<PAGE>   1
                                                                  Exhibit 10.150


              FORBEARANCE AGREEMENT AND AMENDMENT NO. 5 TO SECOND
                 AMENDED AND RESTATED AND CONSOLIDATED LOAN AND
                               SECURITY AGREEMENT


       This Forbearance Agreement and Amendment No. 5 to Second Amended and 
Restated and Consolidated Loan and Security Agreement ("Amendment") dated as of 
December 23, 1998 is entered into by and among FINOVA CAPITAL CORPORATION, a 
Delaware corporation ("FINOVA" or "Lender"), PREFERRED EQUITIES CORPORATION, a 
Nevada corporation ("Borrower") and MEGO FINANCIAL CORP., a New York 
corporation ("Guarantor") and has reference to the following facts:

       A.     FINOVA and Borrower entered into a Second Amended and Restated 
and Consolidated Loan and Security Agreement dated as of May 15, 1997 (the 
"Original Loan Agreement") that evidences a loan from FINOVA to Borrower. The 
Original Loan Agreement was amended by the Hartsel Springs Side Letter dated 
February 18, 1998 (the "First Amendment"), by the Letter Agreement [Biloxi 
Property] dated March 20, 1998 (the "Second Amendment"), by the Letter 
Agreement [Headquarters Readvance] dated September 29, 1998 (the "Third 
Amendment") and by the Amendment No. 4 to Second Amended and Restated and 
Consolidated Loan and Security Agreement dated November 6, 1998 (the "Fourth 
Amendment and together with the Original Loan Agreement, the First Amendment, 
the Second Amendment and the Third Amendment, collectively the "Loan 
Agreement").

       B.     Borrower has advised FINOVA that Borrower may not have performed 
each and every term and condition of the Documents, which nonperformance may 
constitute an Event of Default. Such events of nonperformance (collectively the 
"Existing Events of Default") may allow FINOVA to exercise its rights under the 
Loan Agreement. Such events of nonperformance include, without limitation, 
Borrower's failure to meet the Sales, General and Administrative Expense to Net 
Sales covenant contained in Section 8.23(d) of the Loan Agreement as amended by 
the Fourth Amendment.

       C.     In the event there exists an Existing Event of Default, Borrower 
has requested that FINOVA forbear from enforcing its rights and remedies under 
the Documents with respect thereto. Borrower has also requested that FINOVA 
lend to Borrower the amount of Five Million Six Hundred Sixty Two Thousand 
Dollars ($5,662,000) in addition to the amounts already loaned or agreed to be 
loaned to Borrower under the Documents. FINOVA has agreed to (i) fund a portion 
of such new loan, in the amount of Three Million Dollar ($3,000,000) (the 
"Tranche A Loan"), on the terms provided herein, (ii) fund a portion of the new 
loan, in the amount of Two Million Six Hundred Sixty Two Thousand Dollars 
($2,662,000) (the "Tranche B Loan") on the terms provided herein, and (iii) 
forbear from enforcing its rights and remedies as provided herein.
<PAGE>   2
       D.     Borrower has advised FINOVA that Borrower will be paying its 
debts as they mature in the ordinary course with the proceeds of the Additional 
Advances.

       Now, therefore, in consideration of the foregoing and for the good and 
valuable consideration provided herein, FINOVA, Borrower and Guarantor agree as 
follows:

       1.     LOAN AGREEMENT. Unless otherwise defined herein, all capitalized 
terms used herein shall have the same meaning set forth in the Loan Agreement. 
Provided the conditions precedent described in Section 4 of this Amendment are 
met to the satisfaction of FINOVA, which satisfaction will be evidenced by 
FINOVA's execution of this Amendment, the Loan Agreement is hereby further 
modified as follows:

       1.1    The Loan Agreement is hereby amended by adding to Article I the 
following definitions:

       "Additional Advance Note":  that certain Promissory Note (Additional 
Advances) of Borrower of even date with the Fifth Amendment, executed and 
delivered to FINOVA in the amount of Five Million Six Hundred Sixty Two 
Thousand Dollars ($5,662,000) evidencing the Additional Advances, together with 
any modifications, amendments, restatements or supplements from time to time 
made thereto whether now or hereafter existing.

       "Additional Advances":  shall have the meaning set forth in the Fifth 
Amendment.

       "Affiliate":  means any Person controlling, controlled by or under 
common control with Borrower. For purposes of this definition, "control" means 
the possession, directly or indirectly, of the power to direct or cause 
direction of the management and policies of any Person, whether through 
ownership of common or preferred stock or other equity interests, by contract 
or otherwise. Without limiting the generality of the foregoing, each of the 
following shall be an Affiliate: Guarantor, any officer or director of 
Borrower, any shareholder, member or subsidiary of Borrower, and any other 
Person with whom or which Borrower has common shareholders, officers or 
directors. This definition shall be applicable only with respect to Section 3.1 
of the Fifth Amendment.

       "Brigantine Inn":  shall mean Ramada Vacation Suites on Brigantine Beach 
located in Brigantine, New Jersey and identified in the Business Plan as 
"Brigantine Inn".

       "Brigantine Villas":  shall mean Ramada Vacation Suites on Brigantine 
Beach located in Brigantine, New Jersey and identified in the Business Plan as 
"Brigantine Villas".

       "Business Plan":  shall mean that certain Revised Fiscal 1999 Business 
Plan (New Plan) submitted by Borrower to FINOVA on December 9, 1998.



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<PAGE>   3

     "Calvada Eye": shall mean that parcel of real property described in the 
Business Plan as "Calvada Eye."

     "Calvada Land": shall mean all unsold residential Lots as of the date of 
this Amendment located in Borrower's Calvada Development in Pahrump, Nevada.

     "Calvada Meadows Unit 2 RV Park": shall mean that parcel of real property 
described in the Business Plan as "Proposed RV Park in Calvada Meadows Unit 2 
along Highway 160."

     "Calvada RV Park": shall mean that certain RV Park timeshare project 
located in Pahrump, Nevada and identified in the Business Plan as "Calvada RV 
Park."

     "Calvada Unit 2 Raw Land": shall mean that parcel of real property 
described in the Business Plan as "Raw land bordering Calvada North Unit 2."

     "Calvada North Unit 5": shall mean that parcel of real property described 
in the Business Plan as "Proposed Calvada North Unit 5 (Kissam).

     "CNUC/Cottonwood Park": shall mean that certain parcel of real property 
described in the Business Plan as "Old CNUC/Cottonwood Park area in Valley 
Unit 6."

     "Colorado Water Rights": shall mean those water rights located in Huerfano 
County, Colorado and described in the Business Plan as "Colorado Water Rights."

     "Fifth Amendment": shall mean the Forbearance Agreement and Amendment 
No. 5 to Second Amended and Restated and Consolidated Loan and Security 
Agreement dated December 23, 1998 among Borrower, Lender and Guarantor.

     "Forbearance Collateral Release Conditions": shall mean the occurrence of 
all of the following: (i) the principal amount of the Additional Advances and 
all accrued interest shall have been paid in full, (ii) there shall then exist 
no Event of Default (including the Existing Events of Default) or Incipient 
Default and (iii) Borrower has been in compliance, in all material respects, 
with the Business Plan for the months of March 1999, April 1999, May 1999 and 
June 1999.

     "Former STP Site": shall mean that parcel of real property described in 
the Business Plan as "Former STP Site below Comstock Park."

     "Golf Courses": shall mean that certain golf course development described 
in the Business Plan as "Golf Courses."

     "Incipient Default": shall mean an act or event which with notice, passage 
of time or both would constitute an Event of Default.


