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Form Of Stock Restriction Agreement - HOMEGOLD FINANCIAL INC - 5-15-2000

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Form Of Stock Restriction Agreement - HOMEGOLD FINANCIAL INC - 5-15-2000 Powered By Docstoc
					EXHIBIT 10.11 FORM OF STOCK RESTRICTION AGREEMENT The persons listed below have entered into the Stock Restriction Agreement set forth below in connection with the consummation of the merger of HomeSense Financial Corp. and certain of its affiliates with and into HomeGold,
Inc.; R. Joe Arnold Matthew J. Arnold David C. Gaffney Larry C. Hamilton John W. Neal Ronald J. Sheppard Charles D. Sides, Jr. Terrell E. Stubbs Mary Francis Wyche Sarah Wyche Coenen Wyche Profit Sharing Plan Bradford Wheeler Wyche Harriet Wyche C.T. Wyche Mickel Investment Group, Inc. Minor H. Mickel Rachelle Ellison Mickel Anne Carter Shaw Minor M. Shaw Kathryn Alston Shaw

Elizabeth S. Jarrett Elizabeth Sterling Jarrett Robert Elliott Jarrett William Blakely Jarrett Daniel E.H. Sterling Sterling Family Ltd. Partnership Charles Taylor Sterling Elizabeth H. Sterling John M. Sterling IV John M. Sterling, Jr. Estate of Buck Mickel Buck A. Mickel Charles C. Mickel Charles C. Mickel, Custodian Charles C. Michel, Custodian 2 Charles C. Mickel, Custodian 3 Harold E. Shaw, Jr. Harold Ellis Shaw III Buck A. Mickel, Custodian for Tyler Vaughan Mickel

STOCK RESTRICTION AGREEMENT This Stock Restriction Agreement is entered into by and between the undersigned shareholders of HomeGold Financial, Inc. ("HomeGold"). WHEREAS, HomeGold is entitled to claim net operating loss carry forwards for federal income tax purposes, the tax benefits of which will be substantial and material in the future; and WHEREAS, the tax benefits of the HomeGold loss carry forwards will be greatly reduced, and possibly lost entirely, if an "Ownership Change", within the meaning of Section 382(g) of the Internal Revenue Code, occurs; and WHEREAS, it is in the mutual best interest of the principal shareholders of HomeGold to take steps to insure that an Ownership Change will not take place and therefore each of the

undersigned shareholders of HomeGold has agreed to the restrictions set forth below upon their purchase and sale of the shares of HomeGold. NOW, THEREFORE, in consideration of the mutual promises herein contained, each of the undersigned shareholders agrees that prior to any purchase or sale of the Common Stock of HomeGold, such party will give written notice to the Company, at the address below, specifying whether such purchase or sale will be an open market transaction or a purchase by a specific person or a sale to a specific person and will not consummate such purchase or sale if the Company advises such party within five (5) days of its receipt of such written notice, that such proposed purchase or sale could reasonably be expected to create an "Owner Shift" within the meaning of Section 382(g)(2) of the Internal Revenue Code. In this connection each party will provide the Company such additional information as it may reasonably request in order to make that determination set forth above, including

undersigned shareholders of HomeGold has agreed to the restrictions set forth below upon their purchase and sale of the shares of HomeGold. NOW, THEREFORE, in consideration of the mutual promises herein contained, each of the undersigned shareholders agrees that prior to any purchase or sale of the Common Stock of HomeGold, such party will give written notice to the Company, at the address below, specifying whether such purchase or sale will be an open market transaction or a purchase by a specific person or a sale to a specific person and will not consummate such purchase or sale if the Company advises such party within five (5) days of its receipt of such written notice, that such proposed purchase or sale could reasonably be expected to create an "Owner Shift" within the meaning of Section 382(g)(2) of the Internal Revenue Code. In this connection each party will provide the Company such additional information as it may reasonably request in order to make that determination set forth above, including the identity of the proposed seller or purchaser unless it is proposed that such sale take place as a market transaction. The foregoing restrictions shall terminate upon any of the following: (a) the expiration of three years after the Closing of the merger of HomeGold and HomeSense Financial Corp.; (b) an Ownership Change, as defined in Section 382(g) of the Internal Revenue Code; (c) HomeGold shall have ceased to have at least $5,000,000 of net operating loss carry forwards; or (d) the HomeGold Board shall determine that the restrictions are no longer necessary. Each of the undersigned shareholders agree that HomeGold shall be entitled to treat any attempted purchase or sale in violation of the terms of this Agreement as null and void and HomeGold shall be entitled to disregard such attempted purchase or sale. It is agreed that HomeGold's stock transfer agent may be given "stop transfer" instructions consistent with the foregoing. Each of the undersigned agrees to make available to HomeGold all certificates representing HomeGold stock owned by the undersigned, so that such certificates may be legended to note the restrictions imposed by this Agreement. This Agreement may be signed in counterparts. HOMEGOLD FINANCIAL, INC. By: ____________________________

ARTICLE 5 LEGEND - THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF HOMEGOLD FINANCIAL, INC. AND SUBSIDIARIES FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. CIK: 0000277028 NAME: HOMEGOLD FINANCIAL, INC. MULTIPLIER: 1000 CURRENCY: US DOLLAR

FISCAL YEAR END PERIOD START PERIOD END PERIOD TYPE EXCHANGE RATE CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY

DEC 31 2000 JAN 1 2000 MAR 31 2000 3 MOS 1 13135 0 85831 (6889) 0
1

ARTICLE 5 LEGEND - THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF HOMEGOLD FINANCIAL, INC. AND SUBSIDIARIES FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. CIK: 0000277028 NAME: HOMEGOLD FINANCIAL, INC. MULTIPLIER: 1000 CURRENCY: US DOLLAR

FISCAL YEAR END PERIOD START PERIOD END PERIOD TYPE EXCHANGE RATE CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS COMMON PREFERRED MANDATORY PREFERRED OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

DEC 31 2000 JAN 1 2000 MAR 31 2000 3 MOS 1 13135 0 85831 (6889) 0 01 22933 (6344) 199320 01 11704 509 0 0 (2530) 199320 0 6727 0 11700 0 990 4003 (9966) (10111) (10112) 0 226 0 (9886) (.097) (0.97)

* FOOTNOTE (1) Unclassified Balance Sheet * FOOTNOTE (1) Unclassified Balance Sheet