Document:

<PAGE>

                                                              Exhibit No. 10.238

                             TERMINATION AGREEMENT
                             ---------------------

     THIS TERMINATION AGREEMENT (this "Agreement") is made and entered into this
17th day of January, 2002, between MEGO FINANCIAL CORP., a New York corporation
(the "Company"), and JEROME J. COHEN ("Cohen"). This Agreement is intended to
replace that certain Amended and Restated Employment Agreement, dated as of
November 10, 2000, by and between Mego and Cohen (the "Employment Agreement").
Accordingly, effective as of the Commencement Date hereof as that term is
hereafter defined, the Employment Agreement shall be terminated and declared
null and void and no payment of Executive Incentive Income shall be due
respecting income of the Company for the period from September 1, 2001 to the
Commencement Date.

                             R E C I T A T I O N S
                             ---------------------

     A.   The Company recognizes that Cohen has performed substantial services
for the Company which have contributed to its growth.

     B.   The Company and Cohen now each desire to terminate their existing
business relationship on the terms and conditions set forth in this Agreement.

                    O P E R A T I V E   P R O V I S I O N S
                    -----------------   -------------------

     In consideration of the foregoing recitations, the mutual promises
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged hereby, the parties hereto, intending to
be legally bound, hereby covenant and agree as follows:

                                   ARTICLE I
                             TERMINATION AGREEMENT

     1.1  Termination Fee.  In consideration for prior services provided by
          ---------------
Cohen to Company and for the termination of Cohen's Employment Agreement, the
Company shall pay a fee to Cohen equal to Seven Hundred Fifty Thousand Dollars
($750,000), payable in thirty six (36) equal consecutive monthly installments of
Twenty Thousand Eight Hundred and Thirty-Three Dollars and Thirty-Three cents
($20,833.33) per month, commencing February 1, 2002 (the "Commencement Date").
In the event of Cohen's death prior to the entire distribution of the fee set
forth in this Section 1.1, the remaining amounts shall be paid to the
beneficiary designated by Cohen, in writing, to the Company, or if no such
beneficiary shall be designated, then to Cohen's estate, at such times and in
such amounts as if Cohen had not died.

     1.2  Other Benefits.
          --------------

          (a)  Medical Insurance Coverage.  During the period commencing on the
               --------------------------
<PAGE>

Commencement Date and ending three years from such date (the "Coverage Period")
Cohen and his Spouse shall continue to be covered under that certain Equitable
Life Assurance Society of the United States medical insurance policy, number PPB
N 86 803 722 (the "Policy"), and the Company shall pay the premiums thereon that
are allocable to the Coverage Period. In addition, the Company shall reimburse
Cohen for any medical expenses incurred by Cohen (but not for those medical
expenses incurred by his Spouse) during the Coverage Period that are not covered
under the Policy including, without limitation, any amounts that are not covered
by the reason of the deductible and/or copayment provisions of the Policy.
Reimbursements made by the Company to Cohen shall be made on a quarterly basis
and the amount of the quarterly reimbursement shall be based upon invoices
submitted by Cohen to the Company during such quarter. Notwithstanding anything
to the contrary herein, the Company shall not be required to pay any medical
expenses incurred by Cohen that are not covered by the Policy by reason of their
being in excess of the maximum amount of covered expenses under the Policy.

          (b)  Occupancy of Office.  During the period beginning on the
               -------------------
Commencement Date and ending on the last day of the third calendar month that
begins after the Commencement Date (as defined in Section 1.1 hereof ) (the
"Office Period"), the Company shall continue to lease, and pay the rent and
utility costs of, and Cohen shall have the right to continue utilizing, the
Company's office space in Miami, Florida (the "Miami Office") where Cohen
previously performed services for Mego. In addition, as of the Commencement
Date, Cohen shall be entitled to keep any office furniture, furnishings or
equipment located in the Miami Office. During the Office Period, Cohen shall
organize all records, files and transaction bibles of the Company, and arrange
to have those documents packaged and shipped, at the Company's expense, to the
Company's offices in Las Vegas, Nevada. Cohen shall be entitled to keep or
discard any such documents that the Company does not wish to have shipped as
aforesaid.