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<PAGE>   4

        "NWC Highway 160 Calvada": shall mean that parcel of real property 
described in the Business Plan as "Northwest corner of Highway 160 and Calvada 
Boulevard."

        "Stock Pledge Agreement": shall have the meaning set forth in Section 
4.2(b) of the Fifth Amendment.

        "SWC Highway 160 Calvada": shall mean that parcel of real property 
described in the Business Plan as "Southwest corner of Highway 160 and Calvada 
Boulevard."

        "RV Park Remainder": shall mean that parcel of real property described 
in the Business Plan as "Remainder parcel of existing RV Park."

        "White Sands": shall mean that certain time share project known as 
Ramada Vacation Suites at White Sands located in Honolulu, Hawaii.

        1.2. The definition of the following term in Article I of the Loan 
Agreement, including, to the extent applicable, the First Amendment, Second 
Amendment, Third Amendment and Fourth Amendment is hereby amended and restated 
in its entirety to read as follows:

        "Receivables Loan": shall mean that portion of the Loan not to exceed 
$75,000,000, less the aggregate outstanding principal balance of (a) all 
Advances made under the Mortgage Loan Facility, (b) the Aloha Bay Note, (c) the 
Office Note, (d) the Biloxi Note and (e) the Additional Advance Note.

        1.3 The provisions of Paragraph 2.1 of the Loan Agreement are hereby 
amended and restated in their entirety to read as follows:

        "2.1 The Loan. Subject to the terms and conditions of this Agreement,
Lender hereby agrees to make a Loan to Borrower in the amounts and for the
purposes hereinafter described. The Loan shall be constituted of the Receivables
Loan, the Mortgage Loan Facility, a One Million Seven Thousand One Hundred
Dollars ($1,007,100) nonrevolving mortgage loan made with respect to Aloha Bay
(the "Aloha Bay Loan"), a Six Million Five Hundred Eighty Three Thousand Four
Hundred Six and 43/100 Dollar ($6,583,406.43) nonrevolving mortgage loan
previously made with respect to the Headquarters Building and the FCFC Property
(the "Office Loan"), a One Million One Hundred Seventy Three Thousand Seven
Hundred Fifty Dollar ($1,173,750.00) nonrevolving mortgage loan previously made
with respect to the Biloxi Property and the Additional Advances."


                                       4
<PAGE>   5

        1.4 The provisions of Paragraph 2.2 of the Loan Agreement are hereby 
amended and restated in their entirety to read as follows:

        "2.2 Receivables Loan. Upon Borrower's request, subject to the 
conditions precedent state in Article V hereof and elsewhere in this Agreement 
Lender hereby agrees that the Receivables Loan will be disbursed to Borrower, 
from time to time, in periodic advances, but in no event after the Receivables 
Borrowing Term has expires, in amounts not to exceed those determined by 
subtracting (a) the difference between the unpaid principal balance outstanding 
under the Loan at the time of each Advance over the outstanding principal 
balance of the aggregate of (i) Advances made under the Mortgage Loan Facility, 
(ii) the Aloha Bay Loan, (iii) the Office Loan, (iv) the Additional Advances 
and (v) the Biloxi Note from (b) the Borrowing Base, determined as of the date 
thereof after giving effect to all Eligible Receivables then assigned to (and 
not reassigned by) Lender; provided, however, that the outstanding principal 
amount of the Loan shall not exceed at any time the Maximum Loan Amount, and; 
provided, further, that the principal amount of any and all indebtedness of 
Borrower to Lender which is secured by Receivables Collateral encumbering Lots 
shall not exceed $35,000,000.00."

        1.5 The provisions of Section 2.3.7.5 of the Loan Agreement are hereby 
amended to provide that the entire remaining balance of the Towers Note, 
together with all accrued and unpaid interest and all other sums due and owing 
thereon, shall be due and payable in full on June 30, 1999.

        1.6 The provisions of Paragraph 2.6 of the Loan Agreement are hereby 
amended and restated in their entirety to read as follows:

        "2.6 All Advances of the Loan, whether made under the Receivables Loan 
and evidenced by the Receivables Note, or made under the Mortgage Loan Facility 
and evidenced by a Project Note, or made under the Aloha Bay Loan and evidenced 
by the Aloha Bay Note or made under the Office Loan and evidenced by the 
Office Note, and made with respect to the Biloxi Property and evidenced further 
by the Biloxi Note or made under the Fifth Amendment and evidenced by the 
Additional Advance Note shall be deemed to be a single Loan."

        1.7 Paragraph 8.13.(c) of the Loan Agreement is hereby modified to 
require that interim financial statements for the Borrower and the Guarantor be 
supplied to FINOVA on a monthly basis, rather than a quarterly basis, within 
thirty (30) days following the end of each calendar month.

        1.8 The Office Note is hereby amended to require the payment of 
interest only commencing with the payment due on January 1, 1999 and continuing 
for each subsequent payment due thereafter through and including the payment 
due June 1, 1999. Commencing on July 1, 1999 and on the first day of each month 
thereafter, the Office Note shall be paid in installments of principal and 
interest as more fully set forth in the Office Note.


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<PAGE>   6
Such deferred principal payments shall continue to accrue interest at the rate 
set forth in the Office Note and shall be payable on the Maturity Date (as that 
term is defined in the Office Note) unless the balance of the Office Note is 
previously accelerated pursuant to the provisions thereof.

          1.9  Paragraph (e) of Exhibit "I-C" of the Loan Agreement (i.e. 
Conditions of Eligible Receivables) shall be amended and restated in its 
entirety to read as follows:

          As of the time the original Advance against such Instrument or
          Contract is made, no payment is more than twenty-nine (29) days
          overdue or has been deferred.

          2.   ADDITIONAL ADVANCES.

          2.1  FINOVA is willing to make the Tranche A Loan and the Tranche B
Loan (collectively, the "Additional Advances") to Borrower on the terms and
conditions provided herein. The proceeds of the Additional Advances shall be
used solely for the payment of existing accounts payable and employees salaries
and commissions in the ordinary course of business and for the purposes set
forth in the Business Plan. The Documents are hereby modified as follows to
provide for the Additional Advances. The Additional Advances shall reduce,
dollar for dollar, the amount of borrowing availability under the Mortgage Loan
Facility. In no event shall the outstanding principal balance of the Additional
Advances and the outstanding principal balance of the Mortgage Loan Facility
exceed, at any time, the sum of Fifteen Million Dollars ($15,000,000) and in the
event such limitation is exceeded, Borrower shall immediately make a payment to
FINOVA in an amount equal to such excess together with interest thereon. No
prepayment premium shall be payable in connection with the payment of such
excess. The Additional Advances are nonrevolving in nature.

          2.2  The Tranche A Loan shall be advanced to Borrower in no more than 
two (2) Advances, on or before December 31, 1998. FINOVA's obligation to make 
any Advances of the Tranche A Loan are conditioned upon the satisfaction of 
both the General Conditions (as hereinafter defined) and the Conditions 
Precedent (as hereinafter defined). FINOVA shall have no obligation to make any 
Advance of the Tranche B Loan after January 31, 1999 and there shall be no more 
than two (2) Advances of the Tranche B Loan proceeds in any one (1) calendar 
month. FINOVA's obligation to make any Advances of the Tranche B Loan shall be 
subject to the continued satisfaction of the General Conditions and to the 
satisfaction of the Conditions Subsequent (as hereinafter defined). Subject to 
the foregoing conditions, Additional Advances shall be advanced to Borrower 
pursuant to the Request for Advance and Certification in the form attached 
hereto as Exhibit 2.2



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<PAGE>   7
          3.   ASSIGNMENT OF SALES PROCEEDS.

