgage Note.

          "Other Obligations Secured Hereby" shall mean all of Borrower's debts,
           --------------------------------
obligations or liabilities of every kind, nature, class and description to
Provident (other than those under this Agreement and the other Loan Documents),
now due or to become due, direct or indirect, absolute or contingent, presently
existing or hereafter arising, joint or several, secured or unsecured, purchase
money or non-purchase money, related or unrelated, similar or dissimilar,
whether for payment or performance, regardless of how the same arise or by what
instrument, agreement or book account they may be evidenced, or whether
evidenced by any instrument, agreement or book account, including, without
limitation, all loans (including any loan by renewal or extension), and all
overdrafts, all guarantees, all bankers acceptances, all agreements, all letters
of credit issued by Provident for Borrower and the applications relating
thereto, all indebtedness of Borrower to Provident, all undertakings to take or
refrain from taking any action, and all indebtedness, liabilities and
obligations owing from Borrower to others which Provident may obtain by
purchase, negotiation, discount, assignment or otherwise.

          "Payment Collections" shall mean, collectively, all collections on the
           -------------------
Mortgage Loans attributed to the payment of the principal amount thereof,
accrued interest thereon or any fees, charges or other amounts payable
thereunder or in respect thereof.

          "Person" shall mean an individual, a company, a limited liability
           ------
company, a corporation, an association, a partnership, a joint venture, an
unincorporated trade or business enterprise, a trust, an estate, or other legal
entity or a government (national, regional or local), court, arbitrator or any
agency, instrumentality or official of the foregoing.

          "Prime Rate" shall mean the rate of interest published from time to
           ----------
time in the "Money Rates" column of The Wall Street Journal (Central Edition) as
                                    ------------------------
the "prime rate" or, if such rate ceases to be so published, then such other
rate as may be substituted by Provident as the prime rate, which may be the rate
of interest announced by Provident from time to time as its prime rate. The
Prime Rate shall change on each date the prime rate so published changes.

          "Policies and Procedures" shall mean Provident's Policies and
           -----------------------
Procedures for its Warehouse Division as of the date of this Agreement, as
amended, modified, restated or supplemented by Provident from time to time.

          "Sale Proceeds" shall mean (i) any proceeds received or receivable by
           -------------
Borrower with respect to or in respect of any sale, transfer or other
disposition of any Mortgage Loan and (ii) any proceeds received or receivable by
Borrower with respect to or in respect of any sale, transfer, disposition,
condemnation or casualty event and all other amounts from any disposition,
taking, damage or destruction of any Mortgaged Property acquired by Borrower
upon foreclosure (or deed in lieu of foreclosure) of any Mortgage Loan.

                    "Security Documents" shall have the meaning set forth in
                     ------------------
          Section 5(b).

          "Third Party Investor" shall mean any Person with whom Borrower has
           --------------------
contracted to sell any Mortgage Loan that has been funded and originated by
Borrower with any Advance made by Provident to Borrower under this Agreement.
Provident may itself be a Third Party Investor.

          "UCC" shall mean the Uniform Commercial Code as the same may, from
           ---
time to time, be in effect in the State of Ohio; provided, however, that in the
                                                           -------
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection, or priority of Provident's security interest in any of
the Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Ohio, the term "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection, or priority and for
purposes of definitions related to such provisions.

          (b)  All terms defined in the UCC and used in Section 5 of this
Agreement shall have the meanings assigned to such terms in the UCC.

          (c)  Where appropriate, words importing the singular only shall
include the plural and vice versa.

     2.     ADVANCES.
<PAGE>

          (a)  Subject to the terms and conditions hereof and the Policies and
Procedures, which are hereby incorporated herein by this reference, Provident
may elect, in its sole discretion, to make Advances to Borrower from time to
time in such amounts as Borrower may request. Nothing herein shall be deemed or
construed as a commitment by Provident to make any Advance hereunder and it is
expressly acknowledged and agreed by Borrower that the decision to make any
Advance hereunder is, and shall at all times be, wholly discretionary on the
part of Provident.

          (b)  In order to obtain Advances, Borrower shall comply with the
requirements set forth in this Agreement and the Policies and Procedures and
shall furnish Provident with such requests and all other documents Provident may
request or require at any time in connection with any Advance. In addition, the
following conditions precedent, unless waived in whole or in part by Provident,
shall be satisfied before Provident makes any Advance hereunder: (i) Provident,
in its sole discretion, shall have approved the underwriting of the Mortgage
Loans to be funded with any Advance; (ii) Borrower shall have provided Provident
with an insured closing letter, evidence of a current errors and omissions
insurance policy with limits of at least $1,000,000, an executed closing agent
agreement and wiring instructions for each closing agent used by Borrower to
close the Mortgage Loans funded with any Advance, each of which shall be
acceptable to Provident in its sole discretion; (iii) Borrower shall have
furnished Provident with an executed, recordable Power of Attorney covering the
items set forth in Section 5(e) hereof for each state in which Borrower does
business; and (iv) Provident, or its agent, bailee or designee, shall have
received the Initial Collateral Package for each of the Mortgage Loans funded
with any Advance. Each request for an Advance by Borrower shall constitute a
certification that each of the representations and warranties made by Borrower
to Provident in this Agreement or the other Loan Document shall be true and
correct in all material respects on and as of the date when made and shall, for
all purposes of this Agreement, be deemed to be repeated on and as of each date
an Advance is made by Provident to Borrower hereunder and shall be true and
correct in all material respects on and as of each of such date, except as
affected by the consummation of the transactions contemplated by this Agreement
and the other Loan Documents, and Borrower shall have performed, complied with
and observed all of its covenants and agreements contained in this Agreement and
the other Loan Documents on and as of each date an Advance is made by Provident
to Borrower hereunder.

          (c)  Advances hereunder will be made by Provident on behalf of
Borrower to third parties in connection with the funding of the Mortgage Loans
originated by Borrower. All matters relating to the funding of any Mortgage Loan
hereunder shall be acceptable to Provident in its sole discretion.

          (d)  Borrower represents, warrants and covenants to Provident that all
proceeds of all Advances shall be used by it solely to fund Mortgage Loans
originated by Borrower in the ordinary course of its business and for no other
use or purpose.

          (e) Advances for the funding of any Mortgage Loan originated by
Borrower shall not exceed one hundred percent (100%) of the original principal
amount of such Mortgage Loan.

          (f)  In connection with each Advance, Borrower agrees to pay Provident
the transaction fees charged by Provident with respect to the Mortgage Loans
funded and originated with such Advance ("Fees"). The amounts of Fees payable by
Borrower in connection with any Advance shall be determined by reference to the
Cost and Fee Schedule in effect on the Funding Date of such Advance (the "Cost
and Fee Schedule"). The Cost and Fee Schedule in effect on the date of this
Agreement is attached hereto as Schedule A. Any Cost and Fee Schedule shall
remain in effect until a new Cost and Fee Schedule is delivered to Borrower in
accordance with the requirements of Section I I (f).

     3. INTEREST PAYABLE ON ADVANCES. Borrower promises to pay to Provident
        ----------------------------
interest in arrears on the unpaid amount of each Advance made by Provident to
Borrower pursuant to this Agreement and on the unpaid amount of any interest not
paid when due at a variable rate of interest per annum equal at all times to the
Interest Rate. Interest shall be calculated on the daily unpaid amount of each
Advance from its Funding Date. Interest with respect to each Advance hereunder
shall be payable: (i) commencing on the date that is sixty-one (61) days after
the Funding Date of the Advance and continuing on the same day of each
consecutive month thereafter; and (ii) on its Maturity Date. Payments of
interest shall be due and payable as set forth above until payment in full of
all Advances. All interest under this Agreement shall be calculated on the basis
of a year consisting of 360 days (comprised of twelve 30 day months) and paid
for actual days elapsed.

     4.   TERMINATION; MANDATORY REPAYMENTS OF ADVANCES PRIOR TO TERMINATION
          ------------------------------------------------------------------

          (a)  Provident may, at any time, for any reason and without prior
notice, terminate this Agreement and demand that Borrower pay the aggregate
unpaid amount of all Advances made by Provident to Borrower pursuant to this
Agreement, all accrued and unpaid interest thereon as well as all Fees, charges
and other amounts payable hereunder and under the Loan Documents ("Demand For
Payment").

          Following a Demand for Payment, the aggregate unpaid amount of all
Advances made by Provident to Borrower pursuant to this Agreement, together with
all accrued and unpaid interest thereon as well as all Fees, charges and other
amounts
<PAGE>

payable hereunder and under the other Loan Documents shall be immediately due
and payable in full and no future or additional Advances will be made by
Provident to Borrower hereunder.

          (b)  Prior to termination of this Agreement as provided for above,
Borrower shall repay to Provident the unpaid amount of each Advance made by
Provident to Borrower hereunder, all accrued and unpaid interest thereon and all
Fees, charges and other amounts payable hereunder, on the earlier to occur of:
(i) the Closing Date on which Borrower sells or otherwise disposes of the
Mortgage Loan(s) funded and originated with the Advance whether by sale to a
Third Party Investor or otherwise; or (ii) on or before the applicable number of
days after its Funding Date set forth in the Cost and Fee Schedule under the
heading entitled "Days Allowed for Purchase by Third Party Investor" (the
earlier to occur of (i) or (ii) being referred to herein as the "Maturity
Date").