                                   ARTICLE II
                             Restrictive Covenants.
                             ---------------------

     2.1  Non-Competition.  For the three (3) year period ending on the third
          ---------------
anniversary of the Commencement Date (the "Restricted Period") and provided that
the Company is not in breach of any of its obligations under Sections 1.1, 1.2
or 3.4 of this Agreement, Cohen shall not, directly or indirectly, engage in or
have any interest in any sole proprietorship, corporation, company, partnership,
association, venture or business or any other person or entity (whether as an
employee, officer, director, partner, agent, security holder, creditor,
consultant or otherwise) that directly or indirectly (or through any affiliated
entity) competes with the Company's business (for this purpose, the Company's
business shall mean any business that engages in time share sales in North
America); provided that such provision shall not apply to Cohen's ownership of
Common Stock of the Company or the acquisition by Cohen, solely as an
investment, of securities of any issuer that is registered under Section 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed
or admitted for trading on any United States national securities exchange or
that are quoted on the National Association of Securities Dealers Automated
Quotations System, or any similar system or automated dissemination of
quotations

                                      -2-
<PAGE>

of securities prices in common use, so long as Cohen does not control, acquire a
controlling interest in or become a member of a group which exercises direct or
indirect control of, more than five percent of any class of capital stock of
such corporation.

     2.2  Nonsolicitation of Employees. During the Restricted Period, and
          ----------------------------
provided that the Company is not in breach of any of its obligations under
Sections 1.1, 1.2 or 3.4 of this Agreement, Cohen shall not, directly or
indirectly, for himself or for any other person, firm, corporation, partnership,
association or other entity employ or attempt to employ or enter into any
contractual arrangement with any employee or former employee of the Company,
unless such employee or former employee has not been employed by the Company for
a period in excess of six months.

     2.3  Acknowledgment by Cohen. Cohen acknowledges and confirms that (i) the
          -----------------------
restrictive covenants contained in this Article II are reasonably necessary
to protect the legitimate business interests of the Company, and (ii) the
restrictions contained in this Article II (including without limitation the
length of the term of the provisions of this Article II) are not overbroad,
overlong, or unfair and are not the result of overreaching, duress or coercion
of any kind.  Cohen further acknowledges and confirms that his full, uninhibited
and faithful observance of each of the covenants contained in this Article II
will not cause him any undue hardship, financial or otherwise, and that
enforcement of each of the covenants contained herein will not impair his
ability to obtain employment commensurate with his abilities and on terms fully
acceptable to him or otherwise to obtain income required for the comfortable
support of him and his family and the satisfaction of the needs of his
creditors.  Cohen acknowledges and confirms that his special knowledge of the
business of the Company is such as would cause the Company serious injury or
loss if he were to use such ability and knowledge to the benefit of a competitor
or were to compete with the Company in violation of the terms of this Article
II. Cohen further acknowledges that the restrictions contained in this Article
II are intended to be, and shall be, for the benefit of and shall be enforceable
by, the Company's successors and assigns.

     2.4  Reformation by Court.  In the event that a court of competent
          --------------------
jurisdiction shall determine that any provision of this Article II is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Article II within the jurisdiction of such
court, such provision shall be interpreted and enforced as if it provided for
the maximum restriction permitted under such governing law.

     2.5  Survival.  The provisions of this Article II shall survive the
          --------
payment by the Company to Cohen of the Lump Sum Payment pursuant to Article II
hereof.

     2.6  Injunction.  It is recognized and hereby acknowledged by the parties
          ----------
hereto that a breach by Cohen of any of the covenants contained in Article II of
this Agreement will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to ascertain.  As a result,
Cohen recognizes and hereby acknowledges that the Company shall be entitled to
an injunction from any court of competent jurisdiction enjoining

                                      -3-
<PAGE>

and restraining any violation of any or all of the covenants contained in
Article II of this Agreement by Cohen or any of his affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies the
Company may possess.

                                  ARTICLE III
                                 Miscellaneous
                                 -------------

     3.1  Entire Agreement; Amendment.  This Agreement constitutes the entire
          ---------------------------
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, both written and oral, among the parties hereto.  This Agreement
may not be amended or modified in any way except by a written instrument
executed by the Company and Cohen.

