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                            LINDSAY MANUFACTURING CO.              EXHIBIT 10(F)

                              AMENDED AND RESTATED
                          1991 LONG-TERM INCENTIVE PLAN

     The Lindsay Manufacturing Co. 1991 Long-Term Incentive Plan, as originally
adopted by the Board of Directors on June 6, 1991 and approved by the
shareholders of the Company on February 11, 1992 (the "Original Plan"), is
hereby amended and restated in its entirety as provided herein by this Amended
and Restated 1991 Long-Term Incentive Plan (the "Plan") as of the 28th day of
April, 2000.

                                   ARTICLE I

                                     PURPOSE

     SECTION 1.01. OFFICERS AND KEY EMPLOYEES. The Plan is intended to advance
the interests of Lindsay Manufacturing Co., its shareholders and its
subsidiaries by attracting, retaining and stimulating the performance of
officers and other key employees upon whose judgment, initiative and effort
Lindsay Manufacturing Co. is largely dependent for the successful conduct of its
business, and to encourage and enable such officers and other key employees
("Employee Participants") to acquire and retain a proprietary interest in
Lindsay Manufacturing Co. by ownership of its stock. Options granted may, if so
intended by the Committee, be Incentive Stock Options designed to meet the
requirements of Section 422A of the Internal Revenue Code of 1986.

     SECTION 1.02. NONEMPLOYEE DIRECTORS. The Plan is also intended to promote
the interests of Lindsay Manufacturing Co. by offering nonemployee members of
the Board of Directors ("Director Participants") of the Company the opportunity
to receive Nonqualified Stock Options to provide them with significant
incentives to remain in the service of the Company. Only Nonqualified Stock
Options will be granted to Director Participants under this Plan.

                                   ARTICLE II

                                   DEFINITIONS

     "Automatic Grant Date" shall be September 3 of each year, beginning with
September 3, 1992, provided, that in the event the Common Stock is not sold in
the regular way on the New York Stock Exchange or other national securities
exchange or on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") on September 3 of a particular year, the Automatic
Grant Date shall be the first preceding day on which there were such sales.
Automatic Grant as used in the Plan shall mean the same as Automatic Grant Date.

     "Board" means the Board of Directors of the Company.

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     "Committee" means the Compensation Committee of the Board.

     "Common Stock" means the Company's $1.00 par value common stock.

     "Company" means Lindsay Manufacturing Co., a Delaware corporation.

     "Date of Grant" means the date on which an Option or Restricted Stock is
granted under the Plan to an Employee Participant or Director Participant.

     "Director Participant" means a Director who is not an employee of the
Company or any of its Subsidiaries to whom a Nonqualified Stock Option, which
has not expired, has been granted under the Plan.

     "Employee Participant" means an officer or key employee (or any person who
agrees to become an officer or key employee) of the Company or its subsidiaries
to whom Restricted Stock or an Option, which has not expired, has been granted
under the Plan.

     "Fair Market Value" means the last price per share at which the Common
Stock is sold in the regular way on the New York Stock Exchange or other
national securities exchange or NASDAQ on the day on which an Option is granted
hereunder or, in the absence of any reported sales on such day, the first
preceding day on which there were such sales.

     "Incentive Stock Option" means a stock option granted to an Employee
Participant under the Plan which is intended to meet the requirements of Section
422A of the Internal Revenue Code of 1986.

     "Long-Term Incentive Plan Agreement" means an agreement between the Company
and an Employee Participant or Director Participant under which they may
purchase Common Stock thereunder, and an Employee Participant may also receive
Restricted Stock or may acquire rights concerning SARs or SIRs.

     "Nonqualified Stock Option" means a stock option granted to either an
Employee Participant or Director Participant that is not intended to meet the
requirements of Section 422A of the Internal Revenue Code of 1986.

     "Option" means a Nonqualified Stock Option or an Incentive Stock Option
granted under the Plan. "Options" when granted to Director Participants under
the Plan shall be limited to a Nonqualified Stock Options received on an
Automatic Grant Date.

     "Period of Restriction" means the period starting from the Date of Grant,
during which the transfer of shares of Restricted Stock is restricted pursuant
to Article IX of this Plan, or other such period that may be assigned to any
Options granted under the Plan.

     "Plan" means the Lindsay Manufacturing Co. Amended and Restated 1991
Long-Term Incentive Plan.

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     "Restricted Stock" means Common Stock granted to an Employee Participant
pursuant to Article IX of this Plan.

     "Stock Appreciation Right" or "SAR" is the right of an Employee Participant
to receive, without payment to the Company, a number of shares of Common Stock,
cash or any combination thereof, the amount of which is determined pursuant to
the formula set forth in Article VIII.

     "Stock Indemnification Right" or "SIR" means the right of an Employee
Participant to receive a payment in cash from the Company with respect to shares
of Common Stock that the Employee Participant acquired by the exercise of an
Option or as Restricted Stock, the amount and payment of which is determined in
accordance with the provisions of Article VII.

     "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 425 of the Internal Revenue
Code of 1986.

                                   ARTICLE III

                                  PARTICIPANTS

     SECTION 3.01. EMPLOYEE PARTICIPANTS. The Committee may grant Restricted
Stock, Options, SARs or SIRs to Employee Participants as it shall determine in
its sole discretion from time to time in accordance with the terms and
conditions of the Plan.

     SECTION 3.02. DIRECTOR PARTICIPANTS. Automatic grants of Nonqualified Stock
Options will be granted to each person who, on or after September 3, 1991, is or
becomes a Director Participant as provided in Section 6.02 hereof.

                                   ARTICLE IV

                                 ADMINISTRATION

     SECTION 4.01. COMMITTEE. The Plan shall be administered by the Committee.
Subject to the express provisions of the Plan, the Committee shall have sole
discretion and authority to determine, from among eligible officers and other
key employees, those to whom and the time or times at which Restricted Stock,
Options, SARs or SIRs may be granted to any Employee Participants and the number
of shares of Restricted Stock that may be awarded or the number of shares of
Common Stock to be subject to each Option, SAR or SIR. Subject to the express
provisions of the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend, and rescind rules and regulations
relating to it, to determine the details and provisions of each Long-Term
Incentive Plan Agreement, and to make all the determinations necessary or
advisable in the administration of the Plan as it relates to Employee
Participants. All such actions and determinations by the Committee shall be
conclusively binding for all purposes and upon all persons.

