<PAGE>   1
                                                                  EXHIBIT 10.151

                                                                      Number W-1


NEITHER THIS WARRANT NOR THE STOCK FOR WHICH IT MAY BE EXERCISED HAS BEEN 
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"), OR 
ANY OTHER FEDERAL OR STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED OR 
OTHERWISE DISPOSED OF, EXCEPT AS PROVIDED IN ARTICLE III, UNLESS SO REGISTERED 
OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM.


                              MEGO FINANCIAL CORP.

                         COMMON STOCK PURCHASE WARRANT

     This certifies that, for value received, FINOVA CAPITAL CORPORATION, a 
_____________ corporation, and any registered assignee ("Holder"), is entitled 
to subscribe for and purchase from Mego Financial Corp. ("Company"), a 
corporation organized and existing under the laws of the State of New York, One 
Hundred Fifty Thousand (150,000) shares (subject to adjustment as set forth in 
Article II below, "Warrant Shares") of Common Stock of the Company, par value 
$.01 per share ("Common Stock"), at the exercise price of $1.00 per share 
(subject to adjustment as set forth in Article II below, "Exercise Price"), at 
any time and from time to time beginning on December 31, 1998, ("Exercise 
Date"), and ending on December 31, 2003 ("Expiration Date"), upon written 
notice from the Holder to the Company ("Notice") and subject to the terms 
provided herein.

     Capitalized terms used herein, and not otherwise defined, shall have the 
meanings specified in Article IV. This Warrant is subject to the following 
provisions, terms and conditions:


                                   ARTICLE I.

                        EXERCISE; RESERVATIONS OF SHARES

     Section 1.01 Warrant Exercise. The rights represented by this Warrant may 
be exercised by the Holder at any time and from time to time prior to the 
expiration of this Warrant and after December 31, 1998, as to a minimum of 
25,000 Warrant Shares, upon Notice, by the surrender at the principal office of 
the Company of this Warrant together with a duly executed subscription in the 
form annexed ("Subscription Form") and accompanied by payment, in certified or 
immediately available funds, of the Exercise Price for the number of Warrant 
Shares specified in the Subscription Form. The shares so purchased shall be 
deemed to be issued to the Holder (unless contrary instructions are provided on 
the Subscription Form) as the record owner of such shares as of the close of 
business on the date on which this Warrant shall be exercised as hereinabove 
provided. No fractional shares or scrip representing fractional shares shall be 
issued upon exercise of this Warrant and the number of shares that shall be 
issued upon such exercise shall be rounded to the nearest whole share without 
the payment or receipt of any additional consideration.


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     Section 1.02   Certificates. Certificates for the shares purchased pursuant
to Section 1.01 shall be delivered to the Holder within a reasonable time, not
exceeding ten (10) business days, after the rights represented by this Warrant
shall have been so exercised, and a new Warrant in the name of the Holder
representing the rights, if any, that shall not have been exercised prior to the
Expiration Date with respect to this Warrant shall also be delivered to such
Holder within such time, with such new Warrant to be identical in all other
respects to this Warrant. The term "Warrant," as used herein, includes any
Warrants into which this Warrant may be divided or combined and any subsequent
Warrants issued upon the transfer or exchange or reissuance upon loss hereof.

     Section 1.03   Reservation of Shares. The Company represents, warrants,
covenants and agrees;

          (a)  That all shares of Common Stock that may be issued upon exercise
     of this Warrant will, upon issuance, be validly issued, fully paid and
     nonassessable and free from all taxes, liens and charges with respect to
     the issue thereof;

          (b)  That during the period the rights represented by this Warrant may
     be exercised, the Company will at all times have authorized, and reserved
     for the purpose of issue and delivery upon exercise of the rights evidenced
     by this Warrant, a sufficient number of shares of Common Stock to provide
     for the exercise of the rights represented by this Warrant; and

          (c)  If the Common Stock is listed on any national securities exchange
     or similar trading market, the shares of Common Stock that may be issued
     upon exercise of this Warrant will, prior to or on the date that a
     Registration Statement covering the Warrant Shares is effective, also be
     listed on such exchange subject to notice of issuance.

