<PAGE>

                                                              Exhibit 10.2
                                                              Rediscount Finance



                           FIRST AMENDED AND RESTATED
                                   SCHEDULE TO
                           THIRD AMENDED AND RESTATED
                           LOAN AND SECURITY AGREEMENT

Borrower:            THE THAXTON GROUP, INC.
                     THAXTON OPERATING COMPANY
                     THAXTON INSURANCE GROUP, INC.
                     TICO CREDIT COMPANY, INC.
                     EAGLE PREMIUM FINANCE CO., INC.
                     THAXTON COMMERCIAL LENDING, INC.
                     PARAGON, INC.
                     TICO PREMIUM FINANCE COMPANY, INC.
                     TICO REINSURANCE, LTD.
                     TICO CREDIT COMPANY OF TENNESSEE, INC.
                     TICO CREDIT COMPANY OF NORTH CAROLINA, INC.
                     TICO CREDIT COMPANY OF ALABAMA, INC.
                     TICO CREDIT COMPANY OF MISSISSIPPI, INC.
                     TICO CREDIT COMPANY OF GEORGIA, INC.
                     TICO CREDIT COMPANY (DE)
                     TICO CREDIT COMPANY (MS)
                     TICO CREDIT COMPANY (TN)
                     THAXTON INVESTMENT CORPORATION
                     THE MODERN FINANCE COMPANY
                     SOUTHERN MANAGEMENT CORPORATION
                     MODERN FINANCIAL SERVICES, INC.
                     SOUTHERN FINANCE OF SOUTH CAROLINA, INC.
                     COVINGTON CREDIT OF TEXAS, INC.
                     COVINGTON CREDIT OF GEORGIA, INC.
                     SOUTHERN FINANCE OF TENNESSEE, INC.
                     FITCH  NATIONAL REINSURANCE COMPANY, LTD.
                     SOCO REINSURANCE, LTD.
                     QUICK CREDIT CORPORATION
                     COVINGTON CREDIT, INC. (OKLAHOMA)
                     COVINGTON CREDIT OF LOUISIANA, INC.
                     SOUTHERN FINANCIAL MANAGEMENT, INC.

Address:             1524 PAGELAND HIGHWAY
                     LANCASTER, SOUTH CAROLINA 29721





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<PAGE>


Date:                      December 31, 2001

         This First Amended and Restated Schedule to Third Amended and Restated
Loan and Security Agreement ("Schedule") is executed in conjunction with a
certain Third Amended and Restated Loan and Security Agreement ("Agreement"),
dated April 4, 2001, by and between FINOVA Capital Corporation, as Lender, and
the above Borrowers. All references to Section numbers herein refer to Sections
in the Agreement. The terms and provisions of this First Amended Schedule shall
supersede all terms and provisions contained in all prior schedules.

===============================================================================

1.A   BORROWERS

          The "Borrower(s)" herein shall be defined as follows:

           The Thaxton Group, Inc.                     "TTG" or "Lead Borrower"
          Thaxton Operating Company                    "TOC"
          Thaxton Insurance Group, Inc.                "TIG"
          TICO Credit Company, Inc.                    "TICO"
          Eagle Premium Finance Co., Inc.              "EPF"
          Thaxton Commercial Lending, Inc.             "TCL"
          Paragon, Inc.                                "PI"
          TICO Premium Finance Company, Inc.           "TICO Premium"
          TICO Reinsurance, Ltd.                       "TICOR"
          TICO Credit Company of Tennessee, Inc.       "TICO - Tennessee"
          TICO Credit Company of North Carolina, Inc.  "TICO - North Carolina"
          TICO Credit Company of Alabama, Inc.         "TICO - Alabama"
          TICO Credit Company of Mississippi, Inc.     "TICO - Mississippi"
          TICO Credit Company of Georgia, Inc.         "TICO - Georgia"
          TICO Credit Company (DE)                     "TICO - DE"
          TICO Credit Company (MS)                     "TICO (MS)"
          TICO Credit Company (TN)                     "TICO (TN)"
          THAXTON INVESTMENT CORPORATION               "Thaxton Investment"
          Modern Finance Company d/b/a
                        TICO Credit Company (Ohio)     "TICO-Ohio"
          Modern Financial Services, Inc. d/b/a
                        TICO Financial Services (Ohio) "TICO Financial-Ohio"
          Southern Finance of South Carolina, Inc.     "Southern Finance-SC"
          Southern Management Corporation              "Southern Management"
          Covington Credit of Texas, Inc.              "Covington-Texas"
          Covington Credit of Georgia, Inc.            "Covington-Georgia"
          Southern Finance of Tennessee, Inc.          "Southern Finance-
                                                        Tennessee"
          Fitch National Reinsurance Company, Ltd.     "Fitch"
          SoCo Reinsurance, Ltd.                       "SoCo"
          Quick Credit Corporation                     "Quick Credit"
          Covington Credit, Inc. (Oklahoma)            "Covington Oklahoma"
          Covington Credit of Louisiana, Inc.          "Covington - Louisiana"
          Southern Financial Management, Inc.          "Southern Financial"









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Borrowers warrant and represent that each Borrower is organized under the laws
of the jurisdiction noted beside its signature to this Schedule; that attached
hereto as Exhibit 1.A is a complete and correct organizational chart showing for
each Borrower the ownership of all outstanding and committed equity interests
therein; and that no Borrower directly or indirectly owns an equity interest in
any other business entity that is not itself a Borrower and included in Exhibit
1.A hereto.

===============================================================================

1.16.A.  MAXIMUM AMOUNT OF AN ELIGIBLE RECEIVABLE (SECTION 1.16).