          3.1  As additional security for the payment and Performance of all 
the Obligations, Borrower hereby grants, transfers and assigns to FINOVA a 
Security Interest in and to the Excess Proceeds Collateral. FINOVA's Security 
Interest in the Excess Proceeds Collateral shall be absolute, continuing and 
applicable to all existing and future Advances and shall secure the repayment 
of the Loan (including without limitation the Additional Advances) and the 
Performance of all Obligations throughout the Term of the Loan. For purposes 
hereof, the term "Excess Proceeds Collateral" shall mean (a) ten percent (10%) 
of the gross sales price arising from the sale of a Unit in each of Project 
(Towers), Project (Villas) and White Sands and (b) all proceeds received by 
Borrower or any Affiliates of Borrower arising from a sale of each of (i) 
CNUC/Cottonwood Park, (ii) NWC Highway 160 Calvada, (iii) SWC Highway 160 
Calvada, (iv) RV Park Remainder, (v) Calvada Eye, (vi) Calvada North Unit 5, 
and (vii) Golf Courses, net, in each instance, in the case of this clause (b), 
of the sum of an amount no greater than the following release price, reasonable 
brokerage commissions and closing costs:
<TABLE>
<CAPTION>

       Property                        Lien Holder                    Release Price
       --------                        -----------                    -------------
<S>                                <C>                                <C>
CNUC/Cottonwood Park               Textron Financial Corp.            $1,962,500.00
NWC Highway 160 Calvada            Textron Financial Corp.            $  392,500.00
SWC Highway 160 Calvada            Textron Financial Corp.            $  390,000.00
RV Park Remainder                  Textron Financial Corp.            $1,525,000.00
Calvada Eye                        Textron Financial Corp.            $1,880,000.00
Calvada North Unit 5               William Kissam                     $  100,000.00
Golf Courses                       BancBoston                         $  750,000.00
</TABLE>

Excess Proceeds Collateral shall be paid to FINOVA immediately upon the closing 
of the sale of the applicable property. Borrower represents and warrants to 
FINOVA that the only persons holding liens against the properties in the 
columnar list above are as set forth above (together with real property taxes 
and assessments not yet due and payable) and that the above referenced 
lienholders will release their respective liens on the applicable parcel of 
property upon receipt of an amount no greater than the release price set forth 
above. Borrower covenants and agrees that prior to the occurrence of the 
Forbearance Collateral Release Conditions, Borrower will not further encumber 
the aforementioned properties. Borrower covenants and agrees to sell the 
aforementioned properties solely for terms which require payment to Borrower of 
the entire purchase price in cash. Furthermore, without the prior written 
consent of FINOVA, Borrower shall not sell any of the aforementioned properties 
or any of the other assets set forth in the Business Plan for an amount less 
than eighty percent (80%) of the "Asking Price" as set forth the Business Plan.

          3.2  In the event any of the aforementioned lienholder's liens are
satisfied prior to satisfaction of the Forbearance Collateral Release
Conditions, Borrower agrees to grant to FINOVA a first mortgage or deed of trust
lien on those properties which were previously encumbered by such lien, pursuant
to a deed of trust or mortgage acceptable to



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<PAGE>   8
FINOVA, subject only to such matters as are acceptable to FINOVA, as additional 
security for the payment and Performance of the Obligations. Concurrently 
therewith, Borrower shall obtain a lender's policy of title insurance from a 
title insurance underwriter acceptable to FINOVA with respect to such mortgages 
or deeds of trust, in the amount of the Additional Advance Note and in form and 
substance and with such endorsements as are acceptable to FINOVA (or any 
irrevocable commitment issue such policy) all at the sole cost and expense of 
the Borrower. Such deeds of trust or mortgages shall be accompanied by an 
Environmental Certificate with Representations. Covenants and Warranties in a 
form acceptable to FINOVA with respect to the property encumbered by such 
mortgage or deed of trust. The security interest granted to FINOVA pursuant to 
the aforementioned mortgages or deeds of trust shall be absolute, continuing 
and applicable to all existing and future Advances and secure the repayment of 
the Loan (including without limitation the Additional Advances) and the 
Performance of all Obligations throughout the Term of the Loan.

          4.   CONDITIONS PRECEDENT: FINOVA's obligations under this Amendment 
are subject to the satisfaction of the General Conditions, the Conditions 
Precedent and the Conditions Subsequent, as defined below:

          4.1  The General Conditions are as follows:

          (a)  There shall exist no Event of Default or Incipient Default, 
after giving effect to the then applicable provisions of this Amendment and 
other than the Existing Events of Default.

          (b)  This Amendment shall have been fully signed by Borrower and 
Guarantor.

          (c)  Borrower shall have executed the Additional Advance Note and 
delivered the same to FINOVA.

          (d)  Borrower shall have paid to FINOVA the full Additional Advance 
Fee as defined below:

          (e)  There shall have occurred no material adverse change in any real 
property or in the business or financial condition of Borrower and Guarantor 
since the date of the last financial statements submitted to FINOVA.

          (f)  FINOVA has received:

               (i)  Current updates of the opinion letters received by FINOVA 
     in connection with the Loan Agreement.

               (ii) Such resolutions and authorizations and such other
     documents as FINOVA may require relating to the existence and good standing
     of Borrower and

    
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<PAGE>   9

     Guarantor, and the authority of any person executing this Amendment and 
     other documents on behalf of Borrower and Guarantor.

               (iii) Evidence that Borrower has good and marketable title to the
     collateral pledged to FINOVA pursuant to this Amendment and that there are
     no other financing statements, liens, claims or encumbrances against
     Borrower or the property of Borrower except those that have been disclosed
     to FINOVA and are otherwise approved by FINOVA.

               (iv) Such other documents or instruments are required by FINOVA 
     so as to fully perfect the liens and security interest of FINOVA granted
     hereunder.

          (g)  Neither Borrower nor Guarantor shall have failed to disclose to 
FINOVA any material information and no material information supplied by 
Borrower or Guarantor shall be found to be misleading, misrepresented or 
incorrect in any material respect.

          (h)  All representations and warranties by Borrower and Guarantor 
shall remain true and correct, in all material respects, and all agreements of 
Borrower and Guarantor that are to have been performed or complied with at such 
time shall have been performed or complied with.

          (i)  Borrower shall have reimbursed FINOVA for all of FINOVA's 
out-of-pocket costs and expenses including, without limitation, attorneys', 
engineers' and other consultants' fees and costs, incurred in connection with 
the documentation and closing of this Amendment.

          (j)  Borrower shall have obtained such public liability, casualty and 
other insurance policies as FINOVA may require, written by insurers and in an 
amount and form satisfactory to FINOVA.

          (k)  Borrower shall have executed and delivered to FINOVA such UCC 
financing statements and amendments as FINOVA deems necessary and appropriate.

          4.2  The Conditions Precedent are as follows:

          (a)  Guarantor shall have granted to FINOVA a warrant to purchase One 
Hundred Fifty Thousand (150,000) shares of common stock of Guarantor pursuant 
to the form of agreement attached hereto as Exhibit 4.2(a).