     5.    GRANT OF SECURITY INTEREST.

          (a)  To secure the prompt payment of the Advances, interest and all
other amounts payable hereunder and under the other Loan Documents and the due
and punctual performance and observance by Borrower of all of its other
covenants, obligations and liabilities under this Agreement and the other Loan
Documents and also to secure all of the Other Obligations Secured Hereby,
Borrower hereby grants to Provident a security interest in and to, and hereby
pledges and collaterally assigns to Provident, all of its rights, title,
interest and claims in, to and under all of the following property, wherever
located, whether now or hereafter owned, held or acquired, or hereafter existing
or arising (collectively, the "Collateral"):

               (i)    all Mortgage Loans;

               (ii)   all Mortgage Loan Documents including, without limitation,
     all Mortgage Notes, Mortgages and Assignments of Mortgages relating to the
     Mortgage Loans;

               (iii)  all rights to service or subservice the Mortgage Loans;

               (iv)   all certificates, notes and other securities of any kind
     whatsoever, residual or otherwise, issued to Borrower or now or hereafter
     owned, held or acquired by Borrower in connection with or related to any
     mortgage loan securitization or any asset-back transaction involving the
     Mortgage Loans;

               (v)    all of Borrower's rights under contracts or agreements to
     which Borrower is party (but none of its covenants, obligations or
     liabilities thereunder) in connection with the Mortgage Loans, including
     all contracts or agreements with all Third Party Investors and all
     attorney's opinions of title and title insurance policies;

               (vi)    the Cash Collateral Account and all funds in the Cash
     Collateral Account; and

               (vii)   all Proceeds of any and all of the foregoing Collateral
     in whatever form, including but not limited to, all payments made by
     Mortgagors to Borrower in connection with the Mortgage Loans and all
     premiums paid to Borrower by Third Party Investors in connection with the
     sales of the Mortgage Loans.

          (b)  Borrower shall take all actions necessary or appropriate under
all applicable laws, or as requested by Provident, to perfect, maintain and
preserve, and to continue as perfected, Provident's first lien and security
interest in the Collateral. Borrower shall pay all costs of preparing, recording
and filing UCC Financing Statements (and any continuation or termination
statements with respect thereto) and any other documents, titles, statements,
assignments or the like reasonably required to create, maintain, preserve or
perfect the liens or security interests granted under the Loan Documents,
together with costs and expenses of any lien or UCC searches required by
Provident in connection with the making of any Advance. At Provident's request,
Borrower shall execute and deliver to Provident at any time and from time to
time hereafter, all supplemental documentation that Provident may reasonably
request to perfect, maintain, preserve or continue the security interest and
liens in the Collateral granted Provident hereby and under any of the other Loan
Documents (collectively, the "Security Documents"), in form and substance
acceptable to Lender, and pay the costs of preparing and recording or filing of
the same. Borrower agrees that a carbon, photographic, or other reproduction of
this Agreement or of a financing statement is sufficient as a financing
statement. Borrower shall promptly notify Provident concerning any changes in
its name, identity or structure, concerning any changes in the address(es) of
its chief executive office or other places of business or concerning any changes
in its trade name(s) or name(s) under which it does business.

          (c)  The Document Custodian shall maintain possession of each Credit
File and the Mortgage Loan Documents comprising each Credit File (other than the
Initial Collateral Package) for each Mortgage Loan. Promptly after Provident's
request therefor, Borrower, at its expense, shall cause the Credit Files held by
the Document Custodian to be delivered to Provident or its agent, bailee or
other designee.

          (d)  Borrower shall, at all times, maintain the Cash Collateral
Account with Provident. Borrower shall deposit or cause to be deposited all
Collections into the Cash Collateral Account when and as Collections are
received or receivable by Borrower. Withdrawals
<PAGE>

may be made from the Cash Collateral Account by Borrower in accordance with the
Policies and Procedures. Provident is hereby authorized to withdraw funds from
the Cash Collateral Account from time to time, either before or after
Provident's Demand for Payment, and to apply such withdrawals to the payment of
the Advances, accrued and unpaid interest thereon and Fees, charges and other
amounts payable hereunder or under the other Loan Documents.

          (e)  Borrower hereby makes, constitutes and appoints Provident (by any
of its officers, employees or agents), its true and lawful agent and attorney-
in-fact and hereby gives and grants to Provident full power and authority to do
and perform each and every act whatsoever requisite, necessary and proper (i) to
endorse the related Mortgage Note to the Third Party Investor that purchases any
Mortgage Loan; (ii) to endorse any original Mortgage Note to Provident or the
purchaser thereof should Borrower default in its obligations hereunder; (iii) to
prepare, execute and record on behalf of Borrower any Assignment of Mortgage;
(iv) at the sole option of Provident, to prosecute, in Borrower's or Provident's
name, any and all claims or causes of action collaterally assigned to Provident
hereunder; and (v) to do and perform every act necessary to place Provident in
position to enforce the payment of any Mortgage Loan.

     6.   BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower represents and
          -----------------------------------------
warrants to Provident as follows as of the date hereof and as of each Funding
Date:

          (a)  Borrower is and shall at all times be, duly organized, validly
existing and in good standing under the laws of the State set forth in the first
paragraph of this Agreement and has, and shall at all times have, full power and
authority and legal right to engage in and carry on Borrowers business as now
being conducted, to undertake the borrowings contemplated hereby and to execute
and deliver each of the Loan Documents. Borrower is qualified and licensed in
each jurisdiction wherein the nature or conduct of its business make such
qualification necessary or advisable. Borrower is currently qualified and
licensed in good standing in each such jurisdiction. Borrower's name as set
forth in the caption of this Agreement and as set forth on the signature page of
this Agreement is Borrower's correct individual, partnership or corporate name,
as the case may be.

          (b)  Borrower has full power and authority and legal right to enter
into this Agreement and each of the other Loan Documents, and to perform,
observe and comply with all of its agreements and obligations under each of such
documents, including without limitation, the making by Borrower of the
borrowings contemplated hereby and the granting by Borrower of the security
interest in the Collateral pursuant to Section 5.

          (c)  The execution and delivery by Borrower of this Agreement and the
other Loan Documents, the performance by Borrower of all of its agreements and
obligations hereunder and thereunder and the making by Borrower of the
borrowings contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Borrower and do not and will not
constitute a breach, violation or event of default (or an event which would
become an event of default with the lapse of time or notice or both) under any
judgment, decree, note, agreement, indenture or other instrument to which
Borrower is a party or otherwise subject.

          (d)  Borrower owns or possesses all rights, licenses, permits,
franchises and the like necessary for the conduct of its business as presently
conducted and proposed to be conducted. All of the foregoing rights, licenses,
permits and franchises are in full force and effect, and Borrower is in
compliance with all of the foregoing. No event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such right, license, permit or franchise, or affects the
rights of Borrower thereunder.

          (e)  The balance sheets, statements of income and other financial
statements previously delivered to Provident present fairly the financial
condition and results of operations of Borrower as of the dates thereof and for
the fiscal periods then ended. There are no material liabilities or obligations,
secured and unsecured (whether accrued, absolute or actual, contingent or
otherwise), which were not reflected in the balance sheets of Borrower as of the
dates thereof.

          (f)  No changes have occurred in the assets, liabilities or financial
condition of Borrower from those reflected on the most recent balance sheet
delivered to Provident (the "Current Balance Sheet") which, individually or in
the aggregate, have been adverse. Since the date of the Current Balance Sheet,
there has been no adverse development in the business or in the operations or
prospects of Borrower.

          (g)  Borrower is the sole owner of and has good and marketable title
to the Collateral, free and clear of all Liens and encumbrances whatsoever,
except for the security interest granted by Borrower pursuant to Section 5. All
information famished to Provident concerning the Collateral is and will be
complete, accurate and correct in all respects when furnished.

     7.   COVENANTS REGARDING THE BORROWER. Borrower covenants and agrees with
          --------------------------------
Provident as follows:

          (a)  Borrower shall deliver to Provident as soon as available and, in
any event, within thirty (30) days after the end of each calendar quarter,
quarterly unaudited financial statements of Borrower and within seventy-five
(75) days after the end of each fiscal year of Borrower, annual financial
statements of Borrower which, in each case, shall include a balance sheet,
statement of income, statement of
<PAGE>

changes in financial position and notes to financial statements. Provident
reserves the right to require Borrower to deliver audited annual financial
statements.

          Such financial statements shall be certified by the chief executive
officer of Borrower to the effect that such financial statements reflect, in his
opinion and in the opinion of senior management of Borrower, all adjustments
necessary to present fairly the financial position of Borrower as at the end of
such quarter or year, as the case may be, and the results of its operations for
the period then ended.

          (b)  Borrower shall deliver to Provident all information Provident may
reasonably request at any time and from time to time concerning its business,
financial condition, results of operations, the Mortgage Loans financed
hereunder or the other Collateral.

          (c)  Borrower covenants to keep the Credit File for each of the
Mortgage Loans financed hereunder at all times at Borrower's business premises
or at such other location or locations as Provident may approve in writing.
Borrower further covenants to deliver the Credit File(s) to Provident upon
demand by Provident, which demand may be made in Provident's sole and absolute
discretion.

          (d)  Borrower shall pay or cause to be paid all taxes, assessments and
other governmental charges imposed upon its properties or assets or in respect
of any of its franchises, business, income or profits before any penalty or
interest accrues thereon, and all claims (including, without limitation, claims
for labor, services, materials and supplies) for sums which have become due and
payable and which by law have or might become due and payable and which by law
have or might become a lien or charge upon any of its properties or assets,
provided that (unless any material item of property would be lost, forfeited or
materially damaged as a result thereof) no such charge or claim need be paid if
the amount, applicability or validity thereof is currently being contested in
good faith and if such reserve or other appropriate provision, if any, as shall
be required by generally accepted accounting principles shall have been made
therefor.

