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                                                                  Exhibit 10.231


                      GENERAL LOAN AND SECURITY AGREEMENT
                             (Inventory Loan-III)

                                     among

                        PREFERRED EQUITIES CORPORATION
                                      And
                     BRIGANTINE PREFERRED PROPERTIES, INC.
                                      and

                         TEXTRON FINANCIAL CORPORATION

                          Dated as of March 30, 2001
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SECTION 1.     INTERPRETATION OF THIS AGREEMENT
1.1      Terms Defined
1.2      Directly or Indirectly
1.3      Headings
1.4      Accounting Principles

SECTION 2.     ADVANCES AND NOTE
2.1  Inventory Advances; Inventory Loan
2.2      Issuance of Note; Rate of Interest; Receipt of Payments
2.4  Release Payments; Voluntary Prepayments of Inventory Loan
2.5      Participating Lender

SECTION 3.     COLLATERAL
3.1      Security
3.2      Undertakings Regarding Collateral
3.3      Financing Statements
3.4      Location of Collateral; Books and Records
3.5      Insurance of Collateral
3.6      Condemnation
3.7      Taxes Affecting Collateral
3.8      Discharge of Liens Affecting Collateral
3.9      Use of Resort
3.10 Other Timeshare Covenants
3.11 Protection of Collateral; Assessments; Reimbursement
3.12 Interest on Lender Paid Expenses
3.13 Lender Responsibility
3.14 Release of Lien on Unsold Inventory Lot/Timeshare Intervals

SECTION 4.     REPRESENTATIONS AND WARRANTIES
4.1      Subsidiaries and Capital Structure
4.2      Corporate Organization and Authority
4.3      Business and Property
4.4      Financial Statements
4.5      Full Disclosure
4.6      Pending Litigation
4.7      Title to Properties
4.8      Trademarks; Licenses and Permits
4.9      Transaction Is Legal and Authorized
4.10 No Defaults
4.11 Governmental Consent
4.12 Taxes
4.13 Use of Proceeds
4.14 Compliance with Law
4.15 Restrictions of Debtor
4.16 Brokers' Fees
4.17 Deferred Compensation Plans
4.18 Labor Relations

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4.19 Validity and Enforceability
4.20 Validity of Liens Granted to Lender
4.21 Timeshare Regimen Reports
4.22 The Timeshare Intervals
4.23 Pre-Sale of Timeshare Intervals

SECTION 5.     CONDITIONS PRECEDENT TO ACQUISITION INVENTORY ADVANCE AND
EFFECTIVENESS OF THIS AGREEMENT
5.1      Opinions of Counsel
5.2      Warranties and Representations True as of Closing Date
5.3      Compliance with this Agreement
5.4      Officer's Certificates; Secretary's Certificates; Good-Standing
         Certificates
5.5      Uniform Commercial Code Financing Statements
5.6      Assignment of Property-Related Contracts
5.7      Intentionally Deleted
5.8      Guaranty Agreement
5.9      Subordination of Indebtedness
5.10 Expenses
5.11 Inventory Note; Inventory Deed of Trust
5.12 Title Insurance; Casualty Insurance
5.13 Environmental Site Assessment Report
5.14 Taxes
5.15 Inspection
5.16 Survey
5.17 Engineering Report
5.18 Intentionally Deleted
5.19 Intentionally Deleted
5.20 First Lienholder Status; Quit-Claim Deed; Proxy Acknowledged
5.21 Proceedings Satisfactory

SECTION 6.     Intentionally Deleted

SECTION 7.     COVENANTS
7.1      Payment of Taxes and Claims
7.2 Maintenance of Properties; Corporate Existence; Stock Ownership;
    Renovations; Supervisory Architect; Indebtedness; Liens; Business
7.3      Payment of Note and Maintenance of Office
7.4      Sale of Properties
7.5      Consolidation and Merger
7.6      Guaranties
7.7      Compliance with Environmental Laws
7.8      Transactions with Affiliates; Principal Properties
7.9      Use of the Lender Name
7.10 Subordinated Obligations
7.11 Notice of Legal Proceedings
7.12 Further Assurances
7.13 Financial Statements
7.14 Officers' Certificate
7.15 Inspection

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7.16 Minimum Tangible Net Worth

SECTION 8.     EVENTS OF DEFAULT
8.1      Default
8.2      Default Remedies

SECTION 9.     REVIVAL OF OBLIGATIONS AND LIENS

SECTION 10.    MISCELLANEOUS
10.1 Governing Law
10.2 Expenses and Closing Fees
10.3 Parties, Successors and Assigns
10.4 Notices
10.5 Total Agreement
10.6 Survival
10.7 Litigation
10.8 Power of Attorney
10.9 Survival of Indemnities
10.10 Conflicting Obligations; Rights and Remedies

Schedule 1ai-iv    -          Property Description of Grand Flamingo Properties
Schedule 1b        -          Property Description of Reno
Schedule 1c        -          Property Description of Pahrump
Schedule 1d        -          Property Description of Brigantine
Schedule 1e        -          Property Description of Florida
Schedule 1f        -          Property Description of Hawaii
Schedule 2               -         Property-Related Contracts
Schedule 3               -         Affiliates and Capital Structure
Schedule 4               -         Reserved
Schedule 5               -         Reserved
Schedule 6               -         Litigation
Schedule 7               -         Title Exceptions
Schedule 8               -         Reserved
Schedule 9               -         Permitted Leases and Rentals of Units
Schedule 10        -          Hazardous Substances
Schedule 11        -          Use of Proceeds
Schedule 12        -          Licenses, Permits, Etc. Not Obtained
Schedule 13        -          Deferred Compensation Plans
Schedule 14        -          Payment Instructions
Schedule 15        -          Address of Debtor for Books and Records
Schedule 16        -          Address of Debtor for Notices
Schedule 17        -          Address of Lender for Notices

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Exhibit  A1&2      -          Form of Inventory Deed of Trust/Mortgage
                                           (Nevada, New Jersey, Hawaii, Florida)
Exhibit B          -          Form of Inventory Note
Exhibit C          -          Form of Proxy
Exhibit D          -          Form of Request for Lien Release
Exhibit E          -          Form of Partial Release from
                              Inventory  Deed of Trust/Mortgage
Exhibit F [Reserved]
Exhibit G [Reserved]
Exhibit H [Reserved]
Exhibit I               -     Form of Opinion of Jon Joseph, Esq.
Exhibit J               -     Form of Opinion of Greenburg Traurig
Exhibit K               -     Form of Officers Certificates of Debtor
Exhibit L               -     Form of Steamboat Suites, Inc. Secretary's
                              Certificate
Exhibit M               -     Form of Preferred Equities and Brigantine
                              Preferred
                              Secretary's Certificate.
Exhibit N               -     Form of Mego Financials Secretary's Certificate.
Exhibit O               -     Form of Guaranty Agreement
Exhibit P [Reserved]

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                      GENERAL LOAN AND SECURITY AGREEMENT
                             (INVENTORY LOAN-III)



     THIS GENERAL LOAN AND SECURITY AGREEMENT (as amended from time to time,
this "Agreement"), made and executed as of the 30/th/ day of March, 2001, by and
among TEXTRON FINANCIAL CORPORATION, a Delaware corporation, as secured party
(herein referred to as the "Lender") and PREFERRED EQUITIES CORPORATION and
BRIGANTINE PREFERRED PROPERTIES, INC, both being Nevada corporations, jointly
and severally as debtor (herein collectively referred to as the "Debtor").

BACKGROUND:

     Lender and Preferred Equities Corporation, and Lender and Preferred
Equities Corporation's subsidiary, Steamboat Suites, Inc. ("Steamboat"), are
parties to various loan and security agreements providing in the aggregate for
financing and financing commitments up to $23,800,000. Of the existing financing
and financing commitments, Lender agreed to provide up to $10,900,000 for the
acquisition and retention, until further resale, of real estate lots,
condominiums, deeded timeshare intervals and right to use timeshare intervals
which are held by Preferred Equities Corporation and Steamboat Suites, Inc. for
sale or resale to the general public. Certain of the real estate lots,
condominiums, deeded timeshare intervals and right to use timeshare intervals
owned by Preferred Equities Corporation and Steamboat Suites, Inc. are subjected
to a lien in favor of Lender prior to the time of sale of such item or interest
by Preferred Equities Corporation and by Steamboat Suites, Inc. and are
collateral for the repayment and performance of obligations due to Lender by
each of Preferred Equities Corporation and Steamboat Suites, Inc.

     Brigantine Preferred Properties, Inc. is the owner of the Ramada Vacation
Suites at Brigantine Beach consisting of the Brigantine Inn Resort Club and the
Brigantine Villas located in Brigantine, New Jersey which offers deeded
timeshare intervals for sale to the public.

     Preferred Equities Corporation and Brigantine Preferred Properties, Inc.
have with respect to the Resorts (as hereafter defined) entered into sales of
real estate lots, condominiums, deeded timeshare intervals and right to use
timeshare intervals which sales have for one or more reasons not been fully
complied with by the purchasers in accordance with the terms of the sale
documents and Preferred Equities Corporation and Brigantine Preferred
Properties, Inc. have reacquired fee title to certain of the real estate lots,
condominiums, deeded timeshare intervals and right to use timeshare intervals in
the Resorts which were the subject of the purchasers contracts and upon which
the purchaser has defaulted ("Re-Acquired Intervals").

     Preferred Equities Corporation has requested and Lender has agreed to
increase the existing aggregate inventory financing commitment of $10,900,000 by
$3,700,000 to a maximum aggregate outstanding amount of $14,600,000 under the
terms and conditions stated herein provided that Preferred Equities Corporation
and Brigantine Preferred Properties, Inc. subject the Re-Acquired Intervals to a
Lien in favor of Lender together with other unsold and unencumbered real estate
lots, condominiums, deeded timeshare intervals and right to use timeshare
intervals and other collateral as described herein.

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SECTION 1.  INTERPRETATION OF THIS AGREEMENT

     1.1  Terms Defined.

     As used in this Agreement, the following terms shall have the following
respective meanings set forth below or set forth in the Section referred to
following such term:

     Advance -- means one or more Inventory Advances.

     Affiliate -- means any Person

     (a)  which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Debtor;

     (b)  which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Debtor; or

     (c)  5% or more of the Voting Stock (or in the case of a Person which is
not a corporation, 5% or more of the equity interest) of which is beneficially
owned or held by the Debtor.

The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, other voting Securities, by
contract or otherwise.

     Agreement or this Agreement -- as defined in the preamble hereto.

     Assignment of Rents -- as defined in Section 5.11 of this Agreement.

     Association and Associations -- means collectively or individually, as
applicable, The Ramada Vacation Suites at Brigantine Inn Resort Club and
Brigantine Villas Owners Association, or any successor association thereto as
provided in the Brigantine Timeshare Documents, The Grand Flamingo Suites Owners
Association, or any successor association thereto as provided in the Grand
Flamingo Timeshare Documents, The Calvada Lot Owners Association, or any
successor association thereto, The Ramada Vacation Suites Resort at Reno Owners
Association, or any successor association thereto as provided in the Reno
Timeshare Documents, The Ramada Vacation Suites Resort at Indian Shores, Owners
Association, or any successor association thereto as provided in the Indian
Shores Timeshare Documents and The Ramada Vacation Suites Resort at White Sands
Owners Association, or any successor association thereto as provided in the
White Sands Timeshare Documents.

     Books and Records -- means all books, records, computer tapes, disks,
software and microfiche records of the Debtor related to the Resorts.

     Business Day -- means a day other than a Saturday or Sunday or a day on
which banks in the State of Nevada, the State of Rhode Island or the State of
Connecticut are required or authorized by law to be closed (other than for a
general banking moratorium or holiday for a period exceeding 4 consecutive
days).

     Calvada Lot -- means a parcel of land available for sale located in
Pahrump, Nevada and which

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is subject to the Inventory Deed of Trust.

     Change in Management -- means  that Guarantor shall cease to own, directly
or indirectly, in the aggregate 100% of the total combined voting power of all
classes of Voting Stock or other equity interests of any Person which shall have
managerial and/or supervisory operational responsibilities in respect of any
Resort.

     Closing Date -- means, March 30, 2001.

     Collateral -- as defined Section 3.1 of this Agreement.

     Commitment Letter -- means that certain letter dated January 18, 2001 from
the Lender to Debtor, which letter was accepted by Debtor on January 22, 2001
and subsequently modified by Lender and Preferred Equities Corporation.

     Common Amenities -- means the common areas and other amenities at the
Resorts as contemplated in the Declarations which any purchaser of a Timeshare
Interval or Calvada Lot shall be entitled to use pursuant to the Declarations.

     Compensation -- as defined in Section 3.1(g) of this Agreement.

     Condemnation Compensation -- as defined in Section 3.6(a) of this
Agreement.

     Contract -- means any purchase and sale agreement between one or more
natural Persons and the Debtor which agreement provides for the sale by the
Debtor to such natural Person or Persons of one or more Timeshare Intervals
and/or Calvada Lots.

     Debtor -- collectively, on a joint and several basis, or individually as
the context requires, each of Preferred Equities Corporation and/or Brigantine
Preferred Properties, Inc. as is more particularly defined in the preamble
hereto.

     Declaration or Declarations -- means collectively and individually the
Declaration applicable to any of the Resorts.

     Declarant -- the status of the Debtor as the declarant under applicable law
and under the respective Declarations and the Articles of Incorporation and By-
Laws of the respective Associations.

     Default -- means an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.

     Default Rate -- means, at any time, the per annum rate of interest equal
to the Interest Rate, then in effect, plus 2% per annum; provided, however, that
the Default Rate shall in no event exceed the Maximum Rate.

     Environmental Protection Law -- means each federal, state, county, regional
or local law, statute, or regulation enacted in connection with or relating to
the protection or regulation of the environment, including, without limitation,
those laws, statutes, and regulations regulating the disposal, removal,
production, storing, refining, handling, transferring, processing, or
transporting of Hazardous Substances, and any regulations issued or promulgated
in connection with such statutes by any

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governmental authority and any orders, decrees or judgments issued by any court
of competent jurisdiction in connection with any of the foregoing.

     Equipment -- means the furniture, fixtures and furnishings of each Unit,
but excluding Property owned by the Associations, Property owned by occupants of
the Units and telephone and computer equipment leased in the ordinary course of
business.

     Event of Default -- as defined in Section 8.1 of this Agreement.

     Fair Market Value -- at any time with respect to any Property means the
sale value of such Property that would be realized in an arm's-length sale at
such time between an informed and willing buyer, and an informed and willing
seller, under no compulsion to buy or sell, respectively.

     Guaranty -- as defined in Section 7.6(b) of this Agreement.

     Guaranty Agreement -- as defined in Section 5.8 of this Agreement.

     Guarantor -- means Mego Financial.

     Hazardous Substances -- means any and all pollutants, contaminants, toxic
or hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any Environmental
Protection Law (including, without limitation, asbestos, urea formaldehyde foam
insulation and polychlorinated biphenyls); provided, however, that "Hazardous
Substances" shall not include any substance used by the Debtor, any homeowner or
their respective agents in the ordinary course of business in compliance with
applicable Environmental Protection Laws.

     Impositions -- as defined in Section 3.7 of this Agreement.

     Insurance Premiums -- as defined in Section 3.5(a) of this Agreement.

     Interest Rate -- means, with respect to any calendar month, a per annum
rate of interest equal to the greater of:

          (a)  8.75%, or

          (b)  the sum of

          (i)  2.0%, plus

          (ii) the Prime Rate then in effect for such month.

The interest rate for each calendar month shall be based upon the Prime Rate in
effect at 9:00 a.m. (Eastern time) on the 1st day of such month.  The term
"Prime Rate" shall mean the "prime rate" as announced from time to time by Chase
Manhattan Bank, N.A. or any successor thereto.  In the event Chase Manhattan
Bank, N.A., or any successor thereto, shall discontinue announcement of said
Prime Rate, a comparable index designated by the Lender shall be used in
calculating the Interest Rate.  It is

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expressly agreed that the use of the term "prime rate" or any other similar
designation is not intended to, nor does it, imply that said rate of interest is
a preferred rate of interest or one which is offered by Chase Manhattan Bank,
N.A. or any successor thereto to its most creditworthy customers.

     Inventory Advance -- as defined in Section 2.1 of this Agreement.

     Inventory Deed of Trust -- means that certain combination Deed of Trust,
Security Agreement and Fixture Financing Statement, substantially in the form of
Exhibit A-1 or the Mortgage, Security Agreement and Fixture Financing Statement,
substantially in the form of Exhibit A-2 to this Agreement, as applicable to any
Resort, as the same may be amended from time to time.

     Inventory Loan -- means, at any time, the non-revolving loan facility
comprised of a maximum of $3,700,000, provided however that the maximum amount
of the Inventory Loan shall at no time exceed a 12% advance against the retail
value of the remaining unsold inventory at the Resorts.

     Inventory Maturity Date -- means  April 1, 2005.

     Inventory Note -- as defined in Section 2.2(a) of this Agreement.

     Lender -- as defined in the preamble to this Agreement.

     Lien -- any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and including, but not limited to,
attachments, judgments or tax liens (except for inchoate tax liens which arise
in connection with taxes not yet due and payable) and the security interest or
lien arising from a mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes.  The term
"Lien" shall include reservations, exceptions, encroachments, easements, rights-
of-way, covenants, conditions, restrictions, leases and other title exceptions
and encumbrances affecting Property.  For the purpose of this Agreement, the
Debtor shall be deemed to be the owner of any Property which it has acquired or
holds subject to a conditional sale agreement or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes.

     Loan -- means the Inventory Loan.

     Loan Costs -- as defined in Section 10.2 of this Agreement.

     Maker -- means any natural Person, who shall have, in a bona fide
transaction, purchased a Timeshare Interval or Calvada Lot and executed a
Contract and a Note Receivable in respect thereof.

     Mandatory Inventory Prepayment -- means any prepayment required by Section
2.4(c) of this Agreement.

     Maximum Rate -- as defined in Section 2.2(b) of this Agreement.

     Mego Financial -- means Mego Financial Corp., a New York corporation.

     Monthly Average Weighted Loan Balance -- means, for any calendar month with
respect to the Inventory Loan the quotient of

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     (a)  the aggregate of the Daily Loan Balances for each of the days of such
month in respect of such Loan divided by

     (b)  the number of days in such month.

For purposes of this definition, "Daily Loan Balance" shall mean, for any day,
the principal balance of the Inventory Loan outstanding as of the close of
business of the Lender for such day after giving effect to all payments received
made during such day.

     Note -- means the Inventory Note.

     Note Receivable -- means any promissory note made payable to the order of
the Debtor which provides for payment of the deferred purchase price of one or
more Timeshare Intervals or and/or Calvada Lots purchased by the Maker thereof.

     Obligations -- means all sums now or hereafter loaned, advanced or incurred
by the Lender to or on behalf of the Debtor under this Agreement, the Inventory
Note and any other Security Document (including, without limitation, accrued and
unpaid interest, unpaid prepayment premium and Loan Costs),  and all Obligations
due from Preferred Equities Corporation or Steamboat Suites, Inc. in connection
with  a General Loan and Security Agreement (Inventory Loan) dated as of
December 17, 1999 and a General Loan and Security Agreement (Receivables Loan)
dated as of December 17, 1999 and due from Preferred Equities Corporation in
connection with a Loan and Security Agreement dated as of August 12, 1998 and
the full, prompt and complete performance of all obligations owed by, or
undertakings or indemnities of, Debtor arising hereunder or thereunder.

     Participating Lender -- means any Person which (a) shall have been granted
the right by the Lender to participate in the Note and the Collateral and (b)
shall have entered into a participation agreement in form and substance
satisfactory to the Lender which shall provide, inter alia, that the
Participating Lender shall communicate and deal only with the Lender with
respect to the Participating Lender's interest in the Note and the Collateral.

     Permitted Exceptions -- means the title exceptions set forth in Schedule 7
of this Agreement.

     Person -- means an individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.

     Prime Rate -- as defined in the definition of "Interest Rate" in this
Section 1.1.

     Property or Properties -- means any interest in any kind of property or
asset of Debtor, whether real, personal or mixed, or tangible or intangible.

     Property-Related Contract -- as defined in Section 3.1(b) of this
Agreement.

     Release Fee -- as defined in Section 3.14 of this Agreement.

     Release Price -- means, with respect to any Unsold Inventory Lot/Timeshare
Interval, $1,350 or such other amount as is necessary to retire the Inventory
Loan upon a 70% sell out of the then remaining Unsold Inventory Lot/Timeshare
Intervals.

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     Resort or Resorts --  collectively and individually, as applicable, means
The Ramada Vacation Suites at Brigantine Beach Resort, consisting of Brigantine
Inn Resort Club and Brigantine Villas in Brigantine, New Jersey and The Ramada
Vacation Suites Resort at Las Vegas consisting of Grand Flamingo Terraces and
Grand Flamingo Towers and Grand Flamingo Villas and Grand Flamingo Winnick, Las
Vegas, Nevada and The Calvada Lots located in Pahrump, Nevada and The Ramada
Vacation Suites Resort at Reno, Reno, Nevada and The Ramada Vacation Suites
Resort at Indian Shores, Indian Shores, Florida and The Ramada Vacation Suites
Resort at White Sands, Honolulu, Hawaii.

     Rhode Island Uniform Commercial Code -- means the Uniform Commercial Code
as adopted and in force in the State of Rhode Island, as from time to time in
effect.

     Security -- shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.

     Security Documents -- means this Agreement, the Inventory Note, all
assignments of Property-Related Contracts, the Inventory Deed of Trust, the
Guaranty Agreement and all assignments, instruments, certificates, notices and
other documents executed and delivered in connection with the transactions
contemplated herein.

     Subordination Agreement  -- as defined in Section 5.9 of this Agreement.