                                   ARTICLE II

                                  ADJUSTMENTS

     SECTION 2.01   Reorganization, Reclassification, Consolidation, Merger or
Sale.

          (a)  Capital Events. If any reorganization or reclassification of the
     capital stock of the Company, or any consolidation or merger of the Company
     with another corporation, or the sale of all or substantially all of its
     assets to another corporation (in any instance, a "Capital Event") shall be
     effected in such a way that holders of Common Stock shall be entitled to
     receive stock, securities or assets (including cash) with respect to or in
     exchange for their Common Stock, then, as a condition of such Capital
     Event, lawful and adequate provisions shall be made whereby the Holder
     hereof shall thereafter have the right to purchase and receive upon the
     basis and upon the terms and conditions specified in this Warrant and in
     lieu of the shares of the Common stock of the Company immediately
     theretofore purchasable and receivable upon the exercise of the rights
     represented hereby, an amount of such shares of stock, securities or assets
     (including


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     cash) as may have been issued or payable with respect to or in exchange 
     for a number of outstanding shares of such Common Stock equal to the 
     number of shares of such stock immediately theretofore purchasable and 
     receivable upon the exercise of the rights represented hereby had such 
     Capital Event not taken place.

          (b)  Preservation of Value. In the case of any Capital Event, 
     appropriate provision shall be made with respect to the rights and 
     interests of the Holder of this Warrant to the end that the provisions 
     hereof (including, without limitation provisions for adjustment of the 
     number of shares that may be issued upon exercise of this Warrant and the 
     Exercise Price hereof) shall thereafter be applicable, as nearly as may 
     be, in relation to any shares of stock, securities or assets (including 
     cash) thereafter deliverable upon the exercise of the rights represented 
     hereby.

          (c)  Obligation Expressly Assumed. The Company shall not effect any 
     consolidation, merger or sale of all or substantially all of its assets, 
     unless prior to the consummation thereof the successor corporation (if 
     other than the Company) resulting from such consolidation or merger, or 
     the corporation into or for the securities of which the previously 
     outstanding stock of the Company shall be changed in connection with such 
     consolidation or merger, or the corporation purchasing such assets, as the 
     case may be, shall assume by written instrument executed and mailed or 
     delivered to the registered Holder at the last address of such Holder 
     appearing on the books of the Company, the obligation to deliver to such 
     Holder, upon exercise of this Warrant, such shares of stock, securities or 
     assets (including cash) as, in accordance with the foregoing provisions, 
     such Holder may be entitled to purchase.

     Section 2.02   Subdivision or Combination of Stock. In the event that the
Company shall at any time subdivide or split its outstanding shares of Common
Stock into a greater number of shares, the number of Warrant Shares subject to
issuance upon exercise of this Warrant at the opening of business on the day
upon which such subdivision becomes effective shall be proportionately
increased. In the event that the outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the number of shares
subject to issuance upon exercise of this Warrant at the opening of business on
the day upon which such subdivision becomes effective shall be proportionately
decreased. Any such increase or decrease, as the case may be, shall become
effective immediately after the opening of business on the day following the day
upon which such subdivision or combination, as the case may be, becomes
effective.

     Section 2.03   Stock Dividends. In the event that the Company shall at any 
time declare any dividend or distribution upon its Common Stock payable in 
stock, the number of Warrant Shares subject to issuance upon exercise of this 
Warrant shall be increased by the number (and the kind) of shares which would 
have been issued to the holder of this Warrant if this Warrant were exercised 
immediately prior to such dividend. Such increase shall become effective 
immediately after the opening of business on the day following the record date 
for such dividend or distribution.