          (b)  Borrower shall have pledged to FINOVA as additional security for 
the payment and Performance of the Obligations, one hundred percent (100%) of 
the issued and outstanding stock of Central Nevada Utilities Company, a Nevada 
corporation ("CNUC") pursuant to a Stock Pledge Agreement in form and substance 
satisfactory to FINOVA (the



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<PAGE>   10
"Stock Pledge Agreement") and in connection therewith shall have delivered to 
FINOVA satisfactory opinions of counsel with respect to such pledge together 
with the original share certificates representing such ownership interest which 
shall have been endorsed to FINOVA "in blank" pursuant to an assignment apart 
from certificate. Such opinion of counsel shall indicate that no public utility 
commission approval is required in order for Borrower to pledge the shares of 
stock of CNUC as set forth above or in order for CNUC to grant to FINOVA the 
liens and security interests contemplated pursuant to Section 4.3(d) hereof and 
that public utility commission approval is only required in the event FINOVA 
desires to realize upon the aforementioned stock pledge from Borrower or the 
aforementioned assignments and security interest from CNUC. The security 
interest granted to FINOVA pursuant to the Stock Pledge Agreement shall be 
absolute, continuing and applicable to all existing and future Advances and 
shall secure the repayment of the Loan (including without limitation the 
Additional Advances) and the Performance of all Obligations throughout the term 
of the Loan.

          4.3  The Conditions Subsequent as follows:

          (a)  Borrower has executed and recorded with the appropriate county 
recorders office a Notice of Assignment of Proceeds, in a form acceptable to 
FINOVA, against each of (i) the CNUC/Cottonwood Park, (ii) NWC Highway 160 
Calvada, (iii) SWC Highway 160 Calvada, (iv) RV Park Remainder, (v) Calvada 
North Unit 5, (vii) Golf Courses, (viii) Project (Towers), (ix) Project 
(Villas) and (x) White Sands so as to place of public record Borrower's 
agreement with respect to such properties as more fully set forth in Section 
3.1 hereof.

          (b)  Borrower shall have granted to FINOVA, as additional security for
the payment and Performance of the Obligations, a first deed of trust or
mortgage lien, pursuant to a deed of trust or mortgage acceptable to FINOVA, and
shall have delivered to FINOVA an Environmental Certificate and Indemnity and
(subject to the provisions of Section 4.4 hereof) ALTA certified survey, in a
form acceptable to FINOVA, on each of (i) Calvada Meadows Unit 2 RV Park, (ii)
Calvada Unit 2 Raw Land, (iii) Former STP Site, (iv) Colorado Water Rights, (v)
the unsold Units within Fountains, (vi) the unsold Units within Project
(Terraces - Phase 1), (vii) the unsold Units within Project (Terraces - Phase
2), (viii) the unsold Units within Winnick, (ix) the unsold Units within
Brigantine Inn, (x) the unsold Units within Brigantine Villas, (xi) the unsold
Units with Project (Reno), (xii) the unsold Lots and other land within Calvada
RV Park and (xiii) the unsold Lots and other land within Calvada Land, subject,
in each instance, to such exceptions to title as are acceptable to FINOVA. The
security interest granted to FINOVA pursuant to the aforementioned deeds of 
trust and mortgages shall be absolute, continuing and applicable to all 
existing and future Advances and shall secure the repayment of the Loan 
(including without limitation the Additional Advances) and the Performance of 
all Obligations throughout the Term of the Loan.



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<PAGE>   11
     (c)  FINOVA shall have obtained a lender's policy of title insurance from 
a title insurance underwriter acceptable to FINOVA with respect to each of the 
mortgages and deeds of trust referenced in the immediately previous section 
(other than with respect to the mortgage or deed of trust encumbering the 
Colorado Water Rights) in the amount of the Additional Advance Note and in form 
and substance and with such endorsement  as are acceptable to FINOVA (or an 
irrevocable commitment to issue such policy), all at the sole cost and expense 
of Borrower.

     (d)  Borrower and Guarantor shall have caused CNUC to have assigned to
FINOVA as additional security for the payment and Performance of the
Obligations, all proceeds (net of reasonable closing costs) received from the
sale of any assets of CNUC and shall have caused CNUC to have executed and
recorded against the real property owned by CNUC a Notice of Assignment of
Proceeds, all in form and substance satisfactory to FINOVA. In the alternative,
Borrower and Guarantor shall have caused CNUC to have granted to FINOVA a first
priority lien on and security interest in all of the assets of CNUC as security
for the payment and Performance of the Obligations, pursuant to documents and
instruments acceptable to FINOVA. In connection therewith, Borrower and
Guarantor shall have caused CNUC to deliver to FINOVA mortgages, deeds of trust,
security agreements, financing statements, environmental certificates, (subject
to the provisions of Section 4.4 hereof) surveys and opinions of counsel,
acceptable to FINOVA with regard to such security interest. The aforementioned
assignment and security granted to FINOVA by CNUC shall be absolute, continuing
and applicable to all existing and future Advances and shall secure the
repayment of the Loan (including without limitation the Additional Advances) and
the Performance of all Obligations throughout the term of the Loan. Borrower
covenants and agrees that if any assets of CNUC are sold, such assets shall be
sold solely under terms which require the payment to CNUC of the entire purchase
price in cash.

     (e)  Guarantor shall have granted to FINOVA a warrant, in the form of the 
attached Exhibit 4.3(e), to purchase the number of shares of common stock of 
Guarantor calculated pursuant to the formula set forth below, rounded to the 
next whole share. If the Tranche B Loan proceeds are advanced to Borrower in 
more than one (1) installment, such Advances shall be conditioned upon 
Guarantor granting to FINOVA an additional warrant in the form of attached 
Exhibit 4.3(e) to purchase additional shares of common stock of Guarantor 
calculated pursuant to the formula set forth below, rounded to the next whole 
share, in addition to the satisfaction of all other conditions precedent to 
the making of such Advance.

                    [350,000    x      A ]    less B     
                                     ----
                                   2,662,000 

Where:

A = Total aggregate advances of the Tranche B Loan proceeds made to Borrower

B = Number of warrants previously issued to FINOVA as a result of a prior 
advance of Tranche B Loan proceeds


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<PAGE>   12
     4.4  Even if no portion of the Tranche B Loan proceeds are borrowed by 
Borrower, Borrower shall cause each of the Conditions Subsequent to be 
satisfied, to FINOVA's satisfaction, no later than January 29, 1999, other than 
the Condition Subsequent set forth in Section 4.3(e) above which shall be 
satisfied only concurrently with advances of the Tranche B Loan proceeds and 
other than the Condition Subsequent set forth in Sections 4.3(a) which shall be 
satisfied no later than January 15, 1999 and except to the extent set forth 
below with regard to title insurance policies or commitments. Lender shall be 
entitled to the additional warrants set forth in Section 4.3(e) above upon any 
advance of the Tranche B Loan proceeds, regardless of the unpaid balance of the 
Tranche A Loan and even if the Tranche A Loan has a zero balance. In the event 
Borrower obtains an agreement from its title insurer to delete the survey 
exception from a particular lender's policy of title insurance required to be 
obtained under this Agreement, FINOVA will waive the requirement that a survey 
be obtained as to the property which is the subject matter of such insurance 
policy. In the event Borrower is unable to obtain a waiver of the survey 
exception with regard to a particular parcel of property, then a survey shall 
be required as to such property as outlined above. In the event Borrower is 
unable to obtain a particular title policy (or irrevocable title commitment) 
which is a Condition Subsequent by January 29, 1999, solely because of the fact 
that a survey was required and has not yet been obtained, despite Borrower's 
best efforts, such Condition Subsequent shall be satisfied no later than 
February 26, 1999.