     SECTION 4.02. MAJORITY RULE. A majority of the members of the Committee
shall constitute a quorum, and any action taken by a majority present at a
meeting at which a quorum

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is present or any action taken without a meeting evidenced by a writing executed
by a majority of the whole Committee shall constitute the action of the
Committee.

     SECTION 4.03. COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Committee on all matters relating to eligible employees,
their employment, death, retirement, disability or other termination of
employment, and such other pertinent facts as the Committee may require. The
Company shall furnish the Committee with such clerical and other assistance as
is necessary in the performance of its duties.

                                   ARTICLE V

                         SHARES OF STOCK SUBJECT TO PLAN

     SECTION 5.01. LIMITATIONS; EMPLOYEE PARTICIPANTS. Subject to adjustment
pursuant to the provisions of Section 5.04 hereof (and reflecting all
adjustments made to date pursuant thereto), the number of shares of Common Stock
which may be issued to Employee Participants hereunder shall be the greater of
1,098,562 shares or 7% of the total shares of Common Stock outstanding from time
to time. Such shares may be either authorized but unissued shares, shares issued
and reacquired by the Company or shares bought on the market for the purposes of
the Plan.

     SECTION 5.02. LIMITATIONS; DIRECTOR PARTICIPANTS. Subject to adjustments
pursuant to the provisions of Section 5.04 hereof (and reflecting all
adjustments made to date pursuant thereto), the number of shares of Common Stock
which may be issued to Director Participants hereunder shall be the greater of
303,750 shares or 2% of the total shares of Common Stock outstanding from time
to time. Such shares may be either authorized but unissued shares, shares issued
and reacquired by the Company or shares bought on the market for the purposes of
the Plan.

     SECTION 5.03. RESTRICTED STOCK AND OPTIONS GRANTED UNDER Plan. Shares of
Common Stock with respect to which Restricted Stock shall have vested or Options
granted to Employee Participants, or Nonqualified Stock Options granted to
Director Participants hereunder, that have been exercised shall not again be
available for grant hereunder. If Restricted Stock or an Option granted to
Employee Participants, or Nonqualified Stock Options granted to Director
Participants, hereunder shall terminate for any reason without being wholly
vested or exercised, the number of shares to which such Restricted Stock or
Option termination relates shall again be available for grant hereunder.

     SECTION 5.04. ANTIDILUTION. In the event that the outstanding shares of
Common Stock hereafter are changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of merger, consolidation, other reorganization, recapitalization,
reclassification, combination of shares, stock split-up, or stock dividend, or
in the event that there should be any other stock splits, stock dividends or
other relevant changes in capitalization occurring after the effective date of
this Plan:

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          (a) The aggregate number and kind of Restricted Stock and shares
     subject to Options which may be granted hereunder shall be adjusted
     appropriately; and

          (b) Rights under outstanding Restricted Stock and Options granted to
     Employee Participants or Nonqualified Stock Options granted to Director
     Participants hereunder, both as to the number of subject shares and the
     Option price, shall be adjusted appropriately; and

          (c) Where dissolution or liquidation of the Company or any merger or
     combination in which the Company is not a surviving corporation is
     involved, each outstanding Restricted Stock award and Option granted
     hereunder shall terminate, but the Employee Participant and Director
     Participant shall have the right, immediately prior to such dissolution,
     liquidation, merger, or combination, to receive the Common Stock or to
     exercise any Option or right to Option in whole or in part, to the extent
     that it shall not have been exercised, without regard to any vesting
     restriction or installment exercise provisions.

     The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined solely by the Committee, and any such adjustment
may provide for the elimination of fractional share interests.

                                   ARTICLE VI

                                     OPTIONS

     SECTION 6.01. OPTION GRANT AND AGREEMENT, EMPLOYEE Participants. Each
Option granted hereunder shall be evidenced by minutes of a meeting or the
written consent of the Committee and by a written Long-Term Incentive Plan
Agreement dated as of the Date of Grant and executed by the Company and the
Employee Participant. The Long-Term Incentive Plan Agreement shall set forth
such terms and conditions as may be determined by the Committee to be consistent
with the Plan, but may include additional provisions and restrictions, provided
that they are not inconsistent with the Plan.

     SECTION 6.02. AUTOMATIC OPTION GRANT AND AGREEMENT, DIRECTOR PARTICIPANTS.

          (a) Each Director Participant will be granted a Nonqualified Stock
     Option to purchase 25,312 (reflecting all adjustments made to date pursuant
     to Section 5.04 hereof) shares of Common Stock as of the Automatic Grant
     Date first occurring after he or she is first appointed or elected to the
     Board of Directors. All such Nonqualified Stock Options shall have an
     exercise price equal to the Fair Market Value per share as of the
     applicable Automatic Grant Date. The provisions of this Section 6.02(a)
     shall take effect retroactively as of February 11, 1992 (adjusted
     appropriately to reflect all intervening adjustments made pursuant to
     Section 5.04 hereof), and all such Nonqualified Stock Options heretofore
     granted pursuant to this Section 6.02(a) and consistent with disclosures
     made in any of the Company's proxy statements filed with the Securities and
     Exchange Commission are hereby deemed to be ratified by the Committee.

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          (b) Director Participants as of each Automatic Grant Date after the
     first Automatic Grant Date on which a Director Participant receives a grant
     pursuant to Section 6.02(a) will be granted a Nonqualified Stock Option to
     purchase 5,062 (reflecting all adjustments made to date pursuant to Section
     5.04 hereof) shares of Common Stock. All such Nonqualified Stock Options
     shall have an exercise price equal to the Fair Market Value per share as of
     the applicable Automatic Grant Date. Should the total number of shares of
     Common Stock available under the Plan on any Automatic Grant Date not be
     sufficient to allow all such Nonqualified Stock Options to be granted, then
     Options equal to the number of available shares shall be granted equally to
     all such Directors.