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       Section 2.04  Cash or Other Non-Stock Dividends. In the event that the 
Company shall at any time declare any dividend or distribution upon its Common 
Stock payable in cash, assets or other property, (a "Non-Stock Dividend") the 
number of Warrant Shares subject to issuance upon the exercise of this Warrant 
shall be increased to a number obtained by multiplying (a) the number of 
Warrant Shares for which this Warrant is exercisable immediately prior to such 
dividend by (b) a fraction (i) the numerator of which shall be the Market Value 
per share of Common Stock at the date of the taking of the record holders of 
Common Stock entitled to such dividend or distribution and (ii) the denominator 
of which shall be such Market Value per share of Common Stock minus the 
Non-Stock Dividend paid per one share of Common Stock as determined for 
purposes of accounting for such transaction on the books of the Company. Such 
increase shall become effective immediately after the opening of business on 
the day following the record date for such dividend or distribution.

       Section 2.05  Additional Common Stock, Options, Convertible Securities. 
In the event the Company shall (a) issue any additional shares of Common Stock 
(other than through a stock subdivision or split covered by Section 2.02 or a 
dividend upon the Company's Common Stock payable in stock covered by Section 
2.03) for a consideration (but in no event shall said consideration be rendered 
except in cash) per share less than the Market Value thereof, (b) grant any 
options or warrants for the purchase of Common Stock where the Price per Share 
(as hereinafter defined) of Common Stock issuable upon conversion, exchange or 
exercise is less than the Market Value thereof immediately prior to the time of 
issuance or grant thereof ("Options"), or (c) issue or sell any convertible 
securities that are convertible into or exchangeable for Common Stock at a 
Price per Share less than the Market Value thereof immediately prior to the 
time of issuance or grant thereof ("Convertible Securities"), the number of 
Warrant Shares subject to issuance upon exercise of this Warrant shall be 
increased to a number obtained by multiplying (i) the number of Warrant Shares 
for which this Warrant is exercisable immediately prior to such issuance, grant 
or sale by (ii) a fraction (A) the numerator of which shall be the sum of the 
Outstanding Section 2.05 Shares (as defined below) plus the Deemed Additional 
Shares resulting from such issuance, grant, sale or payment and (B) the 
denominator of which shall be the number of shares ("Outstanding Section 2.05 
Shares") of Common Stock exercisable or outstanding immediately prior to such 
issuance, grant, sale or payment (as if all Options, warrants and rights to 
convert or exchange Convertible Securities outstanding immediately prior to 
such issuance, grant or sale had been exercised, whether or not actually 
exercisable on such date). Such increase shall become effective immediately 
after the opening of business on the day following such issuance, grant or 
sale, as the case may be.

       Section 2.06  Phantom Stock and Similar Compensation Plans. In the event 
the Company pays compensation to any employees, consultants or any other person 
pursuant to any phantom stock option, stock appreciation right, or other 
similar plan whereby the compensation paid is triggered by the settlement of a 
right (the "Right") to receive the difference between (i) a pre-established 
Price per Share that is less than the Market Value of the Common Stock 
immediately prior to the time of issuance or grant of the Right and (ii) the 
Market Value per share of the Common Stock on the settlement date of the Right, 
the number of Warrant Shares subject to issuance upon exercise of this Warrant 
shall be increased to a number obtained by multiplying (a) the number of 
Warrant Shares for which this Warrant is exercisable immediately



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<PAGE>   5
prior to the date such compensation is paid by (b) a fraction (i) the numerator 
of which shall be the exercise price per share of Common Stock on the date of 
grant and (ii) the denominator of which shall be the exercise price per share 
of Common Stock on the date of grant minus the amount of compensation paid 
allocable to one share of Common Stock. Such increase shall become effective 
immediately after the opening of business on the day following such grant.

       Section 2.07  Equitable Adjustment. In the event the Company shall 
participate in any extraordinary corporate event or transaction not otherwise 
provided for herein, including a so-called issuer self-tender, there shall be 
made an equitable and proportionate adjustment in the number of shares issuable 
upon exercise of this Warrant and the Exercise Price consistent with the 
principles of other such adjustments provided for in this Article II.