     5.   APPLICATION OF PROCEEDS. In the absence of an Incipient Default or an 
Event of Default (excluding Existing Events of Default), Excess Proceeds 
Collateral, Project Release Fees and other release fees payable pursuant to 
Section 6 hereof, proceeds derived from the Stock Pledge Agreement, proceeds 
from the assignments and security interests granted by CNUC pursuant to Section 
4.3(d) hereof and proceeds from the sale of the real properties which are 
subject to the deeds of trust or mortgage interests described in Sections 3.2 
and 4.3(b) hereof, shall be applied first against fees, costs and expenses due 
to FINOVA and then against the unpaid principal balance of the Additional 
Advance Note and accrued interest. Thereafter any such proceeds shall be made 
available to Borrower for working capital purposes to be used strictly in 
accordance with the Business Plan. However, if there exists an Incipient 
Default or an Event of Default (in addition to the Existing Events of Default) 
at the time such proceeds are available, such proceeds shall be applied against 
the Obligations in such order and manner as FINOVA shall deem appropriate.

     6.   PROJECT RELEASE FEES. The Project Release Fees with respect to each 
of Fountains, Project (Terraces - Phase 1), Project (Terraces - Phase 2), 
Winnick, Project (Reno), Brigantine Inn, Brigantine Villas, Calvada RV Park and 
Calvada Land shall equal ten percent (10%) of the gross sales price of a Lot or 
Unit sold with such Project. Such Units or Lots shall be released from FINOVA's 
lien upon satisfaction of the Release Conditions. The Project Release Fees 
shall be paid to FINOVA concurrently with the closing of such sale. Project 
Release Fees and the release fees payable pursuant to the following sentence 
shall be applied in the manner set forth in Section 5. FINOVA agrees to release 
its lien on the stock

                                       12
<PAGE>   13
of CNUC granted pursuant to the Stock Pledge Agreement together with the 
assignment of sales proceeds and other security interests granted by CNUC 
pursuant to Section 4.3(d) provided that (i) FINOVA has received a release fee 
in an amount equal to the greater of Two Million Dollars ($2,000,000) or the 
then unpaid principal balance of the Tranche A Loan, together with interest on 
such payment at the rate set forth in the Additional Advance Note, (ii) there 
shall exist no Incipient Default or Event of Default (excluding the Existing 
Events of Default) and (iii) each of the Conditions Subsequent shall have been 
satisfied with the exception of the Condition Subsequent contained in Section 
4.3(e) hereof which is to be satisfied only in connection with advances of the 
Tranche B Loan proceeds.

     7.   RELEASE OF FORBEARANCE COLLATERAL. FINOVA agrees to release and 
reconvey to Borrower, without warranty or representation, the assignments of 
sales proceeds and other liens granted pursuant to Sections 3 and 4.3(d) 
hereof. FINOVA's lien on the stock of CNUC as evidenced by the Stock Pledge 
Agreement and FINOVA's mortgage and deed of trust liens granted pursuant to 
Sections 3.2 and 4.3(b) hereof, upon and on the condition that all of the 
Forbearance Collateral Release Conditions have been satisfied. No release or 
satisfaction of any security interest granted to FINOVA shall impair or affect 
FINOVA's remaining security interest or any term or provision of the Loan 
Agreement.

     8.   EARLY RELEASE OF COLLATERAL. Notwithstanding any contrary provisions 
contained in the Documents, FINOVA shall not have the obligation of releasing 
its lien on any collateral pledged to FINOVA pursuant to the Documents, 
including this Amendment (other than the periodic release of Units and Lots 
upon a sale thereof pursuant to the provisions of the Documents as amended by 
this Amendment and other than as specifically provided in this Amendment) until 
the later to occur of (i) the full satisfaction of the Forbearance Collateral 
Release Conditions or (ii) the full satisfaction of the events set forth in the 
particular Document that are conditions precedent to such collateral release. 
Prior to the full satisfaction of the Forbearance Collateral Release 
Conditions, any amount received by Borrower resulting from the sale of the 
Headquarters Building or the FCFC Property, in excess of the amounts set forth 
in paragraphs 3.10 and 3.11 of the Loan Agreement, shall be applied against the 
outstanding principal balance of the Additional Advance Note.

     9.   MINIMUM SALES PRICE. FINOVA agrees to release the deeds of trust or 
mortgages contemplated pursuant to Sections 3.2, 4.3(b) and 4.3(d) hereof upon 
a sale of the real property encumbering such mortgages or deeds of trust 
provided that there does not then exist an Event of Default or Incipient Default
(other than the Existing Events of Default) and such properties are sold solely
for cash at a purchase price acceptable to FINOVA. FINOVA agrees that a purchase
price of no less than eighty percent (80%) of the "Asking Price" for such
property as set forth in the Business Plan is an acceptable purchase price.
Proceeds from such sales less reasonable closing costs shall be applied as set
forth in Section 5 hereof.

     10.  READVANCE FEE. In consideration of FINOVA's covenants, agreements and 
promises under this Amendment, Borrower shall pay to FINOVA at the time of the 
first Advance made pursuant to this Amendment a fee in the amount of Fifty Six 
Thousand Six 



                                       13
<PAGE>   14
Hundred Twenty Dollars ($56,620) (the "Additional Advance Fee") which may be 
withheld from the proceeds of the Advance made pursuant to this Amendment.

     11.   REPRESENTATIONS, WARRANTIES AND COVENANTS.

     11.1  For all purposes under the Loan Agreement, the Additional 
Advances shall be deemed a "transaction made pursuant to this Agreement," as 
contemplated in Section 8.1 of the Loan Agreement, except that for purposes of 
the representations, covenants and warranties under Article VIII thereof, the 
current status of all litigation matters affecting the Borrower and Guarantor 
is as set forth on the attached Exhibit 11.1 and the current financial 
condition (including, without limitation, compliance with financial covenants) 
of the Borrower and Guarantor is reflected on the most recent financial 
statements delivered by Borrower and Guarantor to FINOVA prior to the date 
hereof.

     11.2  Guarantor represents and warrants that all financial information
and other documents provided to FINOVA by Guarantor in connection with this
Amendment are true, complete and correct as of the date provided and the date
hereof. Borrower represents and warrants that all financial information and
other documents provided to FINOVA by Borrower in connection with this Amendment
are true, complete and correct as of the date provided and the date hereof.

     11.3  Borrower represents and warrants that the assets of CNUC are 
unencumbered other than liens for real property taxes and assessments not yet 
due and payable (and Borrower hereby covenants with FINOVA to cause such assets 
to remain unencumbered at all times while the Stock Pledge Agreement is in 
effect other than any liens granted in favor of FINOVA) and further represents 
and warrants that CNUC owes no indebtedness other than usual customary trade 
debt incurred in the ordinary course of its business (and Borrower hereby 
covenants with FINOVA that Borrower will cause CNUC to incur no other 
indebtedness while the Stock Pledge Agreement is in effect).

     11.4  On or before January 29, 1999, the Loan Agreement shall be further
amended in order to incorporate within its terms financial covenants acceptable
to FINOVA and consistent with the Business Plan.

     11.5  Promptly following request by FINOVA, Borrower will give FINOVA 
an update concerning the progress being made by Borrower in complying with the 
Business Plan.

     12.   GUARANTOR CONSENT.  Guarantor acknowledges and agrees that (i) the
Guarantee shall remain in full force and effect, (ii) the obligations of the
Guarantor under the Guarantee are joint and several with those of each other
Obligor (as that term is defined in the Guarantee), (iii) Guarantor's liability
under the Guarantee shall continue undiminished by and shall include the
obligations of the Borrower under this Amendment, the Additional Advance Note,
the Stock Pledge Agreement, and other documents and instruments executed


                                       14
<PAGE>   15
by Borrower in connection with this Amendment and each of the other Documents, 
as amended through the date hereof and (iv) all terms, conditions and 
provisions set forth in this Amendment, the Additional Advance Note, the Stock 
Pledge Agreement, any other documents and instruments executed by Borrower in 
connection with this Amendment and each of the other Documents, as amended 
through the date hereof, are hereby ratified, approved and confirmed.

