<PAGE>   1
                                                                  EXHIBIT 10.177

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

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

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

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

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

<PAGE>   2

        D. Borrower has advised FINOVA that Borrower will be paying its debts as
they mature in the ordinary course with the proceeds of the Additional Advances.

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

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

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

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

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

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

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

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

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


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<PAGE>   3

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

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

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

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

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

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

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

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

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

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

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

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

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


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<PAGE>   4

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

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

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

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

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

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

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

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

        "2.1 The Loan. Subject to the terms and conditions of this Agreement,
Lender hereby agrees to make a Loan to Borrower in the amounts and for the
purposes hereinafter described. The Loan shall be constituted of the Receivables
Loan, the Mortgage Loan Facility, a One Million Seven Thousand One Hundred
Dollars ($1,007,100) nonrevolving mortgage loan made with respect to Aloha Bay
(the "Aloha Bay Loan"), a Six Million Five Hundred Eighty Three Thousand Four
Hundred Six and 43/100 Dollar ($6,583,406.43) nonrevolving mortgage loan
previously made with respect to the Headquarters Building and the FCFC Property
(the "Office Loan"), a One Million One Hundred Seventy Three Thousand Seven
Hundred Fifty Dollar ($1,173,750) nonrevolving mortgage loan previously made
with respect to the Biloxi Property and the Additional Advances."


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<PAGE>   5

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

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

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

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

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

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

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


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<PAGE>   6

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

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

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

        2. ADDITIONAL ADVANCES.

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

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


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<PAGE>   7

        3. ASSIGNMENT OF SALES PROCEEDS.

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

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

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

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


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<PAGE>   8

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

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

        4.1 The General Conditions are as follows:

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

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

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

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

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

        (f) FINOVA has received:

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

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


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<PAGE>   9

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

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

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

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

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

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

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

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

        4.2 The Conditions Precedent are as follows:

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

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


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<PAGE>   10

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

        4.3 The Conditions Subsequent are as follows:

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

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


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<PAGE>   11

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

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

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

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

Where:

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

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


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<PAGE>   12

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

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

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


                                       12
<PAGE>   13

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

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

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

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

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


                                       13
<PAGE>   14

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

        11. REPRESENTATIONS, WARRANTIES AND COVENANTS.

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

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

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

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

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

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


                                       14
<PAGE>   15

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

        13. FORBEARANCE BY FINOVA.

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

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

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

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

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


                                       15
<PAGE>   16

petition in bankruptcy or an involuntary petition in bankruptcy is filed naming
either Borrower or Guarantor as debtors; or

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

        14. PROTECTIONS AFFORDED TO FINOVA.

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

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


                                       16
<PAGE>   17

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

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

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


                                       17
<PAGE>   18

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

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

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

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

        16. GENERAL.

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

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

        16.3 Except as may be expressly provided herein, Borrower's obligations
under the Documents shall remain in full force and effect and shall not be
waived, modified,


                                       18
<PAGE>   19

superseded or otherwise affected by this Amendment. This Amendment is not a
novation, nor is it be construed as a release, waiver, extension of forbearance
or modification of any of the terms, conditions, representations, warranties,
covenants, rights or remedies set forth in any of the Documents, except as
expressly stated herein.

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

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

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

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


                                       19
<PAGE>   20

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

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

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

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

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


                                       20
<PAGE>   21

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

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

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

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


                                       21
<PAGE>   22

FINOVA:

FINOVA CAPITAL CORPORATION,
a Delaware corporation


By:
   --------------------------------

   Its:
       ----------------------------

BORROWER:

PREFERRED EQUITIES CORPORATION,
a Nevada corporation


By:
   --------------------------------

   Its:
       ----------------------------

Signed in the presence of:

-----------------------------------

GUARANTOR:

MEGO FINANCIAL CORP.,
a New York corporation


By:
   --------------------------------

   Its:
       ----------------------------

Signed in the presence of:

-----------------------------------


                                       22
<PAGE>   23

STATE OF NEVADA               )
                              ) ss.
County of ___________________ )

        The foregoing instrument was acknowledged before me this ____ day of
December ___, 1998 by ______________ as _______________ of PREFERRED EQUITIES
CORPORATION, a Nevada corporation, on behalf of the corporation.


                                             -----------------------------------
                                                         Notary Public

My Commission Expires:

-----------------------------------
STATE OF NEVADA               )
                              ) ss.
County of ____________________)

        The foregoing instrument was acknowledged before me this ____ day of
December ___, 1998 by ______________ as _______________ of MEGO FINANCIAL CORP.,
a New York corporation, on behalf of the corporation.


                                             -----------------------------------
                                                         Notary Public

My Commission Expires:

-----------------------------------

                                       23
<PAGE>   24

                                LIST OF EXHIBITS

       Exhibit 2.2                Request for Advance and Certification
       Exhibit 4.2(a)             Form of Warrant Agreement - Tranche A
       Exhibit 4.3(e)             Form of Warrant Agreement - Tranche B
       Exhibit 11.1               Litigation Schedule


                                       24
<PAGE>   25

                                   EXHIBIT 2.2

                                     FORM OF
                      REQUEST FOR ADVANCE AND CERTIFICATION

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

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

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

                                            "BORROWER"

DATED:  _____________, 199__.               PREFERRED EQUITIES CORPORATION,
                                            a Nevada corporation,



                                            By:
                                               --------------------------------

                                               Its:
                                                   ----------------------------

                                       25
<PAGE>   26
STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE
OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE
PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO ANY
DOCUMENT OR THE SUBJECT MATTER THEREOF, OR, IF FINOVA SHALL INITIATE SUCH
ACTION, IN THE COURT IN WHICH SUCH ACTION IS INITIATED PROVIDED THAT SUCH COURT
HAS JURISDICTION, AND THE CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT
FINOVA'S ELECTION; AND (B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR
PROCEEDING IS BROUGHT IN ANY INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT,
ACTION OR PROCEEDING IS IMPROPER. EACH OF BORROWER, GUARANTOR AND FINOVA HEREBY
WAIVE THE RIGHT TO COLLATERALLY ATTACH ANY JUDGMENT OR ACTION IN ANY OTHER
FORUM.

FINOVA:

FINOVA CAPITAL CORPORATION,
a Delaware corporation

By: /s/ [SIGNATURE ILLEGIBLE]
   ------------------------------------

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

BORROWER:

PREFERRED EQUITIES CORPORATION,
a Nevada corporation

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

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

Signed in the presence of:

/s/ [SIGNATURE ILLEGIBLE]
---------------------------------------


                                       26
<PAGE>   27
GUARANTOR:

MEGO FINANCIAL CORP.,
a New York corporation


    /s/ JON JOSEPH
    -------------------------------

By: JON A. JOSEPH
    -------------------------------

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

Signed in the presence of:

/s/ [signature illegible]
-----------------------------------


                                       27
<PAGE>   28


STATE OF ARIZONA          )
                          ) ss.
County of Maricopa        )


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


                                          /s/ Sandra L. Irons
                                         --------------------------------
                                              Notary Public

My Commission Expires:
      1-29-2002                            NOTARY SEAL




STATE OF ARIZONA          )
                          ) ss.
County of Maricopa        )


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


                                          /s/ Sandra L. Irons
                                         --------------------------------
                                              Notary Public

My Commission Expires:
      1-29-2002                            NOTARY SEAL