     Subsidiary -- means any present or future corporation of which the Debtor
owns, directly or indirectly, more than 50% of the Voting Stock.

     Tangible Net Worth -- The Tangible Net Worth of any Person shall mean, as
of any date, (a) the amount of any capital stock, paid in capital and similar
equity accounts plus (or minus in the case of a deficit) the capital surplus and
retained earnings of such Person and the amount of any foreign currency
translation adjustment account shown as a capital account of such Person, less
(b) the net book value of all items of the following character which are
included in the assets of such Person: (i) good will, including without
limitation, the excess of cost over book value of any asset, (ii) organization
or experimental expenses, (iii) unamortized debt discount and expense, (iv)
patents, trademarks, trade names and copyrights, (v) treasury stock, (vi)
deferred taxes and deferred charges, (vii) franchises, licenses and permits, and
(viii) other assets which are deemed intangible assets under generally accepted
accounting principles, provided, however, that, notwithstanding the foregoing,
no deduction shall be made pursuant to clause (b) in respect of any asset
presently shown on the statement of financial condition of Borrower as "Deferred
Selling Expense" as determined in accordance with generally accepted accounting
principles.

     Timeshare Documents - collectively or individually all documents and
instruments establishing, memorializing, governing, or affecting the rights and
obligations of the purchasers of Timeshare Intervals in and to a Unit or a
Calvada Lot, including, without limitation, the documents and certificates
creating and effecting the timeshare regimen for such Unit, which shall include,
without limitation, the respective Declarations, the Articles of Incorporation
and By-Laws of the Associations, any restrictive covenants in respect of such
regimen and all other project instruments in respect of such regimen.

     Timeshare Interval -- means (i) (A) an estate for years in and to any Unit
which shall confer an exclusive right to use, occupy and possess such or any
other similar Unit for a stipulated week or a week in a stipulated season,
together with a vested remainder as a tenant in common in such Unit at the end
of such estate for years, all as more particularly provided for by the
Declarations and the other Timeshare

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Documents in respect of such Unit or (B) a freehold estate in any Unit created
by the Declarations and the other Timeshare Documents in respect of such Unit,
which freehold estate shall entitle the owner thereof to the exclusive use and
occupancy of one of the 51 annually recurring weekly timeshare periods or a week
in a stipulated season established and designated in said Declarations in
respect of such Unit or any other similar Unit and (ii) the proportionate
interest in the Common Amenities related to such Unit, as set forth in the
Declarations.

     Title Insurance Policy  -- as defined in Section 5.12 hereof.

     Unit -- means any unit (within the meaning of such term in the Declaration)
which is subject to the Inventory Deed of Trust in any Resort other than a
Calvada Lot.

     Unsold Inventory Lot/Timeshare Interval -- means, at any time, any
Timeshare Interval or a Calvada Lot, subjected to the Lien of the Inventory Deed
of Trust, which Timeshare Interval or Calvada Lot shall, as of such time, shall
not have been released from the Lien of the Inventory Deed of Trust.

     Voting Stock -- means securities of any class or classes of a corporation
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing similar
functions) of such corporation.

     1.2   Directly or Indirectly.

     Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provisions shall be
applicable whether such action is taken directly or indirectly by such Person.

     1.3   Headings.

     Section headings have been inserted in this Agreement as a matter of
convenience of reference only; such section headings are not a part of this
Agreement and shall not be used in the interpretation of this Agreement.

     1.4   Accounting Principles.

     Where the character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same
shall be determined or made in accordance with generally accepted accounting
principles, procedures and practices consistently applied at the time in effect,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.

SECTION 2. ADVANCES AND NOTE.

     2.1   Inventory Advances; Inventory Loan.

     The Lender agrees, pursuant to the terms of this Agreement and subject to
Debtor's satisfaction of the conditions precedent in Section 5 of this
Agreement, through September 30, 2001, to make up to three (3) advances (each an
"Inventory Advance") to the Debtor, upon Debtor's prior written notice and
request to Lender of at least fifteen (15) business days and not occurring more
than once in any calendar month,  aggregating a maximum amount of $3,700,000 for
the purposes stated herein. Each Inventory

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Advance shall be related to Timeshare Intervals in a Resort or more than one
Resort and/or for the Calvada Lots to be subjected to the Lien of an Inventory
Deed of Trust and shall be in an amount not greater than Twelve (12%) percent of
the average retail value (calculated as 12% of the average sale price offered to
a Purchaser) during the immediately preceding ninety (90) days of the Timeshare
Intervals in one or more of the Resorts or of the Calvada Lots provided however
that the use of the proceeds of each such Inventory Advance must be utilized to
pay all prior Liens and encumbrances related to the Timeshare Intervals or
Calvada Lots, such that Lender shall have a first priority Lien on each such
Timeshare Interval or such Calvada Lot and further provided that: (a) the
proceeds of the first Inventory Advance repay Lender $832,546.49 of the
Obligations due and owing under the Loan and Security Agreement between
Preferred Equities Corporation and Lender of August 12, 1998; and (b) the
proceeds or a portion thereof of the Inventory Advance related to the Ramada
Vacation Suites at Reno, Reno, Nevada Resort shall be dedicated to the payment
of $400,000 of expenses related to the renovation of such Resort.

     Other than Mandatory Prepayments under Section 2.4(c), Voluntary
Prepayments under Section 2.5, payments of the Release Price with respect to
Timeshare Intervals or a Calvada Lot that have been sold pursuant to a Contract,
the application of insurance proceeds to the prepayment of the Inventory Loan
pursuant to Section 3.5 hereof or the application of Condemnation Compensation
pursuant to Section 3.6 hereof, the Debtor may not prepay the Inventory Loan,
and in no circumstance may it re-borrow previously paid Inventory Advances.  The
Inventory Loan shall be payable in the manner set forth in Section 2.4 of this
Agreement and in the Inventory Note.  The Inventory Loan shall be due and
payable on the Inventory Maturity Date together with any accrued interest
thereon then remaining unpaid and any other amounts then due in connection
therewith, under the Inventory Note or under any of the other Security Documents
relating to, or otherwise securing, the Inventory Loan.

     2.2  Issuance of Note; Rate of Interest; Receipt of Payments.

     (a)  Inventory Note.  The Debtor shall authorize, issue and deliver to the
Lender a promissory note (as amended from time to time, the "Inventory Note")
substantially in the form attached to this Agreement as Exhibit B.

     (b)  Rate of Interest: Inventory Loan.  Interest shall accrue on the
Inventory Loan and be due monthly in arrears on the first (1st) Business Day of
each month, as more particularly provided in the last sentence of this
paragraph, and shall be paid as provided in Section 2.4 of this Agreement.
Subject to the accrual of interest on the Inventory Loan after the occurrence of
a Default or Event of Default, as more particularly provided below in this
clause (b), the Monthly Average Weighted Loan Balance in respect of the
Inventory Loan for each calendar month shall bear interest at a rate per annum
equal to the Interest Rate.

     Interest shall be calculated under this clause (b) on the basis of actual
days elapsed over a period of a 360-day year.

     The Inventory Loan shall bear interest as of the date of the Lender's
wiring of funds thereof through the date of the receipt by the Lender of the
repayment of such Loan (if the repayment of all or any portion of the Loan is
received by the Lender later than 3:00 p.m. Eastern time, then interest accrual
thereon shall be through the next Business Day following such receipt).  After
the occurrence of an Event of Default or after the Inventory Maturity Date (if
the aggregate principal balance of the Inventory Loan is not paid in full on the
Inventory Maturity Date), the Inventory Loan will bear interest at the Default

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<PAGE>

Rate.

     The Debtor and the Lender intend to comply at all times with applicable
usury laws.  All agreements between the Debtor and the Lender, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of demand or acceleration of the
maturity of any Note or otherwise, shall the interest contracted for, charged,
received, paid or agreed to be paid to the Lender exceed the maximum amount
permissible under applicable law, or in the absence of a maximum allowable rate
under applicable law, then, 45% per annum (the "Maximum Rate").  The Lender may,
in determining the Maximum Rate in effect from time to time, take advantage of
any law, rule or regulation in effect from time to time available to the Lender
which exempts the Lender from any limit upon the rate of interest it may charge
or grants to the Lender the right to charge a higher rate of interest than that
otherwise permitted by applicable law.  If, from any circumstance whatsoever,
interest would otherwise be payable to the Lender in excess of the Maximum Rate,
the interest payable to the Lender shall be reduced to the Maximum Rate; and if
from any circumstance the Lender shall ever receive anything of value deemed
interest by applicable law in excess of the Maximum Rate, an amount equal to any
excessive interest shall be applied to the reduction of the principal of the
Loan and not to the payment of interest, or if such excessive interest exceeds
the unpaid balance of principal of the Loan, such excess shall be refunded to
the Debtor.  All interest paid or agreed to be paid to the Lender shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal so that the
interest on the Loan for such full period shall not exceed the Maximum Rate.
The Debtor agrees that in determining whether or not any interest payment under
the Security Documents exceeds the Maximum Rate, any non-principal payment
(except payments specifically described in the Security Documents as "interest")
including without limitation, prepayment fees and late charges, shall to the
maximum extent not prohibited by law, be an expense, fee or premium rather than
interest.  The Lender hereby expressly disclaims any intent to contract for,
charge or receive interest in an amount which exceeds the Maximum Rate.  The
provisions of this Agreement, the Note, and all other Security Documents are
hereby modified to the extent necessary to conform with the limitations and
provisions of this paragraph, and this paragraph shall govern over all other
provisions in any document or agreement now or hereafter existing.  This
paragraph shall never be superseded or waived unless there is a written document
executed by the Lender and the Debtor, expressly declaring the usury limitation
set forth in this paragraph to be null and void, and no other method or language
shall be effective to supersede or waive this paragraph.

     (c)  Interest and Other Payments Due on Holidays. If any payment due on, or
with respect to, this Agreement, the Note or any other Security Document shall
fall due on a day other than a Business Day, then such payment shall be made on
the 1st Business Day following the day on which such payment shall have so
fallen due; provided that if all or any portion of such payment shall consist of
a payment of interest, for purposes of calculating such interest, such payment
shall be deemed to have been originally due on such first following Business
Day, and such interest shall accrue and be payable to (but not including,
subject to clause (d) below) the actual date of payment.

     (d)  Application of Payments Received after 3:00 p.m.  Any payment actually
received by the Lender at or before 3:00 p.m. Eastern time, by federal funds
wire transfer on any Business Day, shall be deemed to have been received by the
Lender on such day.  Any payment actually received by the Lender after 3:00 p.m.
Eastern time, by federal funds wire transfer on any Business Day, shall be
deemed to have been received on the next following Business Day.  All payments
received by the Lender on a day other than a Business Day, or in a manner other
than by federal funds wire transfer, shall be deemed to have been received by
the Lender on the Business Day such amounts actually become available to the
Lender prior to 3:00 p.m. Eastern time in immediately available funds.

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<PAGE>

     2.3  Intentionally Deleted

     2.4  Release Payments; Voluntary Prepayments of Inventory Loan.

     (a)  Release Payments.  Payments of Release Prices in respect of Unsold
Inventory Lot/Timeshare Intervals shall be applied by the Lender when received
in good, collected funds to the payment of the principal amount of the Inventory
Loan.  Debtor shall be responsible on the first (1st) business day of each month
to pay to Lender all fees, costs and expenses as set forth in Section 10.2 of
this Agreement, in each case, as the same may have arisen in respect of the
Inventory Loan, payment of all unpaid Release Fees in respect of the Inventory
Loan, the payment of all billed and unpaid interest, if any, in respect of the
Inventory Loan, the payment of any other Obligations unpaid and in default and
all Interest which accrues on the Inventory Loan in respect of the prior
calendar month.

     (b)  Voluntary Prepayments. Debtor shall have the right to prepay the
Inventory Loan as provided in Section 2.1 or in full at any time provided
however in connection with a full repayment of the Obligations hereunder, Debtor
shall pay a prepayment fee equal to (i) or (ii) below:

          (i)  For the period from and after the Closing Date through the date
               of such prepayment, if $1.00 or more of obligations remains due
               to Lender under a General Loan and Security Agreement of August
               12, 1998, the difference between either (a) $136,745.00 or (b) if
               the number of Unsold Inventory Lot/Timeshare Intervals on the
               Closing Date is less than Three Thousand Nine Hundred Seven
               (3,907), the number of Unsold Inventory Lot/Timeshare Intervals
               on the Closing Date multiplied by seventy (70%) percent and
               further multiplied by $50.00 less (c) the aggregate of all
               Release Fees paid by Debtor and received by Lender to the date of
               such repayment; or

          (ii) For the period from and after the Closing Date through the date
               of such prepayment, if no obligations remain due to Lender under
               a General Loan and Security Agreement of August 12, 1998, the
               number of Unsold Inventory Lot/Timeshare Intervals on the date of
               such repayment multiplied by seventy percent (70%) and further
               multiplied by $25.00.

     (c)  Mandatory Prepayment. Debtor shall make mandatory payments or
prepayments, as the case may be, in addition to the Release Payments as follows:

     (i)  At any time, the retail value (calculated as the aggregate of the
          average offering prices for each Timeshare Interval or Lot for sale to
          Purchasers over the immediately preceding ninety (90) days) of the
          Timeshare Intervals and Calvada Lots remaining subject to the
          Inventory Deed of Trust exceeds Twelve (12%), such amount as is
          necessary to reduce the Obligations to such maximum amount; and

     (ii) At any time that seventy percent (70%) of the remaining Timeshare
          Intervals and Calvada Lots subject to the Inventory Deed of Trust at
          the current retail value (calculated as the aggregate of the average
          offering prices for each Timeshare Interval or Lot for sale to
          Purchasers over the immediately preceding ninety (90) days) are less
          than the Obligations, Debtor shall either make a mandatory payment of
          such amount as is necessary to cause the retail value of seventy
          percent (70%) of the remaining Timeshare Intervals and Calvada Lots to
          exceed the Obligations by $1.00 or more if Debtor desires

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<PAGE>

            to have the Release Price remain at $1,350 or shall on all future
            sales pay such increased Release Price so as to cause the
            Obligations due to Lender to be repaid at such time as seventy
            percent (70%) of the remaining Timeshare Intervals and Calvada Lots
            subject to the Inventory Deed of Trust are sold; and

     (iii)  On or before the following anniversary dates to the extent necessary
            so that the principal balance of the Inventory Loan does not exceed
            the following levels:

                    Date        Principal Balance Remaining
                    ----        ---------------------------

            April 1, 2002               $2,700,000
            April 1, 2003               $1,900,000
            April 1, 2004               $1,500,000
            April 1, 2005               $     0.00

     2.5    Participating Lender.

     The Lender shall have the right, without prior notice to the Debtor or the
approval of the Debtor, to designate one or more Participating Lenders and to
grant to such Participating Lenders participations in the Receivable Loan
Agreement and/or the Inventory Loan, on terms and conditions satisfactory to the
Lender. In the event that the Lender so designates a Participating Lender and
grants such Participating Lender a participation in any of such Loans, such
Participating Lender shall communicate and deal only with the Lender in respect
to such Participating Lender's interest in any of such Loans and the Collateral
and the Debtor shall communicate and deal hereunder only with the Lender and not
with any Participating Lender.

SECTION 3.  COLLATERAL

     3.1    Security.

     For the purpose of securing the prompt and complete payment and performance
by the Debtor of all of the Obligations, the Debtor does unconditionally and
irrevocably hereby grant to the Lender a security interest in, and a Lien upon,
the following Property of the Debtor, whether now owned or hereafter acquired
(such Property being herein referred to as the "Collateral"):

     (a)    all of the Debtor's right, title and interest in, to and under
(including, without limitation, all revenues, proceeds, rents and other benefits
derived from) any franchises (excluding the Hospitality Franchise System and
Ramada Franchise Systems license agreements), permits, trade names, trademarks
(and goodwill associated therewith), approvals, leasehold interests (whether as
lessor or lessee), management contracts, marketing contracts, maintenance
contracts, utility contracts, security contracts, licensing contracts, Timeshare
Documents or other similar contracts and all guaranties of any of the foregoing,
including, without limitation, the contracts set forth on Schedule 2 to this
Agreement (individually, a "Property-Related Contract" and, collectively, the
"Property-Related Contracts") relating, in each case, to the Calvada Lots or
Timeshare Intervals;

     (b)    all other accounts, contract rights, general intangibles, documents,
instruments and proceeds of the Debtor related to the Property described in
clause (a) above, or otherwise connected with, or related to, the operation
and/or use of the Calvada Lots or Timeshare Intervals (including, without
limitation, all rights of the Debtor in and to unearned or prepaid Insurance
Premiums, Impositions or

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<PAGE>

other charges for utilities and any deposits with respect thereto relating to
any Resort and any interest thereon and any Compensation that would be payable
in respect of any construction, architect and engineering contracts entered into
or to be entered into by the Debtor in connection with the refurbishing of the
Timeshare Intervals, Calvada Lots or a Resort;

     (c)  all Books and Records;

     (d)  all Equipment;

     (e)  all of the Debtor's right, title and interest of whatever character
(whether as owner, vendor, chattel lessee, Declarant, Unit owner, Timeshare
Interval owner or otherwise, vested and now owned) in and to (i) all Timeshare
Intervals owned by Debtor (now existing) in any Resort which Timeshare Interval
is subjected to the Inventory Deed of Trust, (ii) the Declarations, (iii) all
building materials, supplies and other Property now or hereafter stored at or
delivered to the Resorts or any other location for installation in or on any
Unit, (iv) except to the extent included in clause (a) or clause (b) above, all
rents, issues, profits and condemnation awards now or hereafter belonging or in
any way pertaining to any Unit, provided that nothing in this clause shall limit
or restrict the right of the Debtor to collect "Rents" as defined, and provided
for, in the Assignment of Rents, and (v) any and all plans, specifications,
drawings, books, records, marketing materials and similar items now or hereafter
relating to any Unit, the operation thereof, any rights of the Debtor thereto or
any interest therein;

     (f)  all of the Debtor's right, title and interest of whatever character
(whether as owner, vendor, chattel lessee, Declarant, or otherwise, vested and
now owned) in and to (i) The Calvada Lots owned by Debtor (now existing) and
subjected to the Inventory Deed of Trust, (ii) the Declarations, (iii) except to
the extent included in clause (a) or clause (b) above, all rents, issues,
profits and condemnation awards now or hereafter belonging or in any way
pertaining to any Calvada Lot subjected to the Inventory Deed of Trust, provided
that nothing in this clause shall limit or restrict the right of the Debtor to
collect "Rents" as defined, and provided for, in the Assignment of Rents and
(iv) any and all plans, specifications, drawings, books, records, marketing
materials and similar items now or hereafter relating to any Calvada Lot or any
rights of the Debtor thereto or any interest therein;

     (g)  all of the Debtor's right, title and interest of whatever character
(whether as owner, chattel lessee, Declarant, Unit owner, Timeshare Interval
owner or otherwise, whether vested or contingent and whether now owned or
hereafter acquired) in and to any and all judgments, settlements, claims,
awards, insurance proceeds and other proceeds and compensation, and any interest
thereon (collectively, "Compensation"), now or hereafter made or payable in
connection with (i) any casualty or other damage to all or any part of the
Timeshare Intervals, Units or Calvada Lots subjected to the Inventory Deed of
Trust, (ii) any condemnation proceedings affecting the Timeshare Intervals,
Units or Calvada Lots subjected to the Inventory Deed of Trust or any rights
thereto or any interest therein, (iii) any damage to or taking of the Timeshare
Intervals, Units or Calvada Lots subjected to the Inventory Deed of Trust or any
rights thereto or any interest therein arising from or otherwise relating to any
exercise of the power of eminent domain (including, without limitation, any and
all Compensation for change of grade of streets or any other injury to or
decrease in the value thereof), or any conveyance in lieu of or under threat of
any such taking, (iv) any and all proceeds of any sale, assignment or other
disposition of the Timeshare Intervals, Units or Calvada Lots subjected to the
Inventory Deed of Trust or any rights thereto or any interest therein, (v) any
and all proceeds of any other conversion (whether voluntary or involuntary) of
the Timeshare Intervals, Units or Calvada Lots subjected to the Inventory Deed
of Trust or any rights thereto or any interest therein or to cash or any
liquidated claim relating thereto, and (vi) any and all refunds and rebates of
or with respect to any Insurance Premium, any Imposition or any other charge for
utilities

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<PAGE>

relating to the Timeshare Intervals, Units or Calvada Lots subjected to the
Inventory Deed of Trust (including, without limitation, any and all refunds and
rebates of or with respect to any deposit or prepayment relating to any such
Insurance Premium, Imposition or charge), and any and all interest thereon,
whether now or hereafter payable or accruing; and

     (h)  all other "Mortgaged Property," as such term is defined in the
Inventory Deed of Trust, whether such Collateral shall be presently in existence
or whether it shall be acquired or created by the Debtor at any time hereafter,
wherever located, together with the products and proceeds thereof, and any
replacements, additions and/or accessions thereto and substitutions thereof and
after-acquired Property related to the Timeshare Intervals, Units or Calvada
Lots subjected to the Inventory Deed of Trust, provided that any Collateral
which shall have been released by the Lender from the Liens provided for herein
or in any other Security Document shall not be deemed to have again become
subject to such Liens solely by virtue of becoming after-acquired Property of
the Debtor.


     The Lender agrees that, upon the release of a Timeshare Interval or Calvada
Lot from the Inventory Deed of Trust, the Lender will release any security
interest, together with all documents, instruments, chattel paper, proceeds,
revenues, Property rights, privileges and other benefits relating thereto.

     3.2  Undertakings Regarding Collateral.

     (a)  The Lender shall not be required to take any steps to perfect or
maintain the perfection of its security interest in the Collateral and no loss
of, or damage to, the Collateral shall release the Debtor from any of the
Obligations.