     3.2  Notice.  All notices under this Agreement shall be in writing and
          ------
shall be given by personal delivery, or by registered or certified United States
mail, postage prepaid, return receipt requested, to the address set forth below:

     If to Cohen:             Jerome J. Cohen
                              11111 Biscayne Blvd. #227
                              Miami, Florida, 33181

     If to Company:           MEGO FINANCIAL CORP.

                              4310 Paradise Road
                              Las Vegas, Nevada  89109
                              Attn:  Floyd W. Kephart, President

or to such other person or persons or to such other address or addresses as
Cohen and the Company or their respective successors or assigns may hereafter
furnish to the other by notice similarly given. Notices, if personally
delivered, shall be deemed to have been received on the date of delivery, and if
given by registered or certified mail, shall be deemed to have been received on
the fifth business day after mailing.

     3.3  Governing Law.  This Agreement shall be governed by, and construed and
          -------------
interpreted in accordance with, the laws of the State of Florida, without giving
effect to the conflict of laws principles of each State.  With respect to any
disputes concerning federal law, such disputes shall be determined in accordance
with the law as it would be interpreted and applied by the United States Court
of Appeals for the Eleventh Circuit.

     3.4  Assignment: Successors and Assigns.  Neither Cohen nor the Company may
          ----------------------------------
make an assignment of this Agreement or any interest herein, by operation of
laws or otherwise, without the prior written consent of the other party.   This
Agreement shall inure to the benefit

                                      -4-
<PAGE>

of, and be binding upon, the Company and Cohen, his heirs, personal
representatives, executors, legal representatives, successors and their
permitted assigns, if any. In the event that the Company shall effect a
reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity, or if more than fifty percent (50%) of its stock shall be sold,
transferred or issued to another party or parties, the Company shall immediately
pay Cohen the balance of the $750,000 fee set forth in Section 1.1 hereof not
previously paid by the monthly payments provided for in the said Section 1.1
hereof (such payment being referred to as the "Lump Sum Payment"). Upon payment
by the Company of the Lump Sum Payment in accordance with the foregoing sentence
of this Section 3.4, then the Coverage Period for the continued payment of
health insurance premiums and reimbursement of medical expenses under Section
1.2(a) hereof shall cease for expenses incurred after the date on which the
Company has made the Lump Sum Payment to Cohen.

     3.5  Waiver.  The waiver by any party hereto of the other party's prompt
          ------
and complete performance or breach or violation of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
or violation, and the waiver by any party hereto to exercise any right or remedy
which he or it may possess shall not operate nor be construed as the waiver of
such right or remedy by such party or as a bar to the exercise of such right or
remedy by such party upon the occurrence of any subsequent breach or violation.

     3.6  Severability.  The invalidity of any one or more of the words,
          ------------
phrases, sentences, clauses, sections or subsections contained in this Agreement
shall not affect the enforceability of the remaining portions of this Agreement
or any part thereof, all of which are inserted conditionally on their being
valid in law, and, in the event that any one or more of the words, phrases,
sentences, clauses, sections or subsections contained in this Agreement shall be
declared invalid by a court of competent jurisdiction, then this Agreement shall
be construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, section or sections, or subsection or subsections
had not been inserted.

     3.7  Damages.  Nothing contained herein shall be construed to prevent the
          -------
Company or Cohen from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach of any term or provision
of this Agreement.  In the event that either party hereto brings suit for the
collection of any damages resulting from, or the injunction of any action
constituting, a breach of any of the terms or provisions of this Agreement, then
the party found to be at fault shall pay all reasonable court costs and
attorneys' fees of the other.

                                      -5-
<PAGE>

     3.8   Consent to Jurisdiction. In the event any controversy or claim arises
           -----------------------
out of or relates to this Agreement or the breach thereof, the parties hereby
consent to the jurisdiction of the Supreme Court of Florida, the Florida
District Court of Appeal, and the United States District Court for the District
of Florida.  Accordingly, with respect to any such court action, Cohen and the
Company each (i) submit to the personal jurisdiction of such courts; (ii)
consent to service of process; and (iii) waive any other requirement (whether
imposed by statute, rule of court, or otherwise) with respect to personal
jurisdiction or service of process.