          (e)  At any time or times during Borrower's usual business hours,
Borrower shall permit Provident (by any of its officers, employees or agents) to
enter upon Borrower's business premises for any of the following reasons: (i) to
inspect the Collateral and any books or records related thereto (including
making copies of and extracts therefrom), (ii) to verify the amount, quality,
quantity, value or condition of, or any other matter relating to, the
Collateral, (iii) to examine all of the other books and records of Borrower
(including making copies of and extracts therefrom), including those relating to
its tax records, payroll records and insurance records, and (iv) to discuss the
business, financial condition or results of operations with any of Borrower's
officers, employees, agents or accountants. Borrower covenants to pay Provident
a reasonable audit fee and reimburse Provident for its out-of-pocket expenses
for all inspections, audits and examinations conducted by Provident other than
regular monthly audits.

          (f)  Borrower covenants to comply with all federal, state and local
laws, rules, regulations and orders applicable to it and its business.

          (g)  Borrower agrees to notify Provident in writing within fifteen
(15) calendar days of any proposed Change of Control or any proposed, or
completed, change in the executive management of Borrower, including, but not
limited to, any management change in the office of president, or any change in
the management of Borrower's underwriting department. Borrower further agrees to
notify Provident in writing at least thirty (30) days in advance of any change
in the location of its principal place of business or of any proposed change in
the name of Borrower or the opening or closing of any office.

          (h)  Borrower shall not at any time create, assume, incur or permit to
exist, any Lien or other encumbrance in respect of any of the Collateral.

     (i)  Borrower agrees to give Provident prompt notice of any development,
financial or otherwise, which would materially adversely affect its business,
properties or affairs or the ability of Borrower to perform its obligations
under this Agreement

     9.   COVENANTS REGARDING THE MORTGAGE LOANS. Borrower further covenants and
          --------------------------------------
agrees with Provident as follows with respect to each Mortgage Loan to be
financed by Provident hereunder.

          (a)  As of its Funding Date, the Initial Collateral Package and Credit
File relating to the Mortgage Loan shall contain each of the documents and
instruments specified herein to be included therein.

          (b)  The related Mortgage shall be a valid and enforceable first or
second Lien of record on the Mortgaged Property subject, in the case of any
second Mortgage Loan, only to a first Lien on such Mortgaged Property and
subject in all cases to the exceptions to title set forth in the title insurance
policy or attorney's opinion of title with respect to the related Mortgage Loan,
which exceptions shall be acceptable to Provident.

          (c)  Borrower shall hold good, marketable and indefeasible title to,
and be the sole owner and holder of, the Mortgage Loan subject to no Liens or
rights of others.
<PAGE>

          (d)  The Mortgage Loan shall not be subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor shall the operation of any of the terms of the Mortgage Note or Mortgage, or
the exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense shall have
been asserted with respect thereto.

          (e)  The Mortgage Loan shall comply with, and shall at all times be
serviced in compliance with, in all material respects, applicable state and
federal laws and regulations, including, without limitation, usury, equal credit
opportunity, consumer credit, truth-in-lending and disclosure laws.

          (f)  With respect to the Mortgage Loan, either (i) a lender's title
insurance policy, issued in standard American Land Title Association or
California Land Title Association form, or other form acceptable in the
particular jurisdiction, by a title insurance company authorized to transact
business in the state in which the related Mortgaged Property is situated,
together with a condominium endorsement, if applicable, in an amount at least
equal to the original principal balance of such Mortgage Loan insuring the
mortgagee's interest under the related Mortgage Loan as the holder of a valid
first or second mortgage Lien of record on the Mortgaged Property described in
the Mortgage, subject only to the exceptions of the character referred to in
subsection (b) above, shall be valid and in full force and effect on the Funding
Date of the origination of such Mortgage Loan or (ii) an attorney's opinion of
title shall be prepared in connection with the origination of such Mortgage
Loan. Such mortgage title insurance policy or attorney's opinion of title shall
be issued in favor of Borrower and its successors and assigns. Borrower shall,
by act or omission, not have done anything that would impair the coverage of
such mortgage title insurance policy or attorney's opinion of title.

          (g)  The Mortgage Note and the related Mortgage shall have been duly
and properly executed, constitute the legal, valid and binding obligation of the
related Mortgagor and shall be enforceable in accordance with their respective
terms, except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
considered in a proceeding or action in equity or at law), and all parties to
the Mortgage Loan shall have had full legal capacity to execute all Mortgage
Loan Documents and to convey the estate therein purported to be conveyed.

          (h)  The terms of the Mortgage Note and the Mortgage shall not have
been or be impaired, altered or modified in any material respect, except by a
written instrument which shall have been recorded or is in the process of being
recorded, if necessary, to protect the interests of Borrower therein. The
original Mortgage shall be recorded, and all subsequent assignments of the
original Mortgage shall be recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the Lien thereof as against creditors
of Borrower.

          (i)  No instrument of release or waiver shall have been executed in
connection with the Mortgage Loan, and no Mortgagor shall have been released
therefrom, in whole or in part.

          (j)  The proceeds of the Mortgage Loan shall have been fully
disbursed, and there shall be no obligation on the part of Borrower to make any
future advances thereunder. All costs, fees and expenses incurred in making or
closing or recording of the Mortgage Loan shall have been paid in full.

          (k)  The Mortgage Note shall not be secured by any collateral, pledged
account or other security except the lien of the corresponding Mortgage.

          (I)  There shall be no obligation on the part of Borrower or any other
Person to make payments in respect of the Mortgage Loan in addition to those to
be made by the Mortgagor.

          (m)  All parties which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee, servicer or otherwise, are
(or, during the period in which they held and disposed of such interest, were)
(1) in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2)(A) organized
under the laws of such state, or (B) qualified to do business in such state, or
(C) federal savings and loan associations or national banks having principal
offices in such state, or (D) not doing business in such state so as to require
qualification or licensing.

          (n)  The Mortgage shall contain customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial or non judicial foreclosure.

          (o)  To the best of Borrower's knowledge, there shall not exist any
circumstances or conditions with respect to the Mortgage Loan, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that could be
reasonably expected to materially adversely affect the value or marketability of
the Mortgage Loan.
<PAGE>

          (p)  Each of the documents and instruments included in the Credit File
shall have been duly executed and in due and proper form and each such document
or instrument shall be in a form generally acceptable to prudent institutional
mortgage lenders that regularly originate or purchase mortgage loans.

          (q)  The Borrower shall be in possession of the complete Credit File
and there shall be no custodial agreements in effect adversely affecting the
right or ability of Borrower to make the document deliveries required hereby.

          (r)  The Mortgage property shall not be damaged by fire, wind or other
cause or loss and there shall not be any condemnation proceedings pending. To
the best knowledge of Borrower, no improvement on any Mortgage property is in
violation of any applicable zoning law or regulation.

          (s)  All signatures, names and addresses, amounts and other statements
of fact, including descriptions of the property, appearing on the credit
application and other related documents relating to each Mortgage Loan shall be
true and correct and the Mortgagors named thereon will be, as of the date of
each such document upon which signatures appear, of majority age, and will have
the legal capacity to enter into the Mortgage.

          (t)  Borrower will have reviewed all of the Mortgage Loan Documents,
and all the related documents thereto, and will make such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein and throughout this Agreement.

          (u)  Each Mortgage Loan which Borrower warrants is insured by a
private mortgage insurance company shall be so insured.

     9.   SALES OF MORTGAGE LOANS AND OTHER COLLATERAL. Until Provident shall
          --------------------------------------------
have made a Demand for Payment, Borrower shall be entitled to sell the Mortgage
Loans financed hereunder and the other Collateral in the ordinary course of
Borrower's business, but nothing herein shall be deemed to waive or release
Provident's security interest in any Proceeds of any Collateral. Upon the sale
of any Mortgage Loan financed hereunder, Borrower shall pay to Provident on its
Closing Date, the unpaid amount of the Advance with respect to such Mortgage
Loan, all accrued and unpaid interest thereon through and including such Closing
Date and all Fees, charges and other amounts payable hereunder. The sales of
Mortgage Loans to Third Party Investors shall be handled in accordance with the
requirements set forth in the Policies and Procedures- In addition, Borrower
agrees that Provident shall have the right, in its sole discretion, to (i)
impose additional requirements regarding the delivery of Mortgage Loan Documents
to any Third Party Investor; and (ii) return wire transfers received in
connection with the sale of any Mortgage Loan to the originating bank if such
wire transfer does not comply with the Policies and Procedures.

     10.  REMEDIES.
          --------

          (a)  After a Demand for Payment shall have been made by Provident, all
amounts owed to Provident hereunder shall thereupon be immediately due and
payable and no additional or future Advances will be made by Provident to
Borrower hereunder.

          (b)  From and after any Demand For Payment, Provident shall, in
addition to its other rights and remedies under applicable law, have the rights
and remedies of a secured party under the Uniform Commercial Code with respect
to the Collateral and all other security pursuant to any other Security
Documents between Provident and Borrower. In addition, Provident or its agents
or representatives may take possession of the Collateral and sell the same. For
such purpose, Provident may enter upon the premises where the Collateral shall
be located and remove the same to such other place as Provident shall determine.
Borrower shall immediately, upon Provident's demand, make the Credit Files
available to Provident at Provident's place of business.