          (c) Nonqualified Stock Options granted hereunder shall be evidenced by
     minutes of a meeting or the written consent of the Committee and by a
     written Long-Term Incentive Plan Agreement dated as of the Automatic Grant
     and executed by the Company and the Director Participant. The Long-Term
     Incentive Plan Agreement shall set forth such terms and conditions as
     consistent with the Plan, but may include additional provisions and
     restrictions, provided that they are not inconsistent with the Plan.

     SECTION 6.03. EXERCISE PRICE. The exercise price per share for all Options
issued under the Plan shall be determined by the Committee in its discretion,
and may be at, below or above the Fair Market Value except that:

          (i)   the exercise price of any Incentive Stock Option shall equal or
     exceed the Fair Market Value of the Common Stock as of the Date of Grant;

          (ii)  the exercise price for any Incentive Stock Option granted to a
     "10% owner" (as defined in Article X) shall be determined as provided in
     Article X(a) hereof; and

          (iii) the exercise price of any Nonqualified Stock Option granted to a
     Director Participant shall be the Fair Market Value as of the applicable
     Automatic Grant Date.

     SECTION 6.04. OPTION PERIOD; EMPLOYEE PARTICIPANT. Options may be granted
to Employee Participants at any time after the effective date of the Plan and
prior to the termination of the Plan, provided that no Incentive Stock Option
may be granted at any time more than 10 years after this Plan has been adopted
by the stockholders of the Company, and the period during which each Incentive
Stock Option may be exercised shall be not later than 10 years from the date
such Incentive Stock Option is granted, provided that Incentive Stock Options
granted to a "10% owner" (as defined in Article X) must be exercised within five
years from the date thereof. The period for the exercise of each Option shall be
determined by the Committee.

     SECTION 6.05. OPTION PERIOD; DIRECTOR PARTICIPANTS. Nonqualified Stock
Options will be granted to Director Participants as provided in Section 6.02 on
each Automatic Grant Date occurring prior to termination of the Plan.
Nonqualified Stock Options may be exercised as provided for in 6.06(c).

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     SECTION 6.06. OPTION EXERCISE BY DIRECTOR PARTICIPANT OR EMPLOYEE
PARTICIPANT.

          (a) Options granted hereunder may not be exercised unless and until
     the Employee Participant shall have been or remained in the employ of the
     Company or its Subsidiaries, or Director Participant shall have been or
     remained a Director of the Company, for six months (or such longer time as
     may be established by the Committee) from and after the Date of Grant,
     except as otherwise provided in the Plan.

          (b) Options may be exercised in whole or part (but only with respect
     to whole shares of Common Stock) at any time within the period permitted
     for the exercise thereof, and shall be exercised by written notice of
     intent to exercise the Option delivered to the Secretary of the Company at
     its principal executive offices.

          (c) Options granted to a Director Participant pursuant to Section 6.02
     will become exercisable by him at the rate of 20% per year beginning on the
     first anniversary of the applicable Automatic Grant Date and continuing at
     the rate of 20% per year thereafter, subject to other provisions as
     provided in the Plan.

          (d) The Committee may impose such restrictions or conditions on the
     exercise of any Option or on any shares of Common Stock acquired pursuant
     to the exercise of an Option under this Plan as it may deem advisable,
     including, without limitation, restrictions imposed by applicable federal
     or state securities laws or the requirements of any stock exchange on which
     such shares of Common Stock are then listed. In that regard, the Committee
     may require as a condition to the exercise of any Option that the
     exercising Employee Participant or Director Participant (or his heirs,
     legatees, or legal representative, as the case may be) deliver to the
     Company a written representation of present intention to purchase the
     Common Stock for investment purposes only and not with a view for
     distribution. In the event such representation is required to be delivered,
     an appropriate legend may be placed upon each certificate evidencing the
     Common Stock issued upon the exercise of such Option.

     SECTION 6.07. PAYMENT. The exercise price for shares of Common Stock
purchased upon exercise of Options by Employee Participants or Director
Participants shall be paid in cash, in shares of Common Stock of the Company
(not subject to limitations on transfer) valued at the then Fair Market Value of
such shares, or a combination of cash and such Common Stock.

     In addition to, and at the time of payment of, the exercise price, Employee
Participants and Director Participants shall pay to the Company in cash or in
Common Stock of the Company the full amount of all federal and state withholding
or other employment taxes applicable to the taxable income resulting from such
exercise.

     SECTION 6.08. NONTRANSFERABILITY OF OPTION. No Option shall be transferred
by an Employee Participant or Director Participant otherwise than by will or the
laws of descent and distribution. During the lifetime of an Employee Participant
or Director Participant the Option shall be exercisable only by him, or, in the
case of an Employee Participant or Director

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Participant who is mentally incapacitated, the Option shall be exercisable by
his guardian or legal representative.

     SECTION 6.09. EFFECT OF DEATH OR OTHER TERMINATION OF EMPLOYEE PARTICIPANT.

          (a) Except as otherwise provided in this Section 6.09, if, prior to a
     date six months from the Date of Grant of an Option (or such longer time as
     may be established by the Committee), an Employee Participant's employment
     with the Company and its Subsidiaries shall be terminated by the Company or
     Subsidiary for any reason, or by the act of the Employee Participant, the
     Employee Participant's right to exercise such Option shall terminate and
     all rights thereunder shall cease.

          (b) If, on or after six months from the Date of Grant of an Option,
     (or such longer time as may be established by the Committee), an Employee
     Participant's employment with the Company or its Subsidiaries shall be
     terminated for any reason other than death, retirement, permanent and total
     disability or serious misconduct, the Employee Participant shall have the
     right, during the period ending 60 days after such termination, to exercise
     such Option to the extent that it was exercisable at the date of such
     termination of employment and shall not have been exercised.

          (c) If an Employee Participant shall die while in the employ of the
     Company or its Subsidiaries or within 60 days after termination of such
     employment, the executor or administrator of the estate of the decedent or
     the person or persons to whom an Option granted hereunder shall have been
     validly transferred by the executor or the administrator pursuant to will
     or the laws of descent and distribution shall have the right, during the
     period ending one year after the date of the Employee Participant's death,
     to exercise the Employee Participant's Option to the extent that it was
     exercisable at the date of death and shall not have been exercised,
     provided, however, such time period may be shortened in accordance with the
     provisions of Section 6.04 if a shortened exercise period is applied to
     Optionees in general.