      13.   FORBEARANCE BY FINOVA.

      13.1  Subject to the conditions set forth in this Amendment and the 
termination provisions of the following paragraph, during the period from the 
date this Amendment is fully executed and delivered by FINOVA, Borrower, and 
Guarantor to and including June 30, 1999 ("End Date") FINOVA shall forbear from 
exercising FINOVA's remedies under the Documents by reason of the Existing 
Events of Default described herein and during the period of forbearance, FINOVA 
shall make Advances of the Receivables Loan and Additional Advances, under the 
conditions set forth in the Loan Agreement and this Amendment and shall 
partially release Units and Lots from FINOVA's Security Interest, as more fully 
provided in the Documents and in this Amendment without requiring that the 
Existing Events of Default described herein be cured as a condition precedent 
to making any such Advances or to such partial releases. FINOVA is not however 
waiving such Existing Events of Default. During such period of forbearance, 
Borrower may operate its business in the ordinary course. However, during such 
period of forbearance, Borrower shall be prohibited from taking any of the 
following actions; (i) the repayment of indebtedness required to be 
subordinated, (ii) the making of distributions or loans to its shareholders 
other than to the extent contemplated in the tax sharing arrangement between 
Borrower and Guarantor, (iii) the payment of directors' fees, (iv) the payment 
of officers' salaries other than in accordance with previous practice or (v) 
the operation of its business other than in material accordance with the 
Business Plan. So long as Borrower is in compliance with this Amendment and the 
other Documents and FINOVA's forbearance as set forth above remains in effect, 
the Existing Events of Default shall not be deemed Events of Default.

      13.2  FINOVA's agreement to so forbear and to make Advances under the 
Loan Agreement or this Amendment shall automatically terminate, without further 
act or instrument, upon the occurrence of any of the following events:

      (a)   Borrower or Guarantor repudiates or asserts a defense to any 
obligation or liability under the Documents or makes or pursues a claim against 
FINOVA;

      (b)   Borrower fails to timely perform any of its obligations (other than 
the Existing Events of Default) set forth in the Documents (after giving effect 
to the then applicable provisions of this Amendment), including, without 
limitation, this Amendment;

      (c)   Borrower or Guarantor makes an assignment for the benefit of 
creditors, or generally admits its inability to pay its obligations as they 
come due or files a


                                       15
<PAGE>   16
petition in bankruptcy or an involuntary petition in bankruptcy is filed naming 
either Borrower or Guarantor as debtors; or

      (d)   FINOVA hereafter becomes aware of (i) any fact or circumstance that 
FINOVA believes in good faith is reasonably likely to impair FINOVA's security 
or (ii) any Incipient Defaults (other than those described in this Amendment) 
or Event of Default under the Documents after giving effect to the then 
applicable provisions of this Amendment and other than Existing Events of 
Default, whether now or existing or hereafter occurring, which would give rise 
to a right by FINOVA to exercise any rights or remedies under the Documents.

      14.   PROTECTIONS AFFORDED TO FINOVA.

      14.1  This Amendment is intended to be a further accommodation by FINOVA 
to Borrower. In consideration of all such accommodations, AND ACKNOWLEDGING 
THAT FINOVA WILL BE SPECIFICALLY RELYING ON THE FOLLOWING AGREEMENT AS A 
MATERIAL INDUCEMENT IN ENTERING INTO THIS AMENDMENT AND IN MAKING THE TRANCHE A 
LOAN AND TRANCHE B LOAN PROVIDED HEREIN, so that FINOVA will not be further 
delayed for an additional period of time under any circumstances, effective 
immediately upon (i) execution of this Amendment by Borrower and Guarantor and 
(ii) the funding of any portion of the Tranche A Loan by FINOVA, and provided 
that FINOVA makes Advances in accordance with the Documents as modified by the 
then applicable provisions of this Amendment and partially releases Units and 
Lots from its Security Interest in accordance with the Documents without 
requiring that the Existing Events of Default be cured above, Borrower and 
Guarantor hereby agree, in addition to and without limiting any of FINOVA's 
other rights or remedies under the Documents and related documents, to the 
following:

      (a)   In connection with a bankruptcy or other similar proceeding 
initiated by or against Borrower or Guarantor, (i) FINOVA will be entitled to 
immediate relief from the automatic stay and all other stays and injunctions 
without further notice, hearing or order of court so that FINOVA will be able 
to immediately exercise all or any of its rights and remedies (A) as provided 
herein. (B) in the Documents, as modified by this Amendment, including, but not 
limited to, the commencement and consummation of a foreclosure on any and all 
of its collateral and the appointment of a receiver, or (C) under applicable 
law; (ii) neither Borrower nor Guarantor will seek or support an effort by any 
other party to obtain an injunction, judgment or any other type of order of any 
court staying or delaying FINOVA from proceeding with any one or more of its 
options or remedies under the Documents, as modified by this Amendment; (iii) 
neither Borrower nor Guarantor will contest any motion, application or other 
pleadings filed by or on behalf of FINOVA in any court of competent 
jurisdiction seeking enforcement of the terms of this Section 14 or otherwise 
seeking enforcement of this Amendment or termination of such automatic stay or 
other injunction; (iv) Borrower and Guarantor will cooperate with FINOVA so 
that FINOVA can promptly enforce its rights as set forth in the Documents, as 
modified by this Amendment; and (v) neither Borrower nor Guarantor will request 
or consent to (A) the imposition of any lien


                                       16
<PAGE>   17
superior to those of FINOVA in the collateral given to FINOVA under any of the
Documents, as modified by this Amendment, whether pursuant to 11 U.S.C. Section
364 or otherwise, (B) a "cramdown" of the Loan pursuant to 11 U.S.C. Section
1129(b) or (C) the impairment of FINOVA's claims, liens, rights under the
Documents or otherwise affect FINOVA's rights or any collateral given to FINOVA
under any of the Documents.

        (b)   Upon the occurrence of an Event of Default under the Documents,
(after giving effect to the then applicable provisions of this Amendment and
other than the Existing Events of Default), Borrower and Guarantor consent to
the appointment of a receiver by FINOVA. Borrower or FINOVA shall execute a
Stipulation for the Appointment of a receiver over any property and the
operation and business of Borrower (the "Stipulation"), which allows the court,
upon the conditions set forth below, and without notice to anyone, including
notice to Borrower or Guarantor to enter an Order for Appointment of Receiver
over any property of Borrower and the operation and business of Borrower
("Receivership Order"). The selection of the receiver and the amount of the
receiver's fee shall be determined by FINOVA in its discretion. Only a nominal
bond not more than Five Thousand Dollars ($5,000) will be required by FINOVA or
the receiver. The original executed Stipulation and form of Receivership Order
shall be delivered to FINOVA within the five (5) business days after the same
are provided to Borrower for execution, and held by FINOVA's attorneys and not
filed with the court, unless and until there is such an Event of Default (i.e.,
a default upon the occurrence of which a receiver may be appointed pursuant to
the first sentence of this Section) by Borrower under this Amendment or the
Documents. Borrower agrees that if Borrower fails to execute and deliver the
Stipulation as required herein, Borrower hereby appoints FINOVA as its
attorney-in-fact to execute the Stipulation for and on behalf of the Borrower.
Such power of attorney is coupled with an interest and is irrevocable. The
Stipulation and Receivership Order may be filed and the Receivership Order may
be immediately signed and entered by the court, solely upon the declaration made
to the Court by FINOVA or its counsel that an Event of Default has occurred. The
failure by Borrower to execute and deliver the Stipulation and Receivership
Order as required herein shall, at FINOVA's election without notice to Borrower,
constitute an Event of Default under the Documents.