     (b)  The execution and delivery of this Agreement, and the granting of the
Liens in and to the Collateral, shall not subject the Lender to, or transfer or
pass to the Lender or in any way affect or modify, the liability of the Debtor
under any or all of the Property-Related Contracts or in connection with the
Resorts or Calvada Lots, the Declaration or the Association's Articles of
Incorporation or By-Laws, it being understood and agreed that notwithstanding
this Agreement, and the granting of the Liens in and to the Collateral, all of
the obligations of the Debtor (whether as owner, chattel lessee, vendor,
mortgagee, Declarant, Unit owner, Timeshare Interval owner or otherwise) to each
and every other party under each and every one of the Property-Related Contracts
and/or in connection with the Resorts or the Declaration and Articles of
Incorporation and By-Laws of the Association shall be and remain enforceable by
such other party, its successors and assigns, only against the Debtor or Persons
other than the Lender, and the Lender has not assumed any of the obligations or
duties of the Debtor under or with respect to any of the Property-Related
Contracts or otherwise in connection with the Resorts or the Declaration or the
Articles of Incorporation or By-Laws of the Association.

     (c)  The Debtor hereby agrees and acknowledges that neither the acceptance
of this Agreement or any other Security Document by the Lender nor the exercise
of, or failure to exercise, any right, power or remedy in this Agreement or in
any other Security Document conferred upon the Lender shall be deemed or
construed to obligate the Lender to pay any sum of money, take any other action
or incur any liability in connection with, or collect or realize upon, any other
Collateral. It is further agreed and understood by the Debtor that the Lender
shall not be liable in any way for any cost, expense or liability connected
with, or any charge or liability arising from, any of the Property-Related
Contracts or any other Collateral.

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<PAGE>

     (d)  The Debtor hereby agrees to indemnify the Lender, and hold it
harmless, from any and all liability, loss or damage which it may or might incur
by reason of any and all claims and demands whatsoever which may be asserted
against the Lender arising out of, as a result of, or otherwise connected with,
the Liens hereby granted to the Lender by the Debtor under or in respect of any
of the Property-Related Contracts or any other Collateral by reason of (i) the
failure by the Debtor to perform any obligations or undertakings required to be
performed by the Debtor under or in connection with any of such Property-Related
Contracts or any other Collateral, (ii) any failure by the Debtor, in connection
with any of the Property-Related Contracts or any other Collateral, to comply
with any applicable federal, state or local consumer credit, sale rescission or
usury statute, and (iii) failure by the Debtor to comply with any applicable
federal, state or local statutes or ordinances and the rules and regulations
promulgated thereunder pertaining to the renovation, construction, use or
operation of the Resorts (including, without limitation, the Units) or to
otherwise discharge its duties and obligations under applicable law and under
the Declaration or the Association's Articles of Incorporation or By-Laws as
Declarant.

     3.3  Financing Statements/Perfection Documents.

     The Debtor agrees, at its own expense, to execute the financing statements
required by the Rhode Island Uniform Commercial Code together with any and all
other instruments or documents and take such other action, including delivery of
such instruments and documents, as may be necessary to perfect, and to continue
the perfection of, the Lender's security interest and Liens in the Collateral
and, unless prohibited by law, the Debtor hereby authorizes the Lender to
execute and file any such financing statement on the Debtor's behalf. The
parties agree that a legible carbon, photographic or other reproduction of this
Agreement or of a financing statement shall be sufficient as a financing
statement.

     3.4  Location of Collateral; Books and Records.

     All tangible Collateral (other than Collateral delivered to the Lender and
other than certain Books and Records which may be kept on Debtor's premises in
Las Vegas, Nevada) which is personal Property is to remain, at all times, on the
premises of the Debtor at 4310 Paradise Road, Las Vegas, Nevada or on the
premises of one of the Resorts and the Debtor represents and warrants to the
Lender that all of the currently existing tangible Collateral is now located
either at Debtors Las Vegas premises or on the premises of one of the Resorts ,
and the Debtor will not transfer the Collateral from such premises to other
locations without the prior written approval of the Lender. The Debtor shall,
upon receipt of a written request therefor from the Lender, deliver to the
Lender, then current copies of all computer tapes, disks, software and
microfiche records constituting, in whole or in part, the Books and Records.

     3.5  Insurance of Collateral.

     (a)  Maintenance of Insurance. The Debtor agrees to maintain, or cause to
be maintained, insurance, with financially sound and reputable insurers
acceptable to the Lender, with respect to the Calvada Lots, Units and the
personal Property located therein (including, without limitation, the furniture,
fixtures and furnishings thereof), all other equipment and other personal
Property of every nature whatsoever now or hereafter located in or on, or
attached to, and used or intended to be used in connection with the Resorts, the
Common Amenities and the Books and Records, against casualties, contingencies,
hazards and such other risks (including, without limitation, (i) fire,
hurricane, tornado, wind damage, and such other risks insured against by a
standard all-risk property and fire insurance policy and endorsement for
extended coverage and (ii) flood insurance, if required by applicable law) and
in such amounts as shall be reasonably satisfactory to the Lender (such
insurance to be maintained during the refurbishing of the Resorts and to cover
materials in as well as adjacent to the structures so insured;

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<PAGE>

such insurance shall also be maintained prior to such refurbishing as well as
after such refurbishing); provided, however, that such casualty insurance shall
(A) in no case be in an amount less than an amount sufficient to rebuild the
Units or the Common Amenity which shall have suffered the loss and replace any
of the personal Property located therein and (B) be sufficient to provide funds
to fully compensate owners of Timeshare Intervals in and to such Unit for any
inability to utilize such Unit and/or Common Amenity during any period following
a loss to such Unit or Common Amenity. The Debtor shall deliver copies of the
policies of such insurance to the Lender, with satisfactory lender's loss
payable endorsements naming the Lender as loss payee to the extent of its
interest and as such interest may appear on the Closing Date, as set forth in
Section 5.12 hereof and within 15 days after the Closing Date, Debtor shall
deliver a certification from the insurance company or insurance companies
issuing such policies certifying that such copies are true and correct. Each
such policy of insurance or endorsement shall contain a clause requiring the
insurer to give not less than 30 days' prior written notice to the Lender in the
event of cancellation of the policy for any reason whatsoever and a clause that
the interest of the Lender shall not be impaired or invalidated by any act or
neglect of the Debtor or owner of the Property nor by the occupation of the
premises for purposes more hazardous than are permitted by said policy. If the
Debtor shall fail to provide and pay for such insurance, or have the same
provided and paid for, the Lender may, at the Debtor's expense, procure the
same, but shall not be required to do so. The Debtor agrees to deliver to the
Lender, promptly as rendered, true copies of all reports made by the Debtor in
any reporting form to insurance companies. The Debtor shall maintain or caused
to be maintained insurance with financially sound and reputable insurers with
respect to its Property and business (including, without limitation, the
Collateral) covering any public liability of the Debtor, its officers, agents or
employees (including, without limitation, damage by Debtor or its officers,
agents or employees or the Association to the Property of other Persons, any
bodily injury caused by Debtor or its officers, agents or employees to any other
Person, or any negligent act or other similar liability of Debtor or its
officers, agents or employees) and in such amounts as are satisfactory to the
Lender; the Lender shall be named as a co-insured thereon.

     The Debtor shall, on or prior to August 15 of each year, commencing on
August 15, 2001, submit to the Lender insurance certificates showing the type
and amounts of insurance coverage maintained, or caused to be maintained, by
Debtor in respect of the Resorts, the then current premium cost in respect
thereof and the amount of such cost which shall have been previously paid. The
Debtor shall, to the extent permitted by applicable law, cause all casualty
policies of insurance provided under the Declarations to have mortgagee
endorsements in respect of the Lender's interests in and to the Timeshare
Interval or Calvada Lot that is the subject of the Inventory Deed of Trust.

     The Debtor shall pay, or cause to be paid, all premiums on the aforesaid
insurance policies and all other fees and charges payable in connection with
such insurance policies (such premiums, fees and charges being collectively
referred to herein as "Insurance Premiums") not later than the due date thereof.
If the Debtor shall fail to pay, or cause to be paid, any such Insurance
Premiums, the Lender may (but shall not be obligated to), at Debtor's expense,
pay the same. Any such payment shall be subject to Section 3.11 hereof.

     If the Mortgaged Property (as defined in the Inventory Deed of Trust) is
sold at a foreclosure sale or if the Lender shall acquire title to said
Mortgaged Property, the Lender shall have all of the right, title and interest
of the Debtor in and to all insurance policies required under this clause (a)
and the unearned premiums thereon, related to the Mortgaged Property, and in and
to the proceeds resulting from any damage to said Mortgaged Property prior to
such sale or acquisition.

     (b)  Condominium/Timeshare Insurance Proceeds. The Lender acknowledges that
application of all or a portion of any proceeds of insurance may be subject to
the Nevada, New Jersey,

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<PAGE>

Florida or Hawaii Condominium Ownership Acts, the Nevada, New Jersey, Florida or
Hawaii Common Interest Ownership Acts and the terms and provisions of the
Declaration, and the foregoing requirements in this Section 3.5 shall be subject
thereto (unless such laws may be modified by agreement and have been so
modified). For so long as the Inventory Loan shall remain outstanding, any
proceeds of insurance payable by the Association, any manager retained by it or
by the Declarant in respect of any Unit or Timeshare Interval to the Debtor
under the Declarations, the Associations' Articles of Incorporation or By-Laws
or under the applicable law shall be promptly paid and/or turned over to the
Lender as proceeds of the Collateral and applied either in accordance with the
applicable law or, if no such requirement exists, to the prepayment of the Loan
without prepayment penalty (after deducting therefrom all out-of-pocket costs
and expenses of the Lender in respect thereof) as provided in Section 2.1
hereof. Without limiting the immediately preceding sentence, any proceeds of
insurance in respect of any Unit or Timeshare Interval received by the Debtor or
received by the Debtor as Declarant or received by the Associations at a time
during which

     (i)  the Debtor (as Debtor or as Declarant) or any Affiliate shall be the
only owner or owners of Units or Timeshare Intervals, or

     (ii) the insurance provisions of the Declarations shall have been
suspended, shall be promptly paid and/or turned over to the Lender (and the
Debtor, as Debtor or as Declarant, shall cause such payment and/or turnover) as
proceeds of the Collateral and applied to the prepayment of the Loan (after
deducting therefrom all out-of-pocket costs and expenses of the Lender in
respect thereof) as provided in Section 2.1 hereof.

     (c)  Miscellaneous Application of Insurance Proceeds. Subject to the terms,
provisions and requirements of the Declarations and applicable law and to the
extent that clause (b) above shall not be applicable, the Lender is hereby
irrevocably authorized and appointed the agent and attorney-in-fact of the
Debtor (with full right of substitution) to adjust or compromise any insured
loss in respect of the Collateral and to collect and receive the proceeds from
any such policy in respect of any such loss, which appointment shall be deemed
to be coupled with an interest. Each insurance company issuing any of the above-
mentioned insurance policies is hereby irrevocably authorized and directed to
make payment in respect of any such loss (whether or not the Lender shall have
exercised its option to adjust or compromise such loss) directly to the Lender
alone and not to the Debtor and the Lender jointly. The Debtor shall immediately
pay over to the Lender any such payments received directly from any such
insurance company. The Lender is hereby irrevocably authorized and appointed the
agent and attorney-in-fact of the Debtor (with full right of substitution) to
endorse the Debtor's name on any instrument in payment of such proceeds, which
appointment shall be deemed to be coupled with an interest. Such insurance
proceeds received by the Lender shall not be, nor be deemed to be, trust funds
and may be commingled with the general funds of the Lender. No interest shall be
payable in respect of any such insurance proceeds received by the Lender. After
deducting from such insurance proceeds any expenses incurred by the Lender in
the adjustment or compromise of such loss or in the collection or handling of
such funds (including, without limitation, attorneys' fees and disbursements),
the Lender shall

     (i)  if an Event of Default shall then exist, apply such net insurance
proceeds to the prepayment of the Loan as provided in Section 2.1;

     (ii) if no Event of Default shall then exist and such loss shall not have
been in respect of all, or substantially all, of the Collateral located at any
Resort and shall have exceeded $20,000 and if the insurer which paid such
insurance proceeds shall not claim any right of participation and/or assignment
of rights in respect of the Lender with respect to the Obligations, either
deliver the net insurance proceeds to

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<PAGE>

the Debtor as contemplated in clause (A) below but subject to the conditions set
forth in said clause (A) or apply the same as contemplated in clause (B) below:

     (A)  (1)  the Debtor shall have, within 30 days of such loss, delivered to
the Lender a written undertaking to rebuild, restore and/or repair the
Collateral damaged or destroyed;

               (2)  the Debtor shall have, within 60 days of such loss,
submitted to the Lender for its approval (x) plans and specifications in respect
of such rebuilding, restoration and/or repairing, which plans and specifications
shall be reasonably satisfactory to the Lender and which shall have been
prepared by an architect reasonably satisfactory to the Lender, (y) an estimate
of all costs of such rebuilding, restoration and/or repairing signed by such
architect and (z) copies of approvals or consents of all necessary governmental
authorities;

               (3)  at the time of each disbursement contemplated by subclause
(8) below, the Lender shall be reasonably satisfied that such net insurance
proceeds, together with any additional funds made available for such purpose by
the Debtor and deposited with the Lender, shall be sufficient to effect such
rebuilding, restoration and/or repairing in accordance with the aforesaid plans
and specifications, free and clear of all Liens except the Liens contemplated or
otherwise permitted herein and in the other Security Documents;

               (4)  at the time of each disbursement contemplated by subclause
(8) below, the Lender shall be reasonably satisfied that such rebuilding,
restoration and/or repairing can be completed within any applicable time
limitation imposed by law or, if there are no such time limitations, within a
reasonable period of time;

               (5)  at the time of each disbursement contemplated by subclause
(8) below, the Lender shall be reasonably satisfied that, after such application
and such rebuilding, restoration and/or repairing (taking into account any
restrictions imposed by law or agreement on such rebuilding, restoration and/or
repairing or on the use of the Collateral after such rebuilding, restoration
and/or repairing), the Collateral shall have a Fair Market Value substantially
the same as, or greater than, the Fair Market Value of the Collateral
immediately prior to the occurrence of such damage or destruction;

               (6)  at the time of each disbursement contemplated by subclause
(8) below, no Property-Related Contract shall have been terminated or, if any
Property-Related Contract shall have been terminated, the Lender shall be
reasonably satisfied that the Debtor will be able to replace such Property-
Related Contract reasonably promptly;

               (7)  the holder of any encumbrance senior to the Liens provided
herein or in any other Security Document in respect of the Collateral shall have
consented and agreed to the application of insurance proceeds as set forth in
this clause (A); and

               (8)  the disbursement of such net insurance proceeds shall be in
accordance with terms, conditions and procedures customarily followed by prudent
institutional lenders in making construction loans in similar amounts and on
such other terms, conditions and procedures as the Lender may reasonably require
(as evidenced by its written notice thereof to the Debtor prior to the first
disbursement pursuant to this subclause (8)) to assure the proper application of
such proceeds and the continuing performance by the Debtor of its obligations
hereunder and under the other Security Documents, including without limitation,
receipt by the Lender of evidence of suitable payment bonds with respect to all
material contracts and Builder's All Risk Insurance and a certificate from the
Debtor

23
<PAGE>

certifying that (x) all rebuilding, restoration and/or repairing to the date of
such disbursement has been performed substantially in accordance with the
aforesaid plans and specifications and that there have been no material changes
or modifications made in such plans and specifications, (y) the labor, services
and/or materials to be paid by such disbursement have been performed upon, or
furnished in respect of, the rebuilding, restoration and/or repairing of the
Collateral and (z) no Event of Default exists at the time of such disbursement,
or

     (B)   the Lender shall apply such net insurance proceeds to the prepayment
of the Loan as provided in Section 2.1 of this Agreement, if the Lender shall
not have received the written confirmation referred to in subclause (A)(1) above
within the time period required therefor or if the Debtor shall have informed
the Lender, in writing, of its intention not to rebuild, repair and restore the
Collateral or the Lender shall have determined the same at any time during the
rebuilding, repairing or restoration process referred to in clause (A) above;

     (iii) if no Event of Default shall then exist and such loss shall not have
been in respect of all, or substantially all, of the Collateral at any Resort
and shall not have exceeded $20,000, deliver all of such net insurance proceeds
to the Debtor and the Debtor shall thereupon be obligated to, and shall,
promptly rebuild, repair and restore the Collateral subject to such loss (or
shall cause such Property to be so promptly rebuilt, repaired and restored) to
the equivalent of its condition immediately prior to such loss, whether or not
such net insurance proceeds shall be sufficient to cover the costs thereof, and
shall certify, within 120 days of such loss, to the Lender that such rebuilding,
repairing and restoration has been completed and paid for in full; or

     (iv)  if no Event of Default shall then exist and if such loss shall be in
respect of all, or substantially all, of the Collateral at any Resort, apply
such net insurance proceeds to the prepayment of the Loan, first, as provided in
Section 2.1 of this Agreement and second, as provided in the Receivable Loan
Agreement.

     Any payment of insurance proceeds over to the Debtor, as provided above,
shall not affect the Lien of this Agreement or any other Security Document as
security for the Obligations. Notwithstanding any such loss, the Debtor shall
continue to pay interest and principal at the applicable rate and amounts and at
the applicable times provided in this Agreement and in the Note. Although the
Lender intends to use reasonable efforts to collect such insurance proceeds in a
timely fashion, the Lender shall not be responsible for any failure to collect
any proceeds due under the terms of any insurance policy, regardless of the
cause of such failure. Any balance of such net insurance proceeds remaining
after the aforesaid application thereof shall, if no Event of Default shall then
exist, belong, or be paid to, as the case may be, the Debtor, provided that, if
an Event of Default shall then exist, the Debtor shall promptly deliver any such
balance to the Lender and such balance shall be applied as a prepayment of the
Loan as provided in Section 2.1 hereof.

     (d)   Debtor Undertakings. In the event of any casualty or loss in respect
of the Collateral, (i) the Debtor shall immediately notify the Lender of the
same, (ii) the Lender may, in addition to its rights as beneficiary under the
Inventory Deed of Trust, elect to exercise the voting rights of the Debtor as
the owner of any Timeshare Interval, as such voting rights are provided for
under the Declaration, regarding all matters of repair and restoration and (iii)
the Debtor shall pay all assessments as required by the Declaration and/or the
Association's Articles of Incorporation or By-Laws for repair and restoration
due to inadequacy of insurance.

     Debtor agrees to cause any contractor hired by it to effect any of the
refurbishing of the Collateral

24
<PAGE>

to carry adequate insurance in respect of bodily injury or other personal
liability or property damage in respect of its employees or other third persons
in connection with such refurbishing or construction. Certificates of such
insurance shall be filed with the Lender prior to commencement of work and shall
be reasonably acceptable to the Lender in form and substance.

     3.6  Condemnation.

     (a)  Condominium/Timeshare Condemnation Compensation. Any compensation,
awards, damages, claims, rights of action, proceeds, payment and other relief
(collectively, "Condemnation Compensation") of, or on account of, any damage or
taking of all or any part of the Collateral at any Resort in connection with any
condemnation proceedings or any exercise of the power of eminent domain (or any
conveyance in lieu of or under threat of any such taking), including, without
limitation, any such Condemnation Compensation for change of grade of streets or
any other injury to or decrease in the value of all or any part of the
Collateral payable by the Association, any manager retained by it or by the
Declarant in respect of any Unit or Timeshare Interval to the Debtor under the
Declaration, the Association's Articles of Incorporation or By-Laws or under
applicable law shall be promptly paid and/or turned over to the Lender as
proceeds of the Collateral and applied to the prepayment of the Loan as provided
in Section 2.1 hereof.

          (b)  Applicable Law.

     (i)  The Lender acknowledges that application of all or a portion of any
Condemnation Compensation may be subject to the Nevada, New Jersey, Florida or
Hawaii Condominium Ownership Act, the Nevada, New Jersey, Florida or Hawaii
Common Interest Ownership Act and the terms and provisions of the Declaration,
and the foregoing requirements in this Section 3.6 shall be subject thereto
(unless such laws may be modified by agreement and have been so modified).

     (ii) Any Condemnation Compensation in respect of any Unit or Timeshare
Interval received by the Debtor or received by the Debtor as Declarant or
received by the Association at a time during which

     (A)  only the Debtor (as Debtor or as Declarant) or any Affiliate shall be
the only owner of Units or Timeshare Intervals or Calvada Lots or

     (B)  the condemnation provisions of the Declaration shall have been
suspended shall be promptly paid and/or turned over to the Lender (and the
Debtor, as Debtor or as Declarant, shall cause such payment and/or turnover) as
proceeds of the Collateral and applied to the prepayment of the Loan as provided
in Section 2.1 hereof.

     (c)  Miscellaneous Application of Condemnation Compensation. Subject to the
requirements, terms and provisions of the Declaration and to the extent that
clause (b) above shall not be applicable, the Lender shall be entitled to all
Condemnation Compensation of, or on account of, any damage or taking of all or
any part of the Collateral in connection with any condemnation proceedings or
any exercise of the power of eminent domain (or any conveyance in lieu of or
under threat of any such taking), including, without limitation, any such
Condemnation Compensation for change of grade of streets or any other injury to
or decrease in the value of all or any part of the Collateral at any Resort. All
such Condemnation Compensation, and the right thereto, is hereby assigned to the
Lender and included in the Collateral. The Debtor shall promptly execute such
further assignments of any such Condemnation Compensation as the Lender may
require, and the Lender shall take all steps to assure that such

25
<PAGE>

Condemnation Compensation shall be paid to the Lender alone, and not to the
Debtor and the Lender jointly, and that such Condemnation Compensation at all
times shall be free and clear of any Liens, charges or encumbrances of any kind
whatsoever, except the Liens permitted or otherwise provided for herein or in
the other Security Documents. The Lender is hereby irrevocably authorized and
appointed the agent and attorney-in-fact of the Debtor (with full right of
substitution) to endorse the Debtor's name on any instrument in payment of such
Condemnation Compensation, which appointment shall be deemed to be coupled with
an interest.