          (d) If an Employee Participant shall retire or become permanently and
     totally disabled while in the employ of the Company, the Employee
     Participant (or in the case of an Employee Participant who is mentally
     incapacitated, his guardian or legal representative) shall have the right,
     during a period ending one year after such retirement or permanent and
     total disability, to exercise such Option to the extent that it was
     exercisable at the date of termination of employment due to retirement or
     permanent and total disability and shall not have been exercised, provided,
     however, such time period may be shortened in accordance with the
     provisions of Section 6.04, if a shortened exercise period is applied to
     Optionees in general.

          (e) If an Employee Participant's employment with the Company or its
     Subsidiaries shall be terminated by the Company or a Subsidiary for serious
     misconduct, the Employee Participant's right to exercise any Option shall
     immediately terminate and all rights thereunder shall cease. For purposes
     of this Plan, the term "serious misconduct" shall include, embezzlement or
     misappropriation of corporate funds, other acts of

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     dishonesty, a significant violation of Company or Subsidiary policy, or a
     significant violation of any contractual, statutory or common law duty of
     loyalty to the Company or its Subsidiaries.

          (f) No transfer of an Option by an Employee Participant by will or by
     laws of descent and distribution shall be effective to bind the Company
     unless the Company shall have been furnished with written notice thereof
     and an authenticated copy of the will and/or such other evidence as the
     Committee may reasonably deem necessary to establish the validity of the
     transfer and the acceptance by the transferee or transferees of the terms
     and conditions of such Option.

     SECTION 6.10. EFFECT OF DEATH OR OTHER TERMINATION OF DIRECTOR PARTICIPANT.

          (a) Except as otherwise provided in this Section 6.10, if, prior to a
     date six months from an Automatic Grant Date relating to any Nonqualified
     Stock Option, a Director Participant ceases to be a member of the Company's
     Board of Directors for any reason, the Director Participant's right to
     exercise such Nonqualified Stock Option shall terminate and all rights
     thereunder shall cease.

          (b) If, on or after six months from an Automatic Grant Date relating
     to any Nonqualified Stock Option, a Director Participant ceases to be a
     member of the Company's Board of Directors for any reason other than death,
     retirement, permanent and total disability or serious misconduct, the
     Director Participant shall have the right, during the period ending 60 days
     after such termination, to exercise such Nonqualified Stock Option to the
     extent that it was exercisable at the date of such cessation of membership
     and shall not have been exercised.

          (c) If a Director Participant shall die while a Director of the
     Company or within 60 days after termination as a Director of the Company,
     the executor or administrator of the estate of the decedent or the person
     or persons to whom any Nonqualified Stock Option granted hereunder shall
     have been validly transferred by the executor or the administrator pursuant
     to will or the laws of descent and distribution shall have the right,
     during the period ending one year after the date of the Director
     Participant's death, to exercise any Nonqualified Stock Option to the
     extent that it was exercisable at the date of death and shall not have been
     exercised.

          (d) If a Director Participant shall retire or become permanently and
     totally disabled while a Director of the Company, the Director Participant
     (or in the case of a Director Participant who becomes mentally
     incapacitated, his guardian or legal representative) shall have the right,
     during a period ending 60 days after such retirement or permanent and total
     disability, to exercise such Option to the extent that it was exercisable
     at the date of termination as a Director due to retirement or permanent and
     total disability and shall not have been exercised.

          (e) If a Director Participant's membership on the Board of Directors
     shall be terminated by the Company for serious misconduct, the Director
     Participant's right to

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     exercise any Nonqualified Stock Option shall immediately terminate and all
     rights thereunder shall cease. For purposes of this Section 6.10, the term
     "serious misconduct" shall include, but not be limited to, embezzlement or
     misappropriation of corporate funds, other acts of dishonesty, significant
     activities harmful to the reputation of the Company or its Subsidiaries, a
     significant violation of Company or Subsidiary policy, willful refusal to
     perform, or substantial disregard of, the duties properly assigned to the
     Director Participant, or a significant violation of any contractual,
     statutory or common law duty of loyalty to the Company or its Subsidiaries.

          (f) No transfer of a Nonqualified Stock Option by a Director
     Participant by will or by laws of descent and distribution shall be
     effective to bind the Company unless the Company shall have been furnished
     with written notice thereof and an authenticated copy of the will and/or
     such other evidence as the Committee may deem necessary to establish the
     validity of the transfer and the acceptance by the transferee or
     transferees of the terms and conditions of a Nonqualified Stock Option.

     SECTION 6.11. RIGHTS AS SHAREHOLDER; EMPLOYEE PARTICIPANT. An Employee
Participant or a transferee of an Option shall have no rights as a shareholder
with respect to any shares subject to such Option prior to the purchase of such
shares by exercise of such Option as provided herein.

     SECTION 6.12. RIGHTS AS SHAREHOLDER; DIRECTOR PARTICIPANT. A Director
Participant or a transferee of a Nonqualified Stock Option shall have no rights
as a shareholder with respect to any shares subject to such Nonqualified Stock
Option prior to the purchase of such shares by exercise of such Nonqualified
Stock Option as provided herein. Nothing contained herein or in any Long-Term
Incentive Plan Agreement shall be construed or interpreted so as to affect
adversely or otherwise impair the shareholders' right to remove any Director
Participant from service on the Board of Directors of the Company at any time in
accordance with the provisions of applicable law.

     SECTION 6.13. DIVIDEND EQUIVALENTS, STOCK SPLITS OR Adjustments. An
Employee Participant or Director Participant, whether or not his Options are
exercisable, shall, in the sole discretion of the Committee, as determined at
the Date of Grant or at any time thereafter, be entitled to receive a cash
payment from the Company, as and when cash dividends are payable to the holders
of the Common Stock of the Company, in the amount equal to the cash dividend
which would be paid to said Employee Participant or Director Participant in
respect to all shares subject to such Options were such Employee Participant or
Director Participant the holder of such shares on the record date for such cash
dividend.