        (c)   For the good and valuable consideration provided herein, Borrower
and Guarantor hereby release and discharge FINOVA and FINOVA Portfolio Services,
Inc. ("FPSI"), and each of their respective agents, servants, employees,
directors, officers, attorneys, accountants, affiliates, representatives,
receivers, trustees, subsidiaries, predecessors, successors and assigns
(collectively, the "Released Parties") from all claims, damages, losses,
demands, liabilities, obligations, actions and causes of action whatsoever
(whether arising in contract or in tort, and whether at law or in equity), which
Borrower and Guarantor may now have or claim to have against the Released
Parties, whether known or unknown, matured or contingent, liquidated or
unliquidated, arising from, in connection with, or in any way concerning or
relating to the Loan or the Documents except acts first arising after the
execution and delivery of this Amendment and which are caused solely by FINOVA's
or FPSI's respective gross negligence or willful misconduct, FPSI is hereby made


                                       17
<PAGE>   18
a third party beneficiary of this Amendment and shall be entitled to enforce 
the same against Borrower and Guarantor in the same manner as if FPSI were a 
party hereto.

       14.2   Borrower and Guarantor hereby acknowledge and agree that, 
notwithstanding anything contained in this Amendment or the other Documents to 
the contrary, the terms, provisions and agreements of Borrower and Guarantor 
set forth in this Section 14 shall be immediately in full force and effect upon 
its execution and delivery by FINOVA, Borrower and Guarantor and shall not be 
vacated, modified, released or its validity or binding nature subject to attack 
for any reason because of the failure of third party consents to be obtained.

       15.    DEFENSES. As of December 22, 1998 the unpaid principal balances 
of the Notes are as set forth below. Borrower and Guarantor acknowledge and 
agree that there are no defenses, counterclaims, setoffs, recoupments or other 
adverse claims or causes of action of any kind existing against FINOVA or with 
respect to the Documents, including without limitation, claims regarding the 
amount, validity, perfection, priority and enforceability of the Documents.


<TABLE>
<CAPTION>
                   Note                          Unpaid Principal Balance
                   ----                          ------------------------
<S>                                              <C>
Receivables Note                                      $34,321,481.00
Aloha Bay Note                                        $   786,675.00
Office Note                                           $ 6,407,998.32
Ida Building Addition Note                            $ 2,050,970.80
Winnick Building Addition Note                        $ 2,360,000.00
Second Winnick Building Addition Note                 $ 1,742,383.04
Towers Note                                           $   730,676.00
Note executed in connection with the First            $ 1,869,200.00                     
  Amendment (the so-called Hartsel Springs Note)
Biloxi Note                                           $ 1,173,750.00
</TABLE>


       16.    GENERAL.

       16.1   Borrower shall pay all of FINOVA's fees, expenses and costs, 
including those of any attorneys, engineers and other consultants, in 
connection with the Existing Events of Default and the Documents, including 
this Amendment.

       16.2   The Documents shall be deemed amended by the provisions of this 
Amendment, as and when applicable and any conflict or inconsistency between 
this Amendment and the Documents shall be resolved in favor of this Amendment. 
Except as so amended, all other consistent terms and conditions of the Documents
will remain in full force and effect.



                                       18
<PAGE>   19
       16.3   Except as may be expressly provided herein, Borrower's obligations
under the Documents shall remain in full force and effect and shall not be 
waived, modified, superseded or otherwise affected by this Amendment. This 
Amendment is not a novation, nor is it be construed as a release, waiver, 
extension of forbearance or modification of any of the terms, conditions, 
representations, warranties, covenants, rights or remedies set forth in any of 
the Documents, except as expressly stated herein.

       16.4   Borrower's failure to timely comply with any of the foregoing 
agreements, covenants, terms and conditions contained in this Amendment, 
without further notice or cure period, constitute an Event of Default under the 
Documents. Borrower and FINOVA agree that time is of the essence in all of its 
covenants and agreements under this Amendment and the Documents.

       16.5   Neither the failure nor delay by FINOVA to exercise its remedies 
under (i) the Documents (whether before or after the date of this Amendment) or 
(ii) any provision of this Amendment, shall be deemed to amend, modify, 
supplement, extend, delay, renew, terminate, waive, release or otherwise limit 
or prejudice FINOVA's rights and remedies or Borrower's or Guarantor's 
obligations under the Documents (after giving effect to the then applicable 
provisions of this Amendment and other than Existing Events of Default) 
(including, but not limited to, FINOVA's right to receive full payment of 
principal and interest as well as late charges, delinquent interest), 
attorneys' fees and expenses and other charges to the extent provided in the 
Documents, except as specifically provided in a written agreement between the 
parties that is fully executed and delivered, nor shall it affect the relative 
priority of FINOVA's security interest in the collateral for the Obligations 
under the Documents. Borrower understands that, except to the extent that 
FINOVA has agreed to this Amendment to forbear with respect to an Existing 
Event of Default, nothing referred to above shall operate to prohibit, restrict 
or to otherwise inhibit FINOVA from exercising any right or remedy it may have 
under the Documents or constitute a cure of any existing Event of Default or 
Incipient Default and, without limitation, shall not extend any applicable 
reinstatement or redemption period. In the event that there is an Event of 
Default now existing or hereafter arising other than an Existing Event of 
Default, FINOVA shall not be obligated to forbear and may immediately enforce 
any and all of its rights and remedies.

       16.6   Borrower and Guarantor acknowledge that FINOVA has performed, and 
is not in default of, its obligations under the Documents; that there are no 
offsets, defenses or counterclaims with respect to any of Borrower's or 
Guarantor's or other party's obligations under the Documents; and that FINOVA 
has not directed Borrower to pay or not pay any of Borrower's payables.

       16.7   Borrower and Guarantor will execute and deliver such further 
instruments and do such things as in the judgment of FINOVA are necessary or 
desirable to effect the intent of this Amendment and to secure to FINOVA the 
benefits of all rights and remedies conferred upon FINOVA by the terms of this 
Amendment and any other documents executed in connection herewith.



                                       19
<PAGE>   20

     16.8 If any provision of this Amendment is held to be unenforceable under 
present or future laws effective while this Amendment is in effect (all of 
which invalidating laws are waived to the fullest extent possible), the 
enforceability of the remaining provisions of this Amendment shall not be 
affected thereby. In lieu of each such unenforceable provision, there shall be 
added automatically as part of this Amendment a provision that is legal, valid 
and enforceable and is similar in terms to such unenforceable provisions as may 
be possible.

     16.9 Any further discussions by and among Borrower, Guarantor and FINOVA, 
if any, and all such discussions in the past, together with any other actions 
or inactions taken by and among Borrower, Guarantor and FINOVA, shall not cause 
a modification of the Documents, establish a custom or waive (unless FINOVA 
made such express waiver in writing), limit or condition the rights and 
remedies of FINOVA under the Documents, all of which rights and remedies are 
expressly reserved. All of the provisions of the Documents, including, without 
limitation, the time of the essence provision, are hereby reiterated and if 
ever waived are hereby reinstated (unless FINOVA made such express waiver in 
writing), except as expressly provided herein.

     16.10 FINOVA acknowledges that it had access to the books and records of 
Borrower. There has been or will be delivered to FINOVA by Borrower in 
connection with this Amendment, the Business Plan and certain estimates of 
income and expense and related financial projections concerning the property 
owned by Borrower and repayment of the Loan. The Business Plan and such books, 
records, financial material and projections have been prepared solely by or 
under the direction of Borrower. Borrower and the Guarantor acknowledge and 
agree FINOVA will not be deemed, directly or indirectly, whether by any action, 
failure to respond thereto or otherwise, in any way to have approved, consented 
to, ratified or adopted said books, records, financial material or projections.