     3.9   Gender and Number.  Wherever the context shall so require, all words
           -----------------
herein in the male gender shall be deemed to include the female or neuter
gender, all singular words shall include the plural and all plural words shall
include the singular.

     3.10  Section Headings.  The section or other headings contained in this
           ----------------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of any or all of the provisions of this Agreement.

     3.11  No Third Party Beneficiary other than Company.  Nothing expressed or
           ---------------------------------------------
implied in this Agreement is intended, or shall be construed, to confer upon or
give any person, firm, corporation, partnership, association or other entity,
other than the parties hereto and each of their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

                                             THE COMPANY:

                                             MEGO FINANCIAL CORP., a New York
                                             corporation

                                               /s/ Floyd W. Kephart
                                             ---------------------------------
                                             FLOYD W. KEPHART, President

                                             COHEN:

                                               /s/ Jerome Cohen
                                             ---------------------------------
                                             JEROME J. COHEN

                                      -6-<PAGE>

                                                              Exhibit No. 10.239

                             EMPLOYMENT AGREEMENT
                             --------------------

     This Employment Agreement ("Agreement") is made and entered into on this
17th day of January, 2002, by and between MEGO FINANCIAL CORP., a New York
corporation (the "Company") and HERBERT B. HIRSCH (the "Executive"). This
Agreement is intended to replace those certain agreements, dated August 1, 1994
and September 2, 1997, by and between the Company and the Executive.
Accordingly, effective as of the Commencement Date hereof as that term is
hereafter defined, the agreements of August 1, 1994 and September 2, 1997 shall
be terminated and declared null and void. As to the agreement of August 1, 1994,
no payments shall be due respecting income of the Company for the period from
September 1, 2001 to the Commencement Date.

                                R E C I T A L S
                                ---------------

     A.  The Executive is currently employed as the Senior Vice President and
Chief Financial Officer of Company.

     B.  The Executive possesses intimate knowledge of the business and affairs
of Company, its policies, methods and personnel.

     C.  The Board of Directors of Company (the "Board") recognizes that the
Executive has contributed to the growth and success of Company, and desires to
assure Company of the Executive's continued employment and to compensate him
therefor.

     D.  The Board has determined that this Agreement will reinforce and
encourage the Executive's continued attention and dedication to the Company.

     E.  The Executive is willing to make his services available to the Company
and on the terms and conditions hereinafter set forth.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:

     1.   Employment.
          ----------

          1.1  Employment and Term. The Company hereby agrees to continue to
               -------------------
employ the Executive and the Executive hereby agrees to continue to serve the
Company on the terms and conditions set forth herein.

          1.2  Duties of Executive. During the Term of Employment under this
               -------------------
Agreement, the Executive shall diligently perform all services as may be
assigned to him by the Chairman of the Board and Chief Executive Officer ("CEO")
(provided that, such services shall not materially differ from the services
currently provided by the Executive), and shall exercise only such power and
authority as may from time to time be delegated to him by the CEO. The
<PAGE>

Executive shall not, however, be required to devote more than five (5) hours per
calendar month to the performance of services under this Agreement.

           2.  Term.
               ----

               2.1  Term. The term of this Agreement shall 2002, (the
                    ----
"Commencement Date") and shall commence on February 1, expire on July 31, 2004,
unless sooner terminated in accordance with Section 5 hereof. This Agreement may
be renewed for an additional period(s) only upon the mutual written agreement of
the parties.

               2.2  Term of Employment and Expiration Date. The period during
                    --------------------------------------
which the Executive shall be employed by the Company pursuant to the terms of
this Agreement is sometimes referred to in this Agreement as the "Term of
Employment", and the date on which the Term of Employment shall expire
(including the date on which any additional term shall expire), is sometimes
referred to in this Agreement as the "Expiration Date".

           3.  Salary. During the Term of Employment, the Company shall pay the
               ------
Executive a salary at the annual rate of Ten Thousand Dollars ($10,000) for
services provided hereunder, payable in 30 equal consecutive monthly
installments of Eight Hundred Thirty-Three Dollars and Thirty Three Cents
($833.33) per month, subject to applicable withholding and other taxes,
commencing on the Commencement Date. Executive shall not be eligible for the
Company's Executive Incentive Income Plan or any other bonus.