                  The term "Maximum Amount of an Eligible Receivable" shall mean
                  for each Receivable type as set forth below:

                  Consumer Loan Receivable other than a Real Estate Secured
                  Receivable - the sum of Thirty Thousand Dollars ($30,000.00)
                  remaining due thereon at any date of determination, including
                  all unearned finance charges and Dealer Discounts pursuant to
                  such Receivable.

                  Real Estate Secured Receivable - the sum of One Hundred
                  Thousand Dollars ($100,000.00)remaining due thereon at any
                  date of determination, including all unearned finance charges
                  and Dealer Discounts pursuant to such Receivable.

===============================================================================

1.16.B.  MAXIMUM TERM OF AN ELIGIBLE RECEIVABLE (SECTION 1.16).

                  The "Maximum Term of an Eligible Receivable" shall be for each
                  Receivable type as set forth below:

                  Consumer Loan Receivable other than a Real Estate Secured
                  Receivable - a period of sixty (60) months remaining until the
                  contractual final due date

                  Real Estate Secured Receivable - a period of One Hundred and
                                                   Eighty (180) months remaining
                                                   until the contractual final
                                                   due date

===============================================================================

1.16.C.  AGING PROCEDURES AND ELIGIBILITY TEST (SECTION 1.16).

AGING PROCEDURES FOR A CONTRACTUAL AGING FOR THE FOLLOWING RECEIVABLE TYPES:
---------------------------------------------------------------------------

CONSUMER LOAN RECEIVABLES (OTHER THAN VEHICLE RECEIVABLES AND INSURANCE PREMIUM
RECEIVABLES)

1.       No payment missed or due                 =  Current.

2.       1 to 30 days past due                    = "30 day Account".

3.       31 to 60 days past due                   = "60 day Account".

4.       61 to 90 days past due                   = "90 day Account".

5.       91 or more days past due                 = "90 + day Account"

INSURANCE PREMIUM RECEIVABLES

1.       No payment missed or due                 = Current.

2.       1 to 30 days past due                    = "30 day NC Account".
         (Financing contract not canceled)






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3.       31 or more days past due                 = "30+ day NC Account".
         (Financing contract not canceled)

4.       1 to 30 days past due                    = "30 day Canceled Account".
         (Financing contract canceled)

5.       31 to 60 days past due                   = "60 day Canceled Account".
         (Finance contract canceled)

6.       61 or more days past due                 = "60 + day Canceled Account".
         (Finance contract canceled)

         For the purposes of the Loan Documents the cancellation of an insurance
receivable shall be immediately effective upon the effective cancellation date
of the associated insurance policy.

VEHICLE RECEIVABLES
-------------------

1.       No payment missed or due                 = Current.

2.       1 to 30 days past due                    = "30 day Account".

3.       31 to 60 days past due                   = "60 day Account".

4.       61 or more days past due                 = "60 + day Account".


ELIGIBILITY TEST:
----------------

The term "Eligibility Test" shall mean the test to determine the eligibility of
a Receivable for the purposes of Section 1.16 (xii) and 1.16 (xiii) hereof, that
test, being as follows for each Receivable type:

    Direct Loan Receivables

           (1)      No payment due on said Receivable  remains unpaid more than
                    ninety (90) days from the specific date on which such
                    payment was due pursuant to the terms of said Receivable;

           (2)      If the initial advance of said Receivable was greater than
                    One Thousand Dollars ($1,000.00), the payment of said
                    Receivable shall be secured by collateral;

           (3)      If said Receivable is purchased from a third party wherein
                    the Borrower is or will become obligated to such third party
                    in conjunction with the purchase of such Receivable through
                    a "reserve" or other liability arrangement, all of such
                    third party's rights in and to the "reserve" or other
                    liability shall be subordinated to Lender in all respects,
                    except as set forth below, in a form and substance
                    satisfactory to Lender. This provision shall not restrict
                    Borrower from making a payment to a third party for a
                    reserve or other liability arrangement, or a part thereof,
                    provided such payment is then contractually due to such
                    third party, pursuant to a written agreement executed at or
                    prior to the time the respective Receivable was purchased by
                    Borrower, and an Event of Default does not then exist; and

           (4)      With respect to Consumer Loan Receivables secured by real
                    estate, on the date of origination of such Receivable, the
                    percentage determined by dividing the outstanding principal
                    balance of such Receivable by the fair market value of the
                    real estate collateral securing such Receivable shall not
                    exceed ninety percent (90%) ("Maximum LTV").





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    Insurance Premium Receivables

           (1)      No payment due on said Receivable remains unpaid more than
                    (i) thirty (30) days for that Insurance Premium Receivable
                    that the contractual obligation evidencing such Receivable
                    has not been canceled according to the terms of such
                    Receivable and (ii) sixty (60) days for Insurance Premium
                    Receivable that the contractual obligation evidencing such
                    Receivable has been canceled according to the terms of such
                    Receivable, from the specific date on which such payment was
                    due pursuant to the terms of said Receivable.

           (2)      The insurance company issuing the insurance policy of which
                    said Receivable evidences the financing of the payment of
                    the premiums with respect to such insurance policy meets one
                    of the following criteria:

                    (i)   rated "C+" or better pursuant to the current edition
                          of "Best's Key Rating Guide - Property and Casualty"
                          as published by the A.M. Best Company ("A.M. Best");
                          or

                    (ii)  a member of a state reinsurance facility or shared
                          pool.

           (3)      No more than twenty percent (20%) of the aggregate
                    outstanding balance of all Category Two Receivables can
                    evidence the financing of the payment of premiums for
                    insurance policies for any one insurance company that is not
                    one of the following:

                    (i)   rated "A-" or better by A.M. Best; or

                    (ii)  a member of a state insurance facility or shared pool.