       Section 2.08  Treasury Shares. The number of shares of Common Stock 
outstanding at any given time shall not include shares owned or held by or for 
the account of the Company or any subsidiary of the Company except for shares 
presently held by the Company's subsidiary, Preferred Equities Corporation, for 
distribution to shareholders of Vacation Spa Resorts, Inc., and the disposition 
of any such shares (other than between the Company and any such subsidiary or 
between any such subsidiaries) shall be considered an issue or sale of Common 
Stock for purposes of this Article II.

       Section 2.09  Minimum Adjustment. No adjustment in the number of shares 
that may be issued upon exercise of this Warrant as provided in this Article II 
shall be required unless such adjustment would require an increase or decrease 
in such number of shares of at least one percent (1%) of the then adjusted 
number of shares of Common Stock that may be issued upon exercise of this 
Warrant; provided, however, that any such adjustments that by reason of the 
foregoing are not required to be made shall be carried forward and taken into 
account and included in determining the amount of any subsequent adjustment; 
and provided further, that if the Company shall at any time subdivide or 
combine the outstanding shares of Common Stock or issue additional shares of 
Common Stock as a dividend, said percentage shall forthwith be proportionately 
adjusted so as to appropriately reflect the same.

       Section 2.10   Adjustment of Exercise Price. Whenever the number of 
shares of Common Stock that may be issued upon exercise of this Warrant is 
adjusted and effective at the time such adjustment is effective, as provided in 
Sections 2.01, 2.02 and 2.03 of this Article II, the Exercise Price shall be 
adjusted (to the nearest whole cent) by multiplying each such Exercise Price 
immediately prior to such adjustment by a fraction (x) the numerator of which 
shall be the number of shares of Common Stock which may be issued upon the 
exercise of each such Warrant immediately prior to such adjustment, and (y) the 
denominator of which shall be the number of shares of Common Stock so 
purchasable immediately thereafter. The Company may retain a firm of 
independent certified public accountants (which may not be the regular 
accountants employed by the Company) to make any required computation, and a 
certificate signed by such firm shall be conclusive evidence of the correctness 
of such adjustment.



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     Section 2.11   Common Stock Buy Back. In the event the Company shall 
commence a buy back program for the acquisition by the Company of Common Stock, 
the Company agrees to purchase at Market Value all Warrant Shares from the 
Holder.

     Section 2.12   Record Date. In the event that the Company shall not take a 
record of the holders of its Common Stock for the purpose of entitling them to 
receive a dividend payable in Common Stock, then such record date shall be 
deemed for the purposes of this Article II to be the date of the issue or sale 
of the shares of Common Stock deemed to have been issued or sold upon the 
declaration of such dividend.

     Section 2.13   Officer's Certificate. Whenever the Exercise Price shall be 
adjusted as provided in this Article II, the Company shall forthwith file with 
its Secretary and retain in the permanent records of the Company, an officer's 
certificate showing the adjusted Exercise Price determined as provided in this 
Article II, setting forth in reasonable detail the facts requiring such 
adjustment, including a statement of the number of additional or fewer shares 
of Common Stock, and such other facts as may be reasonably necessary to show 
the reason for and the method of computing such adjustment. Each such officer's 
certificate shall be made available at all reasonable times for inspection by 
the Holder.

     Section 2.14   Notice of Adjustment. Upon any adjustment of the number of 
shares that may be issued upon exercise of this Warrant or the Exercise Price, 
the Company shall give notice thereof to the Holder, which notice shall state 
the increase or decrease, if any, in the number of shares that may be issued 
upon the exercise of this Warrant and the Exercise Price, setting forth in 
reasonable detail the method of calculation and the facts upon which such 
calculation is based.

     Section 2.15   Definition of "Common Stock". As used in this Article II, 
the term "Common Stock" shall mean and include all of the Company's authorized 
Common Stock of any class as constituted on the effective date hereof, and 
shall also include any capital stock of any class of the Company thereafter 
authorized that shall not be limited to a fixed sum or stated value in respect 
of the rights of the holders thereof to participate in dividends or the 
distribution of assets upon the voluntary or involuntary liquidation, 
dissolution or winding up of the Company.