          (c)  Any such taking of possession by Provident shall not affect
Provident's right, which hereby is confirmed, to retain all payments made prior
thereto by Borrower, and in the event of such taking of possession, Provident
may sell the Collateral at a public or private sale or any other commercially
reasonable manner permitted by law. The proceeds of any such sale or other
disposition shall be applied first to the actual and reasonable costs of such
sale, then to the actual and reasonable costs of retaking possession and storage
of such Collateral and then to the satisfaction of the unpaid balance of the
Advances. In the event the proceeds of any such sale are not sufficient to pay
such expenses and to satisfy all amounts due by acceleration or otherwise with
respect to all Advances made pursuant hereto, Borrower shall pay to Provident
any deficiency existing. Provident will give Borrower reasonable notice of the
time and place of any public sale of the Collateral or of the time after which
any private sales or other intended disposition thereof is to be made. Borrower
agrees that the requirement of reasonable notice shall be met if such notice is
mailed, postage prepaid, to the address of the Borrower listed in Section I 1(f)
at least 10 days prior to the time of such sale or disposition. Borrower further
agrees and acknowledges that: (i) the Collateral is customarily sold in a
recognized market; (ii) Borrower regularly sells and Provident regularly
purchases mortgage loans similar to the Collateral; and (iii) Provident may be
the purchaser of the Collateral either in a public or private sale.
<PAGE>

          (d)  From and after any Demand For Payment, Borrower shall pay, in
addition to interest on funds actually advanced, all costs incurred by Provident
in enforcing Provident's rights hereunder, including those incurred in
bankruptcy proceedings, expenses of locating the Collateral, all costs and
expenses actually incurred by Provident in connection with examination,
preservation and protection of the Collateral, examination of the Borrower's
books and records otherwise in connection with the financing pursuant hereto and
reasonable attorney's fees and legal expenses.

          (e)  If any payment of interest under Section 3 or principal or
interest under Section 4 is not paid when due whether by demand or otherwise,
the unpaid amount of all Advances and all accrued and unpaid interest thereon as
well as any other charges and other amounts due Provident hereunder or under any
Loan Document shall bear interest, at Provident's option, at the Default
Interest Rate from the date on which such late payment shall have first become
due and payable to Provident. Interest will continue to accrue until the
obligations in respect of the payment are discharged (whether before or after
judgment).

          (f)  The rights and remedies of Provident hereunder shall be
cumulative and shall be in addition to every other right or remedy available to
Provident under applicable law.

     11.   GENERAL PROVISIONS.
           ------------------

          (a)  Borrower absolutely and unconditionally agrees to pay to
Provident upon demand by Provident at any time and as often as the occasion
therefor may require, whether or not all or any of the transactions contemplated
by any of the Loan Documents are ultimately consummated (i) all reasonable out-
of-pocket costs and expenses which shall at any time be incurred or sustained by
Provident or any of its directors, officers, employees or agents as a
consequence of, on account of, in relation to or any way in connection with the
preparation, negotiation, execution and delivery of the Loan Documents and the
perfection and continuation of the rights of Provident in connection with the
Advances, as well as the preparation, negotiation, execution, or delivery or in
connection with the amendment or modification of any of the Loan Documents or as
a consequence of, on account of, in relation to or any way in connection with
the granting by Provident of any consents, approvals or waivers under any of the
Loan Documents including, but not limited to, reasonable attorneys' fees and
disbursements; and (ii) all reasonable out-ofpocket costs and expenses which
shall be incurred or sustained by Provident or any of its directors, officers,
employees or agents as a consequence of, on account of, in relation to or any
way in connection with the exercise, protection or enforcement (whether or not
suit is instituted) of any of its rights, remedies, powers or privileges under
any of the Loan Documents or in connection with any litigation, proceeding or
dispute in any respect related to any of the Loan Documents (including, but not
limited to, all of the reasonable fees and disbursements of consultants, legal
advisers, accountants, experts and agents for Provident, the reasonable travel
and living expenses away from home of employees, consultants, experts or agents
of Provident, and the reasonable fees of agents, consultants and experts not in
the full-time employ of Provident for services rendered on behalf of Provident).

          (b)  Borrower shall absolutely and unconditionally indemnify and hold
harmless Provident against any and all claims, demands, suits, actions, causes
of action, damages, losses, settlement payments, obligations, costs, expenses
(including, but not limited to, attorney's fees and other legal costs and
expenses) and all other liabilities whatsoever ("Losses") which shall at any
time or times be incurred or sustained by Provident or by any of its
shareholders, directors, officers, employees, subsidiaries, Affiliates or agents
on account of, or in relation to, or in any way in connection with, any of the
arrangements or transactions contemplated by, associated with or ancillary to
this Agreement or any of the other Loan Documents, whether or not all or any of
the transactions contemplated by, associated with or ancillary to this Agreement
or any of such Loan Documents are ultimately consummated, including, but not
limited to, Losses arising from or in connection with, or related to, any of the
Mortgage Loans financed hereunder, whether arising from the underwriting,
processing, origination, closing, funding, purchase, servicing or sale of any
such Mortgage Loans.

          (c)  No amendment, supplement, modification, termination, waiver,
consent to departure or alteration of the terms hereof or any of the other Loan
Documents shall be binding or effective unless the same is in writing, dated
subsequent to the date hereof, and duly executed by Borrower and Provident, and
then such amendment, modification or waiver shall be effective only in the
specific instance and for the specific purpose for which given.

          (d)  All agreements, representations, obligations and warranties made
herein shall survive the execution and delivery of this Agreement, the making of
any Advance hereunder, the execution and delivery of any of the other Loan
Documents and payment in full of the Advances.

          (e)  This Agreement (including the Exhibits and Schedules hereto) and
the other Loan Documents (including the Security Documents) and any documents,
certificates and instruments referred to herein or delivered by the parties in
connection herewith constitute the entire agreement between the patties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and verbal, between the parties with respect to the
subject matter of this Agreement and are not intended to confer upon any Person
other than the parties any rights or remedies.
<PAGE>

          (f)  All notices and other communications pursuant to this Agreement
and under any of the other Loan Documents shall be in writing, either delivered
in hand or sent by first-class mail, registered or certified, return receipt
requested, or sent by telecopier or facsimile transmission, addressed as
follows:

                    If to Borrower, at:      HomeGold, Inc.
                                             3901 Pelham Rd
                                             Greemille, SC  29651
                                             Attn: Forrest E. Ferrell
                                             Fax No. (864) 289-6096

                    If to Provident, at:     The Provident Bank
                                             One East Fourth Street
                                             Cincinnati, Ohio 45202
                                             Attn: Kenneth D. Logan, Senior Vice
                                             President
                                             Mail Stop:  265D
                                             Fax Number:  (513) 564-7943

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 11. Any notice or other communication pursuant to this Agreement
or any other Loan Document shall be deemed to have been duly given or made and
to have become effective when delivered in hand to the party to which it is
directed, or, if sent by first-class mail or by telecopier or facsimile
transmission, and properly addressed (i) when received by the addressee; or (ii)
if sent by first class mail, on the third (3rd) Business Day following the day
of the mailing thereof (unless actually received earlier).

          (g)  No delay or failure of Provident in exercising any right, power,
remedy or privilege hereunder or under any of the other Loan Documents on any
occasion shall affect such right, power, remedy or privilege or be construed as
a waiver or any requirement of this Agreement; nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such a
right, power or privilege be prejudicial to any subsequent exercise of such
right, power or privilege. Provident's acceptance or approval of any request,
payment, document or instrument pertaining to any Advance made pursuant hereto
shall not constitute any representation or warranty, express or implied, by
Provident as to the validity or sufficiency of any such request, payment,
document or instrument. The rights and remedies of Provident hereunder are
cumulative and not exclusive. All remedies herein provided shall be in addition
to and not in substitution for any remedies otherwise available to Provident.
Any waiver, permit, consent or condition hereof, must be in writing and shall be
effective only to the extent set forth in such writing.

          This Agreement shall be binding upon and inure to the benefit of
Borrower and Provident and their respective successors and assigns, except that
Borrower may not assign or transfer any of its rights or obligations hereunder
to any Person or Persons without the express prior written consent of Provident.
If more than one Borrower shall sign this Agreement, the liability of each
hereunder shall be joint and several.

of Ohio.

(i)  This Agreement shall be governed by and construed in accordance with the
     laws of the State

          (j)  It is hereby stipulated and agreed that TIME IS OF THE ESSENCE
hereon and shall be of the essence as to each of the other Loan Documents.

          (k)  Any provision contained in any document 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 of such document or affecting the validity or
enforceability of such provision in any other jurisdiction.

          This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed and
deliver shall be deemed to be an original and all of which taken together shall
constitute but one and the same Agreement.