     The Lender is hereby irrevocably authorized and appointed the agent and
attorney-in-fact of the Debtor (with full right of substitution) to commence,
appear in and prosecute in its own and/or the Debtor's name any action or
proceeding relating to any condemnation or exercise of the power of eminent
domain, to settle or compromise any claim in connection therewith and to collect
and receive such Condemnation Compensation and give proper receipts and
acquittances therefor, which appointment shall be deemed to be coupled with an
interest. The Debtor from time to time shall promptly deliver to the Lender any
and all instruments and authorizations which the Lender may request to enable
the Lender to take any such action. Such Condemnation Compensation received by
the Lender shall not be, nor be deemed to be, trust funds and may be commingled
with the general funds of the Lender. No interest shall be payable in respect of
any such Condemnation Compensation. After deducting from such Condemnation
Compensation any expenses incurred by the Lender in connection therewith
(including, without limitation, attorneys' fees and disbursements), the Lender
shall

     (i)   if an Event of Default shall then exist, apply such net Condemnation
Compensation to the prepayment of the Loan as provided in Section 2.1;

     (ii)  if no Event of Default shall then exist, such damage or taking shall
have not been in respect of all, or substantially all, of the Collateral at any
Resort, such damage or taking shall not have rendered the remainder of the
Collateral at any Resort economically inviable or unusable to the same extent
and in the same manner as it was immediately prior to such damage or taking, and
the Condemnation Compensation payable in respect thereof shall have exceeded
$20,000, either deliver the Condemnation Compensation to the Debtor as
contemplated in clause (A) below but subject to the conditions set forth in said
clause (A) or apply the same as contemplated in clause (B) below:

     (A)   (1)  the Debtor shall have, within 30 days of such condemnation or
taking, delivered to the Lender a written undertaking to rebuild, restore and/or
repair the Collateral not condemned or taken;

          (2)   the Debtor shall have, within 60 days of such condemnation or
taking, submitted to the Lender for its approval (x) plans and specifications in
respect of such rebuilding, restoration and/or repairing, which plans and
specifications shall be reasonably satisfactory to the Lender and which shall
have been prepared by an architect reasonably satisfactory to the Lender, (y) an
estimate of all costs of such rebuilding, restoration and/or repairing signed by
such architect and (z) copies of approvals or consents of all necessary
governmental authorities;

          (3)   at the time of each disbursement contemplated by subclause (8)
below, the Lender shall be reasonably satisfied that such Condemnation
Compensation, together with any additional funds made available for such purpose
by the Debtor and deposited with the Lender, shall be sufficient to effect such
rebuilding, restoration and/or repairing in accordance with the aforesaid plans
and specifications, free and clear of all Liens except the Liens contemplated or
otherwise permitted herein and in the other Security Documents;

26
<PAGE>

           (4) at the time of each disbursement contemplated by subclause (8)
below, the Lender shall be reasonably satisfied that such rebuilding,
restoration and/or repairing can be completed within any applicable time
limitation imposed by law or, if there are no such time limitations, within a
reasonable period of time;

           (5) at the time of each disbursement contemplated by subclause (8)
below, the Lender shall be reasonably satisfied that, after such application and
such rebuilding, restoration and/or repairing (taking into account any
restrictions imposed by law or agreement on such rebuilding, restoration and/or
repairing or on the use of the Collateral after such rebuilding, restoration
and/or repairing), the Collateral shall have a Fair Market Value substantially
the same as, or greater than, the Fair Market Value of the Collateral
immediately prior to the occurrence of such condemnation or taking;

           (6) at the time of each disbursement contemplated by subclause (8)
below, no Property-Related Contract shall have been terminated or, if any
Property-Related Contract shall have been terminated, the Lender shall be
reasonably satisfied that the Debtor will be able to replace such Property-
Related Contract reasonably promptly;

           (7) the holder of any encumbrance senior to the Liens provided herein
or in any other Security Document in respect of the Collateral shall have
consented and agreed to the application of Condemnation Compensation as set
forth in this clause (A); and

           (8) the disbursement of such Condemnation Compensation shall be in
accordance with terms, conditions and procedures customarily followed by prudent
institutional lenders in making construction loans in similar amounts and on
such other terms, conditions and procedures as the Lender may reasonably require
(as evidenced by its written notice thereof to the Debtor prior to the first
disbursement pursuant to this subclause (8)) to assure the proper application of
such proceeds and the continuing performance by the Debtor of its obligations
hereunder and under the other Security Documents, including without limitation,
receipt by the Lender of evidence of suitable payment bonds with respect to all
material contracts and Builder's All Risk Insurance and a certificate from the
Debtor certifying that (x) all rebuilding, restoration and/or repairing to the
date of such disbursement has been performed substantially in accordance with
the aforesaid plans and specifications and that there have been no material
changes or modifications made in such plans and specifications, (y) the labor,
services and/or materials to be paid by such disbursement have been performed
upon, or furnished in respect of, the rebuilding, restoration and/or repairing
of the Collateral  and (z) no Event of Default exists at the time of such
disbursement, or

     (B)  the Lender shall apply such Condemnation Compensation to the
prepayment of the Loan as provided in Section 2.1 of this Agreement, if Lender
(or its agent) shall have not received the written confirmation referred to in
subclause (A)(1) above within the time period required therefor or if the Debtor
shall have informed the Lender, in writing, of its intention not to rebuild,
repair and restore the Collateral at any Resort or the Lender shall have
determined the same at any time during the rebuilding, repairing or restoration
process referred to in clause (A) above;

     (iii) if no Event of Default shall then exist and such damage or taking
shall not have been in respect of all, or substantially all, of the Collateral
at any Resort and the Condemnation Compensation payable in respect thereof shall
not have exceeded $20,000, deliver all of such net Condemnation Compensation to
the Debtor and the Debtor shall thereupon be obligated to, and shall, promptly
rebuild, repair and restore the Collateral (or shall cause the Collateral to be
so promptly rebuilt, repaired and restored) such that the Collateral is useable
to the same extent and in the same manner, and is in

27
<PAGE>

substantially an equivalent condition, after such damage or taking as it was
immediately prior to such damage or taking, whether or not such net Condemnation
Compensation shall be sufficient to cover the costs thereof, and shall certify,
within 120 days of such damage or taking, to the Lender that such rebuilding,
repairing and restoration has been completed and paid for in full; or

     (iv)  if no Event of Default shall then exist and if such damage or taking
loss shall be in respect of all, or substantially all, of the Collateral at any
Resort or the Resort is no longer economically viable or no longer useable to
the same extent and in the same manner after such damage or taking as it was
immediately prior to such damage or taking, apply such net Condemnation
Compensation to the prepayment of the Loan as provided in Section 2.1of this
Agreement.

     The Lender may release such net Condemnation Compensation to the Debtor
without affecting the Lien of this Agreement or any other Security Document as
security for the Obligations.  Any balance of such net Condemnation Compensation
remaining after the aforesaid application thereof shall, if no Event of Default
shall then exist, belong to, or be paid to, as the case may be, the Debtor,
provided that, if an Event of Default shall then exist, the Debtor shall
promptly deliver any such balance to the Lender and such balance shall be
applied as a prepayment of the Loan as provided in Section 2.1 hereof.
Notwithstanding any such condemnation, the Debtor shall continue to pay interest
and principal at the applicable rate and amounts and at the applicable times
provided in this Agreement and in the Note.  Although the Lender intends to use
reasonable efforts to collect such Condemnation Compensation, in a timely
fashion, the Lender shall not be responsible for any failure to collect such
Condemnation Compensation, regardless of the cause of such failure.

     (d)   Debtor Undertakings.  In the event of any condemnation or taking in
respect of any Resort (including, without limitation, any of the Collateral),
(i) the Debtor shall immediately notify the Lender of the same, (ii) the Lender
may, in addition to its rights as beneficiary under the Inventory Deed of Trust,
elect to exercise the voting rights of the Debtor as the owner of any Timeshare
Interval or of Calvada Lots, as such voting rights are provided for under the
Declaration, regarding all matters of repair and restoration and (iii) the
Debtor shall pay all assessments as required by the Declaration and/or the
Association's Articles of Incorporation or By-Laws for repair and restoration
due to inadequacy of the Condemnation Compensation.

     3.7   Taxes Affecting Collateral.

     The Debtor shall pay or cause to be paid, on or before the last day when
they may be paid without interest or penalty, all taxes, assessments, rates,
dues, charges, fees, levies, excises, duties, fines, impositions, liabilities,
obligations and encumbrances (including, without limitation, water and sewer
rents and charges, charges for setting or repairing meters and charges for other
utilities or services), general or special, ordinary or extraordinary, foreseen
or unforeseen, of every kind whatsoever, now or hereafter imposed, levied or
assessed by any public or quasi-public authority or instrumentality upon or
against any of the Collateral or the use, occupancy or possession of any Resort,
or upon or against this Agreement, the Note or the other Security Documents, the
Obligations or the interest of the Lender in the Inventory Deed of Trust or any
other item of Collateral (provided that this Section 3.7 shall not be construed
to require the Debtor to pay any income tax imposed upon the general income of
the Lender), as well as all assessments and other governmental charges imposed,
levied or assessed in respect of any Collateral, and any and all interest, costs
and penalties on or with respect to any of the foregoing (collectively, the
"Impositions").  Upon request by the Lender, the Debtor shall deliver to the
Lender receipts or other satisfactory proof of payment of any Impositions.

28
<PAGE>

     The Debtor shall not claim, demand or be entitled to receive any reduction
of, or credit toward, any Imposition on account of the Obligations.  No
deduction shall be claimed from the taxable value of any Collateral or any
Resort by reason of the Obligations, any of the Security Documents or the
interest of the Lender in the Collateral.

     If existing laws or procedures governing the taxation of mortgages,
security documents or debts secured by mortgages or other security documents
shall be changed in any manner after the date hereof so as to materially
adversely impair the security of the Inventory Deed of Trust or the security
interest herein granted or granted in any of the other Security Documents or to
reduce the net income to the Lender in respect of the Obligations (excluding
from any such determination of net income any reduction in such net income
attributable to a change in taxes imposed on, or measured by, the net income of
the Lender), then, upon request by the Lender, the Debtor shall pay to the
Lender or to the taxing authority (if so directed by the Lender), all taxes,
charges and related costs for which the Lender may be liable as a result
thereof.

     The Debtor shall pay, or cause to be paid, when due, any and all recording
(mortgage or personal property), intangible property and documentary stamp
taxes, all similar taxes, and all filing, registration and recording fees, which
are now or hereafter may become payable in connection with the Obligations, the
Inventory Deed of Trust, this Agreement, any of the other Security Documents or
any of the other Collateral.  The Debtor shall pay when due any and all excise,
transfer and conveyance taxes which are now or hereafter may become payable in
connection with the Obligations, the Inventory Deed of Trust, this Agreement or
any of the other Security Documents, or in connection with any foreclosure of
the Inventory Deed of Trust or any other foreclosure of any Collateral under
this Agreement or under any of the other Security Documents, or any other
transfer of any item of Collateral in extinguishment of all or any part of the
Obligations or any other enforcement of the rights of the Lender with respect
thereto.

     3.8  Discharge of Liens Affecting Collateral.

     If any mechanic's, laborer's, materialman's, statutory or other Lien (other
than Permitted Exceptions) shall be filed or otherwise imposed upon or against
any item of the Collateral or any Resort, then the Debtor shall, within 30 days
after being given notice of the filing of such Lien or otherwise becoming aware
of the imposition of such Lien, cause such Lien to be vacated or discharged of
record by payment, deposit, bond, final order of a court of competent
jurisdiction or otherwise.

     The Debtor shall have the right, at its sole expense, to contest the
validity of any such Lien or of the claim evidenced or secured thereby, by
appropriate proceedings commenced prior to the expiration of the aforesaid 30-
day period and thereafter diligently and continuously conducted in good faith to
final determination, in which event the Debtor shall not be required to cause
any such Lien to be vacated or discharged of record in accordance with the
immediately preceding paragraph if, and only so long as:

     (a)  no final judicial determination in respect of any foreclosure or other
enforcement proceeding in respect of such Lien or the claim evidenced or secured
thereby shall have been rendered and no nonjudicial foreclosure proceeding or
sale in respect of such Lien or such claim shall have been commenced;

     (b)  no claim for liability of any kind shall have been asserted against
the Lender in connection with such Lien or the claim evidenced or secured
thereby; and

     (c)  if such Lien shall secure a claim of more than $20,000, the Debtor
shall have established

29
<PAGE>

an escrow with the Lender, or shall have delivered to the Lender a satisfactory
bond issued by a surety acceptable to the Lender or a satisfactory letter of
credit for the benefit of the Lender issued by a bank acceptable to the Lender,
in each case in an amount estimated by the Lender to be adequate to cover (i)
the unpaid amount of such claim, (ii) all interest, penalties and similar
charges which reasonably can be expected to accrue by reason of such contest or
by reason of such nonpayment, and (iii) all costs, fees and expenses (including,
without limitation, attorneys' fees and disbursements) which reasonably can be
expected to be incurred in connection therewith by the Lender, which escrow,
bond or letter of credit shall be maintained in effect throughout such contest
and the amount of which shall be increased from time to time if reasonably
required by the Lender to cover the foregoing amounts in subclause (i),
subclause (ii) and subclause (iii).

     The Debtor shall inform the Lender, in advance and in writing, of its
intention to contest any Lien securing a claim, or such claim itself, under this
Section 3.8 if such claim shall exceed $20,000.

     Upon termination of any such contest (whether by final determination or
otherwise), or at any time during the course of any such contest that the
conditions relieving the Debtor of its obligation to cause such Lien to be
vacated or discharged shall no longer be satisfied or shall be discovered not to
have been satisfied, the Debtor shall cause such Lien to be vacated or
discharged of record.  At the Lender's option, the escrow established or bond or
letter of credit, as the case may be, delivered pursuant to this Section 3.8 may
be, in the case of the escrow, liquidated, or, in the case of the bond or the
letter of credit, drawn upon, at such time and the proceeds thereof may be
applied to payment of all or any part of the claim evidenced or secured by such
Lien and the interest, penalties, charges, costs, fees and expenses (including,
without limitation, attorneys' fees and disbursements) referred to in subclause
(ii) and subclause (iii) of the immediately preceding paragraph.  Promptly after
such Lien has been vacated or discharged of record, the Debtor shall deliver to
the Lender evidence reasonably satisfactory to the Lender that such Lien has
been vacated or discharged of record.  Thereafter, the amount then remaining in
the escrow established pursuant to this Section 3.8 or such bond or letter of
credit, as the case may be, shall be returned to the Debtor free and clear of
the Lien of this Agreement or any other Security Document so long as no Event of
Default shall have occurred and be continuing or, if an Event of Default shall
have occurred and be continuing, shall be retained by the Lender as part of the
Collateral.

     If any Lien shall not be vacated or discharged as required by this Section,
then, in addition to any other right or remedy of the Lender, the Lender may,
but shall not be obligated to, discharge such Lien in such manner as the Lender
may select, and the Lender shall be entitled, if the Lender shall so elect, to
compel the prosecution of an action for the foreclosure of such Lien by the
lienor and, if the Lender shall so elect, to pay the amount of any judgment in
favor of such lienor with interest, costs and allowances.  Upon request by the
Lender, the Debtor shall pay to the Lender, or to any other Person designated by
the Lender, the amount of all payments made by the Lender as provided above and
all costs, expenses and liabilities (including, without limitation, attorneys'
fees and disbursements) incurred by the Lender in connection therewith, together
with interest thereon at the Default Rate from the date paid or incurred by the
Lender until the date so paid to, or as directed by, the Lender.  To the extent
permitted by law, the Lender shall thereupon be subrogated to the rights of such
lienor and any such payments made by the Lender pursuant to this Section 3.8
shall be secured by the Collateral.

     3.9  Use of Resorts; Voting Rights of Debtor; Lender Consent to Timeshare
Declaration Amendment.

     (a)  Resorts.  The Debtor shall not, as Declarant, Calvada Lot owner,
Timeshare Interval owner or Unit owner, without the prior written consent of the
Lender:

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     (i)    request or otherwise initiate, consent to or acquiesce in any zoning
classification or reclassification of any Resorts or the adoption, issuance,
imposition or amendment of any other law, ordinance, rule, regulation, order,
judgment, injunction or decree relating to the use, occupancy, operation,
development or disposition of any Resort or which would limit the use of the
Calvada Lots, Units or the Timeshare Intervals therein or reduce their Fair
Market Value;

     (ii)   request or otherwise initiate, consent to or acquiesce in the
annexation of any part of any Resort by or into any municipality or other
governmental or quasi-governmental unit;

     (iii)  execute, file or record any subdivision plat affecting any Resort or
request or otherwise initiate, consent to or acquiesce in any subdivision of any
Resort;

     (iv)   enter into, consent to or otherwise cause, permit or suffer any
Resort to become subject to any covenant, agreement or other arrangement
restricting or limiting the use, occupancy, operation, development or
disposition thereof (other than any covenant of this Agreement or the other
Security Documents and the Declarations );

     (v)    materially and substantially modify, alter, remove or improve the
Common Amenities without the prior written consent of the Lender;

     (vi)   except as set forth in Schedule 9 of this Agreement, maintain the
Units and/or Timeshare Intervals owned by it for lease or as a rental project or
maintain the Calvada Lots for sale;

     (vii)  add or withdraw real Property from any Resort, or

     (VIII) permit the Units or any Timeshare Interval to be used other than for
nonpermanent residential purposes or permit any Calvada Lot to be used other
than for residential purposes.

     (b)    Use by Public.  The Debtor shall not cause, permit or suffer the
Collateral to be used by the public without restriction (except as required by
applicable law) or in any manner that might tend to impair the Debtor's right,
title and interest in and to the Resorts or in any manner that might make
possible any claim of adverse usage or adverse possession by the public or any
claim of implied dedication of all or any part of any Resort.

     (c)    Voting Rights. The Debtor hereby appoints and constitutes the Lender
as its attorney-in-fact (with full power of substitution) to exercise all of its
voting rights pertaining to any Calvada Lot, Unit or Timeshare Interval owned by
the Debtor or in which the Debtor has an interest giving rise to the right to
vote (whether as Declarant, as "Lienholder" under any Pledged Note Receivable
Deed of Trust or otherwise). This power of attorney is coupled with an interest
and shall be irrevocable for so long as any Obligations are owing by the Debtor
to the Lender. This power of attorney may be used from time to time in the sole
discretion of the Lender if there shall exist an Event of Default, or a material
casualty, condemnation or taking shall have occurred with respect to any Resort
or any part thereof. The Debtor agrees to execute, from time to time, such other
documents as the Lender may request (including, without limitation, the form of
proxy substantially in the form of Exhibit C to this Agreement) and file the
same with the Secretary of the Association in accordance with the Association's
By-Laws.

     Except with the prior written consent of the Lender, the Debtor shall not
propose or vote for or

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consent to any modification of, or amendment to, the Declarations or the
Associations' Articles of Incorporation or By-Laws which could have (in the
reasonable sole opinion of the Lender) an adverse effect on the Collateral or
the operation or prospects of the Resorts. In each case under the Declarations
and/or the Associations' Articles of Incorporation or By-Laws in which the
Debtor's consent is required (as Declarant or as an owner of a Calvada Lot, Unit
or a Timeshare Interval or as a vendor) for any proposed action, the Debtor
shall not vote or give such consent without obtaining the prior written consent
of the Lender if such action (in the reasonable sole opinion of the Lender)
could have an adverse effect on the Collateral or the operation or prospects of
any Resort.

     3.10 Other Timeshare Covenants.

     (a)  Access.  The Debtor as owner of Calvada Lots, a Unit or a Timeshare
Interval shall have direct access to a publicly dedicated road.

     (b)  Utilities.  The Debtor shall have electric, gas, sewer, and water
service and other necessary utilities available to the Calvada Lots and Units in
sufficient capacity to service the Calvada Lots and Units.

     (c)  Use of Amenities.  The Debtor shall have access to, and the use of,
all of the amenities and public utilities relating to the Calvada Lots and any
Unit in which such Timeshare Interval is located (consistent with the
contractual provisions and rules and regulations existing with respect to such
amenities and public utilities), including, without limitation, the Common
Amenities.

     (d)  Timeshare Regimen.  The Debtor shall take all necessary actions to
preserve the condominium and timeshare regimens in respect of each of the
Timeshare Intervals and shall take all necessary action to preserve the Calvada
Lots as a residential subdivision.

     (e)  Exchange Program.  The Debtor shall maintain its membership in, and
the Timeshare Intervals eligibility for, the timeshare exchange program of
Resorts Condominium International, Inc or Interval International, Inc.

     (f)  Local Legal Compliance.  The Debtor shall comply, and shall cause the
Units and the Calvada Lots to comply, with all applicable restrictive covenants,
zoning or land use ordinances and building codes, health laws and regulations,
and all other applicable laws, rules, ordinances and regulations.

     (g)  Registration Compliance.  The Debtor shall maintain, or cause to be
maintained, all necessary consents, franchises, approvals, and exemption
certificates, and the Debtor will make, or cause to be made, all registrations
or declarations with any government or any agency or department thereof required
in connection with the Calvada Lots, Units and the Timeshare Intervals and the
occupancy, use and operation of the Units, and the sale and offering for sale of
Timeshare Intervals and Calvada Lots.

     (h)  Records.  The Debtor shall maintain accurate and complete files
relating to the Collateral to the reasonable satisfaction of the Lender.