                                  ARTICLE VII

                          STOCK INDEMNIFICATION RIGHTS

     SECTION 7.01. GRANT OF STOCK INDEMNIFICATION RIGHTS. SIRs may be granted to
Employee Participants at any time and from time to time as shall be determined
by the Committee. SIRs shall be granted only to Employee Participants who, upon
exercise of an

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Option or through the issuance of Restricted Stock, acquire Common Stock that is
subject to a holding period restriction by operation of securities laws,
contractual provisions or other limitations, including internal Company policy
limitations, that prevents the Employee Participant from (a) selling the shares
at all during a holding period or (b) selling the shares and retaining a profit
during the six months following the Option exercise.

     SECTION 7.02. SIR PERIOD. The period encompassed by an SIR shall begin on
the date the Common Stock is issued either as Restricted Stock or upon the
exercise of an Option and shall end at the later of (a) six months thereafter or
(b) upon the expiration of the longest applicable holding period restriction.

     SECTION 7.03. PAYMENT OF SIRS. The Company shall, at the later of (a) the
end of the SIR period set forth in Section 7.02, above or (b) the date the
Employee Participant sells, donates or otherwise transfers the Common Stock
subject to the SIR to a nonaffiliate, but in no event more than five years after
the Common Stock subject to the SIR was issued, make a payment to the holder of
the SIR equal to:

          (i)   the decline, if any, in the Fair Market Value of the Common
     Stock during the period set forth in Section 7.02, above minus

          (ii)  the gain, if any, in the Fair Market Value of the Common Stock
     that occurred during the period beginning immediately subsequent to the
     period set forth in Section 7.02 and ending at the time of the sale,
     donation or other transfer of the Common Stock (but in no event more than
     five years after the Common Stock was issued), times

          (iii) the number of shares acquired through the exercise of Options or
     Restricted Stock which were accompanied by SIRs and which were sold,
     donated or otherwise transferred (or for which the five year time period
     shall have elapsed).

     SECTION 7.04. PAYMENT IN THE EVENT OF AN EMPLOYEE PARTICIPANT'S DEATH. If
an SIR recipient dies before receiving payment, any payment due will be paid to
the recipient's designated beneficiary or, in the absence thereof, to the
recipient's estate as soon as the Common Stock is sold, donated or transferred,
provided that such date shall be no longer than one year after the date of
death.

     SECTION 7.05. FORM OF PAYMENT. Payment of an SIR shall be made in cash,
provided that the Company shall retain the full amount of all federal and state
withholding or other employment taxes applicable to the taxable income of such
Employee Participant resulting from payment of the SIR.

     SECTION 7.06. NONTRANSFERABILITY. No SIR granted under this Plan may be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution.

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                                  ARTICLE VIII

                            STOCK APPRECIATION RIGHTS

     SECTION 8.01. SAR GRANTS. An SAR may be granted to Employee Participants
(a) with respect to any Option granted under this Plan, either concurrently with
the grant of such Option or at such later time as determined by the Committee
(as to all or any portion of the shares of Common Stock subject to the Option),
or (b) alone, without reference to any related Option. Each SAR granted by the
Committee under this Plan shall be subject to the terms and conditions contained
in this Article VIII.

     SECTION 8.02. NUMBER. Each SAR granted to any Employee Participant shall
relate to such number of shares of Common Stock as shall be determined by the
Committee, subject to adjustment as provided in Section 5.04. In the case of an
SAR granted with respect to an Option, the number of shares of Common Stock to
which the SAR pertains shall be reduced in the same proportion that the Employee
Participant exercises the related Option.

     SECTION 8.03. DURATION. Subject to earlier termination as provided in
Section 6.04 or 6.09(e), the term of each SAR shall be determined by the
Committee but shall not exceed 10 years and one day from the Date of Grant.
Unless otherwise provided by the Committee, each SAR shall become exercisable at
such time or times, to such extent and upon such conditions as the Option, if
any, to which it relates is exercisable. No SAR may be exercised during the
first six months of its term (or such longer period as may be established by the
Committee). Except as provided in the preceding sentence, the Committee may in
its discretion accelerate the exercisability of any SAR in the manner described
in Section 6.04.

     SECTION 8.04. EXERCISE. An SAR may be exercised, in whole or in part, by
giving written notice to the Company, specifying the number of SARs which the
Employee Participant wishes to exercise. Upon receipt of such written notice,
the Company shall, within 90 days thereafter, deliver to the exercising Employee
Participant certificates for the shares of Common Stock or cash or both, as
determined by the Committee, to which the holder is entitled pursuant to Section
8.05.

     SECTION 8.05. PAYMENT. Subject to the right of the Committee to deliver
cash in lieu of shares of Common Stock (which, as it pertains to officers of the
Company, shall comply with all requirements of the Securities Exchange Act of
1934, as amended, and regulations adopted thereunder), the number of shares of
Common Stock which shall be issuable upon the exercise of an SAR shall be
determined by dividing:

          (a) the number of shares of Common Stock as to which the SAR is
     exercised multiplied by the amount of the appreciation in such shares (for
     this purpose, the "appreciation" shall be the amount by which the Fair
     Market Value of the shares of Common Stock subject to the SAR on the
     exercise date exceeds (i) in the case of an SAR related to an option, the
     purchase price of the shares of Common Stock under the Option or (ii) in
     the case of an SAR granted alone, without reference to a related Option, an

                                       63

<PAGE>   13

     amount which shall be determined by the Committee at the time of grant,
     subject to adjustment under Section 5.04); by

          (b) the Fair Market Value of a share of Common Stock on the exercise
     date.

In lieu of issuing only shares of Common Stock upon the exercise of a SAR, the
Committee may elect to pay the holder of the SAR cash or any combination of cash
or Common Stock equal to the Fair Market Value on the exercise date of any or
all of the shares which would otherwise be issuable. No fractional shares of
Common Stock shall be issued upon the exercise of an SAR; instead, the holder of
the SAR shall be entitled to receive a cash adjustment equal to the same
fraction of the Fair Market Value of a share of Common Stock on the exercise
date or to purchase the portion necessary to make a whole share at its Fair
Market Value on the date of exercise.