     Section 2.16   Exclusion of Certain Stock. Notwithstanding anything in 
this Article II, no adjustment of the Exercise Price or the number of shares to 
be issued upon exercise of this Warrant shall be made upon, (i) the grant of 
options under any stock option plan of the Company now existing or hereafter 
adopted by the Company (as any such plan may be amended from, time to time), 
provided that the option price per share is not less than 100% of Market Value 
per share on the date of grant, (ii) the issuance of shares of Common Stock 
upon the exercise of options granted under any such plan or (iii) the issuance 
of approximately 9,500 shares of Common Stock to former shareholders of Mego 
International Corp.


                                  ARTICLE III.

                   TRANSFER RESTRICTIONS: REGISTRATION RIGHTS



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     Section 3.01 Securities Law Transfer Restrictions. By taking and holding
this Warrant, the Holder (i) acknowledges that neither this Warrant nor any
shares of Common Stock that may be issued upon exercise of this Warrant have
been registered under the Securities Act or any applicable state securities or
blue sky law (collectively, "Securities Laws"); (ii) agrees not to sell,
transfer or otherwise dispose of this Warrant or any such shares of Common Stock
without such registration unless the sale, transfer or disposition can be
effected without such registration and in compliance with the Securities Laws;
and (iii) agrees not to transfer this Warrant or any portion thereof or interest
therein except to a Permitted Assignee, as hereinafter defined. Any certificate
for shares of Common Stock issued upon exercise of this Warrant shall bear an
appropriate legend describing the foregoing restrictions, unless such shares of
Common Stock have been effectively registered under the applicable Securities
Laws.

     Section 3.02 Provision of Information by Holder. The Holder shall make 
available to the Company such written information, presented in form and 
content satisfactory to the Company, as the Company may reasonably request, 
from time to time, in order to make the determination provided for in Section 
3.01.

     Section 3.03 Registration Rights. The following provisions shall apply 
irrespective of whether the Holder holds this Warrant or has exercised this 
Warrant and holds Warrant Shares, and shall apply during the period beginning 
on the Issue Date and continuing until the Expiration Date:

          (a)  The Company shall, within one year from the Issue Date, include 
the Warrant Shares in a registration statement ("Registration Statement") filed 
with the Securities and Exchange Commission under the Securities Act, and have 
such Registration Statement declared effective no later than the first 
anniversary after the Exercise Date so that upon issuance the Warrant Shares 
will be freely tradeable, provided that the holder shall furnish to the Company 
all appropriate information in connection therewith as the Company may 
reasonably request. Such registration statement shall remain continuously 
effective until the Expiration Date.

          (b)  The Company shall (i) bear the costs, expenses and fees incurred 
in connection with any such registration, excluding any broker fees, selling 
commissions, and out-of-pocket costs and expenses of the Holder, (ii) use its 
best efforts to keep any such registration statement effective through the 
Effective Date, as amended from time to time, as necessary (iii) supply 
prospectuses and other documents as the Holder may reasonably request; (iv) use 
its best efforts to register and qualify the Warrant Shares for sale in such 
states as the Holder designates; (v) do any and all other acts and things that 
may be necessary or desirable to enable Holder to consummate the public sale or 
other disposition of the Warrant Shares; and (vi) enter into 
cross-indemnification arrangements with the Holder with respect to matters 
arising from such Registration Statement and public offering.



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                                  ARTICLE IV.

                                  DEFINITIONS

     As used herein, the following terms shall have the meanings specified
below:

     "DEEMED ADDITIONAL SHARES" shall mean (i) in the case of the issuance of
Common Stock for a consideration per share less than the Market Value thereof, a
number of shares of Common Stock equal to the number obtained by subtracting (x)
the number of shares of Common Stock that would have been issued for the total
consideration being paid in connection with such issuance, if the price per
share of the Common Stock issued equalled the Market Value thereof immediately
prior to such issuance from (y) the number of shares of Common Stock so issued;
or (ii) in the case of the grant or issuance of an Option or Convertible
Security, a number of shares of Common Stock equal to the number obtained by
subtracting (x) the number of shares of Common Stock that would be issuable
under such exercise, conversion or exchange if the Price per Share payable
thereon equalled the Market Value of shares of Common Stock immediately prior to
such grant or issuance, from (y) the number of shares of Common Stock issuable
upon the exercise, conversion or exchange thereof.