     (i)  Property-Related Contracts.  Except as required by applicable law, the
Debtor shall not materially modify or amend, or (subject to the rights and
obligations of the Associations under the Declarations or the Associations'
Articles of Incorporation or By-Laws) permit to be materially modified or
amended, any material Property-Related Contract without the prior written
consent of the Lender,

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which consent shall not be unreasonably withheld, or enter into, or (subject to
the rights and obligations of the Associations under the Declarations or the
Associations' Articles of Incorporation or By-Laws) permit to be entered into,
any new material Property-Related Contract without the prior written consent of
the Lender, which consent shall not be unreasonably withheld. The Debtor shall
deliver any proposed amendment or modification of an existing Property-Related
Contract or proposed new Property-Related Contract to the Lender at least 30
days prior to the execution thereof and shall request the Lender's consent to
the form and substance of such amendment, modification or new Property-Related
Contract. If the Debtor shall not have received a written response to such
request from the Lender within 20 days of the delivery of such amendment,
modification or new Property-Related Contract to the Lender, then the Debtor
shall send a second request via nationally recognized overnight courier. Failure
by the Lender to respond to such second request within 10 days of receipt
thereof shall be deemed to constitute a consent to such request. The Debtor
shall perform all of its obligations in a timely fashion under each Property-
Related Contract.

     (j)  Undertaking.  The Debtor shall perform each and every covenant,
agreement, and undertaking applicable to the Debtor (whether as Declarant,
Calvada Lot owner, owner of a Unit, owner of a Timeshare Interval or otherwise)
under the Declarations and/or the Association's Articles of Incorporation or By-
Laws.

     (k)  Notices.  The Debtor shall promptly deliver to the Lender copies of
each written notice or request, financial statement, budget or other information
received by the Debtor under or with respect to the Declarations and/or the
Associations' Articles of Incorporation or By-Laws, whether in its capacity as
Declarant, Calvada Lot owner, owner of a Unit, owner of a Timeshare Interval,
Lienholder or otherwise.

     3.11 Protection of Collateral; Assessments; Reimbursement.

     All Insurance Premiums and all expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping the Collateral, any
and all Impositions on any of the Collateral or in respect of the sale or other
disposal thereof shall be borne and paid by the Debtor or the Debtor shall cause
the Association or any manager retained by it to pay the same, as provided for
in the Declaration and/or the Association's Articles of Incorporation or By-
Laws.  The Debtor shall promptly pay, as the same become due and payable, its
share of all Insurance Premiums, expenses, Impositions and/or assessments as
required by the Declaration and/or the Association's By-Laws.  If the Debtor
shall fail to pay, or cause to be paid, any such Insurance Premiums, expenses,
Impositions and/or assessments, the Lender may, at the Debtor's expense, pay the
same.

     If, by reason of any suit or proceeding of any kind, nature or description
against the Debtor, or by the Debtor or any other party against any other
Person, or by reason of any other facts or circumstances, which in the Lender's
sole discretion makes it advisable for the Lender to seek counsel for the
protection and preservation of the Collateral, or to defend its own interest,
such expenses and counsel fees shall be allowed to the Lender and borne and paid
by the Debtor.

     3.12 Interest on Lender Paid Expenses.

     All sums paid or incurred by the Lender under this Section 3, and any and
all other sums for which the Debtor may become liable hereunder, and all costs
and expenses (including payments to other Lien holders and attorneys' fees,
legal expenses and court costs) which the Lender may incur in enforcing or
protecting its Lien on, or rights and interest in, the Collateral or any of its
rights or remedies under this Agreement or any other Security Document or in
respect of any of the transactions contemplated herein

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<PAGE>

or therein shall (a) be considered as additional indebtedness owing by the
Debtor to the Lender hereunder and, as such, shall be secured by all of the
Collateral and (b) accrue interest at the Default Rate from the date paid or
incurred by the Lender until paid in full by the Debtor.

     3.13  Lender Responsibility.

     The Lender shall not be (a) obligated or responsible for, the payment of
any of the amounts or sums referred to in this Section 3 or (b) liable or
responsible in any way for the safekeeping of any of the Collateral or for any
loss or damage thereto other than, to exercise the standard of care in respect
thereof which would be exercised by an institutional custodian similarly
situated to the Lender and similarly engaged in the safekeeping of collateral
and, in any case, shall not be liable or responsible in any way for any
diminution in the value of the Collateral or for any act or default of any
manager of any Resort and shall not be liable for any warranty (implied or
express) whether created by statute, at law or pursuant to the Declaration or
any other Timeshare Document.

     Upon the full, final and indefeasible payment of all Obligations , the
Lender shall release its Liens in and to the Collateral, execute in favor of the
Debtor any UCC release or termination statement in respect thereof.  The Debtor
shall bear all out-of-pocket expenses (including, without limitation, legal fees
and disbursements of the Lender) in connection with such release, reassignment
and delivery.  All such release and/or termination documentation shall be
reasonably satisfactory to the Lender and its counsel. The Debtor shall bear all
expenses (including, without limitation, legal fees and disbursements of the
Lender) in connection with such reassignment and delivery.  All such
reassignment and release documentation shall be reasonably satisfactory to the
Lender and its counsel.

     3.14  Release of Lien on Unsold Inventory Lot/Timeshare Intervals.

     (a)   Incremental Release.  The Lender, once a month, agrees to execute and
deliver to the Debtor the documents referred to below pursuant to which the Lien
in its favor in and to any Unsold Inventory Lot/Timeshare Interval created by
this Agreement, the Inventory Deed of Trust or any other Security Document will
be released if, but only if, all of the following conditions shall have been
fully satisfied:

     (i)   the full Release Price in respect of such Unsold Inventory
Lot/Timeshare Interval shall have been paid to the Lender in good, collected
funds;

     (ii)  a request, substantially in the form of Exhibit D attached hereto,
shall have been completed and executed by the Debtor and submitted to the Lender
not less than 5 Business Days in advance of the date on which the Debtor desires
to consummate such release together with a (nonrefundable) administrative
processing fee of $50 for each Unsold Inventory Lot/Timeshare Interval to be so
released so long as there are Obligations outstanding under a Loan and Security
Agreement between Debtor and Lender dated August 12, 1998 and a (nonrefundable)
administrative processing fee of $25 for each Unsold Inventory Lot/Timeshare
Interval to be so released after full repayment of all Obligations outstanding
under a Loan and Security Agreement between Debtor and Lender dated August 12,
1998  (a "Release Fee");

     (iii) a request for partial release of deed of trust, substantially in the
form of Exhibit E attached hereto or such other form reasonably acceptable to
the Lender and its counsel, and a partial release of security interest,
substantially in the form of Exhibit F attached hereto, shall have been
completed by the Debtor and submitted to the Lender with the aforesaid request;
and

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     (iv) no Event of Default shall then exist.

     The Debtor shall bear the responsibility of recording any and all documents
executed by the Lender under this Section 3.15.  The Debtor shall pay all escrow
costs and recording costs in respect of such documents.  If the Debtor shall
have established an escrow in respect of any sale of an Unsold Inventory
Lot/Timeshare Interval to a bona fide consumer purchaser, the Lender shall
deposit the documents to be executed by it pursuant to clause (iii) above in
such escrow if:

               (A) the documentation establishing such escrow is in form and
          substance satisfactory to the Lender and such documentation shall have
          been submitted to the Lender together with the written request
          referred to in clause (ii) above,

               (B) the escrowee under such escrow documentation is satisfactory
          to the Lender,

               (C) such escrow documentation provides that simultaneously with
          the release from such escrow of the documents referred to in clause
          (iii) above, the Release Price in respect of the Unsold Inventory
          Lot/Timeshare Interval to be so released shall be wired via Federal
          Reserve Bank wire (in immediately available funds) to the Lender,

               (D) such escrow documentation provides that such escrow will be
          consummated within 5 Business Days of the Lender's depositing of such
          release documents therein or such release documents shall be returned
          to the Lender by the escrowee of such escrow and

               (E) at the time of the depositing of such documentation into such
          escrow, all of the conditions in clauses (ii) through (iv) above shall
          have been fully satisfied.

     (b)  Full Release of Inventory Deed of Trust. Upon the full, final and
indefeasible payment of all Obligations in respect of the Inventory Loan and if
no Event of Default shall then exist, the Lender shall release the Inventory
Deed of Trust and the Assignment of Rents and shall release its Liens in and to
the Collateral and its Liens in respect of the Development Rights or Special
Declarant Rights, of the Debtor under the assignment referred to in Section 5.6
hereof. The Debtor shall bear all out-of-pocket expenses (including, without
limitation, legal fees and disbursements of the Lender) in connection with such
releases, provided that a release of the Inventory Deed of Trust pursuant to
this clause (b) shall not require the payment of Release Fees with respect to
remaining Unsold Inventory Lot/Timeshare Intervals. All documentation in
connection with any of the aforesaid releases shall be reasonably satisfactory
to the Lender and its counsel.

SECTION 4.  REPRESENTATIONS AND WARRANTIES

     As an inducement to the Lender to make the Inventory Loan, Debtor warrants
and represents, as of the date hereof, and covenants to the Lender as follows:

     4.1  Subsidiaries and Capital Structure.

     Schedule 3 to this Agreement states (a) the name of each of the Affiliates
of Debtor and the nature of the affiliation, (b) the number, nature and the
holder of the outstanding Securities of Debtor, (c) the number of authorized,
issued and treasury shares of Debtor, and (d) the name of each subsidiary of

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<PAGE>

Debtor.

     4.2  Corporate Organization and Authority.

     (a) Each of Preferred Equities Corporation and Brigantine Preferred
Properties, Inc. is duly organized, validly existing and in good standing under
the laws of the State of Nevada.

     (b) Each of Preferred Equities Corporation and Brigantine Preferred
Properties, Inc. has all requisite power and authority and necessary licenses
and permits to own and operate its Properties and to carry on its respective
business as now conducted; and

     (c) Each of Preferred Equities Corporation and Brigantine Preferred
Properties, Inc. has duly qualified and is authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where the character
of its Properties or the nature of its activities makes such qualification
necessary or desirable.

     4.3  Business and Property.

     Form 10K dated as of August 31, 2000 filed by Guarantor with the United
States Securities and Exchange Commission and delivered by Debtor to Lender and
except as set forth in the Form 10K correctly describes the general nature of
the businesses and Properties (including all owned real Property, leases and
leasehold interests) of Debtor.  Except as set forth in the Form 10K the Debtor
has not changed its name, been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of any Person.

     4.4  Financial Statements.

     Preferred Equities Corporation shall have delivered its consolidated (with
Brigantine Preferred Equities, Inc.) tax returns and consolidated and
consolidating balance sheets and statements of income and expenses and such
other financial statements as requested by Lender.

     4.5  Full Disclosure.

     Neither this Agreement nor any written statement made by Preferred Equities
Corporation or Brigantine Preferred Properties, Inc. in connection with this
transaction contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained herein or therein not
misleading. There is no fact which the Debtor has not disclosed to the Lender in
writing which materially affects adversely or, so far as the Debtor can now
foresee, will materially affect adversely the Property, business, prospects,
profits or condition (financial or otherwise) of the Debtor or the ability of
the Debtor to perform its Obligations under this Agreement, the Note or the
other Security Documents.

     4.6  Pending Litigation.

     Except as set forth in Schedule 6 to this Agreement, there are no
proceedings pending, or to the knowledge of the Debtor threatened, against or
affecting the Debtor, any Affiliate, the Guarantor, any Resort or any Unit in
any court or before any governmental authority or arbitration board or tribunal
which involve the possibility of materially and adversely affecting the
Property, business, prospects, profits or condition (financial or otherwise) of
the Debtor or the ability of the Debtor to perform its obligations under this
Agreement, the Note or the other Security Documents, provided that no such

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<PAGE>

proceedings shall be deemed to satisfy such material and adverse effect standard
if such proceeding shall have been commenced by one or more of the aforesaid
Persons as plaintiff and no counterclaim is pending in respect thereof against
such Person.  Neither the Debtor nor any Affiliate nor any Resort nor any Unit
is in default with respect to any order of any court, governmental authority or
arbitration board or tribunal.

     4.7  Title to Properties.

     Preferred Equities Corporation has good and marketable title in fee simple
(or its equivalent under applicable law) to all of the Resorts other than Ramada
Vacation Suites at Brigantine Beach and Brigantine Preferred Equities, Inc. has
good and marketable title in fee simple (or its equivalent under applicable law)
to the Ramada Vacation Suites at Brigantine Beach Resort free from Liens except
as set forth on Schedule 7 to this Agreement. Except as set forth on Schedule 9
hereto, the Resorts are not subject to any leases.

     Neither the buildings in which the Units are located nor any of the Resorts
are under investigation with respect to, and is not in violation of, any
Environmental Protection Law. No proceedings have been commenced against, nor
notice received by, the Debtor or any Affiliate concerning any alleged violation
of any Environmental Protection Law. Neither the buildings in which the Units
are located nor any Resort is, or has been, the subject of any threatened,
proposed or actual cleanup or other protective or remedial action relating to
any Hazardous Substances, whether pursuant to any Environmental Protection Law
or otherwise. There are no Hazardous Substances in, on, or under the buildings
in which the Units are located or any Resort, except as set forth on Schedule 10
to this Agreement and except as used or stored in compliance with all applicable
Environmental Protection Laws or, with respect to ordinary cleaning materials
and supplies, as customarily and prudently used or stored in operations similar
to the Units or any Resort.

     The Debtor shall cause all asbestos located in any Resort to be removed by
a duly licensed asbestos abatement contractor, all in accordance with applicable
federal and state law.

     4.8  Trademarks; Licenses and Permits.

     The Debtor owns or possesses all of the trademarks, service marks, trade
names, copyrights, franchises and licenses, and rights with respect thereto
necessary for the conduct of its business as now conducted and as proposed to be
conducted, without any known conflict with the rights of others.

     4.9  Transaction Is Legal and Authorized.

     The execution and delivery of this Agreement, the Note and the other
Security Documents by the Debtor and the grant of the Liens to the Lender with
respect to the Collateral by the Debtor and compliance by the Debtor with all of
the provisions of this Agreement, the Note and the other Security Documents are:

     (a)  within the corporate powers of each of Preferred Equities Corporation
and Brigantine Preferred Properties, Inc.;

     (b)  duly authorized and approved by the Board of Directors of each of
Preferred Equities Corporation and Brigantine Preferred Properties, Inc.; and

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<PAGE>

     (c)  valid and legal acts and will not conflict with, or result in any
breach in any of the provisions of, or constitute a default under, or result in
the creation of any Lien (except Liens contemplated under this Agreement or any
other Security Document) upon any Property of either of Preferred Equities
Corporation or Brigantine Preferred Properties, Inc. under the provisions of,
any agreement, charter instrument, bylaw or other instrument to which either is
a party or by which its Property may be bound.

     4.10 No Defaults.

     No Default or Event of Default exists, and there is no violation in any
material respect of any term of any agreement, charter instrument, bylaw or
other instrument to which either of Preferred Equities Corporation or Brigantine
Preferred Properties, Inc. is a party or by which it may be bound.

     4.11 Governmental Consent.

     Neither the nature of the Debtor, or of any of its businesses or
Properties, or any relationship between the Debtor and any other Person, or any
circumstance in connection with the execution or delivery of this Agreement, the
Note or the other Security Documents, is such as to require a consent, approval
or authorization of, or filing, registration or qualification with, any
governmental authority on the part of the Debtor, as a condition of the
execution, delivery or performance of this Agreement, the Note or any other
Security Document.

     4.12 Taxes.

     The Debtor is not in default with respect to the payment of any taxes
levied or assessed against it or any of its assets and has not failed to file
any tax return required to be filed by it.

     4.13 Use of Proceeds.

     The proceeds from the Inventory Loan will be used as set forth on Schedule
11 to this Agreement. None of the transactions contemplated in this Agreement
will violate or result in the violation of Section 7 of the Securities Exchange
Act of 1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. The Debtor does not intend to
carry or purchase any "margin security" within the meaning of said Regulation G.
None of the proceeds will be used to purchase or carry (or refinance any
borrowing, the proceeds of which were used to purchase or carry) any "margin
security" within the meaning of said Regulation.

     4.14 Compliance with Law.

Neither Preferred Equities Corporation nor Brigantine Preferred Properties,
Inc.:

     (a)  is not in violation of any laws, ordinances, governmental rules or
regulations to which it is subject; and

     (b)  except as set forth in Schedule 12 hereto, has not failed to obtain
any licenses, permits, franchises or other governmental authorizations, or make
or cause to be made any registrations or declarations with any government or
agency or department thereof, necessary to the ownership of its Property or to
the conduct of its business;

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<PAGE>

which violation or failure to obtain or register would materially adversely
affect the business, prospects, profits, Property or condition (financial or
otherwise) of the Debtor.

     4.15  Restrictions of Debtor.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. is not a party to any contract or agreement which restricts its right or
ability to incur indebtedness with respect to any Resort, or prohibits the
execution of, or compliance with, this Agreement or any of the other Security
Documents by the Debtor. Each of Preferred Equities Corporation and Brigantine
Preferred Properties, Inc. has not agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its Property
constituting the Collateral, whether now owned or hereafter acquired, to be
subject to a Lien other than the Liens provided for herein and in the other
Security Documents.

     4.16  Brokers' Fees.

     The Debtor and the Lender hereby agree that there are no brokers or finders
which are entitled to receive compensation for their services rendered to the
Debtor with respect to the transactions described in this Agreement.

     4.17  Deferred Compensation Plans.

     Except as set forth on Schedule 13 hereto, the Debtor has no pension,
profit sharing or other compensatory or similar plan providing for a program of
deferred compensation for any employee or officer which is subject to any
requirement of the Employee Retirement Income Security Act of 1974, as amended.

     4.18  Labor Relations.

     The employees of the Debtor are not a party to any collective bargaining
agreement with the Debtor.

     4.19  Validity of Liens Granted to Lender.

     Except with respect to the Permitted Exceptions, all Liens granted to the
Lender in respect of the Collateral are, and shall continue to be, prior in
right and superior to all other Liens granted to, or held by, any other Person.

SECTION 5.  CONDITIONS PRECEDENT TO INVENTORY ADVANCE AND EFFECTIVENESS OF THIS
AGREEMENT.

     The effectiveness of this Agreement and the obligation of the Lender to
make each Inventory Advance shall be subject to the following conditions
precedent which in all cases shall be satisfied not less than fifteen (15) days
prior to each requested Inventory Advance:

     5.1   Opinions of Counsel.

The Lender shall have received from counsel for the Debtor, a closing opinion
substantially in the form of Exhibit I attached to this Agreement and from Jon
Joseph, Esq., special counsel to Mego Financial, a closing opinion substantially
in the form of Exhibit J attached to this Agreement.

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<PAGE>

     5.2  Warranties and Representations True as of Closing Date.

     (a)  The warranties and representations contained in this Agreement shall
(except as affected by transactions contemplated by this Agreement) be true in
all material respects on the Closing Date with the same effect as though made on
and as of that date.

     (b)  The Debtor shall not have taken any action, or permitted any condition
to exist which would have been prohibited by any provision of this Agreement if
such provision had been binding and effective at all times during the period
from January 18, 2001 to and including the Closing Date.

     5.3  Compliance with this Agreement.

     The Debtor shall have performed and complied with all covenants, agreements
and conditions contained herein which are required to be performed or complied
with by it before or on the Closing Date, shall have provided to Lender a
Request for Inventory Advance listing the Resorts for which an Inventory Advance
is requested and providing such reasonable detail as is satisfactory to Lender
to show that the Inventory Advance requested meets the requirements of Section
2.1 and after the making of such Inventory Advance when aggregated with all
other Inventory Advances outstanding at the time, there will be no requirement
of a Mandatory Prepayment under Section 2.4(c).

     5.4  Officer's Certificates; Secretary's Certificates; Good-Standing
Certificates.

     (a)  The Lender shall have received a certificate, substantially in the
form of Exhibit K to this Agreement, dated as of the Closing Date and signed by
the President or a Vice-President of each of Preferred Equities Corporation and
Brigantine Preferred Properties, Inc., certifying that the conditions specified
in Section 5.2(a), Section 5.2(b) and Section 5.3 of this Agreement have been
fulfilled.

     (b)  For the initial Inventory Advance only, the Lender shall have received
a certificate of the Secretary or any Assistant Secretary of Steamboat,
substantially in the form of Exhibit L to this Agreement, dated as of the
Closing Date, certifying (i) the adoption by the Board of Directors of
Steamboat Suites  of a resolution authorizing Steamboat Suites  to enter into a
First Amendment to General Loan and Security Agreement between Debtor, Steamboat
and Lender dated as of February  , 2001 ("Steamboat First Amendment") and the
transactions and instruments contemplated thereby and (ii) the incumbency and
authority of, and verifying the specimen signatures of, the officers of
Steamboat authorized to execute and deliver the Steamboat First Amendment.

     (c)  For the initial Inventory Advance only, Steamboat shall have delivered
to the Lender, in form satisfactory to the Lender, a recent good standing
certificate from the Secretary of State of Colorado certifying the Steamboat's
due corporate existence.

     (d)  The Debtor shall have delivered to the Lender, in form satisfactory to
the Lender, (i)  recent certificates of the Secretary of State of each
respective state certifying the due corporate existence of the Associations,
(ii) copies of the Articles of Incorporation and all amendments thereto and
(iii) copies of the By-Laws of the Associations.

     (e)  The Lender shall have received a certificate of the Secretary or any
Assistant Secretary of each of Preferred Equities Corporation and Brigantine
Preferred Properties, Inc., substantially in the form of Exhibit M to this
Agreement, dated as of the Closing Date, certifying (i) the adoption by the
Board of Directors of Debtor of a resolution authorizing each of Preferred
Equities Corporation and Brigantine

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Preferred Properties, Inc. to enter into this Agreement and the transactions and
instruments contemplated hereby and (ii) the incumbency and authority of, and
verifying the specimen signatures of, the officers of each of Preferred Equities
Corporation and Brigantine Preferred Properties, Inc. authorized to execute and
deliver this Agreement, the Note, the other Security Documents and the other
documents contemplated thereunder.