12.    WAIVER OF .JURY TRIAL; JURISDICTION AND VENUE.
       ---------------------------------------------

          (a)  AS A SPECIFICALLY BARGAINED INDUCEMENT FOR PROVIDENT TO EXTEND
CREDIT TO BORROWER, AND AFTER HAVING THE OPPORTUNITY TO CONSULT COUNSEL,
BORROWER AND, IF MORE THAN ONE, EACH OF THEM HEREBY EXPRESSLY WAIVES THE RIGHT
TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS AGREEMENT OR
ARISING (N ANY WAY FROM ITS OBLIGATIONS HEREUNDER.
<PAGE>

          (b)  BORROWER AND, IF MORE THAN ONE, EACH OF THEM HEREBY DESIGNATES
ALL COURTS OF RECORD SITTING IN HAMILTON COUNTY, OHIO AND HAVING JURISDICTION
OVER THE SUBJECT MATTER, STATE AND FEDERAL, AS FORUMS WHERE ANY ACTION, SUIT OR
PROCEEDING IN RESPECT OF OR ARISING FROM OR OUT OF THIS AGREEMENT, ITS MAKING,
VALIDITY, PERFORMANCE, INTERPRETATION OR ENFORCEMENT MAY BE LITIGATED AS TO ALL
PARTIES, THEIR SUCCESSORS AND ASSIGNS, AND BY THE FOREGOING DESIGNATION BORROWER
AND, IF MORE THAN ONE, EACH OF THEM HEREBY CONSENTS TO THE JURISDICTION AND
VENUE OF SUCH COURTS. BORROWER WAIVES ANY AND ALL RIGHTS UNDER THE LAWS OF ANY
OTHER STATE TO OBJECT TO JURISDICTION WITHIN THE STATE OF OHIO FOR THE PURPOSES
OF LITIGATION TO ENFORCE THE OBLIGATIONS UNDER THIS AGREEMENT.
<PAGE>

          IN WITNESS WHEREOF, the undersigned have caused this Warehouse Loan
and Security Agreement to be signed by their duly authorized signatories on and
as of the date first above written-

                                    HomeGold, Inc
                                    BY:  William E. Long
                                    Executive Vice President

                                    THE PROVIDENT BANK
                                    BY:  Martin J. Weiss
                                    Vice President
<PAGE>

                                  Schedule A
                                      to
                     Warehouse Loan and Security Agreement
                     ------------------------------------
                             Cost and Fee Schedule
                             ---------------------

                                  SCHEDULE A
                             COST AND FEE SCHEDULE
                                Homegold, Inc.

I.   Explanation of Loan Risk Grade:

     1    FHA, VA FNMA, FHLMC, Jumbo Conventional to                    $350,000

     2.   Non-Agency First Mortgages (A-, B, C), Jumbo Conventional from
     $350,001.

     3.   Non-Agency Second Mortgages.

     4.   Non-Agency second mortgage loans 95 (degrees)/o LTV or Greater up to
     100% LTV Loans.

     Rates below are interest amounts added to Wall Street Journal published
     Prime Rate:

<TABLE>
<CAPTION>
     Grade       Level 2                 Aged Outstanding                Sweep Rate

------------------------------------------------------------------------------------------------
<S>              <C>                  <C>                            <C>
       1          1.50%            2.50%                                     N/A
------------------------------------------------------------------------------------------------
       2          1.75%            3.00%                                    1.50%
------------------------------------------------------------------------------------------------
       3          2.00%            3.00%                                    1.50(degrees)/a
------------------------------------------------------------------------------------------------
       4          2.50%            3.50%                                     N/A
------------------------------------------------------------------------------------------------
</TABLE>

II.  Volume Incentive for monthly funded volume in excess of certain thresholds
     will be applied to loans funded after surpassing the respective thresholds:

<TABLE>
<CAPTION>

Monthly Funded Volume                         Rate Reduction from Initial Base Rates
---------------------------------------------------------------------------------------
<S>                                        <C>
5,000,001 - 10,000,000                                        .15(degrees)
---------------------------------------------------------------------------------------
10,000,001 - 15,000,000                                       .25%
---------------------------------------------------------------------------------------
15,000,001 +                                                  .30%
---------------------------------------------------------------------------------------
</TABLE>

     Volume incentive is not available on any loan that is aged at the time of
     settlement. The incentive is further suspended for 90 days after the
     settlement date of any aged loan.

III.    Days Allowed for Purchase by Third Party Investor:

     1.   45 days for FHA, VA FNMA, FHLMC, Jumbo Conventional to
          $350,000.
          ---------

     2.   45 days for Non-Agency First Mortgages (A-, B, C), Jumbo Conventional
          from $350,001.
               ---------

     3.   45 days for Non-Agency Second Mortgages and Home Equity Lines or
          Loans.

     4.   45 days for Non-Agency Second Mortgage loans 95% LTV or Greater up to
          100 (degrees) io LTV Loans.

IV.   Transaction Fees:

<TABLE>
<CAPTION>
                                               Standard Fees                  Aged Fees
-----------------------------------------------------------------------------------------------------
<S>                                            <C>                            <C>
Handling Fee                                         $50                              61-90 days $175
-----------------------------------------------------------------------------------------------------
Wire Fee                                             $20                             91-120 days $225
-----------------------------------------------------------------------------------------------------
Processing Fee                                       $30                               121+ days $275
-----------------------------------------------------------------------------------------------------
Other:
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
 </TABLE><PAGE>

                               SERVICING AGREEMENT

       This Servicing Agreement (the "Agreement") is made as of the 25th day of
October, 2000, by and between the Provident Bank, a banking corporation
organized and existing under the laws of the State of Ohio, whose address is One
East Fourth Street, Cincinnati, Ohio 45202 (the "Servicer"), and HomeGold
Financial, Inc.,a corporation whose address is 3901 Pelham Road Greenville, SC
29615 (the"Holder").

                                    WITNESSETH

       WHEREAS, Servicer and Holder have entered into an Amended And Restated
Warehouse Loan And Security Agreement dated (the "Warehouse Agreement"), whereby
Servicer funds loans originated by Holder and secured by mortgages, deeds of
trust, trust deeds, security deeds, deeds to secure debt and like security
instruments on existing single family (I-4 units) residential properties; and

       WHEREAS, Holder desires to engage Servicer as an independent contractor
to perform for a temporary period such servicing functions as are further
described herein, and Servicer desires to accept such engagement pursuant to the
terms and conditions hereinafler set forth.

       NOW, THEREFORE, in consideration of the promises, terms, conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

                                    DEFINITIONS

The following terms shall have the following meanings:

       Agreement: This Servicing Agreement.

       Condemnation Proceeds: All awards of settlement in respect to a Mortgaged
Property by exercise of the power of eminent domain or condemnation.

       Credit Files: All records and documents related to a Mortgage Loan,
including, without limitation, promissory notes, mortgages, deeds of trust or
other documents evidencing a security interest, assignments, underwriting
documents, disclosures required by applicable laws, title insurance commitments
and policies and any other documentation reasonably required by Servicer to set
up and service the accounts.

       Deposit Account: The account or accounts maintained pursuant to
Section 7.

                                       10
<PAGE>

       Escrow Account: The separate account or accounts maintained pursuant to
Section 9.

       Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, mortgage insurance premiums, hazard insurance
premiums, taxes, assessments, condominium fees, and any other payments required
to be escrowed by the Mortgagor with the Mortgagee pursuant to the Mortgage or
other loan documents.

       FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto.

       FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.

       FNMA: The Federal National Mortgage Association or any successor thereto.

       Holder:        HomeGold Financial, Inc.or its successors and assigns.

       HUD: The Department of Housing and Urban Development.

       Investor: The purchaser of any Mortgage Loan from HomeGold, "holder"

       Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related mortgaged property
including FHA insurance proceeds and/or VA guaranty proceeds.

       Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise.

       Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.

       Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a lien in fee simple in real property securing the
Mortgage Note.

       Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Loan.

       Mortgage Loan: An individual Mortgage Loan which is subject to this
Agreement and which includes, without limitation, the Mortgage Note, Mortgage,
the Credit File and all rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan.

       Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.

       Mortgage Property: The real property securing repayment of any Mortgage
Note.

                                       11
<PAGE>

       Mortgagee:  HomeGold Financial, Inc. , its successors and assigns.

       Mortgagor: The obligor on a Mortgage Note.

       Private Mortgage Insurance: A policy of mortgage guaranty insurance
issued by a qualified insurer with respect to certain Mortgage Loans.

       Servicer: The Provident Bank and its successors and assigns.

       Warehouse Agreement: The Amended and Restated Warehouse Loan and Security
Agreement between Provident Bank and HomeGold dated

       Transfer Date: The Transfer Date with respect to any Mortgage Loan shall
be the date upon which the Servicer is entitled to receive the transfer of
servicing responsibilities pursuant to the Agreement.

       VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto.

       1. Relationship of Parties. Holder and Servicer specifically agree that
in the servicing of any loan hereunder, Servicer shall have the status of and
act as an independent contractor. Nothing herein shall be construed to create a
partnership or joint venture between Holder and Servicer. The representations
and warranties of Servicer contained in this Agreement shall in no event be
construed as a warranty or guaranty by Servicer as to future payments by any
Mortgagor. Further, Servicer shall not be responsible for any representations
and warranties which are directly related to the origination process or between
Holder and any Investor relating to the origination or servicing of any Mortgage
Loan.

       2. Types of Loans. All loans submitted to Servicer for servicing
hereunder shall be fixed or adjustable rate loans secured generally by first and
second liens on existing single family (1-4 units) residential properties.
Notwithstanding the foregoing, Servicer reserves the right to require Holder to
submit for servicing other types of loans (such as multi-family loans) that
Servicer in its sole discretion deems necessary. The documentation for each loan
submitted hereunder shall provide for payments of principal, interest and
deposits, if any, to be paid once monthly. Servicer retains the right to reject
for servicing any loans with other payment frequencies.