     "INDEPENDENT APPRAISAL" shall mean an evaluation of the price that would be
paid if the Company were sold at the time on an orderly basis as a going
concern, which evaluation shall be made by an Independent Financial Expert.

     "INDEPENDENT FINANCIAL EXPERT" shall mean an independent financial expert
selected by the Company's Board of Directors on not less than ten (10) days
prior written notice to the Holder but shall not include any independent
financial expert to whom the Holder shall object in writing not later than ten
(10) days after the Board's delivery of notice of selection.

     "MARKET VALUE" of a share of Common Stock of the Company shall be:

          (i)  if the Common Stock is listed on a national securities exchange,
     the closing price of such Common Stock on the principal national
     securities exchange on which such Common Stock is traded on the date for
     which any determination of Market Value is made for any purpose hereunder
     ("Determination Date"), or, if there shall have been no sales on any such
     exchange on the Determination Date, the average of the highest bid and
     lowest asked prices on such principal exchange on such Determination Date;
     or

          (ii) if the Common Stock is not listed on a national securities
     exchange, the closing price on the NASD's National Market System, or, if
     there shall have been no sales on the Determination Date on the National
     Market System, the average of highest bid and lowest asked prices on the
     Determination Date on the National Market System, as applicable; or

          (iii) if the Common Stock is not listed on a securities exchange or
     the National Market System, the average of the representative bid and asked
     prices of the Stock as of the close of trading on the Determination Date as
     quoted in the NASDAQ System; or


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     (iv) if the Common Stock is not quoted in the NASDAQ System, the average 
of the high and low bid and asked prices on the Determination Date in the 
over-the-counter market as reported by the NASD Bulletin Board, the National 
Quotation Bureau, Incorporated, or any similar successor organization; or

     (v) if the Common Stock is not listed on or traded in any recognized 
securities market, such value as the Company and the Holder may agree upon; or

     (vi) if the Company and the Holder cannot agree on a value for the Common 
Stock within thirty (30) days after the Company or the Holder has made a 
written proposal with respect to such value to the other party, the fair market 
value of the Stock as of the Determination Date as determined by an Independent 
Appraisal. The fees and expenses incurred by the Independent Financial Expert 
in rendering its Independent Appraisal shall be paid by the Company. The 
determination of the Market Value of the Common Stock shall be based solely 
upon the value of the Company and shall be computed by dividing the amount that 
represents the value of the Company by the number of outstanding shares of 
Common Stock. In making such a valuation, items such as discounts for minority 
interests, lack of marketability of the Common Stock or blockage shall not be 
considered.

     "PERMITTED ASSIGNEE" shall mean any individual or entity who receives 
valid title and interest to this Warrant or any portion thereof and who 
additionally accepts by written instrument each of the terms and conditions 
that govern the ownership of this Warrant.

     "PRICE PER SHARE" for shares of Common Stock issuable upon the conversion 
of Convertible Securities or the exercise of Options shall be determined by 
dividing (i) the sum of (A) the total amount of consideration, if any, received 
or receivable by the Company as consideration for the granting of such Options 
or the issuance of such Convertible Securities plus (B) the minimum aggregate 
amount of additional consideration payable to the Company upon the exercise of 
all such Options or the conversion or exchange of such Convertible Securities 
into Common Stock plus (C) in the case of all such Options that relate to 
Convertible Securities, the minimum aggregate amount of additional 
consideration, if any, payable upon the issuance of all such Convertible 
Securities and upon conversion or exchange of all such Convertible Securities 
into Common Stock, by (ii) the total number of shares of Common Stock issuable 
upon the exercise of such Options or upon the conversion or exchange of all 
such Convertible Securities.


                                   ARTICLE V.