    Vehicle Receivables

           (1)      No payment due on said Receivable remains unpaid more than
                    sixty (60) days from the specific date on which such payment
                    was due pursuant to the terms of said Receivable.

           (2)      If said Receivable is purchased from a third party wherein
                    the Borrower is or will become obligated to such third party
                    in conjunction with the purchase of such Receivable through
                    a "reserve" or other liability arrangement, all of such
                    third party's rights in and to the "reserve" or other
                    liability shall be subordinated to Lender in all respects,
                    except as set forth below, in a form and substance
                    satisfactory to Lender. This provision shall not restrict
                    Borrower from making a payment or payments to a third party
                    for a reserve or other liability arrangement, or a part
                    thereof, provided such payment is then contractually due to
                    such third party, pursuant to a written agreement executed
                    at or prior to the time the respective Receivable was
                    purchased by Borrower, and an Event of Default does not then
                    exist.


===============================================================================

1.19.    GUARANTOR (whether one or more) (SECTION 1.19).

                  James D. Thaxton (Validity and Support Agreement) with
                  respect to the outstanding balance of the Indebtedness with
                  respect to the Revolving Loan

                  James D. Thaxton (Guaranty Agreement) with respect the Term
                  Loan and the repurchase agreement with respect to the
                  Preferred Stock.

===============================================================================

1.38.    SUBORDINATED DEBT (SECTION 1.38).

                  The following sentences are hereby added to the Agreement at
                  the end of Section 1.38.





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<PAGE>


                  "The Securities now or hereafter issued by The Thaxton Group,
                  Inc. pursuant to that Indenture dated as of February 17, 1998
                  with the Bank of New York, and any extension thereof, have
                  been approved by Lender as Subordinated Debt, but neither said
                  Indenture nor the form of the securities issued pursuant
                  thereto may be amended without Lender's prior written
                  approval, except for amendments that do not affect the
                  subordination provisions thereof and which are either (i)
                  incidental to extensions or renewals or (ii) required by
                  applicable law or by governmental regulators."

                  "The obligation evidenced by the Senior Floating Rate
                  Debenture made by The Thaxton Group, Inc. dated November 15,
                  1999 to Voyager Life Insurance Company shall be subjected to
                  subordination provisions acceptable to Lender on or before
                  January 15, 2002."

===============================================================================

2.1.A.   AMOUNT OF REVOLVING CREDIT LINE, AMOUNT OF TERM LOAN AND AMOUNT OF THE
         TRANCHE `B' CREDIT FACILITY (SECTION 2.1.A.)

                  The "Amount of the Revolving Credit Line" is One Hundred Sixty
                  Five Million Dollars ($165,000,000.00) as of the execution of
                  this Schedule, and shall in the future reduce as follows:

                                    3/31/02          $152,000,000
                                    6/30/02          $149,000,000
                                    9/30/02          $146,000,000
                                    12/31/02         $143,000,000
                                    3/31/03          $140,000,000
                                    6/30/03          $135,500,000
                                    9/30/03          $131,000,000
                                    12/31/03         $126,500,000
                                    3/31/04          $122,000,000
                                    6/30/04          $117,500,000
                                    9/30/04          $113,000,000
                                    12/31/04         $108,500,000
                                    3/31/05          $104,000,000
                                    6/30/05          $  99,500,000
                                    9/30/05          $  95,000,000
                                    12/31/05         $  90,500,000
                                    3/31/06          $  86,000,000
                                    6/30/06          $  81,500,000

                  The "Maximum Amount of the Term Facility" is Twenty Three
                  Million Eight Hundred Fifty Thousand Dollars ($23,850,000.00).

                  The "Amount of the Tranche `B' Credit Facility" is Eight
                  Million Dollars ($8,000,000.00).

===============================================================================

2.1.B.   AVAILABILITY ON ELIGIBLE RECEIVABLES (SECTION 2.1.A.):

                  The "Availability on Revolving Loan Eligible Receivables"
                  shall be the sum of the following:

                    (i)      an amount equal to the result of:

                             (a)     if the date of determination is on or prior
                                     to March 31, 2004, eighty-five percent
                                     (85%) of the aggregate unmatured and unpaid
                                     amount due to Borrower from the Account
                                     Debtor named thereon, excluding all
                                     unearned finance charges, and Dealer
                                     Discounts pursuant to the Consumer Loan
                                     Receivables and the Insurance Premium
                                     Receivables; or





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<PAGE>


                             (b)     if the date of determination is after March
                                     31, 2004, the Availability on Revolving
                                     Loan Eligible Receivables shall reduce from
                                     eighty-five percent (85%) by one-half
                                     percentage point (.50%) each fiscal quarter
                                     beginning with the quarter beginning April
                                     1, 2004 and continuing on the first day of
                                     each calendar quarter thereafter;

                             Less
                             ----
                    (b)      The outstanding balance of the Tranche "B" Credit
                             Facility, on the date of determination.


           Notwithstanding any provision contained in the Loan Documents to the
           contrary,

                  If on any date of determination, upon the occurrence of any of
                  the following events, Lender, in its sole and absolute
                  discretion, may modify the Availability on Revolving Loan
                  Eligible Receivables advance percentage:

                            (A)      the sum of all liabilities and obligations
                                     of all Borrowers plus the outstanding
                                     balance of the Tranche "B" Facility, on
                                     any date of determination, is greater than
                                     the aggregate outstanding balance of all
                                     Eligible Receivables, including all
                                     unearned finance charges and all other
                                     unearned fees and charges, plus all other
                                     tangible assets of the Borrowers, on the
                                     same date of determination, then in that
                                     event, Lender, in its sole and absolute
                                     discretion, may modify the Availability on
                                     any of the Eligible Receivables;

                            (B)      Delinquency Percentage is less than ninety
                                     percent (90%) on any date of determination;
                                     or

                            (C)     The Collateral Recovery Rate is less than
                                    ninety percent (90%) for the twelve (12)
                                    calendar months immediately preceding the
                                    date of determination.