     (f)  Each of Preferred Equities Corporation and Brigantine Preferred
Properties, Inc. shall have delivered to the Lender, in form satisfactory to the
Lender, a recent good standing certificate from the Secretary of State of Nevada
certifying its due corporate existence.

     (g)  The Lender shall have received a certificate of the Secretary or any
Assistant Secretary of Mego Financial, substantially in the form of Exhibit N to
this Agreement, dated as of the Closing Date, certifying (i) the adoption by the
Board of Directors of Mego Financial of a resolution authorizing Mego Financial
to enter into the Guaranty Agreement and the transactions and instruments
contemplated thereby and (ii) the incumbency and authority of, and verifying the
specimen signatures of, the officers of Mego Financial authorized to execute and
deliver the Guaranty Agreement and the other documents contemplated thereunder.

     (h)  Mego Financial shall have delivered to the Lender, in form
satisfactory to the Lender, a recent good standing certificate from the
Secretary of State of New York certifying Mego Financial's due corporate
existence.

     5.5  Uniform Commercial Code Financing Statements.

     All filings of Uniform Commercial Code financing statements and all other
filings and actions necessary to perfect the Lender's security interests in and
to the Collateral shall have been filed and confirmation thereof received.

     5.6  Assignment of Property-Related Contracts.

     The Debtor shall have delivered to the Lender certified copies of all
material Property-Related Contracts and executed and delivered in favor of the
Lender an assignment or assignments thereof, each in form and substance
satisfactory to the Lender and its counsel.   All such Property-Related
Contracts shall be satisfactory to the Lender in form and substance.  Each
Person (other than the Debtor) which is a party to any such Property-Related
Contract shall have been notified of the assignment thereof.

     5.7  Maximum Number of Advances and Termination Date of Advances.

     Debtor shall not have received in the same month any other Inventory
Advance and the date of such Inventory Advance shall be on or before September
30, 2001.

     5.8  Guaranty Agreement.

     Guarantor shall have executed and delivered to the Lender a Guaranty
Agreement (as amended from time to time, individually, a "Guaranty Agreement"
and, collectively, the "Guaranty Agreements")  substantially in the form of
Exhibit O attached to this Agreement.

     5.9  Subordination of Indebtedness.

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     The Debtor, the Lender and Guarantor shall have entered into one or more
Subordination Agreements, substantially in the form of Exhibit A attached to the
Guaranty Agreements (individually, a "Subordination Agreement" and,
collectively, the "Subordination Agreements").

     5.10  Expenses.

     The Debtor shall have authorized payment from the first Inventory Advance
of all fees and expenses required to be paid by it pursuant to Section 10.2 of
this Agreement and shall have paid or authorized payment from the first
Inventory Advance of the commitment fee of $37,000 referred to in the Commitment
Letter and the transaction fee of $37,000 referred to in the Commitment Letter.

     5.11  Inventory Note; Inventory Deed of Trust.

     The Debtor shall have executed, the Inventory Note and the Inventory Deed
of Trust relating to the Timeshare Intervals or Calvada Lots relating to the
Resort for which an Inventory Advance is being requested.  The Inventory Deed of
Trust shall have been recorded, as of the Closing Date, in the Office of the
Clerk and Recorder for the applicable jurisdiction and all taxes, recording fees
and other fees and charges required by applicable law to be paid in connection
therewith shall have been duly paid in full.  The Inventory Deed of Trust shall
have created a valid Lien in and to the Collateral located at the Resort for
which an Inventory Advance is being requested in respect of the Obligations
subject to no other Liens except to the extent permitted by Section 7.2(j) of
this Agreement.

     The Debtor shall have executed and delivered to the Lender an assignment of
leases and rents (as may be amended from time to time, the "Assignment of
Rents"), substantially in the form of Exhibit P to this Agreement.  The
Assignment of Rents shall have been recorded in the Office of the Clerk and
Recorder for the applicable jurisdiction for the Resort for which an Inventory
Advance is being requested and all taxes, recording fees and other fees and
charges required by applicable law to be paid in connection therewith shall have
been duly paid in full.  The Assignment of Rents shall have created a valid Lien
in and to the Property referred to therein in respect of the Obligations subject
to no other Liens except to the extent permitted by Section 7.2(j) of this
Agreement.

     5.12  Title Insurance; Casualty Insurance.

     The Debtor shall have delivered to the Lender a mortgagee's title insurance
policy (issued to the Lender and in full force and effect) in respect of the
Inventory Deed of Trust for the Timeshare Intervals or Calvada Lots relating to
the Resort for which an Inventory Advance is being requested (the "Title
Insurance Policy") together with such endorsements thereto as the Lender may
require, dated the Closing Date.  The Title Insurance Policy  (a) shall have
been issued by a title insurance company which is satisfactory to the Lender,
(b) shall be in form and substance satisfactory to the Lender and its special
counsel, (c) shall be in amount not less than the principal amount of the
Inventory  Loan, (d) shall insure that the Inventory Deed of Trust creates a
valid first Lien in and to the Collateral free and clear of all defects,
encumbrances and other Liens unacceptable to the Lender and (e) shall contain
such further endorsements and affirmative coverage as the Lender may request,
All premiums in respect of such Title Insurance Policy  shall have been paid in
full and evidence thereof shall have been delivered to the Lender.

     The Debtor shall have delivered to the Lender certificates of insurance
evidencing the insurance policies and endorsements required to be delivered
pursuant to Section 3.5 hereof, together with copies of such insurance policies
certified by the Debtor to be true and correct except as otherwise provided in

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Section 3.5.  All premiums in respect of such insurance policies shall have been
paid in full and evidence thereof shall have been delivered to the Lender.

     5.13 Environmental Site Assessment Report.

     The Debtor shall have delivered to the Lender such Phase I environmental
surveys of each Resort as Debtor shall have performed during the past three
years or be in possession of as a result of another of its lenders commissioning
same.

     5.14 Taxes.

     The Debtor shall have delivered to the Lender copies of the most recent tax
receipts for the Collateral and each of the Timeshare Intervals and Calvada Lots
subject to the Lien of the Inventory Deed of Trust (or certificates in respect
thereof) evidencing no delinquency in the payment thereof and that each of the
Units has been segregated from all other Property at any Resort on the
applicable municipal tax rolls.

     5.15 Inspection.

     The Debtor shall have permitted the Lender or its representatives to make
an inspection/audit of its books, accounts and records and such other papers as
it may desire and of its premises and the Resorts, as the Lender may in its sole
discretion determine.  Such inspection/audit shall have been satisfactory to the
Lender (in its sole determination).

     5.16 Survey.

     The Debtor shall have delivered to the Lender such surveys of the Resorts,
other than the Calvada Lots, as Debtor shall have or be in possession of as a
result of one of its other lenders commissioning same.  Debtor shall provide or
cause to be provided the recorded location of the plat maps for each of the
Calvada Lots in such detail that Lender may obtain a copy of same if its
determines same to be necessary.

     5.17 Engineering Report.

     The Debtor shall keep available for delivery to Lender, to the extent same
exist, upon Lender's request, engineering reports which shall confirm that the
Units at the Resorts, other than the Calvada Lots, are structurally and
mechanically sound.

     5.18 Intentionally Deleted.

     5.19 Intentionally Deleted.

     5.20 First Lienholder Status; Proxy Acknowledged.

     The Debtor shall have informed the Associations, in writing, as to the
first Lienholder status of the Lender in and to the Calvada Lots and Timeshare
Intervals in Units and the Associations shall have recognized the Lender as such
First Lienholder. The Associations shall have acknowledged and recognized the
proxy referred to in Section 3.9 hereof.

     5.21 Proceedings Satisfactory.

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<PAGE>

     All actions taken in connection with the execution of this Agreement, the
Inventory Note, any other Security Document and all documents and papers
relating thereto shall be satisfactory to the Lender and its counsel. The Lender
shall be satisfied with its physical inspection of the Calvada Lots, the Units
and the Resorts. The Lender and its counsel shall have received copies of such
documents and papers as the Lender or such counsel may reasonably request in
connection therewith, all in form and substance satisfactory to the Lender and
its counsel, including, without limitation, certified copies of the Declarations
and the Associations' Articles of Incorporation and By-Laws.

SECTION 6.  Intentionally Deleted.

SECTION 7.  COVENANTS

     The Debtor covenants that on and after the date hereof and so long as any
Obligation of the Debtor to the Lender exists as follows:

     7.1  Payment of Taxes and Claims.

     Except as otherwise provided for in Section 3.8 hereof, the each of
Preferred Equities Corporation and Brigantine Preferred Properties, Inc. shall
pay, or cause to be paid, before they become delinquent:

     (a)  all taxes, assessments and governmental charges or levies imposed upon
it or its Property at the Resorts, including, without limitation, the
Collateral; and

     (b)  all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons which, if unpaid, might result in
the creation of a Lien upon its Property at the Resorts, including, without
limitation, the Collateral.

     7.2  Maintenance of Properties; Corporate Existence; Stock Ownership;
Renovations; Indebtedness; Liens; Business.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. shall:

     (a)  Property -- maintain its Property at the Resorts in good repair,
working order and condition and make all necessary renewals, repairs,
replacements, additions, betterments and improvements thereto and, without
limiting the generality of the foregoing, maintain, or cause to be maintained,
the Resorts in good repair, working order and condition and shall make, or shall
cause to be made, all necessary repairs, replacements, additions, betterments
and improvements to the Resorts;

     (b)  Insurance -- maintain, or cause to be maintained, insurance as
required by Section 3.5 of this Agreement;

     (c)  Financial Records -- (i) keep true books of records and accounts
(including, without limitation, the Books and Records) in which full and correct
entries will be made of all its business transactions and (ii) reflect in its
financial statements adequate accruals and appropriations to reserves, all in
accordance with generally accepted accounting principles, practices and
procedures at the time in effect and consistently applied;

     (d)  Corporate Existence and Rights -- do or cause to be done all things
necessary or required (i) to preserve and keep in full force and effect its
corporate existence, rights, powers and franchises and

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<PAGE>

(ii) to continue to own 100% of all legal and beneficial interest in all of the
Voting Stock and other capital stock of Steamboat;

     (e)  Compliance with Law -- not be in violation of (i) any laws,
ordinances, governmental rules and regulations to which it is subject, and to
that end, the Debtor shall not fail to obtain any licenses, permits, franchises
or other governmental authorizations necessary to the ownership of its
Properties or to the conduct of its business, which violation or failure to
obtain might materially and adversely affect the business, prospects, profits,
Property or condition (financial or otherwise) of the Debtor, including, without
limitation, any zoning, land use, subdivision control or Environmental
Protection Laws applicable to its real Property (including, without limitation,
the Units and the Resorts), (ii) any statutes, rules and regulations, whether
now or hereafter in force, in such jurisdictions as the Debtor may make sales of
Timeshare Intervals or Calvada Lots relating to the right to do business in any
of such jurisdictions and (iii) any applicable federal, state or municipal
statutes, rules and regulations relating to sales of Timeshare Intervals and
Calvada Lots and the manner of evidencing and financing the same;

     (f)  Deferred Compensation Plans -- to the extent that it has one or more
pension, profit sharing or other compensatory or similar plans providing for a
program of deferred compensation for any employee or officer, be in compliance
with all requirements of the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated in connection therewith;

     (g)  Renovations and Construction -- retain only duly licensed and
qualified architects, engineers, contractors and subcontractors to complete all
renovations at the Resorts, provided that the Debtor may use qualified employees
to complete such renovations and construction;

     (h)  Equity Contributions -- until such time as all obligations of the
Debtor under the Inventory Loan, the Inventory Note and the Inventory Deed of
Trust have been fully and indefeasibly satisfied, not pay out as a dividend or
other distribution (in cash or Property) or otherwise transfer back (directly or
indirectly by loans, investments, redemption of capital stock, repurchase of
capital stock or otherwise) or return to any Affiliate for so long as any
Obligation shall be outstanding or the Lender shall have any obligation
hereunder to make Inventory Advances the equity capital contributions previously
made to Steamboat by Debtor;

     (i)  Indebtedness/Right of First Refusal -- not incur any indebtedness
(other than the Loan and the leasing of motor vehicles, telephone and computer
equipment in the ordinary course of business) in respect of the Collateral
and/or the Resorts, whether such indebtedness is secured or unsecured, and not
permit the Association to incur any indebtedness, whether secured or unsecured,
provided that the Debtor may incur additional indebtedness for borrowed money
secured principally by Notes Receivable;

     (j)  Liens --  (i) not allow any Liens or encumbrances whatsoever to attach
to the Collateral other than the Liens and security interests of the Lender
created by the Security Documents, any Liens in favor of the Association under
the Declaration, the Liens set forth on Schedule 7, Schedule 8 and Schedule 9
hereto and any Liens permitted in connection with additional indebtedness for
borrowed money permitted under clause (i) above or in connection with the sale
of Notes Receivable and (ii) cause the Liens and security interests of the
Lender created by the Security Documents in and to the Collateral to continue to
be valid, enforceable, perfected Liens and security interests subject to no
other Liens except as set forth in this Agreement or in any other Security
Document and in Schedule 7, Schedule 8 and Schedule 9 hereto;

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<PAGE>

     (k)  Material Adverse Effect -- not undertake any action that would have a
material adverse effect on the operation of the Resorts or the Collateral; and

     (l)  Notification of Claims -- promptly notify the Lender of any claim,
action or proceeding affecting title to the Collateral, or any part thereof, or
any of the security interests granted hereunder, and, at the request of the
Lender, appear in and defend, at the Debtor's expense, any such claim, action or
proceeding.

     7.3  Payment of Note and Maintenance of Office.

     The Debtor shall punctually pay or cause to be paid the principal and
interest (and the accelerated release fee payment, to the extent applicable) to
become due in respect of  the Note according to the terms thereof (all of which
are incorporated herein by reference).  All payments hereunder or under the Note
shall be made in accordance with the payment instructions set forth in Schedule
14 to this Agreement.  The Debtor shall maintain an office in Las Vegas, Nevada
where notices, presentations and demands in respect of this Agreement, the Note
or any other Security Document may be made upon the Debtor.  Such offices shall
be maintained at the address of the Debtor set forth on Schedule 15 to this
Agreement until such time as the Debtor shall so notify the Lender, in writing,
of any change of location of such offices.  The books and records of the Debtor
shall be maintained at the Las Vegas, Nevada office of the Debtor.  The Debtor
shall not change its name without 30-day prior written notice to the Lender.

     7.4  Sale of Properties.

     Without the prior written consent of the Lender, the Debtor shall not sell,
lease, transfer or otherwise dispose of any of the Collateral, provided that the
Debtor may sell the Unsold Inventory Lot/Timeshare Intervals in the ordinary
course of its business to unaffiliated consumers and remove and dispose of (and
receive the proceeds thereof) in the ordinary course of its business, free from
any Liens created or contemplated by this Agreement, items of Collateral
consisting of Equipment which shall have become worn out or obsolete.

     7.5  Consolidation and Merger.

     Without the prior written consent of Lender, the neither Preferred
Equities Corporation nor Brigantine Preferred Properties, Inc. shall consolidate
with or merge into any other Person or permit any other Person to consolidate
with or merge into it or consent or agree to a Change in Management.

     7.6  Guaranties.

     (a)  Except as required by applicable law or any government agency having
regulatory authority with respect to the sale of the Timeshare Intervals and/or
Calvada Lots, neither of Preferred Equities Corporation and Brigantine Preferred
Properties, Inc. shall become liable in respect of, or be liable in respect of,
any Guaranty except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection.

     (b)  "Guaranty" by any Person shall mean all obligations of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other
obligation of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including but not limited to obligations incurred
through an agreement, contingent or otherwise, by such Person:

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<PAGE>

           (i)  to purchase such indebtedness or obligation or any Property or
     assets constituting security therefor;

           (ii) to advance or supply funds

                (A) for the purchase or payment of such indebtedness or
           obligation, or

                (B) to maintain working capital or other balance sheet
           conditions or otherwise to advance or make available funds for the
           purchase or payment of such indebtedness or obligation;

     (iii) lease Property or to purchase any Security or other Property or
services primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of the primary obligor to make payment of the
indebtedness or obligation; or

     (iv)  otherwise to assure the owner of the indebtedness or obligation of
the primary obligor against loss in respect thereof.

     7.7   Compliance with Environmental Laws.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. shall comply, and shall cause the Resorts to be in compliance, in a timely
and diligent fashion with

     (a)   all Environmental Protection Laws (including, without limitation, all
federal, state and local environmental or pollution-control laws, regulations,
orders and decrees governing the emission of waste water effluent, the
treatment, transportation, disposal, generation and storage of solid and
hazardous waste, hazardous and toxic substances and air pollution, and/or
setting forth general environmental conditions),

     (b)   any other applicable requirements for conducting, on a timely basis,
periodic tests and monitoring for contamination of ground water, surface water,
air and/or land, and for biological toxicity of the aforesaid and

     (c)   the regulations of each relevant federal, state or local authority
administering environmental laws, ordinances or regulations,

to the extent that the failure to so comply could have a material and adverse
effect on the business, prospects, profits, Property or condition (financial or
otherwise) of the Debtor or the Resorts.

     Without limiting the generality of the foregoing, each of Preferred
Equities Corporation and Brigantine Preferred Properties, Inc. shall not release
or otherwise dispose of any Hazardous Substance or any other substance
regulated, controlled or described as hazardous under any Environmental
Protection Law on or beneath any real Property owned, leased or otherwise used
by the Debtor or allow the same to occur with respect to the Resorts; and no
asbestos, urea formaldehyde foam, polychlorinated biphenyls, aluminum wire or
lead-containing paint shall be installed or used on any such Property or the
Resorts. The Debtor shall not take or suffer to be taken any act or omission
that would subject it or the Resorts to liability under any Environmental
Protection Law which liability could have a material and adverse effect on the
business, prospects, profits, Property or condition (financial or otherwise) of
the Debtor or the Resorts.

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<PAGE>

     The Lender shall have the right, but shall not be obligated, to notify any
state, federal or local governmental authority of information which may come to
its attention with respect to Hazardous Substances on or emanating from the
Resorts and the Debtor irrevocably releases the Lender from any claims of loss,
damage, liability, expense or injury relating to or arising from, directly or
indirectly, any such disclosure. The Lender will notify the Debtor prior to or
contemporaneously with any action taken by the Lender pursuant to this
paragraph, provided that the failure by the Lender to provide such notification
shall not affect any action so taken.

     Without limiting the scope and the effectiveness of the foregoing
undertakings in this Section 7.7, each of Preferred Equities Corporation and
Brigantine Preferred Properties, Inc. agrees to indemnify and hold the Lender
harmless from and against any losses, liabilities, damages, claims, causes of
action, costs or expenses (including, without limitation, attorneys' fees and
disbursements), arising from, incurred by, or asserted against, the Lender in
connection with any cleanup, removal or similar protective or remedial action
that may be required or undertaken by any governmental authority as a result of
the presence of any Hazardous Substances at the Resorts, the release of any
other Hazardous Substance on or from the Collateral at the Resorts or the
generation, treatment, storage, handling or disposal of any Hazardous Substances
on or from the Resorts (unless such presence, release, generation, treatment,
storage, handling or disposal is directly caused by the Lender or by any agent
of the Lender acting under the Lender's direct orders).  The liability of the
Debtor to the Lender under this paragraph shall survive any assignment,
transfer, discharge or foreclosure of the Inventory Deed of Trust or any
transfer of any of the Resorts (or any portion thereof) by deed in lieu of
foreclosure or otherwise, and any one or more transfers of any Resort (or any
portion thereof) by deed or otherwise, by whosoever made.

     If either of Preferred Equities Corporation or Brigantine Preferred
Properties, Inc. fails to diligently take any action required under this Section
7.7 or by any governmental entity with respect to the cleanup, control or
reporting of any Hazardous Substances, materials or wastes in, on, from or under
the Resorts, the Lender, at its option, may enter upon the Resorts, retain such
experts and consultants at the expense of the Debtor and take such action as the
Lender deems advisable, and the Lender may advance such sums of money as it
deems necessary, with respect to the cleanup, control or reporting of any such
substances, materials or wastes in, on or under the Resorts.  The Debtor shall
pay to the Lender immediately and upon demand, all sums of money so advanced or
expended by the Lender pursuant to this paragraph, together with interest on
each such advance at the Default Rate, and all such sums, and the interest
thereon, shall be secured by the Collateral.  The Lender will notify the Debtor
prior to or contemporaneously with any action taken by the Lender pursuant to
this paragraph, provided that the failure by the Lender to provide such
notification shall not affect any action so taken.

     7.8  Transactions with Affiliates; Principal Properties.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. shall not enter into any transaction including, without limitation, the
purchase, sale or exchange of Property or the rendering of any service with any
Affiliate except in the ordinary course of, and pursuant to the reasonable
requirements of, the Debtor's business and upon fair and reasonable terms no
less favorable to the Debtor than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate.

     7.9  Use of the Lender Name.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. shall not, nor shall it permit any Affiliate to, without the prior written
consent of the Lender, use the name of the Lender

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or the name of any affiliate of the Lender in connection with any of its
respective businesses or activities, except in connection with internal business
matters and as required in dealings with governmental agencies.