       3. Compensation. As compensation for rendering the services set forth
herein, Servicer shall be entitled to:

              (i)    A set-up fee of fifty ($50.00) dollars per Mortgage Loan
                     payable on or before the earlier of receipt by Servicer of
                     the Mortgagor's first Monthly Payment, or sale of the
                     Mortgage Loan to an Investor. Notwithstanding anything
                     contained in this Agreement or the Warehouse Agreement to
                     the contrary, Holder and Servicer expressly agree that the
                     amount of any compensation owing to Servicer may be

                                          12
<PAGE>

                     withdrawn from either the Deposit Account established
                     hereunder or the Cash Collateral Account established by and
                     pursuant to the Warehouse Agreement.

              (ii)   Beginning with each Transfer Date, Servicer shall retain
                     from each monthly payment with respect to any Mortgage Loan
                     a servicing fee in an amount equal to one twelfth (1/12) of
                     the servicing fee rate. The servicing fee rate for each
                     mortgage loan shall be 0.50% per annum (50 basis points).
                     If the mortgage loan retained for servicing by the Servicer
                     is released prior to the collection of a monthly payment,
                     the service fee will be calculated on a daily rate
                     equivalent to one three-hundred sixty (1/360) of the
                     servicing fee rate.

              (iii)  Servicing-related fees charged to Mortgagors, including,
                     but not limited to, release and satisfaction fees, pay-off
                     statement fees, tax service fees, NSF fees, deferral
                     charges, late charges, subordination fees, modification
                     fees, fees for providing copies of documents from a Credit
                     File to any Mortgagor and other miscellaneous servicing
                     fees that Servicer may lawfully charge a Mortgagor whose
                     loan is being serviced

              (iv)   Investment earnings on the custodial account and escrow
                     account (if allowed by applicable law).

       4. Holder Responsibilities. Holder shall be responsible for:

              (i)    Providing Servicer with complete Credit Files for each loan
                     submitted hereunder to enable Servicer to place and service
                     the loan(s) on its system. All such documentation must be
                     received no later than seventy-two hours (72) after the
                     close of any purchase-money transaction, and no later than
                     seventy-two hours (72) after the end of the applicable
                     rescission period for any refinance transaction (the
                     Transfer Date).

              (ii)   Advising Servicer upon delivery of each loan submitted for
                     servicing as to whether the loan is in a warehouse (unsold)
                     status. If a loan which has been delivered to Servicer in a
                     warehouse (unsold) status is subsequently sold, Holder will
                     immediately notify Servicer of the sale by written
                     confirmation and will deliver a copy of the Investor's
                     purchase advice or funding detail report, and Holder shall
                     pay all outstanding interest and fees owed to Servicer
                     pursuant to the Warehouse Agreement and this Agreement
                     prior to any transfer of servicing. Holder shall also
                     provide Servicer with all necessary information regarding
                     the Investor that will enable Servicer to clear the account
                     from its system and transfer the account to the Investor in
                     a timely manner. In the event the Investor charges a
                     penalty for late reporting, remittances, etc., which were
                     caused by Holder's delay in notifying Servicer of the
                     Investor's purchase of the loan, Holder agrees to pay such
                     penalty.

              (iii)  Providing Servicer with Escrow Payments collected at
                     closing, insurance and tax information and any other
                     documentation required by Servicer in the performance of
                     its servicing function pursuant to this agreement.

                                 13
<PAGE>

              (iv)   Providing Servicer with physical evidence that a hazard
                     insurance policy and, if applicable, a Private Mortgage
                     Insurance (PMI) policy (not limited to HUD's Mortgage
                     Insurance Coverage) is in force for each loan delivered to
                     Servicer for servicing and allowing Servicer sufficient
                     time to receive evidence in-house that all notification(s)
                     have been forwarded to Servicer. Further, Holder agrees to
                     indemnify and hold Servicer harmless from any loss, damage,
                     claim or expense caused by insufficient evidence of hazard
                     insurance, or, if applicable, by a lapse in Private
                     Mortgage Insurance coverage or flood insurance coverage
                     prior to delivery of servicing to Servicer.

              (v)    Assuring that improvements on property securing each
                     Mortgage are insured by hazard insurance in an amount at
                     least equal to the unpaid principal balance of the loan or
                     the full insurable value of the improvements, whichever is
                     less, of a type at least as protective as fire and extended
                     coverage, and containing a "standard" or`union" mortgage
                     clause (without contribution) in the form customarily used
                     in the area in which the property is located. In all
                     events, the provisions of the Credit File shall prevail.
                     The mortgagee clause will be reflected as running to the
                     benefit of Lender/Servicer, its successors and assigns.
                     During the course of servicing, the mortgagee clause in the
                     hazard insurance will read as follows:

                               The Provident Bank
                          Its Successors and/or Assigns
                         309 Vine Street, Mail Stop 172D
                              Cincinnati, OH 45202

              (vi)   Providing Servicer with all legal records, including court
                     orders, consent decrees, judgments, verdicts, agreed
                     orders, consents, and other agreements or records that
                     govern the servicing of the loans. Holder agrees to
                     indemnify and hold Servicer harmless from any loss caused
                     by Holder's failure to provide the information required
                     under this subparagraph or from the provision by Holder of
                     incomplete, obsolete or inaccurate information required
                     under this subparagraph.

              (vii)  Providing Servicer with such limited powers of attorney and
                     other documents necessary to enable the Servicer to perform
                     its servicing and administrative obligations under this
                     agreement.

       5. Servicer Responsibilities. The Servicer, as an independent contractor,
shall service and administer the Mortgage Loans from and after the related
Transfer Date and shall have full power and authority, acting alone, to do any
and all things in connection with such servicing and administration which the
Servicer may deem necessary or desirable, consistent with the terms of this
Agreement and with accepted mortgage servicing practices, including taking all
actions that a mortgagee is permitted or required to take by the FHA or VA, with
respect to FHA loans and VA loans, as the case may be. The Servicer shall not
waive, modify or vary any term of any mortgage loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to a Mortgagor unless Servicer has obtained the prior consent of the
Holder. The Servicer is hereby authorized and empowered to execute and deliver
on behalf of itself and the

                                       14
<PAGE>

Holder all instruments of satisfaction or cancellation, or of partial or full
release, discharge and all other comparable instruments with respect to the
Mortgage Loans and with respect to the Mortgaged Properties.

              (i)    The Servicer shall, in accordance with the Real Estate
                     Settlement and Procedures Act (RESPA) or other applicable
                     laws, provide notice to the Mortgagors of each mortgage of
                     the change of servicing to the Servicer. No loans shall be
                     service released to any Investor until all fees, charges
                     and interest owed to Servicer have been paid in full and
                     the RESPA notification period has lapsed.

              (ii)   In servicing and administering any FHA loans or VA loans,
                     the Servicer shall comply strictly with the National
                     Housing Act and the FHA regulations; the Serviceman's
                     Readjustment Act, and the VA regulations and administrative
                     guidelines issued thereunder or pursuant thereto.

              (iii)  In servicing and administering the Mortgage Loans, the
                     Servicer shall employ procedures, including collection
                     procedures, and exercise the same degree of care that it
                     customarily employs and exercises in servicing and
                     administering mortgage loans for its own account, giving
                     due consideration to accepted servicing practices where
                     such practices do not conflict with the requirements of
                     this Agreement.

              (iv)   On or before the 5th business day of each month, the
                     Servicer shall report information pertaining to the
                     Mortgage Loans and Escrow Accounts as may reasonably be
                     requested by Holder and consistent with standard servicing
                     practices. In addition, Servicer shall provide information
                     necessary for Holder to complete any report required by any
                     Private Mortgage Insurance (PMI) carrier, HUD, VA, FHLMC,
                     FNMA, if applicable.

              (v)    Notwithstanding any other provision of this Agreement,
                     Servicer shall not be obligated to advance any funds to
                     Holder or on Holder's behalf with respect to any Mortgage
                     Loan subject to this Agreement. However, in the event it is
                     necessary to advance funds for delinquent taxes, insurance,
                     not limited to Private Mortgage Insurance or Mortgage
                     Impairment Coverage, advances will be taken from the funds
                     collected within the Deposit Account to cover funds
                     advanced.

              (vi)   If the Mortgage Loan becomes delinquent while under this
                     agreement, the Servicer shall consult with the Holder to
                     acquire further direction. It is expressly understood that
                     the Servicer will not proceed with further actions, i.e.,
                     legal action, until written permission is given from the
                     Holder advising the Servicer of the next step that should
                     be taken.

       6. Collection of Mortgage Loan Payments. Continuously from the related
Transfer Date until the date each Mortgage Loan ceases to be subject to this
Servicing Agreement, the

                                       15
<PAGE>

Servicer shall proceed diligently to collect all payments due under each of the
Mortgage Loans when the same shall become due and payable and shall take special
care in ascertaining and estimating escrow payments (if applicable), and all
other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgage Property. In the event that a Mortgage Loan is
sold to an Investor net of one or more Monthly Payments (net-funded), Servicer
shall continue its effort to collect said Monthly Payments after the date the
Mortgage Loan is servicereleased to the investor (or successor servicer), for an
additional period of 60 days. Servicer shall be entitled to receive the
servicing compensation provided by this Agreement for this additional 60 day
servicing period irrespective of whether such Monthly Payments are collected by
Servicer, and the duties and obligations imposed upon Servicer under this
agreement shall terminate at the end of such 60 day period.