===============================================================================

2.2.     STATED INTEREST RATE (SECTION 2.2) AND STATED DIVIDEND RATE (SECTION 2.
         2)

         REVOLVING LOAN CREDIT FACILITY STATED INTEREST RATE
         ---------------------------------------------------
                  A.       If the date of  determination  is on or prior to July
                           31, 2004,  the Revolving Loan Credit  Facility
                           Stated Interest Rate shall be lesser of:

                           (i)      the Governing Rate, plus:

                                    (a.)    One percent (1.0%) per annum; or

                           (ii)     the Maximum Rate.

                  B.       If the date of determination is on or after August 1,
                           2004, the Stated Interest Rate shall be lesser of:

                                    (i)     the Governing Rate, plus

                                            (a)      three percent (3.00%) per
                                                     annum, on the average
                                                     outstanding balance of the
                                                     Indebtedness, for the month
                                                     of determination, that is
                                                     equal to or less than One
                                                     Hundred Million Dollars
                                                     ($100,000,000.00); and






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<PAGE>


                                            (b)      six percent (6.00%) per
                                                     annum, on the average
                                                     outstanding balance of the
                                                     Indebtedness, for the month
                                                     of determination, that is
                                                     greater than One Hundred
                                                     Million Dollars
                                                     ($100,000,000.00).

                                    or

                                    (ii)    the Maximum Rate.

         TERM LOAN CREDIT FACILITY STATED INTEREST RATE

                  The "Term Loan Credit Facility Stated Interest Rate" shall be
         lesser of (i) the Governing Rate plus Two percent (2.00%) per annum; or
         (ii) the Maximum Rate.

===============================================================================

2.3.     MATURITY DATE (SECTION 2.3.D).

                  The primary term of this Agreement shall expire on July 31,
                  2006 (the "Maturity Date"), and all Indebtedness not
                  previously due shall then become finally due and payable.
                  Notwithstanding the foregoing, the Borrower's obligation
                  pursuant to this Agreement shall remain in full force and
                  effect until the Indebtedness due and owing to Lender has been
                  paid in full.

===============================================================================

2.11.    Tranche B Facility.

                  Concurrently with the execution of this Schedule, Borrower
                  shall deliver to Lender a First Amendment to Stock Purchase
                  Agreement confirming that the obligation of James Thaxton to
                  purchase the Preferred Stock includes the obligation to cover
                  any amounts of dividends or other amounts with respect thereto
                  that may be demanded of Lender by any creditor, trustee,
                  debtor in possession or other party claiming under any
                  creditor's rights law.

================================================================================

2.13.    ADVANCES TO LEAD BORROWER.

                  The following is hereby added as a second paragraph to Section
2.13 of the Agreement:

                           "Borrowers further warrant, represent and agree as
                            follows:

                                            A. Joint and Several Liability.
                                               ---------------------------
                                    Borrowers are interdependent for their
                                    operational and financial needs, and they
                                    and Lender intend that each Borrower be
                                    jointly and severally liable for each
                                    monetary obligation, warranty and covenant
                                    obligation arising under this Agreement. The
                                    delivery of funds to any Borrower under this
                                    Agreement shall constitute valuable
                                    consideration and reasonably equivalent
                                    value to all Borrowers for the purpose of
                                    binding them and their assets on a joint and
                                    several basis for the Indebtedness
                                    hereunder. Lender may enforce this Agreement
                                    against any Borrower without first making
                                    demand upon or instituting collection
                                    proceedings against any other Borrower.

                                            B.       Unconditional  Obligation.
                                                     -------------------------
                                    The  unconditional  liability of each
                                    Borrower for the entire Indebtedness shall
                                    not be impaired by any event whatsoever,
                                    including,  but not limited to, the merger,
                                    consolidation,  dissolution,  cessation of
                                    business or liquidation of any Borrower; the
                                    financial  decline or bankruptcy  of any
                                    Borrower;  the failure of any other party to
                                    guarantee the Indebtedness or to provide
                                    collateral  therefor;  Lender's compromise
                                    or settlement with or without release of
                                    any Borrower;  Lender's release of any
                                    collateral for the Indebtedness,  with or
                                    without notice to Borrowers;  Lender's
                                    failure to file suit against any Borrower;
                                    Lender's failure to give any Borrower
                                    notice of default;  the  unenforceability
                                    of the Indebtedness against any Borrower
                                    due to bankruptcy  discharge,  counterclaim
                                    or for any other  reason;  Lender's
                                    acceleration of the Indebtedness at any
                                    time; the extension,





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<PAGE>


                                    modification or renewal of the Indebtedness;
                                    Lender's failure to undertake or exercise
                                    diligence in collection efforts against any
                                    party or property; the termination of any
                                    relationship of any Borrower with any other
                                    Borrower, including, but not limited to, any
                                    relationship of commerce or ownership; any
                                    Borrower's change of name or use of any name
                                    other than the name used to identify such
                                    Borrower in this Agreement; or any
                                    Borrower's use of the credit extended for
                                    any purpose whatsoever.