     7.10  Subordinated Obligations.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. shall not, directly or indirectly, (a) permit any payment to be made in
respect of any indebtedness, liabilities or obligations, direct or contingent,
which are subordinated by the terms thereof or by separate instrument to the
payment of principal of, and interest on, the Note except in accordance with the
terms of such subordination, (b) permit the amendment, rescission or other
modification of any such subordination provisions of any of the Debtor's
subordinated obligations in such a manner as to affect adversely the Lender's
Lien or the prior position of the Note, or (c) permit the unscheduled prepayment
or redemption of all or any part of any subordinated obligations of the Debtor
except in accordance with the terms of such subordination and except as provided
in this Section 7.10 in respect of indebtedness extended to Steamboat by Debtor
and except for payments pursuant to tax sharing agreements.  The Debtor shall
cause Guarantor to subordinate all indebtedness, liabilities or obligations,
direct or contingent, owing to it from the Debtor to the payment of the
Obligations.  The Debtor shall cause each of its other Affiliates to subordinate
all indebtedness, liabilities or obligations, direct or contingent, owing to it
from the Debtor to the payment of the Obligations.  The terms of such
subordination shall be satisfactory to the Lender.

     7.11  Notice of Legal Proceedings.

     Promptly upon becoming aware of the existence thereof, each of Preferred
Equities Corporation and Brigantine Preferred Properties, Inc. shall deliver to
the Lender written notification of the institution of any litigation, legal
proceeding or dispute with any Person, entity or governmental authority in any
way involving the Debtor, the Guarantor, the Resorts, the Collateral or any of
the Debtor's other assets as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, would materially
adversely affect the Debtor, the Guarantor, the Resorts, or the Collateral.

     7.12  Further Assurances.

     Each of Preferred Equities Corporation and Brigantine Preferred Properties,
Inc. shall from time to time execute and deliver to the Lender such other
instruments, certificates and documents and shall take such other action and do
all other things as may from time to time be reasonably requested by the Lender
in order to implement or effectuate the provisions of, or more fully perfect the
rights granted or intended to be granted by the Debtor to the Lender pursuant to
the terms of, this Agreement, the Note or any other Security Document.  The
Debtor agrees, in its capacity as Declarant (to the extent permitted by
applicable law), to cause the Association to take such action and to do all
other things as may from time to time be reasonably requested by the Lender in
order to implement or effectuate the provisions of this Agreement and the other
Security Documents.

     7.13  Financial Statements and Other Information. Preferred Equities
Corporation shall, on a consolidated and consolidating basis, submit to the
Lender the following:

     (a) Annual Statements -- As soon as practicable after the end of each
fiscal year of the Preferred Equities Corporation, and in any event no later
than 120 days thereafter, duplicate copies of:

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<PAGE>

     (i)   a consolidated and consolidating balance sheet of the Preferred
Equities Corporation and its subsidiaries as at the end of such fiscal year, and

     (ii)  a consolidated and consolidating statement of income of the Preferred
Equities Corporation and its subsidiaries for such fiscal year, and

     (iii) a consolidated and consolidating statement of changes in cash flows
of the Preferred Equities Corporation and its subsidiaries during such fiscal
year, and

     (iv)  a statement of material changes of accounting policies, presentations
or principles during such fiscal year, and

     (v)   notes to such financial statements, if any,

prepared in reasonable detail and in accordance with generally accepted
accounting principles, procedures and practices consistently applied, setting
forth, in each case, in comparative form the figures for the previous fiscal
year, certified as complete and correct by the principal financial officer of
the Preferred Equities Corporation and accompanied by an opinion thereon of
independent certified public accountants of recognized national standing
selected by the Guarantor and reasonably satisfactory to the Lender, which
opinion shall be acceptable to the Lender and shall, without qualification,
state that such financial statements fairly present the financial condition of
Preferred Equities Corporation and its Subsidiaries and have been prepared in
accordance with generally accepted accounting principles consistently applied
(except for changes in application in which such accountants concur) and that
the examination of such accountants in connection with such financial statements
has been made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances.

     (b)   Quarterly Statements -- As soon as practicable after the end of each
fiscal quarter of the Debtor, and in any event no later than 90 days thereafter,
duplicate copies of:

     (i)   a consolidated and consolidating balance sheet of Preferred Equities
Corporation and its Subsidiaries (including all assets and liabilities of, or in
respect of, the Resorts) as at the end of such fiscal quarter, and

     (ii)  a consolidated and consolidating statement of income of Preferred
Equities Corporation and its Subsidiaries (including the operations of the
Resorts) for such quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter, and

     (iii) a consolidated and consolidating statement of changes in cash flows
of Preferred Equities Corporation and its Subsidiaries (including the cash flows
of, or in respect of, the Resorts) during such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending with such
quarter, and

     (iv)  a statement of material changes of accounting policies, presentations
or principles during such quarter.

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     Each of the above shall have been prepared in reasonable detail and in
accordance with generally accepted accounting principles, procedures and
practices consistently applied (other than the preparation of notes to such
financial statements), subject to changes resulting from year-end adjustments,
and shall set forth in each case in comparative form the figures for the
corresponding periods in the immediately preceding fiscal year, and shall be
certified as complete and correct by the chief accounting officer of the Debtor.

     (c)  Notice of Default or Event of Default -- Promptly upon becoming aware
of the existence of any condition or event which constitutes a Default or an
Event of Default, a written notice specifying the nature and period of existence
thereof and what action the Debtor is taking or proposes to take with respect
thereto.

     (d)  Notice of Claimed Default -- Immediately upon becoming aware that the
holder of any obligation or of any evidence of indebtedness or other Security of
the Debtor or Guarantor has given notice or taken any other action with respect
to a claimed default or event of default thereunder, a written notice specifying
the notice given or action taken by such holder and the nature of the claimed
default or event of default and what action the Debtor is taking or proposes to
take with respect thereto.

     (e)  Material Adverse Developments -- Immediately upon becoming aware of
any development or other information which may materially and adversely affect
the Property, business, prospects, profits or condition (financial or otherwise)
of the Debtor or the ability of the Debtor to perform its obligations under this
Agreement, the Note or the other Security Documents, telephonic, telefax or
telegraphic notice specifying the nature of such development or information and
the anticipated effect.

     (f)  Financial Information.  As promptly as possible after the receipt
thereof, all financial statements, budgets and other information distributed by
the Association.  The Debtor, as Declarant or otherwise, shall cause the
Association to prepare annual financial statements, substantially as provided in
clause (a) above, and an annual budget, and shall deliver the same to the Lender
within 120 days of the end of each of its fiscal years.

     (g)  Quarterly Certifications Regarding Remaining Unsold Inventory
Lot/Timeshare Interval.   As soon as practicable after the end of each calendar
quarter, Debtor, but in no event later than 15 days thereafter, Debtor shall
provide to Lender a listing current as of the end of the calendar quarter of all
remaining Unsold Inventory Lot/Timeshare Intervals and the average retail
selling price of each to Purchasers over the prior 90 days and shall also
provide such calculations as may be required to show to Lender the amount of any
Mandatory Prepayment which shall be due under Section 2.4 of this Agreement.

     (h)  Requested Information. With reasonable promptness, such other data and
information as from time to time may be reasonably requested by the Lender.

     7.14 Officers' Certificate.

     The financial statements delivered to the Lender pursuant to Section
7.13(a) and Section 7.13(b) of this Agreement shall be accompanied by a
certificate , substantially in the form of Exhibit Q, of the President or a
Vice-President and the Treasurer or an Assistant Treasurer of the Debtor setting
forth:

     (a)  Covenant Compliance -- the information (including detailed
calculations) required in

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<PAGE>

order to establish whether the Debtor was in compliance with all financial
covenants contained in Section 7 of this Agreement during the period covered by
the financial statements or reports then being furnished; and

     (b)  Event of Default -- that the signers have reviewed the relevant terms
of the Agreement (and all other agreements and exhibits between the parties) and
have made, or caused to be made, under their supervision, a review of the
transactions and conditions of the Debtor from the beginning of the period
covered by the financial statements or reports being delivered therewith to the
date of the certificate and that such review has not disclosed the existence
during such period of any condition or event which constitutes a Default or
Event of Default or, if any such condition or event existed or exists or will
exist, specifying the nature and period of existence thereof and what action the
Debtor has taken or proposes to take with respect thereto.

     7.15 Inspection.

     The Debtor shall permit the Lender or its representatives to make such
inspections/audits of its books, accounts, records, orders, original
correspondence and such other papers as it may desire and of its premises, the
Resorts, the Units, and the other Collateral, from time to time, as the Lender
may in its sole discretion determine.  The Debtor shall supply copies of such
records and papers as the Lender may reasonably request, and shall permit the
Lender to discuss the Debtor's respective affairs, finances and accounts with
the Debtor's officers, employees and independent public accountants (and by this
provision the Debtor hereby authorizes said accountants to discuss with the
Lender the finances and affairs of the Debtor), all at reasonable times and as
often as may be desired by the Lender.  The Debtor further agrees to supply the
Lender with such other reasonable information relating to the Debtor and the
Collateral as the Lender may request.  With respect to any inspections and/or
audits referred to in this Section 7.15, the Debtor shall pay for all out-of-
pocket costs and reasonable expenses incurred by the Lender (including, without
limitation, travel expenses, but excluding salaries of employees of the Lender)
and shall promptly reimburse the Lender therefor upon receipt by the Debtor of a
written demand therefor from the Lender.

     7.16 Minimum Tangible Net Worth.

Borrower shall not permit or suffer its Tangible Net Worth to be less than
$25,000,000 at any time.

SECTION 8.  EVENTS OF DEFAULT

     8.1  Default.

     The Debtor hereby covenants, agrees and acknowledges that an Event of
Default shall exist under this Agreement if any of the following events or
conditions (each, an "Event of Default") shall occur and be continuing:

     (a)  Payments -- (i) failure to make any payment of interest on the
Inventory Note, (ii) failure to make any payment of principal of, or Release Fee
or Release Price or accelerated Release Fee payment on the Inventory Note; (iii)
failure to make any Mandatory Inventory  Prepayment; or (iv) failure to make any
other payment required pursuant to the terms of this Agreement, the Note or any
other Security Document; in each case on or before 2 Business Days after the
date such payment is due; or

     (b)  Warranties or Representations -- any warranty, representation or other
statement made or furnished to the Lender by or on behalf of the Debtor or
Guarantor in this Agreement or any other

52
<PAGE>

Security Document proves to have been false or misleading in any material
respect when made or furnished; or

     (c)  Collateral and Financial Covenants -- failure by Debtor to comply with
any covenant set forth in Section 3.5, Section 3.6,  and Section 7 of this
Agreement; or

     (d)  Other Covenants --  failure by the Debtor to comply with any other
covenant relating to the Debtor contained in this Agreement or any other
Security Document, and the continuance of such failure for more than 30 days
after such failure shall have first become known to any officer of the Debtor or
Guarantor; or

     (e)  Material Adverse Change -- any material adverse change in or in
respect of the Collateral (including, without limitation, the termination of any
applicable timeshare or condominium regimen {whether by consent of the
condominium or timeshare owners thereunder or otherwise}, any modification or
amendment to the Declaration which shall, in the opinion of the Lender,
adversely affect the Collateral or the operations or prospects of the Resorts,
or the substantial destruction of any uninsured Unit) or in the financial
condition of the Debtor or Guarantor; or

     (f)  Insolvency -- (i) a receiver, liquidator, custodian or trustee of the
Debtor or  Guarantor, or of all or any of the Property of any of them, shall be
appointed by court order and such order remains in effect for more than 50 days;
or an order for relief shall be entered with respect to the Debtor or
Guarantor, or the Debtor or  Guarantor shall be adjudicated a bankrupt or
insolvent; or any of the Property of any of them shall be sequestered by court
order and such order remains in effect for more than 50 days; or a petition
shall be filed against the Debtor or  Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect, and
shall not be dismissed within 50 days after such filing; or (ii) the Debtor or
Guarantor shall file a petition in voluntary bankruptcy or seeking relief under
any provision of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or shall consent to the filing of any
petition against it under any such law; or (iii) the Debtor or  Guarantor shall
make an assignment for the benefit of its creditors, or shall admit in writing
its inability, or shall fail, to pay its debts generally as they become due, or
shall consent to the appointment of a receiver, liquidator or trustee of the
Debtor or  Guarantor, or of all or any part of the Property of any of them; or

     (g)  Judgment -- final judgment or judgments for the payment of money, the
aggregate of which exceeds $100,000, shall be outstanding against one or more of
the Debtor and the Guarantor and any of such judgments shall have been
outstanding for more than 30 days from the date of its entry and shall not have
been discharged in full or stayed; or

     (h)  Default in Lender Agreements -- any default (after giving effect to
the expiration of any applicable grace periods) under, and as defined in any
other agreement, now existing or hereafter entered into, between (i) the Debtor
and the Lender or any affiliate of the Lender, (ii) Mego Financial and the
Lender or any affiliate of the Lender or (iii) any Affiliate of the Debtor and
the Lender or any affiliate of the Lender; or

     (i)  Default by Debtor in Other Agreements -- any default by the Debtor or
Guarantor in the payment of indebtedness for borrowed money; any other default
under such indebtedness which accelerates or permits the acceleration (after the
giving of notice or passage of time, or both) of the maturity of such
indebtedness, whether or not such default has been waived by the holder of such

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<PAGE>

indebtedness, provided that any such acceleration or permitted acceleration with
respect to a default by Guarantor shall be an Event of Default only if such
acceleration or permitted acceleration could reasonably be expected to have a
material adverse affect on Guarantor and provide further that any default with
respect to that indebtedness described on Schedule 18 shall not be an Event of
Default hereunder unless such default becomes an unappealable judgment against
Debtor; or

     (j)  Suspension of Sales -- the issuance of any stay order, cease and
desist order or similar judicial or nonjudicial sanction limiting or otherwise
affecting the sale of Timeshare Intervals or Calvada Lots in any state or any
jurisdiction thereof and any one of such orders or sanctions shall have been
outstanding for more than 30 days from the date of its entry and shall not have
been discharged in full or stayed by appeal, bond or otherwise; or

     (k)  Guaranty -- any Guaranty Agreement shall have been terminated, revoked
or declared invalid.

     8.2  Default Remedies.

     (a)  Acceleration of Obligations; Right To Dispose of Collateral. If an
Event of Default under Section 8.1(f) of this Agreement shall occur, then the
Obligations shall, automatically and without notice or demand by the Lender,
become at once due and payable, and the Debtor will forthwith pay to the Lender,
in addition to any and all sums and charges otherwise due in respect of the
Obligations, the entire principal of and interest accrued on and the Inventory
Note. If any other Event of Default shall occur, all of the Obligations shall,
at the option of the Lender, and without notice or demand by the Lender, become
at once due and payable, and the Debtor will forthwith pay to the Lender, in
addition to any and all sums and charges otherwise due in respect of the
Obligations, the entire principal of and interest accrued on the Inventory Note.
The Lender shall have all the rights and remedies of a secured party under the
Rhode Island Uniform Commercial Code, all the rights and remedies of a
beneficiary under the Inventory Deed of Trust and all other legal and equitable
rights to which it may be entitled. The Lender shall also have the right to
require the Debtor to assemble the Collateral, at the Debtor's expense, and make
it available to the Lender at a place to be designated by the Lender, which is
reasonably convenient to both parties, and the Lender shall have the right to
take immediate possession of the Collateral and may enter any of the premises of
the Debtor or wherever the Collateral shall be located, in accordance with
applicable law, and to keep and store the same on said premises until sold (and
if said premises be the Property of the Debtor, the Debtor agrees not to charge
the Lender for storage thereof for a period of at least 90 days after sale or
disposition of such Collateral). The Debtor and the Lender agree that 10 days'
notice to the Debtor of any public or private sale or other disposition of
Collateral shall be reasonable notice thereof and such sale shall be at such
location(s) as the Lender shall designate in said notice. The Lender shall have
the right to bid at any such sale on its own behalf.

     In view of the fact that federal and state securities laws may impose
certain restrictions on the methods by which a sale of Collateral, if comprised
of Securities, may be effected after an Event of Default, the Debtor agrees
that, upon the occurrence and continuance or existence of an Event of Default,
the Lender may, from time to time, attempt to sell all or any part of such
Collateral by means of a private placement restricting the bidding and
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for, or with a view to, distribution.  In
so doing, and without limiting any other means of private placement, the Lender
may solicit offers to buy such Collateral, or any part of it for cash, from a
limited number of investors deemed by the Lender, in its reasonable judgment, to
be responsible parties who might be interested in purchasing the Collateral, and
if the Lender solicits such offers from not less than four (4) such investors
(and otherwise acts in good

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<PAGE>

faith), then the acceptance by the Lender of the highest offer obtained
therefrom shall be deemed to be a commercially reasonable method of disposition
of such Collateral.

     (b)  Application of Collateral; Termination of Agreements.  Upon the
occurrence of any Event of Default, the Lender may, with or without proceeding
with such sale or foreclosure or demanding payment of the Obligations, without
notice, terminate the Lender's further performance under this Agreement, without
further liability or obligation by the Lender, and may also, at any time,
appropriate and apply (as provided below) to any Obligations any and all
Collateral in its possession and any and all balances, credits, deposits,
accounts, reserves, indebtedness or other monies due or owing to the Debtor held
by the Lender hereunder or under any other financing agreement or otherwise,
whether accrued or not.  Neither such termination, nor the termination of this
Agreement by lapse of time, the giving of notice or otherwise, shall absolve,
release or otherwise affect the liability of the Debtor in respect of
transactions prior to such termination, or affect any of the Liens, security
interests, rights, powers and remedies of the Lender hereunder, but they shall,
in all events, continue until all of the Obligations are satisfied.

     (c)  Application of Proceeds. To the extent permitted under applicable law,
the proceeds of any exercise of rights with respect to Collateral or any part
thereof shall be paid to and applied as follows:

          First, to the payment of

          (i)    all costs and charges in connection therewith, including,
     without limitation, (A) attorneys' fees for advice, counsel or other legal
     services, (B) costs and expenses incurred as a result of pursuing,
     reclaiming, seeking to reclaim, taking, keeping, removing, storing,
     advertising for sale, selling and foreclosing on the Collateral and any and
     all other charges and expenses in connection therewith, and (C) any costs
     and expenses (including, without limitation, costs and expenses in the
     management and operation of the Resorts) provided for in the Assignment of
     Rents, the Inventory Deed of Trust or any other Security Document,

          (ii)   all taxes, assessments or Liens superior to the Lien of this
     Agreement or the other Security Documents, except any taxes, assessments or
     other superior Liens subject to which any sale of Collateral may have been
     made,

          (iii)  all fees, costs and expenses as set forth in Section 10.2 of
     this Agreement, and

          (iv)   all Release Fees;

     Second, towards the payment of accrued and unpaid interest then due and
payable, if any, at the Default Rate in respect of the Loan,

     Third, towards the payment of all other accrued and unpaid interest, if
any, then due and payable in respect of the Loan,

     Fourth, to the payment of the principal amount of the Loan, and

     Fifth, to the payment of the surplus, if any, to the Debtor, its successors
and assigns, or to whomsoever may be lawfully entitled to receive the same,
provided that if any Obligations then due and

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<PAGE>

payable shall not have been paid in full, any such surplus shall continue to be
held as Collateral hereunder and shall continue to be subject to the terms and
conditions hereof until such Obligations then due and payable shall have been
paid in full.

     The Debtor shall remain liable hereunder for payment of any deficiency
owing on the Obligations after application of such proceeds.

     To the extent that any amount allocated to any of the payment categories
set forth above is insufficient to fully satisfy all of the Obligations referred
to in said category, such amount shall be allocated ratably to each of such
Obligations in accordance with the ratio that the amount of such Obligation
bears to the aggregate amount of such Obligations referred to in such category.

     (d)  Remedies Cumulative.  All covenants, conditions, provisions,
warranties, guaranties, indemnities and other undertakings of the Debtor
contained in this Agreement, or in any document referred to herein or contained
in any agreement supplementary hereto or in any schedule given to the Lender or
contained in any other agreement between the Lender and the Debtor, heretofore,
concurrently or hereafter entered into, including, without limitation, the
Inventory Deed of Trust, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions or agreements of the
Debtor herein contained.  The failure or delay of the Lender to exercise or
enforce any rights, Liens, powers or remedies hereunder or under any of the
aforesaid agreements or other documents or security or Collateral shall not
operate as a waiver of such Liens, rights, powers and remedies, but all such
Liens, rights, powers and remedies shall continue in full force and effect until
the Loan and all other Obligations shall have been fully satisfied.  All Liens,
rights, powers and remedies herein provided for are cumulative and none are
exclusive.

     The acceptance by the Lender at any time and from time to time of partial
payments of the Obligations shall not be deemed to be a waiver of any Event of
Default then existing.  No waiver by the Lender of any Event of Default shall be
deemed to be a waiver of any other or subsequent Event of Default.  No delay or
omission by the Lender in exercising any right or remedy under the Security
Documents shall impair such right or remedy or be construed as a waiver thereof
or an acquiescence therein, nor shall any single or partial exercise of any such
right or remedy preclude other or further exercise thereof, or the exercise of
any other right or remedy under the Security Documents or otherwise.

SECTION 9.  REVIVAL OF OBLIGATIONS AND LIENS

     The Debtor expressly agrees that if the Debtor makes a payment to the
Lender, which payment or any part thereof is subsequently invalidated, declared
to be fraudulent or preferential, or otherwise required to be repaid to a
trustee, receiver or any other party under any bankruptcy act, state or federal
law, common law or equitable cause, then to the extent of such repayment, the
Obligations or any part thereof intended to be satisfied and the Liens provided
for hereunder securing the same shall be revived and continued in full force and
effect as if said payment had not been made.

SECTION 10.  MISCELLANEOUS

     10.1 Governing Law.

     This Agreement and all transactions, assignments and transfers hereunder,
and all the rights of the parties hereto shall be governed as to the validity,
construction, enforcement and in all other respects by the internal laws of the
State of Rhode Island.  To the extent any provision of this Agreement is not
enforceable under applicable law, such provision shall be deemed null and void
and shall have no effect on the remaining portions of this Agreement.