     SECTION 8.06. EMPLOYMENT TAXES. The Company shall retain the full amount of
all federal and state withholding or other employment taxes applicable to the
taxable income of the Employee Participant resulting from the exercise of the
SAR.

                                   ARTICLE IX

                                RESTRICTED STOCK

     SECTION 9.01. GRANT OF RESTRICTED STOCK. The Committee, at any time and
from time to time, may grant shares of Restricted Stock under the Plan to such
Employee Participants and in such amounts as it shall determine. Each grant of
Restricted Stock shall be evidenced by minutes of a meeting or the written
consent of the Committee and by a written Long-Term Incentive Plan Agreement
dated as of the Date of Grant and executed by the Company and the Employee
Participant. The Long-Term Incentive Plan Agreement shall specify the Period(s)
of Restriction and the time or times at which such period(s) shall lapse with
respect to a specified number of shares of Restricted Stock and shall set forth
such other terms and conditions as may be determined by the Committee to be
consistent with the Plan, but may include additional provisions and
restrictions, provided that they are not inconsistent with the Plan. The Periods
of Restriction shall not exceed 10 years from the Date of Grant of the
Restricted Stock.

     SECTION 9.02. NONTRANSFERABILITY. Except as provided in Section 9.08
hereof, the shares of Restricted Stock granted hereunder may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated for such
period of time as shall be specified in the Long-Term Incentive Plan Agreement,
or upon earlier satisfaction of other conditions as specified by the Committee
in its sole discretion and set forth in the Long-Term Incentive Plan Agreement.

     SECTION 9.03. OTHER RESTRICTIONS. The provisions of Section 6.06(d) shall
be applicable to grants of Restricted Stock.

                                       64

<PAGE>   14

     SECTION 9.04. VOTING RIGHTS. Employee Participants holding shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those shares during the Period of Restriction.

     SECTION 9.05. DIVIDENDS, STOCK SPLITS AND OTHER Distributions. During the
Period of Restriction, Employee Participants holding shares of Restricted Stock
granted hereunder shall be entitled to receive all dividends, stock splits and
other distributions paid with respect to those shares while they are so held. If
any such dividends or distributions are paid in shares of Common Stock, those
shares shall be subject to the same restrictions on transferability as the
shares of Restricted Stock with respect to which they were paid.

     SECTION 9.06. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event
that an Employee Participant terminates his employment on or after his
sixty-fifth birthday, the Periods of Restriction applicable to the Restricted
Stock pursuant to Section 9.02 hereof shall lapse automatically and, except as
otherwise provided in Section 9.03, the shares of Restricted Stock shall thereby
be free of restrictions and freely transferable. In the event that an Employee
Participant terminates his employment with the Company or its Subsidiaries by
retiring prior to his sixty-fifth birthday, all shares of Restricted Stock shall
be forfeited and returned to the Company; provided, however, that the Committee
in its sole discretion may waive the restrictions remaining on any or all shares
of Restricted Stock.

     SECTION 9.07. TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the
event an Employee Participant's employment with the Company or its Subsidiaries
terminates because of his death or permanent and total disability during the
Periods of Restriction, the restrictions applicable to the shares of Restricted
Stock pursuant to Section 9.02 hereof shall lapse automatically and the shares
of Restricted Stock shall thereby be free of restrictions and freely
transferable.

     SECTION 9.08. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH,
DISABILITY, OR RETIREMENT. In the event that an Employee Participant's
employment with the Company or its Subsidiaries is voluntarily terminated by the
Employee Participant for any reason other than those set forth in Section 9.06
and 9.07 during the Periods of Restriction, any shares of Restricted Stock still
subject to restrictions at the date of such termination automatically shall be
forfeited and returned to the Company. In the event of termination of the
employment of an Employee Participant by the Company other than a termination
for serious misconduct as defined in Section 6.09(e), the Committee in its sole
discretion may waive the automatic forfeiture of any or all Restricted Stock and
may waive any and all restrictions.

     SECTION 9.09. EMPLOYMENT TAXES. The Company shall retain the full amount of
all federal and state withholding or other employment taxes applicable to the
taxable income of the Employee Participant resulting from such exercise.

                                       65
<PAGE>   15

                                   ARTICLE X

                               TEN-PERCENT OWNERS

     Notwithstanding any other provisions of this Plan, the following terms and
conditions shall apply to Incentive Stock Options granted hereunder to a "10%
owner." For this purpose, a "10% owner" shall mean an Employee Participant who,
at the time the Incentive Stock Option is granted, owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of any Subsidiary. With respect to a 10% owner:

          (a) the price at which shares of stock may be purchased under an
     Incentive Stock Option granted pursuant to this Plan shall be not less than
     110% of the Fair Market Value thereof; and

          (b) the period during which any such Incentive Stock Option may be
     exercised, to be fixed by the Committee in the manner described in Section
     6.04, above, shall expire not later than five years from the date the
     Incentive Stock Option is granted.

                                   ARTICLE XI

                                  ANNUAL LIMITS

     Incentive Stock Options shall not be granted to any individual pursuant to
this Plan, the effect of which would be to permit such person to first exercise
Incentive Stock Options, in any calendar year, for the purchase of shares having
a Fair Market Value in excess of $100,000 (determined at the time of the grant
of the Incentive Stock Options). An Employee Participant hereunder may exercise
Incentive Stock Options for the purchase of shares valued in excess of $100,000
(determined at the time of grant of the Incentive Stock Options) in a calendar
year, but only if the right to exercise such Incentive Stock Options shall have
first become available in prior calendar years.

                                  ARTICLE XII

                           OTHER TERMS AND CONDITIONS

     Any Incentive Stock Option granted hereunder shall contain such other and
additional terms, not inconsistent with the terms of this Plan, which are deemed
necessary or desirable by the Committee, which such terms, together with the
terms of this Plan, shall constitute such Incentive Stock Option as an
"Incentive Stock Option" within the meaning of Section 422A of the 1986 Internal
Revenue Code and lawful regulations thereunder.