                                            C. Deferral of Contribution and
                                               ----------------------------
                                    Subrogation.
                                    -----------
                                    Borrowers' respective rights of contribution
                                    and any other such rights among themselves
                                    are not impaired by this Agreement, except
                                    that each Borrower agrees not to seek
                                    payment directly or indirectly from another
                                    Borrower through a claim of indemnity,
                                    contribution, subrogation or otherwise with
                                    respect to the Indebtedness, until the
                                    Indebtedness has been indefeasibly paid in
                                    full.

                                             D. Solvency.  Borrowers are not
                                                ---------
                                     insolvent and are not rendered insolvent
                                     under any applicable definition under
                                     corporate law or laws applicable to
                                     creditors' rights by their duties
                                     respecting the Indebtedness. Borrowers
                                     agree that it is appropriate to include in
                                     the determination of their solvency under
                                     these laws the value of their rights of
                                     contribution, exoneration, indemnity,
                                     subrogation and other related rights of
                                     recourse respecting their joint and several
                                     liability for the Indebtedness and the
                                     inter-company loans arising under this
                                     Section 2.13, adequate provisions for which
                                     rights of contribution and other rights
                                     exist at law or by independent document(s)
                                     to the satisfaction of the respective
                                     Borrowers. Submitted to Lender concurrently
                                     with the delivery of this Schedule is a
                                     Solvency Certificate further establishing
                                     the solvency of all Borrowers as of the
                                     date of this Schedule.

                                             E. Savings  Provision.  Should
                                                ------------------
                                    the  liability  of any  Borrower  hereunder
                                    for  the entire  amount of the  Indebtedness
                                    be subject to avoidance  or  limitation,
                                    notwithstanding  the contrary  agreement and
                                    the express intention of the parties hereto,
                                    under any state or federal fraudulent
                                    conveyance law or other similar law that may
                                    be determined to be  applicable,  then the
                                    liability of such Borrower for the
                                    Indebtedness shall be limited to the maximum
                                    amount for which the Borrower may be liable
                                    without legal impairment."

===============================================================================

2.15.    FACILITY FEE (SECTION 2.15).

                  The amount of "Facility Fee" shall be One Million Dollars
                  ($1,000,000.00) at the earlier of maturity or termination of
                  the credit facility. No Facility Fee shall be due if the
                  outstanding balance of Tranche "B" is paid in full on or
                  before December 31, 2003.

                  Borrower hereby agrees to pay to Lender a closing fee in the
                  amount of Fifteen Thousand Dollars ($15,000.00) which shall be
                  due and payable upon the execution of this First Amended
                  Schedule.

===============================================================================

3.1.     COLLATERAL DESCRIPTION (SECTION 3.1).

                  Section 3.1.E in the Agreement is hereby deleted and the
following is substituted in lieu thereof:

                                             "E. All monies and all "deposit
                                     accounts" and "investment property" (as
                                     such terms are defined in Revised Article 9
                                     of the Uniform Commercial Code as adopted
                                     in Arizona effective July 1, 2001) now or
                                     hereafter owned by Borrower;"

===============================================================================

3.2.     BUSINESS LOCATIONS OF BORROWER (SECTIONS 3.2, 3.6 and 5.1.N.).

                  All locations as set forth on a list of locations attached
hereto.






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<PAGE>
===============================================================================

3.2.A.   FINANCING STATEMENTS AND FURTHER ASSURANCES (SECTION 3.2).

                  The following sentence is hereby added to the Agreement as a
                  third paragraph to Section 3.2.

                           "Borrower agrees that Lender is authorized to file
                           financing statements as permitted by Revised Article
                           9 of the Uniform Commercial Code as adopted in
                           Arizona effective July 1, 2001."

===============================================================================

3.6.     LOCATION OF COLLATERAL (SECTION 3.6).

                  The following sentence is hereby added to the Agreement as a
                  final paragraph to Section 3.6.

                           "Without limiting any other provision of this
                           Agreement, Borrower agrees to deliver to Lender, as
                           received by Borrower, all original promissory notes
                           that are secured by real estate (i) if the real
                           estate is located in the State of Mississippi, or
                           (ii) if the promissory note is held by any Borrower
                           that is domiciled in Mississippi, in each case as
                           long as Lender deems this delivery appropriate for
                           the purpose of perfecting its security interest
                           therein."

===============================================================================

3.7.     RECORDS AND INSPECTIONS (SECTION 3.7).

                  The following language is hereby added as a final sentence of
                  Section 3.7:

                  "Borrower shall reimburse to Lender the reasonable costs of
                  collateral audits (including auditor time and travel expenses)
                  that Lender may conduct from time to time, but only to the
                  extent that (i) audits exceed the scope and effort of the
                  collateral audits customarily performed by Lender respecting
                  the Loan prior to January 1, 2002 (but in no event absent an
                  Event of Default will such reimbursable audit expenses exceed
                  $50,000 per year) or (ii) audits are performed after the
                  occurrence of (and during the continuation of) an Event of
                  Default."

===============================================================================

5.1.     BORROWER'S TRADENAMES (whether one or more)(SECTION 5.1.B.)

                  TICO Credit Company
                  Eagle Premium Finance Company
                  TICO Premium Finance Company
                  Paragon Lending
                  Thaxton Insurance

                  And as additionally set forth on Exhibit "A".

===============================================================================

6.1.E.   LINES OF BUSINESS.