           4.  Deferred Compensation. As consideration for services previously
               ---------------------
rendered to the Company, the Company shall pay the Executive deferred
compensation in an aggregate amount of One Hundred Twenty-Five Thousand Dollars
($125,000), payable in 30 equal consecutive monthly installments of Four
Thousand One Hundred Sixty-Six Dollars and Sixty-Six Cents ($4,166.66) per
month, commencing on the Commencement Date.

           5.  Expense Reimbursement and Other Benefits.
               ----------------------------------------

               5.1  Reimbursement of Expenses. Upon the submission of proper
                    -------------------------
substantiation by the Executive, and subject to such rules and guidelines as the
Company may from time to time adopt, the Company shall reimburse the Executive
for all reasonable expenses actually paid or incurred by the Executive during
the Term of Employment in the course of and pursuant to the business of the
Company. The Executive shall account to the Company in writing for all expenses
for which reimbursement is sought and shall supply to the Company copies of all
relevant invoices, receipts or other evidence reasonably requested by the
Company.

               5.2  Medical/Health Insurance Coverage. During the Term of
                    ---------------------------------
Employment, the Executive shall continue to be covered under the Company's
health plan and the Company shall continue to pay the entire premium for the
Executive's coverage under that plan. If the Executive so chooses, his Spouse
shall continue to be covered under the Company's health plan during the Term of
Employment, but the Executive shall be responsible for paying the premiums with
respect to her coverage. Upon termination of this Agreement, the Executive and
his Spouse shall be eligible for COBRA coverage under the Company's health plan,
at the Executive's expense.

                                      -2-
<PAGE>

           6.  Termination; Death or Disability.
               --------------------------------

               6.1  Termination.
                    -----------

                    (a) Notwithstanding anything to the contrary contained in
this Agreement, the Executive's employment under this Agreement shall terminate
only on the earliest of:

                        (i)   the expiration of the Term of Employment as set
forth in Section 2.1 hereof;

                        (ii)  the date on which the Executive commits fraud,
embezzlement or any criminal act that is a felony, in connection with the
Executive's duties hereunder; or

                        (iii) the date on which the Company shall effect a
reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity, or if more than fifty percent (50%) of its stock shall be sold,
transferred or issued to another party or parties.

                    (b) In the event that the Executive's employment with the
Company terminates pursuant to Section 6.1(a)(iii) hereof, then the Company
shall immediately pay the Executive the remaining balance of both the Salary and
the Deferred Compensation set forth in Sections 3 and 4 hereof not previously
paid by the monthly payments provided for in the said Sections 3 and 4 hereof
(such payment being referred to as the "Lump Sum Payment").

               6.2  Death or Disability. Notwithstanding anything to the
                    -------------------
contrary contained in this Agreement, in the event of the Executive's death or
Disability during the Term of Employment, the Executive, his beneficiary, his
estate or personal representative shall continue to receive the Salary and
Deferred Compensation provided for in Sections 3 and 4 hereof, at such times and
in such amounts as if the Executive had not died or suffered a Disability. For
purposes of this Agreement, "Disability" shall mean if the Executive shall as a
result of mental or physical incapacity, illness or disability, become unable to
perform his obligations hereunder for a period of 180 days in any 12-month
period.

           7.  Restrictive Covenant.
               --------------------

               7.1  Nonsolicitation of Employees. For the thirty (30) month
                    ----------------------------
period commencing after the Commencement Date (the "Restricted Period") and
provided that the Company is not in breach of any of its obligations under
Sections 3, 4 or 5 of this Agreement, the Executive shall not, directly or
indirectly, for himself or for any other person, firm, corporation, partnership,
association or other entity employ or attempt to employ or enter into any
contractual arrangement with any employee or former employee of the Company,
unless such employee or former employee has not been employed by the Company for
a period in excess of six months.