     16.11 This Amendment shall not be binding upon FINOVA until accepted by 
Borrower and Guarantor as provided for below. This Amendment may be executed in 
counterpart, and any number of which have been executed by all parties shall be 
deemed to constitute one original. FINOVA, its attorneys and agents, may also 
integrate into a single Amendment signature pages from separate counterpart 
Amendments. The telecopied signature of a person shall be deemed an original 
signature, may be relied upon by others and shall be binding upon the signer 
for all purposes provided however that Borrower, Guarantor or any person 
otherwise consenting hereto by telecopied signature shall confirm its 
telecopied signature by signing and returning to FINOVA a copy of this 
Amendment with an original signature.

     16.12 Borrower's and Guarantor's representatives are experienced and 
knowledgeable business people and have been represented by independent legal 
counsel who are experienced in all matters relevant to this Amendment, 
including, but not limited to, bankruptcy and insolvency law. The parties 
hereto have accepted and agreed to this 


                                       20
<PAGE>   21

Amendment after being fully aware and advised of the effect and significance of 
all of its terms, conditions, and provisions.

     16.13 Unless otherwise specifically stipulated elsewhere in the Documents, 
if a matter is left in the Documents or this Amendment to the decision, right, 
requirement, request, determination, judgment, opinion, approval, consent, 
waiver, satisfaction, acceptance, agreement, option or discretion of FINOVA, 
its employees, FINOVA's counsel or any agent for or contractor of FINOVA, such 
action shall be deemed to be exercisable by FINOVA or such other person in its 
sole and absolute discretion and according to standards established in its sole 
and absolute discretion. Without limiting the generality of the foregoing, 
"option" and "discretion" shall be implied by use of the words "if" or "may."

     16.14 The Recitals in this Amendment are incorporated into the body hereof 
as fully set forth herein.

     16.15 THIS AMENDMENT HAS BEEN EXECUTED AND DELIVERED AND SHALL BE 
PERFORMED IN THE STATE OF ARIZONA. THE PROVISIONS OF THIS AMENDMENT AND ALL 
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND 
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ARIZONA AND TO 
THE EXTENT THEY PREEMPT SUCH LAWS, THE LAWS OF THE UNITED STATES. EACH OF 
BORROWER, GUARANTOR AND FINOVA: (A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE 
PROCESS, JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF ARIZONA, MARICOPA 
COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE OF THE UNITED STATES 
DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT, ACTION 
OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO ANY DOCUMENT OR THE SUBJECT 
MATTER THEREOF, OR, IF FINOVA SHALL INITIATE SUCH ACTION, IN THE COURT IN WHICH 
SUCH ACTION IS INITIATED PROVIDED THAT SUCH COURT HAS JURISDICTION, AND THE 
CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT FINOVA'S ELECTION; AND 
(B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES 
NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION 
OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OF PROCEEDING IS BROUGHT IN ANY 
INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS 
IMPROPER. EACH OF BORROWER, GUARANTOR AND FINOVA HEREBY WAIVE THE RIGHT TO 
COLLATERALLY ATTACH ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.


                                       21
<PAGE>   22
STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE 
OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE 
PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO ANY 
DOCUMENT OR THE SUBJECT MATTER THEREOF, OR, IF FINOVA SHALL INITIATE SUCH 
ACTION, IN THE COURT IN WHICH SUCH ACTION IS INITIATED PROVIDED THAT SUCH COURT 
HAS JURISDICTION, AND THE CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT 
FINOVA'S ELECTION; AND (B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, 
HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT 
TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR 
PROCEEDING IS BROUGHT IN ANY INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, 
ACTION OR PROCEEDING IS IMPROPER. EACH OF BORROWER, GUARANTOR AND FINOVA HEREBY 
WAIVE THE RIGHT TO COLLATERALLY ATTACH ANY JUDGMENT OR ACTION IN ANY OTHER 
FORUM.


FINOVA:

FINOVA CAPITAL CORPORATION,
a Delaware corporation


By: 
    ------------------------------
    Its:
         -------------------------


BORROWER:

PREFERRED EQUITIES CORPORATION,
a Nevada corporation


By: /s/ JON A. JOSEPH
    ------------------------------
        Jon A. Joseph

    Its: VICE PRESIDENT
         -------------------------


Signed in the presence of:

/s/ [SIG]
    ------------------------------


                                       22
<PAGE>   23
GUARANTOR:

MEGO FINANCIAL CORP.,
a New York corporation


By: /s/ JON A. JOSEPH
    ------------------------------
        Jon A. Joseph

    Its: VICE PRESIDENT
         -------------------------


Signed in the presence of:

/s/ [SIG]
    ------------------------------


                                       23
<PAGE>   24

STATE OF ARIZONA     )
                     ) ss.
County of Maricopa   )


     The foregoing instrument was acknowledged before me this 23rd day of 
December 23, 1998 by Jon A. Joseph as Vice President of PREFERRED EQUITIES 
CORPORATION, a Nevada corporation, on behalf of the corporation.


                                          /s/ SANDRA L. IRONS
                                --------------------------------------
                                             Notary Public

My Commission Expires:                    [NOTARY PUBLIC SEAL]

     1-29-2002
----------------------


STATE OF ARIZONA     )
                     ) ss.
County of Maricopa   )


     The foregoing instrument was acknowledged before me this 23rd day of 
December 23, 1998 by Jon A. Joseph as Vice President of MEGO FINANCIAL 
CORP., a New York corporation, on behalf of the corporation.


                                          /s/ SANDRA L. IRONS
                                --------------------------------------
                                             Notary Public

My Commission Expires:                    [NOTARY PUBLIC SEAL]

     1-29-2002
----------------------


<PAGE>   25


                                LIST OF EXHIBITS


     Exhibit 2.2         Request for Advance and Certification

     Exhibit 4.2(a)      Form of Warrant Agreement - Tranche A

     Exhibit 4.3(e)      Form of Warrant Agreement - Tranche B

     Exhibit 11.1        Litigation Schedule

<PAGE>   26

                                  EXHIBIT 2.2

                                    FORM OF
                     REQUEST FOR ADVANCE AND CERTIFICATION


     The undersigned ("Borrower") requests that FINOVA Capital Corporation 
("Lender") advance the sum of _______________ and ___/100 United States Dollars 
(U.S. $_________) upon receipt hereof, pursuant to the Second Amended and 
Restated and Consolidated Loan and Security Agreement between such parties 
dated effective as of May 15, 1997 (with any amendments, the "Agreement"). 
Advances made pursuant to this Request for Advance and Certification shall 
constitute Additional Advances.

     Borrower hereby certifies to Lender that (i) all representations and 
warranties contained in the Agreement are true and correct as of the date 
hereof; (ii) after giving effect to the Fifth Amendment there is no condition 
or event, which, after notice or lapse of time or both, would constitute an 
Event of Default (other than the Existing Events of Default); and (iii) 
Borrower has performed and complied with all agreements and conditions required 
by the Agreement to be performed and complied with prior to or at the date of 
the requested disbursement of the Additional Advance.

     Except as otherwise defined herein or the context otherwise requires, all 
capitalized terms used herein have the meaning given to them in the Agreement.


                                          "BORROWER"

DATED: __________, 199___.                PREFERRED EQUITIES CORPORATION,
                                          a Nevada corporation.


                                          By: ______________________________

                                              Its: _________________________