                  Section 6.1.E is hereby amended by adding the following
                  language as a final sentence thereof:

                           "Absent Lender's prior written consent, Borrowers
                           will engage in no additional lines of business and
                           will not increase beyond two percent (2%) of their
                           consolidated gross income as of their future
                           quarterly financial statements, their participation
                           in any present line of business which contributed
                           less than one percent (1%) of their consolidated
                           gross income as of their financial statements dated
                           as of July 31, 2001. For the purpose of this
                           provision, the mere sale of an additional product





                                       10

<PAGE>


                           that is reasonably related to an existing line of
                           business shall not be regarded as a separate line of
                           business as long as the sale of the product does not
                           introduce novel liability or operational
                           requirements. For example, the mere sale of casualty
                           insurance for an agent's fee would be regarded as a
                           different line of business from the underwriting of
                           casualty insurance, but the addition of new
                           credit-related insurance products to Borrower's
                           product line to be sold as agent would be regarded as
                           an expansion of product lines within a line of
                           business and not as a separate line of business.
                           Without limiting the foregoing, Borrowers will not
                           expand the scope of their insurance underwriting
                           activities beyond its present product offerings
                           without Lender's prior written consent."

================================================================================

6.1.H.   ADDITIONAL AFFIRMATIVE COVENANT (SECTION 6.1.H).

                  Section 6.1.H is hereby added to the Agreement in its entirety
as follows:

                                    "H. If the controlling shareholder and
                           senior management succession plan delivered to and
                           approved by Lender dated June 14, 2001 is modified by
                           Borrower, such modification shall be approved in
                           writing as acceptable to Lender, in its reasonable
                           discretion, and its final form shall be delivered to
                           Lender within fifteen (15) days of such modification.

================================================================================

6.2.D.   ADDITIONAL NEGATIVE COVENANT (SECTION 6.2.D).

                  The following sentence is hereby added as the last sentence to
Section 6.2.D of the Agreement:

                           Borrower further agrees not to exercise its right to
                           redeem or prepay any Subordinated Debt prior to its
                           stated maturity without Lender's prior written
                           approval. This restriction applies to voluntary
                           redemptions or prepayments only, and does not
                           restrict redemptions that may occur (i) at the
                           election of the holder of Subordinated Debt under the
                           terms thereof, rather than at the election of
                           Borrower, or (ii) as may be required by applicable
                           law or by a regulator; provided, however, Lender does
                           not consent to any redemption that would violate the
                           terms of subordination set forth in the Indenture and
                           Notes establishing the Subordinated Debt.

================================================================================

6.2.L.   ADDITIONAL NEGATIVE COVENANTS (SECTIONS 6.2.L, 6.2.M).

                  Sections 6.2.L and 6.2.M are hereby added to the Agreement in
their entirety as follows:

                                    "L.     Allow the change of senior
                           management  with respect to James D. Thaxton as
                           President,  Bob Wilson as Executive Vice President
                           or Alan Ross,  Chief  Financial  Officer and not
                           replace such  management within sixty (60) days of
                           the date of such change with another qualified
                           person. With respect to James D. Thaxton, the
                           replacement officer shall be of like experience
                           and expertise, and as to the other officers, the
                           replacement need only be duly qualified for the
                           requirements of the position by ordinary industry
                           standards.

                                    "M.     Issue any equity securities or
                           rights for the issuance of, or convertible into,
                           equity securities, unless documentation acceptable to
                           Lender establishes that the net proceeds of such
                           offering after the reasonable and necessary expenses
                           of issuance are paid to Lender and a corresponding
                           reduction is made in the maximum Amount of the
                           Revolving Credit Line; provided, however, that Lender
                           shall not unreasonably withhold its consent to the
                           issuance of a reasonable amount of such securities as
                           incentive compensation even though no cash proceeds
                           will result from the issuance."

================================================================================

6.3.A.   LEVERAGE RATIO LIMIT (SECTION 6.3.A).

                                       -11-

<PAGE>
                  The term "Leverage Ratio Limit" shall mean 8.50 to 1.00.

================================================================================

6.3.B.   MINIMUM NET INCOME (SECTION 6.3.B).

                  The Minimum Net Income shall be One Million Dollars
($1,000,000.00) for each fiscal year of Borrower.

================================================================================

6.3.C.   DISTRIBUTIONS LIMITATION (SECTION 6.3.C).

                  None, provided that regularly scheduled dividends on Preferred
                  Stock shall not be a distribution for the purposes of this
                  negative covenant.

================================================================================

6.3.D.   MINIMUM NET WORTH (BOOK) (SECTION 6.3.D.).

                  The Minimum Net Worth (Book) shall be as follows:

                           (i)      if  the  date  of   determination  is  on
                                    or  before  December  31,  2001,  Four
                                    Million  Dollars ($4,000,000.00);

                           (ii)     if the date of  determination  is on or
                                    before December 31, 2002, but after
                                    December 31, 2001, Five Million Dollars
                                    ($5,000,000.00);

                           (iii)    if the date of determination is on or before
                                    December 31, 2003, but after December 31,
                                    2002, Six Million Dollars ($6,000,000.00);

                           (iv)     if the date of  determination  is on or
                                    before  December  31,  2004,  but after
                                    December 31, 2003, Seven Million Dollars
                                    ($7,000,000.00);

                           (v)      if the date of  determination is on or
                                    before December 31, 2005, but after
                                    December 31, 2004, Eight Million Dollars
                                    ($8,000,000.00); or

                           (vi)     if the date of determination is after
                                    December 31, 2005, Nine Million Dollars
                                    ($9,000,000.00).

Notwithstanding the foregoing, effective upon Borrower's redemption of the
Preferred Stock from Lender in full on or before December 31, 2003, the Minimum
Net Worth (Book) shall be as follows:

                           (i)      Three Million Dollars ($3,000,000.00) as to
                                    each date of determination prior to
                                    December 31, 2004;

                           (v)      if the date of  determination  is before
                                    December 31, 2005, but on or after
                                    December 31, 2004, Four Million Dollars
                                    ($4,000,000.00); or

                           (v)      if the date of  determination is on or after
                                    December 31, 2005, Five Million Dollars
                                    ($5,000,000.00).