               7.2  Acknowledgment by the Executive. The Executive acknowledges
                    -------------------------------
and confirms that (i) the restrictive covenant contained in this Section 7 is
reasonably necessary to

                                      -3-
<PAGE>

protect the legitimate business interests of the Company, and (ii) the
restriction contained in this Section 7 (including without limitation the length
of the term of the provision of this Section 7) is not overbroad, overlong, or
unfair and is not the result of overreaching, duress or coercion of any kind.
The Executive further acknowledges and confirms that his full, uninhibited and
faithful observance of the covenant contained in this Section 7 will not cause
him any undue hardship, financial or otherwise, and that enforcement of the
covenant contained herein will not impair his ability to obtain employment
commensurate with his abilities and on terms fully acceptable to him or
otherwise to obtain income required for the comfortable support of him and his
family and the satisfaction of the needs of his creditors. The Executive further
acknowledges that the restriction contained in this Section 7 is intended to be,
and shall be, for the benefit of and shall be enforceable by, the Company's
successors and assigns.

               7.3  Reformation by Court. In the event that a court of competent
                    --------------------
jurisdiction shall determine that any provision of this Article II is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Section 7 within the jurisdiction of such
court, such provision shall be interpreted and enforced as if it provided for
the maximum restriction permitted under such governing law.

               7.4  Injunction. It is recognized and hereby acknowledged by the
                    ----------
parties hereto that a breach by the Executive of the covenant contained in
Section 7 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of the covenant contained in Section 7
of this Agreement by the Executive or any of his affiliates, associates,
partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies the
Company may possess.

           8.  Assignment; Successors and Assigns. Neither the Executive nor the
               ----------------------------------
Company may make an assignment of this Agreement or any interest herein, by
operation of laws or otherwise, without the prior written consent of the other
party. This Agreement shall inure to the benefit of and be binding upon the
Company and the Executive, their respective heirs, personal representatives,
executors, administrators, legal representatives, successors and assigns.

           9.  Governing Law. This Agreement shall be governed by, and
               -------------
construed and interpreted in accordance with, the laws of the State of Delaware,
without giving effect to the conflict of laws principles of each State. With
respect to any disputes concerning federal law, such disputes shall be
determined in accordance with the law as it would be interpreted and applied by
the United States Court of Appeals with federal jurisdiction in the State of
Delaware.

           10. Entire Agreement. This Agreement constitutes the entire
               -----------------
agreement between the parties hereto with respect to the subject matter hereof
and, upon its effectiveness, shall supersede all prior agreements,
understandings and arrangements, both oral and written, between the Executive
and the Company with respect to such subject matter. This Agreement may not be
modified in any way unless by a written instrument signed by both the Company
and the Executive.

                                      -4-
<PAGE>

           11.  Notices: All notices under this Agreement shall be in writing
                -------
and shall be given by personal delivery, or by registered or certified United
States mail, postage prepaid, return receipt requested, to the address set forth
below:

           If to the Executive:                Herbert B. Hirsch
                                               64 Hurdle Fence Drive
                                               Avon, CT. 06001

           If to the Company:                  MEGO FINANCIAL CORP.
                                               8910 Paradise Road
                                               Las Vegas, Nevada  89109
                                               Att: Floyd W. Kephart, President

or to such other person or persons or to such other address or addresses as the
Executive and the Company or their respective successors or assigns may
hereafter furnish to the other by notice similarly given. Notices, if personally
delivered, shall be deemed to have been received on the date of delivery, and if
given by registered or certified mail, shall be deemed to have been received on
the fifth business day after mailing.

           12.  Severability.  The invalidity of any one or more of the words,
                ------------
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.

           13.  Waivers. The waiver by any party hereto of the other party's
                -------
prompt and complete performance or breach or violation of any provision of this
Agreement shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the waiver by any party hereto to exercise any right or
remedy which he or it may possess shall not operate nor be construed as the
waiver of such right or remedy by such party or as a bar to the exercise of such
right or remedy by such party upon the occurrence of any subsequent breach or
violation.

           14.  Damages. Nothing contained herein shall be construed to prevent
                -------
the Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.

                                      -5-
<PAGE>

           15.  Section Headings. The section headings contained in this
                ----------------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

           16.  No Third Party Beneficiary. Nothing expressed or implied in this
                --------------------------
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.

           IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.

                                    THE COMPANY:

                                    MEGO FINANCIAL CORP.

                                         /s/ Floyd W. Kephart
                                    -------------------------------
                                    FLOYD W. KEPHART, President

                                    THE EXECUTIVE:

                                         /s/ Herbert Hirsch
                                    -------------------------------
                                    HERBERT B. HIRSCH

                                      -6-

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