       7. Establishment of Deposit Account. The Servicer shall deposit all funds
collected and received pursuant to any Mortgage Loan into one or more Deposit
Accounts. The Deposit Accounts shall be established and maintained at the
Provident Bank, Cincinnati, Ohio. The Servicer, in accordance with the terms of
this Agreement, may draw on the funds deposited into the Deposit Account.

             The Servicer shall deposit into the Deposit Account on a daily
basis and retain therein the following collections received by the Servicer
after the related Transfer Date:

              (i)    All payments on account of principal on the Mortgage Loans,
                     including all principal prepayments;

              (ii)   All payments on account of interest on the Mortgage Loans:

              (iii)  All REO disposition proceeds in connection with payment on
                     account of principal and interest;

              (iv)   All condemnation proceeds which are applied as a principal
                     prepayment;

              (v)    Any amount required to be deposited into the Deposit
                     Account.

             Any benefit derived from the Deposit Account shall accrue to the
Servicer.

       8. Permitted Withdrawals From the Deposit Account. The Servicer shall,
from time to time, withdraw funds from the Deposit Account for the following
purposes:

              (i)    To make payments to the Holder in the amounts and in the
                     manner provided for by this Agreement:

              (ii)   To reimburse itself for servicing compensation provided for
                     in this Agreement:

             (iii)   To clear and terminate the Deposit Account.

                                       16
<PAGE>

              (iv)   To cure any default by Holder with the terms of this
                     Agreement or the Warehouse Agreement.

              (v)    To reimburse Servicer for any advances for any mortgage
                     loan made pursuant to the Warehouse Agreement.

       9. Establishment of and Deposits to Escrow Account. When specifically
requested by Holder, Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets, and shall establish and
maintain one or more Escrow Accounts, in the form of demand accounts. The Escrow
Accounts shall be established at The Provident Bank, Cincinnati, Ohio. The
Servicer, in accordance with the terms of this Agreement, may draw on funds
deposited into the Escrow Account. The Servicer shall deposit into the Escrow
Account or Accounts on a daily basis, and retain therein the following:

              (i)    All Escrow Payments collected on account of the Mortgage
                     Loans, for the purpose of affecting timely payment of any
                     such items as required under the terms of this Agreement;

              (ii)   All amounts representing Insurance Proceeds or Condemnation
                     Proceeds which are to be applied to the restoration or
                     repair of any Mortgage Property;

              (iii)  All Liquidation Proceeds in connection with Escrow Payments
                     and property liquidation expenses; and

              (iv)   Any amounts required to be deposited by the Servicer in
                     connection with the deductible clause and blanket hazard
                     insurance policy.

             The Servicer shall make withdrawals from the Escrow Account only to
affect such payments as are required under this Agreement. To the extent
required by law, the Servicer shall pay interest on escrow funds to the
Mortgagor.

       10. Permitted Withdrawals From Escrow Account The Servicer may make
withdrawals from the Escrow Account or Accounts only:

              (i)    To affect timely payments of taxes, assessments, mortgage
                     insurance premiums, water rates, condominium charges, fire
                     and hazard insurance premiums, or other items constituting
                     Escrow Payments for the related Mortgage;

              (ii)   To refund to any Mortgagor any funds found to be in excess
                     of the amounts required under the terms of the related
                     Mortgage Loan or applicable federal or state law or
                     judicial or administrative ruling; and

              (iv)   To clear and terminate the Escrow Account upon the
                     termination of this Agreement.

                                       17
<PAGE>

       11. Notification of Interest Rate Adjustments. With respect to each
adjustable rate Mortgage Loan, the Servicer shall adjust the Mortgage Interest
Rate on the related interest rate adjustment date and shall adjust the Monthly
Payment on the related mortgage payment adjustment date, if applicable, in
compliance with the requirements of applicable law and the related Mortgage and
Mortgage Note. The Servicer shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and monthly payment
adjustments. The Servicer shall promptly, upon written request therefor, deliver
to the owner such notifications and any additional applicable data regarding
such adjustments and the methods used to calculate and implement such
adjustments. Upon discovery by the Servicer or the receipt of notice from the
Holder that the Servicer has failed to adjust the Mortgage Interest Rate or
Monthly Payment in accordance with the terms of the related Mortgage Note, the
Servicer shall deposit in the Deposit Account from its own funds the amount of
any interest loss caused the Holder thereby as such interest loss occurs.

       12. Completion and Recordation of Assignment of Mortgage and FHA and VA
Change Notices. To the extent permitted by applicable law, each assignment of
mortgage is subject to recordation in all appropriate public offices for real
property records in all of the counties or other comparable jurisdictions in
which any or all of the Mortgage Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
affected at the Holder's expense. At the Holder's direction, the Servicer shall
cause the endorsement of the Mortgage Note, the assignment of mortgage, the
assignment of security agreement, and other necessary and applicable records to
be completed.

       13. Remittances to Holder. With respect to each Mortgage Loan serviced
pursuant to this Agreement, the Servicer shall, after deduction for the
servicing fees provided by this agreement, deposit the remainder of each Monthly
Payment received from the Mortgagor into the applicable Deposit Account. All
Monthly Payments deposited into the Deposit Account shall be applied to reduce
the outstanding balance owing to Servicer from Holder relating to the applicable
Mortgage Loan funded by Servicer pursuant to the terms of the Warehouse
Agreement. Any excess funds remaining after payment of the servicing fees
provided by this agreement and application to the outstanding balance owed to
Servicer by Holder, shall be held in the Deposit Account until the Mortgage Loan
is transferred to an Investor, at which time such excess funds shall be remitted
to Holder. In no event shall any funds held in any Mortgagor's Escrow Account be
applied to reduce any indebtedness of holder to Servicer.

       14. Advances by Servicer. The Servicer shall not be obligated to make any
advances as to any Mortgage Loan serviced pursuant to this Agreement; provided,
however, Servicer shall be obligated to reimburse Holder from its own funds as a
result of any failure by Servicer to adjust a Mortgage Interest Rate or Monthly
Payment in accordance with the terms of the related Mortgage Note as provided
for by this Agreement.

       15. Representations and Warranties of the Holder. The Holder, as a
condition to the consummation of the transactions contemplated hereby, makes the
following representations and warranties to the Servicer as of each Transfer
Date:

                                       18
<PAGE>

       (i)    Due Organization and Authority. The Holder is a corporation duly
              organized, validly existing and in good standing under the laws of
              the state of its incorporation, and has all licenses necessary to
              carry on its business as now being conducted; the Holder has the
              full corporate power and authority to execute and deliver this
              Agreement, and to perform in accordance herewith. The execution,
              delivery and performance of this Agreement, including all
              instruments of transfer to be delivered pursuant to this Agreement
              by the owner, and the consummation of the transactions
              contemplated hereby, have been duly and validly authorized; this
              Agreement evidences the valid binding and enforceable obligation
              of the owner, and all requisite corporate action has been taken by
              the Holder to make this Agreement valid and binding upon the
              Servicer in accordance with these terms.

       (ii)   Sole Owner. Holder is the sole and lawful owner and holder of the
              Mortgage Loans and has full legal right, power and authority to
              enter into this Agreement and to perform each and all of Holder's
              obligations under this Agreement.

       (iii)  Compliance with Applicable Law. Holder has complied with:

              (a)    All applicable laws, rules and regulations of the US
                     Government and each applicable state and local government;

              (b)    If applicable, rules, regulations, handbooks and guides of
                     FHLMC, FNMA, other applicable investors, and each
                     applicable private mortgage insurer relating to such
                     mortgage loans, including, but not limited to, the
                     origination of such mortgage loans, and

              (c)    All provisions of each loan and the loan documents.

       (iv)   No Conflicts. Neither the execution and delivery of this Agreement
              nor the conveyance of the responsibilities to the Servicer or the
              transactions contemplated hereby, will conflict with or result in
              a breach of any of the terms, conditions or provisions of the
              owner's charter or bylaws, or any legal restriction or any
              agreement or instrument to which the owner is now a party, or by
              which it is bound, or constitute a default or result in an
              acceleration under any of the foregoing, or result in the
              violation of any law, rule, regulation, order, judgment or decree
              to which the Holder or its property is subject, or impair the
              value of this contract consummated hereby.

       (v)    No Litigation Pending. There is no action, suit, proceeding or
              investigation pending or threatened against the Holder which,
              either in any one instance or in the aggregate, may result in any
              material adverse change in the business, operations, financial
              condition, properties, or assets of the owner, or in any material
              impairment of the right or ability of the owner to carry on its
              business substantially as now conducted, or in any material
              liability on the part of the owner, or which would draw into
              question the validity of this Agreement, or of any action taken or
              to be taken in connection with the obligations of the owner
              contemplated herein, or

                                       19
<PAGE>

              which would be likely to impair materially the ability of the
              owner to perform pursuant to the terms of this Agreement.

       (vi)   No Untrue Information. Neither this agreement nor any statement,
              report or other document furnished or to be furnished pursuant to
              this Agreement or in connection with the transactions contemplated
              herein, contains any untrue statement of fact or omits any fact
              necessary to make the statements contained therein not misleading.

       16. Indemnification by Holder. The Holder shall indemnify the Servicer
and hold it harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Holder representations
and warranties contained in this Agreement. Any cause of action against the
Holder relating to or arising out of the breach of any representation and
warranty made in this Agreement, shall accrue upon (i) discovery of such breach
by the Servicer or notice thereof by the Servicer to the Holder; (ii) failure by
the Holder to cure such breach; and (iii) demand upon the Holder by the Servicer
for compliance with the terms of this Agreement.