================================================================================

6.3.E.   MINIMUM NET CASH FLOW (SECTION 6.3.E.).

                  The Minimum Net Cash Flow shall be Four Million Two Hundred
                  Thousand Dollars ($4,200,000.00) for each twelve (12) month
                  period immediately preceding the date of determination,
                  beginning after December 31, 2001.

                                       -12-

<PAGE>
================================================================================

6.6.     ANNUAL FINANCIAL STATEMENTS (SECTION 6.6).

                  Annual audited financial statements to be prepared by an
                  independent certified public accountant, satisfactory to
                  Lender.

                  If Lender so requests in writing, Borrowers agree to deliver
                  to Lender a list of and/or copies of any specified financial
                  statements delivered to state or federal regulators.

                  Borrowers agree to deliver to Lender at least annually,
                  without specific request, and as frequently as monthly, should
                  Lender so request, consolidating financial statements of the
                  various Borrowers.

================================================================================

8.1.     REIMBURSEMENT OF EXPENSES (SECTION 8.1).

                   Borrowers shall reimburse Lender for Lender expenses incurred
                  in Lender's attorneys fees and expenses incurred in the
                  negotiation, preparation and execution of these Loan Documents
                  executed in conjunction therewith.

================================================================================

9.1.     NOTICES (SECTION 9.1).

                Lender:             FINOVA Capital Corporation
                                    (copy each office below with all notices)

                                    Corporate Office:

                                    FINOVA Capital Corporation
                                    4800 N. Scottsdale Road
                                    Scottsdale, AZ 85251
                                    Attn: Joseph R. D'Amore, Deputy General
                                    Counsel
                                    Telephone:  (480) 636-4932
                                    Telecopy No.:  (480) 636-4937

                                    Rediscount Finance Office:

                                    FINOVA Capital Corporation
                                    16633 Dallas Parkway
                                    Addison, Texas 75001
                                    Attn: Steve Thomas
                                    Telephone: (972) 764-1100
                                    Telecopy No.:  (972) 764-1149

                Borrower:           (All Borrowers)
                                    1524 Pageland Highway
                                    Lancaster, South Carolina 29721
                                    Telephone: (803) 285-4336
                                    Telecopy No.: (803) 286-5770

                Guarantor: James D. Thaxton
                                    P.O. Box 338
                                    822 Griggs Street
                                    Pageland, SC 29728

================================================================================

                                       -13-

<PAGE>
9.15.    AGENT FOR SERVICE OF PROCESS (SECTION 9.15).

                  James D. Thaxton, whose address is 1524 Pageland Highway,
                  Lancaster, South Carolina 29721.(Agent)

================================================================================

ADDITIONAL AGREEMENTS REGARDING AMENDMENT AND RESTATEMENT OF SCHEDULE.

         A. Concurrently with the execution hereof (except as noted), Borrowers
shall deliver to Lender (i) certificates of existence for each Borrower (except
that no such certificate shall be required of Southern Financial Management,
Inc., which Borrowers warrant and represent has no assets or operations and
which Borrowers agree shall not hereafter have either assets or operations) (ii)
certified copies of resolutions approved by the Board of Directors of each
Borrower (and by the shareholder(s) of each Borrower other than The Thaxton
Group, Inc.) authorizing the execution, delivery and performance of this
Schedule in the precise form as delivered to Lender, and (iii) within ten (10)
days, opinion letters issued by Borrowers' inside and outside counsel addressed
to Lender in the forms previously approved by Lender.

         B. Borrowers and Guarantor warrant and represent to Lender that (i) the
Loan Documents are valid, binding and enforceable against Borrowers according to
their terms, and there exist no agreements or inducements whatsoever between the
parties except as evidenced by the executed Loan Documents, (ii) no Event of
Default presently exists under the Loan Documents and no condition presently
exists which, with the giving of notice, the passing of time, or both, would
cause an Event of Default, (iii) Lender has exercised no inappropriate influence
whatsoever over the policies or practices of the Borrowers (and specifically has
not participated in any degree in the preparation or review of any registration
statement or other securities or disclosure filing or document with respect to
Subordinated Debt issued by any Borrower), and (iv) all Subordinated Debt issued
by any Borrower has been and will continue to be issued in full accordance with
all applicable laws, including, but not limited to, laws relating to the
required substance and accuracy of disclosures about the business and prospects
of the Borrowers.

         C.       As used in this Section C:

         "Affiliate" means, with respect to any Person, another Person who (i)
         owns an equity interest in the first Person, of any degree, (ii) is
         owned, as to equity interest, by the first Person, in any degree, (iii)
         Controls the first Person, (iv) is Controlled by the first Person, or
         (v) is Controlled by a Person who also Controls the first Person.

         "Borrower Parties" means Borrowers, Guarantor and their respective
         predecessors, successors and assigns and their present and previous
         agents, attorneys, representatives, Affiliates, officers, directors,
         and each of them.

         "Claims" means any and all accounts, covenants, agreements,
         obligations, claims, debts, liabilities, offsets, demands, costs,
         expenses, actions or causes of action of every nature, character and
         description, whether arising at law or equity or under statute,
         regulation or otherwise, and whether liquidated or unliquidated,
         contingent or noncontingent, known or unknown, suspected or
         unsuspected.

         "Control" means the ability to substantially direct the policies of a
         Person, whether directly or indirectly, and whether such influence
         exists by right or by economic compulsion.

         "Obligors" means Borrowers and Guarantor.

