ASSUMPTION OF DEBT &
CONTRIBUTION TO CAPITAL AGREEMENT
This Assumption of Debt and Contribution to Capital Agreement (this
"Agreement") is entered into by and between HomeGold Financial, Inc., a South
Carolina corporation ("HFI"), HomeGold, Inc., a South Carolina corporation
("HGI"), and Carolina Investors, Inc., a South Carolina corporation ("CII"), to
be effective as of December 31, 2001.
WHEREAS, HGI is the borrower and CII is the lender under that certain
Revolving Promissory Note in the principal amount of $75,000,000 with an
effective date of ___________secured by certain assets of HGI (the "HGI
Revolver").
WHEREAS, as of December 31, 2001, the principal amount of all
outstanding indebtedness of HGI to CII and the accrued and unpaid interest is
$43,444,216; and
WHEREAS, HFI, HGI and CII desire that HFI assume all of HGI's
indebtedness to CII as of December 31, 2001 as a contribution by HFI to the
capital of HGI;
NOW THEREFORE, in consideration of the mutual covenants set forth
herein, the parties hereto hereby agree as follows:
1. HFI ASSUMPTION OF HGI DEBT TO CII. As a contribution to the capital
of HGI, effective December 31, 2001, HFI hereby assumes all obligations, as
amended hereby, of HGI to CII under (a) the HGI Revolver and (b) any other
indebtedness of HGI to CII (whether or not such indebtedness is evidenced by a
writing).
2. HGI GUARANTY OF HFI OBLIGATIONS UNDER THE HFI REVOLVER. HGI
previously executed and delivered to CII that certain Guaranty of HomeGold, Inc.
and Security Agreement, effective as of December 31, 2000, whereby HGI
guaranteed certain obligations of HFI to CII (the "Guarantee") in connection
with that certain Assumption of Debt and Contribution to Capital Agreement
effective as of December 31, 2000. The undersigned hereby acknowledge, confirm
and agree that the Guarantee remains in full force and effect in accordance with
its terms and shall not in any manner be affected, impaired or discharged
hereby. The undersigned acknowledge and agree that the Lender is relying upon
the agreement of the undersigned contained herein as an inducement to entering
into that certain Amended & Restated Revolving Promissory Note in the principal
amount of $175,000,000 effective as of January 1, 2001.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Assumption of Debt and Contribution to Capital Agreement to be executed on its
behalf by its duly authorized officer as of the date first set forth above.
[SIGNATURES ON FOLLOWING PAGE]
HOMEGOLD FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
HOMEGOLD, INC.
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer
CAROLINA INVESTORS, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Secretary