                                  ARTICLE XIII

                               STOCK CERTIFICATES

     SECTION 13.01. CONDITIONS. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock received pursuant to a grant
of Restricted Stock or

                                       66
<PAGE>   16

purchased upon the exercise of any Option granted to Employee Participants or
Nonqualified Stock Options granted to Director Participants hereunder or any
portion thereof prior to fulfillment of all of the following conditions:

          (a) The completion of any registration or other qualification of such
     shares under any federal or state law or under the rulings or regulations
     of the Securities and Exchange Commission or any other governmental
     regulatory body, which the Committee shall in its sole discretion deem
     necessary or advisable;

          (b) The obtaining of any approval or other clearance from any federal
     or state governmental agency which the Committee shall in its sole
     discretion determine to be necessary or advisable;

          (c) The lapse of such reasonable period of time following the Period
     of Restriction or the exercise of the Option as the Committee from time to
     time may establish for reasons of administrative convenience;

          (d) Satisfaction by the Employee Participant or Director Participant
     of all applicable withholding taxes or other withholding liabilities; and

          (e) Specific requirements as provided for in Section 6.06(d).

     SECTION 13.02. LEGENDS. The Company reserves the right to legend any
certificate for shares of Common Stock conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.

                                  ARTICLE XIV

                TERMINATION, AMENDMENT, AND MODIFICATION OF PLAN

     The Board may at any time, upon recommendation of the Committee, terminate,
and may at any time and from time to time and in any respect amend or modify,
the Plan; provided, however, that no such action shall impair the rights of any
holder of an Option theretofore granted; and further provided, that no such
action of the Board or Committee without approval of the shareholders of the
Company may:

          (a) Increase the total number of shares of Common Stock subject to the
     Plan, except as contemplated in Section 5.04 hereof;

          (b) Change the manner of determining the exercise price of Options;

          (c) Withdraw the administration of the Plan from the Committee or the
     Board;

          (d) Extend the maximum period of restriction or reduce the minimum
     period during which Options may be exercised; or

                                       67
<PAGE>   17

          (e) Change the class of people who may become Employee Participants or
     Director Participants in the Plan.

No termination, amendment, or modification of the Plan shall in any manner
affect any Restricted Stock or Option theretofore granted under the Plan without
the consent of the Employee Participant or Director Participant holding such
Restricted Stock or Option.

                                   ARTICLE XV

                                  MISCELLANEOUS

     SECTION 15.01. EMPLOYMENT OR BOARD MEMBERSHIP. Nothing in the Plan or in
any Option granted hereunder or in any Long-Term Incentive Plan Agreement
relating thereto shall confer upon any employee the right to continue in the
employ of the Company or any Subsidiary, or any Director to remain on the Board
of the Company.

     SECTION 15.02. OTHER COMPENSATION PLANS. The adoption of the Plan shall not
affect any other Plan, stock option or incentive or other compensation plans in
effect for the Company or any Subsidiary, nor shall the Plan preclude the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Subsidiary.

     SECTION 15.03. PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon
the Company, its successors and assigns, and the Employee Participant or
Director Participant, his executor, administrator and permitted transferees.

     SECTION 15.04. SINGULAR, PLURAL; GENDER. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.

     SECTION 15.05. HEADINGS NO PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.

     SECTION 15.06. REPURCHASE OF SHARES. Nothing contained herein or in the
Long-Term Incentive Plan Agreement shall create an obligation on the part of the
Company to repurchase any shares of Common Stock issued hereunder.

                                       68<PAGE>   1

                                                                  EXHIBIT 10.211

                 SEVENTH AMENDMENT TO FORBEARANCE AGREEMENT AND
               AMENDMENT NO. 12 TO SECOND AMENDED AND RESTATED AND
                    CONSOLIDATED LOAN AND SECURITY AGREEMENT

             This Seventh Amendment to Forbearance Agreement and Amendment No.
12 to Second Amended and Restated and Consolidated Loan and Security Agreement
("Amendment") is made and entered into this ___ day of July, 2000 (the
"Effective Date"), 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. Lender 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 Lender 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"); by
the Amendment No. 4 to Second Amended and Restated and Consolidated Loan and
Security Agreement dated November 6, 1998 (the "Fourth Amendment"); by that
certain Forbearance Agreement and Amendment No. 5 to Second Amended and Restated
and Consolidated Loan and Security Agreement dated December 23, 1998 ("Amendment
5"), as the same was amended by a Letter Agreement dated February 8, 1999 (the
"Release Fee Letter") (the Amendment 5 and Release Fee Letter are collectively
called the "Fifth Amendment"); by a First Amendment to Forbearance Agreement and
Amendment No. 6 to Second Amended and Restated and Consolidated Loan and
Security Agreement dated May 7, 1999 (the "Sixth Amendment"); by a Second
Amendment to Forebearance Agreement and Amendment No. 7 to Second Amended and
Restated and Consolidated Loan and Security Agreement dated August 6, 1999 (the
"Seventh Amendment"); by a September 7, 1999 letter agreement regarding the
Additional Advance Note (the "Additional Advance Letter"); by a Third Amendment
to Forebearance Agreement and Amendment No. 8 to Loan and Security Agreement
dated November 9, 1999 (the "Eighth Amendment"); by a letter agreement dated
December 3, 1999 between the Borrower and Lender (the "Receivable Loan Lot Cap
Letter"); by a Fourth Amendment to Forebearance Agreement and Amendment No. 9 to
Loan and Security Agreement dated December 17, 1999 (the "Ninth Amendment"); by
a Fifth Amendment to Forebearance Agreement and Amendment No. 10 to Loan and
Security Agreement dated February 25, 2000 (the "Tenth Amendment"); and, a Sixth
Amendment to Forbearance Agreement and Amendment No. 11 to Second Amended and
Restated and Consolidated Loan Agreement (the "Eleventh Amendment"). The
Original Loan Agreement, First Amendment, Second Amendment, Third Amendment,
Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment,
Additional Advance Letter, Eighth

<PAGE>   2

Amendment, the Receivable Loan Lot Cap Letter, Ninth Amendment, Tenth Amendment
and Eleventh Amendment are collectively called the "Loan Agreement." Capitalized
terms used in this Amendment which are defined in the Loan Agreement shall have
the same meaning and definition when used herein.