         "Person" means any natural person and any legal entity with the ability
         to enter into contracts.

         "Lender Parties" means Lender, its participants, predecessors,
         successors and assigns and their present and previous agents,
         attorneys, representatives, Affiliates, officers, directors, and each
         of them.

In consideration of Lender's execution of this Schedule, the sufficiency of
which is acknowledged, and excepting only the contractual obligations respecting
future performance by Lender arising under this Schedule, the Agreement or the
other


                                       -14-

<PAGE>
Loan Documents, Obligors hereby release and forever discharge the Lender
Parties of and from any and all Claims that any Obligor may have against any
Lender Party as of the execution of this Schedule. Obligors further warrant and
represent that to the best of their knowledge no Borrower Party presently has,
or has alleged to have, any Claim against Lender. Obligors further agree that
they shall forever refrain and forbear from commencing, instituting or
prosecuting any lawsuit, action, or other proceeding, whether judicial,
administrative or otherwise, or otherwise attempting to collect or enforce, any
such released Claim and agree to indemnify, defend (with counsel satisfactory to
Lender) and hold harmless the Lender Parties against any and all loss,
liability, claim or expense, including attorneys' fees, that any of them might
incur as a result of any breach of this Section by any Obligor or the assertion
of any Claim or defense that exists as of the date of this Schedule by any
Obligor. Obligors further waive any presently existing defenses against the
payment and performance of all obligations (of every nature, character and
description) to the Lender Parties under the Loan Documents. Obligors further
warrant and represent to Lender that no Obligor has granted or purported to
grant to any other person or entity any interest whatsoever in any Claim, as
security or otherwise, and that their execution hereof does not require the
consent of or notice to any third party in order to be fully effective as to any
Claim that may have existed in favor of any Obligor at any time.

            [The remainder of this page is intentionally left blank]


                                       -15-

<PAGE>

================================================================================

         IN WITNESS WHEREOF, the parties have executed this Schedule on the day
and year first set forth above.

                            LENDER:

                            FINOVA CAPITAL CORPORATION,
                            a Delaware corporation

                            By:
                               -------------------------------------------------
                                  John B. Burtchaell, Jr., Senior Vice President

                            BORROWER:

                            THE THAXTON GROUP, INC.
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            THAXTON OPERATING COMPANY
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President

                            THAXTON INSURANCE GROUP, INC.
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            TICO CREDIT COMPANY, INC.,
                            a South Carolina Corporation


                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President




            [Signature page to First Amended And Restated Schedule To
             Third Amended And Restated Loan And Security Agreement]


                                       -16-

<PAGE>
                            EAGLE PREMIUM FINANCE CO., INC.
                            a South Carolina Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President



                            THAXTON COMMERCIAL LENDING, INC.
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President



                            PARAGON, INC.
                            a South Carolina Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President



                            TICO PREMIUM FINANCE COMPANY, INC.,
                            a South Carolina Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President



                            TICO REINSURANCE, LTD.,
                            a British West Indies Association

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            TICO CREDIT COMPANY OF TENNESSEE, INC.,
                            a Tennessee Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President




            [Signature page to First Amended And Restated Schedule To
             Third Amended And Restated Loan And Security Agreement]

                                       -17-

<PAGE>

                            TICO CREDIT COMPANY OF NORTH CAROLINA, INC.,
                            a North Carolina Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            TICO CREDIT COMPANY OF ALABAMA, INC.,
                            an Alabama Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President



                            TICO CREDIT COMPANY OF MISSISSIPPI, INC.,
                            a Mississippi Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            TICO CREDIT COMPANY OF GEORGIA, INC.,
                            a Georgia Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            TICO CREDIT COMPANY(DE),
                            a Delaware Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            TICO CREDIT COMPANY(MS),
                            a Mississippi Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President




            [Signature page to First Amended And Restated Schedule To
             Third Amended And Restated Loan And Security Agreement]


                                       -18-

<PAGE>
                           TICO CREDIT COMPANY (TN),
                           a Tennessee Corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            THAXTON INVESTMENT CORPORATION,
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            The MODERN FINANCE COMPANY,
                            an Ohio corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            SOUTHERN MANAGEMENT CORPORATION,
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            MODERN FINANCIAL SERVICES, INC.
                            an Ohio corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            SOUTHERN FINANCE OF SOUTH CAROLINA, INC.,
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President




            [Signature page to First Amended And Restated Schedule To
             Third Amended And Restated Loan And Security Agreement]

                                       -19-

<PAGE>

                            COVINGTON CREDIT OF TEXAS, INC.,
                            a Texas corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            COVINGTON CREDIT OF GEORGIA, INC.,
                            a Georgia corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            SOUTHERN FINANCE OF TENNESSEE, INC.,
                            a Tennessee corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            FITCH NATIONAL REINSURANCE COMPANY, LTD.,
                            a British West Indies Association

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            SOCO REINSURANCE, LTD.,
                            a British West Indies Association

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            QUICK CREDIT CORPORATION,
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President




            [Signature page to First Amended And Restated Schedule To
             Third Amended And Restated Loan And Security Agreement]

                                       -20-

<PAGE>

                            COVINGTON CREDIT, INC.,
                            an Oklahoma corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            COVINGTON CREDIT OF LOUISIANA, INC.,
                            a Louisiana corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President

                            SOUTHERN FINANCIAL MANAGEMENT, INC.,
                            a South Carolina corporation

                            By:
                               -------------------------------------------------
                                  James D. Thaxton, President


                            GUARANTOR (Validity):


                            --------------------------------
                            James D. Thaxton




            [Signature page to First Amended And Restated Schedule To
             Third Amended And Restated Loan And Security Agreement]





                                       -21-