       17. Representations Warranties and Agreements of the Servicer. The
Servicer, as a condition to the consummation of the transactions contemplated by
this Agreement, hereby makes the following representations and warranties to the
Holder as of each Transfer Date:

       (i)    Due Organization and Authority. The Servicer is an Ohio
              corporation organizedand validly existing under the laws of the
              State of Ohio and has all licenses necessary to carry on its
              business as now being conducted, and is licensed, qualified and in
              good standing in each state where a Mortgaged Property is located,
              if the laws of such state require licensing or qualification in
              order to conduct business of the type conducted by the Servicer,
              and in any event, the Servicer is in compliance with the laws of
              any such state to the extent necessary to insure the
              enforceability of the terms of this Agreement; the Servicer has
              the full corporate power and authority to execute and deliver this
              Agreement and to perform in accordance herewith; the execution,
              delivery and performance of this Agreement (including all
              instruments of transfer to be delivered pursuant to this
              Agreement) by the Servicer in the consummation of the transactions
              contemplated hereby, have been duly and validly authorized; this
              Agreement evidences the valid binding and enforceable obligation
              of the Servicer and all requisite corporate action has been taken
              by the Servicer to make this Agreement valid and binding upon the
              Servicer in accordance with its terms.

       (ii)   Ability to Perform. The Servicer does not believe, nor does it
              have any reason or cause to believe, that it cannot perform each
              and every covenant and undertaking contained in this Agreement.

       (iii)  Ability to Service. The Servicer is an FHA approved mortgagee, a
              VA approved lender, and an approved seller/servicer of
              conventional residential mortgage loans for FNMA or FHLMC, with
              the facilities, procedures and experienced personnel

                                       20
<PAGE>

              necessary for the sound servicing of mortgage loans of the same
              type as the Mortgage Loans. The Servicer is in good standing to
              service mortgage loans for the FHA and the VA, and either FNMA or
              FHLMC, and no event has occurred, including, but not limited to, a
              change in insurance coverage, which would make the Servicer unable
              to comply with FHA and VA, and either FNMA or FHLMC eligibility
              requirements or which would require notification to any of the
              FHA, VA, FNMA or FHLMC.

       (iv)   No Litigation Pending. There is no action, suit, proceeding or
              investigation pending or threatened against the Servicer which,
              either in any one instance or in the aggregate, may result in any
              material adverse change in the business operations, financial
              condition, property or assets of the Servicer, or in any material
              impairment of the ability of the Servicer to carry on its business
              substantially as now conducted or in any material liability on the
              part of the Servicer, or which would draw into question the
              validity of this Agreement, or of any action taken or to be taken
              in connection with the obligations of the Servicer contemplated
              herein, or which would be likely to impair materially the ability
              of the Servicer to perform under the terms of this Agreement.

       (v)    No Untrue Information. Neither this Agreement nor any statement,
              report or other document furnished or to be furnished pursuant to
              this Agreement or in connection with the transactions contemplated
              hereby contains any untrue statements of fact or omits to state a
              fact necessary to make the statements contained therein not
              misleading.

       (vi)   No Conflicts. Neither the execution and delivery of this
              Agreement, the acquisition of the servicing responsibilities by
              the Servicer, or the transactions contemplated hereby, nor the
              fulfillment of or compliance with the terms and conditions of this
              Agreement, will conflict with or result in a breach of any of the
              terms, conditions or provisions of the Servicer's charter or
              bylaws or any legal restriction or any agreement or instrument to
              which the Servicer is now a party or by which it is bound, or
              constitute a default or result in an acceleration under any of the
              foregoing, or result in the violation of any law, rule,
              regulation, order, judgment or decree to which the Servicer or its
              property is subject, or impair the ability of the Servicer to
              service the mortgage loans, or impair the value of the mortgage
              loans.

       18. Indemnification of Holder by Servicer. The Servicer shall indemnify
the Holder and hold it harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, breach of the Servicer
representations and warranties contained in this Agreement. Any cause of action
against the Servicer relating to or arising out of the breach of any
representation and warranty made in this Agreement by Servicer shall accrue upon
(i) discovery of such breach by the Holder or notice thereof by the Holder to
the Servicer, (u) failure by the Servicer to cure such breach, and (iii) demand
upon the Servicer by the Holder for compliance with this Agreement.

                                       21
<PAGE>

       19. Termination. With respect to any Mortgage Loan accepted by Servicer
as of the Transfer Date, termination shall occur when Holder has conveyed its
interest in the Mortgage Loan to an Investor, and Servicer has received all
advances, fees and accrued interest pursuant to the Warehouse Agreement between
Holder and Servicer, or when the Warehouse Agreement is terminated according to
the terms thereof. If a Mortgage Loan is purchased by an Investor net of one or
more Monthly Payments (net-funded), termination with respect to such Mortgage
Loan shall occur as provided in Section 6 above.

       20. Severability. If any part, provision, representation or warranty of
this Agreement is deemed prohibited or is held to be void or unenforceable, such
provision, representation or warranty shall be ineffective to the extent that
such prohibition or unenforceability without invalidating the remaining
provisions hereof.

       21. Place of Delivery and Governing Law. This Agreement shall be deemed
in effect when fully executed, and a signed counterpart thereof is received by
Servicer in the State of Ohio, and shall be deemed to have been made in the
State of Ohio. This Agreement shall be construed in accordance with the laws of
the State of Ohio and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with the laws of the State of Ohio.

       22. Binding Agreement. This servicing agreement shall be binding upon and
inure to the benefit of the parties hereto, their successors and assigns. This
servicing agreement may not be assigned by either party without the prior
written consent of the non-assigning party.

       23. Notices. All notices or communications required of this Agreement
shall be deemed to be property served when personally delivered, or when placed
in the US mail, first class, postage prepaid, addressed as set forth here and
below.

       24. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.

       25. Waivers. No term or provision of this Agreement may be waived or
modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.

       IN WITNESS WHEREOF, the Servicer and Holder have caused their names to be
signed and delivered by their duly authorized officers as of the date first
above written.

                                       22
<PAGE>

PROVIDENT BANK

BY:

NAME:

TITLE:

[INSERT HOLDER NAME]

BY:

NAME: Forrest E Ferrell
TITLE: President

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<PAGE>

                    Customer Management Client Questionnaire

To provide you with the superior customer service we've promised as well as
manage your borrowers account we have prepared these questions specific to your
portfolio. This questionnaire should be returned with your executed servicing
agreement. If you have any questions please call:

                                                Diane Borman
                                          Vice President Operations,

                                             PCFS Interim Servicing
                                            1-800-838-9727, ext 18001

         Interim Client Name:             HomeGold Financial, Inc.
         Mailing Address:                 P.O. Box 17526
                                          Greenville, SC 29606

         Servicing Contact:               Bruce Dodd/Jennifer Miles

         Phone#: 864-289-5437/864-289-5853

         Fax#:      8888-362-3633
         E-mail Address: bruce.dodd@homegold.com/jennifer.miles@homegold.com

DDA Accounts
DDA Account #:
Bank Name:

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<PAGE>

Mailing Address:

Phone #:

Contact Person:

Customer Service

1.     Who is the contact for approval of a Partial Release and execution of any
       related loan modification documents? Yvonne Ruby

2.     If you have any second mortgages in your portfolio, will you consider a
       request to subordinate the second when the first mortgage is being
       refinanced? Yes

3.     If yes, who is the contact to review the request and execute the
       subordination agreement?

       Jennifer Miles/Bruce Dodd

4.     If your loans contain prepayment penalties who is the contact to
       review/approve a request to waive or modify the penalty?

5.     Do you consent to termination of an escrow account when the borrower
       requests? YES or NO N/A

6.     If yes, who is the contact to review the request? N/A

7.     If an escrow account WAS NOT established at closing, does the client
       allow an escrow account to be established upon receipt of a borrower's
       written request? NO

Tax Escrow

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<PAGE>

1.     On non-escrowed loans, at what point do you prefer PCFS advance escrow
       funds to pay delinquent property taxes: At first notice of delinquency or
       only when the property is in jeopardy of Tax Sale? Tax sale notification

2.     Do you prefer to be contacted to approve disbursement of delinquent taxes
       on non-escrowed loans? YES

3.     If yes, who is the contact to approve?

       Jennifer Miles

PAH

1.     Do any loans in your portfolio have privat mortgage insurance paid by the
       lender and not through the borrower's escrow payment? NO

2.     Who is your PMI vendor?     N/A

3.     Where do you maintain your original PMI Certificates?     NIA

       (PCFS must receive a copy if you choose to retain the originals.)

VA & FHA Loans

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<PAGE>

1.     Where do you maintain your original MIC or MIP Certificates? N/A
       (PCFS must receive a copy if you choose to retain the originals.)

You will have access to investor accounting reports to monitor the status of
your accounts:

o Daily Freddie Mac Payoff Report Daily Payoff Report
o Daily Regular Payment Remit Report
o Fanme Mae Loan Activity Report
o Freddie Mac Loan Level Report
o Investor Collections Report
o Investor Curtailments Report
o Investor Cutoff Summary Report
o Investor Delinquent Report
o Investor Interim Remit Sum Report
o Investor Loan Sale Report
o Investor Payoffs Report
o Investor Prepaid Report
o Investor Rate and Payment Change Report
o Investor Remittances Report
o Investor Trial Balance Report
o MIDANET Report
o P&I Collections To Date Report
o Remittance Report
o Single Debit Report
o MORNET Report
o Pending Loan Transfers

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