             B. Borrower has requested the Lender to make certain modifications
to the Loan Agreement and the Loan, which the Lender is willing to do, upon and
subject to the terms and conditions set forth in this Amendment.

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

             1. On the Effective Date, Exhibit I-C of the Loan Agreement is
deleted in its entirety and replaced with the Exhibit I-C that is attached to
this Amendment, and by this reference incorporated herein.

             2. The obligations of the Lender under this Amendment are
conditioned upon the satisfaction of the following conditions:

                    (a) This Amendment has been fully signed by the Borrower and
        Guarantor;

                    (b) The Borrower executing and delivering to the Lender such
        additional documents or instruments as required and approved by the
        Lender so as to fully perfect the liens and security interest of Lender
        granted under the Loan Agreement and this Amendment; and

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

             3. Borrower and Guarantor each represents and warrants that:

                    (a) All financial information and other documents it has
        provided to Lender in connection with this Amendment are true, complete
        and correct as of the date provided and the date hereof;

                    (b) There exists 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 and the Unsolidified Lot
        Sales Default;

                    (c) After giving effect to this Amendment, there has been no
        material adverse change in any real property or in the business or
        financial condition

                                       2
<PAGE>   3

        of Borrower and Guarantor since the date of the last financial
        statements submitted to Lender; and

                    (d) After giving effect to this Amendment (including the
        disclosures contained herein) and the most recent financial and
        litigation reports supplied to Lender, all representations and
        warranties by Borrower and Guarantor remain true, complete, and correct,
        in all material respects as of the date hereof.

             4. 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 and 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 and (iv) all terms, conditions and provisions
set forth in this Amendment and 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.

             5. Borrower and Guarantor acknowledge and agree that they have no
defenses, counterclaims, setoffs, recoupments or other adverse claims or causes
of action in tort, contract or of any other kind existing against Lender or with
respect to the Documents, including without limitation, claims regarding the
amount, validity, perfection, priority and enforceability of the Documents.

             6. 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, and are hereby ratified and affirmed.

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

             8. This Amendment in no way acts as a waiver of any default of
Borrower or as a release or relinquishment of any of the liens, security
interests, rights or remedies securing payment and Performance of the Borrower's
Obligations or the enforcement thereof. Such liens, security interests, rights
and remedies are hereby ratified, confirmed, preserved, renewed and extended by
Borrower in all respects. Further, Lender's execution of this Amendment shall
not constitute a waiver (either express or implied) of the requirement that

                                       3
<PAGE>   4

any further forbearance under or modification of the Loan Agreement or any other
Document shall require the express written approval of Lender. No such approval
(either express or implied) has been given as of the date hereof.

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

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

             11. 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.

             12. Any further discussions by and among Borrower, Guarantor and
Lender, if any, and all such discussions in the past, together with any other
actions or inactions taken by and among Borrower, Guarantor and Lender, shall
not cause a modification of the Documents, establish a custom or waive (unless
Lender made such express waiver in writing), limit or condition the rights and
remedies of Lender 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 Lender made such express waiver in
writing), except as expressly provided herein. Notwithstanding anything to the
contrary contained herein or in any other instrument executed by the parties and
notwithstanding any other action or conduct undertaken by the parties on or
before the date hereof, the agreements, covenants and provisions contained
herein and the Loan Agreement shall constitute the only evidence of Lender's
agreement to forbear or to modify the Loan Agreement. Accordingly, no express or
implied consent to any further forbearances or modifications shall be inferred
or implied by Lender's execution of this Amendment. The Loan Agreement and this
Amendment, together with the other Documents, constitute the entire agreement
and understanding among the parties relating to the subject matter hereof, and
supersedes all prior proposals, negotiations, agreements and understandings
relating to such subject matter. In entering into this Amendment, Borrower
acknowledges that it is relying on no statement, representation, warranty,
covenant or agreement of any kind made

                                       4
<PAGE>   5

by the Lender or any employee or agent of the Lender, except for the agreements
of Lender set forth herein.

             13. This Amendment shall not be binding upon Lender 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. Lender, 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 Lender a copy of this Amendment with an original
signature.

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

             15. 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 Lender, its employees, Lender's counsel or any agent for or
contractor of Lender, such action shall be deemed to be exercisable by Lender 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. The Recitals in this Amendment are incorporated into the body
hereof as fully set forth herein.

             17. 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 LENDER: (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

                                       5
<PAGE>   6

SUBJECT MATTER THEREOF, OR, IF LENDER 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 LENDER'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 LENDER HEREBY WAIVE THE RIGHT TO
COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.

                            [SIGNATURE PAGE FOLLOWS]

                                       6
<PAGE>   7

LENDER:

FINOVA CAPITAL CORPORATION,
a Delaware corporation

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

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

BORROWER:

PREFERRED EQUITIES CORPORATION,
a Nevada corporation

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

    Its: Vice President
        ------------------------------
Signed in the presence of:

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

GUARANTOR:

MEGO FINANCIAL CORP.,
a New York corporation

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

    Its: Vice President
        ------------------------------

Signed in the presence of:

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

                                       7
<PAGE>   8

STATE OF NEVADA              )
                             ) ss.
County of Clark              )

             The foregoing instrument was acknowledged before me this 13th day
of July 2000 by Jon A. Joseph as Vice President of PREFERRED EQUITIES
CORPORATION, a Nevada corporation, on behalf of the corporation.

                                       Janese Doyle
                                       ------------------------------------
                                                  Notary Public

My Commission Expires:

May 21, 2003

STATE OF NEVADA              )
                             ) ss.
County of Clark              )

             The foregoing instrument was acknowledged before me this ____ day
of July 2000, by Jon A. Joseph as Vice President of MEGO FINANCIAL CORP., a New
York corporation, on behalf of the corporation.

                                       Janese Doyle
                                       ------------------------------------
                                                  Notary Public

My Commission Expires:

May 21, 2003

STATE OF ARIZONA          )
                          ) ss.
County of Maricopa        )

             This instrument was acknowledged before me this ___ day of July
2000, by ______________________, as _______________ of FINOVA CAPITAL
CORPORATION, a Delaware corporation, on behalf of the corporation.

                                       ------------------------------------
                                       Notary

                                       8

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