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<PAGE>

     10.2 Expenses and Closing Fees.

     Whether or not the transactions contemplated hereunder are completed, the
Debtor shall pay all expenses of Lender relating to negotiating, preparing,
documenting, closing and enforcing this Agreement and relating to the making by
the Lender of any Inventory Advances hereunder to the Debtor (the "Loan Costs"),
including, but not limited to:

     (a)  the cost of reproducing this Agreement, the Inventory Note, and the
other Security Documents;

     (b)  the fees and disbursements of the Lender's counsel (including in-house
counsel;

     (c)  the Lender's out-of-pocket expenses, including, without limitation,
Lender's out-of-pocket expenses in connection with any audits in respect of the
Debtor and/or the Collateral conducted by Lender prior to the date hereof (but
excluding salaries of employees of the Lender);

     (d)  all fees and expenses relating to any amendments, waivers, consents or
review of documents in connection with any subsequent closings pursuant to the
provisions of this Agreement;

     (e)  all costs, outlays, attorneys' fees and expenses of every kind and
character had or incurred in (i) the enforcement of any of the provisions of, or
rights and remedies under, this Agreement, any assignment agreement, or any
other Security Document and (ii) the preparation for, negotiations regarding,
consultations concerning, or the defense of legal proceedings involving, any
claim or claims made or threatened against the Lender arising out of this
transaction or the protection of the Collateral securing the Obligations,
expressly including, without limitation, the defense by the Lender of any legal
proceedings instituted or threatened by any Person to seek to recover or set
aside any payment or setoff theretofore received or applied by the Lender with
respect to the Obligations; and

     (f)  all taxes levied against or paid by the Lender (other than taxes on,
or measured by, the income or profits of the Lender) and all filing and
recording fees, costs and expenses which may be incurred by the Lender with
respect to the filing or recording of any document or instrument relating to the
transactions described in this Agreement.

     10.3 Parties, Successors and Assigns.

     This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns (except that the
Debtor may not assign any of its rights hereunder), and all representations,
covenants, provisions and agreements by or on behalf of the Debtor which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Lender. Except as provided in this Section 10.3, this Agreement
shall not create and shall not be construed as creating any rights enforceable
by, or benefits in favor of, any Person not a party hereto.

     10.4 Notices.

     All notices or demands by either party to the other relating to this
Agreement shall, except as otherwise provided herein, be in writing and sent by
certified or registered United States mail, first class postage prepaid and
return receipt requested, or by a nationally recognized overnight courier
service with all delivery fees prepaid.  Notices shall be deemed received (a) on
the 3rd succeeding Business Day following deposit in the United States mail,
certified or registered and first class postage prepaid and

57
<PAGE>

return receipt requested or (b) upon delivery if sent by nationally recognized
overnight courier with all delivery fees prepaid. Notices and demands shall be
addressed, if to the Debtor, at the mailing address set forth on Schedule 16 to
this Agreement or to such other address as the Debtor may from time to time
specify in writing or, if to the Lender, at the mailing address of the Lender
set forth on Schedule 17 hereto or to such other address as the Lender may from
time to time specify in writing to the Debtor.

     10.5  Total Agreement.

     This Agreement, including the Exhibits, the Schedules and the other
agreements referred to herein, is the entire agreement between the parties
hereto relating to the subject matter hereof, incorporates or rescinds all prior
agreements and understandings between the parties hereto relating to the subject
matter hereof, and may not be changed or terminated orally or by course of
conduct.  This Agreement may be modified or changed only in a writing executed
by both the Lender and the Debtor.  The failure or delay of the Lender to
exercise or enforce any rights, Liens, powers, remedies, conditions or other
terms hereunder or under any other agreement or instrument executed in
connection herewith shall not operate as a waiver of any such rights, Liens,
powers, remedies, conditions or other terms.

     10.6  Survival.

     All warranties, representations and covenants made by the Debtor herein or
in any certificate or other instrument delivered by it or on its behalf under
this Agreement shall be considered to have been relied upon by the Lender and
shall survive the delivery to the Lender of the Note regardless of any
investigation made by the Lender or on its behalf. All statements in any such
certificate or other instrument shall constitute warranties and representations
by the Debtor hereunder.

     10.7  Litigation.

     EACH OF THE DEBTOR AND THE LENDER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION
OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION MAY BE
COMMENCED ARISING OUT OF THIS AGREEMENT, THE NOTE, ANY OTHER SECURITY DOCUMENT,
THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR
DISPUTE WHATSOEVER BETWEEN THE DEBTOR AND THE LENDER OF ANY KIND OR NATURE.

     THE DEBTOR AND THE LENDER HEREBY AGREE THAT THE FOLLOWING COURTS:

     STATE COURT:  RHODE ISLAND COURT FOR THE DISTRICT SITTING AT PROVIDENCE;
FEDERAL COURT:  UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND
SITTING AT PROVIDENCE, OR, (TO THE EXTENT PERMITTED BY APPLICABLE RHODE ISLAND
LAW) AT THE OPTION OF THE LENDER, ANY OTHER COURT LOCATED IN THE STATES OF RHODE
ISLAND OR NEVADA IN WHICH IT SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH SHALL HAVE SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY,
SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE DEBTOR AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT OR TO ANY MATTER ARISING HEREFROM.  THE DEBTOR AND THE LENDER
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN ANY SUCH COURT.

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<PAGE>

     THE STIPULATIONS OF THE DEBTOR AND THE LENDER IN THIS SECTION 10.7 SHALL
SURVIVE THE FINAL PAYMENT OF ALL OF THE OBLIGATIONS OF THE DEBTOR AND THE
RESULTING TERMINATION OF THIS AGREEMENT.

     Initials____/____


     10.8  Power of Attorney.

     The Debtor hereby makes, constitutes and appoints the Lender the true and
lawful agent and attorney-in-fact of the Debtor, with full power of
substitution, (a) to receive, open and dispose of all mail addressed to the
Debtor; (b) to open all such mail and remove therefrom any notes, checks,
acceptances, drafts, money orders or other instruments constituting Collateral,
with full power to endorse the name of the Debtor upon any such notes, checks,
acceptances, drafts, money orders, instruments or other documents, and to effect
the deposit and collection thereof, and the Lender shall have the further right
and power to endorse the name of the Debtor on any documents relating to the
Collateral; (c) to execute on behalf of the Debtor assignments, notices of
assignment, financing statements and other public records and notices related
thereto; (d) to do any and all things necessary or take action in the name and
on behalf of the Debtor to carry out the intent of this Agreement, including,
without limitation, the grant of the security interest provided herein and to
perfect and protect the security interest granted to the Lender with respect to
the Collateral and the Lender's rights created under this Agreement. The Debtor
agrees that neither the Lender nor any of its agents, designees or attorneys-in-
fact will be liable for any acts of commission or omission, or for any error of
judgment or mistake of fact or law with respect to the exercise of the power of
attorney granted under this Section 10.8 except for its own gross negligence or
willful misconduct. The power of attorney granted under this Section 10.8 is
coupled with an interest and shall be irrevocable during the term of this
Agreement.

     10.9  Survival of Indemnities.

     All indemnities set forth in this Agreement shall survive the execution and
delivery of this Agreement and the execution and delivery of the Note as well as
the payment in full of the Note and the otherwise full performance of this
Agreement.

     10.10 Conflicting Obligations; Rights and Remedies.

     To the extent that the terms of any of the Security Documents contain
conflicting obligations, the terms set forth in this Agreement shall be deemed
to be the controlling terms, provided that all rights and remedies of the Lender
under the Security Documents are cumulative and in addition to every other right
or remedy, and no right or remedy is intended to be exclusive of any other right
or remedy.

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<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

Debtor:                             Lender:

PREFERRED EQUITIES CORPORATION      TEXTRON FINANCIAL CORPORATION


By:                                 By:

     Title: President                    Title: Assistant Vice President

[CORPORATE SEAL]


BRIGANTINE PREFERRED PROPERTIES, INC.


By:

     Title: President

[CORPORATE SEAL]

STATE OF NEVADA  )
                 )  ss.
COUNTY OF CLARK  )

     At Las Vegas in said County and State on this _____ day of March,  2001,
personally appeared _________________, duly authorized officer of Preferred
Equities Corporation, and he/she acknowledged the foregoing instrument by
him/her signed and sealed to be his/her free act and deed and the free act and
deed of Textron Financial Corporation.

     Before me:
                              Notary Public in and for said State
                              My Commission expires:


STATE OF NEVADA  )
                 )  ss.
COUNTY OF CLARK  )

     At Las Vegas in said County and State on this _____ day of March,  2001,
personally appeared _________________, duly authorized officer of Brigantine
Preferred Properties, Inc., and he/she acknowledged the foregoing instrument by
him/her signed and sealed to be his/her free act and deed and the free act and
deed of Textron Financial Corporation.

     Before me:
                              Notary Public in and for said State

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<PAGE>

                              My Commission expires:


STATE OF CONNECTICUT  )
                      )  ss.
COUNTY OF HARTFORD    )

     At        in said County and State on this _______ day of April, 2001,
personally appeared , duly authorized officer of Textron Financial Corporation,
and he/she acknowledged the foregoing instrument by him/her signed and sealed to
be his/her free act and deed and the free act and deed of Textron Financial
Corporation.

     Before me:
                    Notary Public in and for said State
                    My Commission expires:

61
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                  SCHEDULE 1

Property Descriptions:

a.   Grand Flamingo Winnick

          An undivided 73/612 interest in and to Lot 51 in Block 3 of Flamingo
          Estates as shown on a map thereof on file in Book 5 of Plats, Page 22
          in the Clark County, Nevada Recorder's office, excepting from such
          interests in Lots 51all gas and oil rights that now exist or may be
          developed upon said property as reserved by Rose Rabin, in a Deed
          recorded on February 18, 1952 as Document 381100 in the Clark County
          Nevada Recorders Office and subsequently conveyed to Harry Cobb by a
          Deed recorded March 25, 1957 as Document 102052 in the Clark County,
          Nevada Recorders Office but including the west ten (10) feet of that
          certain pedestrian walkway abutting the easterly line of said Lot 51
          by that certain order of vacation recorded June 21, 1962 as document
          #297340 in the Official Records of Clark County Nevada

     Grand Flamingo Terraces

          An undivided 379/2550 interest in and to Lots 21 and 22, 23 and 24 in
          Block 2 of Flamingo Estates as shown on a map thereof on file in Book
          5 of Plats, Page 22 in the Clark County, Nevada Recorder's office,
          excepting from such interests in Lots 21, 22, 23 and 24 all gas and
          oil rights that now exist or may be developed upon said property as
          reserved by Rose Rabin, in a Deed recorded on February 18, 1952 as
          Document 381100 in the Clark County Nevada Recorders Office and
          subsequently conveyed to Harry Cobb by a Deed recorded March 25, 1957
          as Document 102052 in the Clark County, Nevada Recorders Office

     Grand Flamingo Towers

          An undivided 225/4743 interest in and to Lots 16, 17, 18, 19 and 20 in
          Block 2 of Flamingo Estates as shown on a map thereof on file in Book
          5 of Plats, Page 22 in the Clark County, Nevada Recorder's office,
          excepting from such interests in Lots 21, 22, 23 and 24 all gas and
          oil rights that now exist or may be developed upon said property as
          reserved by Rose Rabin, in a Deed recorded on February 18, 1952 as
          Document 381100 in the Clark County Nevada Recorders Office and
          subsequently conveyed to Harry Cobb by a Deed recorded March 25, 1957
          as Document 102052 in the Clark County, Nevada Recorders Office

     Grand Flamingo Villas

          An undivided 295/4794 interest in and to Lots 4 through 15 in Block 1
          of Flamingo Estates as shown on a map thereof on file in Book 5 of
          Plats, Page 22 in the Clark County, Nevada Recorder's office,
          excepting from such interests in Lots 4 through 15 all gas and oil
          rights that now exist or may be developed upon said property as
          reserved by Rose Rabin, in a Deed recorded on February 18, 1952 as
          Document 381100 in the Clark County Nevada Recorders Office and
          subsequently conveyed to Harry Cobb by a Deed recorded March 25, 1957
          as Document 102052 in the Clark County, Nevada Recorders Office

62
<PAGE>

b.   Reno Spa, Reno

          An undivided 1103/4845 interest in and to Lots 4 through 7 in Block 9
          of Lake's Addition to the City of Reno as shown on the map thereof on
          file in the Washoe County, Nevada Recorder's office dated September
          29, 1887, excepting from such interests in Lots 4 through 7 all gas,
          oil and mineral rights, if any, and water rights, the foregoing being
          subject to all restrictions, reservations and easements of record as
          recorded in the Official Records of Washoe County, Nevada in a Deed
          recorded March 30, 1990 as File #1389863.

c.  Calvada
          Lot 10, Block 18 of Calvada Valley Unit No. 1 recorded October 5, 1970
          as document number 20290, in the office of the County Recorder of Nye
          County, Nevada

          Lot 1, Block 104; Lot 6, Block 157 of Calvada Valley Unit 4B recorded
          July 5, 1975 as document number 33044, in the office of the County
          Recorder of Nye County, Nevada

          Lot 8, Block 5; Lot 19, Block 6 of Calvada Valley Unit 6 recorded
          February 5, 1973 as document number 36024, in the office of the County
          Recorder of Nye County, Nevada

          Lot 14, Block 29 of Calvada Valley Unit 7 recorded February 5, 1973 as
          document number 36023, in the office of the County Recorder of Nye
          County, Nevada

          Lot 104, Block 16, Lot 147, Block 16 of Calvada Valley Unit 8A
          recorded April 5, 1971 as document number 23255, in the office of the
          County Recorder of Nye County, Nevada

          Lots 8, 10, 14 and 16, Block 12 of Calvada Valley Unit 9A recorded
          June 5, 1973 as document number 36870, in the office of the County
          Recorder of Nye County, Nevada

          Lot 7, Block 36; Lot 31, Block 42; Lot 10, Block 50 of Calvada Valley
          Unit 11 recorded February 5, 1974 as document number 40749, in the
          office of the County Recorder of Nye County, Nevada

          Lots 126, 173 and 270, Block 16 Calvada Meadows Unit 2 recorded March
          4, 1980 as document number 18918, amended March 11, 1986 in document
          number 157274 and amended August 22, 1986 in document number 166510,
          in the office of the County Recorder of Nye County, Nevada

          Lot 21 and 22, Block 13; Lot 11, Block 15, Lot 11, Block 19 of Calvada
          Meadows Unit 4 recorded January 2, 1997 as document number 411499, in
          the

63
<PAGE>

          office of the County Recorder of Nye County, Nevada

          Lots 19 and 20, Block 50; Lot 8, Block 52; Lot 13, Block 54; Lot 16,
          Block 55; Lot 228, Block 57 of Calvada Valley North Unit 1 recorded
          February 5, 1975 as document number 46310, in the office of the County
          Recorder of Nye County, Nevada

          Lot 2, Block 71; Lot 22, Block 81; Lot 138, 141 and 157, Block 88; Lot
          13, Block 94 of Calvada Valley North Unit 2, recorded February 5, 1975
          as document 46311, in the office of the County Recorder of Nye County,
          Nevada

          Lot 330, Block 12; Lots 210, 246, 260, 275 and 291, Block 24; Lots 21
          and 24, Block 25; Lot 13, Block 27 of Calvada Valley North Unit 3,
          recorded February 5, 1975 as document 46312, in the office of the
          County Recorder of Nye County, Nevada

          Lot 1, Block 1; Lot 11, Block 5 of Clavada Valley North Unit 4,
          recorded March 23, 1995 as file number 369307, in the office of the
          County Recorder of Nye County, Nevada

          Brigantine Villas and Inn, New Jersey

          Brigantine Villas, a condominium, together with the fee interest in
          the common elements as set forth in the Master Deed dated August 4,
          1988 recorded August 5, 1988 in the office of the Atlantic County
          Clerk in Book 4750 at Page 45 also being known as part of Block 1402
          on the official tax map of the City of Brigantine

          Brigantine Inn Resort Club, a condominium, together with the fee
          interest in the common elements as set forth in the Master Deed dated
          May 2, 1985 recorded May 7, 1985 in the office of the Atlantic County
          Clerk in Book 4056 at Page 263 also being known as part of Block 1401
          on the official tax map of the City of Brigantine

d.   Indian Springs, Florida

          Lots 1 & 2, Block 6, Indian Rocks South Shore, according to the Plat
          thereof recorded in Plat Book 4, Page 20 of the General Records of
          Pinellas County, Florida, together with the non-exclusive rights as a
          member of the public to use that certain easement for public highway
          over Bay Place as set forth on the Plat of said Indian Rocks South
          Shore recorded in Plat Book 4, Page 20 of the Public Records of
          Pinellas County.  Said property is also known as  Units 101, 102A-102,
          103-103A, 104-112, inclusive, 114, 115A-115, 116-116A, 117, 201, 202A-
          202, 203-203A,204-212, inclusive, 214, 215A-215, 216-216A and 217
          Aloha Bay, a condominium, according to the Declaration of condominium
          thereof, recorded in Official Records  Book 9477 at Pages 1645 et seq
          of the Public Records of Pinellas County, Florida.

64
<PAGE>

e.   White Sands, Hawaii

          The estate created under a Ground Lease dated July 14, 1983 between
the Queen Emma Foundation and First Hawaiian Bank, as Trustee, being Document
#1182895 being noted on Transfer Certificate of Title #251,194 being Lot 3-A-1-B
as shown on Map 5 filed in the office of the Assistant Registrar of the Land
Court of the State of Hawaii with Land Court Application 634 of Guardian Trust
Company, Limited and Lot 26-A-5 as shown on Map 10 filed in the office of the
Assistant Registrar of the Land Court of the State of Hawaii with Land Court
Application 571 of Guardian Trust Company, Limited and Lot 26-A-5 and the estate
created under a Ground Lease dated January 8, 1958 between Waikiki Development
Co and South Pacific Hotels, Inc. filed in the office of the Assistant Registrar
of the Land Court of the State of Hawaii as Document #211800 which was assigned
to First Hawaiin Bank , Trustee by an Assignment dated May 15, 1979 as Document
#941188 being noted on Transfer Certificate of Title #210,979 being Lot 36 as
shown on Map 22 filed in the office of the Assistant Registrar of the Land Court
of the State of Hawaii with Land Court Application 324 of Bruce Cartwright,
deceased and being a portion of the land described in Transfer Certificate of
Title 210,979.

65
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   SCHEDULE 2

Property Related Contracts-NONE

66
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   SCHEDULE 3


Affiliates and Capital Structure

SEE MEGO FINANCIAL CORP. 10-K DATED AUGUST 31, 2000

67
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   SCHEDULE 6

Litigation

68
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   SCHEDULE 7

Title Exceptions-See Individual Commitments and Policies

69
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   SCHEDULE 9

Permitted Leases and Rentals-

70
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 10


Hazardous Substances

NONE

71
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 11


Use of Proceeds

To pay all prior Liens on Collateral
To repay $832,546.49 of the financial accommodation from Lender of August 12,
1998
To pay for up to $400,000 of the cost of renovations for the Ramada Vacations
Suites Reno Resort
To pay existing indebtedness due to vendors and for working capital

72
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 12


Licenses, Permits, Etc. Not Obtained

NONE

73
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 13


Deferred Compensation Plans and Arrangements-See Mego Financial Corp. 10 K

74
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 14


Payment Instructions

WIRING INSTRUCTIONS:

     BANK OF AMERICA, LAS VEGAS, NV
     ACCOUNT NAME:  PREFERRED EQUITIES CORPORATION
     ABA #122400724
     ACCOUNT #140000169

75
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 15


Address of Debtor for Books and Records

PREFERRED EQUITIES CORPORATION
4310 PARADISE ROAD
LAS VEGAS, NV. 89109

BRIGANTINE PREFERRED PROPERTIES, INC.
4310 PARADISE ROAD
LAS VEGAS, NV. 89109

76
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 16


Address of Debtor for Notices

PREFERRED EQUITIES CORPORATION
4310 PARADISE ROAD
LAS VEGAS, NV. 89109
ATTN: JON JOSEPH, SENIOR VICE PRESIDENT AND GENERAL COUNSEL

BRIGANTINE PREFERRED PROPERTIES, INC.
4310 PARADISE ROAD
LAS VEGAS, NV. 89109
ATTN: JON JOSEPH SENIOR VICE PRESIDENT AND GENERAL COUNSEL

WITH COPIES TO:

ROMIVEST
1125 N.E. 125th St.
North Miami 33161
ATTN: JEROME COHEN

HERBERT HIRSCH
64 HURDLE FENCE DRIVE
AVON, CT 06001

77
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                  SCHEDULE 17


Address of Lender for Notices

TEXTRON FINANCIAL CORPORATION
COMMERCE CENTER
333 EAST RIVER DRIVE, SUITE #305
HARTFORD, CT 06108
ATTN: JOHN D'ANNIBALE

78
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   EXHIBIT A
                           Deeds of Trust & Mortgages

79
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   EXHIBIT B
                             Form of Inventory Note

80
<PAGE>

                            INVENTORY LOAN AGREEMENT
                                   EXHIBIT C
                                 Form of Proxy

81
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT D
                       Form of Request for Lien Release

82
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT E
                         Form of Partial Release from
                       Inventory Deed of Trust/Mortgage

83
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT I
                      Form of Opinion of Jon Joseph, Esq.

84
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT J
                      Form of Opinion of Jon Joseph, Esq.

85
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT K
                    Form of Officers Certificates of Debtor

86
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT L
            Form of Steamboat Suites, Inc. Secretary's Certificate

87
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT M
 Form of Preferred Equities and Brigantine Preferred Secretary's Certificate.

88
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT N
               Form of Mego Financials Secretary's Certificate.

89
<PAGE>

                           INVENTORY LOAN AGREEMENT
                                   EXHIBIT O
                          Form of Guaranty Agreement

90