                                 MISCELLANEOUS

     Section 5.01   Transfer of Warrants. Subject to Article III, this Warrant 
and any shares of any Stock obtained upon exercise of this Warrant may be 
transferred at the principal office of the Company by registration in the stock 
books of the Company maintained for such purpose upon delivery to the Company 
of a duly executed assignment in the form annexed ("Assignment Form").



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<PAGE>   10


      Section 5.02     Notices.   Any notice or communication to be given
pursuant to this Warrant shall be in writing and shall be delivered in person or
by certified mail, return receipt requested, in the United States mail, postage
prepaid. Notices to the Company shall be addressed to the Company's principal
office. Notices to the Holder shall be addressed to the Holder's address as
reflected in the records of the Company. Notices shall be effective upon
delivery in person, or, if mailed, at midnight on the fifth business day after
mailing.

      Section 5.03     Issue Tax.   The issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder for any issuance tax in respect thereof, provided that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of the Warrant exercised.

      Section 5.04     No Shareholder rights.   This Warrant shall not entitle
the Holder to any voting rights or other rights as a shareholder of the Company.

      Section 5.05     Current Information.   The Company shall cause copies of
all financial statements and reports, proxy statements and other documents that
are provided to its shareholders to be sent by first class mail, postage
prepaid, on the date of mailing to such shareholders, to the Holder at the
address reflected in the records of the Company.

      Section 5.06     Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.

      Section 5.07     Headings: Interpretation.   The section headings used
herein are for convenience of reference only and are not intended to define,
limit or describe the scope or intent of any provision of this Warrant. When
used in this Warrant, the term "including" shall mean "including, without
limitation by reason or enumeration".

      Section 5.08     Successors.   The covenants, agreements and provisions of
this Warrant shall bind the parties hereto and their respective successors and
permitted assigns.

 

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be issued as of 
the 23rd of December, 1998.

<TABLE>
<S>                                     <C>
ATTEST:                                 MEGO FINANCIAL CORP.

By: [SIG]                               By: [SIG]
    ----------------------------------      ------------------------------------
Title: Secretary                        Title: President
       ------------------------------          ---------------------------------
</TABLE>





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<PAGE>   12

                               SUBSCRIPTION FORM

                  TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT

        The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases __________ shares of Common Stock MEGO FINANCIAL
CORP. that may be issued under this Warrant and herewith delivers the sum of
$_________ in full payment of the Exercise Price for such shares, all on the
terms and conditions specified in this Warrant. Such shares are to be registered
in the name of the registered holder of this Warrant unless contrary
instructions are herein given and certificates evidencing such shares are to be
delivered to it/him/her at the address reflected in the records of the Company
unless contrary instructions are herein given.

Register shares in the name of

_______________________________________________________________________________


Deliver certificates to

_______________________________________________________________________________


Dated:______________________                    _______________________________
                                                (Signature of Registered Owner)

                                                _______________________________
                                                (Street Address)

                                                _______________________________
                                                (City) (State) (Zip Code)



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<PAGE>   13
                                ASSIGNMENT FORM

                 TO BE EXECUTED ONLY UPON ASSIGNMENT OF WARRANT

     For value received, the undersigned registered owner,
____________________________________ hereby sells, assigns and transfers unto
___________________________________________, whose address is
_______________________________________, the right to purchase Common Stock of
MEGO FINANCIAL CORP. represented by this Warrant to the extent of _________
shares, as to which such right is exercisable and does hereby irrevocably
constitute and appoint ______________________, Attorney-in-Fact, to transfer the
same on the books of the Company with full power of substitution in the
premises. The assignee hereby agrees to assume the obligations of the Warrant
Holder contained in this Warrant to the extent any such obligations are
applicable to it. The registered owner and the assignee each warrant and
represent to Mego Financial Corp. that the assignee is a Permitted Assignee as
defined in the Warrant.

Dated:______________________                    _______________________________
                                                (Signature of Registered Owner)

                                                _______________________________
                                                (Street Address)

                                                _______________________________
                                                (City) (State) (Zip Code)

Dated:______________________                    _______________________________
                                                (Signature of Assignee)


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